Common Carrier of Passenger

Contents

Nature of Responsibility Definition 1732;1733;1755

1
Ampang v. Guino-o Transit
Apr 30, 1953 (NF)
1
Landicho v BTC
Sep 20, 1956 (NF)................1
Isaac v. A.L. Ammen
Aug 23, 1957...............1
Laguna v. Tiongson
Apr 30, 1966..................3
La Mallorca v. De Jesus
May 14, 1966..........6
Anuran v. Buo
May 20, 1966........................7
Maranan v. Perez
Jun 26, 1967.......................8
BTC v. Caguimbal
Jan 24, 1968...................10
Del Castillo v. Jaymalin
Mar 17, 1982.........11
Vasquez v. CA
Sep 13, 1985.........................13
Mecenas v. CA
Dec 14, 1989........................15
Gatchalin v. Delim
Oct 21, 1991...................20
Trans-Asia v. CA
Mar 4, 1996......................24
Negros Navigation v. CA
Nov 17, 1997......28
Cervantes v. CA
Mar 25, 1999......................34
Calalas v. CA
May 31, 2000........................36
Jose v. CA
Jan 18, 2000...............................38
Baritua v. Mercader
Jan 23, 2001.................42
Presumption of Negligence 1756....................46
Picart v. Smith
Mar 15, 1918.........................46
Macawili v. Panay
Mar 1,1956 (NF).............48
Sy v. Malate Taxicab
Nov 29,1957..............48
Abeto v. PAL
July 30,1982..........................50
PAL v. NLRC
Sep 2,1983 (PDF)..................52
Bachelor Express v. CA
July 231,1990........52
Mallari v. CA
Jan 31, 2000..........................57
Breach of Contract of Carriage.......................59
Singson v. CA
Nov 18, 1997, GR 119995....59
Cathay Pacific v. Vazquez
Mar 14, 2003, GR#150843 63
Singapore Airlines v. Andion
Dec 10, 2003, GR142305
Japan Airlines v. Asuncion
Jan 28, 2005, GR#161730 72
Northwest v. Chiong
Jan 31, 2008, GR 155550
74
Vector Shipping v. Macasa
Jul 21, 2008, GR 160219 79
Japan Airlines v. Simangan
Apr 22, 2008...83
Philippine Airlines v. CA
Sep 22, 2008.......89
Northwest v. Hashan
Feb 3, 2010 (NF-internet)
93
Spouses Villoria v. Continental
Jan 16, 201293
Fortuitous Event as a Defense.......................103
Lasam v. Smith
45 PHIL 657, Feb 2, 1924. 103
Necesito v. Paras
104 SCRA 84, Jun 30, 1958 (NF)
105
Juntilla v. Fontanar
May 31, 1985..............105
Yobido v. CA
Oct 17, 1997........................107
Gacal v. PAL
183 SCRA 189....................109
Pilapil v. CA
Dec 22, 1989.......................112
Fortune Express v. CA
305 SCRA 14, Mar 18, 1999 114
JAL v. CA
Aug 7, 1998.............................118
Singapore Airlines v. Andion
Dec 10, 2003, GR142305
Duration of Responsibility............................123
Bataclan v. Medina
Oct 22, 1957................123
La Mallorca v. CA
July 27, 1966................125
Phil. Rabbit v. IAC
Aug 30, 1990...............127
PAL v. CA
Sep 15, 1993............................133
Trans-Asia Shipping v. CA
Mar 4, 1996. .137

68

120

Baliwag Transit v. CA
May 15, 1996.........142
Negros NavigationCo., v. CA
Nov 7, 1997145
JAL v. CA
Aug 7, 1998.............................152
Limited Liability; Validity of Stipulations 1757; 1758
Lara v. Valencia
June 30, 1958...................154
Bataclan v. Medina
Oct 22,1957.................156
Maranan v. Perez
June 26,1967...................158
Baliwag Transit v. CA
May 5,1996............160
Fabre v. CA
July 26,1996............................163
Mallari v. CA
Jan 31,2000.........................167
Contributory Negligence of Pax 1761; 1762.170
Cangco v. MRR
Oct 14,1918......................170
Del Prado v. MRR
Mar 7, 1929..................175
Brias v. People
Nov 25,1983.....................176
PNOC v. CA
Oct 4,1985...........................179
Dangwa v. CA
Oct 7,1991...........................186
Fortune Express v. Ca
Mar 18,1999..........189
Isaac v. Al Ammen
101 PHIL 1046...........193
Responsibility for Acts of Strangers and Co-pax 1763
MRR v. Ballesteros
Apr 29,1966................195
Bacarro v. Castao
Nov 5,1982.................197
Gacal v. PAL
Mar 15,1990........................199
Fortune Express v. CA
Mar 18,1999..........202
LRT Authority v. Marjorie Navidad
Feb 6, 2003
Liability for Quasi-Delict..............................208
China Airlines v. CA
May 18,1990............208
Calalas v. CA
May 31,2000.......................212
Phoenix Construction v. IAC
Mar 10, 1987215
PNR v. CA
Oct 15, 2007............................219
Dy Teban v. Jose Ching, Liberty Forest
Feb 4, 2008
Liability for Injury to Stevedores..................229
Sulpicio Lines v. CA
July 14, 1995...........229

Nature
of
1732;1733;1755

Ampang v. Guino-o Transit

Landicho v BTC

Responsibility

Definition

Apr 30, 1953 (NF)

Sep 20, 1956 (NF)

Isaac v. A.L. Ammen

G.R. No. L-9671

Aug 23, 1957

August 23, 1957

CESAR L. ISAAC, plaintiff-appellant,

vs.
A. L. AMMEN TRANSPORTATION
defendant-appellee.
Angel S. Gamboa for appellant.
Manuel O. Chan for appellee.
BAUTISTA ANGELO, J.:

CO.,

INC.,

154

195

206

222

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.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A.,
Labrador, Concepcion, Endencia and Felix, JJ., concur.

heirs of the deceased Ricardo C. Tiongson, against

petitioner.
In its answer to the complaint, petitioner alleged that it had
observed utmost diligence in operating Bus No. 204 on
June 3, 1958; that its driver could not have prevented or
avoided the accident which was fortuitous insofar as it was
concerned; and that the proximate cause of the death of
passenger Tiongson "as the negligence and imprudence of
one Porvenir Aralar Barretto and his employer Santiago
Syjuco, Inc. and/or Seven-Up Bottling Company of the
Philippines, or, in the alternative, the gross negligence of
the highway authorities in failing to keep and maintain the
national roads in good repair at all times and safe condition
for all motorists".
Finding petitioner's driver to blame for the accident, the
trial court, on December 28, 1959, rendered judgment as
follows:

Laguna v. Tiongson Apr 30, 1966

G.R. No. L-22143
April 30, 1966

Wherefore, judgment is hereby rendered sentencing

defendant to pay to plaintiffs the sum of P50,000.00 by way
of actual, compensatory and moral damages, and the further
sum of P5,000.00 as counsel fees, with costs against
defendant.

LAGUNA TAYABAS BUS CO., petitioner,

vs.
ANTONIO TIONGSON and FELICITAS J. TIONGSON,
respondents.

Both parties appealed to the Court of Appeals petitioner

from the portion thereof holding it liable for damages for
breach of contract, and respondents from the portion
determining the amount of damages awarded to them.

Ozaeta, Gibbs and Ozaeta and D. E. de Lara and Associates

for petitioner.
Ejercito, Velilla and Balonkita for respondents.

Meanwhile, on July 31, 1961, the Court of First Instance of

Laguna, in Criminal Case No. B-3311, acquitted Claro
Samonte, petitioner's driver, of the offense charged
mentioned heretofore, on the ground of reasonable doubt.
Upon the other hand, on October 28, 1963, the Court of
Appeals rendered the decision appealed from.

DIZON, J.:
This is an appeal by certiorari taken by Laguna Tayabas
Bus Co., a common carrier engaged in the land
transportation business in the southern Tagalog provinces,
to review the decision of the Court of Appeals affirming
that of the Court of First Instance of Bulacan in Civil Case
No. 1760 entitled "Antonio Tiongson, Paz C. Tiongson and
Felicitas J. Tiongson, plaintiffs, vs. Laguna Tayabas Bus
Company, defendant" sentencing the latter to pay the
former the sum of P50,000.00 by way of actual,
compensatory and moral damages, and the further sum of
P5,000.00 as attorney's fees and costs.
On June 3, 1958, about two kilometers past the poblacion
of Bay, Laguna, petitioner's LTB Bus No. 204, coming
from San Pablo City towards Manila, collided with a 7-Up
delivery truck coming from the opposite direction. As a
consequence the bus fell on its right side on the shoulder of
the road resulting in injuries to many of its passengers and
the death of Ricardo C. Tiongson and a woman passenger.
Both drivers were prosecuted for double homicide, multiple
serious physical injuries and damage to property, thru
reckless imprudence, in the Court of First Instance of
Laguna, but a separate action for damages for breach of
contract of carriage was filed in the Court of First Instance
of Bulacan (Civil Case No. 1760) by respondents herein, as

In its first assignment of error, petitioner contends that the

Court of Appeals erred in affirming instead of reversing the
findings made by the trial court to the effect that the driver
of the LTB bus and not the driver of the 7-Up truck was to
blame for the accident in question.
The following are the pertinent facts found established by
the trial court:
About two kilometers past the poblacion of Bay, Laguna,
defendant's LTB Bus No. 204 collided with the 7-Up
delivery truck which came from the opposite direction, that
is, from Manila towards San Pablo City. As a result of the
collision, defendant's bus fell on the right side on the
shoulder of the road, which resulted in injuries to many
passengers, and the death of Ricardo C. Tiongson and a
woman passenger. ... Having been notified of the collision,
Gerardo Dilla, chief of police of Bay, Laguna, immediately
proceeded to the scene thereof. The Bay Chief of Police
made an on-the-spot investigation and prepared a sketch of
the spot where the collision occurred. From the findings of
the chief of police, it appears that the road had an asphalted
pavement, 5-1/2 meters wide, and shoulders on both sides,
the shoulder going towards the poblacion of Bay being 65

cm. wide and the one on the opposite side having a width
of 70 cm. The chief of police also saw on the asphalted
pavement a somewhat rectangular depression, 3 meters
long, 2 meters wide, and 12 cm. deep, on the left side of the
road going north, that is, going towards Manila . . . . .
Perhaps of most value to plaintiffs is the testimony of Rufo
Reao, a farmer and a barrio lieutenant of Tabon, Bay,
Laguna. The substance of Rufo's testimony is that ... he saw
two LTB trucks, following each other, from south to north
at a distance of about 30 meters from each other; that he
also saw a 7-Up truck going from north to south; that the
leading LTB bus (presumably Bus No. 204) was travelling
faster than the 7-Up truck; that suddenly, he heard the
impact of a collision between the leading LTB bus and the
7-Up truck; that as a result of the collision, the LTB bus fell
on its side while the 7-Up truck turned crosswise on the
road; . . . .
Samonte testified that ... while he was in barrio Tabon, Bay,
Laguna, at about 5:45 that same afternoon, he first saw the
7-Up truck from a distance of about 150 meters; that he
was then running at about 30 kilometers per hour; that upon
sighting the 7-Up truck, he slackened his speed and placed
his bus on the right side of the road; that when the distance
between his bus and the 7-Up truck had been reduced to
about ten (10) meters and foreseeing that he could not
avoid being hit by the truck which had swerved to the left,
he applied his brakes and maneuvered his bus towards the
right side of the road so much so that the right wheels were
already on the shoulder of the road; but that before he could
come to a complete stop, at a speed then of only 10
kilometers per hour, the left front mudguard of his bus was
hit by the 7-Up truck.
After thus evaluating the prosecution evidence and the
testimony of petitioner's witnesses, namely, Claro Samonte,
its driver, Ernesto Alcantara, its conductor, and Teotimo de
Mesa, its Chief Clerk, the trial court said:
In moving forward to a conclusion in this case, certain
general principles must be borne in mind, namely: (1) the
liability of a carrier is contractual and arises upon its breach
of the obligation, and there is a breach if it fails to exercise
extraordinary diligence according to all the circumstances
of each case; (2) a carrier is obliged to carry its passengers
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 its passengers, it being its duty to
prove that it exercised extra-ordinary diligence; (4) a carrier
is not an insurer against all risks of travel (Isaac vs. A.L.
Ammen Transportation Co., Inc., G.R. No. L-9671, August
28, 1957); and (5) that a carrier shall not be responsible for
events which could not be foreseen, or which, though
foreseen, were inevitable (Alfaro vs. Ayson, 54 O.G. 7922).
In the light of the foregoing principles and the evidence of
record, the main questions for determination are whether
defendant has successfully discharged its burden of
disproving its presumptive negligence because of its failure
to transport safely to his destination the deceased Ricardo

C. Tiongson, and whether defendant has sufficiently

established its defense of fortuitous event.
After a review of the record, the court believes that
defendant has not successfully discharged its burden.
Defendant's driver, Samonte, wanted to impress the court
that he was entirely free from fault or negligence in the
collision between his bus and the 7-Up truck. This he
testified that when he first sighted the 7-Up truck, 150
meters away from his bus, the said truck was then running
between 50 and 60 kilometers per hour, while he, for his
part, was then going only at about 30 kilometers per hour.
This testimony of Samonte is to be seriously doubted. In
the first place, he and his conductor, Alcantara, must be
necessarily biased witnesses for they are both employed by
the defendant. In the second place, it is of common
knowledge that a delivery truck fully loaded with cases of
soft drinks is a slower-moving vehicle than a passenger
bus. A passenger bus is necessarily designed for speed
because travellers usually want to arrive at their
destinations within the shortest possible time, whereas soft
drinks delivery trucks are built for the safety of its bottled
cargo than for speed. In the third place, Samonte's claim
that when he applied the brakes of his bus when it was then
about 10 meters away from the 7-Up truck, the speed of his
bus was only about 10 kilometers per hour cannot be given
full credence. He stated that after applying the brakes, his
bus still moved less than 5 meters before being hit by the 7Up truck. If his speed had only been 10 kilometers per
hour, upon the application of the brakes, he would have
stopped the bus within a much shorter distance.
But even assuming that defendant's bus was then running
only at approximately 10 kilometers per hour when the
driver Samonte first applied the brakes, it would seem that
he applied the brakes too late. Samonte testified that upon
sighting the 7-Up truck at a distance of approximately 150
meters, he slackened his speed by first reducing it to 20 and
then to 10 kilometers per hour, and brought his bus towards
the right side of the road; and that it was only when the
distance between the two vehicles was only about 10
meters that he first stepped on the brakes. The court feels
that it was not enough for Samonte to slacken his speed
gradually until he came down to 10 kilometers per hour. He
should have stopped his bus immediately upon seeing the
7-Up truck veer towards his lane after jumping out of the
big depression on the asphalted pavement. He was not
unaware of such depression, and the location thereof for he
had been travelling on the same route for a considerable
length of time prior to 3 June 1958.1wph1.t
It will not do for defendant's driver to claim that he could
not avoid the 7-Up truck because if he did he would have
fallen into the ditch on his side of the highway. If he was
placed in the position claimed by him, it was entirely his
fault, for he could have easily avoided the 7-Up truck if he
had applied his brakes on time, while the 7-Up truck was
still more than 10 meters away from him. Besides, instead
of applying the brakes while the 7-Up truck was still some
distance away from him, he could have veered to the left
side of the road, going north, where there was sufficient
space for him, taking into account that the asphalted

pavement of the road was 5-1/2 meters wide with a

shoulder of 65 cm. wide. In such posture, he could have
avoided collision with the 7-Up truck which, on the other
hand, would have also been free to right its direction after it
came out from the big depression.
An examination of the sketch prepared by the chief of
police of Bay, Laguna (Exhibit 1) shows that the collision
between defendant's bus and the 7-Up truck occurred only
8 meters away from the big depression. This short distance
would seem to indicate that defendant's driver, Samonte,
knowing exactly the location of the depression, and
anticipating that the 7-Up truck coming the opposite
direction would veer to the left of the said depression in
order to avoid the same, raced with the 7-Up truck in order
that he could first pass through the space between the
depression and what was left of the asphalted pavement of
the lane on which he was then travelling, obviously for the
purpose of avoiding delay. Because of this, the 7-Up truck
driver who must have intended to pass on the said space in
order to avoid going through the depression, was suddenly
forced into the depression, in order to avoid a head-on
collision with defendant's bus. But unfortunately, after
bumping out of the depression, the truck veered to the left
and hit defendant's bus on the left front side, thereby
causing the bus to overturn on its right side.
The Court of Appeals agreed with the above being of the
opinion that the testimony of Rufo Reao, a barrio
lieutenant and a disinterested eye-witness of the accident,
was credible; that, to the contrary, the testimony of Claro
Samonte and Ernesto Alcantara, driver and conductor
respectively of petitioner's bus, was improbable and biased;
that Samonte actually applied the brakes on his bus too late
to avoid the accident because at that time the distance
between the two vehicles was only ten meters; that
Samonte was well aware of the condition of the road,
particularly of the existence of a depression near the place
where the two vehicles collided, because he had been
driving through and along the same route for a considerable
period of time prior to the accident; that on May 16, 1958
or only two weeks before the fatal collission, Samonte had
been apprehended for overspeeding, and finally, that certain
admissions made on the witness stand by Teotimo de Mesa,
petitioner's chief clerk since 1948, sufficiently showed that
the company had not exercised due care and diligence in
connection with the hiring of Samonte. The Court of
Appeals therefore expressly found that petitioner not only
failed to disprove the presumption of negligence arising
against it (Articles 1733, 1755, and 1756 of the New Civil
Code) but that, on the contrary, its negligence had been
established by more than mere preponderance of evidence.
A thorough review of the record by Us has not disclosed
any material fact or circumstance showing that the trial
court and the Court of Appeals erred in the respects covered
by the issue under consideration.
The remaining assignment of errors refer to the correctness
of the decision appealed from in so far as it grants moral
damages to respondents, the amount of the award for loss

of earnings, and the additional award of P5,000 for

attorney's fees.
Petitioner's liability for moral damages can not now be
seriously questioned in view of the provisions of Articles
1764 and 2206, Nos. 1 and 3 of the New Civil Code and the
ruling in Necesito, et al. vs. Paras, et al., G.R. Nos. L10605-06, Resolution on motion to reconsider, September
11, 1958 where, speaking through, Mr. Justice Jose B.L.
Reyes, We said:
In awarding to the heirs of the deceased Severino Garces an
indemnity for the loss of "her guidance, protection and
company," although it is but moral damages, the Court took
into account that the case of a passenger who dies in the
course of an accident, due to the carrier's negligence,
constitutes an exception to the general rule. While, as
pointed out in the main decision, under Article 2220 of the
new Civil Code there can be no recovery of moral damages
for a breach of contract in the absence of fraud (malice) or
bad faith, the case of a violation of the contract or carrier
leading to a passenger's death escapes this general rule, in
view of Article 1764 in connection with Article 2206, No. 3
of the new Civil Code.
"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 a common carrier.
"Art. 2206. x x x

xxx

xxx

"(3) The spouse, legitimate and illegitimate descendants

and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the
deceased."
Being a special rule limited to cases of fatal injuries, these
articles prevail over the general rule of Article 2220.
Special provisions control general ones (Lichauco & Co.
vs. Apostol, 44 Phil. 138; Sancho vs. Lizarrage, 55 Phil.
601).
It thus appears that under the new Civil Code, in case of
accident due to a carrier's negligence, the heirs of a
deceased passenger may recover moral damages, even
though a passenger who is injured, but manages to survive,
is not entitled to them. There is, therefore, no conflict
between our main decision in the instant case and that of
Cachero vs. Manila Taxicab Co., G.R. No. 8721, May 23,
1957, where the passenger suffered injuries, but did not
lose his life.
The above ruling was followed and applied in Cariaga vs.
L.T.B., G.R. No. L-11037, December 29, 1960; Bernardo
vs. Luna, G.R. Nos. L-13328-29, September 29, 1961; and
Martinez vs. Gonzales, G.R. No. L-17570, October 30,
1962.
Petitioner contends that the compensatory and moral
damages awarded are excessive. We do not find them to be

so, considering the pertinent facts of record. The deceased

Ricardo C. Tiongson, at the time of his death on June 3,
1958, was only thirty-two years old. He was a Bachelor of
Science in Commerce (Far Eastern University - 1949) and
obtained employment with the San Pablo City Branch of
the People's Bank in 1954 with a starting monthly salary of
P150.00 which, after six months in the service, was
increased to P175.00. While thus employed with the
People's Bank, he was also administering his mother's farm
in Calamba, Laguna. He was the only son of respondent
spouses Antonio Tiongson and Paz Cailles Tiongson, and
had been married hardly three years when he died. The
foregoing circumstances, in our opinion, fully justify the
damages awarded in the appealed decision which are
substantially in accord with the rules of law contained in
Articles 1764 and 2206, Nos. 1 and 3 of the New Civil
Code.
Lastly, it is contended that the Court of Appeals erred in
affirming the trial court's award for attorney's fees. This
contention is likewise untenable.
Considering the provisions of Article No. 2208, Nos. 2 and
11 of the New Civil Code, and the proven fact that
petitioner ignored respondents' demand for an amicable
settlement of their claim, the award of attorney's fees in this
case seems to be completely justified (Rex Taxicab Co.,
Inc. vs. Bautista, G.R. No. L-15392, September 30, 1960;
Necesito vs. Paras, supra).
Wherefore, the decision appealed, from is affirmed, with
costs.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L.,
Barrera, Regala, Makalintal, Bengzon, J.P., and Sanchez,
JJ., concur.
Zaldivar, J., took no part.
La Mallorca v. De Jesus
May 14, 1966
G.R. No. L-21486
May 14, 1966
LA MALLORCA and PAMPANGA BUS COMPANY,
petitioner,
vs.
VALENTIN DE JESUS, MANOLO TOLENTINO and
COURT OF APPEALS, respondents.
Manuel O. Chan for petitioners.
Sixto T. Antonio for respondents.
MAKALINTAL, J.:
La Mallorca and Pampanga Bus Company, Inc., commonly
known as La Mallorca-Pambusco, filed this appeal by
certiorari from the decision of the Court of Appeals which
affirmed that rendered by the Court of First Instance of
Bulacan in its civil case No. 2100, entitled "Valentin de
Jesus and Manolo Tolentino vs. La Mallorca-Pambusco."
The court a quo sentenced the defendant, now petitioner,
"to pay to plaintiffs the amount of P2,132.50 for actual
damages; P14,400.00 as compensatory damages;

P10,000.00 to each plaintiff by way of moral damages; and

P3,000.00 as counsel fees."
Two errors are attributed to the appellate Court: (1) "in
sustaining the decision (of the court a quo) holding that the
petitioners were liable for the accident which was caused
by a blow-out of one of the tires of the bus and in not
considering the same as caso fortuito," and (2) in holding
petitioners liable for moral damages.
The suit arose by reason of the death of Lolita de Jesus, 20year old daughter of Valentin de Jesus and wife of Manolo
Tolentino, in a head-on collision between petitioner's bus,
on which she was a passenger, and a freight truck traveling
in the opposite direction, in a barrio in Marilao Bulacan, in
the morning of October 8, 1959. The immediate cause of
the collision was the fact that the driver of the bus lost
control of the wheel when its left front tire suddenly
exploded.
Petitioner maintains that a tire blow-out is a fortuitous
event and gives rise to no liability for negligence, citing the
rulings of the Court of Appeals in Rodriguez vs. Red Line
Transportation Co., CA-G.R. No. 8136, December 29,
1954, and People vs. Palapad, CA-G.R. No. 18480, June
27, 1958. These rulings, however, not only are not not
binding on this Court but were based on considerations
quite different from those that obtain in the at bar. The
appellate Court there made no findings of any specified
acts of negligence on the part of the defendants and
confined itself to the question of whether or not a tire blowout, by itself alone and without a showing as to the
causative factors, would generate liability. In the present
case, the cause of the blow-out was known. The inner tube
of the left front tire, according to petitioner's own evidence
and as found by the Court of Appeals "was pressed between
the inner circle of the left wheel and the rim which had
slipped out of the wheel." This was, said Court correctly
held, 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.
Then again both the trial court and the Court of Appeals
found as a fact that the bus was running quite fast
immediately before the accident. Considering that the tire
which exploded was not new petitioner describes it as
"hindi masyadong kalbo," or not so very worn out the
plea of caso fortuito cannot be entertained.1wph1.t
The second issue raised by petitioner is already a settled
one. In this jurisdiction moral damages are recoverable by
reason of the death of a passenger caused by the breach of
contract of a common carrier, as provided in Article 1764,
in relation to Article 2206, of the Civil Code. These articles
have been applied by this Court in a number of cases,
among them Necesito, etc. vs. Paras, et al., L-10605-06,
June 30, 1958; Mercado vs. Lira, L-13328-29, Sept. 29,
1961; Villa-Rey Transit vs. Bello, L-18957, April 23, 1963.
Wherefore, the judgment appealed from is affirmed, with
costs against petitioners.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L.,

Barrera, Dizon, Regala, Bengzon, J.P., Zaldivar and
Sanchez, JJ., concur.
Anuran v. Buo
May 20, 1966
G.R. Nos. L-21353 and L-21354

May 20, 1966

GREGORIO ANURAN, MARIA MALIGAYA, LAPAZ

LARO, ET AL., petitioners,
vs.
PEPITO BUO, PEDRO GAHOL, LUISA ALCANTARA,
GUILLERMO RAZON, ANSELMO MALIGAYA and
CEFERINA ARO, respondents.
Victoriano A. Endaya for petitioners.
Trinidad and Borromeo for respondents Buo, et al.
Contreras and Adapon for respondents Razon, et al.
BENGZON, C.J.:
At noon of January 12, 1958, a passenger jeepney was
parked on the road to Taal, Batangas. A motor truck
speeding along, negligently bumped it from behind, with
such violence that three of its passengers died, even as two
others (passengers too) suffered injuries that required their
confinement at the Provincial Hospital for many days.
So, in February 1958 these suits were instituted by the
representatives of the dead and of the injured, to recover
consequently damages against the driver and the owners of
the truck and also against the driver and the owners of the
jeepney.
The Batangas Court of First Instance, after trial, rendered
judgment absolving the driver of the jeepney and its
owners, but it required the truck driver and the owners
thereof to make compensation.
The plaintiffs appealed to the Court of Appeals insisting
that the driver and the owners of the jeepney should also be
made liable for damages.
The last mentioned court, upon reviewing the record,
declared that:
It is admitted that at about noontime on January 13, 1958,
the passenger jeepney owned by defendants spouses Pedro
Gahol and Luisa Alcantara, bearing plate No. TPU-13548,
then being driven by their regular driver, defendant Pepito
Buo was on its regular route travelling from Mahabang
Ludlud, Taal, Batangas, towards the poblacion of the said
municipality. When said passenger jeepney crossed the
bridge separating Barrios Mahabang Ludlud and Balisong,
Taal, Batangas, it had fourteen passengers, excluding the
driver, according to the testimony of defendant Buo (pp.
12 and 18, t.s.n. July 17, 1958), or sixteen passengers
according to the testimony of plaintiff Edita de Sagun, (pp.
9, 12 and 13, t.s.n. June 26, 1958). However, the fact
remains that the vehicle was overloaded with passengers at
the time, because according to the partial stipulation of
facts "the maximum capacity of the jeepney bearing plate

No. TPU-13548 of said defendants was eleven (11)

passengers including the driver. (Printed Record on Appeal,
pp. 35, 37.)
After crossing the bridge, defendant Buo stopped his
vehicle in order to allow one of his passengers to alight.
But he so parked his jeepney in such a way that one-half of
its width (the left wheels) was on the asphalted pavement of
the road and the other half, on the right shoulder of said
road (pp. 21-22, t.s.n. May 26, 1958; p. 12 t.s.n. July 17,
1958). Approximately five minutes later and before Buo
could start his vehicle, a speeding water truck, which bore
plate No. T-17526 and owned by defendants-spouses
Anselmo Maligaya and Ceferina Aro, then being driven by
Guillermo Razon from the direction of Mahabang Ludlud,
Taal, Batangas, towards the poblacion of that municipality,
violently smashed against the parked jeepney from behind,
causing it to turn turtle into a nearby ditch.
Then said Appellate Court went on to affirm the
exoneration of the jeepney driver and of its owners. It
explained that although "the driver of the ill-starred vehicle
was not free from fault, for he was guilty of an antecedent
negligence in parking his vehicle with a portion thereof
occupying the asphalted road", it considered the truck
driver guilty of greater negligence which was the efficient
cause of the collision; and applying the doctrine of the "last
clear chance"1 said Court ordered the owners of the truck
to pay, solidarily with its driver, damages as follows:
x x x the sum of P6,000.00 for the death of their daughter
Emelita, another sum of P5,000.00 as moral damages and
the sum of P500.00 as actual damages, and to plaintiffs
Simplicio, Alberto, Avelina and Alfredo, all surnamed
Arriola, and represented by their guardian ad litem Agustin
Arriola, the sum of P6,000.00 for the death of their natural
mother, Leonor Masongsong, another sum of P5,000.00 as
moral damages the sum of P3,600.00 for loss of earning
capacity of said deceased and the sum of P850.00 as actual
damages.
The plaintiffs brought the matter to this Supreme Court
insisting that the driver and the owners of the jeepney
should also be made liable.
We gave due course to the petition for review, because we
thought the decision meant exoneration of the carrier from
liability to its passengers, notwithstanding the negligence of
its driver.
Upon further and more extended consideration of the
matter, we have become convinced that error of law was
committed in releasing the jeepney from liability. It must be
remembered that the obligation of the carrier to transport its
passengers safely is such that the New Civil Code requires
"utmost diligence" from the carriers (Art. 1755) who are
"presumed to have been at fault or to have acted
negligently, unless they prove that they have observed
extraordinary diligence" (Art. 1756). In this instance, this
legal presumption of negligence is confirmed by the Court
of Appeals' finding that the driver of the jeepney in
question was at fault in parking the vehicle improperly. It

must follow that the driver and the owners of the

jeepney must answer for injuries to its passengers.

that the death was a caso fortuito for which the carrier was
not liable.

The principle about the "last clear chance" would call for
application in a suit between the owners and drivers of the
two colliding vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to
exempt the negligent driver of the jeepney and its owners
on the ground that the other driver was likewise guilty of
negligence.

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).

Now as to damages. The driver and the owners of the truck

have not appealed from the Court of Appeals' assessment.
The plaintiffs (petitioners) have not asked here for a greater
amount of indemnity. They merely pray for a declaration
that Pepito Buo, Pedro Gahol and Luisa Alcantara (the
driver and the owners of the jeepney, respectively) be
declared jointly and severally liable with the other
defendants.1wph1.t
Wherefore, affirming the decision under review, we hereby
modify it in the sense prayed for by plaintiffs-petitioners.
The three defendants last mentioned are required to pay
solidarily with the other defendants-respondents the
amounts fixed by the appealed decision. Costs of both
appeals against said three defendants. So ordered.
Bautista Angelo, Concepcion, J.B.L. Reyes, Dizon, Regala,
Makalintal and Bengzon, J.P., JJ., concur.
Barrera, Zaldivar and Sanchez, JJ., took no part.
Maranan v. Perez Jun 26, 1967
G.R. No. L-22272
June 26, 1967
ANTONIA MARANAN, plaintiff-appellant,
vs.
PASCUAL PEREZ, ET AL., defendants.
PASCUAL PEREZ, defendant appellant.
Pedro Panganiban for plaintiff-appellant.
Magno T. Bueser for defendant-appellant.

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)

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

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

10

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 the Gillaco 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.
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 award moral
damages in addition to compensatory damages, 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
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.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
Zaldivar, Sanchez and Castro, JJ., concur.
BTC v. Caguimbal Jan 24, 1968
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.:

11

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 the calesa; 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

12

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
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.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, Angeles and Fernando, JJ., concur.
Bengzon, J.P., J., took no part.
Del Castillo v. Jaymalin
Mar 17, 1982
G.R. No. L-28256 March 17, 1982
SEVERO DEL CASTILLO, plaintiff-appellant,
vs.
LORENZO JAYMALIN MANUEL SABIT and
BITRANCO and A. L. AMMEN TRANS. CO., INC.,
defendants-appellees.

MELENCIO-HERRERA, J.:
A direct appeal from the Decision, dated January 25, 1967,
of the Court of First Instance of Sorsogon, Branch 1,
dismissing this case for Damages (Civil Case No. 1784
below) by reason of plaintiff Severo del Castillo's death.
On June 29, 1960, Mario del Castillo, a deaf-mute, son of
plaintiff Severo del Castillo, and a paying passenger of
defendant Bicol Transportation Company (Bitranco),
operated by A.L. Ammen Transportation Co., Inc.
(ALATCO) at Casiguran, Sorsogon, fell upon alighting
from Bus No. 624 of said companies and died as a result.
On September 5, 1962, an action for the recovery of
damages for Mario's death was filed by his father, Severo,
plaintiff herein, against the driver and conductor of the bus,
and the transportation companies. The Complaint alleged
that Severo, a widower, was the sole heir.
Defendant transportation companies traversed the
complaint by stating that the passenger bus involved was
owned by Bicol Transportation Co. alone; that the two
companies had always exercised due diligence in the
selection and supervision of their employees; and that the
proximate cause of Mario's death was his recklessness and
gross negligence in jumping out of the bus while in motion.
Trial ensued with plaintiff having been able to present his
evidence and rest his case. Defendants proceeded with the
presentation of their witnesses until July 9, 1966 when they
filed a "Motion for Annulment of Proceedings after
February 1, 1965", having learned that plaintiff Severo had
died on February 1, 1965, at which time plaintiff had not
yet rested his case having done so only on January 28,
1966. the Court a quo directed plaintiff's counsel to verify
the existence of heirs and whether they were willing to be
substituted as parties-plaintiffs."

13

On August 6, 1966, plaintiff's counsel filed a "Motion to

Admit Amended Complaint" substituting Severo's son-inlaw, one Wenceslao Haloc, as party plaintiff. This was in
virtue of a "Deed of Assignment" dated August 13, 1960,
thumbmarked by Severo, and reading as follows:
KNOW ALL MEN BY THESE PRESENTS:
That I, SEVERO DEL CASTILLO, of age, a widower and
a resident of Casiguran, Sorsogon, Philippines, for reasons
of my health and old age, do hereby transfer and assigned
(sic) and by these presents do hereby assign and transfer
unto the said WENCESLAO (sic) HALOC, my son in-law,
of Barrio Storom Casiguran, Sorsogon, Philippines, my
rights, privileges and all its accessory rights as such an heir
to me (sic) for and in my behalf (sic) the case I originally
instituted for indemnity for the death of my son the late
Mario Castillo, who died while a passenger in an Alatco
Bus No. 624, June 29, 1960 at about 7:00 P.M. more or less
at Barrio Storom, Casiguran, Sorsogon.
That I hereby declare that from this date August 13, 1960
on, my son-in-law Wenceslao Haloc, of legal age will be
my assignee as aforesaid.
(Sgd.) Thumb mark SEVERO DEL CASTILLO Res. Cert.
No. A2920570
Issued on July 5, 1960
at
Casiguran. Sorsogon
The Amended Complaint was admitted by the trial Court
for lack of objection thereto on August 20, 1966.
Trial proceeded with defendants closing their evidence on
November 25, 1966.
On January 26, 1967, the trial Court rendered judgment in
defendants' favor dismissing the original and the amended
Complaints upon the following ratiocination
... Since Severo del Castillo died before the conclusion of
this case, this action died with him. Wenceslao Haloc is
without personality to continue this case. He is not even an
heir of Severo del Castillo.
Wenceslao Haloc appealed as a pauper directly to this
Court contending that the Decision is "contrary to law."

assigned his rights to another, in which case, the proper

procedure would have been for the transferee to have been
substituted for the transferor as plaintiff. 1 The rights of
Severo to claim damages for his son were transferable.
Severo had transferred his rights as plaintiff to Wenceslao
Haloc but after the assignment the case continued in
Severo's name and there was no immediate and formal
substitution of party plaintiff. This is but a formality,
however, and the fact remains that, after the assignment,
the substantial plaintiff and real party in interest became
Haloc, with Severo as a sort of trustee of whatever fruits
the litigation would bring
It was reversible error, therefore, for the trial Court to have
dismissed the case by virtue of Severo's death. The action
did not die with him. In point is the following ruling of this
Court:
... where an assignable right has been transferred before
action brought, the proceeding ought to be instituted in the
name of the assignee; and where an assignment is effect
pendente lite, it is proper to have the assignee substituted
for the original plaintiff. If such substitution should not be
effected and the transfer of the right of action should not be
brought to the attention of the court, the original plaintiff, if
successful in the litigation, would hold the fruits of the
action as a sort of trustee for the use and benefit of his
assignee. ... 2
Relative to the aspect of damages, the trial Court ruled:
Common carriers are responsible for the death of their
passengers (Articles 1764 and 2206 of the Civil Code).
This liability includes the loss of the earning capacity of the
deceased. It appears proven that the defendant corporations
failed to exercise the diligence that was their duty to
observe according to Articles 1733 and 1755. The
conductor was apprised of the fact that Mario del Castillo
was deaf and dumb. With this knowledge the conductor
should have taken extra-ordinary care for the safety of the
said passenger. In this he failed.
The trial Court then concluded that "under the
circumstances obtaining in the case, the plaintiff Severo del
Castillo would be entitled to actual and moral damages but
did not determine the amount of damages because it
dismissed the case.

Before this instance, it is urged that the trial Court erred:

1)
In construing the Deed of Assignment as not a
deed that transfers any benefit to the transferee.
2)
In dismissing the case in virtue of the death of
Severo del Castillo after the deed of assignment was
executed and further still after the evidence testimonial and
documentary were already presented.
We find merit in the foregoing contentions.
This is not a case where the provisions of Section 17, Rule
3 of the Rules of Court on "death of a party" are applicable.
Rather, it is a situation where plaintiff, while alive, had

Technicality would require a remand of this case to the

Court a quo, for a determination of the amount of damages
[the total amount of P41,000.00 (P6,000.00 as damages for
death, and P35,000.00 for loss of earning capacity), and
attorney's fees of P5,000.00, were claimed]. Considering,
however, the pendency of this case for 13 years and in
order to put an end to the controversy, we determine the
damages at P12,000.00 for the death of the victim, without
interest, and P2,000.00 for attorney's fees. Loss of earning
capacity in the amount of P35,000.00 has not been proven
specially considering that the victim was a deaf-mute.
WHEREFORE, the judgment appealed from is hereby
reversed, and defendants hereby ordered jointly and

14

severally, to pay Wenceslao Haloc, the amount of

P12,000.00 as damages for death, without interest, and
P2,000.00 as attorney's fees.
No costs.
SO ORDERED.
Vasquez v. CA
Sep 13, 1985
G.R. No. L-42926 September 13, 1985
PEDRO VASQUEZ, SOLEDAD ORTEGA, CLETO B.
BAGAIPO, AGUSTINA VIRTUDES, ROMEO VASQUEZ
and MAXIMINA CAINAY, petitioners,
vs.
THE COURT OF APPEALS and FILIPINAS PIONEER
LINES, INC., respondents.
Emilio D. Castellanes for petitioners.
Apolinario A. Abantao for private respondents.

MELENCIO-HERRERA, J.:
This litigation involves a claim for damages for the loss at
sea of petitioners' respective children after the shipwreck of
MV Pioneer Cebu due to typhoon "Klaring" in May of
1966.
The factual antecedents, as summarized by the trial Court
and adopted by respondent Court, and which we find
supported by the record, read as follows:
When the inter-island vessel MV "Pioneer Cebu" left the
Port of Manila in the early morning of May 15, 1966 bound
for Cebu, it had on board the spouses Alfonso Vasquez and
Filipinas Bagaipo and a four-year old boy, Mario Marlon
Vasquez, among her passengers. The MV "Pioneer Cebu"
encountered typhoon "Klaring" and struck a reef on the
southern part of Malapascua Island, located somewhere
north of the island of Cebu and subsequently sunk. The
aforementioned passengers were unheard from since then.

The evidence on record as to the circumstances of the last

voyage of the MV "Pioneer Cebu" came mainly, if not
exclusively, from the defendant. The MV "Pioneer Cebu"
was owned and operated by the defendant and used in the
transportation of goods and passengers in the inter-island
shipping. Scheduled to leave the Port of Manila at 9:00
p.m. on May 14, 1966, it actually left port at 5:00 a.m. the
following day, May 15, 1966. It had a passenger capacity of
three hundred twenty-two (322) including the crew. It
undertook the said voyage on a special permit issued by the
Collector of Customs inasmuch as, upon inspection, it was
found to be without an emergency electrical power system.
The special permit authorized the vessel to carry only two
hundred sixty (260) passengers due to the said deficiency
and for lack of safety devices for 322 passengers (Exh. 2).
A headcount was made of the passengers on board,
resulting on the tallying of 168 adults and 20 minors,
although the passengers manifest only listed 106
passengers. It has been admitted, however, that the
headcount is not reliable inasmuch as it was only done by
one man on board the vessel.
When the vessel left Manila, its officers were already aware
of the typhoon Klaring building up somewhere in
Mindanao. There being no typhoon signals on the route
from Manila to Cebu, and the vessel having been cleared
by the Customs authorities, the MV "Pioneer Cebu" left on
its voyage to Cebu despite the typhoon. When it reached
Romblon Island, it was decided not to seek shelter thereat,
inasmuch as the weather condition was still good. After
passing Romblon and while near Jintotolo island, the
barometer still indicated the existence of good weather
condition continued until the vessel approached Tanguingui
island. Upon passing the latter island, however, the weather
suddenly changed and heavy rains felt Fearing that due to
zero visibility, the vessel might hit Chocolate island group,
the captain ordered a reversal of the course so that the
vessel could 'weather out' the typhoon by facing the winds
and the waves in the open. Unfortunately, at about
noontime on May 16, 1966, the vessel struck a reef near
Malapascua island, sustained leaks and eventually sunk,
bringing with her Captain Floro Yap who was in command
of the vessel.

Plaintiffs Pedro Vasquez and Soledad Ortega are the

parents of Alfonso Vasquez; plaintiffs Cleto Bagaipo and
Agustina Virtudes are the parents of Filipinas Bagaipo; and
plaintiffs Romeo Vasquez and Maxima Cainay are the
parents of the child, Mario Marlon Vasquez. They seek the
recovery of damages due to the loss of Alfonso Vasquez,
Filipinas Bagaipo and Mario Marlon Vasquez during said
voyage.

Due to the loss of their children, petitioners sued for

damages before the Court of First Instance of Manila (Civil
Case No. 67139). Respondent defended on the plea of force
majeure, and the extinction of its liability by the actual total
loss of the vessel.

At the pre-trial, the defendant admitted its contract of

carriage with Alfonso Vasquez, Filipinas Bagaipo and
Mario Marlon Vasquez, and the fact of the sinking of the
MV "Pioneer Cebu". The issues of the case were limited to
the defenses alleged by the defendant that the sinking of the
vessel was caused by force majeure, and that the
defendant's liability had been extinguished by the total loss
of the vessel.

WHEREFORE, judgment is hereby rendered ordering the

defendant to pay:

After proper proceedings, the trial Court awarded damages,

thus:

(a)
Plaintiffs Pedro Vasquez and Soledad Ortega the
sums of P15,000.00 for the loss of earning capacity of the
deceased Alfonso Vasquez, P2,100.00 for support, and
P10,000.00 for moral damages;

15

(b)
Plaintiffs Cleto B. Bagaipo and Agustina Virtudes
the sum of P17,000.00 for loss of earning capacity of
deceased Filipinas Bagaipo, and P10,000.00 for moral
damages; and
(c)
Plaintiffs Romeo Vasquez and Maximina Cainay
the sum of P10,000.00 by way of moral damages by reason
of the death of Mario Marlon Vasquez.
On appeal, respondent Court reversed the aforementioned
judgment and absolved private respondent from any and all
liability.
Hence, this Petition for Review on Certiorari, the basic
issue being the liability for damages of private respondent
for the presumptive death of petitioners' children.
The trial Court found the defense of caso fortuito untenable
due to various decisive factors, thus:
... It is an admitted fact that even before the vessel left on
its last voyage, its officers and crew were already aware of
the typhoon brewing somewhere in the same general
direction to which the vessel was going. The crew of the
vessel took a calculated risk when it proceeded despite the
typhoon advisory. This is quite evident from the fact that
the officers of the vessel had to conduct conferences
amongst themselves to decide whether or not to proceed.
The crew assumed a greater risk when, instead of seeking
shelter in Romblon and other islands the vessel passed en
route, they decided to take a change on the expected
continuation of the good weather the vessel was
encountering, and the possibility that the typhoon would
veer to some other directions. The eagerness of the crew of
the vessel to proceed on its voyage and to arrive at its
destination is readily understandable. It is undeniably
lamentable, however, that they did so at the risk of the lives
of the passengers on board.
Contrariwise, respondent Appellate Court believed that the
calamity was caused solely and proximately by fortuitous
event which not even extraordinary diligence of the highest
degree could have guarded against; and that there was no
negligence on the part of the common carrier in the
discharge of its duties.
Upon the evidence and the applicable law, we sustain the
trial Court. "To constitute a caso fortuito that would exempt
a person from responsibility, it is necessary that (1) the
event must be independent of the human will; (2) the
occurrence must render it impossible for the debtor to
fulfill the obligation in a normal manner; and that (3) the
obligor must be free of participation in, or aggravation of,
the injury to the creditor." 1 In the language of the law, the
event must have been impossible to foresee, or if it could
be foreseen, must have been impossible to avoid. 2 There
must be an entire exclusion of human agency from the
cause of injury or loss. 3
Turning to this case, before they sailed from the port of
Manila, the officers and crew were aware of typhoon
"Klaring" that was reported building up at 260 kms. east of

Surigao. In fact, they had lashed all the cargo in the hold
before sailing in anticipation of strong winds and rough
waters. 4 They proceeded on their way, as did other vessels
that day. Upon reaching Romblon, they received the
weather report that the typhoon was 154 kms. east
southeast of Tacloban and was moving west northwest. 5
Since they were still not within the radius of the typhoon
and the weather was clear, they deliberated and decided to
proceed with the course. At Jintotolo Island, the typhoon
was already reported to be reaching the mainland of Samar.
6 They still decided to proceed noting that the weather was
still "good" although, according to the Chief Forecaster of
the Weather Bureau, they were already within the typhoon
zone. 7 At Tanguingui Island, about 2:00 A.M. of May 16,
1966, the typhoon was in an area quite close to Catbalogan,
placing Tanguingui also within the typhoon zone. Despite
knowledge of that fact, they again decided to proceed
relying on the forecast that the typhoon would weaken
upon crossing the mainland of Samar. 8 After about half an
hour of navigation towards Chocolate Island, there was a
sudden fall of the barometer accompanied by heavy
downpour, big waves, and zero visibility. The Captain of
the vessel decided to reverse course and face the waves in
the open sea but because the visibility did not improve they
were in total darkness and, as a consequence, the vessel ran
aground a reef and sank on May 16, 1966 around 12:45
P.M. near Malapascua Island somewhere north of the island
of Cebu.
Under the circumstances, while, indeed, the typhoon was
an inevitable occurrence, yet, having been kept posted on
the course of the typhoon by weather bulletins at intervals
of six hours, the captain and crew were well aware of the
risk they were taking as they hopped from island to island
from Romblon up to Tanguingui. They held frequent
conferences, and oblivious of the utmost diligence required
of very cautious persons, 9 they decided to take a
calculated risk. In so doing, they failed to observe that
extraordinary diligence required of them explicitly by law
for the safety of the passengers transported by them with
due regard for an circumstances 10 and unnecessarily
exposed the vessel and passengers to the tragic mishap.
They failed to overcome that presumption of fault or
negligence that arises in cases of death or injuries to
passengers. 11
While the Board of Marine Inquiry, which investigated the
disaster, exonerated the captain from any negligence, it was
because it had considered the question of negligence as
"moot and academic," the captain having "lived up to the
true tradition of the profession." While we are bound by the
Board's factual findings, we disagree with its conclusion
since it obviously had not taken into account the legal
responsibility of a common carrier towards the safety of the
passengers involved.
With respect to private respondent's submission that the
total loss of the vessel extinguished its liability pursuant to
Article 587 of the Code of Commerce 12 as construed in
Yangco vs. Laserna, 73 Phil. 330 [1941], suffice it to state
that even in the cited case, it was held that the liability of a
shipowner is limited to the value of the vessel or to the

16

insurance thereon. Despite the total loss of the vessel

therefore, its insurance answers for the damages that a
shipowner or agent may be held liable for by reason of the
death of its passengers.
WHEREFORE, the appealed judgment is hereby
REVERSED and the judgment of the then Court of First
Instance of Manila, Branch V, in Civil Case No. 67139, is
hereby reinstated. No costs.
SO ORDERED.
Mecenas v. CA
Dec 14, 1989
G.R. No. 88052 December 14, 1989
JOSE P. MECENAS, ROMEO P. MECENAS, LILIA P.
MECENAS, ORLANDO P. MECENAS, VIOLETA M.
ACERVO, LUZVIMINDA P. MECENAS; and OFELIA M.
JAVIER, petitioners,
vs.
HON. COURT OF APPEALS, CAPT. ROGER
SANTISTEBAN and NEGROS NAVIGATION CO., INC.,
respondents.

Civil Case No. Q-31525, against private respondents

Negros Navigation and Capt. Roger Santisteban, the
captain of the "Don Juan" without, however, impleading
either PNOC or PNOC Shipping. In their complaint,
petitioners alleged that they were the seven (7) surviving
legitimate children of Perfecto Mecenas and Sofia Mecenas
and that the latter spouses perished in the collision which
had resulted from the negligence of Negros Navigation and
Capt. Santisteban. Petitioners prayed for actual damages of
not less than P100,000.00 as well as moral and exemplary
damages in such amount as the Court may deem reasonable
to award to them.
Another complaint, docketed as Civil Case No. Q-33932,
was filed in the same court by Lilia Ciocon claiming
damages against Negros Navigation, PNOC and PNOC
Shipping for the death of her husband Manuel Ciocon,
another of the luckless passengers of the "Don Juan."
Manuel Ciocon's body, too, was never found.
The two (2) cases were consolidated and heard jointly by
the Regional Trial Court of Quezon City, Branch 82. On 17
July 1986, after trial, the trial court rendered a decision, the
dispositive of which read as follows:

Benito P. Favie and Jose Dario Magno for petitioners.

Hernandez, Velicaria, Vibar & Santiago for private
respondents.

FELICIANO, J.:
At 6:20 o'clock in the morning of 22 April 1980, the M/T
"Tacloban City," a barge-type oil tanker of Philippine
registry, with a gross tonnage of 1,241,68 tons, owned by
the Philippine National Oil Company (PNOC) and operated
by the PNOC Shipping and Transport Corporation (PNOC
Shipping), having unloaded its cargo of petroleum
products, left Amlan, Negros Occidental, and headed
towards Bataan. At about 1:00 o'clock in the afternoon of
that same day, the M/V "Don Juan," an interisland vessel,
also of Philippine registry, of 2,391.31 tons gross weight,
owned and operated by the Negros Navigation Co., Inc.
(Negros Navigation) left Manila bound for Bacolod with
seven hundred fifty (750) passengers listed in its manifest,
and a complete set of officers and crew members.
On the evening of that same day, 22 April 1980, at about
10:30 o'clock, the "Tacloban City" and the "Don Juan"
collided at the Talbas Strait near Maestra de Ocampo Island
in the vicinity of the island of Mindoro. When the collision
occurred, the sea was calm, the weather fair and visibility
good. As a result of this collision, the M/V "Don Juan" sank
and hundreds of its passengers perished. Among the illfated passengers were the parents of petitioners, the
spouses Perfecto Mecenas and Sofia Mecenas, whose
bodies were never found despite intensive search by
petitioners.
On 29 December 1980, petitioners filed a complaint in the
then Court- of First Instance of Quezon City, docketed as

WHEREFORE, the Court hereby renders judgment

ordering:
a)
The defendant Negros Navigation Co., Inc. and
Capt. Roger Santisteban jointly and severally liable to pay
plaintiffs in Civil Case No Q-31525, the sum of
P400,000.00 for the death of plaintiffs' parents, Perfecto A.
Mecenas and Sofia P. Mecenas; to pay said plaintiff's the
sum of P15.000,00 as and for attorney's fees; plus costs of
the suit.
b)
Each of the defendants Negros Navigation Co
Inc. and Philippine National Oil Company/PNOC Shipping
and Transportation Company, to pay the plaintiff in Civil
Case No. Q-33932, the sum of P100,000.00 for the death of
Manuel Ciocon, to pay said plaintiff jointly and severally,
the sum of P1 5,000.00 as and for attorney's fees, plus costs
of the suit. 1
Negros Navigation, Capt. Santisteban, PNOC and PNOC
Shipping appealed the trial court's decision to the Court of
Appeals. Later, PNOC and PNOC Shipping withdrew their
appeal citing a compromise agreement reached by them
with Negros Navigation; the Court of Appeals granted the
motion by a resolution dated 5 September 1988, subject to
the reservation made by Lilia Ciocon that she could not be
bound by the compromise agreement and would enforce the
award granted her by the trial court.
In time, the Court of Appeals rendered a decision dated 26
January 1989 which decreed the following:
WHEREFORE, in view of the foregoing, the decision of
the court a quo is hereby affirmed as modified with respect
to Civil Case No. 31525, wherein defendant appellant
Negros Navigation Co. Inc. and Capt. Roger Santisteban
are held jointly and severally liable to pay the plaintiffs the

17

amount of P100,000. 00 as actual and compensatory

damages and P15,000.00 as attorney's fees and the cost of
the suit. 2
The issue to be resolved in this Petition for Review is
whether or not the Court of Appeals had erred in reducing
the amount of the damages awarded by the trial court to the
petitioners from P400,000.00 to P100,000.00.
We note that the trial court had granted petitioners the sum
of P400,000,00 "for the death of [their parents]" plus
P15,000.00 as attorney's fees, while the Court of Appeals
awarded them P100,000.00 "as actual and compensatory
damages" and P15,000.00 as attorney's fees. To determine
whether such reduction of the damages awarded was
proper, we must first determine whether petitioners were
entitled to an award of damages other than actual or
compensatory damages, that is, whether they were entitled
to award of moral and exemplary damages.
We begin by noting that both the trial court and the Court
of Appeals considered the action (Civil Case No. Q-31525)
brought by the sons and daughters of the deceased Mecenas
spouses against Negros Navigation as based on quasidelict. We believed that action is more appropriately
regarded as grounded on contract, the contract of carriage
between the Mecenas spouses as regular passengers who
paid for their boat tickets and Negros Navigation; the
surviving children while not themselves passengers are in
effect suing the carrier in representation of their deceased
parents. 3 Thus, the suit (Civil Case No. Q-33932) filed by
the widow Lilia Ciocon was correctly treated by the trial
and appellate courts as based on contract (vis-a-vis Negros
Navigation) and as well on quasi-delict (vis-a-vis PNOC
and PNOC Shipping). In an action based upon a breach of
the contract of carriage, the carrier under our civil law is
liable for the death of passengers arising from the
negligence or willful act of the carrier's employees
although such employees may have acted beyond the scope
of their authority or even in violation of the instructions of
the carrier, 4 which liability may include liability for moral
damages. 5 It follows that petitioners would be entitled to
moral damages so long as the collision with the "Tacloban
City" and the sinking of the "Don Juan" were caused or
attended by negligence on the part of private respondents.
In respect of the petitioners' claim for exemplary damages,
it is only necessary to refer to Article 2232 of the Civil
Code:
Article 2332. In contracts and quasi-contracts, the court
may exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner. 6
Thus, whether petitioners are entitled to exemplary
damages as claimed must depend upon whether or not
private respondents acted recklessly, that is, with gross
negligence.
We turn, therefore, to a consideration of whether or not
Negros Navigation and Capt. Santisteban were grossly
negligent during the events which culminated in the

collision with "Tacloban City" and the sinking of the "Don

Juan" and the resulting heavy loss of lives.
The then Commandant of the Philippine Coast Guard,
Commodore B.C. Ochoco, in a decision dated 2 March
1981, held that the "Tacloban City" was "primarily and
solely [sic] at fault and responsible for the collision." 7
Initially, the Minister of National Defense upheld the
decision of Commodore Ochoco. 8 On Motion for
Reconsideration, however, the Minister of National
Defense reversed himself and held that both vessels had
been at fault:
It is therefore evident from a close and thorough review of
the evidence that fault is imputable to both vessels for the
collision. Accordingly, the decision dated March 12, 1982,
subject of the Motion for Reconsideration filed by counsel
of M/T Tacloban City, is hereby reversed. However, the
administrative penalties imposed oil both vessels and their
respective crew concerned are hereby affirmed. 9
The trial court, after a review of the evidence submitted
during the trial, arrived at the same conclusion that the
Minister of National Defense had reached that both the
"Tacloban City" and the "Don Juan" were at fault in the
collision. The trial court summarized the testimony and
evidence of PNOC and PNOC Shipping as well as of
Negros Navigation in the following terms:
Defendant PNOC's version of the incident:
M/V Don Juan was first sighted at about 5 or 6 miles from
Tacloban City (TSN, January 21, 1985, p. 13); it was on the
starboard (right) side of Tacloban City. This was a visual
contact; not picked up by radar (p. 15, Ibid). Tacloban City
was travelling 310 degrees with a speed of 6 knots,
estimated speed of Don Juan of 16 knots (TSN, May 9, pp.
5-6). As Don Juan approached, Tacloban City gave a
leeway of 1 0 degrees to the left. 'The purpose was to
enable Tacloban to see the direction of Don Juan (p. 19,
Ibid). Don Juan switched to green light, signifying that it
will pass Tacloban City's right side; it will be a starboard to
starboard passing (p. 21, Ibid) Tacloban City's purpose in
giving a leeway of 10 degrees at this point, is to give Don
Juan more space for her passage (p. 22, Ibid). This was
increased by Tacloban City to an additional 15 degrees
towards the left (p. 22, Ibid). The way was clear and Don
Juan has not changed its course (TSN, May 9,1985, p. 39).
When Tacloban City altered its course the second time,
from 300 degrees to 285 degrees, Don Juan was about 4.5
miles away (TSN, May 9,1985, p. 7).
Despite executing a hardport maneuver, the collision
nonetheless occurred. Don Juan rammed the Tacloban City
near the starboard bow (p. 7, Ibid)."
NENACO's [Negros Navigation] version.
Don Juan first sighted Tacloban City 4 miles away, as
shown by radar (p. 13, May 24, 1983). Tacloban City
showed its red and green lights twice; it proceeded to, and

18

will cross, the path of Don Juan. Tacloban was on the left
side of Don Juan (TSN, April 20,1983, p. 4).
Upon seeing Tacloban's red and green lights, Don Juan
executed hard starboard (TSN, p. 4, Ibid.) This maneuver is
in conformity with the rule that 'when both vessels are head
on or nearly head on, each vessel must turn to the right in
order to avoid each other. (p. 5, Ibid). Nonetheless,
Tacloban appeared to be heading towards Don Juan (p. 6,
Ibid),
When Don Juan executed hard starboard, Tacloban was
about 1,500 feet away (TSN, May 24,1983, p. 6). Don
Juan, after execution of hard starboard, will move forward
200 meters before the vessel will respond to such maneuver
(p. 7, Ibid). The speed of Don Juan at that time was 17
knits; Tacloban City 6.3 knots. t "Between 9 to 15 seconds
from execution of hard starboard, collision occurred (p. 8,
Ibid). (pp. 3-4 Decision). 10
The trial court concluded:
M/ V Don Juan and Tacloban City became aware of each
other's presence in the area by visual contact at a distance
of something like 6 miles from each other. They were fully
aware that if they continued on their course, they will meet
head on. Don Juan - steered to the right; Tacloban City
continued its course to the left. There can be no excuse for
them not to realize that, with such maneuvers, they will
collide. They executed maneuvers inadequate, and too late,
to avoid collision.
The Court is of the considered view that the defendants are
equally negligent and are liable for damages. (p. 4,
decision). 11
The Court of Appeals, for its part, reached the same
conclusion. 12
There is, therefore, no question that the "Don Juan" was at
least as negligent as the M/T "Tacloban City" in the events
leading up to the collision and the sinking of the "Don
Juan." The remaining question is whether the negligence on
the part of the "Don Juan" reached that level of
recklessness or gross negligence that our Civil Code
requires for the imposition of exemplary damages. Our own
review of the record in the case at bar requires us to answer
this in the affirmative.
In the first place, the report of the Philippine Coast Guard
Commandant (Exhibit "l 0"), while holding the "Tacloban
City" as "primarily and solely [sic] at fault and responsible
for the collision," did itself set out that there had been fault
or negligence on the part of Capt. Santisteban and his
officers and crew before the collision and immediately after
contact of the two (2) vessels. The decision of Commodore
Ochoco said:
xxx

xxx

xxx

M/S Don Juan's Master, Capt. Rogelio Santisteban, was

playing mahjong before and up to the time of collision.

Moreover, after the collision, he failed to institute

appropriate measures to delay the sinking MS Don Juan
and to supervise properly the execution of his order of
abandonship. As regards the officer on watch, Senior 3rd
Mate Rogelio Devera, he admitted that he failed or did not
call or inform Capt. Santisteban of the imminent danger of
collision and of the actual collision itself Also, he failed to
assist his master to prevent the fast sinking of the ship. The
record also indicates that Auxiliary Chief Mate Antonio
Labordo displayed laxity in maintaining order among the
passengers after the collision.
x x x x x x x x x. 13
We believe that the behaviour of the captain of the "Don
Juan" in tills instance-playing mahjong "before and up to
the time of collision constitutes behaviour that is simply
unacceptable on the part of the master of a vessel to whose
hands the lives and welfare of at least seven hundred fifty
(750) passengers had been entrusted. Whether or not Capt.
Santisteban was "off-duty" or "on-duty" at or around the
time of actual collision is quite immaterial; there is, both
realistically speaking and in contemplation of law, no such
thing as "off-duty" hours for the master of a vessel at sea
that is a common carrier upon whom the law imposes the
duty of extraordinary diligence[t]he duty 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. 14
The record does not show that was the first or only time
that Capt. Santisteban had entertained himself during a
voyage by playing mahjong with his officers and
passengers; Negros Navigation in permitting, or in failing
to discover and correct such behaviour, must be deemed
grossly negligent.
Capt. Santisteban was also faulted in the Philippine Coast
Guard decision for failing after the collision, "to institute
appropriate measures to delay the sinking of M/V Don
Juan." This appears to us to be a euphemism for failure to
maintain the sea-worthiness or the water-tight integrity of
the "Don Juan." The record shows that the "Don Juan" sank
within ten (10) to fifteen (15) minutes after initial contact
with the "Tacloban City. 15 While the failure of Capt.
Santisteban to supervise his officers and crew in the process
of abandoning the ship and his failure to avail of measures
to prevent the too rapid sinking of his vessel after collision,
did not cause the collision by themselves, such failures
doubtless contributed materially to the consequent loss of
life and, moreover, were indicative of the kind and level of
diligence exercised by Capt. Santisteban in respect of his
vessel and his officers and men prior to actual contact
between the two (2) vessels. The officer-on-watch in the
"Don Juan" admitted that he had failed to inform Capt.
Santisteban not only of the "imminent danger of collision"
but even of "the actual collision itself "
There is also evidence that the "Don Juan" was carrying
more passengers than she had been certified as allowed to

19

carry. The Certificate of Inspection 16 dated 27 August

1979, issued by the Philippine Coast Guard Commander at
Iloilo City, the Don Juan's home port, states:
Passengers allowed : 810
Total Persons Allowed : 864
The report of the Philippine Coast Guard (Exhibit "10")
stated that the "Don Juan" had been "officially cleared with
878 passengers on board when she sailed from the port of
Manila on April 22, 1980 at about 1:00 p.m." This headcount of the passengers "did not include the 126 crew
members, children below three (3) years old and two (2)
half-paying passengers" which had been counted as one
adult passenger. 17 Thus, the total number of persons on
board the "Don Juan" on that ill-starred night of 22 April 1
980 was 1,004, or 140 persons more than the maximum
lumber that could be safely carried by the "Don Juan," per
its own Certificate of Inspection. 18 We note in addition,
that only 750 passengers had been listed in its manifest for
its final voyage; in other words, at least 128 passengers on
board had not even been entered into the "Don Juan's"
manifest. The "Don Juan's" Certificate of Inspection
showed that she carried life boat and life raft
accommodations for only 864 persons, the maximum
number of persons she was permitted to carry; in other
words, she did not carry enough boats and life rafts for all
the persons actually on board that tragic night of 22 April
1980.
We hold that under these circumstances, a presumption of
gross negligence on the part of the vessel (her officers and
crew) and of its ship-owner arises; this presumption was
never rebutted by Negros Navigation.
The grossness of the negligence of the "Don Juan" is
underscored when one considers the foregoing
circumstances in the context of the following facts: Firstly,
the "Don Juan" was more than twice as fast as the
"Tacloban City." The "Don Juan's" top speed was 17 knots;
while that of the "Tacloban City" was 6.3. knots. 19
Secondly, the "Don Juan" carried the full complement of
officers and crew members specified for a passenger vessel
of her class. Thirdly, the "Don Juan" was equipped with
radar which was functioning that night. Fourthly, the "Don
Juan's" officer on-watch had sighted the "Tacloban City" on
his radar screen while the latter was still four (4) nautical
miles away. Visual confirmation of radar contact was
established by the "Don Juan" while the "Tacloban City"
was still 2.7 miles away. 20 In the total set of circumstances
which existed in the instant case, the "Don Juan," had it
taken seriously its duty of extraordinary diligence, could
have easily avoided the collision with the "Tacloban City,"
Indeed, the "Don Juan" might well have avoided the
collision even if it had exercised ordinary diligence merely.
It is true that the "Tacloban City" failed to follow Rule 18
of the International Rules of the Road which requires two
(2) power- driven vessels meeting end on or nearly end on
each to alter her course to starboard (right) so that each
vessel may pass on the port side (left) of the other. 21 The

"Tacloban City," when the two (2) vessels were only threetenths (0.3) of a mile apart, turned (for the second time)
150 to port side while the "Don Juan" veered hard to
starboard. This circumstance, while it may have made the
collision immediately inevitable, cannot, however, be
viewed in isolation from the rest of the factual
circumstances obtaining before and up to the collision. In
any case, Rule 18 like all other International Rules of the
Road, are not to be obeyed and construed without regard to
all the circumstances surrounding a particular encounter
between two (2) vessels. 22 In ordinary circumstances, a
vessel discharges her duty to another by a faithful and
literal observance of the Rules of Navigation, 23 and she
cannot be held at fault for so doing even though a different
course would have prevented the collision. This rule,
however, is not to be applied where it is apparent, as in the
instant case, that her captain was guilty of negligence or of
a want of seamanship in not perceiving the necessity for, or
in so acting as to create such necessity for, a departure from
the rule and acting accordingly. 24 In other words, "route
observance" of the International Rules of the Road will not
relieve a vessel from responsibility if the collision could
have been avoided by proper care and skill on her part or
even by a departure from the rules. 25
In the petition at bar, the "Don Juan" having sighted the
"Tacloban City" when it was still a long way off was
negligent in failing to take early preventive action and in
allowing the two (2) vessels to come to such close quarters
as to render the collision inevitable when there was no
necessity for passing so near to the "Tacloban City" as to
create that hazard or inevitability, for the "Don Juan" could
choose its own distance. 26, It is noteworthy that the
"Tacloban City," upon turning hard to port shortly before
the moment of collision, signalled its intention to do so by
giving two (2) short blasts with horn. 26A The "Don Juan "
gave no answering horn blast to signal its own intention
and proceeded to turn hatd to starboard. 26B
We conclude that Capt. Santisteban and Negros Navigation
are properly held liable for gross negligence in connection
with the collision of the "Don Juan" and "Tacloban City"
and the sinking of the "Don Juan" leading to the death of
hundreds of passengers. We find no necessity for passing
upon the degree of negligence or culpability properly
attributable to PNOC and PNOC Shipping or the master of
the "Tacloban City," since they were never impleaded here.
It will be recalled that the trial court had rendered a lump
sum of P400,000.00 to petitioners for the death of their
parents in the "Don Juan" tragedy. Clearly, the trial court
should have included a breakdown of the lump sum award
into its component parts: compensatory damages, moral
damages and exemplary damages. On appeal, the Court of
Appeals could have and should have itself broken down the
lump sum award of the trial court into its constituent parts;
perhaps, it did, in its own mind. In any case, the Court of
Appeals apparently relying upon Manchester Development
Corporation V. Court of Appeals 27 reduced the
P400,000.00 lump sum award into a P100,000.00 for actual
and compensatory damages only.

20

We believe that the Court of Appeals erred in doing so, It is

true that the petitioners' complaint before the trial court had
in the body indicated that the petitioner-plaintiffs believed
that moral damages in the amount of at least P1,400,000.00
were properly due to them (not P12,000,000.00 as the
Court of Appeals erroneously stated) as well as exemplary
damages in the sum of P100,000.00 and that in the prayer
of their complaint, they did not specify the amount of moral
and exemplary damages sought from the trial court. We do
not believe, however, that the Manchester doctrine, which
has been modified and clarified in subsequent decision by
the Court in Sun Insurance Office, Ltd. (SIOL), et al. v.
Asuncion, et al. 28 can be applied in the instant case so as
to work a striking out of that portion of the trial court's
award which could be deemed nationally to constitute an
award of moral and exemplary damages. Manchester was
promulgated by the Court on 7 May 1987. Circular No. 7 of
this Court, which embodied the doctrine in Manchester, is
dated 24 March 1988. Upon the other hand, the complaint
in the case at bar was filed on 29 December 1980, that is,
long before either Manchester or Circular No. 7 of 24
March 1988 emerged. The decision of the trial court was
itself promulgated on 17 July 1986, again, before
Manchester and Circular No. 7 were promulgated. We do
not believe that Manchester should have been applied
retroactively to this case where a decision on the merits had
already been rendered by the trial court, even though such
decision was then under appeal and had not yet reached
finality. There is no indication at all that petitioners here
sought simply to evade payment of the court's filing fees or
to mislead the court in the assessment of the filing fees. In
any event, we apply Manchester as clarified and amplified
by Sun Insurance Office Ltd. (SIOL), by holding that the
petitioners shall pay the additional filing fee that is properly
payable given the award specified below, and that such
additional filing fee shall constitute a lien upon the
judgment.
We consider, finally, the amount of damages-compensatory,
moral and exemplary-properly imposable upon private
respondents in this case. The original award of the trial
court of P400,000.00 could well have been disaggregated
by the trial court and the Court of Appeals in the following
manner:
actual or compensatory damages proved in the course of
trial consisting of actual expenses
incurred by petitioners
in their search for their
parents' bodies-

-P126,000.00

actual or compensatory
damages in case of
wrongful death
(P30,000.00 x 2) -P60,000.00 29
(3)

moral damages

-P107,000.00

(4)

exemplary damages-P107,000.00

Total -P400,000.00
Considering that petitioners, legitimate children of the
deceased spouses Mecenas, are seven (7) in number and
that they lost both father and mothe in one fell blow of fate,
and considering the pain and anxiety they doubtless
experienced while searching for their parents among the
survivors and the corpses recovered from the sea or washed
ashore, we believe that an additional amount of
P200,000.00 for moral damages, making a total of
P307,000.00 for moral damages, making a total of
P307,000.00 as moral damages, would be quite reasonable.
Exemplary damages are designed by our civil law to permit
the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or
deterrents against such behaviour. In requiring compliance
with the standard which is in fact that of the highest
possible degree of diligence, from common carriers and in
creating a presumption of negligence against them, the law
seels to compel them to control their employees, to tame
their reckless instincts and to force them to take adequate
care of human beings and their property. The Court will
take judicial notive of the dreadful regularity with which
grievous maritime disasters occur in our waters with
massive loss of life. The bulk of our population is too poor
to afford domestic air transportation. So it is that
notwithstanding the frequent sinking of passenger vessels
in our waters, crowds of people continue to travel by sea.
This Court is prepared to use the instruments given to it by
the law for securing the ends of law and public policy. One
of those instruments is the institution of exemplary
damages; one of those ends, of special importance in an
archipelagic state like the Philippines, is the safe and
reliable carriage of people and goods by sea. Considering
the foregoing, we believe that an additional award in the
amount of P200,000.00 as exmplary damages, is quite
modest.
The Court is aware that petitioners here merely asked for
the restoration of the P 400.000.00 award of the trial court.
We underscore once more, however, the firmly settled
doctrine that this Court may consider and resolved all
issues which must be decided in order to render substantial
justice to the parties, including issues not explicity raised
by the party affected. In the case at bar, as in Kapalaran Bus
Line v. Coronado, et al., 30 both the demands of sustantial
justice and the imperious requirements of public policy
compel us to the conclusion that the trial court's implicit
award of moral and exemplary damages was erronoeusly
deledted and must be restored and augmented and brought
more nearely to the level required by public policy and
substantial justice.
WHEREFORE, the Petition for Review on certiorari is
hereby GRANTED and the Decision of the Court of
Appeals insofar as it redurce the amount of damages
awarded to petitioners to P100,000.00 is hereby
REVERSED and SET ASIDE. The award granted by the

21

trial court is hereby RESTORED and AUGMENTED as

follows:
(a)

P 126,000.00 for actual damages;

(b)
P 60,000.00 as compensatory damages for
wrongful death;
(c)

That we were passengers of Thames with Plate No. 52-222

PUJ Phil. 73 and victims after the said Thames met an
accident at Barrio Payocpoc Norte, Bauang, La Union
while passing through the National Highway No. 3;

P 307,000.00 as moral damages;

(d)
P 307,000.00 as exemplary damages making a
total of P 800,000.00; and
(e)

from the hospital. However, before Mrs. Delim left, she had
the injured passengers, including petitioner, sign an already
prepared Joint Affidavit which stated, among other things:

That after a thorough investigation the said Thames met the

accident due to mechanical defect and went off the road
and turned turtle to the east canal of the road into a creek
causing physical injuries to us;

P 15,000.00 as attorney's fees.

xxx

Petitioners shall pay the additional filing fees properly due

and payable in view of the award here made, which fees
shall be computed by the Clerks of Court of the trial court,
and shall constitute a lien upon the judgment here awarded.
Cost against private respondents.

xxx

xxx

That we are no longer interested to file a complaint,

criminal or civil against the said driver and owner of the
said Thames, because it was an accident and the said driver
and owner of the said Thames have gone to the extent of
helping us to be treated upon our injuries.

SO ORDERED.
xxx
Gatchalin v. Delim Oct 21, 1991
G.R. No. L-56487 October 21, 1991
REYNALDA GATCHALIAN, petitioner,
vs.
ARSENIO DELIM and the HON. COURT OF APPEALS,
respondents.
Pedro G. Peralta for petitioner.
Florentino G. Libatique for private respondent.

FELICIANO, J.:p
At noon time on 11 July 1973, petitioner Reynalda
Gatchalian boarded, as a paying passenger, respondent's
"Thames" mini bus at a point in San Eugenio, Aringay, La
Union, bound for Bauang, of the same province. On the
way, while the bus was running along the highway in
Barrio Payocpoc, Bauang, Union, "a snapping sound" was
suddenly heard at one part of the bus and, shortly
thereafter, the vehicle bumped a cement flower pot on the
side of the road, went off the road, turned turtle and fell
into a ditch. Several passengers, including petitioner
Gatchalian, were injured. They were promptly taken to
Bethany Hospital at San Fernando, La Union, for medical
treatment. Upon medical examination, petitioner was found
to have sustained physical injuries on the leg, arm and
forehead, specifically described as follows: lacerated
wound, forehead; abrasion, elbow, left; abrasion, knee, left;
abrasion, lateral surface, leg, left. 1
On 14 July 1973, while injured. passengers were confined
in the hospital, Mrs. Adela Delim, wife of respondent,
visited them and later paid for their hospitalization and
medical expenses. She also gave petitioner P12.00 with
which to pay her transportation expense in going home

xxx

xxx 2

(Emphasis supplied)
Notwithstanding this document, petitioner Gathalian filed
with the then Court of First Instance of La Union an action
extra contractu to recover compensatory and moral
damages. She alleged in the complaint that her injuries
sustained from the vehicular mishap had left her with a
conspicuous white scar measuring 1 by 1/2 inches on the
forehead, generating mental suffering and an inferiority
complex on her part; and that as a result, she had to retire in
seclusion and stay away from her friends. She also alleged
that the scar diminished her facial beauty and deprived her
of opportunities for employment. She prayed for an award
of: P10,000.00 for loss of employment and other
opportunities; P10,000.00 for the cost of plastic surgery for
removal of the scar on her forehead; P30,000.00 for moral
damages; and P1,000.00 as attorney's fees.
In defense, respondent averred that the vehicular mishap
was due to force majeure, and that petitioner had already
been paid and moreover had waived any right to institute
any action against him (private respondent) and his driver,
when petitioner Gatchalian signed the Joint Affidavit on 14
July 1973.
After trial, the trial court dismissed the complaint upon the
ground that when petitioner Gatchalian signed the Joint
Affidavit, she relinquished any right of action (whether
criminal or civil) that she may have had against respondent
and the driver of the mini-bus.
On appeal by petitioner, the Court of Appeals reversed the
trial court's conclusion that there had been a valid waiver,
but affirmed the dismissal of the case by denying
petitioner's claim for damages:
We are not in accord, therefore, of (sic) the ground of the
trial court's dismissal of the complaint, although we

22

conform to the trial court's disposition of the case its

dismissal.

which is not the case of the one relied upon in this

appeal. (Emphasis supplied)

IN VIEW OF THE FOREGOING considerations, there

being no error committed by the lower court in dismissing
the plaintiff-appellant's complaint, the judgment of
dismissal is hereby affirmed.

If we apply the standard used in Yepes and Susaya, we

would have to conclude that the terms of the Joint Affidavit
in the instant case cannot be regarded as a waiver cast in
"clear and unequivocal" terms. Moreover, the
circumstances under which the Joint Affidavit was signed
by petitioner Gatchalian need to be considered. Petitioner
testified that she was still reeling from the effects of the
vehicular accident, having been in the hospital for only
three days, when the purported waiver in the form of the
Joint Affidavit was presented to her for signing; that while
reading the same, she experienced dizziness but that, seeing
the other passengers who had also suffered injuries sign the
document, she too signed without bothering to read the
Joint Affidavit in its entirety. Considering these
circumstances there appears substantial doubt whether
petitioner understood fully the import of the Joint Affidavit
(prepared by or at the instance of private respondent) she
signed and whether she actually intended thereby to waive
any right of action against private respondent.

Without special pronouncement as to costs.

SO ORDERED. 3
In the present Petition for Review filed in forma pauperis,
petitioner assails the decision of the Court of Appeals and
ask this Court to award her actual or compensatory
damages as well as moral damages.
We agree with the majority of the Court of Appeals who
held that no valid waiver of her cause of action had been
made by petitioner. The relevant language of the Joint
Affidavit may be quoted again:
That we are no longer interested to file a complaint,
criminal or civil against the said driver and owner of the
said Thames, because it was an accident and the said driver
and owner of the said Thames have gone to the extent of
helping us to be treated upon our injuries. (Emphasis
supplied)
A waiver, to be valid and effective, must in the first place
be couched in clear and unequivocal terms which leave no
doubt as to the intention of a person to give up a right or
benefit which legally pertains to him. 4 A waiver may not
casually be attributed to a person when the terms thereof do
not explicitly and clearly evidence an intent to abandon a
right vested in such person.
The degree of explicitness which this Court has required in
purported waivers is illustrated in Yepes and Susaya v.
Samar Express Transit (supra), where the Court in reading
and rejecting a purported waiver said:
. . . It appears that before their transfer to the Leyte
Provincial Hospital, appellees were asked to sign as, in fact,
they signed the document Exhibit I wherein they stated that
"in consideration of the expenses which said operator has
incurred in properly giving us the proper medical treatment,
we hereby manifest our desire to waive any and all claims
against the operator of the Samar Express Transit."
xxx

xxx

xxx

Even a cursory examination of the document mentioned

above will readily show that appellees did not actually
waive their right to claim damages from appellant for the
latter's failure to comply with their contract of carriage. All
that said document proves is that they expressed a "desire"
to make the waiver which obviously is not the same as
making an actual waiver of their right. A waiver of the kind
invoked by appellant must be clear and unequivocal
(Decision of the Supreme Court of Spain of July 8, 1887)

Finally, because what is involved here is the liability of a

common carrier for injuries sustained by passengers in
respect of whose safety a common carrier must exercise
extraordinary diligence, we must construe any such
purported waiver most strictly against the common carrier.
For a waiver to be valid and effective, it must not be
contrary to law, morals, public policy or good
customs. 5 To uphold a supposed waiver of any right to
claim damages by an injured passenger, under
circumstances like those exhibited in this case, would be to
dilute and weaken the standard of extraordinary diligence
exacted by the law from common carriers and hence to
render that standard unenforceable. 6 We believe such a
purported waiver is offensive to public policy.
Petitioner Gatchalian also argues that the Court of Appeals,
having by majority vote held that there was no enforceable
waiver of her right of action, should have awarded her
actual or compensatory and moral damages as a matter of
course.
We have already noted that a duty to exercise extraordinary
diligence in protecting the safety of its passengers is
imposed upon a common carrier. 7 In case of death or
injuries to passengers, a statutory presumption arises that
the common carrier was at fault or had acted negligently
"unless it proves that it [had] observed extraordinary
diligence as prescribed in Articles 1733 and 1755." 8 In
fact, because of this statutory presumption, it has been held
that a court need not even make an express finding of fault
or negligence on the part of the common carrier in order to
hold it liable. 9 To overcome this presumption, the common
carrier must slow to the court that it had exercised
extraordinary diligence to prevent the injuries. 10 The
standard of extraordinary diligence imposed upon common
carriers is considerably more demanding than the standard
of ordinary diligence, i.e., the diligence of a good
paterfamilias established in respect of the ordinary relations
between members of society. A common carrier is bound to

23

carry its passengers safely" as far as human care and

foresight can provide, using the utmost diligence of a very
cautious person, with due regard to all the circumstances".
11
Thus, the question which must be addressed is whether or
not private respondent has successfully proved that he had
exercised extraordinary diligence to prevent the mishap
involving his mini-bus. The records before the Court are
bereft of any evidence showing that respondent had
exercised the extraordinary diligence required by law.
Curiously, respondent did not even attempt, during the trial
before the court a quo, to prove that he had indeed
exercised the requisite extraordinary diligence. Respondent
did try to exculpate himself from liability by alleging that
the mishap was the result of force majeure. But allegation
is not proof and here again, respondent utterly failed to
substantiate his defense of force majeure. To exempt a
common carrier from liability for death or physical injuries
to passengers upon the ground of force majeure, the carrier
must clearly show not only that the efficient cause of the
casualty was entirely independent of the human will, but
also that it was impossible to avoid. Any participation by
the common carrier in the occurrence of the injury will
defeat the defense of force majeure. In Servando v.
Philippine Steam Navigation Company, 12 the Court
summed up the essential characteristics of force majeure by
quoting with approval from the Enciclopedia Juridica
Espaola:
Thus, where fortuitous event or force majeure is the
immediate and proximate cause of the loss, the obligor is
exempt from liability non-performance. The Partidas, the
antecedent of Article 1174 of the Civil Code, defines "caso
fortuito" as '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 robber.
In its dissertation on the phrase "caso fortuito" the
Enciclopedia Juridica Espaola says: 'In 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 occurence, 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 must be free from any participation in the
aggravation of the injury resulting to the creditor.
Upon the other hand, the record yields affirmative evidence
of fault or negligence on the part of respondent common
carrier. In her direct examination, petitioner Gatchalian
narrated that shortly before the vehicle went off the road
and into a ditch, a "snapping sound" was suddenly heard at
one part of the bus. One of the passengers, an old woman,
cried out, "What happened?" ("Apay addan samet
nadadaelen?"). The driver replied, nonchalantly, "That is
only normal" ("Ugali ti makina dayta"). The driver did not
stop to check if anything had gone wrong with the bus.

Moreover, the driver's reply necessarily indicated that the

same "snapping sound" had been heard in the bus on
previous occasions. This could only mean that the bus had
not been checked physically or mechanically to determine
what was causing the "snapping sound" which had occurred
so frequently that the driver had gotten accustomed to it.
Such a sound is obviously alien to a motor vehicle in good
operating condition, and even a modicum of concern for
life and limb of passengers dictated that the bus be checked
and repaired. The obvious continued failure of respondent
to look after the roadworthiness and safety of the bus,
coupled with the driver's refusal or neglect to stop the minibus after he had heard once again the "snapping sound" and
the cry of alarm from one of the passengers, constituted
wanton disregard of the physical safety of the passengers,
and hence gross negligence on the part of respondent and
his driver.
We turn to petitioner's claim for damages. The first item in
that claim relates to revenue which petitioner said she
failed to realize because of the effects of the vehicular
mishap. Petitioner maintains that on the day that the minibus went off the road, she was supposed to confer with the
district supervisor of public schools for a substitute
teacher's job, a job which she had held off and on as a
"casual employee." The Court of Appeals, however, found
that at the time of the accident, she was no longer employed
in a public school since, being a casual employee and not a
Civil Service eligible, she had been laid off. Her
employment as a substitute teacher was occasional and
episodic, contingent upon the availability of vacancies for
substitute teachers. In view of her employment status as
such, the Court of Appeals held that she could not be said
to have in fact lost any employment after and by reason of
the accident. 13 Such was the factual finding of the Court
of Appeals, a finding entitled to due respect from this
Court. Petitioner Gatchalian has not submitted any basis for
overturning this finding of fact, and she may not be
awarded damages on the basis of speculation or conjecture.
14
Petitioner's claim for the cost of plastic surgery for removal
of the scar on her forehead, is another matter. A person is
entitled to the physical integrity of his or her body; if that
integrity is violated or diminished, actual injury is suffered
for which actual or compensatory damages are due and
assessable. Petitioner Gatchalian is entitled to be placed as
nearly as possible in the condition that she was before the
mishap. A scar, especially one on the face of the woman,
resulting from the infliction of injury upon her, is a
violation of bodily integrity, giving raise to a legitimate
claim for restoration to her conditio ante. If the scar is
relatively small and does not grievously disfigure the
victim, the cost of surgery may be expected to be
correspondingly modest. In Araneta, et al. vs. Areglado, et
al., 15 this Court awarded actual or compensatory damages
for, among other things, the surgical removal of the scar on
the face of a young boy who had been injured in a vehicular
collision. The Court there held:
We agree with the appellants that the damages awarded by
the lower court for the injuries suffered by Benjamin

24

Araneta are inadequate. In allowing not more than

P1,000.00 as compensation for the "permanent deformity
and something like an inferiority complex" as well as
for the "pathological condition on the left side of the jaw"
caused to said plaintiff, the court below overlooked the
clear evidence on record that to arrest the degenerative
process taking place in the mandible and restore the injured
boy to a nearly normal condition, surgical intervention was
needed, for which the doctor's charges would amount to
P3,000.00, exclusive of hospitalization fees, expenses and
medicines. Furthermore, the operation, according to Dr.
Dio, would probably have to be repeated in order to
effectuate a complete cure, while removal of the scar on the
face obviously demanded plastic surgery.
xxx

xxx

xxx

The father's failure to submit his son to a plastic operation

as soon as possible does not prove that such treatment is
not called for. The damage to the jaw and the existence of
the scar in Benjamin Araneta's face are physical facts that
can not be reasoned out of existence. That the injury should
be treated in order to restore him as far as possible to his
original condition is undeniable. The father's delay, or even
his negligence, should not be allowed to prejudice the son
who has no control over the parent's action nor impair his
right to a full indemnity.
. . . Still, taking into account the necessity and cost of
corrective measures to fully repair the damage; the pain
suffered by the injured party; his feelings of inferiority due
to consciousness of his present deformity, as well as the
voluntary character of the injury inflicted; and further
considering that a repair, however, skillfully conducted, is
never equivalent to the original state, we are of the opinion
that the indemnity granted by the trial court should be
increased to a total of P18,000.00. (Emphasis supplied)
Petitioner estimated that the cost of having her scar
surgically removed was somewhere between P10,000.00 to
P15,000.00. 16 Upon the other hand, Dr. Fe Tayao Lasam,
a witness presented as an expert by petitioner, testified that
the cost would probably be between P5,000.00 to
P10,000.00. 17 In view of this testimony, and the fact that a
considerable amount of time has lapsed since the mishap in
1973 which may be expected to increase not only the cost
but also very probably the difficulty of removing the scar,
we consider that the amount of P15,000.00 to cover the cost
of such plastic surgery is not unreasonable.
Turning to petitioner's claim for moral damages, the longestablished rule is that moral damages may be awarded
where gross negligence on the part of the common carrier is
shown. 18 Since we have earlier concluded that respondent
common carrier and his driver had been grossly negligent
in connection with the bus mishap which had injured
petitioner and other passengers, and recalling the
aggressive manuevers of respondent, through his wife, to
get the victims to waive their right to recover damages even
as they were still hospitalized for their injuries, petitioner
must be held entitled to such moral damages. Considering
the extent of pain and anxiety which petitioner must have

suffered as a result of her physical injuries including the

permanent scar on her forehead, we believe that the amount
of P30,000.00 would be a reasonable award. Petitioner's
claim for P1,000.00 as atttorney's fees is in fact even more
modest. 19
WHEREFORE, the Decision of the Court of Appeals dated
24 October 1980, as well as the decision of the then Court
of First Instance of La Union dated 4 December 1975 are
hereby REVERSED and SET ASIDE.Respondent is hereby
ORDERED to pay petitioner Reynalda Gatchalian the
following sums: 1) P15,000.00 as actual or compensatory
damages to cover the cost of plastic surgery for the removal
of the scar on petitioner's forehead; 2) P30,000.00 as moral
damages; and 3) P1,000.00 as attorney's fees, the aggregate
amount to bear interest at the legal rate of 6% per annum
counting from the promulgation of this decision until full
payment thereof. Costs against private respondent.
SO ORDERED.
Trans-Asia v. CA Mar 4, 1996
[G.R. No. 118126. March 4, 1996]
TRANS-ASIA SHIPPING LINES, INC., petitioner, vs.
COURT OF APPEALS and ATTY. RENATO T. ARROYO,
respondents.
DECISION
DAVIDE, JR., J.:
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 vessels voyage and the
consequent delay in that vessels 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 petitioners
formulation of the issue imprecise. As this Court sees it,
what stands for resolution is a common carriers 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

25

petitioner], a corporation engaged in x x x 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.
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 acceded [sic] to their request and thus the
vessel headed back to Cebu City.
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.
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]
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 respondents mental distress. He
further alleged that by reason of the petitioners 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 damage&arising from bad
faith, breach of contract and from tort, with the former
arising from the petitioners 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 non-performance 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 defendants
employees, the complaint is DISMISSED. Defendants
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:
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 employee 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 vessels 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

26

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, want only 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 (CA-G.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 courts 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 plaintiffappellant:
1.
2.
3.
4.

P20,000.00 as moral damages;

P10,000.00 as exemplary damages;
P5,000.00 as attorneys fees;
Cost of suit.

SO ORDERED.[12]
It did not, however, allow the grant of damages for the
delay in the performance of the petitioners 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
vessels 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
respondents 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. Defendant-appellee averred:
x x x The dropping of the vessels anchor after running
slowly on only one engine when it departed earlier must
have alarmed some nervous passengers x x x
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 defendant-appellee. 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 defendantappellee.
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, defendant-appellee 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 in 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. Defendantappellee should have made certain that the vessel [could]
complete the voyage before starting [to] sail. Anything less

27

than this, the vessel [could not] sail x x x 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.

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 x
x x negative incentives or deterrents against such behavior.
[18]

As expected, x x x 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.

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]

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. Defendantappellee may call him a very panicky passenger or a
nervous person, but this will not relieve defendantappellee from the liability it incurred for its failure to
exercise utmost diligence.[13]

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]

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 vessels 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]

The petitioner then instituted this petition and submitted the

question of law earlier adverted to.

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
vessels 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 adrift 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 is 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

28

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 petitioners 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 petitioners 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 petitioners other vessel the following day,
using the ticket he had purchased for the previous days
voyage.
Any further delay then in the private respondents 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 of the vessel
and passengers was never at stake because the sea was
calm in the vicinity where it stopped as faithfully
recorded in the vessels log book (Exhibit 4). Hence, the
petitioner concludes, the private respondent was merely
over-reacting to the situation obtaining then.[31]

29

We hold that the petitioners defense cannot exculpate it

nor mitigate its liability. On the contrary, such a claim
demonstrates beyond cavil the petitioners lack of genuine
concern for the safety of its passengers. It was, perhaps,
only providential that 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 at 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
attorneys 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.[34] Hence, 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 case - and 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 Courts decision was
devoid of any statement regarding attorneys 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 attorneys fees pursuant to
Article 2208 of the Civil Code. It states:
Article 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 defendants act or omission has compelled the
plaintiff to litigate with third 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 attorneys fees.[37] In sum,
for lack of factual and legal basis, the award of attorneys
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 attorneys fees which is hereby SET
ASIDE.
Costs against the petitioner.
SO ORDERED.
Negros Navigation v. CA
Nov 17, 1997
[G.R. No. 110398. November 7, 1997]

NEGROS NAVIGATION CO., INC., petitioner, vs. THE

COURT OF APPEALS, RAMON MIRANDA, SPS.
RICARDO and VIRGINIA DE LA VICTORIA,
respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision of
the Court of Appeals affirming with modification the
Regional Trial Courts award of damages to private
respondents for the death of relatives as a result of the
sinking of petitioners vessel.
In April of 1980, private respondent Ramon Miranda
purchased from the Negros Navigation Co., Inc. four
special cabin tickets (#74411, 74412, 74413 and 74414) for
his wife, daughter, son and niece who were going to
Bacolod City to attend a family reunion. The tickets were
for Voyage No. 457-A of the M/V Don Juan, leaving
Manila at 1:00 p.m. on April 22, 1980.
The ship sailed from the port of Manila on schedule.
At about 10:30 in the evening of April 22, 1980, the Don
Juan collided off the Tablas Strait in Mindoro, with the M/T
Tacloban City, an oil tanker owned by the Philippine
National Oil Company (PNOC) and the PNOC Shipping
and Transport Corporation (PNOC/STC). As a result, the
M/V Don Juan sank. Several of her passengers perished in
the sea tragedy. The bodies of some of the victims were
found and brought to shore, but the four members of
private respondents families were never found.
Private respondents filed a complaint on July 16, 1980 in
the Regional Trial Court of Manila, Branch 34, against the
Negros Navigation, the Philippine National Oil Company
(PNOC), and the PNOC Shipping and Transport
Corporation (PNOC/STC), seeking damages for the death
of Ardita de la Victoria Miranda, 48, Rosario V. Miranda,
19, Ramon V. Miranda, Jr., 16, and Elfreda de la Victoria,
26.
In its answer, petitioner admitted that private respondents
purchased ticket numbers 74411, 74412, 74413 and 74414;
that the ticket numbers were listed in the passenger
manifest; and that the Don Juan left Pier 2, North Harbor,
Manila on April 22, 1980 and sank that night after being
rammed by the oil tanker M/T Tacloban City, and that, as a
result of the collision, some of the passengers of the M/V
Don Juan died. Petitioner, however, denied that the four
relatives of private respondents actually boarded the vessel
as shown by the fact that their bodies were never recovered.
Petitioner further averred that the Don Juan was seaworthy
and manned by a full and competent crew, and that the
collision was entirely due to the fault of the crew of the
M/T Tacloban City.
On January 20, 1986, the PNOC and petitioner Negros
Navigation Co., Inc. entered into a compromise agreement
whereby petitioner assumed full responsibility for the
payment and satisfaction of all claims arising out of or in

30

connection with the collision and releasing the PNOC and

the PNOC/STC from any liability to it. The agreement was
subsequently held by the trial court to be binding upon
petitioner, PNOC and PNOC/STC. Private respondents did
not join in the agreement.

3. Ordering and sentencing defendants-appellants, jointly

and severally, to pay plaintiffs-appellees Dela Victoria
spouses the amount of P50,000.00, instead of P30,000.00,
as compensatory damages for the death of their daughter
Elfreda Dela Victoria;

After trial, the court rendered judgment on February 21,

1991, the dispositive portion of which reads as follows:

Hence this petition, raising the following issues:

WHEREFORE, in view of the foregoing, judgment is

hereby rendered in favor of the plaintiffs, ordering all the
defendants to pay jointly and severally to the plaintiffs
damages as follows:
To Ramon Miranda:
P42,025.00 for actual damages;
P152,654.55
as compensatory damages for loss of
earning capacity of his wife;
P90,000.00
as compensatory damages for wrongful
death of three (3) victims;
P300,000.00 as moral damages;
P50,000.00
as exemplary damages, all in the total
amount of P634,679.55; and
P40,000.00 as attorneys fees.
To Spouses Ricardo and Virginia de la Victoria:
P12,000.00 for actual damages;
P158,899.00
earning capacity;

as compensatory damages for loss of

P30,000.00 as compensatory damages for wrongful death;

P100,000.00 as moral damages;
P20,000.00
as exemplary damages, all in the total
amount of P320,899.00; and
P15,000.00 as attorneys fees.
On appeal, the Court of Appeals[1] affirmed the decision of
the Regional Trial Court with modification
1. Ordering and sentencing defendants-appellants, jointly
and severally, to pay plaintiff-appellee Ramon Miranda the
amount of P23,075.00 as actual damages instead of
P42,025.00;
2. Ordering and sentencing defendants-appellants, jointly
and severally, to pay plaintiff-appellee Ramon Miranda the
amount of P150,000.00, instead of P90,000.00, as
compensatory damages for the death of his wife and two
children;

(1) whether the members of private respondents families

were actually passengers of the Don Juan;
(2) whether the ruling in Mecenas v. Court of Appeals,[2]
finding the crew members of petitioner to be grossly
negligent in the performance of their duties, is binding in
this case;
(3)
whether the total loss of the M/V Don Juan
extinguished petitioners liability; and
(4) whether the damages awarded by the appellate court
are excessive, unreasonable and unwarranted.
First. The trial court held that the fact that the victims were
passengers of the M/V Don Juan was sufficiently proven by
private respondent Ramon Miranda, who testified that he
purchased tickets numbered 74411, 74412, 74413, and
74414 at P131.30 each from the Makati office of petitioner
for Voyage No. 47-A of the M/V Don Juan, which was
leaving Manila on April 22, 1980. This was corroborated
by the passenger manifest (Exh. E) on which the numbers
of the tickets and the names of Ardita Miranda and her
children and Elfreda de la Victoria appear.
Petitioner contends that the purchase of the tickets does not
necessarily mean that the alleged victims actually took the
trip. Petitioner asserts that it is common knowledge that
passengers purchase tickets in advance but do not actually
use them. Hence, private respondent should also prove the
presence of the victims on the ship. The witnesses who
affirmed that the victims were on the ship were biased and
unreliable.
This contention is without merit. Private respondent Ramon
Miranda testified that he personally took his family and his
niece to the vessel on the day of the voyage and stayed with
them on the ship until it was time for it to leave. There is no
reason he should claim members of his family to have
perished in the accident just to maintain an action. People
do not normally lie about so grave a matter as the loss of
dear ones.
It would be more difficult for private
respondents to keep the existence of their relatives if indeed
they are alive than it is for petitioner to show the contrary.
Petitioners only proof is that the bodies of the supposed
victims were not among those recovered from the site of
the mishap. But so were the bodies of the other passengers
reported missing not recovered, as this Court noted in the
Mecenas[3] case.
Private respondent Mirandas testimony was corroborated
by Edgardo Ramirez. Ramirez was a seminarian and one
of the survivors of the collision. He testified that he saw
Mrs. Miranda and Elfreda de la Victoria on the ship and

31

that he talked with them. He knew Mrs. Miranda who was

his teacher in the grade school. He also knew Elfreda who
was his childhood friend and townmate. Ramirez said he
was with Mrs. Miranda and her children and niece from
7:00 p.m. until 10:00 p.m. when the collision happened and
that he in fact had dinner with them. Ramirez said he and
Elfreda stayed on the deck after dinner and it was there
where they were jolted by the collision of the two vessels.
Recounting the moments after the collision, Ramirez
testified that Elfreda ran to fetch Mrs. Miranda. He
escorted her to the room and then tried to go back to the
deck when the lights went out. He tried to return to the
cabin but was not able to do so because it was dark and
there was a stampede of passengers from the deck.
Petitioner casts doubt on Ramirez testimony, claiming that
Ramirez could not have talked with the victims for about
three hours and not run out of stories to tell, unless Ramirez
had a storehouse of stories. But what is incredible about
acquaintances thrown together on a long journey staying
together for hours on end, in idle conversation precisely to
while the hours away?
Petitioner also points out that it took Ramirez three (3) days
before he finally contacted private respondent Ramon
Miranda to tell him about the fate of his family. But it is
not improbable that it took Ramirez three days before
calling on private respondent Miranda to tell him about the
last hours of Mrs. Miranda and her children and niece, in
view of the confusion in the days following the collision as
rescue teams and relatives searched for survivors.
Indeed, given the facts of this case, it is improper for
petitioner to even suggest that private respondents relatives
did not board the ill-fated vessel and perish in the accident
simply because their bodies were not recovered.
Second. In finding petitioner guilty of negligence and in
failing to exercise the extraordinary diligence required of it
in the carriage of passengers, both the trial court and the
appellate court relied on the findings of this Court in
Mecenas v. Intermediate Appellate Court,[4] which case
was brought for the death of other passengers. In that case
it was found that although the proximate cause of the
mishap was the negligence of the crew of the M/T Tacloban
City, the crew of the Don Juan was equally negligent as it
found that the latters master, Capt. Rogelio Santisteban,
was playing mahjong at the time of collision, and the
officer on watch, Senior Third Mate Rogelio De Vera,
admitted that he failed to call the attention of Santisteban to
the imminent danger facing them. This Court found that
Capt. Santisteban and the crew of the M/V Don Juan failed
to take steps to prevent the collision or at least delay the
sinking of the ship and supervise the abandoning of the
ship.
Petitioner Negros Navigation was found equally negligent
in tolerating the playing of mahjong by the ship captain and
other crew members while on board the ship and failing to
keep the M/V Don Juan seaworthy so much so that the ship
sank within 10 to 15 minutes of its impact with the M/T
Tacloban City.

In addition, the Court found that the Don Juan was

overloaded. The Certificate of Inspection, dated August
27, 1979, issued by the Philippine Coast Guard
Commander at Iloilo City stated that the total number of
persons allowed on the ship was 864, of whom 810 are
passengers, but there were actually 1,004 on board the
vessel when it sank, 140 persons more than the maximum
number that could be safely carried by it.
Taking these circumstances together, and the fact that the
M/V Don Juan, as the faster and better-equipped vessel,
could have avoided a collision with the PNOC tanker, this
Court held that even if the Tacloban City had been at fault
for failing to observe an internationally-recognized rule of
navigation, the Don Juan was guilty of contributory
negligence. Through Justice Feliciano, this Court held:
The grossness of the negligence of the Don Juan is
underscored when one considers the foregoing
circumstances in the context of the following facts: Firstly,
the Don Juan was more than twice as fast as the
Tacloban City. The Don Juans top speed was 17 knots;
while that of the Tacloban City was 6.3. knots. Secondly,
the Don Juan carried the full complement of officers and
crew members specified for a passenger vessel of her class.
Thirdly, the Don Juan was equipped with radar which
was functioning that night. Fourthly, the Don Juans
officer on-watch had sighted the Tacloban City on his
radar screen while the latter was still four (4) nautical miles
away. Visual confirmation of radar contact was established
by the Don Juan while the Tacloban City was still 2.7
miles away. In the total set of circumstances which existed
in the instant case, the Don Juan, had it taken seriously
its duty of extraordinary diligence, could have easily
avoided the collision with the Tacloban City. Indeed, the
Don Juan might well have avoided the collision even if it
had exercised ordinary diligence merely.
It is true that the Tacloban City failed to follow Rule 18
of the International Rules of the Road which requires two
(2) power-driven vessels meeting end on or nearly end on
each to alter her course to starboard (right) so that each
vessel may pass on the port side (left) of the other. The
Tacloban City, when the two (2) vessels were only threetenths (0.3) of a mile apart, turned (for the second time)
15o to port side while the Don Juan veered hard to
starboard. . . . [But] route observance of the International
Rules of the Road will not relieve a vessel from
responsibility if the collision could have been avoided by
proper care and skill on her part or even by a departure
from the rules.
In the petition at bar, the Don Juan having sighted the
Tacloban City when it was still a long way off was
negligent in failing to take early preventive action and in
allowing the two (2) vessels to come to such close quarters
as to render the collision inevitable when there was no
necessity for passing so near to the Tacloban City as to
create that hazard or inevitability, for the Don Juan could
choose its own distance. It is noteworthy that the
Tacloban City, upon turning hard to port shortly before

32

the moment of collision, signalled its intention to do so by

giving two (2) short blasts with its horn. The Don Juan
gave no answering horn blast to signal its own intention
and proceeded to turn hard to starboard.
We conclude that Capt. Santisteban and Negros Navigation
are properly held liable for gross negligence in connection
with the collision of the Don Juan and Tacloban City
and the sinking of the Don Juan leading to the death of
hundreds of passengers. . . .[5]
Petitioner criticizes the lower courts reliance on the
Mecenas case, arguing that, although this case arose out of
the same incident as that involved in Mecenas, the parties
are different and trial was conducted separately. Petitioner
contends that the decision in this case should be based on
the allegations and defenses pleaded and evidence adduced
in it or, in short, on the record of this case.
The contention is without merit. What petitioner contends
may be true with respect to the merits of the individual
claims against petitioner but not as to the cause of the
sinking of its ship on April 22, 1980 and its liability for
such accident, of which there can only be one truth.
Otherwise, one would be subscribing to the sophistry: truth
on one side of the Pyrenees, falsehood on the other!
Adherence to the Mecenas case is dictated by this Courts
policy of maintaining stability in jurisprudence in
accordance with the legal maxim stare decisis et non
quieta movere (Follow past precedents and do not disturb
what has been settled.) Where, as in this case, the same
questions relating to the same event have been put forward
by parties similarly situated as in a previous case litigated
and decided by a competent court, the rule of stare decisis
is a bar to any attempt to relitigate the same issue.[6] In
Woulfe v. Associated Realties Corporation,[7] the Supreme
Court of New Jersey held that where substantially similar
cases to the pending case were presented and applicable
principles declared in prior decisions, the court was bound
by the principle of stare decisis. Similarly, in State ex rel.
Tollinger v. Gill,[8] it was held that under the doctrine of
stare decisis a ruling is final even as to parties who are
strangers to the original proceeding and not bound by the
judgment under the res judicata doctrine. The Philadelphia
court expressed itself in this wise: Stare decisis simply
declares that, for the sake of certainty, a conclusion reached
in one case should be applied to those which follow, if the
facts are substantially the same, even though the parties
may be different.[9] Thus, in J. M. Tuason v. Mariano,
supra, this Court relied on its rulings in other cases
involving different parties in sustaining the validity of a
land title on the principle of stare decisis et non quieta
movere.
Indeed, the evidence presented in this case was the same as
those presented in the Mecenas case, to wit:
Document
This case

Mecenas case

Decision of Commandant
Exh. 11-B-NN/X
Phil. Coast Guard in BMI Case
No. 415-80 dated 3/26/81
Decision of the Minister
Exh. ZZ
of National Defense dated 3/12/82
Resolution on the motion
Exh. AAA
for
reconsideration
(private respondents)
decision of the Minister of
National Defense dated 7/24/84
Certificate of inspection
Exh. 19-NN
dated 8/27/79
Certificate of Stability
Exh. 19-D-NN
dated 12/16/76

Exh. 10[10]

Exh. 11[11]
Exh. 13[12]
of

the

Exh. 1-A[13]
Exh. 6-A[14]

Nor is it true that the trial court merely based its decision
on the Mecenas case. The trial court made its own
independent findings on the basis of the testimonies of
witnesses, such as Senior Third Mate Rogelio de Vera, who
incidentally gave substantially the same testimony on
petitioners behalf before the Board of Marine Inquiry. The
trial court agreed with the conclusions of the then Minister
of National Defense finding both vessels to be negligent.
Third. The next issue is whether petitioner is liable to pay
damages notwithstanding the total loss of its ship. The
issue is not one of first impression. The rule is wellentrenched in our jurisprudence that a shipowner may be
held liable for injuries to passengers notwithstanding the
exclusively real and hypothecary nature of maritime law if
fault can be attributed to the shipowner.[15]
In Mecenas, this Court found petitioner guilty of
negligence in (1) allowing or tolerating the ship captain and
crew members in playing mahjong during the voyage, (2)
in failing to maintain the vessel seaworthy and (3) in
allowing the ship to carry more passengers than it was
allowed to carry. Petitioner is, therefore, clearly liable for
damages to the full extent.
Fourth.
Petitioner contends that, assuming that the
Mecenas case applies, private respondents should be
allowed to claim only P43,857.14 each as moral damages
because in the Mecenas case, the amount of P307,500.00
was awarded to the seven children of the Mecenas couple.
Under petitioners formula, Ramon Miranda should receive
P43,857.14, while the De la Victoria spouses should receive
P97,714.28.
Here is where the principle of stare decisis does not apply
in view of differences in the personal circumstances of the
victims. For that matter, differentiation would be justified
even if private respondents had joined the private
respondents in the Mecenas case. The doctrine of stare
decisis works as a bar only against issues litigated in a
previous case. Where the issue involved was not raised nor
presented to the court and not passed upon by the court in

33

the previous case, the decision in the previous case is not

stare decisis of the question presently presented.[16] The
decision in the Mecenas case relates to damages for which
petitioner was liable to the claimants in that case.
In the case at bar, the award of P300,000.00 for moral
damages is reasonable considering the grief petitioner
Ramon Miranda suffered as a result of the loss of his entire
family. As a matter of fact, three months after the collision,
he developed a heart condition undoubtedly caused by the
strain of the loss of his family. The P100,000.00 given to
Mr. and Mrs. de la Victoria is likewise reasonable and
should be affirmed.
As for the amount of civil indemnity awarded to private
respondents, the appellate courts award of P50,000.00 per
victim should be sustained. The amount of P30,000.00
formerly set in De Lima v. Laguna Tayabas Co.,[17] Heirs
of Amparo delos Santos v. Court of Appeals,[18] and
Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate
Court[19] as benchmark was subsequently increased to
P50,000.00 in the case of Sulpicio Lines, Inc. v. Court of
Appeals,[20] which involved the sinking of another
interisland ship on October 24, 1988.
We now turn to the determination of the earning capacity of
the victims. With respect to Ardita Miranda, the trial court
awarded damages computed as follows:[21]
In the case of victim Ardita V. Miranda whose age at the
time of the accident was 48 years, her life expectancy was
computed to be 21.33 years, and therefore, she could have
lived up to almost 70 years old. Her gross earnings for
21.33 years based on P10,224.00 per annum, would be
P218,077.92. Deducting therefrom 30% as her living
expenses, her net earnings would be P152,654.55, to which
plaintiff Ramon Miranda is entitled to compensatory
damages for the loss of earning capacity of his wife. In
considering 30% as the living expenses of Ardita Miranda,
the Court takes into account the fact that plaintiff and his
wife were supporting their daughter and son who were both
college students taking Medicine and Law respectively.
In accordance with the ruling in Villa-Rey Transit, Inc. v.
Court of Appeals,[22] we think the life expectancy of
Ardita Miranda was correctly determined to be 21.33 years,
or up to age 69. Petitioner contends, however, that Mrs.
Miranda would have retired from her job as a public school
teacher at 65, hence her loss of earning capacity should be
reckoned up to 17.33 years only.
The accepted formula for determining life expectancy is 2/3
multiplied by (80 minus the age of the deceased). It may
be that in the Philippines the age of retirement generally is
65 but, in calculating the life expectancy of individuals for
the purpose of determining loss of earning capacity under
Art. 2206(1) of the Civil Code, it is assumed that the
deceased would have earned income even after retirement
from a particular job. In this case, the trial court took into
account the fact that Mrs. Miranda had a masters degree
and a good prospect of becoming principal of the school in
which she was teaching. There was reason to believe that

her income would have increased through the years and she
could still earn more after her retirement, e.g., by becoming
a consultant, had she not died. The gross earnings which
Mrs. Miranda could reasonably be expected to earn were it
not for her untimely death was, therefore, correctly
computed by the trial court to be P218,077.92 (given a
gross annual income of P10,224.00 and life expectancy of
21.33 years).
Petitioner contends that from the amount of gross earnings,
60% should be deducted as necessary living expenses, not
merely 30% as the trial court allowed. Petitioner contends
that 30% is unrealistic, considering that Mrs. Mirandas
earnings would have been subject to taxes, social security
deductions and inflation.
We agree with this contention. In Villa-Rey Transit, Inc. v.
Court of Appeals,[23] the Court allowed a deduction of
P1,184.00 for living expenses from the P2,184.00 annual
salary of the victim, which is roughly 54.2% thereof. The
deceased was 29 years old and a training assistant in the
Bacnotan Cement Industries. In People v. Quilaton,[24] the
deceased was a 26-year old laborer earning a daily wage.
The court allowed a deduction of P120,000.00 which was
51.3% of his annual gross earnings of P234,000.00. In
People v. Teehankee,[25] the court allowed a deduction of
P19,800.00, roughly 42.4% thereof from the deceaseds
annual salary of P46,659.21. The deceased, Maureen
Hultman, was 17 years old and had just received her first
paycheck as a secretary. In the case at bar, we hold that a
deduction of 50% from Mrs. Mirandas gross earnings
(P218,077.92) would be reasonable, so that her net earning
capacity should be P109,038.96. There is no basis for
supposing that her living expenses constituted a smaller
percentage of her gross income than the living expenses in
the decided cases. To hold that she would have used only
a small part of her income for herself, a larger part going to
the support of her children would be conjectural and
unreasonable.
As for Elfreda de la Victoria, the trial court found that, at
the time of her death, she was 26 years old, a teacher in a
private school in Malolos, Bulacan, earning P6,192.00 per
annum. Although a probationary employee, she had
already been working in the school for two years at the
time of her death and she had a general efficiency rating of
92.85% and it can be presumed that, if not for her untimely
death, she would have become a regular teacher. Hence,
her loss of earning capacity is P111,456.00, computed as
follows:
net earning capacity (x) = life expectancy x
[ gross
annual income less reasonable & necessary living expenses
(50%) ]
x
P3,096.00]

[ 2 (80-26) ]

[P6,192.00

3
=

34

36

3,096.00

P111,456.00

On the other hand, the award of actual damages in the

amount of P23,075.00 was determined by the Court of
Appeals on the basis of receipts submitted by private
respondents. This amount is reasonable considering the
expenses incurred by private respondent Miranda in
organizing three search teams to look for his family,
spending for transportation in going to places such as
Batangas City and Iloilo, where survivors and the bodies of
other victims were found, making long distance calls,
erecting a monument in honor of the four victims, spending
for obituaries in the Bulletin Today and for food, masses
and novenas.
Petitioners contention that the expenses for the erection of
a monument and other expenses for memorial services for
the victims should be considered included in the indemnity
for death awarded to private respondents is without merit.
Indemnity for death is given to compensate for violation of
the rights of the deceased, i.e., his right to life and physical
integrity.[26] On the other hand, damages incidental to or
arising out of such death are for pecuniary losses of the
beneficiaries of the deceased.
As for the award of attorneys fees, we agree with the Court
of Appeals that the amount of P40,000.00 for private
respondent Ramon Miranda and P15,000.00 for the de la
Victoria spouses is justified. The appellate court correctly
held:
The Mecenas case cannot be made the basis for
determining the award for attorneys fees. The award
would naturally vary or differ in each case. While it is
admitted that plaintiff-appellee Ramon Miranda who is
himself a lawyer, represented also plaintiffs-appellees Dela
Victoria spouses, we note that separate testimonial evidence
were adduced by plaintiff-appellee Ramon Miranda (TSN,
February 26, 1982, p. 6) and plaintiffs-appellees spouses
Dela Victoria (TSN, August 13, 1981, p. 43). Considering
the amount of work and effort put into the case as indicated
by the voluminous transcripts of stenographic notes, we
find no reason to disturb the award of P40,000.00 for
plaintiff-appellee Ramon Miranda and P15,000.00 for
plaintiffs-appellees Dela Victoria spouses.[27]

judicial notice of the dreadful regularity with which

grievous maritime disasters occur in our waters with
massive loss of life. The bulk of our population is too poor
to afford domestic air transportation. So it is that
notwithstanding the frequent sinking of passenger vessels
in our waters, crowds of people continue to travel by sea.
This Court is prepared to use the instruments given to it by
the law for securing the ends of law and public policy. One
of those instruments is the institution of exemplary
damages; one of those ends, of special importance in an
archipelagic state like the Philippines, is the safe and
reliable carriage of people and goods by sea.[28]
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED with modification and petitioner is
ORDERED to pay private respondents damages as follows:
To private respondent Ramon Miranda:
P23,075.00

P109,038.96
as compensatory damages for
loss of earning capacity of his wife;
P150,000.00
as compensatory damages for
wrongful death of three (3) victims;
P300,000.00

P40,000.00

as attorneys fees.

To private respondents Spouses Ricardo and Virginia de la

Victoria:
P12,000.00

for actual damages;

P111,456.00
loss of earning capacity;

as compensatory damages for

P50,000.00
wrongful death;

as compensatory damages for

as moral damages;

P100,000.00
as exemplary damages, all in
the total amount of P373,456.00; and
P15,000.00

Exemplary damages are designed by our civil law to permit

the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or
deterrents against such behaviour. In requiring compliance
with the standard of extraordinary diligence, a standard
which is in fact that of the highest possible degree of
diligence, from common carriers and in creating a
presumption of negligence against them, the law seeks to
compel them to control their employees, to tame their
reckless instincts and to force them to take adequate care of
human beings and their property. The Court will take

as moral damages;

P300,000.00
as exemplary damages, all in
the total amount of P882,113.96; and

P100,000.00
The award of exemplary damages should be increased to
P300,000.00 for Ramon Miranda and P100,000.00 for the
de la Victoria spouses in accordance with our ruling in the
Mecenas case:

for actual damages;

as attorneys fees.

Petitioners are further ordered to pay costs of suit.

In the event the Philippine National Oil Company and/or
the PNOC Shipping and Transport Corporation pay or are
required to pay all or a portion of the amounts adjudged,
petitioner Negros Navigation Co., Inc. shall reimburse
either of them such amount or amounts as either may have
paid, and in the event of failure of Negros Navigation Co.,
Inc., to make the necessary reimbursement, PNOC and/or

35

PNOC/STC shall be entitled to a writ of execution without

need of filing another action.
SO ORDERED.
Cervantes v. CA Mar 25, 1999
THIRD DIVISION
[G.R. No. 124320. March 2, 1999.]
HEIRS OF GUIDO YAPTINCHAY AND ISABEL
YAPTINCHAY,
NAMELY:
LETICIA
ENCISOGADINGAN, EMILIO ENCISO, AURORA ENCISO,
AND NORBERTO ENCISO, REPRESENTED BY
LETICIA ENCISO-GADINGAN, ATTORNEY-IN-FACT,
Petitioners, v. HON. ROY S. DEL ROSARIO,
PRESIDING JUDGE, RTC, BRANCH 21, IMUS,
CAVITE; THE REGISTER OF DEEDS FOR TRECE
MARTIRES CITY, GEORGE T. CHUA, SPS. ALFONSO
NG AND ANNABELLE CHUA, SPS. ROSENDO L. DY
AND DIANA DY, SPS. ALEXANDER NG AND
CRISTINA NG, SPS. SAMUEL MADRID AND BELEN
MADRID, SPS. JOSE MADRID AND BERNARDA
MADRID, SPS. DAVID MADRID AND VIOLETA
MADRID, JONATHAN NG, SPS. VICTORIANO CHAN,
JR. AND CARMELITA CHAN, SPS. MARIETES C. LEE
AND GREGORIE W.C. LEE, JACINTO C. NG, JR., SPS.
ADELAIDO S. DE GUZMAN AND ROSITA C. DE
GUZMAN, SPS. RICARDO G. ONG AND JULIE LIMIT,
SPS. MISAEL ADELAIDA P. SOLIMAN AND
FERDINAND SOLIMAN, SPS. MYLENE T. LIM AND
ARTHUR LIM, EVELYN K. CHUA, GOLDEN BAY
REALTY AND DEVELOPMENT CORPORATION,
Respondents.
DECISION

Corporation ("Golden Bay") under Transfer Certificate of

Title Nos. ("TCT") 225254 and 225255. With the discovery
of what happened to subject parcels of land, petitioners
filed
a
complaint
for
ANNULMENT
and/or
DECLARATIONS OF NULLITY OF TCT NO. 493363,
493364, 193665, 493366, 493367; and its Derivatives; As
Alternative Reconveyance of Realty WITH A PRAYER
FOR A WRIT OF PRELIMINARY INJUNCTION and/or
RESTRAINING ORDER WITH DAMAGES, docketed as
RTC BCV-94-127 before Branch 21 of the Regional Trial
Court in Imus, Cavite.
Upon learning that "Golden Bay" sold portions of the
parcels of land in question, petitioners filed with the "RTC"
an Amended Complaint to implead new and additional
defendants and to mention the TCTs to be annulled. But the
respondent
court
dismissed
the
Amended
Complaint.chanrobles virtual lawlibrary
Petitioners moved for reconsideration of the Order
dismissing the Amended Complaint. The motion was
granted by the RTC in an Order 1 dated July 7, 1995, which
further allowed the herein petitioners to file a Second
Amended Complaint, 2 which they promptly did.
On August 12, 1995, the private respondents presented a
Motion to Dismiss 3 on the grounds that the complaint
failed to state a cause of action, that plaintiffs did not have
a right of action, that they have not established their status
as heirs, that the land being claimed is different from that of
the defendants, and that plaintiffs claim was barred by
laches. The said Motion to Dismiss was granted by the
respondent court in its Order 4 dated October 25, 1995,
holding that petitioners "have not shown any proof or even
a semblance of it except the allegations that they are the
legal heirs of the above-named Yaptinchays that they
have been declared the legal heirs of the deceased
couple."cralaw virtua1aw library

PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the
Revised Rules of Court assailing the Orders dated October
25, 1995 and February 23, 1996, respectively, of Branch 21
of the Regional Trial Court in Imus, Cavite ("RTC").
The facts that matter are, as follows:chanrob1es virtual 1aw
library
Petitioners claim that they are the legal heirs of the late
Guido and Isabel Yaptinchay, the owners-claimants of Lot
No. 1131 with an area of 520,638 and Lot No. 1132 with an
area of 36,235 square meters, more or less situated in
Bancal, Carmona, Cavite.

Petitioners interposed a Motion for Reconsideration 5 but

to no avail. The same was denied by the RTC in its Order 6
of February 23, 1996.
Undaunted, petitioners have come before this Court to seek
relief from respondent courts Orders under attack.
Petitioners contend that the respondent court acted with
grave abuse of discretion in ruling that the issue of heirship
should first be determined before trial of the case could
proceed. It is petitioners submission that the respondent
court should have proceeded with the trial and
simultaneously resolved the issue of heirship in the same
case.chanroblesvirtualawlibrary
The petition is not impressed with merit.

On March 17, 1994, petitioners executed an Extra-Judicial

Settlement of the estate of the deceased Guido and Isabel
Yaptinchay.
On August 26, 1994, petitioners discovered that a portion,
if not all, of the aforesaid properties were titled in the name
of respondent Golden Bay Realty and Development

To begin with, petitioners Petition for Certiorari before this

Court is an improper recourse. Their proper remedy should
have been an appeal. An order of dismissal, be it right or
wrong, is a final order, which is subject to appeal and not a
proper subject of certiorari 7 . Where appeal is available as
a remedy certiorari will not lie 8 .

36

Neither did the respondent court commit grave abuse of

discretion in issuing the questioned Order dismissing the
Second Amended Complaint of petitioners, as it aptly
ratiocinated and ruled:jgc:chanrobles.com.ph
"But the plaintiffs who claimed to be the legal heirs of the
said Guido and Isabel Yaptinchay have not shown any
proof or even a semblance of it except the allegations
that they are the legal heirs of the aforementioned
Yaptinchays that they have been declared the legal heirs
of the deceased couple. Now, the determination of who are
the legal heirs of the deceased couple must be made in the
proper special proceedings in court, and not in an ordinary
suit for reconveyance of property. This must take
precedence over the action for reconveyance (Elena C.
Monzon, et. al., v. Angelita Taligato, CA-G-R No. 33355,
August 12, 1992)."cralaw virtua1aw library
In Litam, etc., et. al. v. Rivera 9 , this court opined that the
declaration of heirship must be made in an administration
preceding, and not in an independent civil action. This
doctrine was reiterated in Solivio v. Court of Appeals 10
where the court held:chanroblesvirtuallawlibrary:red
"In Litam, Et. Al. v. Rivera, 100 Phil. 364, where despite
the pendency of the special proceedings for the settlement
of the intestate estate of the deceased Rafael Litam, the
plaintiffs-appellants filed a civil action in which they
claimed that they were the children by a previous marriage
of the deceased to a Chinese woman, hence, entitled to
inherit his one-half share of the conjugal properties
acquired during his marriage to Marcosa Rivera, the trial
court in the civil case declared that the plaintiffs-appellants
were not children of the deceased, that the properties in
question were paraphernal properties of his wife, Marcosa
Rivera, and that the latter was his only heir. On appeal to
this Court, we ruled that such declarations (that Marcosa
Rivera was the only heir of the decedent) is improper, in
Civil Case No. 2071, it being within the exclusive
competence of the court in Special Proceedings No. 1537,
in which it is not as yet, in issue, and, will not be,
ordinarily, in issue until the presentation of the project of
partition. (p. 378)."cralaw virtua1aw library

(Phils.), Inc. v. Court of Appeals, 11 it was ruled

that:jgc:chanrobles.com.ph
". . . if the suit is not brought in the name of or against the
real party in interest, a motion to dismiss may be filed on
the ground that the complaint states no cause of
action."cralaw virtua1aw library
WHEREFORE, for lack of merit, the Petition under
consideration is hereby DISMISSED. No pronouncement
as to costs.chanroblesvirtual|awlibrary
SO ORDERED.
Calalas v. CA
May 31, 2000
[G.R. No. 122039. May 31, 2000]
VICENTE CALALAS, petitioner, vs. COURT OF
APPEALS,
ELIZA
JUJEURCHE
SUNGA and
FRANCISCO SALVA, respondents.
D E C I S I ON
MENDOZA, J.:
This is a petition for review on certiorari of the decision[1]
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 oclock 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. Sclaw

The trial court cannot make a declaration of heirship in the

civil action for the reason that such a declaration can only
be made in a special proceeding. Under Section 3, Rule 1
of the 1997 Revised Rules of Court, a civil action is defined
as "one by which a party sues another for the enforcement
or protection of a right, or the prevention or redress of a
wrong" while a special proceeding is "a remedy by which a
party seeks to establish a status, a right, or a particular
fact." It is then decisively clear that the declaration of
heirship can be made only in a special proceeding
inasmuch as the petitioners here are seeking the
establishment
of
a
status
or
right.chanroblesvirtuallawlibrary

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.

We therefore hold that the respondent court did the right

thing in dismissing the Second Amended Complaint, which
stated no cause of action. In Travel Wide Associated Sales

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

37

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. Korte
The lower court rendered judgment against Salva as thirdparty 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. Rtcspped
On appeal to the Court of Appeals, the ruling of the lower
court was reversed on the ground that Sungas 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 attorneys 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. Sdaadsc
The petition has no merit.
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 of res
judicata does not apply. Missdaa
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 Verena were liable for quasidelict for the damage caused to petitioners 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. Slxmis
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 petitioners 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 preexisting 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: Slxsc
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

38

observed extraordinary diligence as prescribed by articles

1733 and 1755.

foreseen the danger of parking his jeepney with its body

protruding two meters into the highway. Kycalr

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. Scslx

Finally, petitioner challenges the award of moral damages

alleging that it is excessive and without basis in law. We
find this contention well taken.

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 petitioners
contention. Slx
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:
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.
Second, it is undisputed that petitioners driver took in
more passengers than the allowed seating capacity of the
jeepney, a violation of 32(a) of the same law. It provides:
Mesm
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.
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. Calrky
We find it hard to give serious thought to petitioners
contention that Sungas 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 petitioners 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 debtors 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

In awarding moral damages, the Court of Appeals stated:

Kyle
Plaintiff-appellant at the time of the accident was a firstyear college student in 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."
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 x x x has a defect already."
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.
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. Sungas contention that petitioners
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. Exsm
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.

39

SO ORDERED.
Jose v. CA
Jan 18, 2000
[G.R. Nos. 118441-42. January 18, 2000]
ARMANDO JOSE y PAZ and MANILA CENTRAL BUS
LINES (MCL), represented by its General Manager MR.
DANILO T. DE DIOS, petitioners vs. COURT OF
APPEALS, ROMMEL ABRAHAM, represented by his
father FELIXBERTO ABRAHAM, JOSE MACARUBO
and MERCEDES MACARUBO, respondents.
DECISION
MENDOZA, J.: rny
This is a petition for review on certiorari of the decision[1]
of the Court of Appeals, reversing the decision of the
Regional Trial Court, Branch 172, Valenzuela, Metro
Manila and ordering petitioners to pay damages for injuries
to persons and damage to property as a result of a vehicular
accident.
The facts are as follows:
Petitioner Manila Central Bus Lines Corporation (MCL) is
the operator-lessee of a public utility bus (hereafter referred
to as Bus 203) with plate number NVR-III-TB-PIL and
body number 203. Bus 203 is owned by the Metro Manila
Transit Corporation and is insured with the Government
Service Insurance System.
On February 22, 1985, at around six oclock in the
morning, Bus 203, then driven by petitioner Armando Jose,
collided with a red Ford Escort driven by John Macarubo
on MacArthur Highway, in Marulas, Valenzuela, Metro
Manila. Bus 203 was bound for Muntinlupa, Rizal, while
the Ford Escort was headed towards Malanday, Valenzuela
on the opposite lane. As a result of the collision, the left
side of the Ford Escorts hood was severely damaged while
its driver, John Macarubo, and its lone passenger, private
respondent Rommel Abraham, were seriously injured. The
driver and conductress of Bus 203 rushed Macarubo and
Abraham to the nearby Fatima Hospital where Macarubo
lapsed into a coma. Despite surgery, Macarubo failed to
recover and died five days later. Abraham survived, but he
became blind on the left eye which had to be removed. In
addition, he sustained a fracture on the forehead and
multiple lacerations on the face, which caused him to be
hospitalized for a week.
On March 26, 1985, Rommel Abraham, represented by his
father, Felixberto, instituted Civil Case No. 2206-V-85 for
damages against petitioners MCL and Armando Jose in the
Regional Trial Court, Branch 172, Valenzuela.
On July 17, 1986, the spouses Jose and Mercedes
Macarubo, parents of the deceased John Macarubo, filed
their own suit for damages in the same trial court, where it
was docketed as Civil Case No. 2428-V-86, against MCL
alone. On the other hand, MCL filed a third-party
complaint against Juanita Macarubo, registered owner of

the Ford Escort on the theory that John Macarubo was

negligent and that he was the "authorized driver" of Juanita
Macarubo. The latter, in turn, filed a counterclaim for
damages against MCL for the damage to her car. Civil Case
No. 2206-V-85 and Civil Case No. 2428-V-86 were
consolidated and later tried jointly. The facts, as found by
the trial court, are as follows: Esmsc
In Civil Case No. 2206-V-85, the Court heard the
testimonies that during the night previous to the accident of
February 22, 1985 at 6:15 a.m., Rommel Abraham and
John Macarubo were at a party. There was therefore, no
sleep for them, notwithstanding testimony to the contrary
and the service of drinks cannot be totally discounted. After
the party at 11 p.m., while both Rommel and John were
enroute home to Valenzuela from La Loma, the car
encountered mechanical trouble and had to be repaired as
its cross-joint was detached. The defect of a cross-joint is
not minor and repair thereof would as testified to by
Rommel lasted up to early dawn and the car started to run
only after five oclock in the morning. With lack of sleep,
the strains of a party still on their bodies, and the attention
to the repair coupled with the wait until the car was ready
to run, are potentials in a driver for possible accident. The
accident happened at 6:15 a.m. when the physical and
mental condition of the driver John Macarubo was as
expected not too fit for the driving as he could not anymore
control the car. The desire to be home quick for the much
needed sleep could have prompted him to overtake the
preceding vehicle.
Indeed the pictures taken of the two vehicles (Exh. 1,2 and
3) will clearly show that the MCL bus was at its proper lane
and not in an overtaking position while the car driven by
John Macarubo was positioned in a diagonal manner and
crossed the line of the MCL, which is an indication of an
overtaking act. If it were the bus that was overtaking at the
time, the car would have been thrown farther away from
the point of the impact.
The court is convinced of the close supervision and control
of MCL over their drivers, and its exercise of due diligence
in seeing to it that no recklessness is committed by its
employees, drivers especially, from the unrebutted
testimonies of Cesar Cainglet.
The Court noted the respective damages of the two vehicles
especially the point of the impact. From these damages as
shown by the picture, it can be clearly deduced which
vehicle did the bumping. It was the car driven by John
Macarubo that hit the MCL which was on its right and
correct lane.[2]
Based on the foregoing facts, the trial court rendered
judgment on September 28, 1989, dismissing both civil
cases against MCL and ruling favorably on its third-party
complaint against Juanita Macarubo, ordering the latter to
pay MCL P54,232.12 as actual damages, P24,000.00 for
lost income, and P10,000.00 as attorneys fees.
Rommel Abraham, the Macarubo spouses, and third-party
defendant Juanita Macarubo then appealed to the Court of

40

Appeals which, on December 21, 1994, rendered a decision

reversing the decision of the trial court. It held (1) that the
trial court erred in disregarding Rommel Abrahams
uncontroverted testimony that the collision was due to the
fault of the driver of Bus 203; (2) that the trial court erred
in relying on photographs (Exhs. 1-3) which had been taken
an hour after the collision as within that span of time, the
positions of the vehicles could have been changed; (3) that
the photographs do not show that the Ford Escort was
overtaking another vehicle when the accident happened and
that John Macarubo, its driver, was negligent; and (4) that
MCL failed to make a satisfactory showing that it exercised
due diligence in the selection and supervision of its driver
Armando Jose. The dispositive portion of the decision
reads: Jksm
WHEREFORE, the appealed decision is hereby
REVERSED and the defendants-appellees MCL and
Armando Jose are adjudged to pay jointly and severally:
1. Rommel Abraham, represented by his father Felixberto
Abraham:
(a) P37,576.47 as actual damages;
(b) P50,000.00 as compensatory damages;
(c) P15,000.00 as moral damages;
(d) P5,000.00 as exemplary damages; and
(e) P10,000.00 as attorneys fees.

this Court has, in many occasions, relied principally upon

physical evidence in ascertaining the truth. In People v.
Vasquez,[6] where the physical evidence on record ran
counter to the testimonial evidence of the prosecution
witnesses, we ruled that the physical evidence should
prevail.[7] Esm
In this case, the positions of the two vehicles, as shown in
the photographs (Exhs. 1 to 3) taken by MCL line inspector
Jesus Custodio about an hour and fifteen minutes after the
collision, disputes Abrahams self-serving testimony that
the two vehicles collided because Bus 203 invaded the lane
of the Ford Escort and clearly shows that the case is exactly
the opposite of what he claimed happened. Contrary to
Abrahams testimony, the photographs show quite clearly
that Bus 203 was in its proper lane and that it was the Ford
Escort which usurped a portion of the opposite lane. The
three photographs show the Ford Escort positioned
diagonally on the highway, with its two front wheels
occupying Bus 203s lane. As shown by the photograph
marked Exhibit 3, the portion of MacArthur Highway
where the collision took place is marked by a groove which
serves as the center line separating the right from the left
lanes. The photograph shows that the left side of Bus 203 is
about a few feet from the center line and that the bus is
positioned parallel thereto. This negates the claim that Bus
203 was overtaking another vehicle and, in so doing,
encroached on the opposite lane occupied by the Ford
Escort.

2. The heirs of John Macarubo:

(a) P50,000.00 as indemnity for his death;
(b) P50,000.00 as moral damages;
(c) P10,000.00 as exemplary damages; and
(d) P10,000.00 as attorneys fees.
Costs against the appellees.
SO ORDERED.
Hence, this petition for review on certiorari. Petitioners
MCL and Armando Jose raise four issues which boil down
to the question whether it was the driver of Bus 203 or that
of the Ford Escort who was at fault for the collision of the
two vehicles.
It is well-settled that a question of fact is to be determined
by the evidence offered to support the particular contention.
[3] In the proceedings below, petitioners relied mainly on
photographs, identified in evidence as Exhibits 1 to 3,
showing the position of the two vehicles after the collision.
On the other hand, private respondents offered the
testimony of Rommel Abraham to the effect that the
collision took place because Bus 203 invaded their lane.[4]
The trial court was justified in relying on the photographs
rather than on Rommel Abrahams testimony which was
obviously biased and unsupported by any other evidence.
Physical evidence is a mute but an eloquent manifestation
of truth, and it ranks high in our hierarchy of trustworthy
evidence.[5] In criminal cases such as murder or rape
where the accused stands to lose his liberty if found guilty,

Indeed, Bus 203 could not have been overtaking another

vehicle when the collision happened. It was filled with
passengers,[8] and it was considerably heavier and larger
than the Ford Escort. If it was overtaking another vehicle, it
necessarily had to accelerate. The acceleration of its speed
and its heavy load would have greatly increased its
momentum so that the impact of the collision would have
thrown the smaller and lighter Ford Escort to a
considerable distance from the point of impact. Exhibit 1,
however, shows that the Ford Escorts smashed hood was
only about one or two meters from Bus 203s damaged left
front. If there had been a great impact, such as would be the
case if Bus 203 had been running at a high speed, the two
vehicles should have ended up far from each other.
In discrediting the physical evidence, the appellate court
made the following observations:
We cannot believe that it was the car which overtook
another vehicle and proceeded to the lane occupied by the
bus. There was a traffic jam on the "bus lane" while traffic
was light on the "car lane." Indeed, we find it inconceivable
that the car, occupying the lane without any traffic, would
overtake and traverse a heavy traffic lane.[9] (Underscoring
supplied.)
This is correct. However, the fact remains that when the
Ford Escort finally came to a stop, it encroached on the
opposite lane occupied by Bus 203.
Significantly, Rommel Abraham testified that on February
21, 1985, the night before the accident, he and John

41

Macarubo went to a friends house in La Loma where they

stayed until 11 p.m.[10] Abrahams explanation as to why
they did not reach Valenzuela until six oclock in the
morning of the next day when the accident happened
indicates that the Ford Escort careened and slammed
against Bus 203 because of a mechanical defect. Abraham
told the court:[11] Esmmis

Q: So you were able to repair the car?

A: Yes, maam.
Q: What time were you able to repair the car?
A: Around 5:00 oclock in the morning, sir.

ATTY. RESPICIO:
Q: You were able to replace the cross-joint or what?
Q: I am sorry, Your honor. After leaving Arnels place
where did you go?

A: Ginawaan ng paraan, maam.

ROMMEL ABRAHAM

Q: How?

A: We proceeded in going home, sir.

A: The cross-joint were welded in order to enable us to go

home, maam.

Q: You were on your way home?

Q: No spare parts was replaced? Msesm
A: Yes, sir.
A: No, maam.
Q: What time did you . . . I will reform the question. You
met the accident at about 6:00 oclock the next day, 6:00
oclock in the morning the next day, did it take you long to
reach BBB?
A: Our car had a mechanical trouble somewhere at 2nd
Avenue, sir.
Q: What kind of trouble?
A: The cross-joint were detached, sir.
Q: Are you familiar with cars?
A: A little, sir.
COURT:
Q: What time was that when you have this cross-joint
problem?
A: About 12:00 oclock perhaps, sir.
Q: What happened to the cross joint?
A: It was cut, maam.
Q: You were able to repair that cross-joint 12:00 oclock
and you were able to run and reached this place of accident
at 6:00 oclock?
A: No, we were not able to get spare parts, maam.
Q: Why were you able to reach this place at 6:00 oclock?
A: We went home and look for the spare parts in their
house, maam.
Q: House of Macarubo?

Thus, as Rommel Abraham himself admitted, the Ford

Escorts rear cross-joint was cut/detached. This mechanism
controls the movement of the rear tires. Since trouble in the
cross-joint affects a cars maneuverability, the matter
should have been treated as a serious mechanical problem.
In this case, when asked if they were able to repair the
cross-joint, Abraham said "Ginawaan ng paraan, maam,"
by simply welding them just so they could reach home. His
testimony indicates that the rear cross-joint was hastily
repaired and that, at most, the kind of repairs made thereon
were merely temporary; just enough to enable Abraham and
Macarubo to reach home. Given such fact, the likelihood is
that while the Ford Escort might not have been overtaking
another vehicle, it actually strayed into the bus lane
because of the defective cross-joint, causing its driver to
lose control of the vehicle.
The appellate court refused to give credence to the physical
evidence on the ground that the photographs were taken an
hour after the collision and that within such span of time
the bus could have been moved because there was no
showing that the driver left the scene of the accident. This
is not correct. Constancia Gerolada, Bus 203s conductress,
testified that, immediately after the collision, she and bus
driver, petitioner Armando Jose, took the injured driver and
passenger of the Ford Escort to the Fatima Hospital.[12]
This fact is not disputed by private respondents.
Rommel Abraham mentioned in his appellants brief in the
appellate court a sketch of the scene of the accident
allegedly prepared by one Patrolman Kalale, which shows
Bus 203 to be occupying the Ford Escorts lane. However,
the records of this case do not show that such a sketch was
ever presented in evidence in the trial court or that
Patrolman Kalale was ever presented as a witness to testify
on the sketch allegedly prepared by him. Under Rule 132,
3 of the Rules on Evidence, courts cannot consider any
evidence unless formally offered by a party.

A: Yes, maam.

42

Finally, the appellate court also ruled that MCL failed to

make a satisfactory showing that it exercised the diligence
of a good father of a family in the selection and supervision
of its bus driver, Armando Jose.[13] Under the
circumstances of this case, we hold that proof of due
diligence in the selection and supervision of employees is
not required.

complaint are enough to make out a case of quasi-delict

under Art. 2180 of the Civil Code, the failure to prove the
employees negligence during the trial is fatal to proving
the employers vicarious liability. In this case, private
respondents failed to prove their allegation of negligence
against driver Armando Jose who, in fact, was acquitted in
the case for criminal negligence arising from the same
incident.[15]

The Civil Code provides in pertinent parts:

Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of
this chapter.
Art. 2180. The obligation imposed in Art. 2176 is
demandable not only for ones own acts or omissions, but
also for those of persons for whom one is responsible.
Esmso
....
Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope
of their assigned tasks, even though the former are not
engaged in any business or industry.
....
The responsibility treated of in this article shall cease when
the persons herein mentioned prove that they observed all
the diligence of a good father of a family to prevent
damage.
Thus, the responsibility of employers is premised upon the
presumption of negligence of their employees. As held in
Poblete v. Fabros:[14]
[I]t is such a firmly established principle, as to have
virtually formed part of the law itself, that the negligence of
the employee gives rise to the presumption of negligence
on the part of the employer. This is the presumed
negligence in the selection and supervision of the
employee. The theory of presumed negligence, in contrast
with the American doctrine of respondent superior, where
the negligence of the employee is conclusively presumed to
be the negligence of the employer, is clearly deducible
from the last paragraph of Article 2180 of the Civil Code
which provides that the responsibility therein mentioned
shall cease if the employers prove that they observed all the
diligence of a good father of a family to prevent damages
(12 Manresa, 657; Balica vs. Litonjua and Leynes, 30 Phil.
624; Cangco vs. Manila Railroad Co., 30 Phil. 768), as
observed in the same cases just cited.
Therefore, before the presumption of the employers
negligence in the selection and supervision of its employees
can arise, the negligence of the employee must first be
established. While the allegations of negligence against the
employee and that of an employer-employee relation in the

For the foregoing reasons, we hold that the appellate court

erred in holding petitioners liable to private respondents.
The next question then is whether, as the trial court held,
private respondent Juanita Macarubo is liable to petitioners.
Article 2180 of the Civil Code makes the persons specified
therein responsible for the quasi-delicts of others. The
burden is upon MCL to prove that Juanita Macarubo is one
of those specified persons who are vicariously liable for the
negligence of the deceased John Macarubo. Exsm
In its third-party complaint, MCL alleged that Juanita
Macarubo was the registered owner of the Ford Escort car
and that John Macarubo was the "authorized driver" of the
car.[16] Nowhere was it alleged that John Macarubo was
the son, ward, employee or pupil of private respondent
Juanita Macarubo so as to make the latter vicariously liable
for the negligence of John Macarubo. The allegation that
John Macarubo was "the authorized driver" of the Ford
Escort is not equivalent to an allegation that he was an
employee of Juanita Macarubo. That John Macarubo was
the "authorized driver" of the car simply means that he
drove the Ford Escort with the permission of Juanita
Macarubo.
Nor did MCL present any evidence to prove that Juanita
Macarubo was the employer of John Macarubo or that she
is in any way liable for John Macarubos negligence under
Art. 2180 of the Civil Code. For failure to discharge its
burden, MCLs third-party complaint should be dismissed.
WHEREFORE, the decision of the Court of Appeals is
REVERSED and the complaints filed in Civil Cases Nos.
2206-V-85 and 24428-V-86 against Manila Central Bus
Lines and Armando Jose, as well as the third-party
complaint filed in Civil Case No. 2206-V-85 against Juanita
Macarubo, are hereby DISMISSED.
SO ORDERED.
Baritua v. MercaderJan 23, 2001
[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

43

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:
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]
The assailed Resolution denied petitioners Motion for
Reconsideration.

The antecedents of the case are succinctly summarized by

the Court of Appeals in this wise:
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:
(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;

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]

(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;

WHEREFORE, on preponderance of evidence, judgment

is for [herein respondents] and against [herein petitioners],
ordering the latter to pay the former:

(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;

(a) As compensatory damages for the death of Dominador

Mercader -- P50,000.00;

(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.

(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;

(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.

(e) As moral damages -- P50,000.00;

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

In its answer, [petitioners] denied specifically all the

material allegations in the complaint and alleged the
following:

(g) To pay the costs.

The Facts

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

44

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:
NOTICE
Baggage carried at owners risk x x x liability on prepaid
freight otherwise declared.
x x x
xxx

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.

x x x
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.

Whole Fare Paid P ______________

Declared value ____________ x x x.

7. There is no factual nor any legal basis for plaintiffs

proffered claims for damages.

Description of Freight _____________________________

II. AFFIRMATIVE DEFENSES
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

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.
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:
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.
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

45

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.

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

Ruling of the Court of Appeals

IV
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 to P798,000. 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]

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 Issues
The Courts Ruling
In their Memorandum, petitioners submit the following
issues for our consideration:

The Petition is devoid of merit.

First Issue: Jurisdiction

46

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.

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

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

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
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.

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.

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.
We sustain the ruling of the CA that petitioners failed to
prove that they had observed extraordinary diligence.

47

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

Presumption of Negligence

1756

Picart v. Smith
Mar 15, 1918
G.R. No. L-12219
March 15, 1918
AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.
Alejo Mabanag for appellant.
G. E. Campbell for appellee.
STREET, J.:
In this action the plaintiff, Amado Picart, seeks to recover
of the defendant, Frank Smith, jr., the sum of P31,000, as
damages alleged to have been caused by an automobile
driven by the defendant. From a judgment of the Court of
First Instance of the Province of La Union absolving the
defendant from liability the plaintiff has appealed.
The occurrence which gave rise to the institution of this
action took place on December 12, 1912, on the Carlatan
Bridge, at San Fernando, La Union. It appears that upon the
occasion in question the plaintiff was riding on his pony
over said bridge. Before he had gotten half way across, the
defendant approached from the opposite direction in an

automobile, going at the rate of about ten or twelve miles

per hour. As the defendant neared the bridge he saw a
horseman on it and blew his horn to give warning of his
approach. He continued his course and after he had taken
the bridge he gave two more successive blasts, as it
appeared to him that the man on horseback before him was
not observing the rule of the road.
The plaintiff, it appears, saw the automobile coming and
heard the warning signals. However, being perturbed by the
novelty of the apparition or the rapidity of the approach, he
pulled the pony closely up against the railing on the right
side of the bridge instead of going to the left. He says that
the reason he did this was that he thought he did not have
sufficient time to get over to the other side. The bridge is
shown to have a length of about 75 meters and a width of
4.80 meters. As the automobile approached, the defendant
guided it toward his left, that being the proper side of the
road for the machine. In so doing the defendant assumed
that the horseman would move to the other side. The pony
had not as yet exhibited fright, and the rider had made no
sign for the automobile to stop. Seeing that the pony was
apparently quiet, the defendant, instead of veering to the
right while yet some distance away or slowing down,
continued to approach directly toward the horse without
diminution of speed. When he had gotten quite near, there
being then no possibility of the horse getting across to the
other side, the defendant quickly turned his car sufficiently
to the right to escape hitting the horse alongside of the
railing where it as then standing; but in so doing the
automobile passed in such close proximity to the animal
that it became frightened and turned its body across the
bridge with its head toward the railing. In so doing, it as
struck on the hock of the left hind leg by the flange of the
car and the limb was broken. The horse fell and its rider
was thrown off with some violence. From the evidence
adduced in the case we believe that when the accident
occurred the free space where the pony stood between the
automobile and the railing of the bridge was probably less
than one and one half meters. As a result of its injuries the
horse died. The plaintiff received contusions which caused
temporary unconsciousness and required medical attention
for several days.
The question presented for decision is whether or not the
defendant in maneuvering his car in the manner above
described was guilty of negligence such as gives rise to a
civil obligation to repair the damage done; and we are of
the opinion that he is so liable. As the defendant started
across the bridge, he had the right to assume that the horse
and the rider would pass over to the proper side; but as he
moved toward the center of the bridge it was demonstrated
to his eyes that this would not be done; and he must in a
moment have perceived that it was too late for the horse to
cross with safety in front of the moving vehicle. In the
nature of things this change of situation occurred while the
automobile was yet some distance away; and from this
moment it was not longer within the power of the plaintiff
to escape being run down by going to a place of greater
safety. The control of the situation had then passed entirely
to the defendant; and it was his duty either to bring his car
to an immediate stop or, seeing that there were no other

48

persons on the bridge, to take the other side and pass

sufficiently far away from the horse to avoid the danger of
collision. Instead of doing this, the defendant ran straight
on until he was almost upon the horse. He was, we think,
deceived into doing this by the fact that the horse had not
yet exhibited fright. But in view of the known nature of
horses, there was an appreciable risk that, if the animal in
question was unacquainted with automobiles, he might get
exited and jump under the conditions which here
confronted him. When the defendant exposed the horse and
rider to this danger he was, in our opinion, negligent in the
eye of the law.
The test by which to determine the existence of negligence
in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent act use that person
would have used in the same situation? If not, then he is
guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct
of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the
situation before him. The law considers what would be
reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a
prudent man in a given situation must of course be always
determined in the light of human experience and in view of
the facts involved in the particular case. Abstract
speculations cannot here be of much value but this much
can be profitably said: Reasonable men govern their
conduct by the circumstances which are before them or
known to them. They are not, and are not supposed to be,
omniscient of the future. Hence they can be expected to
take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case
under consideration, foresee harm as a result of the course
actually pursued? If so, it was the duty of the actor to take
precautions to guard against that harm. Reasonable
foresight of harm, followed by ignoring of the suggestion
born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the
proper criterion for determining the existence of negligence
in a given case is this: Conduct is said to be negligent when
a prudent man in the position of the tortfeasor would have
foreseen that an effect harmful to another was sufficiently
probable to warrant his foregoing conduct or guarding
against its consequences.
Applying this test to the conduct of the defendant in the
present case we think that negligence is clearly established.
A prudent man, placed in the position of the defendant,
would in our opinion, have recognized that the course
which he was pursuing was fraught with risk, and would
therefore have foreseen harm to the horse and the rider as
reasonable consequence of that course. Under these
circumstances the law imposed on the defendant the duty to
guard against the threatened harm.

It goes without saying that the plaintiff himself was not free
from fault, for he was guilty of antecedent negligence in
planting himself on the wrong side of the road. But as we
have already stated, the defendant was also negligent; and
in such case the problem always is to discover which agent
is immediately and directly responsible. It will be noted
that the negligent acts of the two parties were not
contemporaneous, since the negligence of the defendant
succeeded the negligence of the plaintiff by an appreciable
interval. Under these circumstances the law is that the
person who has the last fair chance to avoid the impending
harm and fails to do so is chargeable with the
consequences, without reference to the prior negligence of
the other party.
The decision in the case of Rkes vs. Atlantic, Gulf and
Pacific Co. (7 Phil. Rep., 359) should perhaps be
mentioned in this connection. This Court there held that
while contributory negligence on the part of the person
injured did not constitute a bar to recovery, it could be
received in evidence to reduce the damages which would
otherwise have been assessed wholly against the other
party. The defendant company had there employed the
plaintiff, as a laborer, to assist in transporting iron rails
from a barge in Manila harbor to the company's yards
located not far away. The rails were conveyed upon cars
which were hauled along a narrow track. At certain spot
near the water's edge the track gave way by reason of the
combined effect of the weight of the car and the insecurity
of the road bed. The car was in consequence upset; the rails
slid off; and the plaintiff's leg was caught and broken. It
appeared in evidence that the accident was due to the
effects of the typhoon which had dislodged one of the
supports of the track. The court found that the defendant
company was negligent in having failed to repair the bed of
the track and also that the plaintiff was, at the moment of
the accident, guilty of contributory negligence in walking at
the side of the car instead of being in front or behind. It was
held that while the defendant was liable to the plaintiff by
reason of its negligence in having failed to keep the track in
proper repair nevertheless the amount of the damages
should be reduced on account of the contributory
negligence in the plaintiff. As will be seen the defendant's
negligence in that case consisted in an omission only. The
liability of the company arose from its responsibility for the
dangerous condition of its track. In a case like the one now
before us, where the defendant was actually present and
operating the automobile which caused the damage, we do
not feel constrained to attempt to weigh the negligence of
the respective parties in order to apportion the damage
according to the degree of their relative fault. It is enough
to say that the negligence of the defendant was in this case
the immediate and determining cause of the accident and
that the antecedent negligence of the plaintiff was a more
remote factor in the case.
A point of minor importance in the case is indicated in the
special defense pleaded in the defendant's answer, to the
effect that the subject matter of the action had been
previously adjudicated in the court of a justice of the peace.
In this connection it appears that soon after the accident in
question occurred, the plaintiff caused criminal proceedings

49

to be instituted before a justice of the peace charging the

defendant with the infliction of serious injuries (lesiones
graves). At the preliminary investigation the defendant was
discharged by the magistrate and the proceedings were
dismissed. Conceding that the acquittal of the defendant at
the trial upon the merits in a criminal prosecution for the
offense mentioned would be res adjudicata upon the
question of his civil liability arising from negligence -- a
point upon which it is unnecessary to express an opinion -the action of the justice of the peace in dismissing the
criminal proceeding upon the preliminary hearing can have
no effect. (See U. S. vs. Banzuela and Banzuela, 31 Phil.
Rep., 564.)
From what has been said it results that the judgment of the
lower court must be reversed, and judgment is her rendered
that the plaintiff recover of the defendant the sum of two
hundred pesos (P200), with costs of other instances. The
sum here awarded is estimated to include the value of the
horse, medical expenses of the plaintiff, the loss or damage
occasioned to articles of his apparel, and lawful interest on
the whole to the date of this recovery. The other damages
claimed by the plaintiff are remote or otherwise of such
character as not to be recoverable. So ordered.
Arellano, C.J., Torres, Carson, Araullo, Avancea, and
Fisher, JJ., concur.
Johnson, J., reserves his vote.
Macawili v. Panay Mar 1,1956 (NF)
Sy v. Malate Taxicab
G.R. No. L-8937

Nov 29,1957
November 29, 1957

OLEGARIO BRITO SY, plaintiff-appellee,

vs.
MALATE TAXI CAB & GARAGE, INC., defendantappelant;
MALATE TAXICAB & GARAGE, INC., third-party
plaintiff-appellant,
vs.
JESUS DEQUITO Y DUPY, third-party defendantappellee.
Paredes, Gaw and Acevedo for appellee.
Diaz and Baizas for appellant.
ENDENCIA, J.:
On June 26, 1952, at Dewey Boulevard in front of the
Selecta Restaurant, Olegario Brito Sy engaged a taxicab
bearing plate No. Taxi-1130, owned and operated by
Malate Taxicab and Garage, Inc. and driven by Catalino
Ermino, to take him to his place of business at Dencia's
Restaurant on the Escolta where he was the general
manager. Upon reaching the Rizal Monument he told the
driver to turn to the right, but the latter did not heed him
and instead countered that they better pass along Katigbak
Drive. At the intersection of Dewey Bolevard and Katigbak
Drive, the taxi collided with an army wagon with plate No.
TPI-695 driven by Sgt. Jesus De quito, as a result of which

Olegario Brito Sy was jarred, jammed and jolted. He was

taken to the Santa Isabel Hospital suffering from bruises
and contusions as well as fractured right leg. Thereafter he
was transferred to the Gonzales Orthopedic Clinic and was
accordingly operated on. He spent some P2,266.45 for
medical bills and hospitalization.
On September 30, 1952, Sy filed action against the Malate
Taxicab & Garage, Inc., based upon a contract of carriage,
to recover the sums of P7,200 as actual or compensatory
damages, P20,000 as moral damages, P15,000 as nominal
and exemplary damages, and P3,000 a attorney's fees. On
October 2, 1952, a copy of the complaint was served on
and received by the defendant, but the latter filed its answer
only on October 20, 1952, wherein it alleged that the
collision subject of the complaint was not due to the
negligence of its driver but to that of Sgt. Jesus Dequito,
the driver of the army wagon; and, by way of counterclaim,
sought to recover the sum of P1,000 as damages caused by
the alleged malicious and frivolous action filed against it.
The record reveals that upon plaintiff's motion filed on
October 23, 1952, the lower court ordered on October 25,
1952 that the answer which was filed by defendant out of
time be stricken out, and declared the Malate Taxicab &
Garage, Inc. in default. Thereafter, on October 30, 1952,
plaintiff presented his evidence, and on November 20, 1952
judgment was rendered awarding plaintiff the sum of
P14.000 as actual, compensatory, moral, nominal and
exemplary damages including attorney's fees and costs,
with interest at the legal rate from the filing of the action.
Defendant then filed a motion on December 17, 1952, for
relief from the order of default and for new trial, which was
granted. Hence, plaintiff filed his reply to defendant's
answer and counterelaim, and by leave of court, the latter
filed on February 24, 1953 a third-party complaint against
Sgt. Jesus Dequito alleging that the cause of the collision
between the taxicab and the army wagon was the
negligence of the army sergeant, and praying that whatever
amount the court may assess against it in the action filed by
plaintiff, be paid to said third-party plaintiff, plus an
additional amount of P1,000 representing attorney's fees. It
appears, however, that the summons and copy of the thirdparty complaint were never served upon third-party
defendant Dequito in view of his continued assignment
from place to place in connection with his army duties, and
for this reason the main case was set for trial on May 10,
1953, obviously for the sole purpose of disposing of the
issue arising from plaintiffs complaint. On the day of the
trial, defendant failed to appear, whereupon plaintiff
presented his evidence, and judgment was rendered against
the defendant in the total sum of P4,200 representing
actual, compensatory and moral damages, as well as
attorney's fees, with interest at the legal rate from the filing
of the action, plus costs of suit. Aga nst said judgment
defendant appealed to the Court of Appeals and assigned in
its brief two errors of the lower court, namely:
1.
The trial court erred in not finding that the thirdparty complaint involves a prejudicial question, and
therefore, the main complaint cannot be decided until the
third-party complaint is decided.

50

2.
The trial court erred in not deciding or making an
express finding as to whether the defendant appellant
Malate Taxicab & Garage, Inc. was responsible for the
collision, and hence, civilly responsible to the plaintiffappellee.
Finding the quoted assignment of errors as involving a
purely question of law, the Court of Appeals, by virtue of
the provisions of section 17, paragraph 6 of the judiciary
Act of 1948, as amended, certified the case to this Court for
adjudication, in its Resolution of February 7, 1955.
We find no merit in the first assignment of error that the
third-party complaint is a pre-judicial question. As
enunciated by this Court in Berbari vs. Concepcion, 40
Phil. 837, "Pre-judicial question in understood in law to be
that which precedes the criminal action, or that which
requires a decision before final judgment is rendered in the
principal action with which said question is closely
connected. Not all previous questions are pre-judicial
questions are necessarily previous", although all prejudicial questions are necessarily previous." In the present
case, the third-party complaint is not a pre-judicial
question, as the issue in the main action is not entirely
dependent upon those in the third-party complaint; on the
contrary, it is the third-party complaint that is dependent
upon the main case at least in the amount of damages
which defendant appellant seeks to be reimbursed in its
third-party complaint. Furthermore, the complaint is based
on a contractual obligation of transportation of passenger
which defendant-appellant failed to carry out, and the
action is entirely different and independent from that in the
third-party complaint which is based an alleged tortious act
committed by the third-party defendant Sgt. Dequito. The
main case, therefore, is entirely severable and may be
litigated independently. Moreover, whatever the outcome of
the third-party complaint might be would not in any way
affect or alter the contractual liability of the appellant to
plaintiff. If the collision was due to the negligence of the
third-party defendant, as alleged, then defendant appellant
may file a separate civil action for damages based on tort
ex-delicto or upon quasi-delict, as the case may be.
Coming to the second assignment of error that the lower
court erred in not making an express findings as to whether
defendant appellant was responsible for the collision, we
find the same to be unjustified. The pertinent, provisions of
the new Civil Code under the heading Common Carriers,
are the following:
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, 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 to safety 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. (Emphasis supplied.)
Evidently, under these provisions of law, the court need not
make an express finding of fault or negligence on the part
of the defendant appellant in order to hold it responsible to
pay the damages sought for by the plaintiff, for the action
initiated therefor is based on a contract of carriage and not
on tort. When plaintiff rode on defendant-appellant's
taxicab, the latter assumed the express obligation to
transport him 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, supra). This is an
exception to the general rule that negligence must be
proved, and it was 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. It is noteworthy, however, that at the hearing in the
lower court defendant-appellant failed to appear and has
not presented any evidence at all to overcome and
overwhelm the presumption of negligence imposed upon it
by law; hence, there was no need for the lower court to
make an express finding thereon in view of the provisions
of the aforequoted Article 1756 of the new Civil Code.
Wherefore, the decision of the lower court is hereby
affirmed with cost against the appellant.
Paras, C. J., Bengzon, Montemayor, Bautista Angelo,
Labrador, and Concepcion, JJ., concur,.
Abeto v. PAL
July 30,1982
G.R. No. L-28692 July 30, 1982
CONRADA VDA. DE ABETO, CARME0000LO ABETO,
CECILIA ABETO, CONCEPCION ABETO, MARIA
ABETO, ESTELA ABETO, PERLA ABETO, PATRIA
ABETO and ALBERTO ABETO, plaintiffs-appellees,
vs.
PHILIPPINE AIR LINES, INCORPORATED, defendantappellant.
Quijano, Arroyo & Padilla Law Offices for plaintiffsappellees.
Siguion Reyna, Montecillo & Ongsiako, Belo and
Associates for defendant-appellant.

RELOVA, J..

51

Appeal from the decision of the Court of First Instance of

Iloilo finding that defendant-appellant "did not exercise
extraordinary diligence or prudence as far as human
foresight can provide ... but on the contrary showed
negligence and indifference for the safety of the passengers
that it was bound to transport, " and for the death of
Judge Quirico Abeto, defendant- appellant was ordered to
pay plaintiffs, the heirs of Judge Abeto, the following:
1st For the death of Judge Quirico Abeto, the amount of
P6,000.00;
2nd For the loss of his earning capacity, for 4.75 (4 )
years at the rate of P7,200.00 per annum in the amount of
P34,200.00;
3rd For moral damages in favor of the plaintiffs in the
sum of P10,000.00;
4th For actual damages in the sum of P2,000.00 minus
P400.00 received under Voucher Exhibit 'H' the amount of
Pl,600.00;
5th For attorney's fees, the sum of P6,000.00 and/or the
total sum of P57,800.00 and; To pay the costs of this
proceedings.
Plaintiff's evidence shows that about 5:30 in the afternoon
of November 23, 1960, Judge Quirico Abeto, with the
necessary tickets, boarded the Philippine Air Lines' PIC133 plane at the Mandurriao Airport, Iloilo City for
Manila. He was listed as the No. 18 passenger in its Load
Manifest (Exhibit A). The plane which would then take two
hours from Iloilo to Manila did not reach its destination and
the next day there was news that the plane was missing.
After three weeks, it was ascertained that the plane crashed
at Mt. Baco, Province of Mindoro. All the passengers,
including Judge Abeto, must have been killed instantly and
their remains were scattered all over the area. Among the
articles recovered on the site of the crash was a leather bag
with the name "Judge Quirico Abeto. " (Exhibit C.)
Judge Abeto, prior to the plane crash, was a Technical
Assistant in the Office of the President receiving an annual
compensation of P7,200.00; and before that, has held the
various positions in the government, namely: Municipal
President of Iloilo; Provincial Fiscal of Antique, Negros
Occidental and Cebu; Judge of the Court of First Instance
of Manila, and Secretary of Justice. He was in good health
before the incident even if he was already 79 years old at
that time.
Plaintiff-appellee Conrada Vda. de Abeto was appointed
administratrix of the estate of Judge Abeto. The other
plaintiffs-appellees are the children of the deceased. When
they received the news of the plane crash, Mrs. Abeto was
shocked and until it was ascertained that the plane had
crashed three weeks after, she could not sleep and eat. She
felt sick and was miserable after that. The members of the
family also suffered.

Personal belongings which were lost amounted to P300.00.

Burial expenses of the late judge was P1,700.00.
When defendant-appellant would not hear demands for
settlement of damages, plaintiffs-appellees were compelled
to hire counsel for the institution and prosecution of this
case.
Defendant-appellant tried to prove that the plane crash at
Mt. Baco was beyond the control of the pilot. The plane at
the time of the crash was airworthy for the purpose of
conveying passengers across the country as shown by the
certificate of airworthiness issued by the Civil Aeronautics
Administration (CAA). There was navigational error but no
negligence or malfeasance on the part of the pilot. The
plane had undergone 1,822 pre- flight checks, 364 thorough
checks, 957 terminating checks and 501 after maintenance
checks. These checks were part of the quality control
operation of defendant airline Further, deviation from its
prescribed route was due to the bad weather conditions
between Mt. Baco and Romblon and strong winds which
caused the plane to drift to Mt. Baco. Under the
circumstances, appellant argues that the crash was a
fortuitous event and, therefore, defendant-appellant cannot
be held liable under the provisions of Article 1174 of the
New Civil Code. Besides, appellant tried to prove that it
had exercised all the cares, skill and diligence required by
law on that particular flight in question.
The trial court, finding for the plaintiffs, said:
The Court after a thorough perusal of the evidences,
testimonial and documentaries submitted by both parties
has come into the conclusion that the evidence introduced
by the plaintiffs have established the following significant
facts which proved the negligence of the defendant's pilot
of the plane on that flight- in question.
1st That the Pilot of the plane disobeyed instruction
given in not following the route of Amber 1 prescribed by
the CAA in Violation of Standard Regulation.
Second The defendant failed to perform the pre-flight
test on plane PIC-133 before the same took off from
Mandurriao Airport to Manila in order to find out a possible
defect of the plane.
Third When the defendant allowed during the flight in
question, student Officer Rodriguez on training as proved
when his body was found on the plane's cockpit with its
microphone hanging still on his left leg.
Fourth When the Pilot during the flight in question
failed or did not report his position over or abeam Romblon
which is a compulsory reporting point.
These facts as established by the evidence of the plaintiff
lead to the inevitable conclusion that the defendant did not
exercise extraordinary diligence or prudence as far as
human foresight can provide imposed upon by the Law, but
on the contrary showed negligence and indifference for the
safety of the passengers that it was bound to transport. By

52

the very evidence of the defendant, as shown by the

deposition of one Jose Abanilla, dated December 13, 1963,
Section Chief of the Actuarial Department of the Insular
Life Insurance Company regarding life expectancy through
American experience, the late Judge Abeto at the age of 79
would still live or have a life expectancy of 4.75 years.
Appealing to this Court, defendant claimed that the trial
court erred:

Baco. According to defendant's witness, Ramon A.

Pedroza, Administrative Assistant of the Philippine Air
Lines, Inc., this tragic crash would have not happened had
the pilot continued on the route indicated. Hereunder is Mr.
Pedroza's testimony on this point:
Q Had the pilot continued on the route indicated, Amber A1 there would have been no crash, obviously?
A Yes, Your Honor

I
ATTY. HILADO:
... in finding, contrary to the evidence, that the appellant
was negligent;

(To the witness)

III

Q Because Mt. Baco is 30 miles from Amber I?

... in not finding that the appellant, in the conduct and

operation of PI-C133, exercised its statutory obligation
over the passengers of PI C133 of extraordinary diligence
as far as human care and foresight can provide, using the
utmost diligence of a very cautious person with due regard
for all the circumstances and in not finding that the crash of
PI-C133 was caused by fortuitous events;

A Yes,sir.(TSN,p.75,Oct.22,1963 hearing)

... in awarding damages to the appellees; and

Q But the fact is that you found him out, that he was off
course?

xxx

xxx

xxx

And, Assistant Director Cesar Mijares of the Civil

Aeronautics Administration testified that the pilot of said
plane was "off course."

IV
A Yes, sir.
... in not finding that appellant acted in good faith and
exerted efforts to minimize damages.
The issue before Us in this appeal is whether or not the
defendant is liable for violation of its contract of carriage.

Q And off course, you mean that he did not follow the route
prescribed for him?
A Yes, sir.

The provisions of the Civil Code on this question of

liability are clear and explicit. Article 1733 binds common
carriers, "from the nature of their business and by reasons
of public policy, ... to observe extraordinary diligence in the
vigilance ... for the safety of the passengers transported by
them according to all the circumstances of each case."
Article 1755 establishes the standard of care required of a
common carrier, which is, "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." Article 1756 fixes the burden of
proof by providing that "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 extra-ordinary diligence as prescribed in
Articles 1733 and 1755." Lastly, Article 1757 states that
"the responsibility of a common carrier for the safety of
passengers ... cannot be dispensed with or lessened by
stipulation, by the posting of notices, by statements on
tickets, or otherwise."

Q And the route for him to follow was Amber A-l?

The prescribed airway of plane PI-C133 that afternoon of

November 23, 1960, with Capt. de Mesa, as the pilot, was
Iloilo-Romblon-Manila, denominated as airway "Amber l,"
and the prescribed elevation of the flight was 6,000 ft. The
fact is, the plane did not take the designated route because
it was some 30 miles to the west when it crashed at Mt.

It is clear that the pilot did not follow the designated route
for his flight between Romblon and Manila. The weather
was clear and he was supposed to cross airway "Amber I"
over Romblon; instead, he made a straight flight to Manila
in violation of air traffic rules.

A Yes, sir.
Q And the route for Iloilo direct to Manila, is passing
Romblon to Manila?
A Yes, passing Romblon to Manila.
Q And you found that he was not at all following the route
to Romblon to Manila?
A Yes, sir.
Q You know Mr. Witness that a disregard or, violation, or
disregard of instruction is punishable by law?
A Yes,sir. (TSN,pp.247-248,Dec. 20, 1963)
xxx

53

xxx

xxx

At any rate, in the absence of a satisfactory explanation by

appellant as to how the accident occurred, the presumption
is, it is at fault.
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 (Art. 1756, New Civil Code). This
is an exception to the general rule that negligence must be
proved. (Batangas Transportation Company vs. Caguimbal,
22 SCRA 171.)
The total of the different items which the lower court
adjudged herein appellant to pay the plaintiffs is
P57,800.00. The judgment of the court a quo is modified in
the sense that the defendant is hereby ordered to pay the
said amount to the plaintiffs, with legal interest thereon
from the finality of this judgment. With costs against
defendant-appellant.
Teehankee (Chairman), Makasiar, Melencio-Herrera, Plana
and Vasquez, JJ., concur.
Gutierrez, Jr., J., is on leave.
PAL v. NLRC

Sep 2,1983 (PDF)

Bachelor Express v. CA
July 231,1990
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; 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
After due trial, the trial court issued an order dated August
8, 1985 dismissing the complaint.
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 plaintiffsappellants 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,

54

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)

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.

The petitioners now pose the following questions

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.

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.

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.

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
self-preservation 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.

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.

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.

Article 1174 of the present Civil Code states:

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

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.

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:

xxx

55

... 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.

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.
The trial court found the following facts:

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

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 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.

56

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.

notably unreliable for lack of veracity. On direct

examination, he testified:
xxx

xxx

xxx

Q So what happened to the passengers inside your bus?

A Some of the passengers jumped out of the window.

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.
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?

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?
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.

Front door.

xxx

xxx

COURT:
xxx
Kilometers or miles?
(Tsn., p. 4, Aug. 8, 1984)
A Miles.
xxx

xxx

xxx
Atty. Gambe:

Q What happened after there was a commotion at the rear

portion of the bus?
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.'
(Tsn. p. 3, August 8, 1984).
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

Q That is only your estimate by your experience?

A Yes, sir, estimate.
(Tsn., pp. 4-5, Oct. 17, 1983).
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

57

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 Appealsthe 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.
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 majeure and
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.
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 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).
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

58

dated August 1, 1988 of the Court of Appeals are

AFFIRMED.

amounts as may be fixed by the trial court for exemplary

damages and attorneys fees.

SO ORDERED.

The trial court found that the proximate cause of the

collision was the negligence of Felix Angeles, driver of the
Bulletin delivery van, considering the fact that the left front
portion of the delivery truck driven by Felix Angeles hit
and bumped the left rear portion of the passenger jeepney
driven by Alfredo Mallari Jr. Hence, the trial court ordered
BULLETIN and Felix Angeles to pay jointly and severally
Claudia G. Reyes, widow of the deceased victim, the sums
of P42,106.93 for medical expenses; P8,600.00 for funeral
and burial expenses; P1,006,777.40 for loss of earning
capacity; P5,000.00 for moral damages and P10,000.00 for
attorneys fees. The trial court also ordered N.V.
Netherlands Insurance Company to indemnify Claudia G.
Reyes P12,000.00 as death indemnity and P2,500.00 for
funeral expenses which when paid should be deducted from
the liabilities of respondent BULLETIN and its driver Felix
Angeles to the plaintiff. It also dismissed the complaint
against the other defendants Alfredo Mallari Sr. and
Alfredo Mallari Jr.

Mallari v. CA
Jan 31, 2000
[G.R. No. 128607. January 31, 2000]
ALFREDO MALLARI SR. and ALFREDO MALLARI
JR., petitioners, vs. COURT OF APPEALS and
BULLETIN PUBLISHING CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
ALFREDO MALLARI SR. and ALFREDO MALLARI
JR. in this petition for review on certiorari seek to set aside
the Decision of the Court of Appeals[1] which reversed the
court a quo and adjudged petitioners to be liable for
damages due to negligence as a common carrier resulting in
the death of a passenger.
On 14 October 1987, at about 5:00 o'clock in the morning,
the passenger jeepney driven by petitioner Alfredo Mallari
Jr. and owned by his co-petitioner Alfredo Mallari Sr.
collided with the delivery van of respondent Bulletin
Publishing Corp. (BULLETIN, for brevity) along the
National Highway in Barangay San Pablo, Dinalupihan,
Bataan. Petitioner Mallari Jr. testified that he went to the
left lane of the highway and overtook a Fiera which had
stopped on the right lane. Before he passed by the Fiera, he
saw the van of respondent BULLETIN coming from the
opposite direction. It was driven by one Felix Angeles. The
sketch of the accident showed that the collision occurred
after Mallari Jr. overtook the Fiera while negotiating a
curve in the highway. The points of collision were the left
rear portion of the passenger jeepney and the left front side
of the delivery van of BULLETIN. The two (2) right
wheels of the delivery van were on the right shoulder of the
road and pieces of debris from the accident were found
scattered along the shoulder of the road up to a certain
portion of the lane travelled by the passenger jeepney. The
impact caused the jeepney to turn around and fall on its left
side resulting in injuries to its passengers one of whom was
Israel Reyes who eventually died due to the gravity of his
injuries. Manikan
On 16 December 1987 Claudia G. Reyes, the widow of
Israel M. Reyes, filed a complaint for damages with the
Regional Trial Court of Olongapo City against Alfredo
Mallari Sr. and Alfredo Mallari Jr., and also against
BULLETIN, its driver Felix Angeles, and the N.V.
Netherlands Insurance Company. The complaint alleged
that the collision which resulted in the death of Israel Reyes
was caused by the fault and negligence of both drivers of
the passenger jeepney and the Bulletin Isuzu delivery van.
The complaint also prayed that the defendants be ordered
jointly and severally to pay plaintiff P1,006,777.40 in
compensatory damages, P40,000.00 for hospital and
medical expenses, P18,270.00 for burial expenses plus such

On appeal the Court of Appeals modified the decision of

the trial court and found no negligence on the part of
Angeles and consequently of his employer, respondent
BULLETIN. Instead, the appellate court ruled that the
collision was caused by the sole negligence of petitioner
Alfredo Mallari Jr. who admitted that immediately before
the collision and after he rounded a curve on the highway,
he overtook a Fiera which had stopped on his lane and that
he had seen the van driven by Angeles before overtaking
the Fiera. The Court of Appeals ordered petitioners Mallari
Jr. and Mallari Sr. to compensate Claudia G. Reyes
P1,006,777.50 for loss of earning capacity, P50,000.00 as
indemnity for death and P10,000.00 for attorneys fees. It
absolved from any liability respondent BULLETIN, Felix
Angeles and N.V. Netherlands Insurance Company. Hence
this petition. Oldmis o
Petitioners contend that there is no evidence to show that
petitioner Mallari Jr. overtook a vehicle at a curve on the
road at the time of the accident and that the testimony of
Angeles on the overtaking made by Mallari Jr. was not
credible and unreliable. Petitioner also submits that the trial
court was in a better position than the Court of Appeals to
assess the evidence and observe the witnesses as well as
determine their credibility; hence, its finding that the
proximate cause of the collision was the negligence of
respondent Angeles, driver of the delivery van owned by
respondent BULLETIN, should be given more weight and
consideration.
We cannot sustain petitioners. Contrary to their allegation
that there was no evidence whatsoever that petitioner
Mallari Jr. overtook a vehicle at a curve on the road at the
time of or before the accident, the same petitioner himself
testified that such fact indeed did occur Q:.......And what was that accident all about?

59

A:.......Well, what happened, sir, is that at about that time

5:00 oclock in that morning of October 14 while I was
negotiating on the highway at San Pablo, Dinalupihan,
Bataan, I was then following a blue Ford Fierra and my
distance behind was about twenty (20) feet and then I
passed that blue Ford Fierra. I overtook and when I was
almost on the right lane of the highway towards Olongapo
City there was an oncoming delivery van of the Bulletin
Publishing Corporation which bumped the left rear portion
of the jeepney which I was driving and as a result of which
the jeepney x x x turned around and fell on its left side and
as a result of which some of my passengers including me
were injured, sir x x x x
Q:.......Before you overtook the Ford Fierra jeepney did you
look x x x whether there was any vehicle coming towards
you?
A:.......Yes, sir.
Q:.......Did you see the Bulletin van or the Press van
coming towards you?
A:.......Yes, sir.
Q:.......At the moment the Ford Fierra xxx stop(ped) and in
overtaking the Fierra, did you not have an option to stop
and not to overtake the Ford Fierra?
A:.......Well, at the time when the Ford Fierra stopped in
front of me I slowed down with the intention of applying
the brake, however, when I saw the oncoming vehicle
which is the Press van is very far x x x which is 100 feet
distance, x x x it is sufficient to overtake the Ford Fierra so
I overt(ook) it x x x x
Q:.......You said that you took into consideration the speed
of the oncoming Press van but you also could not estimate
the speed of the press van because it was dark at that time,
which of these statements are true? Ncm
A:.......What I wanted to say, I took into consideration the
speed of the oncoming vehicle, the Press van, although at
the moment I could not estimate the speed of the oncoming
vehicle x x x x[2]
The Court of Appeals correctly found, based on the sketch
and spot report of the police authorities which were not
disputed by petitioners, that the collision occurred
immediately after petitioner Mallari Jr. overtook a vehicle
in front of it while traversing a curve on the highway.[3]
This act of overtaking was in clear violation of Sec. 41,
pars. (a) and (b), of RA 4136 as amended, otherwise known
as The Land Transportation and Traffic Code which
provides:
Sec. 41. Restrictions on overtaking and passing. - (a) The
driver of a vehicle shall not drive to the left side of the
center line of a highway in overtaking or passing another
vehicle proceeding in the same direction, unless such left
side is clearly visible and is free of oncoming traffic for a

sufficient distance ahead to permit such overtaking or

passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass
another vehicle proceeding in the same direction when
approaching the crest of a grade, nor upon a curve in the
highway, where the drivers view along the highway is
obstructed within a distance of five hundred feet ahead
except on a highway having two or more lanes for
movement of traffic in one direction where the driver of a
vehicle may overtake or pass another vehicle:
Provided That on a highway, within a business or
residential district, having two or more lanes for movement
of traffic in one direction, the driver of a vehicle may
overtake or pass another vehicle on the right.
The rule is settled that a driver abandoning his proper lane
for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and
not to proceed if he cannot do so in safety.[4] When a
motor vehicle is approaching or rounding a curve, there is
special necessity for keeping to the right side of the road
and the driver does not have the right to drive on the left
hand side relying upon having time to turn to the right if a
car approaching from the opposite direction comes into
view.[5] Ncmmis
In the instant case, by his own admission, petitioner Mallari
Jr. already saw that the BULLETIN delivery van was
coming from the opposite direction and failing to consider
the speed thereof since it was still dark at 5:00 o'clock in
the morning mindlessly occupied the left lane and overtook
two (2) vehicles in front of it at a curve in the highway.
Clearly, the proximate cause of the collision resulting in the
death of Israel Reyes, a passenger of the jeepney, was the
sole negligence of the driver of the passenger jeepney,
petitioner Alfredo Mallari Jr., who recklessly operated and
drove his jeepney in a lane where overtaking was not
allowed by traffic rules. Under Art. 2185 of the Civil Code,
unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the
time of the mishap he was violating a traffic regulation. As
found by the appellate court, petitioners failed to present
satisfactory evidence to overcome this legal presumption.
The negligence and recklessness of the driver of the
passenger jeepney is binding against petitioner Mallari Sr.,
who admittedly was the owner of the passenger jeepney
engaged as a common carrier, considering the fact that in
an action based on 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 for the payment
of damages sought by the passenger. Under Art. 1755 of the
Civil Code, 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. Moreover, under
Art. 1756 of the Civil Code, in case of death or injuries to
passengers, a common carrier is presumed to have been at
fault or to have acted negligently, unless it proves that it
observed extraordinary diligence. Further, pursuant to Art.

60

1759 of the same Code, it is liable for the death of or

injuries to passengers through the negligence or willful acts
of the formers employees. This liability of the common
carrier does not cease upon proof that it exercised all the
diligence of a good father of a family in the selection of its
employees. Clearly, by the contract of carriage, the carrier
jeepney owned by Mallari Sr. assumed the express
obligation to transport the passengers to their destination
safely and to observe extraordinary diligence with due
regard for all the circumstances, and any injury or death
that might be suffered by its passengers is right away
attributable to the fault or negligence of the carrier. Scnc
m
The monetary award ordered by the appellate court to be
paid by petitioners to the widow of the deceased passenger
Israel M. Reyes of P1,006,777.50 for loss of earning
capacity, P50,000.00 as civil indemnity for death, and
P10,000.00 for attorneys fees, all of which were not
disputed by petitioners, is a factual matter binding and
conclusive upon this Court.
WHEREFORE, the Petition is DENIED and the Decision
of the Court of Appeals dated 20 September 1995 reversing
the decision of the trial court being in accord with law and
evidence is AFFIRMED. Consequently, petitioners are
ordered jointly and severally to pay Claudia G. Reyes
P1,006,777.50 for loss of earning capacity, P50,000.00 as
civil indemnity for death, and P10,000.00 for attorneys
fees. Costs against petitioners.
SO ORDERED.

Breach of Contract of Carriage

Singson v. CA
Nov 18, 1997, GR 119995
[G.R. No. 119995. November 18, 1997]
CARLOS SINGSON, petitioner, vs. COURT OF
APPEALS and CATHAY PACIFIC AIRWAYS, INC.,
respondents.
DECISION
BELLOSILLO, J.:
A contract of air carriage is a peculiar one. Imbued with
public interest, common carriers are required by law to
carry passengers safely as far as human care and foresight
can provide, using the utmost diligence of a very cautious
person, with due regard for all the circumstances.[1] A
contract to transport passengers is quite different in kind
and degree from any other contractual relation. And this
because its business is mainly with the traveling public. It
invites people to avail of the comforts and advantages it
offers. The contract of carriage, therefore, generates a
relation attended with a public duty.[2] Failure of the
carrier to observe this high degree of care and extraordinary
diligence renders it liable for any damage that may be
sustained by its passengers.
The instant case is an illustration of the exacting standard
demanded by the law of common carriers: On 24 May
1988 CARLOS SINGSON and his cousin Crescentino

Tiongson bought from Cathay Pacific Airways, Ltd.

(CATHAY), at its Metro Manila ticket outlet two (2) opendated, identically routed, round trip plane tickets for the
purpose of spending their vacation in the United States.
Each ticket consisted of six (6) flight coupons
corresponding to this itinerary: flight coupon no. 1 Manila to Hongkong; flight coupon no. 2 - Hongkong to
San Francisco; flight coupon no. 3 - San Francisco to Los
Angeles; flight coupon no. 4 - Los Angeles back to San
Francisco; flight coupon no. 5 - San Francisco to
Hongkong; and, finally, flight coupon no. 6 - Hongkong to
Manila. The procedure was that at the start of each leg of
the trip a flight coupon corresponding to the particular
sector of the travel would be removed from the ticket
booklet so that at the end of the trip no more coupon would
be left in the ticket booklet.
On 6 June 1988 CARLOS SINGSON and Crescentino
Tiongson left Manila on board CATHAYs Flight No. 902.
They arrived safely in Los Angeles and after staying there
for about three (3) weeks they decided to return to the
Philippines. On 30 June 1988 they arranged for their return
flight at CATHAYs Los Angeles Office and chose 1 July
1988, a Friday, for their departure. While Tiongson easily
got a booking for the flight, SINGSON was not as lucky. It
was discovered that his ticket booklet did not have flight
coupon no. 5 corresponding to the San FranciscoHongkong leg of the trip. Instead, what was in his ticket
was flight coupon no. 3 - San Francisco to Los Angeles which was supposed to have been used and removed from
the ticket booklet. It was not until 6 July 1988 that
CATHAY was finally able to arrange for his return flight to
Manila.
On 26 August 1988 SINGSON commenced an action for
damages against CATHAY before the Regional Trial Court
of Vigan, Ilocos Sur.[3] He claimed that he insisted on
CATHAYs confirmation of his return flight reservation
because of very important and urgent business
engagements in the Philippines. But CATHAY allegedly
shrugged off his protestations and arrogantly directed him
to go to San Francisco himself and do some investigations
on the matter or purchase a new ticket subject to refund if it
turned out that the missing coupon was still unused or
subsisting. He remonstrated that it was the airlines
agent/representative who must have committed the mistake
of tearing off the wrong flight coupon; that he did not have
enough money to buy new tickets; and, CATHAY could
conclude the investigation in a matter of minutes because
of its facilities. CATHAY, allegedly in scornful insolence,
simply dismissed him like an impertinent "brown pest."
Thus he and his cousin Tiongson, who deferred his own
flight to accompany him, were forced to leave for San
Francisco on the night of 1 July 1988 to verify the missing
ticket.
CATHAY denied these allegations and averred that since
petitioner was holding an "open-dated" ticket, which meant
that he was not booked on a specific flight on a particular
date, there was no contract of carriage yet existing such that
CATHAYs refusal to immediately book him could not be
construed as breach of contract of carriage. Moreover, the

61

coupon had been missing for almost a month hence

CATHAY must first verify its status, i.e., whether the ticket
was still valid and outstanding, before it could issue a
replacement ticket to petitioner. For that purpose, it sent a
request by telex on the same day, 1 July 1988, to its
Hongkong Headquarters where such information could be
retrieved.[4] However, due to the time difference between
Los Angeles and Hongkong, no response from the
Hongkong office was immediately received. Besides, since
2 and 3 July 1988 were a Saturday and a Sunday,
respectively, and 4 July 1988 was an official holiday being
U.S. Independence Day, the telex response of CATHAY
Hongkong was not read until 5 July 1988. Lastly,
CATHAY denied having required SINGSON to make a trip
back to San Francisco; on the other hand, it was the latter
who informed CATHAY that he was making a side trip to
San Francisco. Hence, CATHAY advised him that the
response of Hongkong would be copied in San Francisco so
that he could conveniently verify thereat should he wish to.

death of a passenger and (b) it is proved that the carrier was

guilty of fraud and bad faith even if death does not result x
x x x In disallowing the trial courts award of moral
damages, the Court takes appropriate note of the necessity
for the appellants verification of the status of the missing
flight coupon as well as the justifiable delay thereto
attendant x x x x Contrary to the appellees allegation that
he was peremptorily refused confirmation of his flight, and
arrogantly told to verify the missing flight coupon on his
own, the record shows that the appellant adopted such
measures as were reasonably required under the
circumstances. Even the testimonies offered by the
appellee and his witnesses collectively show no trace of
fraud or bad faith as would justify the trial courts award of
moral damages.

The trial court rendered a decision in favor of petitioner

herein holding that CATHAY was guilty of gross
negligence amounting to malice and bad faith for which it
was adjudged to pay petitioner P20,000.00 for actual
damages with interest at the legal rate of twelve percent
(12%) per annum from 26 August 1988 when the complaint
was filed until fully paid, P500,000.00 for moral damages,
P400,000.00 for exemplary damages, P100,000.00 for
attorneys fees, and, to pay the costs.

Petitioner's subsequent motion for reconsideration having

been denied for lack of merit and for being pro forma he
came to us for review. He claims that the trial court found
CATHAY guilty of gross negligence amounting to malice
and bad faith in: (a) detaching the wrong coupon; (b) using
that error to deny confirmation of his return flight; and, (c)
directing petitioner to prematurely return to San Francisco
to verify his missing coupon. He also underscores the
scornful and demeaning posture of CATHAYs employees
toward him. He argues that since findings of fact of the
trial court are entitled to the highest degree of respect from
the appellate courts, especially when they were supported
by evidence, it was erroneous for the Court of Appeals to
strike out the award of moral and exemplary damages as
well as attorneys fees allegedly for lack of basis.

On appeal by CATHAY, the Court of Appeals reversed the

trial courts finding that there was gross negligence
amounting to bad faith or fraud and, accordingly, modified
its judgment by deleting the awards for moral and
exemplary damages, and the attorneys fees as well.
Reproduced hereunder are the pertinent portions of the
decision of the appellate court[5] There is enough merit in this appeal to strike down the trial
courts award of moral and exemplary damages and
attorneys fees x x x x In this material respect, the appellant
correctly underscores the fact that the appellee held an open
dated ticket for his return flight from San Francisco to
Manila via Hongkong and that, as a consequence, the latter
was not actually confirmed on the July 1, 1988 flight or, for
that matter, any of the appellants flights x x x x The
appellant certainly committed no breach of contract of
carriage when it refused the appellee the booking he
requested on the said July 1, 1988 flight. As a "chance
passenger," the latter had no automatic right to fly on that
flight and on that date.
Even assuming arguendo that a breach of contract of
carriage may be attributed the appellant, the appellees
travails were directly traceable to the mistake in detaching
the San Francisco-Hongkong flight coupon of his plane
ticket which led to the appellants refusal to honor his plane
ticket. While that may constitute negligence on the part of
the air carrier, the same cannot serve as basis for an award
of moral damages. The rule is that moral damages are
recoverable in a damage suit predicated upon a breach of
contract of carriage only where (a) the mishap results in the

The basis for the award of moral damages discounted, there

exists little or no reason to allow the exemplary damages
and attorneys fees adjudicated in favor of the appellee.

In its Comment, CATHAY firmly maintains that it did not

breach its contract of carriage with petitioner. It argues that
it is only when a passenger is confirmed on a particular
flight and on a particular date specifically stated in his
ticket that its refusal to board the passenger will result in a
breach of contract. And even assuming that there was
breach of contract, there was no fraud or bad faith on the
part of CATHAY as to justify the award of moral and
exemplary damages plus attorneys fees in favor of
petitioner.
There are two (2) main issues that confront the Court: first,
whether a breach of contract was committed by CATHAY
when it failed to confirm the booking of petitioner for its 1
July 1988 flight; and, second, whether the carrier was liable
not only for actual damages but also for moral and
exemplary damages, and attorneys fees for failing to book
petitioner on his return flight to the Philippines.
We find merit in the petition. CATHAY undoubtedly
committed a breach of contract when it refused to confirm
petitioner's flight reservation back to the Philippines on
account of his missing flight coupon. Its contention that
there was no contract of carriage that was breached because
petitioners ticket was open-dated is untenable. To begin
with, the round trip ticket issued by the carrier to the

62

passenger was in itself a complete written contract by and

between the carrier and the passenger. It had all the
elements of a complete written contract, to wit: (a) the
consent of the contracting parties manifested by the fact
that the passenger agreed to be transported by the carrier to
and from Los Angeles via San Francisco and Hongkong
back to the Philippines, and the carriers acceptance to
bring him to his destination and then back home; (b) cause
or consideration, which was the fare paid by the passenger
as stated in his ticket; and, (c) object, which was the
transportation of the passenger from the place of departure
to the place of destination and back, which are also stated
in his ticket.[6] In fact, the contract of carriage in the
instant case was already partially executed as the carrier
complied with its obligation to transport the passenger to
his destination, i.e., Los Angeles. Only the performance of
the other half of the contract - which was to transport the
passenger back to the Philippines - was left to be done
Moreover, Timothy Remedios, CATHAYs reservation and
ticketing agent, unequivocally testified that petitioner
indeed had reservations booked for travel Q: Were you able to grant what they wanted, if not, please
state why?
A: I was able to obtain a record of Mr. Singsons computer
profile from my flight reservations computer. I verified
that Mr. Singson did indeed have reservations booked for
travel: Los Angeles to San Francisco, San Francisco to
Hongkong to Manila. I then proceeded to revalidate their
tickets but was surprised to observe that Mr. Singsons
ticket did not contain a flight coupon for San Francisco to
Hongkong. His ticket did, however, contain a flight
coupon for San Francisco to Los Angeles which was
supposed to have been utilized already, that is, supposed to
have been removed by U.S. Air when he checked in San
Francisco for his flight from San Francisco to Los
Angeles[7] (underscoring supplied).
Clearly therefore petitioner was not a mere "chance
passenger with no superior right to be boarded on a specific
flight," as erroneously claimed by CATHAY and sustained
by the appellate court.
Interestingly, it appears that CATHAY was responsible for
the loss of the ticket. One of two (2) things may be
surmised from the circumstances of this case: first, US Air
(CATHAYs agent) had mistakenly detached the San
Francisco-Hongkong flight coupon thinking that it was the
San Francisco-Los Angeles portion; or, second, petitioners
booklet of tickets did not from issuance include a San
Francisco-Hongkong flight coupon. In either case, the loss
of the coupon was attributable to the negligence of
CATHAYs agents and was the proximate cause of the nonconfirmation of petitioner's return flight on 1 July 1988. It
virtually prevented petitioner from demanding the
fulfillment of the carriers obligations under the contract.
Had CATHAYs agents been diligent in double checking
the coupons they were supposed to detach from the
passengers tickets, there would have been no reason for
CATHAY not to confirm petitioners booking as
exemplified in the case of his cousin and flight companion

Tiongson whose ticket booklet was found to be in order.

Hence, to hold that no contractual breach was committed
by CATHAY and totally absolve it from any liability would
in effect put a premium on the negligence of its agents,
contrary to the policy of the law requiring common carriers
to exercise extraordinary diligence.
With regard to the second issue, we are of the firm view
that the appellate court seriously erred in disallowing moral
and exemplary damages. Although the rule is that moral
damages predicated upon a breach of contract of carriage
may only be recoverable in instances where the mishap
results in the death of a passenger,[8] or where the carrier is
guilty of fraud or bad faith,[9] there are situations where
the negligence of the carrier is so gross and reckless as to
virtually amount to bad faith, in which case, the passenger
likewise becomes entitled to recover moral damages.[10]
In the instant case, the following circumstances attended
the breach of contract by CATHAY, to wit: First, as
heretofore discussed, the ticket coupon corresponding to
the San Francisco-Hongkong flight was missing either due
to the negligence of CATHAYs agents in improperly
detaching petitioners flight coupons or failing to issue the
flight coupon for San Francisco-Hongkong in the ticket
booklet; second, petitioner and his cousin presented their
respective ticket booklets bearing identical itineraries to
prove that there had been a mistake in removing the
coupons of petitioner. Furthermore, CATHAY's Timothy
Remedios testified that he was able to ascertain from his
flight reservations computer that petitioner indeed had
reservations booked for travel on their return flight, but
CATHAY apparently ignored the clear evidential import of
these facts and peremptorily refused to confirm petitioners
flight - while ready to confirm his traveling companions
identically routed plane ticket - on the lame and flimsy
excuse that the existence and validity of the missing ticket
must first be verified; third, petitioner was directed by
CATHAY to go to its San Francisco office and make the
necessary verification concerning the lost coupon himself.
This, notwithstanding the fact that CATHAY was
responsible for the loss of the ticket and had all the
necessary equipment, e.g., computers, fax and telex
machines and telephones which could facilitate the
verification right there at its Los Angeles Office.
CATHAYs allegation that it never required petitioner to go
to San Francisco is unpersuasive. Petitioner categorically
testified that a lady employee of CATHAY in Los Angeles
"insisted that we take the matter (up) with their office in
San Francisco."[11] In fact, it even appeared from the
evidence that it was the San Francisco office which
arranged for his return flight to the Philippines and not the
Los Angeles office.[12] Moreover, due deference must be
accorded the trial courts finding that petitioner was indeed
sent by CATHAY to its San Francisco office to verify. For
good and sound reasons, this Court has consistently
affirmed that review of the findings of fact of the trial court
is not a function that appellate courts ordinarily undertake,
such findings being as a rule binding and conclusive.[13] It
is true that certain exceptions have become familiar.
However, nothing in the records warrants a review based

63

on any of these well-recognized exceptions; and, fourth,

private respondent endeavored to show that it undertook the
verification of the lost coupon by sending a telex to its
Hongkong Office. It likewise tried to justify the five (5)
days delay in completing the verification process, claiming
that it was due to the time difference between Hongkong
and Los Angeles and the coinciding non-working days in
the United States. The following dialogue between Consul
Cortez and Cathay's reservation and ticketing agent
Timothy Remedios can be enlightening Q: What official action did you in turn take?
A: While Mr. Singson was still in my office I sent a telex
out at approximately 10:00 a.m. on 30 June 1988 to
Hongkong Accounting Office and copied San Francisco
ticket office since Mr. Singson advised he might not be able
to return to my office but would be going to San Francisco.
10:00 a.m. on 30 June 1988 in Los Angeles is however 2:00
a.m. on 1 July 1988 in Hongkong and since office hours
start at 9:00 a.m. in Hongkong, no reply was instantly sent
back to me. The response was sent out from Hongkong on
2 July 1988 at approximately 12:00 noon (Hongkong time)
and was received immediately by the Los Angeles telex
machine. However, 12:00 noon 2 July 1988 Hongkong
time was 8:00 p.m. 1 July 1988 in Los Angeles where
office hours close at 5:00 p.m. The Los Angeles office was
closed on 2 and 3 July 1988 being Saturday and Sunday
and also closed 4 July 1988 for a public holiday
(Independence day) so the reply from Hongkong was not
read until 5 July 1988, 8:30 Los Angeles time.[14]
But far from helping private respondents cause, the
foregoing testimony only betrayed another act of
negligence committed by its employees in Hongkong. It
will be observed that CATHAYs Hongkong Office
received the telex from Los Angeles on 1 July 1988 at
approximately 2:00 a.m. (Hongkong time) and sent out
their response only on 2 July 1988 at 12:00 noon. In spite
of the fact that they had access to all records and facilities
that would enable them to verify in a matter of minutes, it
strangely took them more than twenty-four (24) hours to
complete the verification process and to send their reply to
Los Angeles. The inevitable conclusion is that CATHAYs
Hongkong personnel never acted promptly and timely on
the request for verification.
Besides, to be stranded for five (5) days in a foreign land
because of an air carriers negligence is too exasperating an
experience for a plane passenger.
For sure, petitioner
underwent profound distress and anxiety, not to mention
the worries brought about by the thought that he did not
have enough money to sustain himself, and the
embarrassment of having been forced to seek the generosity
of relatives and friends.

independent acts of negligence above-enumerated. Taken

together, they indubitably signify more than ordinary
inadvertence or inattention and thus constitute a radical
departure from the extraordinary standard of care required
of common carriers. Put differently, these circumstances
reflect the carriers utter lack of care and sensitivity to the
needs of its passengers, clearly constitutive of gross
negligence, recklessness and wanton disregard of the rights
of the latter, acts evidently indistinguishable or no different
from fraud, malice and bad faith. As the rule now stands,
where in breaching the contract of carriage the defendant
airline is shown to have acted fraudulently, with malice or
in bad faith, the award of moral and exemplary damages, in
addition to actual damages, is proper.[15]
However, the P500,000.00 moral damages and P400,000.00
exemplary damages awarded by the trial court have to be
reduced. The well-entrenched principle is that the grant of
moral damages depends upon the discretion of the court
based on the circumstances of each case.[16] This
discretion is limited by the principle that the "amount
awarded should not be palpably and scandalously
excessive" as to indicate that it was the result of prejudice
or corruption on the part of the trial court.[17] Damages are
not intended to enrich the complainant at the expense of the
defendant. They are awarded only to alleviate the moral
suffering that the injured party had undergone by reason of
the defendant's culpable action.[18] There is no hard-andfast rule in the determination of what would be a fair
amount of moral damages since each case must be
governed by its own peculiar facts.
In the instant case, the injury suffered by petitioner is not so
serious or extensive as to warrant an award amounting to
P900,000.00. The assessment of P200,000.00 as moral
damages and P50,000.00 as exemplary damages in his
favor is, in our view, reasonable and realistic.
On the issue of actual damages, we agree with the Court of
Appeals that the amount of P20,000.00 granted by the trial
court to petitioner should not be disturbed. Petitioner
categorically testified that he incurred the amount during
the period of his delay in departing from the United States Q: Will you kindly tell the Court what expenses if any did
you incur for these x x x days from July 1 until you were
able to leave on July 6, 1988?
A: Well, it is true we stayed in the house of my nephew
but still we had to spend for our food and I left him some
around five hundred dollars for our stay for around five
days.
Q: How about your meals?
A: For our meals, we have to eat outside.

Anent the accusation that private respondents personnel

were rude and arrogant, petitioner failed to adduce
sufficient evidence to substantiate his claim. Nonetheless,
such fact will not in any manner affect the disposition of
this case. Private respondents mistake in removing the
wrong coupon was compounded by several other

Q: Will you tell, more or less, how much you spent for
your meals?
xxxx

64

A: For every meal we spend around thirty dollars each.

Business Class has priority for upgrading to First Class if

the Business Class Section is fully booked.

Q: And this is for how many days?

A: From July 1, up to the 6th in the morning, sir.
Q: So more or less how many in pesos did you spend for
this period of waiting from July 1 to 6?

Respondents-spouses Dr. Daniel Earnshaw Vazquez and

Maria Luisa Madrigal Vazquez are frequent flyers of
Cathay and are Gold Card members of its Marco Polo
Club. On 24 September 1996, the Vazquezes, together with
their maid and two friends Pacita Cruz and Josefina Vergel
de Dios, went to Hongkong for pleasure and business.

A: Twenty thousand pesos, sir [19]

In the absence of any countervailing evidence from private
respondent, and in view of the negligence attributable to it,
the foregoing testimony suffices as basis for actual
damages as determined by the court a quo.
As regards attorney's fees, they may be awarded when the
defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his
interest. It was therefore erroneous for the Court of
Appeals to delete the award made by the trial court;
consequently, petitioner should be awarded attorney's fees
and the amount of P25,000.00, instead of P100,000.00
earlier awarded, may be considered rational, fair and
reasonable.
WHEREFORE, the petition is GRANTED and the 14 July
1994 Decision of the Court of Appeals is REVERSED.
Private respondent is ordered to pay petitioner P20,000.00
for actual damages as fixed by the trial court, plus
P200,000.00 for moral damages, P50,000.00 for exemplary
damages and P25,000.00 for attorney's fees. No costs.
SO ORDERED.
Cathay Pacific v. Vazquez
Mar 14, 2003, GR#150843
[G.R. No. 150843. March 14, 2003]
CATHAY PACIFIC AIRWAYS, LTD., petitioner, vs.
SPOUSES DANIEL VAZQUEZ and MARIA LUISA
MADRIGAL VAZQUEZ, respondents.
DECISION
DAVIDE, JR., C.J.:
Is an involuntary upgrading of an airline passengers
accommodation from one class to a more superior class at
no extra cost a breach of contract of carriage that would
entitle the passenger to an award of damages? This is a
novel question that has to be resolved in this case.
The facts in this case, as found by the Court of Appeals and
adopted by petitioner Cathay Pacific Airways, Ltd.,
(hereinafter Cathay) are as follows:
Cathay is a common carrier engaged in the business of
transporting passengers and goods by air. Among the many
routes it services is the Manila-Hongkong-Manila course.
As part of its marketing strategy, Cathay accords its
frequent flyers membership in its Marco Polo Club. The
members enjoy several privileges, such as priority for
upgrading of booking without any extra charge whenever
an opportunity arises. Thus, a frequent flyer booked in the

For their return flight to Manila on 28 September 1996,

they were booked on Cathays Flight CX-905, with
departure time at 9:20 p.m. Two hours before their time of
departure, the Vazquezes and their companions checked in
their luggage at Cathays check-in counter at Kai Tak
Airport and were given their respective boarding passes, to
wit, Business Class boarding passes for the Vazquezes and
their two friends, and Economy Class for their maid. They
then proceeded to the Business Class passenger lounge.
When boarding time was announced, the Vazquezes and
their two friends went to Departure Gate No. 28, which was
designated for Business Class passengers. Dr. Vazquez
presented his boarding pass to the ground stewardess, who
in turn inserted it into an electronic machine reader or
computer at the gate. The ground stewardess was assisted
by a ground attendant by the name of Clara Lai Han Chiu.
When Ms. Chiu glanced at the computer monitor, she saw a
message that there was a seat change from Business
Class to First Class for the Vazquezes.
Ms. Chiu approached Dr. Vazquez and told him that the
Vazquezes accommodations were upgraded to First Class.
Dr. Vazquez refused the upgrade, reasoning that it would
not look nice for them as hosts to travel in First Class and
their guests, in the Business Class; and moreover, they were
going to discuss business matters during the flight. He also
told Ms. Chiu that she could have other passengers instead
transferred to the First Class Section. Taken aback by the
refusal for upgrading, Ms. Chiu consulted her supervisor,
who told her to handle the situation and convince the
Vazquezes to accept the upgrading. Ms. Chiu informed the
latter that the Business Class was fully booked, and that
since they were Marco Polo Club members they had the
priority to be upgraded to the First Class. Dr. Vazquez
continued to refuse, so Ms. Chiu told them that if they
would not avail themselves of the privilege, they would not
be allowed to take the flight. Eventually, after talking to
his two friends, Dr. Vazquez gave in. He and Mrs. Vazquez
then proceeded to the First Class Cabin.
Upon their return to Manila, the Vazquezes, in a letter of 2
October 1996 addressed to Cathays Country Manager,
demanded that they be indemnified in the amount of
P1million for the humiliation and embarrassment caused
by its employees. They also demanded a written apology
from the management of Cathay, preferably a responsible
person with a rank of no less than the Country Manager, as
well as the apology from Ms. Chiu within fifteen days
from receipt of the letter.

65

In his reply of 14 October 1996, Mr. Larry Yuen, the

assistant to Cathays Country Manager Argus Guy Robson,
informed the Vazquezes that Cathay would investigate the
incident and get back to them within a weeks time.
On 8 November 1996, after Cathays failure to give them
any feedback within its self-imposed deadline, the
Vazquezes instituted before the Regional Trial Court of
Makati City an action for damages against Cathay, praying
for the payment to each of them the amounts of P250,000
as temperate damages; P500,000 as moral damages;
P500,000 as exemplary or corrective damages; and
P250,000 as attorneys fees.
In their complaint, the Vazquezes alleged that when they
informed Ms. Chiu that they preferred to stay in Business
Class, Ms. Chiu obstinately, uncompromisingly and in a
loud, discourteous and harsh voice threatened that they
could not board and leave with the flight unless they go to
First Class, since the Business Class was overbooked. Ms.
Chius loud and stringent shouting annoyed, embarrassed,
and humiliated them because the incident was witnessed by
all the other passengers waiting for boarding. They also
claimed that they were unjustifiably delayed to board the
plane, and when they were finally permitted to get into the
aircraft, the forward storage compartment was already full.
A flight stewardess instructed Dr. Vazquez to put his roll-on
luggage in the overhead storage compartment. Because he
was not assisted by any of the crew in putting up his
luggage, his bilateral carpal tunnel syndrome was
aggravated, causing him extreme pain on his arm and wrist.
The Vazquezes also averred that they belong to the
uppermost and absolutely top elite of both Philippine
Society and the Philippine financial community, [and that]
they were among the wealthiest persons in the
Philippine[s].
In its answer, Cathay alleged that it is a practice among
commercial airlines to upgrade passengers to the next better
class of accommodation, whenever an opportunity arises,
such as when a certain section is fully booked. Priority in
upgrading is given to its frequent flyers, who are
considered favored passengers like the Vazquezes. Thus,
when the Business Class Section of Flight CX-905 was
fully booked, Cathays computer sorted out the names of
favored passengers for involuntary upgrading to First Class.
When Ms. Chiu informed the Vazquezes that they were
upgraded to First Class, Dr. Vazquez refused. He then stood
at the entrance of the boarding apron, blocking the queue of
passengers from boarding the plane, which inconvenienced
other passengers. He shouted that it was impossible for him
and his wife to be upgraded without his two friends who
were traveling with them. Because of Dr. Vazquezs
outburst, Ms. Chiu thought of upgrading the traveling
companions of the Vazquezes. But when she checked the
computer, she learned that the Vazquezes companions did
not have priority for upgrading. She then tried to book the
Vazquezes again to their original seats. However, since the
Business Class Section was already fully booked, she
politely informed Dr. Vazquez of such fact and explained
that the upgrading was in recognition of their status as
Cathays valued passengers. Finally, after talking to their

guests, the Vazquezes eventually decided to take the First

Class accommodation.
Cathay also asserted that its employees at the Hong Kong
airport acted in good faith in dealing with the Vazquezes;
none of them shouted, humiliated, embarrassed, or
committed any act of disrespect against them (the
Vazquezes). Assuming that there was indeed a breach of
contractual obligation, Cathay acted in good faith, which
negates any basis for their claim for temperate, moral, and
exemplary damages and attorneys fees. Hence, it prayed
for the dismissal of the complaint and for payment of
P100,000 for exemplary damages and P300,000 as
attorneys fees and litigation expenses.
During the trial, Dr. Vazquez testified to support the
allegations in the complaint.
His testimony was
corroborated by his two friends who were with him at the
time of the incident, namely, Pacita G. Cruz and Josefina
Vergel de Dios.
For its part, Cathay presented documentary evidence and
the testimonies of Mr. Yuen; Ms. Chiu; Norma Barrientos,
Comptroller of its retained counsel; and Mr. Robson. Yuen
and Robson testified on Cathays policy of upgrading the
seat accommodation of its Marco Polo Club members when
an opportunity arises. The upgrading of the Vazquezes to
First Class was done in good faith; in fact, the First Class
Section is definitely much better than the Business Class in
terms of comfort, quality of food, and service from the
cabin crew. They also testified that overbooking is a
widely accepted practice in the airline industry and is in
accordance with the International Air Transport Association
(IATA) regulations. Airlines overbook because a lot of
passengers do not show up for their flight. With respect to
Flight CX-905, there was no overall overbooking to a
degree that a passenger was bumped off or downgraded.
Yuen and Robson also stated that the demand letter of the
Vazquezes was immediately acted upon. Reports were
gathered from their office in Hong Kong and immediately
forwarded to their counsel Atty. Remollo for legal advice.
However, Atty. Remollo begged off because his services
were likewise retained by the Vazquezes; nonetheless, he
undertook to solve the problem in behalf of Cathay. But
nothing happened until Cathay received a copy of the
complaint in this case. For her part, Ms. Chiu denied that
she shouted or used foul or impolite language against the
Vazquezes. Ms. Barrientos testified on the amount of
attorneys fees and other litigation expenses, such as those
for the taking of the depositions of Yuen and Chiu.
In its decision[1] of 19 October 1998, the trial court found
for the Vazquezes and decreed as follows:
WHEREFORE, finding preponderance of evidence to
sustain the instant complaint, judgment is hereby rendered
in favor of plaintiffs Vazquez spouses and against
defendant Cathay Pacific Airways, Ltd., ordering the latter
to pay each plaintiff the following:
a)
Nominal damages in the amount of P100,000.00
for each plaintiff;

66

b)
Moral damages in the amount of P2,000,000.00
for each plaintiff;
c)
Exemplary damages in the amount of
P5,000,000.00 for each plaintiff;
d)
Attorneys fees and expenses of litigation in the
amount of P1,000,000.00 for each plaintiff; and
e)

Costs of suit.

SO ORDERED.
According to the trial court, Cathay offers various classes
of seats from which passengers are allowed to choose
regardless of their reasons or motives, whether it be due to
budgetary constraints or whim. The choice imposes a clear
obligation on Cathay to transport the passengers in the class
chosen by them. The carrier cannot, without exposing
itself to liability, force a passenger to involuntarily change
his choice.
The upgrading of the Vazquezes
accommodation over and above their vehement objections
was due to the overbooking of the Business Class. It was a
pretext to pack as many passengers as possible into the
plane to maximize Cathays revenues. Cathays actuations
in this case displayed deceit, gross negligence, and bad
faith, which entitled the Vazquezes to awards for damages.
On appeal by the petitioners, the Court of Appeals, in its
decision of 24 July 2001,[2] deleted the award for
exemplary damages; and it reduced the awards for moral
and nominal damages for each of the Vazquezes to
P250,000 and P50,000, respectively, and the attorneys fees
and litigation expenses to P50,000 for both of them.
The Court of Appeals ratiocinated that by upgrading the
Vazquezes to First Class, Cathay novated the contract of
carriage without the formers consent. There was a breach
of contract not because Cathay overbooked the Business
Class Section of Flight CX-905 but because the latter
pushed through with the upgrading despite the objections of
the Vazquezes.
However, the Court of Appeals was not convinced that Ms.
Chiu shouted at, or meant to be discourteous to, Dr.
Vazquez, although it might seemed that way to the latter,
who was a member of the elite in Philippine society and
was not therefore used to being harangued by anybody. Ms.
Chiu was a Hong Kong Chinese whose fractured Chinese
was difficult to understand and whose manner of speaking
might sound harsh or shrill to Filipinos because of cultural
differences. But the Court of Appeals did not find her to
have acted with deliberate malice, deceit, gross negligence,
or bad faith. If at all, she was negligent in not offering the
First Class accommodations to other passengers. Neither
can the flight stewardess in the First Class Cabin be said to
have been in bad faith when she failed to assist Dr. Vazquez
in lifting his baggage into the overhead storage bin. There
is no proof that he asked for help and was refused even
after saying that he was suffering from bilateral carpal
tunnel syndrome. Anent the delay of Yuen in responding

to the demand letter of the Vazquezes, the Court of Appeals

found it to have been sufficiently explained.
The Vazquezes and Cathay separately filed motions for a
reconsideration of the decision, both of which were denied
by the Court of Appeals.
Cathay seasonably filed with us this petition in this case.
Cathay maintains that the award for moral damages has no
basis, since the Court of Appeals found that there was no
wanton, fraudulent, reckless and oppressive display of
manners on the part of its personnel; and that the breach of
contract was not attended by fraud, malice, or bad faith. If
any damage had been suffered by the Vazquezes, it was
damnum absque injuria, which is damage without injury,
damage or injury inflicted without injustice, loss or damage
without violation of a legal right, or a wrong done to a man
for which the law provides no remedy. Cathay also invokes
our decision in United Airlines, Inc. v. Court of Appeals[3]
where we recognized that, in accordance with the Civil
Aeronautics Boards Economic Regulation No. 7, as
amended, an overbooking that does not exceed ten percent
cannot be considered deliberate and done in bad faith. We
thus deleted in that case the awards for moral and
exemplary damages, as well as attorneys fees, for lack of
proof of overbooking exceeding ten percent or of bad faith
on the part of the airline carrier.
On the other hand, the Vazquezes assert that the Court of
Appeals was correct in granting awards for moral and
nominal damages and attorneys fees in view of the breach
of contract committed by Cathay for transferring them from
the Business Class to First Class Section without prior
notice or consent and over their vigorous objection. They
likewise argue that the issuance of passenger tickets more
than the seating capacity of each section of the plane is in
itself fraudulent, malicious and tainted with bad faith.
The key issues for our consideration are whether (1) by
upgrading the seat accommodation of the Vazquezes from
Business Class to First Class Cathay breached its contract
of carriage with the Vazquezes; (2) the upgrading was
tainted with fraud or bad faith; and (3) the Vazquezes are
entitled to damages.
We resolve the first issue in the affirmative.
A contract is a meeting of minds between two persons
whereby one agrees to give something or render some
service to another for a consideration. There is no contract
unless the following requisites concur: (1) consent of the
contracting parties; (2) an object certain which is the
subject of the contract; and (3) the cause of the obligation
which is established.[4] Undoubtedly, a contract of carriage
existed between Cathay and the Vazquezes. They
voluntarily and freely gave their consent to an agreement
whose object was the transportation of the Vazquezes from
Manila to Hong Kong and back to Manila, with seats in the
Business Class Section of the aircraft, and whose cause or
consideration was the fare paid by the Vazquezes to Cathay.

67

The only problem is the legal effect of the upgrading of the

seat accommodation of the Vazquezes. Did it constitute a
breach of contract?
Breach of contract is defined as the failure without legal
reason to comply with the terms of a contract.[5] It is also
defined as the [f]ailure, without legal excuse, to perform
any promise which forms the whole or part of the
contract.[6]
In previous cases, the breach of contract of carriage
consisted in either the bumping off of a passenger with
confirmed reservation or the downgrading of a passengers
seat accommodation from one class to a lower class. In this
case, what happened was the reverse. The contract between
the parties was for Cathay to transport the Vazquezes to
Manila on a Business Class accommodation in Flight CX905. After checking-in their luggage at the Kai Tak Airport
in Hong Kong, the Vazquezes were given boarding cards
indicating their seat assignments in the Business Class
Section. However, during the boarding time, when the
Vazquezes presented their boarding passes, they were
informed that they had a seat change from Business Class
to First Class. It turned out that the Business Class was
overbooked in that there were more passengers than the
number of seats. Thus, the seat assignments of the
Vazquezes were given to waitlisted passengers, and the
Vazquezes, being members of the Marco Polo Club, were
upgraded from Business Class to First Class.
We note that in all their pleadings, the Vazquezes never
denied that they were members of Cathays Marco Polo
Club. They knew that as members of the Club, they had
priority for upgrading of their seat accommodation at no
extra cost when an opportunity arises. But, just like other
privileges, such priority could be waived. The Vazquezes
should have been consulted first whether they wanted to
avail themselves of the privilege or would consent to a
change of seat accommodation before their seat
assignments were given to other passengers. Normally, one
would appreciate and accept an upgrading, for it would
mean a better accommodation. But, whatever their reason
was and however odd it might be, the Vazquezes had every
right to decline the upgrade and insist on the Business Class
accommodation they had booked for and which was
designated in their boarding passes. They clearly waived
their priority or preference when they asked that other
passengers be given the upgrade. It should not have been
imposed on them over their vehement objection. By
insisting on the upgrade, Cathay breached its contract of
carriage with the Vazquezes.
We are not, however, convinced that the upgrading or the
breach of contract was attended by fraud or bad faith. Thus,
we resolve the second issue in the negative.
Bad faith and fraud are allegations of fact that demand clear
and convincing proof. They are serious accusations that can
be so conveniently and casually invoked, and that is why
they are never presumed. They amount to mere slogans or
mudslinging unless convincingly substantiated by whoever
is alleging them.

Fraud has been defined to include an inducement through

insidious machination. Insidious machination refers to a
deceitful scheme or plot with an evil or devious purpose.
Deceit exists where the party, with intent to deceive,
conceals or omits to state material facts and, by reason of
such omission or concealment, the other party was induced
to give consent that would not otherwise have been given.
[7]
Bad faith does not simply connote bad judgment or
negligence; it imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, a breach of a
known duty through some motive or interest or ill will that
partakes of the nature of fraud.[8]
We find no persuasive proof of fraud or bad faith in this
case. The Vazquezes were not induced to agree to the
upgrading through insidious words or deceitful machination
or through willful concealment of material facts. Upon
boarding, Ms. Chiu told the Vazquezes that their
accommodations were upgraded to First Class in view of
their being Gold Card members of Cathays Marco Polo
Club. She was honest in telling them that their seats were
already given to other passengers and the Business Class
Section was fully booked. Ms. Chiu might have failed to
consider the remedy of offering the First Class seats to
other passengers. But, we find no bad faith in her failure to
do so, even if that amounted to an exercise of poor
judgment.
Neither was the transfer of the Vazquezes effected for some
evil or devious purpose. As testified to by Mr. Robson, the
First Class Section is better than the Business Class Section
in terms of comfort, quality of food, and service from the
cabin crew; thus, the difference in fare between the First
Class and Business Class at that time was $250.[9]
Needless to state, an upgrading is for the better condition
and, definitely, for the benefit of the passenger.
We are not persuaded by the Vazquezes argument that the
overbooking of the Business Class Section constituted bad
faith on the part of Cathay. Section 3 of the Economic
Regulation No. 7 of the Civil Aeronautics Board, as
amended, provides:
Sec 3. Scope. This regulation shall apply to every
Philippine and foreign air carrier with respect to its
operation of flights or portions of flights originating from
or terminating at, or serving a point within the territory of
the Republic of the Philippines insofar as it denies boarding
to a passenger on a flight, or portion of a flight inside or
outside the Philippines, for which he holds confirmed
reserved space. Furthermore, this Regulation is designed to
cover only honest mistakes on the part of the carriers and
excludes deliberate and willful acts of non-accommodation.
Provided, however, that overbooking not exceeding 10% of
the seating capacity of the aircraft shall not be considered
as a deliberate and willful act of non-accommodation.
It is clear from this section that an overbooking that does
not exceed ten percent is not considered deliberate and

68

therefore does not amount to bad faith.[10] Here, while

there was admittedly an overbooking of the Business Class,
there was no evidence of overbooking of the plane beyond
ten percent, and no passenger was ever bumped off or was
refused to board the aircraft.
Now we come to the third issue on damages.
The Court of Appeals awarded each of the Vazquezes moral
damages in the amount of P250,000. Article 2220 of the
Civil Code provides:
Article 2220. Willful injury to property may be a legal
ground for awarding moral damages if the court should find
that, under the circumstances, such damages are justly due.
The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.
Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar
injury. Although incapable of pecuniary computation,
moral damages may be recovered if they are the proximate
result of the defendants wrongful act or omission.[11]
Thus, case law establishes the following requisites for the
award of moral damages: (1) there must be an injury clearly
sustained by the claimant, whether physical, mental or
psychological; (2) there must be a culpable act or omission
factually established; (3) the wrongful act or omission of
the defendant is the proximate cause of the injury sustained
by the claimant; and (4) the award for damages is
predicated on any of the cases stated in Article 2219 of the
Civil Code.[12]
Moral damages predicated upon a breach of contract of
carriage may only be recoverable in instances where the
carrier is guilty of fraud or bad faith or where the mishap
resulted in the death of a passenger.[13] Where in
breaching the contract of carriage the airline is not shown
to have acted fraudulently or in bad faith, liability for
damages is limited to the natural and probable
consequences of the breach of the obligation which the
parties had foreseen or could have reasonably foreseen. In
such a case the liability does not include moral and
exemplary damages.[14]
In this case, we have ruled that the breach of contract of
carriage, which consisted in the involuntary upgrading of
the Vazquezes seat accommodation, was not attended by
fraud or bad faith. The Court of Appeals award of moral
damages has, therefore, no leg to stand on.
The deletion of the award for exemplary damages by the
Court of Appeals is correct. It is a requisite in the grant of
exemplary damages that the act of the offender must be
accompanied by bad faith or done in wanton, fraudulent or
malevolent manner.[15] Such requisite is absent in this
case. Moreover, to be entitled thereto the claimant must
first establish his right to moral, temperate, or
compensatory damages.[16] Since the Vazquezes are not
entitled to any of these damages, the award for exemplary
damages has no legal basis. And where the awards for

moral and exemplary damages are eliminated, so must the

award for attorneys fees.[17]
The most that can be adjudged in favor of the Vazquezes
for Cathays breach of contract is an award for nominal
damages under Article 2221 of the Civil Code, which reads
as follows:
Article 2221 of the Civil Code provides:
Article 2221. Nominal damages are adjudicated in order
that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized,
and not for the purpose of indemnifying the plaintiff for
any loss suffered by him.
Worth noting is the fact that in Cathays Memorandum filed
with this Court, it prayed only for the deletion of the award
for moral damages. It deferred to the Court of Appeals
discretion in awarding nominal damages; thus:
As far as the award of nominal damages is concerned,
petitioner respectfully defers to the Honorable Court of
Appeals discretion. Aware as it is that somehow, due to
the resistance of respondents-spouses to the normallyappreciated gesture of petitioner to upgrade their
accommodations, petitioner may have disturbed the
respondents-spouses wish to be with their companions
(who traveled to Hong Kong with them) at the Business
Class on their flight to Manila. Petitioner regrets that in its
desire to provide the respondents-spouses with additional
amenities for the one and one-half (1 1/2) hour flight to
Manila, unintended tension ensued.[18]
Nonetheless, considering that the breach was intended to
give more benefit and advantage to the Vazquezes by
upgrading their Business Class accommodation to First
Class because of their valued status as Marco Polo
members, we reduce the award for nominal damages to
P5,000.
Before writing finis to this decision, we find it well-worth
to quote the apt observation of the Court of Appeals
regarding the awards adjudged by the trial court:
We are not amused but alarmed at the lower courts
unbelievable alacrity, bordering on the scandalous, to
award excessive amounts as damages. In their complaint,
appellees asked for P1 million as moral damages but the
lower court awarded P4 million; they asked for
P500,000.00 as exemplary damages but the lower court
cavalierly awarded a whooping P10 million; they asked for
P250,000.00 as attorneys fees but were awarded P2
million; they did not ask for nominal damages but were
awarded P200,000.00. It is as if the lower court went on a
rampage, and why it acted that way is beyond all tests of
reason. In fact the excessiveness of the total award invites
the suspicion that it was the result of prejudice or
corruption on the part of the trial court.

69

The presiding judge of the lower court is enjoined to

hearken to the Supreme Courts admonition in Singson vs.
CA (282 SCRA 149 [1997]), where it said:
The well-entrenched principle is that the grant of moral
damages depends upon the discretion of the court based on
the circumstances of each case. This discretion is limited
by the principle that the amount awarded should not be
palpably and scandalously excessive as to indicate that it
was the result of prejudice or corruption on the part of the
trial court.
and in Alitalia Airways vs. CA (187 SCRA 763 [1990],
where it was held:
Nonetheless, we agree with the injunction expressed by the
Court of Appeals that passengers must not prey on
international airlines for damage awards, like trophies in a
safari. After all neither the social standing nor prestige of
the passenger should determine the extent to which he
would suffer because of a wrong done, since the dignity
affronted in the individual is a quality inherent in him and
not conferred by these social indicators. [19]
We adopt as our own this observation of the Court of
Appeals.
WHEREFORE, the instant petition is hereby partly
GRANTED. The Decision of the Court of Appeals of 24
July 2001 in CA-G.R. CV No. 63339 is hereby
MODIFIED, and as modified, the awards for moral
damages and attorneys fees are set aside and deleted, and
the award for nominal damages is reduced to P5,000.
No pronouncement on costs.
SO ORDERED.
Singapore Airlines v. Andion Dec 10, 2003, GR142305
[G.R. No. 142305. December 10, 2003]
SINGAPORE AIRLINES LIMITED,
ANDION FERNANDEZ, respondent.
DECISION
CALLEJO, SR., J.:

petitioner,

vs.

This is a petition for review on certiorari assailing the

Decision[1] of the Court of Appeals which affirmed in toto
the decision[2] of the Regional Trial Court of Pasig City,
Branch 164 in Civil Case No. 60985 filed by the
respondent for damages.
The Case for the Respondent
Respondent Andion Fernandez is an acclaimed soprano
here in the Philippines and abroad. At the time of the
incident, she was availing an educational grant from the
Federal Republic of Germany, pursuing a Masters Degree
in Music majoring in Voice.[3]

engagement, an airline passage ticket was purchased from

petitioner Singapore Airlines which would transport her to
Manila from Frankfurt, Germany on January 28, 1991.
From Manila, she would proceed to Malaysia on the next
day.[4] It was necessary for the respondent to pass by
Manila in order to gather her wardrobe; and to rehearse and
coordinate with her pianist her repertoire for the aforesaid
performance.
The petitioner issued the respondent a Singapore Airlines
ticket for Flight No. SQ 27, leaving Frankfurt, Germany on
January 27, 1991 bound for Singapore with onward
connections from Singapore to Manila. Flight No. SQ 27
was scheduled to leave Frankfurt at 1:45 in the afternoon of
January 27, 1991, arriving at Singapore at 8:50 in the
morning of January 28, 1991. The connecting flight from
Singapore to Manila, Flight No. SQ 72, was leaving
Singapore at 11:00 in the morning of January 28, 1991,
arriving in Manila at 2:20 in the afternoon of the same day.
[5]
On January 27, 1991, Flight No. SQ 27 left Frankfurt but
arrived in Singapore two hours late or at about 11:00 in the
morning of January 28, 1991. By then, the aircraft bound
for Manila had left as scheduled, leaving the respondent
and about 25 other passengers stranded in the Changi
Airport in Singapore.[6]
Upon disembarkation at Singapore, the respondent
approached the transit counter who referred her to the
nightstop counter and told the lady employee thereat that it
was important for her to reach Manila on that day, January
28, 1991. The lady employee told her that there were no
more flights to Manila for that day and that respondent had
no choice but to stay in Singapore. Upon respondents
persistence, she was told that she can actually fly to Hong
Kong going to Manila but since her ticket was nontransferable, she would have to pay for the ticket. The
respondent could not accept the offer because she had no
money to pay for it.[7] Her pleas for the respondent to
make arrangements to transport her to Manila were
unheeded.[8]
The respondent then requested the lady employee to use
their phone to make a call to Manila. Over the employees
reluctance, the respondent telephoned her mother to inform
the latter that she missed the connecting flight.
The
respondent was able to contact a family friend who picked
her up from the airport for her overnight stay in Singapore.
[9]
The next day, after being brought back to the airport, the
respondent proceeded to petitioners counter which says:
Immediate Attention To Passengers with Immediate
Booking. There were four or five passengers in line. The
respondent approached petitioners male employee at the
counter to make arrangements for immediate booking only
to be told: Cant you see I am doing something. She
explained her predicament but the male employee
uncaringly retorted: Its your problem, not ours.[10]

She was invited to sing before the King and Queen of

Malaysia on February 3 and 4, 1991. For this singing

70

The respondent never made it to Manila and was forced to

take a direct flight from Singapore to Malaysia on January
29, 1991, through the efforts of her mother and travel
agency in Manila. Her mother also had to travel to
Malaysia bringing with her respondents wardrobe and
personal things needed for the performance that caused
them to incur an expense of about P50,000.[11]

II

As a result of this incident, the respondents performance

before the Royal Family of Malaysia was below par.
Because of the rude and unkind treatment she received
from the petitioners personnel in Singapore, the
respondent was engulfed with fear, anxiety, humiliation and
embarrassment causing her to suffer mental fatigue and
skin rashes. She was thereby compelled to seek immediate
medical attention upon her return to Manila for acute
urticaria.[12]

THE HONORABLE COURT OF APPEALS ERRED IN

DISMISSING THE PETITIONERS COUNTERCLAIMS.
[15]

On June 15, 1993, the RTC rendered a decision with the

following dispositive portion:
ACCORDINGLY and as prayed for, defendant Singapore
Airlines is ordered to pay herein plaintiff Andion H.
Fernandez the sum of:
1.
FIFTY THOUSAND (P50,000.00) PESOS as
compensatory or actual damages;
2.
TWO HUNDRED and FIFTY THOUSAND
(P250,000.00) PESOS as moral damages considering
plaintiffs professional standing in the field of culture at
home and abroad;
3.
ONE HUNDRED THOUSAND (P100,000.00)
PESOS as exemplary damages;
4.
SEVENTY-FIVE THOUSAND (P75,000.00)
PESOS as attorneys fees; and
5.

To pay the costs of suit.

SO ORDERED.[13]
The petitioner appealed the decision to the Court of
Appeals.
On June 10, 1998, the CA promulgated the assailed
decision finding no reversible error in the appealed decision
of the trial court.[14]
Forthwith, the petitioner filed the instant petition for
review, raising the following errors:

THE HONORABLE COURT OF APPEALS ERRED IN

HOLDING THAT THE PETITIONER ACTED IN BAD
FAITH.
III

The petitioner assails the award of damages contending that

it exercised the extraordinary diligence required by law
under the given circumstances. The delay of Flight No. SQ
27 from Frankfurt to Singapore on January 28, 1991 for
more than two hours was due to a fortuitous event and
beyond petitioners control. Inclement weather prevented
the petitioners plane coming from Copenhagen, Denmark
to arrive in Frankfurt on time on January 27, 1991. The
plane could not take off from the airport as the place was
shrouded with fog. This delay caused a snowball effect
whereby the other flights were consequently delayed. The
plane carrying the respondent arrived in Singapore two (2)
hours behind schedule.[16] The delay was even
compounded when the plane could not travel the normal
route which was through the Middle East due to the raging
Gulf War at that time. It had to pass through the restricted
Russian airspace which was more congested.[17]
Under these circumstances, petitioner therefore alleged that
it cannot be faulted for the delay in arriving in Singapore
on January 28, 1991 and causing the respondent to miss her
connecting flight to Manila.
The petitioner further contends that it could not also be held
in bad faith because its personnel did their best to look after
the needs and interests of the passengers including the
respondent. Because the respondent and the other 25
passengers missed their connecting flight to Manila, the
petitioner automatically booked them to the flight the next
day and gave them free hotel accommodations for the
night. It was respondent who did not take petitioners
offer and opted to stay with a family friend in Singapore.
The petitioner also alleges that the action of the respondent
was baseless and it tarnished its good name and image
earned through the years for which, it was entitled to
damages in the amount of P1,000,000; exemplary damages
of P500,000; and attorneys fees also in the amount of
P500,000.[18]
The petition is barren of merit.

I
THE HONORABLE COURT OF APPEALS ERRED IN
AFFIRMING IN TOTO THE DECISION OF THE TRIAL
COURT
THAT
AWARDED
DAMAGES
TO
RESPONDENT FOR THE ALLEGED FAILURE OF THE
PETITIONER TO EXERCISE
EXTRAORDINARY
DILIGENCE.

When an airline issues a ticket to a passenger, confirmed

for a particular flight on a certain date, a contract of
carriage arises. The passenger then has every right to
expect that he be transported on that flight and on that date.
If he does not, then the carrier opens itself to a suit for a
breach of contract of carriage.[19]

71

The contract of air carriage is a peculiar one. Imbued with

public interest, the law requires common carriers 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.[20] In an
action for breach of contract of carriage, the aggrieved
party does not have to prove that the common carrier was at
fault or was negligent. All that is necessary to prove is the
existence of the contract and the fact of its nonperformance by the carrier.[21]
In the case at bar, it is undisputed that the respondent
carried a confirmed ticket for the two-legged trip from
Frankfurt to Manila: 1) Frankfurt-Singapore; and 2)
Singapore-Manila. In her contract of carriage with the
petitioner, the respondent certainly expected that she would
fly to Manila on Flight No. SQ 72 on January 28, 1991.
Since the petitioner did not transport the respondent as
covenanted by it on said terms, the petitioner clearly
breached its contract of carriage with the respondent. The
respondent had every right to sue the petitioner for this
breach. The defense that the delay was due to fortuitous
events and beyond petitioners control is unavailing. In
PAL vs. CA,[22] we held that:
.... Undisputably, PALs diversion of its flight due to
inclement weather was a fortuitous event. Nonetheless,
such occurrence did not terminate PALs contract with its
passengers. Being in the business of air carriage and the
sole one to operate in the country, PAL is deemed to be
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
carriers 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...
...
...If the cause of non-fulfillment of the contract is due to a
fortuitous event, it has to be the sole and only cause (Art.
1755 C.C., Art. 1733 C.C.). Since part of the failure to
comply with the obligation of common carrier to deliver its
passengers safely to their destination lay in the defendants
failure to provide comfort and convenience to its stranded
passengers using extraordinary diligence, the cause of nonfulfillment is not solely and exclusively due to fortuitous
event, but due to something which defendant airline could
have prevented, defendant becomes liable to plaintiff.
Indeed, in the instant case, petitioner was not without
recourse to enable it to fulfill its obligation to transport the
respondent safely as scheduled as far as human care and
foresight can provide to her destination. Tagged as a
premiere airline as it claims to be and with the complexities
of air travel, it was certainly well-equipped to be able to
foresee and deal with such situation. The petitioners
indifference and negligence by its absence and insensitivity
was exposed by the trial court, thus:

(a)
Under Section 9.1 of its Traffic Manual (Exhibit 4)
flights can be delayed to await the uplift of connecting
cargo and passengers arriving on a late in-bound flight
As adverted to by the trial court,Flight SQ-27/28 maybe
delayed for about half an hour to transfer plaintiff to her
connecting flight. As pointed out above, delay is normal in
commercial air transportation (RTC Decision, p. 22); or
(b) Petitioner airlines could have carried her on one of its
flights bound for Hongkong and arranged for a connecting
flight from Hongkong to Manila all on the same date. But
then the airline personnel who informed her of such
possibility told her that she has to pay for that flight.
Regrettably, respondent did not have sufficient funds to pay
for it. (TSN, 30 March 1992, pp.8-9; RTC Decision, pp.
22-23) Knowing the predicament of the respondent,
petitioner did not offer to shoulder the cost of the ticket for
that flight; or
(c)
As noted by the trial court from the account of
petitioners witness, Bob Khkimyong, that a passenger
such as the plaintiff could have been accommodated in
another international airline such as Lufthansa to bring the
plaintiff to Singapore early enough from Frankfurt
provided that there was prior communication from that
station to enable her to catch the connecting flight to
Manila because of the urgency of her business in Manila
(RTC Decision, p. 23)
The petitioners diligence in communicating to its
passengers the consequences of the delay in their flights
was wanting. As elucidated by the trial court:
It maybe that delay in the take off and arrival of
commercial aircraft could not be avoided and may be
caused by diverse factors such as those testified to by
defendants pilot. However, knowing fully well that even
before the plaintiff boarded defendants Jumbo aircraft in
Frankfurt bound for Singapore, it has already incurred a
delay of two hours. Nevertheless, defendant did not take
the trouble of informing plaintiff, among its other
passengers of such a delay and that in such a case, the usual
practice of defendant airline will be that they have to stay
overnight at their connecting airport; and much less did it
inquire from the plaintiff and the other 25 passengers
bound for Manila whether they are amenable to stay
overnight in Singapore and to take the connecting flight to
Manila the next day. Such information should have been
given and inquiries made in Frankfurt because even the
defendant airlines manual provides that in case of urgency
to reach his or her destination on the same date, the head
office of defendant in Singapore must be informed by
telephone or telefax so as the latter may make certain
arrangements with other airlines in Frankfurt to bring such
a passenger with urgent business to Singapore in such a
manner that the latter can catch up with her connecting
flight such as S-27/28 without spending the night in
Singapore[23]
The respondent was not remiss in conveying her
apprehension about the delay of the flight when she was
still in Frankfurt. Upon the assurance of petitioners

72

personnel in Frankfurt that she will be transported to

Manila on the same date, she had every right to expect that
obligation fulfilled. She testified, to wit:
Q: Now, since you were late, when the plane that arrived
from Frankfurt was late, did you not make arrangements so
that your flight from Singapore to Manila would be
adjusted?

Japan Airlines v. Asuncion Jan 28, 2005, GR#161730

G.R. No. 161730
January 28, 2005
JAPAN AIRLINES, petitioner,
vs.
MICHAEL ASUNCION and JEANETTE ASUNCION,
respondents.
DECISION

A: I asked the lady at the ticket counter, the one who gave
the boarding pass in Frankfurt and I asked her, Since my
flight going to Singapore would be late, what would happen
to my Singapore-Manila flight? and then she said, Dont
worry, Singapore Airlines would be responsible to bring
you to Manila on the same date. And then they have
informed the name of the officer, or whatever, that our
flight is going to be late.[24]
When a passenger contracts for a specific flight, he has a
purpose in making that choice which must be respected.
This choice, once exercised, must not be impaired by a
breach on the part of the airline without the latter incurring
any liability.[25] For petitioners failure to bring the
respondent to her destination, as scheduled, we find the
petitioner clearly liable for the breach of its contract of
carriage with the respondent.
We are convinced that the petitioner acted in bad faith. Bad
faith means a breach of known duty through some motive
of interest or ill will. Self-enrichment or fraternal interest,
and not personal ill will, may well have been the motive;
but it is malice nevertheless.[26] Bad faith was imputed by
the trial court when it found that the petitioners employees
at the Singapore airport did not accord the respondent the
attention and treatment allegedly warranted under the
circumstances. The lady employee at the counter was
unkind and of no help to her. The respondent further
alleged that without her threats of suing the company, she
was not allowed to use the companys phone to make long
distance calls to her mother in Manila. The male employee
at the counter where it says: Immediate Attention to
Passengers with Immediate Booking was rude to her when
he curtly retorted that he was busy attending to other
passengers in line. The trial court concluded that this
inattentiveness and rudeness of petitioners personnel to
respondents plight was gross enough amounting to bad
faith. This is a finding that is generally binding upon the
Court which we find no reason to disturb.
Article 2232 of the Civil Code provides that in a
contractual or quasi-contractual relationship, exemplary
damages may be awarded only if the defendant had acted in
a wanton, fraudulent, reckless, oppressive or malevolent
manner. In this case, petitioners employees acted in a
wanton, oppressive or malevolent manner. The award of
exemplary damages is, therefore, warranted in this case.
WHEREFORE, the Petition is DENIED. The Decision of
the Court of Appeals is AFFIRMED.
SO ORDERED.

YNARES-SANTIAGO, J.:
This petition for review seeks to reverse and set aside the
October 9, 2002 decision1 of the Court of Appeals and its
January 12, 2004 resolution,2 which affirmed in toto the
June 10, 1997 decision of the Regional Trial Court of
Makati City, Branch 61 in Civil Case No. 92-3635.3
On March 27, 1992, respondents Michael and Jeanette
Asuncion left Manila on board Japan Airlines (JAL) Flight
742 bound for Los Angeles. Their itinerary included a stopover in Narita and an overnight stay at Hotel Nikko Narita.
Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL
endorsed their applications for shore pass and directed them
to the Japanese immigration official.4 A shore pass is
required of a foreigner aboard a vessel or aircraft who
desires to stay in the neighborhood of the port of call for
not more than 72 hours.
During their interview, the Japanese immigration official
noted that Michael appeared shorter than his height as
indicated in his passport. Because of this inconsistency,
respondents were denied shore pass entries and were
brought instead to the Narita Airport Rest House where
they were billeted overnight.
The immigration official also handed Mrs. Higuchi a
Notice5 where it was stated that respondents were to be
"watched so as not to escape".
Mr. Atsushi Takemoto of the International Service Center
(ISC), the agency tasked by Japans Immigration
Department to handle passengers who were denied shore
pass entries, brought respondents to the Narita Airport Rest
House where they stayed overnight until their departure the
following day for Los Angeles. Respondents were charged
US$400.00 each for their accommodation, security service
and meals.
On December 12, 1992, respondents filed a complaint for
damages6 claiming that JAL did not fully apprise them of
their travel requirements and that they were rudely and
forcibly detained at Narita Airport.
JAL denied the allegations of respondents. It maintained
that the refusal of the Japanese immigration authorities to
issue shore passes to respondents is an act of state which
JAL cannot interfere with or prevail upon. Consequently, it
cannot impose upon the immigration authorities that
respondents be billeted at Hotel Nikko instead of the airport
resthouse.7

73

On June 10, 1997, the trial court rendered its decision, the
dispositive portion of which reads:
WHEREFORE PREMISES CONSIDERED, judgment is
hereby rendered in favor of plaintiffs ordering defendant
JAL to pay plaintiffs as follows:
1. the sum of US$800.00 representing the expenses
incurred at the Narita Airport with interest at 12% per
annum from March 27, 1992 until the sum is fully paid;
2. the sum of P200,000.00 for each plaintiff as moral
damages;
3. the amount of P100,000.00 for each plaintiff as
exemplary damages;

their overnight stay. Respondents mother, Mrs. Imelda

Asuncion, insisted though that Ms. Linda Villavicencio of
JAL assured her that her children would be granted the
passes.12 This assertion was satisfactorily refuted by Ms.
Villavicencios testimony during the cross examination, to
wit:
ATTY. GONZAGA:
Q I will show to you Exh. 9 which is the TIM and on page
184 hereof, particularly number 10, and I quote, "Those
holding tickets with confirmed seats and other documents
for their onward journey and continuing their journey to a
third country provided that they obtain an indorsement with
an application of shore pass or transit pass from the airline
ground personnel before clearing the immigration
formality?"

4. the amount of P100,000.00 as attorneys fees; and

WITNESS:
5. costs of suit.
A Yes, Sir.
SO ORDERED.8
Q Did you tell this provision to Mrs. Asuncion?
The trial court dismissed JALs counterclaim for litigation
expenses, exemplary damages and attorneys fees.

A Yes, Sir. I did.

On October 9, 2002, the Court of Appeals affirmed in toto

the decision of the trial court. Its motion for reconsideration
having been denied,9 JAL now files the instant petition.

Q Are you sure?

The basic issue for resolution is whether JAL is guilty of

breach of contract.

Q Did you give a copy?

Under Article 1755 of the Civil Code, a common carrier

such as JAL 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 for all
the circumstances. When an airline issues a ticket to a
passenger, confirmed for a particular flight on a certain
date, a contract of carriage arises. The passenger has every
right to expect that he be transported on that flight and on
that date and it becomes the carriers obligation to carry
him and his luggage safely to the agreed destination.10 If
the passenger is not so transported or if in the process of
transporting he dies or is injured, the carrier may be held
liable for a breach of contract of carriage.11
We find that JAL did not breach its contract of carriage
with respondents. It may be true that JAL has the duty to
inspect whether its passengers have the necessary travel
documents, however, such duty does not extend to
checking the veracity of every entry in these documents.
JAL could not vouch for the authenticity of a passport and
the correctness of the entries therein. The power to admit or
not an alien into the country is a sovereign act which
cannot be interfered with even by JAL. This is not within
the ambit of the contract of carriage entered into by JAL
and herein respondents. As such, JAL should not be faulted
for the denial of respondents shore pass applications.
Prior to their departure, respondents were aware that upon
arrival in Narita, they must secure shore pass entries for

A Yes, Sir.

A No, Sir, I did not give a copy but verbally I explained to

her the procedure they have to undergo when they get to
narita airport.
.
Q And you read the contents of this [TIM]?
A No, Sir, I did not read it to her but I explained to her the
procedure that each passenger has to go through before
when they get to narita airport before they line up in the
immigration counter.
Q In other words, you told Mrs. Asuncion the responsibility
of securing shore passes bears solely on the passengers
only?
A Yes, Sir.
Q That the airline has no responsibility whatsoever with
regards (sic) to the application for shore passes?
A Yes, Sir.13
Next, respondents claimed that petitioner breached its
contract of carriage when it failed to explain to the
immigration authorities that they had overnight vouchers at
the Hotel Nikko Narita. They imputed that JAL did not
exhaust all means to prevent the denial of their shore pass
entry applications.

74

To reiterate, JAL or any of its representatives have no

authority to interfere with or influence the immigration
authorities. The most that could be expected of JAL is to
endorse respondents applications, which Mrs. Higuchi did
immediately upon their arrival in Narita.
As Mrs. Higuchi stated during her deposition:
ATTY. QUIMBO
Q: Madam Witness, what assistance did you give, if any, to
the plaintiffs during this interview?
A: No, I was not present during their interview. I cannot
assist.
Q: Why not?
A: It is forbidden for a civilian personnel to interfere with
the Immigration agents duties.14
.
Q: During the time that you were in that room and you
were given this notice for you to sign, did you tell the
immigration agent that Michael and Jeanette Asuncion
should be allowed to stay at the Hotel Nikko Narita
because, as passengers of JAL, and according to the
plaintiff, they had vouchers to stay in that hotel that night?
A: No, I couldnt do so.
Q: Why not?
A: This notice is evidence which shows the decision of
immigration authorities. It shows there that the immigration
inspector also designated Room 304 of the Narita Airport
Resthouse as the place where the passengers were going to
wait for their outbound flight.1awphi1.nt I cannot interfere
with that decision.15

malevolent manner. Attorneys fees are allowed when

exemplary damages are awarded and when the party to a
suit is compelled to incur expenses to protect his interest.17
There being no breach of contract nor proof that JAL acted
in wanton, fraudulent or malevolent manner, there is no
basis for the award of any form of damages.
Neither should JAL be held liable to reimburse respondents
the amount of US$800.00. It has been sufficiently proven
that the amount pertained to ISC, an agency separate and
distinct from JAL, in payment for the accommodations
provided to respondents. The payments did not in any
manner accrue to the benefit of JAL.
However, we find that the Court of Appeals correctly
dismissed JALs counterclaim for litigation expenses,
exemplary damages and attorneys fees. The action was
filed by respondents in utmost good faith and not
manifestly frivolous. Respondents honestly believed that
JAL breached its contract. A persons right to litigate
should not be penalized by holding him liable for damages.
This is especially true when the filing of the case is to
enforce what he believes to be his rightful claim against
another although found to be erroneous.18
WHEREFORE, in view of the foregoing, the instant
petition is PARTLY GRANTED. The October 9, 2002
decision of the Court of Appeals and its January 12, 2004
resolution in CA-G.R. CV No. 57440, are REVERSED and
SET ASIDE insofar as the finding of breach on the part of
petitioner and the award of damages, attorneys fees and
costs of the suit in favor of respondents is concerned.
Accordingly, there being no breach of contract on the part
of petitioner, the award of actual, moral and exemplary
damages, as well as attorneys fees and costs of the suit in
favor of respondents Michael and Jeanette Asuncion, is
DELETED for lack of basis. However, the dismissal for
lack of merit of petitioners counterclaim for litigation
expenses, exemplary damages and attorneys fees, is
SUSTAINED. No pronouncement as to costs.
SO ORDERED.

Mrs. Higuchi did all she could to assist the respondents.

Upon being notified of the denial of respondents
applications, Mrs. Higuchi immediately made reservations
for respondents at the Narita Airport Rest House which is
really more a hotel than a detention house as claimed by
respondents.16

Northwest v. Chiong
Jan 31, 2008, GR 155550
NORTHWEST AIRLINES, INC.,
Petitioner,

More importantly, nowhere in respondent Michaels

testimony did he state categorically that Mrs. Higuchi or
any other employee of JAL treated them rudely or exhibited
improper behavior throughout their stay. We therefore find
JAL not remiss in its obligations as a common
carrier.1awphi1.nt
Moral damages may be recovered in cases where one
willfully causes injury to property, or in cases of breach of
contract where the other party acts fraudulently or in bad
faith. Exemplary damages are imposed by way of example
or correction for the public good, when the party to a
contract acts in wanton, fraudulent, oppressive or

- versus -

STEVEN P. CHIONG,
Respondent.
G.R. No. 155550

75

Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CORONA,*
NACHURA, and
REYES, JJ.
Promulgated:
January 31, 2008
x-----------------------------------------------------------------------------------x

DECISION
NACHURA, J.:

Before us is a petition for review on certiorari under

Rule 45 of the Rules of Court seeking the reversal of the
Court of Appeals (CA) Decision[1] in CA-G.R. CV No.
50308[2] which affirmed in toto the Regional Trial Court
(RTC) Decision[3] holding petitioner Northwest Airlines,
Inc. (Northwest) liable for breach of contract of carriage.
On March 14, 1989, Philimare Shipping and Seagull
Maritime Corporation (Philimare), as the authorized
Philippine agent of TransOcean Lines (TransOcean), hired
respondent Steven Chiong as Third Engineer of
TransOceans vessel M/V Elbia at the San Diego,
California Port. Under the service crew agreement, Chiong
was guaranteed compensation at a monthly salary of
US$440.00 and a monthly overtime pay of US$220.00, or a
total of US$7,920.00 for one year.
Subsequently, on March 27, 1989, Philimare dispatched a
Letter of Guarantee to CL Hutchins & Co., Inc.,
TransOceans agent at the San Diego Port, confirming
Chiongs arrival thereat in time to board the M/V Elbia
which was set to sail on April 1, 1989 (California, United
States time). For this purpose, Philimare purchased for
Chiong a Northwest plane ticket for San Diego, California
with a departure date of April 1, 1989 from Manila. Ten
(10) days before his scheduled departure, Chiong fetched
his entire family from Samar and brought them to Manila to
see him off at the airport.

Calvo, Philimares Liaison Officer, met Chiong at the

departure gate, and the two proceeded to the Philippine
Coast Guard (PCG) Counter to present Chiongs seaman
service record book for clearance. Thereafter, Chiongs
passport was duly stamped, after complying with
government requirements for departing seafarers.
Calvo remained at the PCG Counter while Chiong
proceeded to queue at the Northwest check-in counter.
When it was Chiongs turn, the Northwest personnel[5]
informed him that his name did not appear in the
computers list of confirmed departing passengers. Chiong
was then directed to speak to a man in barong standing
outside Northwests counters from whom Chiong could
allegedly obtain a boarding pass. Posthaste, Chiong
approached the man in barong who demanded
US$100.00 in exchange therefor. Without the said amount,
and anxious to board the plane, Chiong queued a number of
times at Northwests Check-in Counter and presented his
ticket. However, the Northwest personnel at the counter
told him to simply wait and that he was being a pest.
Frustrated, Chiong went to Calvo at the PCG counter
and inquired if she had money so he could obtain a
boarding pass from the man in barong. Calvo, who
already saw that something was amiss, insisted that
Chiongs plane ticket was confirmed and as such, he could
check-in smoothly and board the plane without shelling out
US$100.00 for a boarding pass. Ultimately, Chiong was not
allowed to board Northwest Flight No. 24 bound for San
Diego that day and, consequently, was unable to work at
the M/V Elbia by April 1, 1989 (California, U.S.A. time).
It appears that Chiongs name was crossed out and
substituted with W. Costine in Northwests Air Passenger
Manifest.[6]
In a letter dated April 3, 1989, Chiongs counsel
demanded as recompense: (1) the amount equivalent to
Chiongs salary under the latters Crew Agreement[7] with
TransOcean; (2) P15,000.00 for Chiongs expenses in
fetching and bringing his family from Samar to Manila; (3)
P500,000.00 as moral damages; and (4) P500,000.00 as
legal fees.[8]
Northwest demurred. Thus, on May 24, 1989,
Chiong filed a Complaint for breach of contract of carriage
before the RTC. Northwest filed a Motion to Dismiss[9]
the complaint citing the trial courts lack of jurisdiction
over the subject matter of the case, but the trial court denied
the same.[10]
In its Answer,[11] Northwest contradicted the claim
that it breached its contract of carriage with Chiong,
reiterating that Chiong had no cause of action against it
because per its records, Chiong was a no-show passenger
for Northwest Flight No. 24 on April 1, 1989.

On April 1, 1989, Chiong arrived at the Manila

International Airport[4] (MIA), at about 6:30 a.m., three (3)
hours before the scheduled time of departure. Marilyn

76

In the RTCs Pre-trial Order[12] based on the parties

respective Pre-trial Briefs,[13] the triable issues were
limited to the following:
(a)
Whether [Chiong] was bumped-off by
[Northwest] from Flight NW 24 or whether [Chiong] noshowed for said flight.
(b)
If defendant is found guilty of having
breached its contract of carriage with plaintiff, what
damages are awardable to plaintiff and how much.

In the course of proceedings, Northwest, on

September 14, 1990, filed a separate criminal complaint for
False Testimony[14] against Chiong based on the latters
testimony that he did not leave the Philippines after April 1,
1989 contrary to the notations in his seaman service record
book that he had left the country on April 17, 1989, and
returned on October 5 of the same year. Chiong did not
participate in the preliminary investigation; thus, on
December 14, 1990, the City Prosecutor of Manila filed an
Information against Chiong with the RTC Manila, Branch
54, docketed as Criminal Case No. 90-89722.
In the meantime, after a flurry of motions filed by
Northwest in the civil case were denied by the RTC,
Northwest filed a Petition for Certiorari before the CA
imputing grave abuse of discretion to the RTC.[15]
Correlatively, Northwest moved for a suspension of the
proceedings before the trial court. However, both the
Petition for Certiorari and Motion for Suspension of the
proceedings were denied by the CA and RTC, respectively.
[16]
After trial, the RTC rendered a Decision finding
preponderance of evidence in favor of Chiong, and holding
Northwest liable for breach of contract of carriage. The
RTC ruled that the evidence adduced by the parties
supported the conclusion that Chiong was deliberately
prevented from checking-in and his boarding pass
unjustifiably withheld to accommodate an American
passenger by the name of W. Costine.
The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, in consideration of all
the foregoing, judgment is hereby rendered, ordering the
defendant liable to plaintiff in damages by reason of the
latters inability to take defendants NW Flight No. 24 on
April 1, 1989, for the following amounts:
1)
U.S.$8,447.00[17] or its peso equivalent at the time
of finality of this judgment with legal interests until fully
paid, representing compensatory damages due to plaintiffs
loss of income for one (1) year as a direct result of
defendants breach of contract of carriage;
2)
P15,000.00, Philippine Currency, representing
plaintiffs actual incurred damages as a consequence of his

failure to avail of defendants Flight No. 24 on April 1,

1989;
3)
P200,000.00, Philippine Currency, representing
moral damages suffered and sustained by the plaintiff as a
result of defendants breach of contract of carriage;
4)
P200,000.00, Philippine Currency, representing
exemplary or punitive damages due to plaintiff from
defendant, owing to the latters breach of contract of
carriage with malice and fraud; and
5)
P200,000.00, Philippine Currency, for and as
attorneys fees, plus costs of suit.
SO ORDERED.

On appeal, the CA affirmed in toto the ruling of the RTC.

Identical to the RTCs findings, those of the CA were as
follows: on April 1, 1989, Chiong was at the MIA three
hours before the 10:15 a.m. departure time for Northwest
Flight No. 24. Contrary to Northwests claim that Chiong
was a no-show passenger, the CA likewise concluded, as
the RTC did, that Chiong was not allowed to check-in and
was not issued a boarding pass at the Northwest check-in
counter to accommodate a certain W. Costine. As for
Northwests defense that Chiong had left the country after
April 1, 1989 and worked for M/V Elbia, the CA ruled that
Northwests failure to raise this defense in its Answer or
Motion to Dismiss is equivalent to a waiver thereof. The
CA declared that, in any event, Northwest failed to present
any evidence to prove that Chiong had worked under the
original crew agreement.
Hence, this recourse.
Northwest ascribes grievous errors to the CA when the
appellate court ruled that: (1) Northwest breached the
contract of carriage with Chiong who was present at the
MIA on April 1, 1989 to board Northwests Flight No. 24;
(2) As a result of the breach, Northwest is liable to Chiong
for compensatory, actual, moral and exemplary damages,
attorneys fees, and costs of suit; and (3) Northwests
Exhibits 2 and 3, the Flight Manifest and the Passenger
Name Record, respectively, were hearsay evidence and
ought to be excluded from the records.
The petition must fail.
We are in complete accord with the common ruling
of the lower courts that Northwest breached the contract of
carriage with Chiong, and as such, he is entitled to
compensatory, actual, moral and exemplary damages,
attorneys fees and costs of suit.
Northwest contends that Chiong, as a no-show
passenger on April 1, 1989, already defaulted in his
obligation to abide by the terms and conditions of the

77

contract of carriage;[18] and thus, Northwest could not

have been in breach of its reciprocal obligation to transport
Chiong. In sum, Northwest insists that Chiongs testimony
is a complete fabrication, supposedly demonstrated by the
following: (1) Chiongs seaman service record book
reflects that he left the Philippines after April 1, 1989,
specifically on April 17, 1989, to board the M/V Elbia, and
was discharged therefrom upon his personal request; (2) the
Information filed against Chiong for False Testimony; and
(3) the Flight Manifest and the Passenger Name Record
both indicate that he was a no-show passenger.
We are not convinced.
The records reveal that Chiong, as plaintiff in the
trial court, satisfied the burden of proof required in civil
cases, i.e., preponderance of evidence. Section 1 of Rule
133 provides:
SECTION 1. Preponderance of evidence, how
determined. In civil cases, the party having the burden of
proof must establish his case by a preponderance of
evidence. In determining where the preponderance or
superior weight of evidence on the issues involved lies, the
court may consider all the facts and circumstance of the
case, the witnesses manner of testifying, their intelligence,
their means and opportunity of knowing the facts to which
they are testifying, the nature of the facts to which they
testify, the probability or improbability of their testimony,
their interest or want of interest, and also their personal
credibility so far as the same may legitimately appear upon
the trial. The court may also consider the number of
witnesses, though preponderance is not necessarily with the
greater number.

In this regard, the Court notes that, in addition to his

testimony, Chiongs evidence consisted of a Northwest
ticket for the April 1, 1989 Flight No. 24, Chiongs passport
and seaman service record book duly stamped at the PCG
counter, and the testimonies of Calvo, Florencio Gomez,
[19] and Philippine Overseas Employment and
Administration (POEA) personnel who all identified the
signature and stamp of the PCG on Chiongs passport.
We have scoured the records, and found no reason to
depart from the well-settled rule that factual findings of the
lower courts deserve the utmost respect and are not to be
disturbed on appeal.[20] Indeed, Chiongs Northwest ticket
for Flight No. 24 on April 1, 1989, coupled with the PCG
stamps on his passport showing the same date, is direct
evidence that he was present at MIA on said date as he
intended to fly to the United States on board that flight. As
testified to by POEA personnel and officers, the PCG stamp
indicates that a departing seaman has passed through the
PCG counter at the airport, surrendered the exit pass, and
complied with government requirements for departing
seafarers. Calvo, Philimares liaison officer tasked to assist
Chiong at the airport, corroborated Chiongs testimony on
the latters presence at the MIA and his check-in at the PCG

counter without a hitch. Calvo further testified that she

purposely stayed at the PCG counter to confirm that
Chiong was able to board the plane, as it was part of her
duties as Philimares liaison officer, to confirm with their
principal, TransOcean in this case, that the seafarer had left
the country and commenced travel to the designated port
where the vessel is docked.[21] Thus, she had observed that
Chiong was unable to check-in and board Northwest Flight
No. 24, and was actually being given the run-around by
Northwest personnel.
It is of no moment that Chiongs witnesses who all
corroborated his testimony on his presence at the airport on,
and flight details for, April 1, 1989, and that he was
subsequently bumped-off are, likewise, employees of
Philimare which may have an interest in the outcome of
this case. We intoned in Philippine Airlines, Inc. v. Court of
Appeals,[22] thus:
(T)his Court has repeatedly held that a witness relationship
to the victim does not automatically affect the veracity of
his or her testimony. While this principle is often applied in
criminal cases, we deem that the same principle may apply
in this case, albeit civil in nature. If a witness relationship
with a party does not ipso facto render him a biased witness
in criminal cases where the quantum of evidence required
is proof beyond reasonable doubt, there is no reason why
the same principle should not apply in civil cases where the
quantum of evidence is only preponderance of evidence.

The foregoing documentary and testimonial evidence,

taken together, amply establish the fact that Chiong was
present at MIA on April 1, 1989, passed through the PCG
counter without delay, proceeded to the Northwest check-in
counter, but when he presented his confirmed ticket thereat,
he was not issued a boarding pass, and ultimately barred
from boarding Northwest Flight No. 24 on that day.
In stark contrast is Northwests bare-faced claim that
Chiong was a no-show passenger, and was scheduled to
leave the country only on April 17, 1989. As previously
discussed, the records belie this assertion. It is also
noteworthy that Northwest did not present any evidence to
support its belated defense that Chiong departed from the
Philippines on April 17, 1989 to work as Third Engineer on
board M/V Elbia under the original crew agreement.
It is true that Chiongs passport and seaman service
record book indicate that he had left the country on April
17, 1989 and come back on October 5 of the same year.
However, this evidence fails to debunk the facts established
to have transpired on April 1, 1989, more particularly,
Chiongs presence at the airport and his subsequent
bumping-off by Northwest despite a confirmed ticket.
Although initially, the burden of proof was with Chiong to
prove that there was a breach of contract of carriage, the
burden of evidence shifted to Northwest when Chiong
adduced sufficient evidence to prove the facts he had
alleged. At that point, Northwest had the burden of going

78

forward[23] to controvert Chiongs prima facie case. As

the party asserting that Chiong was a no-show passenger,
Northwest then had the burden of evidence to establish its
claim. Regrettably, Northwest failed to do so.
Furthermore, it has not escaped our attention that
Northwest, despite the declaration in its Pre-Trial Brief, did
not present as a witness their check-in agent on that
contentious date.[24] This omission was detrimental to
Northwests case considering its claim that Chiong did not
check-in at their counters on said date. It simply insisted
that Chiong was a no-show passenger and totally relied
on the Flight Manifest, which, curiously, showed a
horizontal line drawn across Chiongs name, and the name
W. Costine written above it. The reason for the insertion, or
for Chiongs allegedly being a no-show passenger, is not
even recorded on the remarks column of the Flight
Manifest beside the Passenger Name column. Clearly, the
categorical declaration of Chiong and his other witnesses,
coupled with the PCG stamp on his passport and seaman
service record book, prevails over Northwests evidence,
particularly the Flight Manifest. Thus, we are perplexed
why, despite the evidence presented by Chiong, and the
RTCs specific order to Northwests counsel to present the
person(s) who prepared the Flight Manifest and Passenger
Name Record for a proper identification of, and to testify
on, those documents, Northwest still insisted on presenting
Gonofredo Mendoza and Amelia Meris who were,
admittedly, not competent to testify thereon.[25]
In its desperate attempt to evade liability for the
breach, Northwest claims that Chiong worked at M/V Elbia
when he left the Philippines on April 17, 1989. The
argument was not only belatedly raised, as we have
repeatedly stated, but is off-tangent.
On this point, we uphold the RTCs and CAs ruling
that the failure of Northwest to raise the foregoing defense
in its Motion to Dismiss or Answer constituted a waiver
thereof. Section 1, Rule 9 of the Rules of Court provides:
SECTION 1. Defenses and objections not pleaded.
Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived. However,
when it appears from the pleadings or the evidence on
record that the court has no jurisdiction over the subject
matter, that there is another action pending between the
same parties for the same cause, or that the action is barred
by a prior judgment or by statute of limitations, the court
shall dismiss the claim. (Emphasis supplied)

Similarly, Section 8, Rule 15 of the Rules of Court reads:

SECTION 8. Omnibus Motion. Subject to the
provisions of section 1 of Rule 9, a motion attacking a
pleading, order, judgment, or proceeding shall include all
objections then available, and all objections not so included
shall be deemed waived.

Moreover, Northwest paints a scenario that

ostensibly transpired on a different date. Even if Chiong
left the Philippines on April 17, 1989, it would not
necessarily prove that Chiong was a no-show on April 1,
1989. Neither does it negate the already established fact
that Chiong had a confirmed ticket for April 1, 1989, and
first passed through the PCG counter without delay, then
reached and was at the Northwest check-in counters on
time for the scheduled flight.
Essentially, Northwest argues that Chiong was a noshow passenger on two (2) separate occasions, March 28
and April 1, 1989 because he was actually scheduled to
depart for the US on April 17, 1989 as ostensibly evidenced
by his passport and seaman record book. Had this new
matter alleged been proven by Northwest, it would prevent
or bar recovery by Chiong. Unfortunately, Northwest was
unsuccessful in proving not only the no-show claim, but
that Chiong, likewise, worked under the original crew
agreement.
Northwest likewise insists now that there is a
pending criminal case for False Testimony against Chiong
that a falsified part of Chiongs testimony would indicate
the falsity of his entire testimony, consistent with the
falsus in uno, falsus in omnibus[26] doctrine. Following
Northwests flawed logic, this would invariably lead to the
conclusion that the corroborating testimonies of Chiongs
witnesses are also false.
The legal maxim falsus in uno, falsus in omnibus,
cited by Northwest, is not a positive rule of law and is not
strictly applied in this jurisdiction. Before this maxim can
be applied, the witness must be shown to have willfully
falsified the truth on one or more material points. The
principle presupposes the existence of a positive testimony
on a material point contrary to subsequent declarations in
the testimony. However, the records show that Chiongs
testimony did not contain inconsistencies on what occurred
on April 1, 1989. Yet, Northwest never even attempted to
explain or impugn the evidence that Chiong passed through
the PCG counter on April 1, 1989, and that his passport was
accordingly stamped, obviously for purposes of his
departure on that day.
As to the criminal case, it is well to note that there is no
final determination, as yet, of Chiongs guilt by the courts.
But even if Chiong is adjudged guilty, it will have little
effect on the outcome of this case. As we held in Leyson v.
Lawa:[27]
The testimony of a witness must be considered in its
entirety instead of in truncated parts. The technique in
deciphering a testimony is not to consider only its isolated
parts and anchor a conclusion on the basis of said parts. In
ascertaining the facts established by a witness, everything
stated by him on direct, cross and redirect examinations
must be calibrated and considered.

79

It must be stressed that facts imperfectly or

erroneously stated in answer to one question may be
supplied or explained as qualified by his answer to other
question. The principle falsus in uno, falsus in omnibus is
not strictly applied in this jurisdiction. The doctrine deals
only with the weight of evidence and is not a positive rule
of law, and the same is not an inflexible one of universal
application. The testimony of a witness can be believed as
to some facts and disbelieved as to others:

xxxx
Professor Wigmore gives the following enlightening
commentary:
It may be said, once for all, that the maxim is in
itself worthless first, in point of validity, because in one
form it merely contains in loose fashion a kernel of truth
which no one needs to be told, and in the others, it is
absolutely false as a maxim of life; and secondly, in point
of utility, because it merely tells the jury what they may do
in any event, not what they must do or must not do, and
therefore it is a superfluous form of words. It is also in
practice pernicious, first, because there is frequently a
misunderstanding of its proper force, and secondly, because
it has become in the hands of many counsel a mere
instrument for obtaining new trials upon points wholly
unimportant in themselves.

From the foregoing disquisition, the ineluctable

conclusion is that Northwest breached its contract of
carriage with Chiong.
Time and again, we have declared that a contract of
carriage, in this case, air transport, is primarily intended to
serve the traveling public and thus, imbued with public
interest. The law governing common carriers consequently
imposes an exacting standard of conduct. As the aggrieved
party, Chiong only had to prove the existence of the
contract and the fact of its non-performance by Northwest,
as carrier, in order to be awarded compensatory and actual
damages.
We reiterate that Northwest failed to prove its claim
that Chiong worked on M/V Elbia from April 17 to October
5, 1989 under the original crew agreement. Accordingly,
we affirm the lower courts finding on Chiongs entitlement
to actual and compensatory damages.
We, likewise, uphold the findings of both courts on
Northwests liability for moral and exemplary damages,
and attorneys fees.
Under Article 2220 of the Civil Code of the
Philippines, an award of moral damages, in breaches of
contract, is in order upon a showing that the defendant
acted fraudulently or in bad faith. Bad faith does not simply
connote bad judgment or negligence.[28] It imports a

dishonest purpose or some moral obliquity and conscious

doing of a wrong.[29] It means breach of a known duty
through some motive, interest or ill will that partakes of the
nature of fraud.[30] Bad faith is in essence a question of
intention.[31]
In the case at bench, the courts carefully examined
the evidence as to the conduct and outward acts of
Northwest indicative of its inward motive. It is borne out
by the records that Chiong was given the run-around at the
Northwest check-in counter, instructed to deal with a man
in barong to obtain a boarding pass, and eventually barred
from boarding Northwest Flight No. 24 to accommodate an
American, W. Costine, whose name was merely inserted in
the Flight Manifest, and did not even personally check-in at
the counter.[32]
Under the foregoing circumstances, the award of
exemplary damages is also correct given the evidence that
Northwest acted in an oppressive manner towards Chiong.
[33]
As for the award of attorneys fees, while we
recognize that it is sound policy not to set a premium on the
right to litigate,[34] we sustain the lower courts award
thereof.
Attorneys fees may be awarded when a party is
compelled to litigate or incur expenses to protect his
interest,[35] or where the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiffs plainly
valid, just and demandable claim.[36] In the case at bench,
Northwest deliberately breached its contract of carriage
with Chiong and then repeatedly refused to satisfy Chiongs
valid, just and demandable claim. This unjustified refusal
constrained Chiong to not only lose income under the crew
agreement, but to further incur expenses and exert effort for
almost two (2) decades in order to protect his interests and
vindicate his right. Therefore, this Court deems it just and
equitable to grant Chiong P200,000.00 as attorneys fees.
The award is reasonable in view of the time it has taken for
this case to be resolved.[37]
Finally, the issue of the exclusion of Northwests
Exhibits 2 and 3 need not detain us long. Suffice it to
state that the RTC and CA correctly excluded these
documents as hearsay evidence. We quote with favor the
CAs holding thereon, thus:
As a rule, entries made at, or near the time of the
transactions to which they refer, by a person deceased, or
unable to testify, who was in a position to know the facts
therein stated, may be received as prima facie evidence, if
such person made the entries in his professional capacity or
in the performance of a duty and in the ordinary or regular
course of business or duty. [Rule 130, Section 43, Revised
Rules of Court]
Otherwise stated, in order to be admissible as
entries in the course of business, it is necessary that: (a) the

80

person who made the entry must be dead or unable to

testify; (b) the entries were made at or near the time of the
transactions to which they refer; (c) the entrant was in a
position to know the facts stated in the entries; (d) the
entries were made in his professional capacity or in the
performance of a duty; and (e) the entries were made in the
ordinary or regular course of business or duty.
Tested by these requirements, we find the manifest
and passenger name record to be mere hearsay evidence.
While there is no necessity to bring into court all the
employees who individually made the entries, it is
sufficient that the person who supervised them while they
were making the entries testify that the account was
prepared under his supervision and that the entries were
regularly entered in the ordinary course of business. In the
case at bench, while MENDOZA was the supervisor onduty on April 1, 1989, he has no personal knowledge of the
entries in the manifest since he did not supervise the
preparation thereof. More importantly, no evidence was
presented to prove that the employee who made the entries
was dead nor did the defendant-appellant set forth the
circumstances that would show the employees inability to
testify.[38]

WHEREFORE, premises considered, the petition is

hereby DENIED. The ruling of the Court of Appeals in
CA-G.R. CV No. 50308 is hereby AFFIRMED. Costs
against the petitioner.

SO ORDERED.
Vector Shipping v. Macasa Jul 21, 2008, GR 160219
VECTOR SHIPPING CORPORATION and FRANCISCO
SORIANO,
Petitioners,

- versus -

ADELFO B. MACASA, EMELIA B. MACASA,

TIMOTEO B. MACASA, CORNELIO B. MACASA, JR.,
and ROSARIO C. MACASA, SULPICIO LINES, INC.,
GO GUIOC SO,
ENRIQUE S. GO, EUSEBIO S. GO, RICARDO S. GO,
VICTORIANO S. GO, EDWARD S. GO, ARTURO S. GO,
EDGAR S. GO and EDMUNDO S. GO,
Respondents.
G.R. No. 160219

Present:

QUISUMBING, J.*
YNARES-SANTIAGO,
Chairperson,
CARPIO,**
NACHURA, and
REYES, JJ.

Promulgated:
July 21, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --------------------x
DECISION
NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1]

under Rule 45 of the Rules of Civil Procedure seeking the
reversal of the Court of Appeals (CA) Decision[2] dated
September 24, 2003, which affirmed with modification the
Decision[3] of the Regional Trial Court (RTC), Branch 17
of Davao City, dated May 5, 1995.
The Facts

On December 19, 1987, spouses Cornelio (Cornelio)

and Anacleta Macasa (Anacleta), together with their eightyear-old grandson, Ritchie Macasa, (Ritchie) boarded the
MV Doa Paz, owned and operated by respondent Sulpicio
Lines, Inc. (Sulpicio Lines), at Tacloban, Leyte bound for
Manila. On the fateful evening of December 20, 1987, MV
Doa Paz collided with the MT Vector, an oil tanker owned
and operated by petitioners Vector Shipping Corporation
(Vector Shipping) and Francisco Soriano (Soriano), which
at the time was loaded with 860,000 gallons of gasoline and
other petroleum products, in the vicinity of Dumali Point,
Tablas Strait, between Marinduque and Oriental Mindoro.
Only twenty-six persons survived: 24 passengers of MV
Doa Paz and 2 crew members of MT Vector. Both vessels
were never retrieved. Worse, only a few of the victims
bodies, who either drowned or were burned alive, were
recovered. Cornelio, Anacleta and Ritchie were among the
victims whose bodies have yet to be recovered up to this
day.
Respondents Adelfo, Emilia, Timoteo, and Cornelio,
Jr., all surnamed Macasa, are the children of Cornelio and
Anacleta. On the other hand, Timoteo and his wife,
respondent Rosario Macasa, are the parents of Ritchie (the
Macasas). Some of the Macasas went to the North Harbor
in Manila to await the arrival of Cornelio, Anacleta and
Ritchie. When they heard the news that MV Doa Paz was
rammed at sea by another vessel, bewildered, the Macasas

81

went to the office of Sulpicio Lines to check on the veracity

of the news, but the latter denied that such an incident
occurred. According to the Macasas, Sulpicio Lines was
uncooperative and was reluctant to entertain their inquiries.
Later, they were forced to rely on their own efforts to
search for the bodies of their loved ones, but to no avail.
The Macasas manifested that before they filed a case
in court, Sulpicio Lines, through counsel, intimated its
intention to settle, and offered the amount of P250,000.00
for the death of Cornelio, Anacleta and Ritchie. The
Macasas rejected the said offer. Thus, on October 2, 1991,
the Macasas filed a Complaint for Damages arising out of
breach of contract of carriage against Sulpicio Lines before
the RTC. The complaint imputed negligence to Sulpicio
Lines because it was remiss in its obligations as a common
carrier. The Macasas prayed for civil indemnity in the
amount of P800,000.00 for the death of Cornelio, Anacleta
and Ritchie, as well as for Cornelios and Anacletas
alleged unearned income since they were both working as
vocational instructors before their demise. The Macasas
also claimed P100,000.00 as actual and compensatory
damages for the lost cash, checks, jewelries and other
personal belongings of the latter, P600,000.00 in moral
damages, P100,000.00 by way of exemplary damages, and
P100,000.00 as costs and attorneys fees.
Sulpicio Lines traversed the complaint, alleging,
among others that (1) MV Doa Paz was seaworthy in all
aspects; (2) it exercised extraordinary diligence in
transporting their passengers and goods; (3) it acted in good
faith as it gave immediate assistance to the survivors and
kin of the victims; (4) the sinking of MV Doa Paz was
without contributory negligence on its part; and (5) the
collision was MT Vectors fault since it was allowed to sail
with an expired coastwise license, expired certificate of
inspection and it was manned by unqualified and
incompetent crew members per findings of the Board of
Marine Inquiry (BMI) in BMI Case No. 653-87 which had
exonerated Sulpicio Lines from liability. Thus, Sulpicio
Lines filed a Third-Party Complaint against Vector
Shipping, Soriano and Caltex Philippines Inc. (Caltex), the
charterer of MT Vector.
Trial on the merits ensued.
The RTCs Ruling
In its Decision[4] dated May 5, 1995, the RTC
awarded P200,000.00 as civil indemnity for the death of
Cornelio, Anacleta and Ritchie; P100,000.00 as actual
damages; P500,000.00 as moral damages; P100,000.00 as
exemplary damages; and P50,000.00 as attorneys fees.
The case was disposed of in this wise:
Accordingly, as a result of this decision, on plaintiffs
complaint against third-party (sic) defendant Sulpicio Lines
Inc., third-party defendant Caltex Philippines, Inc. and
third-party defendant MT Vector Shipping Corporation
and/or Francisco Soriano, are liable against defendant third-

party plaintiff, Sulpicio Lines, for reimbursement,

subrogation and indemnity on all amounts, defendant
Sulpicio Lines was ordered liable against plaintiffs, by way
of actual, moral, exemplary damages and attorneys fee,
MT Vector Shipping Lines and/or Francisco Soriano, thirdparty defendants, are ordered jointly and severally, liable to
pay third-party plaintiff, Sulpicio Lines, by way of
reimbursement, subrogation and indemnity, of all the above
amounts, ordered against defendant Sulpicio Lines, Inc., to
pay in favor of plaintiff, with interest and cost of suit.
SO ORDERED.[5]

Aggrieved, Sulpicio Lines, Caltex, Vector Shipping

and Soriano appealed to the CA.
The CAs Ruling

In the assailed Decision[6] dated September 24, 2003, the

CA held:

WHEREFORE, all premises considered, the

assailed decision is hereby modified in that third-party
defendant-appellant Caltex Phils., Inc. is hereby exonerated
from liability. The P100,000 actual damages is deleted
while the indemnity for (sic) is reduced to P150,000. All
other aspects of the appealed judgment are perforce
affirmed.
SO ORDERED.[7]
The Issues
Hence, this Petition raising the following issues:
1)
May the decision of the Board Marine Inquiry
(BMI) which, to
date, is still pending with
the Department of National Defense (DND) and, therefore,
deemed vacated as it is not yet final and executory, be
binding upon the court?
2)
In the absence of clear, convincing, solid, and
concrete proof of including, but not limited to, absence of
eyewitnesses on that tragic maritime incident on 20
December 1987, will it be in consonance with law, logic,
principles of physics, and/or allied science, to hold that MT
VECTOR is the vessel solely at fault and responsible for
the collision? How about MV DOA PAZ, a bigger ship of
2,324.08 gross tonnage (5-deck cargo passenger vessel,
then cruising at 16.5 knots)? As compared to MT
VECTOR of 629.82 gross tonner tanker, then cruising at
4.5 knots? May it be considered that, as between the two
vessels, MV DOA PAZ could ha[ve] avoid[ed] such
collision had there been an official on the bridge, and that
MV DOA PAZ could had been earlier alarmed by its
radar for an approaching vessel?
3)
May VECTOR and SORIANO be held liable to
indemnify/reimburse SULPICIO the amounts it is ordered
to pay the MACASAs because SULPICIOs liability arises
from breach of contract of carriage, inasmuch as in culpa

82

contractual it is sufficient to prove the existence of the

contract, because carrier is presumed to be at fault or to
have acted negligently it being its duty to exercise
extraordinary diligence, and cannot make the [safety] of its
passengers dependent upon the diligence of VECTOR and
SORIANO?
4)
Will it be in accord with existing law and/or
jurisprudence that both vessels (MV DOA PAZ and MT
VECTOR) be declared mutually at fault and, therefore,
each must [bear] its own loss? In the absence of CLEAR
and CONVINCING proof[,] who is solely at fault?[8]

Petitioners posit that the factual findings of the BMI

are not binding on the Court as such is limited to
administrative liabilities and does not absolve the common
carrier from its failure to observe extraordinary diligence;
that this Courts ruling in Caltex (Philippines), Inc. v.
Sulpicio Lines, Inc.[9] is not res adjudicata to this case,
since there were several other cases which did not reach
this Court but, however, attained finality, previously
holding that petitioners and Sulpicio Lines are jointly and
severally liable to the victims;[10] that the collision was
solely due to the fault of MV Doa Paz as it was guilty of
navigational fault and negligence; that due to the absence
of the ship captain and other competent officers who were
not at the bridge at the time of collision, and running at a
speed of 16.5 knots, it was the MV Doa Paz which
rammed MT Vector; and that it was improbable for a
slower vessel like MT Vector which, at the time, was
running at a speed of merely 4.5 knots to ram a much faster
vessel like the MV Doa Paz.[11]
On the other hand, Sulpicio Lines claims that this
Courts ruling in Caltex (Philippines), Inc. v. Sulpicio
Lines, Inc.[12] is res adjudicata to this case being of similar
factual milieu and that the same is the law of the case on
the matter; that the BMI proceedings are administrative in
nature and can proceed independently of any civil action
filed with the regular courts; that the BMI findings, as
affirmed by the Philippine Coast Guard, holding that MT
Vector was solely at fault at the time of collision, were
based on substantial evidence and by reason of its special
knowledge and technical expertise, the BMIs findings of
facts are generally accorded respect by the courts; and that,
as such, said BMI factual findings cannot be the subject of
the instant petition for review asking this Court to look
again into the pieces of evidence already presented. Thus,
Sulpicio Lines prays that the instant Petition be denied for
lack of merit.[13]
In their memorandum, the Macasas manifest that
they are basically concerned with their claims against
Sulpicio Lines for breach of contract of carriage. The
Macasas opine that the arguments raised by Sulpicio Lines
in its attempt to avoid liability to the Macasas are without
basis in fact and in law because the RTCs Decision is
supported by applicable provisions of law and settled
jurisprudence on contract of carriage. However, they
disagree with the CA on the deletion of the RTCs award of

P100,000.00 actual damages. The CAs simple justification

that if indeed the victims had such huge amount of money,
they could have traveled by plane instead of taking the MV
Doa Paz, according to the Macasas, is unjust, misplaced
and adds insult to injury. They insist that the claim for
actual damages was duly established in the hearings before
the RTC by ample proof that Cornelio and Anacleta were
both professionals; that they were in possession of personal
effects and jewelries; and that since it was the Christmas
season, the spouses intended a vacation in Manila and buy
things to bring home as gifts. The Macasas also appeal that
the reduction of the civil indemnity for the death of
Cornelio, Anacleta and Ritchie from P200,000.00 to
P150,000.00 be reconsidered. Thus, the Macasas pray that
the RTC Decision be affirmed in toto and/or the CA
Decision be modified with respect to the deleted award of
actual damages and the reduced civil indemnity for the
death of the victims.[14]
This Courts Ruling
The instant Petition lacks merit.
It is a well-established doctrine that in petitions for
review on certiorari under Rule 45 of the Rules of Civil
Procedure, only questions of law may be raised by the
parties and passed upon by this Court. This Court defined a
question of law, as distinguished from a question of fact, to
wit:
A question of law arises when there is doubt as to
what the law is on a certain state of facts, while there is a
question of fact when the doubt arises as to the truth or
falsity of the alleged facts. For a question to be one of law,
the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of
them. The resolution of the issue must rest solely on what
the law provides on the given set of circumstances. Once it
is clear that the issue invites a review of the evidence
presented, the question posed is one of fact. Thus, the test
of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the
same; rather, it is whether the appellate court can determine
the issue raised without reviewing or evaluating the
evidence, in which case, it is a question of law; otherwise it
is a question of fact.[15]
Petitioners insistence that MV Doa Paz was at fault at the
time of the collision will entail this Courts review and
determination of the weight, credence, and probative value
of the evidence presented. This Court is being asked to
evaluate the pieces of evidence which were adequately
passed upon by both the RTC and the CA. Without doubt,
this matter is essentially factual in character and, therefore,
outside the ambit of a petition for review on certiorari
under Rule 45 of the Rules of Civil Procedure. Petitioners
ought to remember that this Court is not a trier of facts. It
is not for this Court to weigh these pieces of evidence all
over again.[16]
Likewise, we take judicial notice[17] of our decision in
Caltex (Philippines), Inc. v. Sulpicio Lines, Inc.[18] In
that case, while Caltex was exonerated from any third-party

83

liability, this Court sustained the CA ruling that Vector

Shipping and Soriano are liable to reimburse and indemnify
Sulpicio Lines for whatever damages, attorneys fees and
costs the latter is adjudged to pay the victims therein.
Petitioners invocation of the pendency before this Court of
Francisco Soriano v. Sulpicio Lines, Inc.[19] along with
Vector Shipping Corporation and Francisco Soriano v.
American Home Assurance Co. and Sulpicio Lines, Inc.
[20] is unavailing. It may be noted that in a Resolution
dated February 13, 2006, this Court denied the petition in
Francisco Soriano v. Sulpicio Lines, Inc. for its failure to
sufficiently show that the CA committed any reversible
error in the challenged decision as to warrant the exercise
of this Courts discretionary appellate jurisdiction. As a
result, the CA decision[21] dated November 17, 2003
holding that Sulpicio Lines has a right to reimbursement
and indemnification from the third-party defendants
Soriano and Vector Shipping, who are the same petitioners
in this case, was sustained by this Court. Considering that
in the cases which have reached this Court, we have
consistently upheld the third-party liability of petitioners,
we see no cogent reason to deviate from this ruling.
Moreover, in Caltex (Philippines), Inc. v. Sulpicio
Lines, Inc.,[22] we held that MT Vector fits the definition
of a common carrier under Article 1732[23] of the New
Civil Code. Our ruling in that case is instructive:
Thus, the carriers are deemed to warrant impliedly
the seaworthiness of the ship. 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.
The failure of a common carrier to maintain in seaworthy
condition the vessel involved in its contract of carriage is a
clear breach of its duty prescribed in Article 1755 of the
Civil Code.
The provisions owed their conception to the nature of the
business of common carriers. This business is impressed
with a special public duty. The public must of necessity rely
on the care and skill of common carriers in the vigilance
over the goods and safety of the passengers, especially
because with the modern development of science and
invention, transportation has become more rapid, more
complicated and somehow more hazardous. For these
reasons, a passenger or a shipper of goods is under no
obligation to conduct an inspection of the ship and its crew,
the carrier being obliged by law to impliedly warrant its
seaworthiness.
Thus, we are disposed to agree with the findings of the CA
when it aptly held:
We are not swayed by the lengthy disquisition of
MT Vector and Francisco Soriano urging this Court to
absolve them from liability. All evidence points to the fact
that it was MT Vectors negligent officers and crew which
caused it to ram into MV Doa Paz. More so, MT Vector
was found to be carrying expired coastwise license and
permits and was not properly manned. As the records
would also disclose, there is a defect in the ignition system
of the vessel, and it was not convincingly shown whether

the necessitated repairs were in fact undertaken before the

said ship had set to sea. In short, MT Vector was
unseaworthy at the time of the mishap. That the said vessel
was allowed to set sail when it was, to everyone in the
groups knowledge, not fit to do so translates into rashness
and imprudence.[24]

We reiterate, anew, the rule that findings of fact of

the CA are generally binding and conclusive on this Court.
[25] While this Court has recognized several
exceptions[26] to this rule, none of these exceptions finds
application in this case. It bears emphasis also that this
Court accords respect to the factual findings of the trial
court, especially if affirmed by the CA on appeal. Unless
the trial court overlooked substantial matters that would
alter the outcome of the case, this Court will not disturb
such findings. In any event, we have meticulously
reviewed the records of the case and found no reason to
depart from the rule.[27]
Lastly, we cannot turn a blind eye to this gruesome
maritime tragedy which is now a dark page in our nations
history. We commiserate with all the victims, particularly
with the Macasas who were denied justice for almost two
decades in this case. To accept petitioners submission that
this Court, along with the RTC and the CA, should await
the review by the Department of National Defense of the
BMI findings, would, in effect, limit the courts jurisdiction
to expeditiously try, hear and decide cases filed before
them. It would not only prolong the Macasas agony but
would result in yet another tragedy at the expense of speedy
justice. This, we cannot allow.
WHEREFORE, the instant Petition is DENIED.
The assailed Court of Appeals Decision dated September
24, 2003 is hereby AFFIRMED. Costs against petitioners.

SO ORDERED.
Japan Airlines v. Simangan Apr 22, 2008
JAPAN AIRLINES,
G.R. No. 170141
Petitioner,
Present:
- versus SANTIAGO, J.,

YNARESChairperso

n,
MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:
JESUS SIMANGAN,
Respondent.
April 22, 2008
x-------------------------------------------------x

84

DECISION

REYES, R.T., J.:

WHEN an airline issues a ticket to a passenger confirmed

on a particular flight on a certain date, a contract of carriage
arises, and the passenger has every right to expect that he
would fly on that flight and on that date. If he does not,
then the carrier opens itself to a suit for breach of contract
of carriage.[1]
The power to admit or not an alien into the country is
a sovereign act which cannot be interfered with even by
Japan Airlines (JAL).[2]
In this petition for review on certiorari,[3] petitioner JAL
appeals the: (1) Decision[4] dated May 31, 2005 of the
Court of Appeals (CA) ordering it to pay respondent Jesus
Simangan moral and exemplary damages; and
(2)
Resolution[5] of the same court dated September 28, 2005
denying JALs motion for reconsideration.
The Facts
In 1991, respondent Jesus Simangan decided to donate a
kidney to his ailing cousin, Loreto Simangan, in UCLA
School of Medicine in Los Angeles, California, U.S.A.
Upon request of UCLA, respondent undertook a series of
laboratory tests at the National Kidney Institute in Quezon
City to verify whether his blood and tissue type are
compatible with Loretos.[6] Fortunately, said tests proved
that respondents blood and tissue type were well-matched
with Loretos.[7]
Respondent needed to go to the United States to complete
his preliminary work-up and donation surgery. Hence, to
facilitate respondents travel to the United States, UCLA
wrote a letter to the American Consulate in Manila to
arrange for his visa. In due time, respondent was issued an
emergency U.S. visa by the American Embassy in Manila.
[8]
Having obtained an emergency U.S. visa, respondent
purchased a round trip plane ticket from petitioner JAL for
US$1,485.00 and was issued the corresponding boarding
pass.[9] He was scheduled to a particular flight bound for
Los Angeles, California, U.S.A. via Narita, Japan.[10]
On July 29, 1992, the date of his flight, respondent
went to Ninoy Aquino International Airport in the company
of several relatives and friends.[11] He was allowed to
check-in at JALs counter.[12] His plane ticket, boarding
pass, travel authority and personal articles were subjected
to rigid immigration and security routines.[13] After
passing through said immigration and security procedures,
respondent was allowed by JAL to enter its airplane.[14]

While inside the airplane, JALs airline crew suspected

respondent of carrying a falsified travel document and
imputed that he would only use the trip to the United States
as a pretext to stay and work in Japan.[15] The stewardess
asked respondent to show his travel documents. Shortly
after, the stewardess along with a Japanese and a Filipino
haughtily ordered him to stand up and leave the plane.[16]
Respondent protested, explaining that he was issued a U.S.
visa. Just to allow him to board the plane, he pleaded with
JAL to closely monitor his movements when the aircraft
stops over in Narita.[17] His pleas were ignored. He was
then constrained to go out of the plane.[18] In a nutshell,
respondent was bumped off the flight.
Respondent went to JALs ground office and waited there
for three hours. Meanwhile, the plane took off and he was
left behind.[19] Afterwards, he was informed that his
travel documents were, indeed, in order.[20] Respondent
was refunded the cost of his plane ticket less the sum of
US$500.00 which was deducted by JAL.[21]
Subsequently, respondents U.S. visa was cancelled.[22]

Displeased by the turn of events, respondent filed an action

for damages against JAL with the Regional Trial Court
(RTC) in Valenzuela City, docketed as Civil Case No.
4195-V-93. He claimed he was not able to donate his
kidney to Loreto; and that he suffered terrible
embarrassment and mental anguish.[23] He prayed that he
be awarded P3 million as moral damages, P1.5 million as
exemplary damages and P500,000.00 as attorneys fees.
[24]
JAL denied the material allegations of the complaint. It
argued, among others, that its failure to allow respondent to
fly on his scheduled departure was due to a need for his
travel documents to be authenticated by the United States
Embassy[25] because no one from JALs airport staff had
encountered a parole visa before.[26] It posited that the
authentication required additional time; that respondent was
advised to take the flight the following day, July 30, 1992.
JAL alleged that respondent agreed to be rebooked on July
30, 1992.[27]
JAL also lodged a counterclaim anchored on respondents
alleged wrongful institution of the complaint. It prayed for
litigation expenses, exemplary damages and attorneys fees.
[28]
On September 21, 2000, the RTC presided by Judge Floro
P. Alejo rendered its decision in favor of respondent
(plaintiff), disposing as follows:
WHEREFORE, judgment is hereby rendered ordering the
defendant to pay the plaintiff the amount of P1,000,000.00
as moral damages, the amount of P500,000.00 as
exemplary damages and the amount of P250,000.00 as
attorneys fees, plus the cost of suit.[29]

85

The RTC explained:

In summarily and insolently ordering the plaintiff to
disembark while the latter was already settled in his
assigned seat, the defendant violated the contract of
carriage; that when the plaintiff was ordered out of the
plane under the pretext that the genuineness of his travel
documents would be verified it had caused him
embarrassment and besmirched reputation; and that when
the plaintiff was finally not allowed to take the flight, he
suffered more wounded feelings and social humiliation for
which the plaintiff was asking to be awarded moral and
exemplary damages as well as attorneys fees.
The reason given by the defendant that what prompted
them to investigate the genuineness of the travel documents
of the plaintiff was that the plaintiff was not then carrying a
regular visa but just a letter does not appear satisfactory.
The defendant is engaged in transporting passengers by
plane from country to country and is therefore conversant
with the travel documents. The defendant should not be
allowed to pretend, to the prejudice of the plaintiff not to
know that the travel documents of the plaintiff are valid
documents to allow him entry in the United States.
The foregoing act of the defendant in ordering the plaintiff
to deplane while already settled in his assigned seat clearly
demonstrated that the defendant breached its contract of
carriage with the plaintiff as passenger in bad faith and as
such the plaintiff is entitled to moral and exemplary
damages as well as to an award of attorneys fees.[30]
Disagreeing with the RTC judgment, JAL appealed to the
CA contending that it is not guilty of breach of contract of
carriage, hence, not liable for damages.[31] It posited that
it is the one entitled to recover on its counterclaim.[32]
CA Ruling
In a Decision[33] dated May 31, 2005, the CA affirmed the
decision of the RTC with modification in that it lowered the
amount of moral and exemplary damages and deleted the
award of attorneys fees. The fallo of the CA decision
reads:

shouted at him to stand up and arrogantly asked him to

produce his travel papers, without the least courtesy every
human being is entitled to;[38] and that he was
compelled to deplane on the grounds that his papers were
fake.[39]
The CA ratiocinated:
While the protection of passengers must take precedence
over convenience, the implementation of security measures
must be attended by basic courtesies.
In fact, breach of the contract of carriage creates against the
carrier a presumption of liability, by a simple proof of
injury, relieving the injured passenger of the duty to
establish the fault of the carrier or of his employees; and
placing on the carrier the burden to prove that it was due to
an unforeseen event or to force majeure.
That appellee possessed bogus travel documents and that he
might stay illegally in Japan are allegations without
substantiation. Also, appellants attempt to rebook appellee
the following day was too late and did not relieve it from
liability. The damage had been done. Besides, its belated
theory of novation, i.e., that appellants original obligation
to carry appellee to Narita and Los Angeles on July 29,
1992 was extinguished by novation when appellant and
appellant agreed that appellee will instead take appellants
flight to Narita on the following day, July 30, 1992,
deserves little attention.
It is inappropriate at bar.
Questions not taken up during the trial cannot be raised for
the first time on appeal.[40] (Underscoring ours and
citations were omitted)
Citing Ortigas, Jr. v. Lufthansa German Airlines,[41] the
CA declared that (i)n contracts of common carriage,
inattention and lack of care on the part of the carrier
resulting in the failure of the passenger to be
accommodated in the class contracted for amounts to bad
faith or fraud which entitles the passengers to the award of
moral damages in accordance with Article 2220 of the Civil
Code.[42]
Nevertheless, the CA modified the damages awarded by the
RTC. It explained:

WHEREFORE, the appealed Decision is AFFIRMED with

MODIFICATION. Appellant JAPAN AIR LINES is
ordered to pay appellee JESUS SIMANGAN the reduced
sums, as follows: Five Hundred Thousand Pesos
(P500,000.00) as moral damages, and Two Hundred Fifty
Thousand Pesos (P250,000.00) as exemplary damages. The
award of attorneys fees is hereby DELETED.[34]

Fundamental in the law on damages is that one injured by a

breach of a contract, or by a wrongful or negligent act or
omission shall have a fair and just compensation
commensurate to the loss sustained as consequence of the
defendants act. Being discretionary on the court, the
amount, however, should not be palpably and scandalously
excessive.

The CA elucidated that since JAL issued to respondent a

round trip plane ticket for a lawful consideration, there
arose a perfected contract between them.[35] It found that
respondent was haughtily ejected[36] by JAL and that
he was certainly embarrassed and humiliated[37] when,
in the presence of other passengers, JALs airline staff

Here, the trial courts award of P1,000,000.00 as moral

damages appears to be overblown. No other proof of
appellees social standing, profession, financial capabilities
was presented except that he was single and a businessman.
To Us, the sum of 500,000.00 is just and fair. For, moral
damages are emphatically not intended to enrich a

86

complainant at the expense of the defendant. They are

awarded only to enable the injured party to obtain means,
diversion or amusements that will serve to alleviate the
moral suffering he has undergone, by reason of the
defendants culpable action.
Moreover, the grant of P500,000.00 as exemplary damages
needs to be reduced to a reasonable level. The award of
exemplary damages is designed to permit the courts to
mould behavior that has socially deleterious consequences
and its imposition is required by public policy to suppress
the wanton acts of the offender. Hence, the sum of
P250,000.00 is adequate under the circumstances.
The award of P250,000.00 as attorneys fees lacks factual
basis. Appellee was definitely compelled to litigate in
protecting his rights and in seeking relief from appellants
misdeeds. Yet, the record is devoid of evidence to show the
cost of the services of his counsel and/or the actual
expenses incurred in prosecuting his action.[43] (Citations
were omitted)

WANTON, FRAUDULENT, RECKLESS, OPPRESSIVE

OR MALEVOLENT CONDUCT.
B.
ASSUMING ARGUENDO THAT JAL WAS
GUILTY OF BREACH, JAL DID NOT ACT IN A
WANTON FRAUDULENT, RECKLESS, OPPRESSIVE
OR MALEVOLENT MANNER AS TO ENTITLE
RESPONDENT TO EXEMPLARY DAMAGES.
III.
ASSUMING ARGUENDO THAT RESPONDENT WAS
ENTITLED TO AN AWARD OF DAMAGES, WHETHER
OR NOT THE COURT OF APPEALS AWARD OF
P750,000 IN DAMAGES WAS EXCESSIVE AND
UNPRECEDENTED.
IV.
WHETHER OR NOT THE COURT OF APPEALS
ERRED IN NOT FINDING FOR JAL ON ITS
COUNTERCLAIM.[44] (Underscoring Ours)

Issues

Basically, there are three (3) issues to resolve here: (1)

whether or not JAL is guilty of contract of carriage; (2)
whether or not respondent is entitled to moral and
exemplary damages; and (3) whether or not JAL is entitled
to its counterclaim for damages.

JAL poses the following issues

Our Ruling

I.
WHETHER OR NOT THE COURT OF APPEALS
ERRED IN RULING THAT RESPONDENT WAS
ENTITLED TO MORAL DAMAGES, CONSIDERING
THAT:

This Court is not a trier of facts.

When JALs motion for reconsideration was denied, it

resorted to the petition at bar.

A. JAL WAS NOT GUILTY OF BREACH OF

CONTRACT.
B. MORAL DAMAGES MAY BE AWARDED IN
BREACH OF CONTRACT CASES ONLY WHEN THE
BREACH IS ATTENDED BY FRAUD OR BAD FAITH.
ASSUMING ARGUENDO THAT JAL WAS GUILTY OF
BREACH, JAL DID NOT ACT FRAUDULENTLY OR IN
BAD FAITH AS TO ENTITLE RESPONDENT TO
MORAL DAMAGES.
C. THE LAW DISTINGUISHES A CONTRACTUAL
BREACH EFFECTED IN GOOD FAITH FROM ONE
ATTENDED BY BAD FAITH.
II.
WHETHER OR NOT THE COURT OF APPEALS
ERRED IN RULING THAT RESPONDENT WAS
ENTITLED
TO
EXEMPLARY
DAMAGES
CONSIDERING THAT:
A.
EXEMPLARY
DAMAGES
ARE
NOT
RECOVERABLE IN BREACH OF CONTRACT OF
CARRIAGE UNLESS THE CARRIER IS GUILTY OF

Chiefly, the issues are factual. The RTC findings of facts

were affirmed by the CA. The CA also gave its nod to the
reasoning of the RTC except as to the awards of damages,
which were reduced, and that of attorneys fees, which was
deleted.
We are not a trier of facts. We generally rely upon, and are
bound by, the conclusions on this matter of the lower
courts, which are better equipped and have better
opportunity to assess the evidence first-hand, including the
testimony of the witnesses.[45]
We have repeatedly held that the findings of fact of the CA
are final and conclusive and cannot be reviewed on appeal
to the Supreme Court provided they are based on
substantial evidence.[46] We have no jurisdiction, as a
rule, to reverse their findings.[47] Among the exceptions to
this rule are: (a) when the conclusion is a finding grounded
entirely on speculations, surmises or conjectures; (b) when
the inference made is manifestly mistaken, absurd or
impossible; (c) where there is grave abuse of discretion; (d)
when the judgment is based on a misapprehension of facts;
(e) when the findings of facts are conflicting; (f) when the
CA, in making its findings, went beyond the issues of the
case and the same is contrary to the admissions of both
appellant and appellee.[48]
The said exceptions, which are being invoked by JAL, are
not found here. There is no indication that the findings of

87

the CA are contrary to the evidence on record or that vital

testimonies of JALs witnesses were disregarded. Neither
did the CA commit misapprehension of facts nor did it fail
to consider relevant facts. Likewise, there was no grave
abuse of discretion in the appreciation of facts or mistaken
and absurd inferences.

freely consented to be rebooked the next day. In short, he

did not agree to the alleged novation. Since novation
implies a waiver of the right the creditor had before the
novation, such waiver must be express.[58] It cannot be
supposed, without clear proof, that respondent had
willingly done away with his right to fly on July 29, 1992.

We thus sustain the coherent facts as established by the

courts below, there being no sufficient showing that the
said courts committed reversible error in reaching their
conclusions.

Moreover, the reason behind the bumping off incident, as

found by the RTC and CA, was that JAL personnel imputed
that respondent would only use the trip to the United States
as a pretext to stay and work in Japan.[59]

JAL is guilty of breach of

contract of carriage.

Apart from the fact that respondents plane ticket, boarding

pass, travel authority and personal articles already passed
the rigid immigration and security routines,[60] JAL, as a
common carrier, ought to know the kind of valid travel
documents respondent carried. As provided in Article 1755
of the New Civil Code: 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.[61]
Thus, We find untenable JALs
defense of verification of respondents documents in its
breach of contract of carriage.

That respondent purchased a round trip plane ticket from

JAL and was issued the corresponding boarding pass is
uncontroverted.[49] His plane ticket, boarding pass, travel
authority and personal articles were subjected to rigid
immigration and security procedure.[50] After passing
through said immigration and security procedure, he was
allowed by JAL to enter its airplane to fly to Los Angeles,
California, U.S.A. via Narita, Japan.[51] Concisely, there
was a contract of carriage between JAL and respondent.
Nevertheless, JAL made respondent get off the plane
on his scheduled departure on July 29, 1992. He was not
allowed by JAL to fly. JAL thus failed to comply with its
obligation under the contract of carriage.

JAL justifies its action by arguing that there was a need to

verify the authenticity of respondents travel
document.[52] It alleged that no one from its airport staff
had encountered a parole visa before.[53] It further
contended that respondent agreed to fly the next day so that
it could first verify his travel document, hence, there was
novation.[54] It maintained that it was not guilty of breach
of contract of carriage as respondent was not able to travel
to the United States due to his own voluntary desistance.
[55]
We cannot agree. JAL did not allow respondent to fly. It
informed respondent that there was a need to first check the
authenticity of his travel documents with the U.S. Embassy.
[56] As admitted by JAL, the flight could not wait for Mr.
Simangan because it was ready to depart.[57]
Since JAL definitely declared that the flight could not wait
for respondent, it gave respondent no choice but to be left
behind. The latter was unceremoniously bumped off
despite his protestations and valid travel documents and
notwithstanding his contract of carriage with JAL. Damage
had already been done when respondent was offered to fly
the next day on July 30, 1992. Said offer did not cure
JALs default.
Considering that respondent was forced to get out of the
plane and left behind against his will, he could not have

It bears repeating that the power to admit or not an alien

into the country is a sovereign act which cannot be
interfered with even by JAL.[62]
In an action for breach of contract of carriage, all that is
required of plaintiff is to prove the existence of such
contract and its non-performance by the carrier through the
latters failure to carry the passenger safely to his
destination.[63] Respondent has complied with these twin
requisites.
Respondent is entitled to moral and exemplary damages
and attorneys fees plus legal interest.
With reference to moral damages, JAL alleged that they are
not recoverable in actions ex contractu except only when
the breach is attended by fraud or bad faith. It is contended
that it did not act fraudulently or in bad faith towards
respondent, hence, it may not be held liable for moral
damages.
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 Article 2219 of
the Civil Code.[64] As an exception, such damages are
recoverable: (1) in cases in which the mishap results in the
death of a passenger, as provided in Article 1764, in
relation to Article 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 Article 2220.[65]
The acts committed by JAL against respondent amounts to
bad faith. As found by the RTC, JAL breached its contract
of carriage with respondent in bad faith. JAL personnel
summarily and insolently ordered respondent to disembark

88

while the latter was already settled in his assigned seat. He

was ordered out of the plane under the alleged reason that
the genuineness of his travel documents should be verified.

right to be treated by the carriers employees with kindness,

respect, courtesy and due consideration and are entitled to
be protected against personal misconduct, injurious
language, indignities and abuses from such employees.[70]

These findings of facts were upheld by the CA, to wit:

x x x he was haughtily ejected by appellant. He was
certainly embarrassed and humiliated when, in the presence
of other passengers, the appellants airline staff shouted at
him to stand up and arrogantly asked him to produce his
travel papers, without the least courtesy every human being
is entitled to. Then, he was compelled to deplane on the
grounds that his papers were fake. His protestation of
having been issued a U.S. visa coupled with his plea to
appellant to closely monitor his movements when the
aircraft stops over in Narita, were ignored. Worse, he was
made to wait for many hours at the office of appellant only
to be told later that he has valid travel documents.[66]
(Underscoring ours)

Clearly, JAL is liable for moral damages. It is firmly

settled that moral damages are recoverable in suits
predicated on breach of a contract of carriage where it is
proved that the carrier was guilty of fraud or bad faith, as in
this case. Inattention to and lack of care for the interests of
its passengers who are entitled to its utmost consideration,
particularly as to their convenience, amount to bad faith
which entitles the passenger to an award of moral damages.
What the law considers as bad faith which may furnish the
ground for an award of moral damages would be bad faith
in securing the contract and in the execution thereof, as
well as in the enforcement of its terms, or any other kind of
deceit.[67]
JAL is also liable for exemplary damages as its abovementioned acts constitute wanton, oppressive and
malevolent acts against respondent. Exemplary damages,
which are awarded by way of example or correction for the
public good, may be recovered in contractual obligations,
as in this case, if defendant acted in wanton, fraudulent,
reckless, oppressive, or malevolent manner.[68]
Exemplary damages are designed by our civil law to permit
the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or
deterrents against such behaviour. In requiring compliance
with the standard of extraordinary diligence, a standard
which is, in fact, that of the highest possible degree of
diligence, from common carriers and in creating a
presumption of negligence against them, the law seeks to
compel them to control their employees, to tame their
reckless instincts and to force them to take adequate care of
human beings and their property.[69]

The assessment of P500,000.00 as moral damages and

P100,000.00 as exemplary damages in respondents favor
is, in Our view, reasonable and realistic. This award is
reasonably sufficient to indemnify him for the humiliation
and embarrassment he suffered. This also serves as an
example to discourage the repetition of similar oppressive
acts.
With respect to attorney's fees, they may be awarded
when defendants act or omission has compelled plaintiff to
litigate with third persons or to incur expenses to protect his
interest.[71] The Court, in Construction Development
Corporation of the Philippines v. Estrella,[72] citing
Traders Royal Bank Employees Union-Independent v.
National Labor Relations Commission,[73] elucidated thus:
There are two commonly accepted concepts of attorneys
fees, the so-called ordinary and extraordinary. In its
ordinary concept, an attorneys fee is the reasonable
compensation paid to a lawyer by his client for the legal
services he has rendered to the latter. The basis of this
compensation is the fact of his employment by and his
agreement with the client.
In its extraordinary concept, an attorneys fee is an
indemnity for damages ordered by the court to be paid by
the losing party in a litigation. The basis of this is any of
the cases provided by law where such award can be made,
such as those authorized in Article 2208, Civil Code, and is
payable not to the lawyer but to the client, unless they have
agreed that the award shall pertain to the lawyer as
additional compensation or as part thereof.[74]

It was therefore erroneous for the CA to delete the

award of attorneys fees on the ground that the record is
devoid of evidence to show the cost of the services of
respondents counsel. The amount is actually discretionary
upon the Court so long as it passes the test of
reasonableness. They may be recovered as actual or
compensatory damages when exemplary damages are
awarded and whenever the court deems it just and
equitable,[75] as in this case.
Considering the factual backdrop of this case, attorneys
fees in the amount of P200,000.00 is reasonably modest.
The above liabilities of JAL in the total amount of
P800,000.00 earn legal interest pursuant to the Courts
ruling in Construction Development Corporation of the
Philippines v. Estrella,[76] citing Eastern Shipping Lines,
Inc. v. Court of Appeals,[77] to wit:

Neglect or malfeasance of the carriers employees could

give ground for an action for damages. Passengers have a

89

Regarding the imposition of legal interest at the rate of 6%

from the time of the filing of the complaint, we held in
Eastern Shipping Lines, Inc. v. Court of Appeals, that when
an obligation, regardless of its source, i.e., law, contracts,
quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for payment of interest in the
concept of actual and compensatory damages, subject to the
following rules, to wit
1.
When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or forbearance
of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest
shall be 12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil Code.
2.
When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims
or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where
the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but
when such certainty cannot be so reasonably established at
the time the demand is made, the interest shall begin to run
only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed
to have been reasonably ascertained). The actual base for
the computation of legal interest shall, in any case, be on
the amount finally adjudged.
3.
When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of
credit.[78] (Emphasis supplied and citations omitted)
Accordingly, in addition to the said total amount of
P800,000.00, JAL is liable to pay respondent legal interest.
Pursuant to the above ruling of the Court, the legal interest
is 6% and it shall be reckoned from September 21, 2000
when the RTC rendered its judgment. From the time this
Decision becomes final and executory, the interest rate
shall be 12% until its satisfaction.
JAL is not entitled to its counterclaim for damages.
The counterclaim of JAL in its Answer[79] is a compulsory
counterclaim for damages and attorneys fees arising from
the filing of the complaint. There is no mention of any
other counter claims.

This compulsory counterclaim of JAL arising from the

filing of the complaint may not be granted inasmuch as the
complaint against it is obviously not malicious or
unfounded. It was filed by respondent precisely to claim
his right to damages against JAL. Well-settled is the rule
that the
commencement of an action does not per se make the
action wrongful and subject the action to damages, for the
law could not have meant to impose a penalty on the right
to litigate.[80]
We reiterate case law that if damages result from a partys
exercise of a right, it is damnum absque injuria.[81]
Lawful acts give rise to no injury. Walang perhuwisyong
maaring idulot ang paggamit sa sariling karapatan.
During the trial, however, JAL presented a witness who
testified that JAL suffered further damages. Allegedly,
respondent caused the publications of his subject complaint
against JAL in the newspaper for which JAL suffered
damages.[82]
Although these additional damages allegedly suffered by
JAL were not incorporated in its Answer as they arose
subsequent to its filing, JALs witness was able to testify on
the same before the RTC.[83] Hence, although these issues
were not raised by the pleadings, they shall be treated in all
respects as if they had been raised in the pleadings.
As provided in Section 5, Rule 10 of the Rules of Court,
(w)hen issues not raised by the pleadings are tried with the
express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the
pleadings.
Nevertheless, JALs counterclaim cannot be granted.
JAL is a common carrier. JALs business is mainly with the
traveling public. It invites people to avail themselves of the
comforts and advantages it offers.[84] Since JAL deals
with the public, its bumping off of respondent without a
valid reason naturally drew public attention and generated a
public issue.
The publications involved matters about which the public
has the right to be informed because they relate to a public
issue. This public issue or concern is a legitimate topic of a
public comment that may be validly published.
Assuming that respondent, indeed, caused the publication
of his complaint, he may not be held liable for damages for
it. The constitutional guarantee of freedom of the speech
and of the press includes fair commentaries on matters of
public interest. This is explained by the Court in Borjal v.
Court of Appeals,[85] to wit:
To reiterate, fair commentaries on matters of public interest
are privileged and constitute a valid defense in an action for
libel or slander. The doctrine of fair comment means that
while in general every discreditable imputation publicly

90

made is deemed false, because every man is presumed

innocent until his guilt is judicially proved, and every false
imputation is deemed malicious, nevertheless, when the
discreditable imputation is directed against a public person
in his public capacity, it is not necessarily actionable. In
order that such discreditable imputation to a public official
may be actionable, it must either be a false allegation of
fact or a comment based on a false supposition. If the
comment is an expression of opinion, based on established
facts, then it is immaterial that the opinion happens to be
mistaken, as long as it might reasonably be inferred from
the facts.[86] (Citations omitted and underscoring ours)
Even though JAL is not a public official, the rule on
privileged commentaries on matters of public interest
applies to it. The privilege applies not only to public
officials but extends to a great variety of subjects, and
includes matters of public concern, public men, and
candidates for office.[87]

Hence, pursuant to the Borjal case, there must be an actual

malice in order that a discreditable imputation to a public
person in his public capacity or to a public official may be
actionable. To be considered malicious, the libelous
statements must be shown to have been written or
published with the knowledge that they are false or in
reckless disregard of whether they are false or not.[88]

COURT OF APPEALS and SPOUSES MANUEL S.

BUNCIO and AURORA R. BUNCIO, Minors DEANNA
R. BUNCIO and NIKOLAI R. BUNCIO, assisted by their
Father, MANUEL S. BUNCIO, and JOSEFA
REGALADO, represented by her Attorney-in-Fact,
MANUEL S. BUNCIO,
Respondents.
G.R. No. 123238

Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

Promulgated:

September 22, 2008

x---------------------------------------- - - - - - - - - -x

Considering that the published articles involve matters of

public interest and that its expressed opinion is not
malicious but based on established facts, the imputations
against JAL are not actionable. Therefore, JAL may not
claim damages for them.

DECISION

WHEREFORE, the petition is DENIED. The

appealed Decision of the Court of Appeals is AFFIRMED
WITH MODIFICATION. As modified, petitioner Japan
Airlines is ordered to pay respondent Jesus Simangan the
following: (1) P500,000.00 as moral damages;
(2) P100,000.00 as exemplary damages; and (3)
P200,000.00 as attorneys fees.

Before Us is a Petition for Review[1] on Certiorari under

Rule 45 of the Rules of Court seeking to set aside the
Decision,[2] dated 20 December 1995, of the Court of
Appeals in CA-G.R. CV No. 26921 which affirmed in toto
the Decision,[3] dated 2 April 1990, of the Quezon City
Regional Trial Court (RTC), Branch 90, in Civil Case No.
Q-33893.

The total amount adjudged shall earn legal interest at the

rate of 6% per annum from the date of judgment of the
Regional Trial Court on September 21, 2000 until the
finality of this Decision. From the time this Decision
becomes final and executory, the unpaid amount, if any,
shall earn legal interest at the rate of 12% per annum until
its satisfaction.

The undisputed facts are as follows:

SO ORDERED.
Philippine Airlines v. CA
Sep 22, 2008
PHILIPPINE AIRLINES, INCORPORATED,
Petitioner,
- versus

CHICO-NAZARIO, J.:

Sometime before 2 May 1980, private respondents spouses

Manuel S. Buncio and Aurora R. Buncio purchased from
petitioner Philippine Airlines, Incorporated, two plane
tickets[4] for their two minor children, Deanna R. Buncio
(Deanna), then 9 years of age, and Nikolai R. Buncio
(Nikolai), then 8 years old. Since Deanna and Nikolai will
travel as unaccompanied minors, petitioner required private
respondents to accomplish, sign and submit to it an
indemnity bond.[5] Private respondents complied with this
requirement. For the purchase of the said two plane tickets,
petitioner agreed to transport Deanna and Nikolai on 2 May
1980 from Manila to San Francisco, California, United
States of America (USA), through one of its planes, Flight
106. Petitioner also agreed that upon the arrival of Deanna

91

and Nikolai in San Francisco Airport on 3 May 1980, it

would again transport the two on that same day through a
connecting flight from San Francisco, California, USA, to
Los Angeles, California, USA, via another airline, United
Airways 996. Deanna and Nikolai then will be met by their
grandmother, Mrs. Josefa Regalado (Mrs. Regalado), at the
Los Angeles Airport on their scheduled arrival on 3 May
1980.
On 2 May 1980, Deanna and Nikolai boarded Flight 106 in
Manila.
On 3 May 1980, Deanna and Nikolai arrived at the San
Francisco Airport. However, the staff of United Airways
996 refused to take aboard Deanna and Nikolai for their
connecting flight to Los Angeles because petitioners
personnel in San Francisco could not produce the
indemnity bond accomplished and submitted by private
respondents. The said indemnity bond was lost by
petitioners personnel during the previous stop-over of
Flight 106 in Honolulu, Hawaii. Deanna and Nikolai were
then left stranded at the San Francisco Airport.
Subsequently, Mr. Edwin Strigl (Strigl), then the Lead
Traffic Agent of petitioner in San Francisco, California,
USA, took Deanna and Nikolai to his residence in San
Francisco where they stayed overnight.
Meanwhile, Mrs. Regalado and several relatives waited for
the arrival of Deanna and Nikolai at the Los Angeles
Airport. When United Airways 996 landed at the Los
Angeles Airport and its passengers disembarked, Mrs.
Regalado sought Deanna and Nikolai but she failed to find
them. Mrs. Regalado asked a stewardess of the United
Airways 996 if Deanna and Nikolai were on board but the
stewardess told her that they had no minor passengers.
Mrs. Regalado called private respondents and informed
them that Deanna and Nikolai did not arrive at the Los
Angeles Airport. Private respondents inquired about the
location of Deanna and Nikolai from petitioners personnel,
but the latter replied that they were still verifying their
whereabouts.
On the morning of 4 May 1980, Strigl took Deanna and
Nikolai to San Francisco Airport where the two boarded a
Western Airlines plane bound for Los Angeles. Later that
day, Deanna and Nikolai arrived at the Los Angeles Airport
where they were met by Mrs. Regalado. Petitioners
personnel had previously informed Mrs. Regalado of the
late arrival of Deanna and Nikolai on 4 May 1980.
On 17 July 1980, private respondents, through their lawyer,
sent a letter[6] to petitioner demanding payment of 1
million pesos as damages for the gross negligence and
inefficiency of its employees in transporting Deanna and
Nikolai. Petitioner did not heed the demand.
On 20 November 1981, private respondents filed a
complaint[7] for damages against petitioner before the
RTC. Private respondents impleaded Deanna, Nikolai and
Mrs. Regalado as their co-plaintiffs. Private respondents

alleged that Deanna and Nikolai were not able to take their
connecting flight from San Francisco to Los Angeles as
scheduled because the required indemnity bond was lost on
account of the gross negligence and malevolent conduct of
petitioners personnel. As a consequence thereof, Deanna
and Nikolai were stranded in San Francisco overnight,
thereby exposing them to grave danger. This dilemma
caused Deanna, Nikolai, Mrs. Regalado and private
respondents to suffer serious anxiety, mental anguish,
wounded feelings, and sleepless nights.
Private
respondents prayed the RTC to render judgment ordering
petitioner: (1) to pay Deanna and Nikolai P100,000.00
each, or a total of P200,000.00, as moral damages; (2) to
pay private respondents P500,000.00 each, or a total of
P1,000,000,00, as moral damages; (3) to pay Mrs.
Regalado P100,000.00 as moral damages; (4) to pay
Deanna, Nikolai, Mrs. Regalado and private respondents
P50,000.00 each, or a total of P250,000.00 as exemplary
damages; and (5) to pay attorneys fees equivalent to 25%
of the total amount of damages mentioned plus costs of
suit.
In its answer[8] to the complaint, petitioner admitted that
Deanna and Nikolai were not allowed to take their
connecting flight to Los Angeles and that they were
stranded in San Francisco. Petitioner, however, denied that
the loss of the indemnity bond was caused by the gross
negligence and malevolent conduct of its personnel.
Petitioner averred that it always exercised the diligence of a
good father of the family in the selection, supervision and
control of its employees. In addition, Deanna and Nikolai
were personally escorted by Strigl, and the latter exerted
efforts to make the connecting flight of Deanna and Nikolai
to Los Angeles possible. Further, Deanna and Nikolai were
not left unattended from the time they were stranded in San
Francisco until they boarded Western Airlines for a
connecting flight to Los Angeles. Petitioner asked the RTC
to dismiss the complaint based on the foregoing averments.
After trial, the RTC rendered a Decision on 2 April 1990
holding petitioner liable for damages for breach of contract
of carriage. It ruled that petitioner should pay moral
damages for its inattention and lack of care for the welfare
of Deanna and Nikolai which, in effect, amounted to bad
faith, and for the agony brought by the incident to private
respondents and Mrs. Regalado. It also held that petitioner
should pay exemplary damages by way of example or
correction for the public good under Article 2229 and 2232
of the Civil Code, plus attorneys fees and costs of suit. In
sum, the RTC ordered petitioner: (1) to pay Deanna and
Nikolai P50,000.00 each as moral damages and P25,000.00
each as exemplary damages; (2) to pay private respondent
Aurora R. Buncio, as mother of Deanna and Nikolai,
P75,000.00 as moral damages; (3) to pay Mrs. Regalado, as
grandmother of Deanna and Nikolai, P30,000.00 as moral
damages; and (4) to pay an amount of P38,250.00 as
attorneys fees and the costs of suit. Private respondent
Manuel S. Buncio was not awarded damages because his
court testimony was disregarded, as he failed to appear
during his scheduled cross-examination. The dispositive
portion of the RTC Decision reads:

92

ACCORDINGLY, judgment is hereby rendered:

1.
Ordering defendant Philippines Airlines, Inc.
to pay Deanna R. Buncio and Nikolai R. Buncio the
amount of P50,000.00 each as moral damages; and the
amount of P25,000.00 each as exemplary damages;
2.
Ordering said defendant to pay the amount
of P75,000.00 to Aurora R. Buncio, mother of Deanna and
Nikolai, as moral damages; and the amount of P30,000.00
to Josefa Regalado, grandmother of Deanna and Nikolai, as
moral damages; and
3.
Ordering said defendant to pay P38,250.00
as attorneys fees and also the costs of the suit.[9]

Petitioner appealed to the Court of Appeals. On 20

December 1995, the appellate court promulgated its
Decision affirming in toto the RTC Decision, thus:
WHEREFORE, the decision appealed is hereby
AFFIRMED in toto and the instant appeal DISMISSED.
[10]

Petitioner filed the instant petition before us assigning the

following errors[11]:
I.
THE COURT OF APPEALS ERRED IN SUSTAINING
THE RTC AWARD OF MORAL DAMAGES.
II.
THE COURT OF APPEALS ERRED IN SUSTAINING
THE RTC AWARD OF EXEMPLARY DAMAGES.
III.
THE COURT OF APPEALS ERRED IN SUSTAINING
THE RTC AWARD OF ATTORNEYS FEES AND
ORDER FOR PAYMENT OF COSTS.

Anent the first assigned error, petitioner maintains that

moral damages may be awarded in a breach of contract of
air carriage only if the mishap results in death of a
passenger or if the carrier acted fraudulently or in bad faith,
that is, by breach of a known duty through some motive of
interest or ill will, some dishonest purpose or conscious
doing of wrong; if there was no finding of fraud or bad
faith on its part; if, although it lost the indemnity bond,
there was no finding that such loss was attended by ill will,
or some motive of interest, or any dishonest purpose; and if

there was no finding that the loss was deliberate, intentional

or consciously done.[12]
Petitioner also claims that it cannot be entirely blamed for
the loss of the indemnity bond; that during the stop-over of
Flight 106 in Honolulu, Hawaii, USA, it gave the
indemnity bond to the immigration office therein as a
matter of procedure; that the indemnity bond was in the
custody of the said immigration office when Flight 106 left
Honolulu, Hawaii, USA; that the said immigration office
failed to return the indemnity bond to petitioners personnel
before Flight 106 left Honolulu, Hawaii, USA; and that
even though it was negligent in overlooking the indemnity
bond, there was still no liability on its part because mere
carelessness of the carrier does not per se constitute or
justify an inference of malice or bad faith.[13]
When an airline issues a ticket to a passenger, confirmed
for a particular flight on a certain date, a contract of
carriage arises. The passenger has every right to expect
that he be transported on that flight and on that date, and it
becomes the airlines obligation to carry him and his
luggage safely to the agreed destination without delay. If
the passenger is not so transported or if in the process of
transporting, he dies or is injured, the carrier may be held
liable for a breach of contract of carriage.[14]
Private respondents and petitioner entered into a contract of
air carriage when the former purchased two plane tickets
from the latter. Under this contract, petitioner obliged itself
(1) to transport Deanna and Nikolai, as unaccompanied
minors, on 2 May 1980 from Manila to San Francisco
through one of its planes, Flight 106; and (2) upon the
arrival of Deanna and Nikolai in San Francisco Airport on 3
May 1980, to transport them on that same day from San
Francisco to Los Angeles via a connecting flight on United
Airways 996. As it was, petitioner failed to transport
Deanna and Nikolai from San Francisco to Los Angeles on
the day of their arrival at San Francisco. The staff of
United Airways 996 refused to take aboard Deanna and
Nikolai for their connecting flight to Los Angeles because
petitioners personnel in San Francisco could not produce
the indemnity bond accomplished and submitted by private
respondents. Thus, Deanna and Nikolai were stranded in
San Francisco and were forced to stay there overnight. It
was only on the following day that Deanna and Nikolai
were able to leave San Francisco and arrive at Los Angeles
via another airline, Western Airlines.
Clearly then,
petitioner breached its contract of carriage with private
respondents.
In breach of contract of air carriage, moral damages may be
recovered where (1) the mishap results in the death of a
passenger; or (2) where the carrier is guilty of fraud or bad
faith; or (3) where the negligence of the carrier is so gross
and reckless as to virtually amount to bad faith.[15]
Gross negligence implies a want or absence of or failure to
exercise even slight care or diligence, or the entire absence
of care. It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them.[16]

93

In Singson v. Court of Appeals,[17] we ruled that a carriers

utter lack of care for and sensitivity to the needs of its
passengers constitutes gross negligence and is no different
from fraud, malice or bad faith. Likewise, in Philippine
Airlines, Inc. v. Court of Appeals,[18] we held that a
carriers inattention to, and lack of care for, the interest of
its passengers who are entitled to its utmost consideration,
particularly as to their convenience, amount to bad faith
and entitles the passenger to an award of moral damages.
It was established in the instant case that since Deanna and
Nikolai would travel as unaccompanied minors, petitioner
required private respondents to accomplish, sign and
submit to it an indemnity bond. Private respondents
complied with this requirement. Petitioner gave a copy of
the indemnity bond to one of its personnel on Flight 106,
since it was required for the San Francisco-Los Angeles
connecting flight of Deanna and Nikolai. Petitioners
personnel lost the indemnity bond during the stop-over of
Flight 106 in Honolulu, Hawaii. Thus, Deanna and Nikolai
were not allowed to take their connecting flight.
Evidently, petitioner was fully aware that Deanna and
Nikolai would travel as unaccompanied minors and,
therefore, should be specially taken care of considering
their tender age and delicate situation. Petitioner also knew
well that the indemnity bond was required for Deanna and
Nikolai to make a connecting flight from San Francisco to
Los Angeles, and that it was its duty to produce the
indemnity bond to the staff of United Airways 996 so that
Deanna and Nikolai could board the connecting flight. Yet,
despite knowledge of the foregoing, it did not exercise
utmost care in handling the indemnity bond resulting in its
loss in Honolulu, Hawaii. This was the proximate cause
why Deanna and Nikolai were not allowed to take the
connecting flight and were thus stranded overnight in San
Francisco. Further, petitioner discovered that the indemnity
bond was lost only when Flight 106 had already landed in
San Francisco Airport and when the staff of United
Airways 996 demanded the indemnity bond. This only
manifests that petitioner did not check or verify if the
indemnity bond was in its custody before leaving Honolulu,
Hawaii for San Francisco.
The foregoing circumstances reflect petitioners utter lack
of care for and inattention to the welfare of Deanna and
Nikolai as unaccompanied minor passengers. They also
indicate petitioners failure to exercise even slight care and
diligence in handling the indemnity bond. Clearly, the
negligence of petitioner was so gross and reckless that it
amounted to bad faith.
It is worth emphasizing that petitioner, as a common
carrier, is bound by law to exercise extraordinary diligence
and utmost care in ensuring for the safety and welfare of its
passengers with due regard for all the circumstances.[19]
The negligent acts of petitioner signified more than
inadvertence or inattention and thus constituted a radical
departure from the extraordinary standard of care required
of common carriers.

Petitioners claim that it cannot be entirely blamed for the

loss of the indemnity bond because it gave the indemnity
bond to the immigration office of Honolulu, Hawaii, as a
matter of procedure during the stop-over, and the said
immigration office failed to return the indemnity bond to
petitioners personnel before Flight 106 left Honolulu,
Hawaii, deserves scant consideration. It was petitioners
obligation to ensure that it had the indemnity bond in its
custody before leaving Honolulu, Hawaii for San
Francisco. Petitioner should have asked for the indemnity
bond from the immigration office during the stop-over
instead of partly blaming the said office later on for the loss
of the indemnity bond. Petitioners insensitivity on this
matter indicates that it fell short of the extraordinary care
that the law requires of common carriers.
Petitioner, nonetheless, insists that the following
circumstances negate gross negligence on its part: (1) Strigl
requested the staff of United Airways 996 to allow Deanna
and Nikolai to board the plane even without the indemnity
bond; (2) Strigl took care of the two and brought them to
his house upon refusal of the staff of the United Airways
996 to board Deanna and Nikolai; (3) private respondent
Aurora R. Buncio and Mrs. Regalado were duly informed
of Deanna and Nikolais predicament; and (4) Deanna and
Nikolai were able to make a connecting flight via an
alternative airline, Western Airlines.[20] We do not agree.
It was petitioners duty to provide assistance to Deanna and
Nikolai for the inconveniences of delay in their
transportation. These actions are deemed part of their
obligation as a common carrier, and are hardly anything to
rave about.[21]
Apropos the second and third assigned error, petitioner
argues that it was not liable for exemplary damages because
there was no wanton, fraudulent, reckless, oppressive, or
malevolent manner on its part.
Further, exemplary
damages may be awarded only if it is proven that the
plaintiff is entitled to moral damages. Petitioner contends
that since there was no proof that private respondents were
entitled to moral damages, then they are also not entitled to
exemplary damages.[22]
Petitioner also contends that no premium should be placed
on the right to litigate; that an award of attorneys fees and
order of payment of costs must be justified in the text of the
decision; that such award cannot be imposed by mere
conclusion without supporting explanation; and that the
RTC decision does not provide any justification for the
award of attorneys fees and order of payment of costs.[23]
Article 2232 of the Civil Code provides that exemplary
damages may be awarded in a breach of contract if the
defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. In addition, Article 2234
thereof states that the plaintiff must show that he is entitled
to moral damages before he can be awarded exemplary
damages.

94

As we have earlier found, petitioner breached its contract of

carriage with private respondents, and it acted recklessly
and malevolently in transporting Deanna and Nikolai as
unaccompanied minors and in handling their indemnity
bond. We have also ascertained that private respondents
are entitled to moral damages because they have
sufficiently established petitioners gross negligence which
amounted to bad faith. This being the case, the award of
exemplary damages is warranted.
Current jurisprudence[24] instructs that in awarding
attorneys fees, the trial court must state the factual, legal,
or equitable justification for awarding the same, bearing in
mind that the award of attorneys fees is the exception, not
the general rule, and it is not sound public policy to place a
penalty on the right to litigate; nor should attorneys fees be
awarded every time a party wins a lawsuit. The matter of
attorneys fees cannot be dealt with only in the dispositive
portion of the decision. The text of the decision must state
the reason behind the award of attorneys fees. Otherwise,
its award is totally unjustified.[25]
In the instant case, the award of attorneys fees was merely
cited in the dispositive portion of the RTC decision without
the RTC stating any legal or factual basis for said award.
Hence, the Court of Appeals erred in sustaining the RTCs
award of attorneys fees.
Since we have already resolved that the RTC and Court of
Appeals were correct in awarding moral and exemplary
damages, we shall now determine whether their
corresponding amounts were proper.
The purpose of awarding moral damages is to enable the
injured party to obtain means, diversion or amusement that
will serve to alleviate the moral suffering he has undergone
by reason of defendants culpable action.[26] On the other
hand, the aim of awarding exemplary damages is to deter
serious wrongdoings.[27]
Article 2216 of the Civil Code provides that assessment of
damages is left to the discretion of the court according to
the circumstances of each case. This discretion is limited
by the principle that the amount awarded should not be
palpably excessive as to indicate that it was the result of
prejudice or corruption on the part of the trial court.[28]
Simply put, the amount of damages must be fair, reasonable
and proportionate to the injury suffered.
The RTC and the Court of Appeals ordered petitioner to
pay Deanna and Nikolai P50,000.00 each as moral
damages.
This amount is reasonable considering the
harrowing experience they underwent at their tender age
and the danger they were exposed to when they were
stranded in San Francisco. Both of them testified that they
were afraid and were not able to eat and sleep during the
time they were stranded in San Francisco.[29] Likewise,
the award of P25,000.00 each to Deanna and Nikolai as
exemplary damages is fair so as to deter petitioner and

other common carriers from committing similar or other

serious wrongdoings.
Both courts also directed petitioner to pay private
respondent Aurora R. Buncio P75,000.00 as moral
damages. This is equitable and proportionate considering
the serious anxiety and mental anguish she experienced as a
mother when Deanna and Nikolai were not allowed to take
the connecting flight as scheduled and the fact that they
were stranded in a foreign country and in the company of
strangers. Private respondent Aurora R. Buncio testified
that she was very fearful for the lives of Deanna and
Nikolai when they were stranded in San Francisco, and that
by reason thereof she suffered emotional stress and
experienced upset stomach.[30] Also, the award of
P30,000.00 as moral damages to Mrs. Regalado is
appropriate because of the serious anxiety and wounded
feelings she felt as a grandmother when Deanna and
Nikolai, whom she was to meet for the first time, did not
arrive at the Los Angeles Airport. Mrs. Regalado testified
that she was seriously worried when Deanna and Nikolai
did not arrive in Los Angeles on 3 May 1980, and she was
hurt when she saw the two crying upon arriving in Los
Angeles on 4 May 1980.[31] The omission of award of
damages to private respondent Manuel S. Buncio was
proper for lack of basis. His court testimony was rightly
disregarded by the RTC because he failed to appear in his
scheduled cross-examination.[32]
On another point, we held in Eastern Shipping Lines, Inc. v.
Court of Appeals,[33] that when an obligation, not
constituting a loan or forbearance of money is breached, an
interest on the amount of damages awarded may be
imposed at the rate of 6% per annum. We further declared
that when the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal
interest, whether it is a loan/forbearance of money or not,
shall be 12% per annum from such finality until its
satisfaction, this interim period being deemed to be then
equivalent to a forbearance of credit.
In the instant case, petitioners obligation arose from a
contract of carriage and not from a loan or forbearance of
money. Thus, an interest of 6% per annum should be
imposed on the damages awarded, to be computed from the
time of the extra-judicial demand on 17 July 1980 up to the
finality of this Decision. In addition, the interest shall
become 12% per annum from the finality of this Decision
up to its satisfaction.
Finally, the records[34] show that Mrs. Regalado died on 1
March 1995 at the age of 74, while Deanna passed away on
8 December 2003 at the age of 32. This being the case, the
foregoing award of damages plus interests in their favor
should be given to their respective heirs.
WHEREFORE, the Petition is PARTLY GRANTED. The
Decision of the Court of Appeals, dated 20 December 1995,
in CA-G.R. CV No. 26921, is hereby AFFIRMED with the
following MODIFICATIONS: (1) the award of attorneys
fees is deleted; (2) an interest of 6% per annum is imposed

95

on the damages awarded, to be computed from 17 July

1980 up to the finality of this Decision; and (3) an interest
of 12% per annum is also imposed from the finality of this
Decision up to its satisfaction. The damages and interests
granted in favor of deceased Mrs. Regalado and deceased
Deanna are hereby awarded to their respective heirs. Costs
against petitioner.

plaintiffs-appellees is hereby REVERSED and SET

ASIDE.
Defendant-appellants counterclaim is DENIED.
Costs against plaintiffs-appellees.
SO ORDERED.2

SO ORDERED.
Northwest v. Hashan

Feb 3, 2010 (NF-internet)

Spouses Villoria v. Continental

SPOUSES FERNANDO
and LOURDES VILORIA,
Petitioners,

Jan 16, 2012

- versus -

CONTINENTAL AIRLINES, INC.,

Respondent.
G.R. No. 188288
Present:
CARPIO, J.,
Chairperson,
PEREZ,
SERENO,
REYES, and
BERNABE, JJ.
Promulgated:
January 16, 2012
x-----------------------------------------------------------------------------------x
DECISION
REYES, J.:
This is a petition for review under Rule 45 of the Rules of
Court from the January 30, 2009 Decision1 of the Special
Thirteenth Division of the Court of Appeals (CA) in CAG.R. CV No. 88586 entitled Spouses Fernando and
Lourdes Viloria v. Continental Airlines, Inc., the
dispositive portion of which states:
WHEREFORE, the Decision of the Regional Trial Court,
Branch 74, dated 03 April 2006, awarding US$800.00 or its
peso equivalent at the time of payment, plus legal rate of
interest from 21 July 1997 until fully paid, [P]100,000.00
as moral damages, [P]50,000.00 as exemplary damages,
[P]40,000.00 as attorneys fees and costs of suit to

On April 3, 2006, the Regional Trial Court of Antipolo

City, Branch 74 (RTC) rendered a Decision, giving due
course to the complaint for sum of money and damages
filed by petitioners Fernando Viloria (Fernando) and
Lourdes Viloria (Lourdes), collectively called Spouses
Viloria, against respondent Continental Airlines, Inc. (CAI).
As culled from the records, below are the facts giving rise
to such complaint.
On or about July 21, 1997 and while in the United States,
Fernando purchased for himself and his wife, Lourdes, two
(2) round trip airline tickets from San Diego, California to
Newark, New Jersey on board Continental Airlines.
Fernando purchased the tickets at US$400.00 each from a
travel agency called Holiday Travel and was attended to
by a certain Margaret Mager (Mager). According to
Spouses Viloria, Fernando agreed to buy the said tickets
after Mager informed them that there were no available
seats at Amtrak, an intercity passenger train service
provider in the United States. Per the tickets, Spouses
Viloria were scheduled to leave for Newark on August 13,
1997 and return to San Diego on August 21, 1997.
Subsequently, Fernando requested Mager to reschedule
their flight to Newark to an earlier date or August 6, 1997.
Mager informed him that flights to Newark via Continental
Airlines were already fully booked and offered the
alternative of a round trip flight via Frontier Air. Since
flying with Frontier Air called for a higher fare of
US$526.00 per passenger and would mean traveling by
night, Fernando opted to request for a refund. Mager,
however, denied his request as the subject tickets are nonrefundable and the only option that Continental Airlines can
offer is the re-issuance of new tickets within one (1) year
from the date the subject tickets were issued. Fernando
decided to reserve two (2) seats with Frontier Air.
As he was having second thoughts on traveling via Frontier
Air, Fernando went to the Greyhound Station where he saw
an Amtrak station nearby. Fernando made inquiries and was
told that there are seats available and he can travel on
Amtrak anytime and any day he pleased. Fernando then
purchased two (2) tickets for Washington, D.C.
From Amtrak, Fernando went to Holiday Travel and
confronted Mager with the Amtrak tickets, telling her that
she had misled them into buying the Continental Airlines
tickets by misrepresenting that Amtrak was already fully
booked. Fernando reiterated his demand for a refund but
Mager was firm in her position that the subject tickets are
non-refundable.

96

Upon returning to the Philippines, Fernando sent a letter to

CAI on February 11, 1998, demanding a refund and
alleging that Mager had deluded them into purchasing the
subject tickets.3
In a letter dated February 24, 1998, Continental Micronesia
informed Fernando that his complaint had been referred to
the Customer Refund Services of Continental Airlines at
Houston, Texas.4
In a letter dated March 24, 1998, Continental Micronesia
denied Fernandos request for a refund and advised him
that he may take the subject tickets to any Continental
ticketing location for the re-issuance of new tickets within
two (2) years from the date they were issued. Continental
Micronesia informed Fernando that the subject tickets may
be used as a form of payment for the purchase of another
Continental ticket, albeit with a re-issuance fee.5
On June 17, 1999, Fernando went to Continentals ticketing
office at Ayala Avenue, Makati City to have the subject
tickets replaced by a single round trip ticket to Los
Angeles, California under his name. Therein, Fernando was
informed that Lourdes ticket was non-transferable, thus,
cannot be used for the purchase of a ticket in his favor. He
was also informed that a round trip ticket to Los Angeles
was US$1,867.40 so he would have to pay what will not be
covered by the value of his San Diego to Newark round trip
ticket.
In a letter dated June 21, 1999, Fernando demanded for the
refund of the subject tickets as he no longer wished to have
them replaced. In addition to the dubious circumstances
under which the subject tickets were issued, Fernando
claimed that CAIs act of charging him with US$1,867.40
for a round trip ticket to Los Angeles, which other airlines
priced at US$856.00, and refusal to allow him to use
Lourdes ticket, breached its undertaking under its March
24, 1998 letter.6

which are made part hereof (and are available on

application at the offices of carrier), except in
transportation between a place in the United States or
Canada and any place outside thereof to which tariffs in
force in those countries apply.8
According to CAI, one of the conditions attached to their
contract of carriage is the non-transferability and nonrefundability of the subject tickets.
The RTCs Ruling
Following a full-blown trial, the RTC rendered its April 3,
2006 Decision, holding that Spouses Viloria are entitled to
a refund in view of Magers misrepresentation in obtaining
their consent in the purchase of the subject tickets.9 The
relevant portion of the April 3, 2006 Decision states:
Continental Airlines agent Ms. Mager was in bad faith
when she was less candid and diligent in presenting to
plaintiffs spouses their booking options. Plaintiff Fernando
clearly wanted to travel via AMTRAK, but defendants
agent misled him into purchasing Continental Airlines
tickets instead on the fraudulent misrepresentation that
Amtrak was fully booked. In fact, defendant Airline did not
specifically denied (sic) this allegation.
Plainly, plaintiffs spouses, particularly plaintiff Fernando,
were tricked into buying Continental Airline tickets on Ms.
Magers misleading misrepresentations. Continental
Airlines agent Ms. Mager further relied on and exploited
plaintiff Fernandos need and told him that they must book
a flight immediately or risk not being able to travel at all on
the couples preferred date. Unfortunately, plaintiffs
spouses fell prey to the airlines and its agents unethical
tactics for baiting trusting customers.10

On September 8, 2000, Spouses Viloria filed a complaint

against CAI, praying that CAI be ordered to refund the
money they used in the purchase of the subject tickets with
legal interest from July 21, 1997 and to pay P1,000,000.00
as moral damages, P500,000.00 as exemplary damages and
P250,000.00 as attorneys fees.7

Citing Articles 1868 and 1869 of the Civil Code, the RTC
ruled that Mager is CAIs agent, hence, bound by her bad
faith and misrepresentation. As far as the RTC is
concerned, there is no issue as to whether Mager was CAIs
agent in view of CAIs implied recognition of her status as
such in its March 24, 1998 letter.

CAI interposed the following defenses: (a) Spouses Viloria

have no right to ask for a refund as the subject tickets are
non-refundable; (b) Fernando cannot insist on using the
ticket in Lourdes name for the purchase of a round trip
ticket to Los Angeles since the same is non-transferable; (c)
as Mager is not a CAI employee, CAI is not liable for any
of her acts; (d) CAI, its employees and agents did not act in
bad faith as to entitle Spouses Viloria to moral and
exemplary damages and attorneys fees. CAI also invoked
the following clause printed on the subject tickets:

The act of a travel agent or agency being involved here, the

following are the pertinent New Civil Code provisions on
agency:

3. To the extent not in conflict with the foregoing carriage

and other services performed by each carrier are subject to:
(i) provisions contained in this ticket, (ii) applicable tariffs,
(iii) carriers conditions of carriage and related regulations

Art. 1868. By the contract of agency a person binds himself

to render some service or to do something in representation
or on behalf of another, with the consent or authority of the
latter.
Art. 1869. Agency may be express, or implied from the acts
of the principal, from his silence or lack of action, or his
failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.

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Agency may be oral, unless the law requires a specific

form.
As its very name implies, a travel agency binds itself to
render some service or to do something in representation or
on behalf of another, with the consent or authority of the
latter. This court takes judicial notice of the common
services rendered by travel agencies that represent
themselves as such, specifically the reservation and
booking of local and foreign tours as well as the issuance of
airline tickets for a commission or fee.
The services rendered by Ms. Mager of Holiday Travel
agency to the plaintiff spouses on July 21, 1997 were no
different from those offered in any other travel agency.
Defendant airline impliedly if not expressly acknowledged
its principal-agent relationship with Ms. Mager by its offer
in the letter dated March 24, 1998 an obvious attempt to
assuage plaintiffs spouses hurt feelings.11
Furthermore, the RTC ruled that CAI acted in bad faith in
reneging on its undertaking to replace the subject tickets
within two (2) years from their date of issue when it
charged Fernando with the amount of US$1,867.40 for a
round trip ticket to Los Angeles and when it refused to
allow Fernando to use Lourdes ticket. Specifically:
Tickets may be reissued for up to two years from the
original date of issue. When defendant airline still charged
plaintiffs spouses US$1,867.40 or more than double the
then going rate of US$856.00 for the unused tickets when
the same were presented within two (2) years from date of
issue, defendant airline exhibited callous treatment of
passengers.12
The Appellate Courts Ruling
On appeal, the CA reversed the RTCs April 3, 2006
Decision, holding that CAI cannot be held liable for
Magers act in the absence of any proof that a principalagent relationship existed between CAI and Holiday Travel.
According to the CA, Spouses Viloria, who have the burden
of proof to establish the fact of agency, failed to present
evidence demonstrating that Holiday Travel is CAIs agent.
Furthermore, contrary to Spouses Vilorias claim, the
contractual relationship between Holiday Travel and CAI is
not an agency but that of a sale.
Plaintiffs-appellees assert that Mager was a sub-agent of
Holiday Travel who was in turn a ticketing agent of
Holiday Travel who was in turn a ticketing agent of
Continental Airlines. Proceeding from this premise, they
contend that Continental Airlines should be held liable for
the acts of Mager. The trial court held the same view.
We do not agree. By the contract of agency, a person binds
him/herself to render some service or to do something in
representation or on behalf of another, with the consent or
authority of the latter. The elements of agency are: (1)
consent, express or implied, of the parties to establish the

relationship; (2) the object is the execution of a juridical act

in relation to a third person; (3) the agent acts as a
representative and not for him/herself; and (4) the agent
acts within the scope of his/her authority. As the basis of
agency is representation, there must be, on the part of the
principal, an actual intention to appoint, an intention
naturally inferable from the principals words or actions. In
the same manner, there must be an intention on the part of
the agent to accept the appointment and act upon it. Absent
such mutual intent, there is generally no agency. It is
likewise a settled rule that persons dealing with an assumed
agent are bound at their peril, if they would hold the
principal liable, to ascertain not only the fact of agency but
also the nature and extent of authority, and in case either is
controverted, the burden of proof is upon them to establish
it. Agency is never presumed, neither is it created by the
mere use of the word in a trade or business name. We have
perused the evidence and documents so far presented. We
find nothing except bare allegations of plaintiffs-appellees
that Mager/Holiday Travel was acting in behalf of
Continental Airlines. From all sides of legal prism, the
transaction in issue was simply a contract of sale, wherein
Holiday Travel buys airline tickets from Continental
Airlines and then, through its employees, Mager included,
sells it at a premium to clients.13
The CA also ruled that refund is not available to Spouses
Viloria as the word non-refundable was clearly printed on
the face of the subject tickets, which constitute their
contract with CAI. Therefore, the grant of their prayer for a
refund would violate the proscription against impairment of
contracts.
Finally, the CA held that CAI did not act in bad faith when
they charged Spouses Viloria with the higher amount of
US$1,867.40 for a round trip ticket to Los Angeles.
According to the CA, there is no compulsion for CAI to
charge the lower amount of US$856.00, which Spouses
Viloria claim to be the fee charged by other airlines. The
matter of fixing the prices for its services is CAIs
prerogative, which Spouses Viloria cannot intervene. In
particular:
It is within the respective rights of persons owning and/or
operating business entities to peg the premium of the
services and items which they provide at a price which they
deem fit, no matter how expensive or exhorbitant said price
may seem vis--vis those of the competing companies. The
Spouses Viloria may not intervene with the business
judgment of Continental Airlines.14
The Petitioners Case
In this Petition, this Court is being asked to review the
findings and conclusions of the CA, as the latters reversal
of the RTCs April 3, 2006 Decision allegedly lacks factual
and legal bases. Spouses Viloria claim that CAI acted in
bad faith when it required them to pay a higher amount for
a round trip ticket to Los Angeles considering CAIs
undertaking to re-issue new tickets to them within the

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period stated in their March 24, 1998 letter. CAI likewise

acted in bad faith when it disallowed Fernando to use
Lourdes ticket to purchase a round trip to Los Angeles
given that there is nothing in Lourdes ticket indicating that
it is non-transferable. As a common carrier, it is CAIs duty
to inform its passengers of the terms and conditions of their
contract and passengers cannot be bound by such terms and
conditions which they are not made aware of. Also, the
subject contract of carriage is a contract of adhesion;
therefore, any ambiguities should be construed against
CAI. Notably, the petitioners are no longer questioning the
validity of the subject contracts and limited its claim for a
refund on CAIs alleged breach of its undertaking in its
March 24, 1998 letter.

c.
Assuming that CAI is bound by the acts of
Holiday Travels agents and employees, can the
representation of Mager as to unavailability of seats at
Amtrak be considered fraudulent as to vitiate the consent of
Spouse Viloria in the purchase of the subject tickets?
d.
Is CAI justified in insisting that the subject
tickets are non-transferable and non-refundable?
e.
Is CAI justified in pegging a different price for
the round trip ticket to Los Angeles requested by Fernando?
f. Alternatively, did CAI act in bad faith or renege its
obligation to Spouses Viloria to apply the value of the
subject tickets in the purchase of new ones when it refused
to allow Fernando to use Lourdes ticket and in charging a
higher price for a round trip ticket to Los Angeles?

The Respondents Case

This Courts Ruling

In its Comment, CAI claimed that Spouses Vilorias

allegation of bad faith is negated by its willingness to issue
new tickets to them and to credit the value of the subject
tickets against the value of the new ticket Fernando
requested. CAI argued that Spouses Vilorias sole basis to
claim that the price at which CAI was willing to issue the
new tickets is unconscionable is a piece of hearsay
evidence an advertisement appearing on a newspaper
stating that airfares from Manila to Los Angeles or San
Francisco cost US$818.00.15 Also, the advertisement
pertains to airfares in September 2000 and not to airfares
prevailing in June 1999, the time when Fernando asked
CAI to apply the value of the subject tickets for the
purchase of a new one.16 CAI likewise argued that it did
not undertake to protect Spouses Viloria from any changes
or fluctuations in the prices of airline tickets and its only
obligation was to apply the value of the subject tickets to
the purchase of the newly issued tickets.

I. A principal-agent relationship exists between CAI and

Holiday Travel.

With respect to Spouses Vilorias claim that they are not

aware of CAIs restrictions on the subject tickets and that
the terms and conditions that are printed on them are
ambiguous, CAI denies any ambiguity and alleged that its
representative informed Fernando that the subject tickets
are non-transferable when he applied for the issuance of a
new ticket. On the other hand, the word non-refundable
clearly appears on the face of the subject tickets.
CAI also denies that it is bound by the acts of Holiday
Travel and Mager and that no principal-agency relationship
exists between them. As an independent contractor, Holiday
Travel was without capacity to bind CAI.

With respect to the first issue, which is a question of fact

that would require this Court to review and re-examine the
evidence presented by the parties below, this Court takes
exception to the general rule that the CAs findings of fact
are conclusive upon Us and our jurisdiction is limited to the
review of questions of law. It is well-settled to the point of
being axiomatic that this Court is authorized to resolve
questions of fact if confronted with contrasting factual
findings of the trial court and appellate court and if the
findings of the CA are contradicted by the evidence on
record.17
According to the CA, agency is never presumed and that he
who alleges that it exists has the burden of proof. Spouses
Viloria, on whose shoulders such burden rests, presented
evidence that fell short of indubitably demonstrating the
existence of such agency.
We disagree. The CA failed to consider undisputed facts,
discrediting CAIs denial that Holiday Travel is one of its
agents. Furthermore, in erroneously characterizing the
contractual relationship between CAI and Holiday Travel
as a contract of sale, the CA failed to apply the fundamental
civil law principles governing agency and differentiating it
from sale.
In Rallos v. Felix Go Chan & Sons Realty Corporation,18
this Court explained the nature of an agency and spelled out
the essential elements thereof:

Issues
To determine the propriety of disturbing the CAs January
30, 2009 Decision and whether Spouses Viloria have the
right to the reliefs they prayed for, this Court deems it
necessary to resolve the following issues:
a.
Does a principal-agent relationship exist between
CAI and Holiday Travel?
b.
Assuming that an agency relationship exists
between CAI and Holiday Travel, is CAI bound by the acts
of Holiday Travels agents and employees such as Mager?

Out of the above given principles, sprung the creation and

acceptance of the relationship of agency whereby one party,
called the principal (mandante), authorizes another, called
the agent (mandatario), to act for and in his behalf in
transactions with third persons. The essential elements of
agency are: (1) there is consent, express or implied of the
parties to establish the relationship; (2) the object is the
execution of a juridical act in relation to a third person; (3)
the agent acts as a representative and not for himself, and
(4) the agent acts within the scope of his authority.

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Agency is basically personal, representative, and derivative

in nature. The authority of the agent to act emanates from
the powers granted to him by his principal; his act is the act
of the principal if done within the scope of the authority.
Qui facit per alium facit se. "He who acts through another
acts himself."19
Contrary to the findings of the CA, all the elements of an
agency exist in this case. The first and second elements are
present as CAI does not deny that it concluded an
agreement with Holiday Travel, whereby Holiday Travel
would enter into contracts of carriage with third persons on
CAIs behalf. The third element is also present as it is
undisputed that Holiday Travel merely acted in a
representative capacity and it is CAI and not Holiday
Travel who is bound by the contracts of carriage entered
into by Holiday Travel on its behalf. The fourth element is
also present considering that CAI has not made any
allegation that Holiday Travel exceeded the authority that
was granted to it. In fact, CAI consistently maintains the
validity of the contracts of carriage that Holiday Travel
executed with Spouses Viloria and that Mager was not
guilty of any fraudulent misrepresentation. That CAI
admits the authority of Holiday Travel to enter into
contracts of carriage on its behalf is easily discernible from
its February 24, 1998 and March 24, 1998 letters, where it
impliedly recognized the validity of the contracts entered
into by Holiday Travel with Spouses Viloria. When
Fernando informed CAI that it was Holiday Travel who
issued to them the subject tickets, CAI did not deny that
Holiday Travel is its authorized agent.
Prior to Spouses Vilorias filing of a complaint against it,
CAI never refuted that it gave Holiday Travel the power
and authority to conclude contracts of carriage on its
behalf. As clearly extant from the records, CAI recognized
the validity of the contracts of carriage that Holiday Travel
entered into with Spouses Viloria and considered itself
bound with Spouses Viloria by the terms and conditions
thereof; and this constitutes an unequivocal testament to
Holiday Travels authority to act as its agent. This Court
cannot therefore allow CAI to take an altogether different
position and deny that Holiday Travel is its agent without
condoning or giving imprimatur to whatever damage or
prejudice that may result from such denial or retraction to
Spouses Viloria, who relied on good faith on CAIs acts in
recognition of Holiday Travels authority. Estoppel is
primarily based on the doctrine of good faith and the
avoidance of harm that will befall an innocent party due to
its injurious reliance, the failure to apply it in this case
would result in gross travesty of justice.20 Estoppel bars
CAI from making such denial.
As categorically provided under Article 1869 of the Civil
Code, [a]gency may be express, or implied from the acts
of the principal, from his silence or lack of action, or his
failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.

had branded the contractual relationship between CAI and

Holiday Travel as one of sale. The distinctions between a
sale and an agency are not difficult to discern and this
Court, as early as 1970, had already formulated the
guidelines that would aid in differentiating the two (2)
contracts. In Commissioner of Internal Revenue v.
Constantino,21 this Court extrapolated that the primordial
differentiating consideration between the two (2) contracts
is the transfer of ownership or title over the property
subject of the contract. In an agency, the principal retains
ownership and control over the property and the agent
merely acts on the principals behalf and under his
instructions in furtherance of the objectives for which the
agency was established. On the other hand, the contract is
clearly a sale if the parties intended that the delivery of the
property will effect a relinquishment of title, control and
ownership in such a way that the recipient may do with the
property as he pleases.
Since the company retained ownership of the goods, even
as it delivered possession unto the dealer for resale to
customers, the price and terms of which were subject to the
company's control, the relationship between the company
and the dealer is one of agency, tested under the following
criterion:
The difficulty in distinguishing between contracts of sale
and the creation of an agency to sell has led to the
establishment of rules by the application of which this
difficulty may be solved. The decisions say the transfer of
title or agreement to transfer it for a price paid or promised
is the essence of sale. If such transfer puts the transferee in
the attitude or position of an owner and makes him liable to
the transferor as a debtor for the agreed price, and not
merely as an agent who must account for the proceeds of a
resale, the transaction is a sale; while the essence of an
agency to sell is the delivery to an agent, not as his
property, but as the property of the principal, who remains
the owner and has the right to control sales, fix the price,
and terms, demand and receive the proceeds less the agent's
commission upon sales made. 1 Mechem on Sales, Sec. 43;
1 Mechem on Agency, Sec. 48; Williston on Sales, 1;
Tiedeman on Sales, 1. (Salisbury v. Brooks, 94 SE 117,
118-119)22
As to how the CA have arrived at the conclusion that the
contract between CAI and Holiday Travel is a sale is
certainly confounding, considering that CAI is the one
bound by the contracts of carriage embodied by the tickets
being sold by Holiday Travel on its behalf. It is undisputed
that CAI and not Holiday Travel who is the party to the
contracts of carriage executed by Holiday Travel with third
persons who desire to travel via Continental Airlines, and
this conclusively indicates the existence of a principalagent relationship. That the principal is bound by all the
obligations contracted by the agent within the scope of the
authority granted to him is clearly provided under Article
1910 of the Civil Code and this constitutes the very notion
of agency.

Considering that the fundamental hallmarks of an agency

are present, this Court finds it rather peculiar that the CA

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II. In actions based on quasi-delict, a principal can only be

held liable for the tort committed by its agents employees
if it has been established by preponderance of evidence that
the principal was also at fault or negligent or that the
principal exercise control and supervision over them.
Considering that Holiday Travel is CAIs agent, does it
necessarily follow that CAI is liable for the fault or
negligence of Holiday Travels employees? Citing China
Air Lines, Ltd. v. Court of Appeals, et al.,23 CAI argues
that it cannot be held liable for the actions of the employee
of its ticketing agent in the absence of an employeremployee relationship.
An examination of this Courts pronouncements in China
Air Lines will reveal that an airline company is not
completely exonerated from any liability for the tort
committed by its agents employees. A prior determination
of the nature of the passengers cause of action is necessary.
If the passengers cause of action against the airline
company is premised on culpa aquiliana or quasi-delict for
a tort committed by the employee of the airline companys
agent, there must be an independent showing that the
airline company was at fault or negligent or has contributed
to the negligence or tortuous conduct committed by the
employee of its agent. The mere fact that the employee of
the airline companys agent has committed a tort is not
sufficient to hold the airline company liable. There is no
vinculum juris between the airline company and its agents
employees and the contractual relationship between the
airline company and its agent does not operate to create a
juridical tie between the airline company and its agents
employees. Article 2180 of the Civil Code does not make
the principal vicariously liable for the tort committed by its
agents employees and the principal-agency relationship per
se does not make the principal a party to such tort; hence,
the need to prove the principals own fault or negligence.
On the other hand, if the passengers cause of action for
damages against the airline company is based on
contractual breach or culpa contractual, it is not necessary
that there be evidence of the airline companys fault or
negligence. As this Court previously stated in China Air
Lines and reiterated in Air France vs. Gillego,24 in an
action based on a breach of contract of carriage, the
aggrieved party does not have to prove that the common
carrier was at fault or was negligent. All that he has to
prove is the existence of the contract and the fact of its nonperformance by the carrier.
Spouses Vilorias cause of action on the basis of Magers
alleged fraudulent misrepresentation is clearly one of tort or
quasi-delict, there being no pre-existing contractual
relationship between them. Therefore, it was incumbent
upon Spouses Viloria to prove that CAI was equally at
fault.
However, the records are devoid of any evidence by which
CAIs alleged liability can be substantiated. Apart from
their claim that CAI must be held liable for Magers
supposed fraud because Holiday Travel is CAIs agent,

Spouses Viloria did not present evidence that CAI was a

party or had contributed to Magers complained act either
by instructing or authorizing Holiday Travel and Mager to
issue the said misrepresentation.
It may seem unjust at first glance that CAI would consider
Spouses Viloria bound by the terms and conditions of the
subject contracts, which Mager entered into with them on
CAIs behalf, in order to deny Spouses Vilorias request for
a refund or Fernandos use of Lourdes ticket for the reissuance of a new one, and simultaneously claim that they
are not bound by Magers supposed misrepresentation for
purposes of avoiding Spouses Vilorias claim for damages
and maintaining the validity of the subject contracts. It may
likewise be argued that CAI cannot deny liability as it
benefited from Magers acts, which were performed in
compliance with Holiday Travels obligations as CAIs
agent.
However, a persons vicarious liability is anchored on his
possession of control, whether absolute or limited, on the
tortfeasor. Without such control, there is nothing which
could justify extending the liability to a person other than
the one who committed the tort. As this Court explained in
Cangco v. Manila Railroad Co.:25
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
to limit such liability to cases in which the person upon
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
persons whose acts or omissions 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 extracontractual liability with certain well-defined 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 one's own acts, or in having failed to exercise due
care in the selection and control of one's agent or servants,
or in the control of persons who, by reasons of their status,
occupy a position of dependency with respect to the person
made liable for their conduct.26 (emphasis supplied)
It is incumbent upon Spouses Viloria to prove that CAI
exercised control or supervision over Mager by
preponderant evidence. The existence of control or
supervision cannot be presumed and CAI is under no
obligation to prove its denial or nugatory assertion. Citing
Belen v. Belen,27 this Court ruled in Jayme v. Apostol,28
that:
In Belen v. Belen, this Court ruled that it was enough for
defendant to deny an alleged employment relationship. The
defendant is under no obligation to prove the negative
averment. This Court said:

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It is an old and well-settled rule of the courts that the

burden of proving the action is upon the plaintiff, and that
if he fails satisfactorily to show the facts upon which he
bases his claim, the defendant is under no obligation to
prove his exceptions. This [rule] is in harmony with the
provisions of Section 297 of the Code of Civil Procedure
holding that each party must prove his own affirmative
allegations, etc.29 (citations omitted)
Therefore, without a modicum of evidence that CAI
exercised control over Holiday Travels employees or that
CAI was equally at fault, no liability can be imposed on
CAI for Magers supposed misrepresentation.
Even on the assumption that CAI may be held liable for the
acts of Mager, still, Spouses Viloria are not entitled to a
refund. Magers statement cannot be considered a causal
fraud that would justify the annulment of the subject
contracts that would oblige CAI to indemnify Spouses
Viloria and return the money they paid for the subject
tickets.
Article 1390, in relation to Article 1391 of the Civil Code,
provides that if the consent of the contracting parties was
obtained through fraud, the contract is considered voidable
and may be annulled within four (4) years from the time of
the discovery of the fraud. Once a contract is annulled, the
parties are obliged under Article 1398 of the same Code to
restore to each other the things subject matter of the
contract, including their fruits and interest.
On the basis of the foregoing and given the allegation of
Spouses Viloria that Fernandos consent to the subject
contracts was supposedly secured by Mager through
fraudulent means, it is plainly apparent that their demand
for a refund is tantamount to seeking for an annulment of
the subject contracts on the ground of vitiated consent.
Whether the subject contracts are annullable, this Court is
required to determine whether Magers alleged
misrepresentation constitutes causal fraud. Similar to the
dispute on the existence of an agency, whether fraud
attended the execution of a contract is factual in nature and
this Court, as discussed above, may scrutinize the records if
the findings of the CA are contrary to those of the RTC.
Under Article 1338 of the Civil Code, there is fraud when,
through insidious words or machinations of one of the
contracting parties, the other is induced to enter into a
contract which, without them, he would not have agreed to.
In order that fraud may vitiate consent, it must be the causal
(dolo causante), not merely the incidental (dolo incidente),
inducement to the making of the contract.30 In Samson v.
Court of Appeals,31 causal fraud was defined as a
deception employed by one party prior to or simultaneous
to the contract in order to secure the consent of the
other.32
Also, fraud must be serious and its existence must be
established by clear and convincing evidence. As ruled by

this Court in Sierra v. Hon. Court of Appeals, et al.,33 mere

preponderance of evidence is not adequate:
Fraud must also be discounted, for according to the Civil
Code:
Art. 1338. There is fraud when, through insidious words or
machinations of one of the contracting parties, the other is
induced to enter into a contract which without them, he
would not have agreed to.
Art. 1344. In order that fraud may make a contract
voidable, it should be serious and should not have been
employed by both contracting parties.
To quote Tolentino again, the misrepresentation
constituting the fraud must be established by full, clear, and
convincing evidence, and not merely by a preponderance
thereof. The deceit must be serious. The fraud is serious
when it is sufficient to impress, or to lead an ordinarily
prudent person into error; that which cannot deceive a
prudent person cannot be a ground for nullity. The
circumstances of each case should be considered, taking
into account the personal conditions of the victim.34
After meticulously poring over the records, this Court finds
that the fraud alleged by Spouses Viloria has not been
satisfactorily established as causal in nature to warrant the
annulment of the subject contracts. In fact, Spouses Viloria
failed to prove by clear and convincing evidence that
Magers statement was fraudulent. Specifically, Spouses
Viloria failed to prove that (a) there were indeed available
seats at Amtrak for a trip to New Jersey on August 13, 1997
at the time they spoke with Mager on July 21, 1997; (b)
Mager knew about this; and (c) that she purposely informed
them otherwise.
This Court finds the only proof of Magers alleged fraud,
which is Fernandos testimony that an Amtrak had assured
him of the perennial availability of seats at Amtrak, to be
wanting. As CAI correctly pointed out and as Fernando
admitted, it was possible that during the intervening period
of three (3) weeks from the time Fernando purchased the
subject tickets to the time he talked to said Amtrak
employee, other passengers may have cancelled their
bookings and reservations with Amtrak, making it possible
for Amtrak to accommodate them. Indeed, the existence of
fraud cannot be proved by mere speculations and
conjectures. Fraud is never lightly inferred; it is good faith
that is. Under the Rules of Court, it is presumed that "a
person is innocent of crime or wrong" and that "private
transactions have been fair and regular."35 Spouses Viloria
failed to overcome this presumption.
IV. Assuming the contrary, Spouses Viloria are nevertheless
deemed to have ratified the subject contracts.
Even assuming that Magers representation is causal fraud,
the subject contracts have been impliedly ratified when
Spouses Viloria decided to exercise their right to use the

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subject tickets for the purchase of new ones. Under Article

1392 of the Civil Code, ratification extinguishes the action
to annul a voidable contract.
Ratification of a voidable contract is defined under Article
1393 of the Civil Code as follows:

Considering that the subject contracts are not annullable on

the ground of vitiated consent, the next question is: Do
Spouses Viloria have the right to rescind the contract on the
ground of CAIs supposed breach of its undertaking to
issue new tickets upon surrender of the subject tickets?
Article 1191, as presently worded, states:

Art. 1393. Ratification may be effected expressly or tacitly.

It is understood that there is a tacit ratification if, with
knowledge of the reason which renders the contract
voidable and such reason having ceased, the person who
has a right to invoke it should execute an act which
necessarily implies an intention to waive his right.
Implied ratification may take diverse forms, such as by
silence or acquiescence; by acts showing approval or
adoption of the contract; or by acceptance and retention of
benefits flowing therefrom.36
Simultaneous with their demand for a refund on the ground
of Fernandos vitiated consent, Spouses Viloria likewise
asked for a refund based on CAIs supposed bad faith in
reneging on its undertaking to replace the subject tickets
with a round trip ticket from Manila to Los Angeles.
In doing so, Spouses Viloria are actually asking for a
rescission of the subject contracts based on contractual
breach. Resolution, the action referred to in Article 1191, is
based on the defendants breach of faith, a violation of the
reciprocity between the parties37 and in Solar Harvest, Inc.
v. Davao Corrugated Carton Corporation,38 this Court
ruled that a claim for a reimbursement in view of the other
partys failure to comply with his obligations under the
contract is one for rescission or resolution.
However, annulment under Article 1390 of the Civil Code
and rescission under Article 1191 are two (2) inconsistent
remedies. In resolution, all the elements to make the
contract valid are present; in annulment, one of the
essential elements to a formation of a contract, which is
consent, is absent. In resolution, the defect is in the
consummation stage of the contract when the parties are in
the process of performing their respective obligations; in
annulment, the defect is already present at the time of the
negotiation and perfection stages of the contract.
Accordingly, by pursuing the remedy of rescission under
Article 1191, the Vilorias had impliedly admitted the
validity of the subject contracts, forfeiting their right to
demand their annulment. A party cannot rely on the
contract and claim rights or obligations under it and at the
same time impugn its existence or validity. Indeed, litigants
are enjoined from taking inconsistent positions.39
V. Contracts cannot be rescinded for a slight or casual
breach.
CAI cannot insist on the non-transferability of the subject
tickets.

The power to rescind obligations is implied in reciprocal

ones, in case one of the obligors should not comply with
what is incumbent upon him.
The injured party may choose between the fulfilment and
the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there
be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of
third persons who have acquired the thing, in accordance
with articles 1385 and 1388 and the Mortgage Law.
According to Spouses Viloria, CAI acted in bad faith and
breached the subject contracts when it refused to apply the
value of Lourdes ticket for Fernandos purchase of a round
trip ticket to Los Angeles and in requiring him to pay an
amount higher than the price fixed by other airline
companies.
In its March 24, 1998 letter, CAI stated that nonrefundable tickets may be used as a form of payment
toward the purchase of another Continental ticket for
$75.00, per ticket, reissue fee ($50.00, per ticket, for tickets
purchased prior to October 30, 1997).
Clearly, there is nothing in the above-quoted section of
CAIs letter from which the restriction on the nontransferability of the subject tickets can be inferred. In fact,
the words used by CAI in its letter supports the position of
Spouses Viloria, that each of them can use the ticket under
their name for the purchase of new tickets whether for
themselves or for some other person.
Moreover, as CAI admitted, it was only when Fernando had
expressed his interest to use the subject tickets for the
purchase of a round trip ticket between Manila and Los
Angeles that he was informed that he cannot use the ticket
in Lourdes name as payment.
Contrary to CAIs claim, that the subject tickets are nontransferable cannot be implied from a plain reading of the
provision printed on the subject tickets stating that [t]o the
extent not in conflict with the foregoing carriage and other
services performed by each carrier are subject to: (a)
provisions contained in this ticket, x x x (iii) carriers
conditions of carriage and related regulations which are
made part hereof (and are available on application at the
offices of carrier) x x x. As a common carrier whose

103

business is imbued with public interest, the exercise of

extraordinary diligence requires CAI to inform Spouses
Viloria, or all of its passengers for that matter, of all the
terms and conditions governing their contract of carriage.
CAI is proscribed from taking advantage of any ambiguity
in the contract of carriage to impute knowledge on its
passengers of and demand compliance with a certain
condition or undertaking that is not clearly stipulated. Since
the prohibition on transferability is not written on the face
of the subject tickets and CAI failed to inform Spouses
Viloria thereof, CAI cannot refuse to apply the value of
Lourdes ticket as payment for Fernandos purchase of a
new ticket.
CAIs refusal to accept Lourdes ticket for the purchase of a
new ticket for Fernando is only a casual breach.
Nonetheless, the right to rescind a contract for nonperformance of its stipulations is not absolute. The general
rule is that rescission of a contract will not be permitted for
a slight or casual breach, but only for such substantial and
fundamental violations as would defeat the very object of
the parties in making the agreement.40 Whether a breach is
substantial is largely determined by the attendant
circumstances.41
While CAIs refusal to allow Fernando to use the value of
Lourdes ticket as payment for the purchase of a new ticket
is unjustified as the non-transferability of the subject tickets
was not clearly stipulated, it cannot, however be considered
substantial. The endorsability of the subject tickets is not an
essential part of the underlying contracts and CAIs failure
to comply is not essential to its fulfillment of its
undertaking to issue new tickets upon Spouses Vilorias
surrender of the subject tickets. This Court takes note of
CAIs willingness to perform its principal obligation and
this is to apply the price of the ticket in Fernandos name to
the price of the round trip ticket between Manila and Los
Angeles. CAI was likewise willing to accept the ticket in
Lourdes name as full or partial payment as the case may be
for the purchase of any ticket, albeit under her name and for
her exclusive use. In other words, CAIs willingness to
comply with its undertaking under its March 24, 1998
cannot be doubted, albeit tainted with its erroneous
insistence that Lourdes ticket is non-transferable.
Moreover, Spouses Vilorias demand for rescission cannot
prosper as CAI cannot be solely faulted for the fact that
their agreement failed to consummate and no new ticket
was issued to Fernando. Spouses Viloria have no right to
insist that a single round trip ticket between Manila and Los
Angeles should be priced at around $856.00 and refuse to
pay the difference between the price of the subject tickets
and the amount fixed by CAI. The petitioners failed to
allege, much less prove, that CAI had obliged itself to issue
to them tickets for any flight anywhere in the world upon
their surrender of the subject tickets. In its March 24, 1998
letter, it was clearly stated that [n]on-refundable tickets
may be used as a form of payment toward the purchase of
another Continental ticket42 and there is nothing in it
suggesting that CAI had obliged itself to protect Spouses

Viloria from any fluctuation in the prices of tickets or that

the surrender of the subject tickets will be considered as
full payment for any ticket that the petitioners intend to buy
regardless of actual price and destination. The CA was
correct in holding that it is CAIs right and exclusive
prerogative to fix the prices for its services and it may not
be compelled to observe and maintain the prices of other
airline companies.43
The conflict as to the endorsability of the subject tickets is
an altogether different matter, which does not preclude CAI
from fixing the price of a round trip ticket between Manila
and Los Angeles in an amount it deems proper and which
does not provide Spouses Viloria an excuse not to pay such
price, albeit subject to a reduction coming from the value of
the subject tickets. It cannot be denied that Spouses Viloria
had the concomitant obligation to pay whatever is not
covered by the value of the subject tickets whether or not
the subject tickets are transferable or not.
There is also no showing that Spouses Viloria were
discriminated against in bad faith by being charged with a
higher rate. The only evidence the petitioners presented to
prove that the price of a round trip ticket between Manila
and Los Angeles at that time was only $856.00 is a
newspaper advertisement for another airline company,
which is inadmissible for being hearsay evidence, twice
removed. Newspaper clippings are hearsay if they were
offered for the purpose of proving the truth of the matter
alleged. As ruled in Feria v. Court of Appeals,:44
[N]ewspaper articles amount to hearsay evidence, twice
removed and are therefore not only inadmissible but
without any probative value at all whether objected to or
not, unless offered for a purpose other than proving the
truth of the matter asserted. In this case, the news article is
admissible only as evidence that such publication does exist
with the tenor of the news therein stated.45 (citations
omitted)
The records of this case demonstrate that both parties were
equally in default; hence, none of them can seek judicial
redress for the cancellation or resolution of the subject
contracts and they are therefore bound to their respective
obligations thereunder. As the 1st sentence of Article 1192
provides:
Art. 1192. In case both parties have committed a breach of
the obligation, the liability of the first infractor shall be
equitably tempered by the courts. If it cannot be determined
which of the parties first violated the contract, the same
shall be deemed extinguished, and each shall bear his own
damages. (emphasis supplied)
Therefore, CAIs liability for damages for its refusal to
accept Lourdes ticket for the purchase of Fernandos round
trip ticket is offset by Spouses Vilorias liability for their
refusal to pay the amount, which is not covered by the
subject tickets. Moreover, the contract between them
remains, hence, CAI is duty bound to issue new tickets for
a destination chosen by Spouses Viloria upon their
surrender of the subject tickets and Spouses Viloria are

104

obliged to pay whatever amount is not covered by the value

of the subject tickets.

are insufficient while the latter denies all liability for any
damages whatever.

This Court made a similar ruling in Central Bank of the

Philippines v. Court of Appeals.46 Thus:

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.

Since both parties were in default in the performance of

their respective reciprocal obligations, that is, Island
Savings Bank failed to comply with its obligation to furnish
the entire loan and Sulpicio M. Tolentino failed to comply
with his obligation to pay his P17,000.00 debt within 3
years as stipulated, they are both liable for damages.
Article 1192 of the Civil Code provides that in case both
parties have committed a breach of their reciprocal
obligations, the liability of the first infractor shall be
equitably tempered by the courts. WE rule that the liability
of Island Savings Bank for damages in not furnishing the
entire loan is offset by the liability of Sulpicio M. Tolentino
for damages, in the form of penalties and surcharges, for
not paying his overdue P17,000.00 debt. x x x.47
Another consideration that militates against the propriety of
holding CAI liable for moral damages is the absence of a
showing that the latter acted fraudulently and in bad faith.
Article 2220 of the Civil Code requires evidence of bad
faith and fraud and moral damages are generally not
recoverable in culpa contractual except when bad faith had
been proven.48 The award of exemplary damages is
likewise not warranted. Apart from the requirement that the
defendant acted in a wanton, oppressive and malevolent
manner, the claimant must prove his entitlement to moral
damages.49
WHEREFORE, premises considered, the instant Petition is
DENIED.
SO ORDERED.

Fortuitous Event as a Defense

Lasam v. Smith
February 2, 1924

45 PHIL 657, Feb 2, 1924

G.R. No. 19495

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

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

105

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; 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 wellconsidered 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

106

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.
Necesito v. Paras

104 SCRA 84, Jun 30, 1958 (NF)

Juntilla v. Fontanar May 31, 1985

G.R. No. L-45637 May 31, 1985
ROBERTO JUNTILLA, petitioner,
vs.
CLEMENTE FONTANAR, FERNANDO BANZON and
BERFOL CAMORO, respondents.
Valentin A. Zozobrado for petitioner.
Ruperto N. Alfarara for respondents.

GUTIERREZ, JR., J.:

This is a petition for review, on questions of law, of the
decision of the Court of First Instance of Cebu which
reversed the decision of the City Court of Cebu and
exonerated the respondents from any liability arising from a
vehicular accident.
The background facts which led to the filing of a complaint
for breach of contract and damages against the respondents
are summarized by the Court of First Instance of Cebu as
follows:
The facts established after trial show that the plaintiff was a
passenger of the public utility jeepney bearing plate No.
PUJ-71-7 on the course of the trip from Danao City to
Cebu City. The jeepney was driven by defendant Berfol
Camoro. It was registered under the franchise of defendant
Clemente Fontanar but was actually owned by defendant
Fernando Banzon. When the jeepney reached Mandaue
City, the right rear tire exploded causing the vehicle to turn
turtle. In the process, the plaintiff who was sitting at the
front seat was thrown out of the vehicle. Upon landing on
the ground, the plaintiff momentarily lost consciousness.
When he came to his senses, he found that he had a
lacerated wound on his right palm. Aside from this, he
suffered injuries on his left arm, right thigh and on his
back. (Exh. "D"). Because of his shock and injuries, he
went back to Danao City but on the way, he discovered that
his "Omega" wrist watch was lost. Upon his arrival in
Danao City, he immediately entered the Danao City
Hospital to attend to his injuries, and also requested his
father-in-law to proceed immediately to the place of the
accident and look for the watch. In spite of the efforts of his
father-in-law, the wrist watch, which he bought for P
852.70 (Exh. "B") could no longer be found.
xxx

xxx

xxx

Petitioner Roberto Juntilla filed Civil Case No. R-17378 for

breach of contract with damages before the City Court of
Cebu City, Branch I against Clemente Fontanar, Fernando
Banzon and Berfol Camoro.
The respondents filed their answer, alleging inter alia that
the accident that caused losses to the petitioner was beyond
the control of the respondents taking into account that the
tire that exploded was newly bought and was only slightly
used at the time it blew up.
After trial, Judge Romulo R. Senining of the Civil Court of
Cebu rendered judgment in favor of the petitioner and
against the respondents. The dispositive portion of the
decision reads:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants and the latter are hereby
ordered, jointly and severally, to pay the plaintiff the sum
of P750.00 as reimbursement for the lost Omega wrist
watch, the sum of P246.64 as unrealized salary of the
plaintiff from his employer, the further sum of P100.00 for
the doctor's fees and medicine, an additional sum of
P300.00 for attorney's fees and the costs.
The respondents appealed to the Court of First Instance of
Cebu, Branch XIV.
Judge Leonardo B. Canares reversed the judgment of the
City Court of Cebu upon a finding that the accident in
question was due to a fortuitous event. The dispositive
portion of the decision reads:
WHEREFORE, judgment is hereby rendered exonerating
the defendants from any liability to the plaintiff without
pronouncement as to costs.
A motion for reconsideration was denied by the Court of
First Instance.
The petitioner raises the following alleged errors
committed by the Court of First Instance of Cebu on appeal

a.
The Honorable Court below committed grave
abuse of discretion in failing to take cognizance of the fact
that defendants and/or their employee failed to exercise
"utmost and/or extraordinary diligence" required of
common carriers contemplated under Art. 1755 of the Civil
Code of the Philippines.
b.
The Honorable Court below committed grave
abuse of discretion by deciding the case contrary to the
doctrine laid down by the Honorable Supreme Court in the
case of Necesito et al. v. Paras, et al.
We find the petition impressed with merit.
The City Court and the Court of First Instance of Cebu
found that the right rear tire of the passenger jeepney in
which the petitioner was riding blew up causing the vehicle

107

to fall on its side. The petitioner questions the conclusion of

the respondent court drawn from this finding of fact.

passengers in the front seat and fourteen (14) passengers in

the rear.

The Court of First Instance of Cebu erred when it absolved

the carrier from any liability upon a finding that the tire
blow out is a fortuitous event. The Court of First Instance
of Cebu ruled that:

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.

After reviewing the records of the case, this Court finds

that the accident in question was due to a fortuitous event.
A tire blow-out, such as what happened in the case at bar, is
an inevitable accident that exempts the carrier from
liability, there being absence of a showing that there was
misconduct or negligence on the part of the operator in the
operation and maintenance of the vehicle involved. The fact
that the right rear tire exploded, despite being brand new,
constitutes a clear case of caso fortuito which can be a
proper basis for exonerating the defendants from
liability. ...
The Court of First Instance relied on the ruling of the Court
of Appeals in Rodriguez v. Red Line Transportation Co.,
CA G.R. No. 8136, December 29, 1954, where the Court of
Appeals ruled that:
A tire blow-out does not constitute negligence unless the
tire was already old and should not have been used at all.
Indeed, this would be a clear case of fortuitous event.
The foregoing conclusions of the Court of First Instance of
Cebu are based on a misapprehension of overall facts from
which a conclusion should be drawn. The reliance of the
Court of First Instance on the Rodriguez case is not in
order. In La Mallorca and Pampanga Bus Co. v. De Jesus,
et al. (17 SCRA 23), we held that:
Petitioner maintains that a tire blow-out is a fortuitous
event and gives rise to no liability for negligence, citing the
rulings of the Court of Appeals in Rodriguez v. Red Line
Transportation Co., CA G.R. No. 8136, December 29,
1954, and People v. Palapad, CA-G.R. No. 18480, June 27,
1958. These rulings, however, not only are not binding on
this Court but were based on considerations quite different
from those that obtain in the case at bar. The appellate court
there made no findings of any specific acts of negligence
on the part of the defendants and confined itself to the
question of whether or not a tire blow-out, by itself alone
and without a showing as to the causative factors, would
generate liability. ...
In the case at bar, there are specific acts of negligence on
the part of the respondents. The records show that the
passenger jeepney turned turtle and jumped into a ditch
immediately after its right rear tire exploded. The evidence
shows that the passenger jeepney was running at a very fast
speed before the accident. We agree with the observation of
the petitioner that a public utility jeep running at a regular
and safe speed will not jump into a ditch when its right rear
tire blows up. There is also evidence to show that the
passenger jeepney was overloaded at the time of the
accident. The petitioner stated that there were three (3)

In Lasam v. Smith (45 Phil. 657), we laid down the

following essential characteristics of caso fortuito:
xxx

xxx

xxx

... 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 Encyclopedia Juridica
Espanola, 309.)
In the case at bar, the cause of the unforeseen and
unexpected occurrence was not independent of the human
will. The accident was caused either through the negligence
of the driver or because of mechanical defects in the tire.
Common carriers should teach their drivers not to overload
their vehicles, not to exceed safe and legal speed limits, and
to know the correct measures to take when a tire blows up
thus insuring the safety of passengers at all times. Relative
to the contingency of mechanical defects, we held in
Necesito, et al. v. Paras, et al. (104 Phil. 75), that:
... The preponderance of authority is in favor of the
doctrine that a passenger is entitled to recover damages
from a carrier for an injury resulting from a defect in an
appliance purchased from a manufacturer, whenever it
appears that the defect would have been discovered by the
carrier if it had exercised the degree of care which under
the circumstances was incumbent upon it, with regard to
inspection and application of the necessary tests. For the
purposes of this doctrine, the manufacturer is considered as
being in law the agent or servant of the carrier, as far as
regards the work of constructing the appliance. According
to this theory, the good repute of the manufacturer will not
relieve the carrier from liability' (10 Am. Jur. 205, s, 1324;
see also Pennsylvania R. Co. v. Roy, 102 U.S. 451; 20 L.
Ed. 141; Southern R. Co. v. Hussey, 74 ALR 1172; 42 Fed.
2d 70; and Ed Note, 29 ALR 788.: Ann. Cas. 1916E 929).

108

The rationale of the carrier's liability is the fact that the

passenger has neither choice nor control over the carrier in
the selection and use of the equipment and appliances in
use by the carrier. Having no privity whatever with the
manufacturer or vendor of the defective equipment, the
passenger has no remedy against him, while the carrier
usually has. It is but logical, therefore, that the carrier,
while not an insurer of the safety of his passengers, should
nevertheless be held to answer for the flaws of his
equipment if such flaws were at all discoverable. ...
It is sufficient to reiterate that the source of a common
carrier's legal liability is the contract of carriage, and by
entering into the said contract, it binds itself to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of a very cautious
person, with a due regard for all the circumstances. The
records show that this obligation was not met by the
respondents.
The respondents likewise argue that the petitioner cannot
recover any amount for failure to prove such damages
during the trial. The respondents submit that if the
petitioner was really injured, why was he treated in Danao
City and not in Mandaue City where the accident took
place. The respondents argue that the doctor who issued the
medical certificate was not presented during the trial, and
hence not cross-examined. The respondents also claim that
the petitioner was not wearing any wrist watch during the
accident.
It should be noted that the City Court of Cebu found that
the petitioner had a lacerated wound on his right palm aside
from injuries on his left arm, right thigh and on his back,
and that on his way back to Danao City, he discovered that
his "Omega" wrist watch was lost. These are findings of
facts of the City Court of Cebu which we find no reason to
disturb. More so when we consider the fact that the Court
of First Instance of Cebu impliedly concurred in these
matters when it confined itself to the question of whether or
not the tire blow out was a fortuitous event.
WHEREFORE, the decision of the Court of First Instance
of Cebu, Branch IV appealed from is hereby REVERSED
and SET ASIDE, and the decision of the City Court of
Cebu, Branch I is REINSTATED, with the modification
that the damages shall earn interest at 12% per annum and
the attorney's fees are increased to SIX HUNDRED PESOS
(P600.00). Damages shall earn interests from January 27,
1975.
SO ORDERED.
Yobido v. CA
Oct 17, 1997
[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 28year-old Tito Tumboy and physical injuries to other
passengers.
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 thirdparty 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]
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.
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 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.

109

Defendant Cresencio Yobido underwent such test and

submitted his professional drivers license and clearances
from the barangay, the fiscal and the police.
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.
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 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

110

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 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.
Gacal v. PAL
183 SCRA 189
G.R. No. L-55300 March 15, 1990

111

FRANKLIN G. GACAL and CORAZON M. GACAL, the

latter assisted by her husband, FRANKLIN G. GACAL,
petitioners,
vs.
PHILIPPINE AIR LINES, INC., and THE HONORABLE
PEDRO SAMSON C. ANIMAS, in his capacity as
PRESIDING JUDGE of the COURT OF FIRST
INSTANCE OF SOUTH COTABATO, BRANCH I,
respondents.
Vicente A. Mirabueno for petitioners.
Siguion Reyna, Montecillo & Ongsiako for private
respondent.

PARAS, J.:
This is a, petition for review on certiorari of the decision of
the Court of First Instance of South Cotabato, Branch 1, *
promulgated on August 26, 1980 dismissing three (3)
consolidated cases for damages: Civil Case No. 1701, Civil
Case No. 1773 and Civil Case No. 1797 (Rollo, p. 35).
The facts, as found by respondent court, are as follows:
Plaintiffs Franklin G. Gacal and his wife, Corazon M.
Gacal, Bonifacio S. Anislag and his wife, Mansueta L.
Anislag, and the late Elma de Guzman, were then
passengers boarding defendant's BAC 1-11 at Davao
Airport for a flight to Manila, not knowing that on the same
flight, Macalinog, Taurac Pendatum known as Commander
Zapata, Nasser Omar, Liling Pusuan Radia, Dimantong
Dimarosing and Mike Randa, all of Marawi City and
members of the Moro National Liberation Front (MNLF),
were their co-passengers, three (3) armed with grenades,
two (2) with .45 caliber pistols, and one with a .22 caliber
pistol. Ten (10) minutes after take off at about 2:30 in the
afternoon, the hijackers brandishing their respective
firearms announced the hijacking of the aircraft and
directed its pilot to fly to Libya. With the pilot explaining to
them especially to its leader, Commander Zapata, of the
inherent fuel limitations of the plane and that they are not
rated for international flights, the hijackers directed the
pilot to fly to Sabah. With the same explanation, they
relented and directed the aircraft to land at Zamboanga
Airport, Zamboanga City for refueling. The aircraft landed
at 3:00 o'clock in the afternoon of May 21, 1976 at
Zamboanga Airport. When the plane began to taxi at the
runway, it was met by two armored cars of the military with
machine guns pointed at the plane, and it stopped there.
The rebels thru its commander demanded that a DC-aircraft
take them to Libya with the President of the defendant
company as hostage and that they be given $375,000 and
six (6) armalites, otherwise they will blow up the plane if
their demands will not be met by the government and
Philippine Air Lines. Meanwhile, the passengers were not
served any food nor water and it was only on May 23, a
Sunday, at about 1:00 o'clock in the afternoon that they
were served 1/4 slice of a sandwich and 1/10 cup of PAL

water. After that, relatives of the hijackers were allowed to

board the plane but immediately after they alighted
therefrom, an armored car bumped the stairs. That
commenced the battle between the military and the
hijackers which led ultimately to the liberation of the
surviving crew and the passengers, with the final score of
ten (10) passengers and three (3) hijackers dead on the spot
and three (3) hijackers captured.
City Fiscal Franklin G. Gacal was unhurt. Mrs. Corazon M.
Gacal suffered injuries in the course of her jumping out of
the plane when it was peppered with bullets by the army
and after two (2) hand grenades exploded inside the plane.
She was hospitalized at General Santos Doctors Hospital,
General Santos City, for two (2) days, spending P245.60 for
hospital and medical expenses, Assistant City Fiscal
Bonifacio S. Anislag also escaped unhurt but Mrs. Anislag
suffered a fracture at the radial bone of her left elbow for
which she was hospitalized and operated on at the San
Pedro Hospital, Davao City, and therefore, at Davao
Regional Hospital, Davao City, spending P4,500.00. Elma
de Guzman died because of that battle. Hence, the action of
damages instituted by the plaintiffs demanding the
following damages, to wit:
Civil Case No. 1701
City Fiscal Franklin G. Gacal and Mrs. Corazon M. Gacal
actual damages: P245.60 for hospital and medical
expenses of Mrs Gacal; P8,995.00 for their personal
belongings which were lost and not recovered; P50,000.00
each for moral damages; and P5,000.00 for attorney's fees,
apart from the prayer for an award of exemplary damages
(Record, pp. 4-6, Civil Case No. 1701).
Civil Case No. 1773
xxx

xxx

xxx

Civil Case No. 1797

xxx

xxx

xxx

The trial court, on August 26, 1980, dismissed the

complaints finding that all the damages sustained in the
premises were attributed to force majeure.
On September 12, 1980 the spouses Franklin G. Gacal and
Corazon M. Gacal, plaintiffs in Civil Case No. 1701, filed a
notice of appeal with the lower court on pure questions of
law (Rollo, p. 55) and the petition for review on certiorari
was filed with this Court on October 20, 1980 (Rollo, p.
30).
The Court gave due course to the petition (Rollo, p. 147)
and both parties filed their respective briefs but petitioner
failed to file reply brief which was noted by the Court in
the resolution dated May 3, 1982 (Rollo, p. 183).
Petitioners alleged that the main cause of the unfortunate
incident is the gross, wanton and inexcusable negligence of
respondent Airline personnel in their failure to frisk the

112

passengers adequately in order to discover hidden weapons

in the bodies of the six (6) hijackers. They claimed that
despite the prevalence of skyjacking, PAL did not use a
metal detector which is the most effective means of
discovering potential skyjackers among the passengers
(Rollo, pp. 6-7).
Respondent Airline averred that in the performance of its
obligation to safely transport passengers as far as human
care and foresight can provide, it has exercised the utmost
diligence of a very cautious person with due regard to all
circumstances, but the security checks and measures and
surveillance precautions in all flights, including the
inspection of baggages and cargo and frisking of
passengers at the Davao Airport were performed and
rendered solely by military personnel who under
appropriate authority had assumed exclusive jurisdiction
over the same in all airports in the Philippines.
Similarly, the negotiations with the hijackers were a purely
government matter and a military operation, handled by
and subject to the absolute and exclusive jurisdiction of the
military authorities. Hence, it concluded that the accident
that befell RP-C1161 was caused by fortuitous event, force
majeure and other causes beyond the control of the
respondent Airline.
The determinative issue in this case is whether or not
hijacking or air piracy during martial law and under the
circumstances obtaining herein, is a caso fortuito or force
majeure which would exempt an aircraft from payment of
damages to its passengers whose lives were put in jeopardy
and whose personal belongings were lost during the
incident.
Under the Civil Code, common carriers are required to
exercise extraordinary diligence in their vigilance over the
goods and for the safety of passengers transported by them,
according to all the circumstances of each case (Article
1733). They are presumed at fault or to have acted
negligently whenever a passenger dies or is injured
(Philippine Airlines, Inc. v. National Labor Relations
Commission, 124 SCRA 583 [1983]) or for the loss,
destruction or deterioration of goods in cases other than
those enumerated in Article 1734 of the Civil Code
(Eastern Shipping Lines, Inc. v. Intermediate Appellate
Court, 150 SCRA 463 [1987]).
The source of a common carrier's legal liability is the
contract of carriage, and by entering into said contract, it
binds itself to carry the passengers safely as far as human
care and foresight can provide. There is breach of this
obligation if it fails to exert extraordinary diligence
according to all the circumstances of the case in exercise of
the utmost diligence of a very cautious person (Isaac v.
Ammen Transportation Co., 101 Phil. 1046 [1957]; Juntilla
v. Fontanar, 136 SCRA 624 [1985]).
It is the duty of a common carrier to overcome the
presumption of negligence (Philippine National Railways v.
Court of Appeals, 139 SCRA 87 [1985]) and it must be
shown that the carrier had observed the required

extraordinary diligence of a very cautious person as far as

human care and foresight can provide or that the accident
was caused by a fortuitous event (Estrada v. Consolacion,
71 SCRA 523 [1976]). Thus, as ruled by this Court, no
person shall be responsible for those "events which could
not be foreseen or which though foreseen were inevitable.
(Article 1174, Civil Code). The term is synonymous with
caso fortuito (Lasam v. Smith, 45 Phil. 657 [1924]) which
is of the same sense as "force majeure" (Words and Phrases
Permanent Edition, Vol. 17, p. 362).
In order to constitute a caso fortuito or force majeure that
would exempt a person from liability under Article 1174 of
the Civil Code, it is necessary that the following elements
must concur: (a) the cause of the breach of the obligation
must be independent of the human will (the will of the
debtor or the obligor); (b) the event must be either
unforeseeable or unavoidable; (c) the event must be such as
to render it impossible for the debtor to fulfill his obligation
in a normal manner; and (d) the debtor must be free from
any participation in, or aggravation of the injury to the
creditor (Lasam v. Smith, 45 Phil. 657 [1924]; Austria v.
Court of Appeals, 39 SCRA 527 [1971]; Estrada v.
Consolacion, supra; Vasquez v. Court of Appeals, 138
SCRA 553 [1985]; Juan F. Nakpil & Sons v. Court of
Appeals, 144 SCRA 596 [1986]). Caso fortuito or force
majeure, by definition, are extraordinary events not
foreseeable or avoidable, events that could not be foreseen,
or which, though foreseen, are inevitable. It is, therefore,
not enough that the event should not have been foreseen or
anticipated, as is commonly believed, but it must be one
impossible to foresee or to avoid. The mere difficulty to
foresee the happening is not impossibility to foresee the
same (Republic v. Luzon Stevedoring Corporation, 21
SCRA 279 [1967]).
Applying the above guidelines to the case at bar, the failure
to transport petitioners safely from Davao to Manila was
due to the skyjacking incident staged by six (6) passengers
of the same plane, all members of the Moro National
Liberation Front (MNLF), without any connection with
private respondent, hence, independent of the will of either
the PAL or of its passengers.
Under normal circumstances, PAL might have foreseen the
skyjacking incident which could have been avoided had
there been a more thorough frisking of passengers and
inspection of baggages as authorized by R.A. No. 6235.
But the incident in question occurred during Martial Law
where there was a military take-over of airport security
including the frisking of passengers and the inspection of
their luggage preparatory to boarding domestic and
international flights. In fact military take-over was
specifically announced on October 20, 1973 by General
Jose L. Rancudo, Commanding General of the Philippine
Air Force in a letter to Brig. Gen. Jesus Singson, then
Director of the Civil Aeronautics Administration (Rollo, pp.
71-72) later confirmed shortly before the hijacking incident
of May 21, 1976 by Letter of Instruction No. 399 issued on
April 28, 1976 (Rollo, p. 72).

113

Otherwise stated, these events rendered it impossible for

PAL to perform its obligations in a nominal manner and
obviously it cannot be faulted with negligence in the
performance of duty taken over by the Armed Forces of the
Philippines to the exclusion of the former.
Finally, there is no dispute that the fourth element has also
been satisfied. Consequently the existence of force majeure
has been established exempting respondent PAL from the
payment of damages to its passengers who suffered death
or injuries in their persons and for loss of their baggages.
PREMISES CONSIDERED, the petition is hereby
DISMISSED for lack of merit and the decision of the Court
of First Instance of South Cotabato, Branch I is hereby
AFFIRMED.
SO ORDERED.
Pilapil v. CA
G.R. No. 52159

Dec 22, 1989

December 22, 1989

JOSE PILAPIL, petitioner,

vs.
HON. COURT OF APPEALS and ALATCO
TRANSPORTATION COMPANY, INC., respondents.
Martin Badong, Jr. for petitioner.

he was treated for another week. Since there was no

improvement in his left eye's vision, petitioner went to V.
Luna Hospital, Quezon City where he was treated by Dr.
Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and
sustained a permanent scar above the left eye.
Thereupon, petitioner instituted before the Court of First
Instance of Camarines Sur, Branch I an action for recovery
of damages sustained as a result of the stone-throwing
incident. After trial, the court a quo rendered judgment with
the following dispositive part:
Wherefore, judgment is hereby entered:
1.
Ordering defendant transportation company to
pay plaintiff Jose Pilapil the sum of P 10,000.00, Philippine
Currency, representing actual and material damages for
causing a permanent scar on the face and injuring the eyesight of the plaintiff;
2.
Ordering further defendant transportation
company to pay the sum of P 5,000.00, Philippine
Currency, to the plaintiff as moral and exemplary damages;
3.
Ordering furthermore, defendant transportation
company to reimburse plaintiff the sum of P 300.00 for his
medical expenses and attorney's fees in the sum of P
1,000.00, Philippine Currency; and

Eufronio K. Maristela for private respondent.

4.

To pay the costs.

SO ORDERED 1
PADILLA, J.:
This is a petition to review on certiorari the decision*
rendered by the Court of Appeals dated 19 October 1979 in
CA-G.R. No. 57354-R entitled "Jose Pilapil, plaintiffappellee versus Alatco Transportation Co., Inc., defendantappellant," which reversed and set aside the judgment of
the Court of First Instance of Camarines Sur in Civil Case
No. 7230 ordering respondent transportation company to
pay to petitioner damages in the total sum of sixteen
thousand three hundred pesos (P 16,300.00).
The record discloses the following facts:
Petitioner-plaintiff Jose Pilapil, a paying passenger,
boarded respondent-defendant's bus bearing No. 409 at San
Nicolas, Iriga City on 16 September 1971 at about 6:00
P.M. While said bus No. 409 was in due course negotiating
the distance between Iriga City and Naga City, upon
reaching the vicinity of the cemetery of the Municipality of
Baao, 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
petitioner above his left eye. Private respondent's personnel
lost no time in bringing the petitioner to the provincial
hospital in Naga City where he was confined and treated.

From the judgment, private respondent appealed to the

Court of Appeals where the appeal was docketed as CAG.R. No. 57354R. On 19 October 1979, the Court of
Appeals, in a Special Division of Five, rendered judgment
reversing and setting aside the judgment of the court a quo.
Hence the present petition.
In seeking a reversal of the decision of the Court of
Appeals, petitioner contends that said court has decided the
issue not in accord with law. Specifically, petitioner argues
that the nature of the business of a transportation company
requires the assumption of certain risks, and the stoning of
the bus by a stranger resulting in injury to petitionerpassenger is one such risk from which the common carrier
may not exempt itself from liability.
We do not agree.
In consideration of the right granted to it by the public to
engage in the business of transporting passengers and
goods, a common carrier does not give its consent to
become an insurer of any and all risks to passengers and
goods. It merely undertakes to perform certain duties to the
public as the law imposes, and holds itself liable for any
breach thereof.

Considering that the sight of his left eye was impaired,

petitioner was taken to Dr. Malabanan of Iriga City where

114

Under Article 1733 of the Civil Code, 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. The requirement of
extraordinary diligence imposed upon common carriers is
restated in Article 1755: "A common carrier is bound to
carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the
circumstances." Further, in case of death of or injuries to
passengers, the law presumes said common carriers to be at
fault or to have acted negligently. 2
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, however, make the carrier an insurer of the
absolute safety of its passengers. 3
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. what constitutes compliance
with said duty is adjudged with due regard to all the
circumstances.
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. Being a mere presumption,
however, 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. 4
In fine, we can only infer from the law the intention of the
Code Commission and Congress to curb the recklessness of
drivers and operators of common carriers in the conduct of
their business.
Thus, it is clear that 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. 5
Petitioner contends that respondent common carrier failed
to rebut the presumption of negligence against it by proof
on its part that it exercised extraordinary diligence for the
safety of its passengers.
We do not agree.
First, as stated earlier, the presumption of fault or
negligence against the carrier is only a disputable
presumption. It gives in where contrary facts are
established proving either that the carrier had exercised the
degree of diligence required by law or the injury suffered

by the passenger was due to a fortuitous event. Where, as in

the instant case, the injury sustained by the petitioner 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 private respondent's 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. To rule
otherwise would make the common carrier the insurer of
the absolute safety of its passengers which is not the
intention of the lawmakers.
Second, while 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 directly cause the
injury, while the contract of carriage Article 1763 governs:
Article 1763.
A common carrier is responsible for
injuries suffered by a passenger on account of the wilful
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.
Clearly under the above provision, 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. Further, under
the same provision, it is to be noted that 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.
Petitioner has charged respondent carrier of negligence on
the ground that the injury complained of could have been
prevented by the common carrier if something like meshwork grills had covered the windows of its bus.
We do not agree.
Although the suggested precaution could have prevented
the injury complained of, the rule of ordinary care and
prudence is not so exacting as to require one charged with
its exercise to take doubtful or unreasonable precautions to
guard against unlawful acts of strangers. The carrier is not
charged with the duty of providing or maintaining vehicles
as to absolutely prevent any and all injuries to passengers.
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. 6

115

Finally, petitioner contends that it is to the greater interest

of the State if a carrier were made liable for such stonethrowing incidents rather than have the bus riding public
lose confidence in the transportation system.
Sad to say, we are not in a position to so hold; such a policy
would be better left to the consideration of Congress which
is empowered to enact laws to protect the public from the
increasing risks and dangers of lawlessness in society.
WHEREFORE, the judgment appealed from is hereby
AFFIRMED.
SO ORDERED.
Fortune Express v. CA
305 SCRA 14, Mar 18, 1999
[G.R. No. 119756. March 18, 1999]
FORTUNE EXPRESS, INC., petitioner, vs. COURT OF
APPEALS, PAULIE U. CAORONG, and minor children
YASSER KING CAORONG, ROSE HEINNI and PRINCE
ALEXANDER, all surnamed CAORONG, and represented
by their mother PAULIE U. CAORONG, respondents.
DECISION
MENDOZA, J.:
This is an appeal by petition for review on certiorari of the
decision, dated July 29, 1994, of the Court of Appeals,
which reversed the decision of the Regional Trial Court,
Branch VI, Iligan City. The aforesaid decision of the trial
court dismissed the complaint of private respondents
against petitioner for damages for breach of contract of
carriage filed on the ground that petitioner had not
exercised the required degree of diligence in the operation
of one of its buses. Atty. Talib Caorong, whose heirs are
private respondents herein, was a passenger of the bus and
was killed in the ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private
respondent Paulie Caorong is the widow of Atty. Caorong,
while private respondents Yasser King, Rose Heinni, and
Prince Alexander are their minor children.
On November 18, 1989, a bus of petitioner figured in an
accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney,
including two Maranaos. Crisanto Generalao, a volunteer
field agent of the Constabulary Regional Security Unit No.
X, conducted an investigation of the accident. He found
that the owner of the jeepney was a Maranao residing in
Delabayan, Lanao del Norte and that certain Maranaos
were planning to take revenge on the petitioner by burning
some of its buses. Generalao rendered a report on his
findings to Sgt. Reynaldo Bastasa of the Philippine
Constabulary Regional Hearquarters at Cagayan de Oro.
Upon the instruction of Sgt. Bastasa, he went to see
Diosdado Bravo, operations manager of petitioner, at its
main office in Cagayan de Oro City. Bravo assured him
that the necessary precautions to insure the safety of lives
and property would be taken.[1]

At about 6:45 P.M. on November 22, 1989, three armed

Maranaos who pretended to be passengers, seized a bus of
petitioner at Linamon, Lanao del Norte while on its way to
Iligan City. Among the passengers of the bus was Atty.
Caorong. The leader of the Maranaos, identified as one
Bashier Mananggolo, ordered the driver, Godofredo
Cabatuan, to stop the bus on the side of the highway.
Mananggolo then shot Cabatuan on the arm, which caused
him to slump on the steering wheel. Then one of the
companions of Mananggolo started pouring gasoline inside
the bus, as the other held the passengers at bay with a
handgun. Mananggolo then ordered the passengers to get
off the bus. The passengers, including Atty. Caorong,
stepped out of the bus and went behind the bushes in a field
some distance from the highway.[2]
However, Atty. Caorong returned to the bus to retrieve
something from the overhead rack. At that time, one of the
armed men was pouring gasoline on the head of the driver.
Cabatuan, who had meantime regained consciousness,
heard Atty. Caorong pleading with the armed men to spare
the driver as he was innocent of any wrong doing and was
only trying to make a living. The armed men were,
however, adamant as they repeated their warning that they
were going to burn the bus along with its driver. During
this exchange between Atty. Caorong and the assailants,
Cabatuan climbed out of the left window of the bus and
crawled to the canal on the opposite side of the highway.
He heard shots from inside the bus. Larry de la Cruz, one
of the passengers, saw that Atty. Caorong was hit. Then the
bus was set on fire. Some of the passengers were able to
pull Atty. Caorong out of the burning bus and rush him to
the Mercy Community Hospital in Iligan City, but he died
while undergoing operation.[3]
The private respondents brought this suit for breach of
contract of carriage in the Regional Trial Court, Branch VI,
Iligan City. In his decision, dated December 28, 1990, the
trial court dismissed the complaint, holding as follows:
The fact that defendant, through Operations Manager
Diosdado Bravo, was informed of the rumors that the
Moslems intended to take revenge by burning five buses of
defendant is established since the latter also utilized
Crisanto Generalaos as a witness. Yet despite this
information, the plaintiffs charge, defendant did not take
proper precautions. . . . Consequently, plaintiffs now fault
the defendant for ignoring the report. Their position is that
the defendant should have provided its buses with security
guards. Does the law require common carriers to install
security guards in its buses for the protection and safety of
its passengers? Is the failure to post guards an omission of
the duty to exercise the diligence of a good father of the
family which could have prevented the killing of Atty.
Caorong? To our mind, the diligence demanded by law
does not include the posting of security guards in buses. It
is an obligation that properly belongs to the State. Besides,
will the presence of one or two security guards suffice to
deter a determined assault of the lawless and thus prevent
the injury complained of? Maybe so, but again, perhaps
not. In other words, the presence of a security guard is not

116

a guarantee that the killing of Atty. Caorong would have

been definitely avoided.
.
Accordingly, the failure of defendant to accord faith and
credit to the report of Mr. Generalao and the fact that it did
not provide security to its buses cannot, in the light of the
circumstances, be characterized as negligence.
Finally, the evidence clearly shows that the assailants did
not have the least intention of harming any of the
passengers. They ordered all the passengers to alight and
set fire on the bus only after all the passengers were out of
danger. The death of Atty. Caorong was an unexpected and
unforseen occurrence over which defendant had no control.
Atty. Caorong performed an act of charity and heroism in
coming to the succor of the driver even in the face of
danger. He deserves the undying gratitude of the driver
whose life he saved. No one should blame him for an act
of extraordinary charity and altruism which cost his life.
But neither should any blame be laid on the doorstep of
defendant. His death was solely due to the willful acts of
the lawless which defendant could neither prevent nor stop.
.
WHEREFORE, in view of the foregoing, the complaint is
hereby dismissed. For lack of merit, the counter-claim is
likewise dismissed. No cost.[4]
On appeal, however, the Court of Appeals reversed. It
held:
In the case at bench, how did defendant-appellee react to
the tip or information that certain Maranao hotheads were
planning to burn five of its buses out of revenge for the
deaths of two Maranaos in an earlier collision involving
appellees bus? Except for the remarks of appellees
operations manager that we will have our action . . . . and
Ill be the one to settle it personally, nothing concrete
whatsoever was taken by appellee or its employees to
prevent the execution of the threat. Defendant-appellee
never adopted even a single safety measure for the
protection of its paying passengers. Were there available
safeguards? Of course, there were: one was frisking
passengers particularly those en route to the area where the
threats were likely to be carried out such as where the
earlier accident occurred or the place of influence of the
victims or their locality. If frisking was resorted to, even
temporarily, . . . . appellee might be legally excused from
liability. Frisking of passengers picked up along the route
could have been implemented by the bus conductor; for
those boarding at the bus terminal, frisking could have been
conducted by him and perhaps by additional personnel of
defendant-appellee. On hindsight, the handguns and
especially the gallon of gasoline used by the felons all of
which were brought inside the bus would have been
discovered, thus preventing the burning of the bus and the
fatal shooting of the victim.

Appellees argument that there is no law requiring it to

provide guards on its buses and that the safety of citizens is
the duty of the government, is not well taken. To be sure,
appellee is not expected to assign security guards on all of
its buses; if at all, it has the duty to post guards only on its
buses plying predominantly Maranao areas. As discussed
in the next preceding paragraph, the least appellee could
have done in response to the report was to adopt a system
of verification such as frisking of passengers boarding its
buses. Nothing, and to repeat, nothing at all, was done by
defendant-appellee to protect its innocent passengers from
the danger arising from the Maranao threats. It must be
observed that frisking is not a novelty as a safety measure
in our society. Sensitive places in fact, nearly all
important places have applied this method of security
enhancement. Gadgets and devices are available in the
market for this purpose. It would not have weighed much
against the budget of the bus company if such items were
made available to its personnel to cope up with situations
such as the Maranao threats.
In view of the constitutional right to personal privacy, our
pronouncement in this decision should not be construed as
an advocacy of mandatory frisking in all public
conveyances. What we are saying is that given the
circumstances obtaining in the case at bench that: (a) two
Maranaos died because of a vehicular collision involving
one of appellees vehicles; (b) appellee received a written
report from a member of the Regional Security Unit,
Constabulary Security Group, that the tribal/ethnic group of
the two deceased were planning to burn five buses of
appellee out of revenge; and (c) appellee did nothing
absolutely nothing for the safety of its passengers
travelling in the area of influence of the victims, appellee
has failed to exercise the degree of diligence required of
common carriers. Hence, appellee must be adjudged liable.
.
WHEREFORE, the decision appealed from is hereby
REVERSED and another rendered ordering defendantappellee to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorneys
fees; and
Costs against defendant-appellee.[5]
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN
REVERSING THE DECISION OF THE REGIONAL
TRIAL COURT DATED DECEMBER 28, 1990
DISMISSING THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE
RESPONDENTS BY ORDERING PETITIONER TO PAY
THE GARGANTUAN SUM OF P3,449,649.20 PLUS
P500.00 PER APPEARANCE AS ATTORNEYS FEES,
AS WELL AS DENYING PETITIONERS MOTION FOR
RECONSIDERATION AND THE SUPPLEMENT TO

117

SAID MOTION, WHILE HOLDING, AMONG OTHERS,

THAT PETITIONER BREACHED THE CONTRACT OF
CARIAGE BY ITS FAILURE TO EXERCISE THE
REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS
WERE SO GRAVE, IRRESISTIBLE, VIOLENT, AND
FORCEFUL, AS TO BE REGARDED AS CASO
FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF
APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER COULD HAVE PROVIDED ADEQUATE
SECURITY IN PREDOMINANTLY MUSLIM AREAS
AS PART OF ITS DUTY TO OBSERVE EXTRAORDINARY DILIGENCE AS A COMMON CARRIER.
The instant petition has no merit.
First. Petitioners Breach of the Contract of Carriage
Art. 1763 of the Civil Code provides that a common carrier
is responsible for injuries suffered by a passenger on
account of the wilful acts of other passengers, if the
employees of the common carrier could have prevented the
act the exercise of the diligence of a good father of a
family. In the present case, it is clear that because of the
negligence of petitioners employees, the seizure of the bus
by Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan
de Oro that the Maranaos were planning to take revenge on
the petitioner by burning some of its buses and the
assurance of petitioners operation manager, Diosdado
Bravo, that the necessary precautions would be taken,
petitioner did nothing to protect the safety of its passengers.
Had petitioner and its employees been vigilant they would
not have failed to see that the malefactors had a large
quantity of gasoline with them. Under the circumstances,
simple precautionary measures to protect the safety of
passengers, such as frisking passengers and inspecting their
baggages, preferably with non-intrusive gadgets such as
metal detectors, before allowing them on board could have
been employed without violating the passengers
constitutional rights. As this Court intimated in Gacal v.
Philippine Air Lines, Inc.,[6] a common carrier can be held
liable for failing to prevent a hijacking by frisking
passengers and inspecting their baggages.
From the foregoing, it is evident that petitioners
employees failed to prevent the attack on one of petitioners
buses because they did not exercise the diligence of a good
father of a family. Hence, petitioner should be held liable
for the death of Atty. Caorong.
Second. Seizure of Petitioners Bus not a Case of Force
Majeure
The petitioner contends that the seizure of its bus by the
armed assailants was a fortuitous event for which it could
not be held liable.

Art. 1174 of the Civil Code defines a fortuitous even as an

occurrence which could not be foreseen or which though
foreseen, is inevitable. In Yobido v. Court of Appeals,[7]
we held that to be considered as force majeure, it is
necessary that: (1) the cause of the breach of the obligation
must be independent of the human will; (2) the event must
be either unforeseeable or unavoidable; (3) the occurrence
must be such as to render it impossible for the debtor to
fulfill the obligation in a normal manner; and (4) the
obligor must be free of participation in, or aggravation of,
the injury to the creditor. The absence of any of the
requisites mentioned above would prevent the obligor from
being excused from liability.
Thus, in Vasquez v. Court of Appeals,[8] it was held that
the common carrier was liable for its failure to take the
necessary precautions against an approaching typhoon, of
which it was warned, resulting in the loss of the lives of
several passengers. The event was foreseeable, and, thus,
the second requisite mentioned above was not fulfilled.
This ruling applies by analogy to the present case. Despite
the report of PC agent Generalao that the Maranaos were
going to attack its buses, petitioner took no steps to
safeguard the lives and properties of its passengers. The
seizure of the bus of the petitioner was foreseeable and,
therefore, was not a fortuitous event which would exempt
petitioner from liability.
Petitioner invokes the ruling in Pilapil v. Court of
Appeals[9] and De Guzman v. Court of Appeals[10] in
support of its contention that the seizure of its bus by the
assailants constitutes force majeure. In Pilapil v. Court of
Appeals,[11] it was held that a common carrier is not liable
for failing to install window grills on its buses to protect
passengers from injuries caused by rocks hurled at the bus
by lawless elements. On the other hand, in De Guzman v.
Court of Appeals,[12] it was ruled that a common carrier is
not responsible for goods lost as a result of a robbery which
is attended by grave or irresistible threat, violence, or force.
It is clear that the cases of Pilapil and De Guzman do not
apply to the present case. Art. 1755 of the Civil Code
provides that a common carrier is bound to carry the
passengers as far as human care and foresight can provide,
using the utmost diligence of very cautious person, with
due regard for all the circumstances. Thus, we held in
Pilapil and De Guzman that the respondents therein were
not negligent in failing to take special precautions against
threats to the safety of passengers which could not be
foreseen, such as tortious or criminal acts of third persons.
In the present case, this factor of unforeseeablility (the
second requisite for an event to be considered force
majeure) is lacking. As already stated, despite the report of
PC agent Generalao that the Maranaos were planning to
burn some of petitioners buses and the assurance of
petitioners operations manager (Diosdado Bravo) that the
necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers.
Third. Deceased not Guilty of Contributory Negligence

118

The petitioner contends that Atty. Caorong was guilty of

contributory negligence in returning to the bus to retrieve
something. But Atty. Caorong did not act recklessly. It
should be pointed out that the intended targets of the
violence were petitioner and its employees, not its
passengers. The assailants motive was to retaliate for the
loss of life of two Maranaos as a result of the collision
between petitioners bus and the jeepney in which the two
Maranaos were riding. Mananggolo, the leader of the
group which had hijacked the bus, ordered the passengers
to get off the bus as they intended to burn it and its driver.
The armed men actually allowed Atty. Caorong to retrieve
something from the bus. What apparently angered them
was his attempt to help the driver of the bus by pleading for
his life. He was playing the role of the good Samaritan.
Certainly, this act cannot be considered an act of
negligence, let alone recklessness.

case, the petitioner acted in a wanton and reckless manner.

Despite warning that the Maranaos were planning to take
revenge against the petitioner by burning some of its buses,
and contrary to the assurance made by its operations
manager that the necessary precautions would be taken, the
petitioner and its employees did nothing to protect the
safety of passengers. Under the circumstances, we deem it
reasonable to award private respondents exemplary
damages in the amount of P100,000.00.[17]

Fourth. Petitioner Liable to Private Respondents for

Damages

Compensation for Loss of Earning Capacity. Art. 1764 of

the Civil Code, in relation to Art. 2206 thereof, provides
that in addition to the indemnity for death arising from the
breach of contract of carriage by a common carrier, the
defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter. The formula established in decided
cases for computing net earning capacity is as follows:[19]

We now consider the question of damages that the heirs of

Atty. Caorong, private respondents herein, are entitled to
recover from the petitioner.
Indemnity for Death. Art. 1764 of the Civil Code, in
relation to Art. 2206 thereof, provides for the payment of
indemnity for the death of passengers caused by the
breached of contract of carriage by a common carrier.
Initially fixed in Art. 2206 at P3,000.00, the amount of the
said indemnity for death has through the years been
gradually increased in view of the declining value of the
peso. It is presently fixed at P50,000.00.[13] Private
respondents are entitled to this amount.
Actual damages. Art. 2199 provides that Except as
provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. The trial court
found that the private respondents spent P30,000.00 for the
wake and burial of Atty. Caorong.[14] Since petitioner does
not question this finding of the trial court, it is liable to
private respondents in the said amount as actual damages.
Moral Damages. Under Art. 2206, the spouse, legitimate
and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish
by reason of the death of the deceased. The trial court
found that private respondent Paulie Caorong suffered pain
from the death of her husband and worry on how to provide
support for their minor children, private respondents Yasser
King, Rose Heinni, and Prince Alexander.[15] The
petitioner likewise does not question this finding of the trial
court. Thus, in accordance with recent decisions of this
Court,[16] we hold that the petitioner is liable to the private
respondents in the amount of P100,000.00 as moral
damages for the death of Atty. Caorong.
Exemplary Damages. Art. 2232 provides that in contracts
and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner. In the present

Attorneys Fees. Pursuant to Art. 2208, attorneys fees may

be recovered when, as in the instant case, exemplary
damages are awarded. In the recent case of Sulpicio Lines,
Inc. v. Court of Appeals,[18] we held an award of
P50,000.00 as attorneys fees to be reasonable. Hence, the
private respondents are entitled to attorneys fees in that
amount.

Gross
Necessary
Net earning = Life
x Annual - Living
Capacity
Expectancy Income
Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied
by the difference of eighty (80) and the age of the deceased.
[20] Since Atty. Caorong was 37 years old at the time of his
death,[21] he had a life expectancy of 28 2/3 more years.
[22] His projected gross annual income, computed based on
his monthly salary of P11,385.00[23] as a lawyer in the
Department of Agrarian Reform at the time of his death,
was P148,005.00.[24] allowing for necessary living
expenses of fifty percent (50%)[25]of his projected gross
annual income, his total earning capacity amounts to
P2,121,404.90.[26] Hence, the petitioner is liable to the
private respondents in the said amount as compensation for
loss of earning capacity.
WHEREFORE, the decision, dated July 29, 1994, of the
Court of Appeals is hereby AFFIRMED with the
MODIFICATION that petitioner Fortune Express, Inc. is
ordered to pay the following amounts to private
respondents Paulie, Yasser King, Rose Heinni, and Prince
Alexander Caorong:
1. death indemnity in the amount of fifty thousand pesos
(P50,000.00);
2. actual damages in the amount of thirty thousand pesos
(P30,000.00);
3. moral damages in the amount of one hundred thousand
pesos(P100,000.00);

119

4. exemplary damages in the amount of one hundred

thousand pesos (P100,000.00);
5. attorneys fees in the amount of fifty thousand pesos
(P50,000.00);
6. compensation for loss of earning capacity in the amount
of two million one hundred twenty-one thousand four
hundred four pesos and ninety centavos (P2,121,404.90);
and
7) costs of suits.
SO ORDERED.
JAL v. CA
Aug 7, 1998
[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.
DECISION
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 NAIAs 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 damages and pay attorneys
fees in the amount of Two Hundred Thousand Pesos
(P200,000.00), and to pay the costs of suit.
Undaunted, JAL appealed the decision before the Court of
Appeals, which, however, with the exception of lowering
the damages awarded affirmed the trial courts 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 attorneys
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

120

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 in PAL 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, PALs diversion of its flight due to inclement
weather was a fortuitous event.
Nonetheless, such
occurrence did not terminate PALs 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 carriers
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 the fortuitous
event was accompanied by neglect and malfeasance by the
carriers 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.

121

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 NAIAs 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 attorneys fees of
P50,000.00 plus costs.
SO ORDERED.
Singapore Airlines v. Andion Dec 10, 2003, GR142305
[G.R. No. 142305. December 10, 2003]
SINGAPORE AIRLINES LIMITED,
ANDION FERNANDEZ, respondent.
DECISION
CALLEJO, SR., J.:

petitioner,

vs.

This is a petition for review on certiorari assailing the

Decision[1] of the Court of Appeals which affirmed in toto
the decision[2] of the Regional Trial Court of Pasig City,
Branch 164 in Civil Case No. 60985 filed by the
respondent for damages.
The Case for the Respondent
Respondent Andion Fernandez is an acclaimed soprano
here in the Philippines and abroad. At the time of the
incident, she was availing an educational grant from the
Federal Republic of Germany, pursuing a Masters Degree
in Music majoring in Voice.[3]
She was invited to sing before the King and Queen of
Malaysia on February 3 and 4, 1991. For this singing
engagement, an airline passage ticket was purchased from
petitioner Singapore Airlines which would transport her to
Manila from Frankfurt, Germany on January 28, 1991.
From Manila, she would proceed to Malaysia on the next
day.[4] It was necessary for the respondent to pass by
Manila in order to gather her wardrobe; and to rehearse and

coordinate with her pianist her repertoire for the aforesaid

performance.
The petitioner issued the respondent a Singapore Airlines
ticket for Flight No. SQ 27, leaving Frankfurt, Germany on
January 27, 1991 bound for Singapore with onward
connections from Singapore to Manila. Flight No. SQ 27
was scheduled to leave Frankfurt at 1:45 in the afternoon of
January 27, 1991, arriving at Singapore at 8:50 in the
morning of January 28, 1991. The connecting flight from
Singapore to Manila, Flight No. SQ 72, was leaving
Singapore at 11:00 in the morning of January 28, 1991,
arriving in Manila at 2:20 in the afternoon of the same day.
[5]
On January 27, 1991, Flight No. SQ 27 left Frankfurt but
arrived in Singapore two hours late or at about 11:00 in the
morning of January 28, 1991. By then, the aircraft bound
for Manila had left as scheduled, leaving the respondent
and about 25 other passengers stranded in the Changi
Airport in Singapore.[6]
Upon disembarkation at Singapore, the respondent
approached the transit counter who referred her to the
nightstop counter and told the lady employee thereat that it
was important for her to reach Manila on that day, January
28, 1991. The lady employee told her that there were no
more flights to Manila for that day and that respondent had
no choice but to stay in Singapore. Upon respondents
persistence, she was told that she can actually fly to Hong
Kong going to Manila but since her ticket was nontransferable, she would have to pay for the ticket. The
respondent could not accept the offer because she had no
money to pay for it.[7] Her pleas for the respondent to
make arrangements to transport her to Manila were
unheeded.[8]
The respondent then requested the lady employee to use
their phone to make a call to Manila. Over the employees
reluctance, the respondent telephoned her mother to inform
the latter that she missed the connecting flight.
The
respondent was able to contact a family friend who picked
her up from the airport for her overnight stay in Singapore.
[9]
The next day, after being brought back to the airport, the
respondent proceeded to petitioners counter which says:
Immediate Attention To Passengers with Immediate
Booking. There were four or five passengers in line. The
respondent approached petitioners male employee at the
counter to make arrangements for immediate booking only
to be told: Cant you see I am doing something. She
explained her predicament but the male employee
uncaringly retorted: Its your problem, not ours.[10]
The respondent never made it to Manila and was forced to
take a direct flight from Singapore to Malaysia on January
29, 1991, through the efforts of her mother and travel
agency in Manila. Her mother also had to travel to
Malaysia bringing with her respondents wardrobe and
personal things needed for the performance that caused
them to incur an expense of about P50,000.[11]

122

As a result of this incident, the respondents performance

before the Royal Family of Malaysia was below par.
Because of the rude and unkind treatment she received
from the petitioners personnel in Singapore, the
respondent was engulfed with fear, anxiety, humiliation and
embarrassment causing her to suffer mental fatigue and
skin rashes. She was thereby compelled to seek immediate
medical attention upon her return to Manila for acute
urticaria.[12]
On June 15, 1993, the RTC rendered a decision with the
following dispositive portion:
ACCORDINGLY and as prayed for, defendant Singapore
Airlines is ordered to pay herein plaintiff Andion H.
Fernandez the sum of:
1.
FIFTY THOUSAND (P50,000.00) PESOS as
compensatory or actual damages;
2.
TWO HUNDRED and FIFTY THOUSAND
(P250,000.00) PESOS as moral damages considering
plaintiffs professional standing in the field of culture at
home and abroad;
3.
ONE HUNDRED THOUSAND (P100,000.00)
PESOS as exemplary damages;
4.
SEVENTY-FIVE THOUSAND (P75,000.00)
PESOS as attorneys fees; and
5.

To pay the costs of suit.

SO ORDERED.[13]
The petitioner appealed the decision to the Court of
Appeals.
On June 10, 1998, the CA promulgated the assailed
decision finding no reversible error in the appealed decision
of the trial court.[14]
Forthwith, the petitioner filed the instant petition for
review, raising the following errors:

THE HONORABLE COURT OF APPEALS ERRED IN

DISMISSING THE PETITIONERS COUNTERCLAIMS.
[15]
The petitioner assails the award of damages contending that
it exercised the extraordinary diligence required by law
under the given circumstances. The delay of Flight No. SQ
27 from Frankfurt to Singapore on January 28, 1991 for
more than two hours was due to a fortuitous event and
beyond petitioners control. Inclement weather prevented
the petitioners plane coming from Copenhagen, Denmark
to arrive in Frankfurt on time on January 27, 1991. The
plane could not take off from the airport as the place was
shrouded with fog. This delay caused a snowball effect
whereby the other flights were consequently delayed. The
plane carrying the respondent arrived in Singapore two (2)
hours behind schedule.[16] The delay was even
compounded when the plane could not travel the normal
route which was through the Middle East due to the raging
Gulf War at that time. It had to pass through the restricted
Russian airspace which was more congested.[17]
Under these circumstances, petitioner therefore alleged that
it cannot be faulted for the delay in arriving in Singapore
on January 28, 1991 and causing the respondent to miss her
connecting flight to Manila.
The petitioner further contends that it could not also be held
in bad faith because its personnel did their best to look after
the needs and interests of the passengers including the
respondent. Because the respondent and the other 25
passengers missed their connecting flight to Manila, the
petitioner automatically booked them to the flight the next
day and gave them free hotel accommodations for the
night. It was respondent who did not take petitioners
offer and opted to stay with a family friend in Singapore.
The petitioner also alleges that the action of the respondent
was baseless and it tarnished its good name and image
earned through the years for which, it was entitled to
damages in the amount of P1,000,000; exemplary damages
of P500,000; and attorneys fees also in the amount of
P500,000.[18]
The petition is barren of merit.

I
THE HONORABLE COURT OF APPEALS ERRED IN
AFFIRMING IN TOTO THE DECISION OF THE TRIAL
COURT
THAT
AWARDED
DAMAGES
TO
RESPONDENT FOR THE ALLEGED FAILURE OF THE
PETITIONER TO EXERCISE
EXTRAORDINARY
DILIGENCE.
II
THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT THE PETITIONER ACTED IN BAD
FAITH.
III

When an airline issues a ticket to a passenger, confirmed

for a particular flight on a certain date, a contract of
carriage arises. The passenger then has every right to
expect that he be transported on that flight and on that date.
If he does not, then the carrier opens itself to a suit for a
breach of contract of carriage.[19]
The contract of air carriage is a peculiar one. Imbued with
public interest, the law requires common carriers 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.[20] In an
action for breach of contract of carriage, the aggrieved
party does not have to prove that the common carrier was at
fault or was negligent. All that is necessary to prove is the

123

existence of the contract and the fact of its nonperformance by the carrier.[21]
In the case at bar, it is undisputed that the respondent
carried a confirmed ticket for the two-legged trip from
Frankfurt to Manila: 1) Frankfurt-Singapore; and 2)
Singapore-Manila. In her contract of carriage with the
petitioner, the respondent certainly expected that she would
fly to Manila on Flight No. SQ 72 on January 28, 1991.
Since the petitioner did not transport the respondent as
covenanted by it on said terms, the petitioner clearly
breached its contract of carriage with the respondent. The
respondent had every right to sue the petitioner for this
breach. The defense that the delay was due to fortuitous
events and beyond petitioners control is unavailing. In
PAL vs. CA,[22] we held that:
.... Undisputably, PALs diversion of its flight due to
inclement weather was a fortuitous event. Nonetheless,
such occurrence did not terminate PALs contract with its
passengers. Being in the business of air carriage and the
sole one to operate in the country, PAL is deemed to be
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
carriers 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...
...
...If the cause of non-fulfillment of the contract is due to a
fortuitous event, it has to be the sole and only cause (Art.
1755 C.C., Art. 1733 C.C.). Since part of the failure to
comply with the obligation of common carrier to deliver its
passengers safely to their destination lay in the defendants
failure to provide comfort and convenience to its stranded
passengers using extraordinary diligence, the cause of nonfulfillment is not solely and exclusively due to fortuitous
event, but due to something which defendant airline could
have prevented, defendant becomes liable to plaintiff.
Indeed, in the instant case, petitioner was not without
recourse to enable it to fulfill its obligation to transport the
respondent safely as scheduled as far as human care and
foresight can provide to her destination. Tagged as a
premiere airline as it claims to be and with the complexities
of air travel, it was certainly well-equipped to be able to
foresee and deal with such situation. The petitioners
indifference and negligence by its absence and insensitivity
was exposed by the trial court, thus:
(a)
Under Section 9.1 of its Traffic Manual (Exhibit 4)
flights can be delayed to await the uplift of connecting
cargo and passengers arriving on a late in-bound flight
As adverted to by the trial court,Flight SQ-27/28 maybe
delayed for about half an hour to transfer plaintiff to her
connecting flight. As pointed out above, delay is normal in
commercial air transportation (RTC Decision, p. 22); or

(b) Petitioner airlines could have carried her on one of its

flights bound for Hongkong and arranged for a connecting
flight from Hongkong to Manila all on the same date. But
then the airline personnel who informed her of such
possibility told her that she has to pay for that flight.
Regrettably, respondent did not have sufficient funds to pay
for it. (TSN, 30 March 1992, pp.8-9; RTC Decision, pp.
22-23) Knowing the predicament of the respondent,
petitioner did not offer to shoulder the cost of the ticket for
that flight; or
(c)
As noted by the trial court from the account of
petitioners witness, Bob Khkimyong, that a passenger
such as the plaintiff could have been accommodated in
another international airline such as Lufthansa to bring the
plaintiff to Singapore early enough from Frankfurt
provided that there was prior communication from that
station to enable her to catch the connecting flight to
Manila because of the urgency of her business in Manila
(RTC Decision, p. 23)
The petitioners diligence in communicating to its
passengers the consequences of the delay in their flights
was wanting. As elucidated by the trial court:
It maybe that delay in the take off and arrival of
commercial aircraft could not be avoided and may be
caused by diverse factors such as those testified to by
defendants pilot. However, knowing fully well that even
before the plaintiff boarded defendants Jumbo aircraft in
Frankfurt bound for Singapore, it has already incurred a
delay of two hours. Nevertheless, defendant did not take
the trouble of informing plaintiff, among its other
passengers of such a delay and that in such a case, the usual
practice of defendant airline will be that they have to stay
overnight at their connecting airport; and much less did it
inquire from the plaintiff and the other 25 passengers
bound for Manila whether they are amenable to stay
overnight in Singapore and to take the connecting flight to
Manila the next day. Such information should have been
given and inquiries made in Frankfurt because even the
defendant airlines manual provides that in case of urgency
to reach his or her destination on the same date, the head
office of defendant in Singapore must be informed by
telephone or telefax so as the latter may make certain
arrangements with other airlines in Frankfurt to bring such
a passenger with urgent business to Singapore in such a
manner that the latter can catch up with her connecting
flight such as S-27/28 without spending the night in
Singapore[23]
The respondent was not remiss in conveying her
apprehension about the delay of the flight when she was
still in Frankfurt. Upon the assurance of petitioners
personnel in Frankfurt that she will be transported to
Manila on the same date, she had every right to expect that
obligation fulfilled. She testified, to wit:
Q: Now, since you were late, when the plane that arrived
from Frankfurt was late, did you not make arrangements so
that your flight from Singapore to Manila would be
adjusted?

124

A: I asked the lady at the ticket counter, the one who gave
the boarding pass in Frankfurt and I asked her, Since my
flight going to Singapore would be late, what would happen
to my Singapore-Manila flight? and then she said, Dont
worry, Singapore Airlines would be responsible to bring
you to Manila on the same date. And then they have
informed the name of the officer, or whatever, that our
flight is going to be late.[24]
When a passenger contracts for a specific flight, he has a
purpose in making that choice which must be respected.
This choice, once exercised, must not be impaired by a
breach on the part of the airline without the latter incurring
any liability.[25] For petitioners failure to bring the
respondent to her destination, as scheduled, we find the
petitioner clearly liable for the breach of its contract of
carriage with the respondent.
We are convinced that the petitioner acted in bad faith. Bad
faith means a breach of known duty through some motive
of interest or ill will. Self-enrichment or fraternal interest,
and not personal ill will, may well have been the motive;
but it is malice nevertheless.[26] Bad faith was imputed by
the trial court when it found that the petitioners employees
at the Singapore airport did not accord the respondent the
attention and treatment allegedly warranted under the
circumstances. The lady employee at the counter was
unkind and of no help to her. The respondent further
alleged that without her threats of suing the company, she
was not allowed to use the companys phone to make long
distance calls to her mother in Manila. The male employee
at the counter where it says: Immediate Attention to
Passengers with Immediate Booking was rude to her when
he curtly retorted that he was busy attending to other
passengers in line. The trial court concluded that this
inattentiveness and rudeness of petitioners personnel to
respondents plight was gross enough amounting to bad
faith. This is a finding that is generally binding upon the
Court which we find no reason to disturb.
Article 2232 of the Civil Code provides that in a
contractual or quasi-contractual relationship, exemplary
damages may be awarded only if the defendant had acted in
a wanton, fraudulent, reckless, oppressive or malevolent
manner. In this case, petitioners employees acted in a
wanton, oppressive or malevolent manner. The award of
exemplary damages is, therefore, warranted in this case.
WHEREFORE, the Petition is DENIED. The Decision of
the Court of Appeals is AFFIRMED.
SO ORDERED.

Duration of Responsibility

Bataclan v. Medina Oct 22, 1957

.R. No. L-10126
October 22, 1957
SALUD VILLANUEVA VDA. DE BATACLAN and the
minors NORMA, LUZVIMINDA, ELENITA, OSCAR and

ALFREDO BATACLAN, represented by their Natural

guardian, SALUD VILLANUEVA VDA. DE BATACLAN,
plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.
Lope E. Adriano, Emmanuel Andamo and Jose R.
Francisco for plaintiffs-appellants.
Fortunato Jose for defendant and appellant.
MONTEMAYOR, J.:
Shortly after midnight, on September 13, 1952 bus no. 30
of the Medina Transportation, operated by its owner
defendant Mariano Medina under a certificate of public
convenience, left the town of Amadeo, Cavite, on its way to
Pasay City, driven by its regular chauffeur, Conrado
Saylon. There were about eighteen passengers, including
the driver and conductor. Among the passengers were Juan
Bataclan, seated beside and to the right of the driver, Felipe
Lara, sated to the right of Bataclan, another passenger
apparently from the Visayan Islands whom the witnesses
just called Visaya, apparently not knowing his name, seated
in the left side of the driver, and a woman named Natalia
Villanueva, seated just behind the four last mentioned. At
about 2:00 o'clock that same morning, while the bus was
running within the jurisdiction of Imus, Cavite, one of the
front tires burst and the vehicle began to zig-zag until it fell
into a canal or ditch on the right side of the road and turned
turtle. Some of the passengers managed to leave the bus the
best way they could, others had to be helped or pulled out,
while the three passengers seated beside the driver, named
Bataclan, Lara and the Visayan and the woman behind
them named Natalia Villanueva, could not get out of the
overturned bus. Some of the passengers, after they had
clambered up to the road, heard groans and moans from
inside the bus, particularly, shouts for help from Bataclan
and Lara, who said they could not get out of the bus. There
is nothing in the evidence to show whether or not the
passengers already free from the wreck, including the
driver and the conductor, made any attempt to pull out or
extricate and rescue the four passengers trapped inside the
vehicle, but calls or shouts for help were made to the
houses in the neighborhood. After half an hour, came about
ten men, one of them carrying a lighted torch made of
bamboo with a wick on one end, evidently fueled with
petroleum. These men presumably approach the overturned
bus, and almost immediately, a fierce fire started, burning
and all but consuming the bus, including the four
passengers trapped inside it. It would appear that as the bus
overturned, gasoline began to leak and escape from the
gasoline tank on the side of the chassis, spreading over and
permeating the body of the bus and the ground under and
around it, and that the lighted torch brought by one of the
men who answered the call for help set it on fire.
That same day, the charred bodies of the four deemed
passengers inside the bus were removed and duly identified
that of Juan Bataclan. By reason of his death, his widow,
Salud Villanueva, in her name and in behalf of her five
minor children, brought the present suit to recover from
Mariano Medina compensatory, moral, and exemplary

125

damages and attorney's fees in the total amount of P87,150.

After trial, the Court of First Instance of Cavite awarded
P1,000 to the plaintiffs plus P600 as attorney's fee, plus
P100, the value of the merchandise being carried by
Bataclan to Pasay City for sale and which was lost in the
fire. The plaintiffs and the defendants appealed the decision
to the Court of Appeals, but the latter endorsed the appeal
to us because of the value involved in the claim in the
complaint.
Our new Civil Code amply provides for the responsibility
of common carrier to its passengers and their goods. For
purposes of reference, we are reproducing the pertinent
codal provisions:
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 extra ordinary 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
ART. 1759. 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 order 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.
ART. 1763. A common carrier responsible for injuries
suffered by a passenger on account of the willful 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.
We agree with the trial court that the case involves a breach
of contract of transportation for hire, the Medina
Transportation having undertaken to carry Bataclan safely
to his destination, Pasay City. We also agree with the trial
court that there was negligence on the part of the defendant,
through his agent, the driver Saylon. There is evidence to

show that at the time of the blow out, the bus was speeding,
as testified to by one of the passengers, and as shown by
the fact that according to the testimony of the witnesses,
including that of the defense, from the point where one of
the front tires burst up to the canal where the bus
overturned after zig-zaging, there was a distance of about
150 meters. The chauffeur, after the blow-out, must have
applied the brakes in order to stop the bus, but because of
the velocity at which the bus must have been running, its
momentum carried it over a distance of 150 meters before it
fell into the canal and turned turtle.
There is no question that under the circumstances, the
defendant carrier is liable. The only question is to what
degree. The trial court was of the opinion that the
proximate cause of the death of Bataclan was not the
overturning of the bus, but rather, the fire that burned the
bus, including himself and his co-passengers who were
unable to leave it; that at the time the fire started, Bataclan,
though he must have suffered physical injuries, perhaps
serious, was still alive, and so damages were awarded, not
for his death, but for the physical injuries suffered by him.
We disagree. A satisfactory definition of proximate cause is
found in Volume 38, pages 695-696 of American
jurisprudence, cited by plaintiffs-appellants in their brief. It
is as follows:
. . . '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.' And more comprehensively, 'the 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
effecting 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 ordinary
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 may be that ordinarily, when a passenger bus overturns,
and pins down a passenger, merely causing him physical
injuries, if through some event, unexpected and
extraordinary, the overturned bus is set on fire, say, by
lightning, or if some highwaymen after looting the vehicle
sets it on fire, and the passenger is burned to death, one
might still contend that the proximate cause of his death
was the fire and not the overturning of the vehicle. But in
the present case under the circumstances obtaining in the
same, we do not hesitate to hold that the proximate cause
was the overturning of the bus, this for the reason that when
the vehicle turned not only on its side but completely on its
back, the leaking of the gasoline from the tank was not
unnatural or unexpected; that the coming of the men with a
lighted torch was in response to the call for help, made not
only by the passengers, but most probably, by the driver
and the conductor themselves, and that because it was dark
(about 2:30 in the morning), the rescuers had to carry a
light with them, and coming as they did from a rural area

126

where lanterns and flashlights were not available; and what

was more natural than that said rescuers should innocently
approach the vehicle to extend the aid and effect the rescue
requested from them. In other words, the coming of the
men with a torch was to be expected and was a natural
sequence of the overturning of the bus, the trapping of
some of its passengers and the call for outside help. What is
more, the burning of the bus can also in part be attributed to
the negligence of the carrier, through is driver and its
conductor. According to the witness, the driver and the
conductor were on the road walking back and forth. They,
or at least, the driver should and must have known that in
the position in which the overturned bus was, gasoline
could and must have leaked from the gasoline tank and
soaked the area in and around the bus, this aside from the
fact that gasoline when spilled, specially over a large area,
can be smelt and directed even from a distance, and yet
neither the driver nor the conductor would appear to have
cautioned or taken steps to warn the rescuers not to bring
the lighted torch too near the bus. Said negligence on the
part of the agents of the carrier come under the codal
provisions above-reproduced, particularly, Articles 1733,
1759 and 1763.

whose testimony he was banking to support the complaint,

either failed or appear or were reluctant to testify. But the
record of the case before us shows the several witnesses,
passengers, in that bus, willingly and unhesitatingly
testified in court to the effect of the said driver was
negligent. In the public interest the prosecution of said
erring driver should be pursued, this, not only as a matter of
justice, but for the promotion of the safety of passengers on
public utility buses. Let a copy of this decision be furnished
the Department of Justice and the Provincial Fiscal of
Cavite.

As regard the damages to which plaintiffs are entitled,

considering the earning capacity of the deceased, as well as
the other elements entering into a damage award, we are
satisfied that the amount of SIX THOUSAND (P6,000)
PESOS would constitute satisfactory compensation, this to
include compensatory, moral, and other damages. We also
believe that plaintiffs are entitled to attorney's fees, and
assessing the legal services rendered by plaintiffs' attorneys
not only in the trial court, but also in the course of the
appeal, and not losing sight of the able briefs prepared by
them, the attorney's fees may well be fixed at EIGHT
HUNDRED (P800) PESOS for the loss of merchandise
carried by the deceased in the bus, is adequate and will not
be disturbed.

La Mallorca v. CA July 27, 1966

G.R. No. L-20761
July 27, 1966

There is one phase of this case which disturbs if it does not

shock us. According to the evidence, one of the passengers
who, because of the injuries suffered by her, was
hospitalized, and while in the hospital, she was visited by
the defendant Mariano Medina, and in the course of his
visit, she overheard him speaking to one of his bus
inspectors, telling said inspector to have the tires of the bus
changed immediately because they were already old, and
that as a matter of fact, he had been telling the driver to
change the said tires, but that the driver did not follow his
instructions. If this be true, it goes to prove that the driver
had not been diligent and had not taken the necessary
precautions to insure the safety of his passengers. Had he
changed the tires, specially those in front, with new ones,
as he had been instructed to do, probably, despite his
speeding, as we have already stated, the blow out would not
have occurred. All in all, there is reason to believe that the
driver operated and drove his vehicle negligently, resulting
in the death of four of his passengers, physical injuries to
others, and the complete loss and destruction of their
goods, and yet the criminal case against him, on motion of
the fiscal and with his consent, was provisionally
dismissed, because according to the fiscal, the witnesses on

In view of the foregoing, with the modification that the

damages awarded by the trial court are increased from
ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND
(P6,000) PESOS, and from SIX HUNDRED PESOS TO
EIGHT HUNDRED (P800) PESOS, for the death of
Bataclan and for the attorney's fees, respectively, the
decision appealed is from hereby affirmed, with costs.
Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo,
Labrador, Concepcion, Reyes, J. B. L., Endencia, and Felix,
JJ., concur.

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.

127

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 his bayong
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

128

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.
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

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.5 Herein
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.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon,
J.P., Zaldivar, Sanchez and Castro, JJ., concur.
Makalintal, J., concurs in the result.
Phil. Rabbit v. IAC Aug 30, 1990
G.R. Nos. 66102-04
August 30, 1990
PHILIPPINE RABBIT BUS LINES, INC., petitioner,
vs.
THE HONORABLE INTERMEDIATE APPELLATE
COURT AND CASIANO PASCUA, ET AL., respondents.
Santiago & Santiago for petitioner.
Federico R. Vinluan for private respondents.

MEDIALDEA, J.:

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.

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

the Intermediate Appellate Court (now Court of Appeals)
dated July 29, 1983 in AC-G.R. Nos. CV-65885, CV-65886
and CV-65887 which reversed the decision of the Court of
First Instance (now Regional Trial Court) of Pangasinan
dated December 27, 1978; and its resolution dated
November 28, 1983 denying the motion for
reconsideration.

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,

The antecedent facts are as follows:

It is an established principle that the factual findings of the

Court of Appeals are final and may not be reviewed by this
Court on appeal. However, this principle is subject to
certain exceptions. One of these is when the findings of the
appellate court are contrary to those of the trial court (see
Sabinosa v. The Honorable Court of Appeals, et al., G.R.
No. L-47981, July 24, 1989) in which case, a reexamination of the facts and evidence may be undertaken.
This is Our task now.

About 11:00 o'clock in the morning on December 24, 1966,

Catalina Pascua, Caridad Pascua, Adelaida Estomo, Erlinda
Meriales, Mercedes Lorenzo, Alejandro Morales and
Zenaida Parejas boarded the jeepney owned by spouses
Isidro Mangune and Guillerma Carreon and driven by
Tranquilino Manalo at Dau, Mabalacat, Pampanga bound

129

for Carmen, Rosales, Pangasinan to spend Christmas at

their respective homes. Although they usually ride in buses,
they had to ride in a jeepney that day because the buses
were full. Their contract with Manalo was for them to pay
P24.00 for the trip. The private respondents' testimonial
evidence on this contractual relationship was not
controverted by Mangune, Carreon and Manalo, nor by
Filriters Guaranty Assurance Corporation, Inc., the insurer
of the jeepney, with contrary evidence. Purportedly riding
on the front seat with Manalo was Mercedes Lorenzo. On
the left rear passenger seat were Caridad Pascua, Alejandro
Morales and Zenaida Parejas. On the right rear passenger
seat were Catalina Pascua, Adelaida Estomo, and Erlinda
Meriales. After a brief stopover at Moncada, Tarlac for
refreshment, the jeepney proceeded towards Carmen,
Rosales, Pangasinan.

multiple lacerations of the left lower lobe of the lungs;

contusions on the left lower lobe of the lungs; and simple
fractures of the 2nd, 3rd, 4th, 5th, 6th, 7th, and 8th ribs,
left. The forcible impact of the jeep caused the above
injuries which resulted in her death. . . .

Upon reaching barrio Sinayoan, San Manuel, Tarlac, the

right rear wheel of the jeepney was detached, so it was
running in an unbalanced position. Manalo stepped on the
brake, as a result of which, the jeepney which was then
running on the eastern lane (its right of way) made a Uturn, invading and eventually stopping on the western lane
of the road in such a manner that the jeepney's front faced
the south (from where it came) and its rear faced the north
(towards where it was going). The jeepney practically
occupied and blocked the greater portion of the western
lane, which is the right of way of vehicles coming from the
north, among which was Bus No. 753 of petitioner
Philippine Rabbit Bus Lines, Inc. (Rabbit) driven by Tomas
delos Reyes. Almost at the time when the jeepney made a
sudden U-turn and encroached on the western lane of the
highway as claimed by Rabbit and delos Reyes, or after
stopping for a couple of minutes as claimed by Mangune,
Carreon and Manalo, the bus bumped from behind the right
rear portion of the jeepney. As a result of the collision,
three passengers of the jeepney (Catalina Pascua, Erlinda
Meriales and Adelaida Estomo) died while the other
jeepney passengers sustained physical injuries. What could
have been a festive Christmas turned out to be tragic.

The police investigators of Tacpal and policemen of San

Manuel, Tarlac, Tarlac, upon arrival at the scene of the
mishap, prepared a sketch (common exhibit "K" for private
respondents "19" for Rabbit) showing the relative positions
of the two vehicles as well as the alleged point of impact
(p. 100, Record on Appeal):

The causes of the death of the three jeepney passengers

were as follows (p. 101, Record on Appeal):
The deceased Catalina Pascua suffered the following
injuries, to wit: fracture of the left parietal and temporal
regions of the skull; fracture of the left mandible; fracture
of the right humenous; compound fracture of the left
radious and ullma middle third and lower third; fracture of
the upper third of the right tibia and fillnea; avulsion of the
head, left internal; and multiple abrasions. The cause of her
death was shock, secondary to fracture and multiple
hemorrhage. The fractures were produced as a result of the
hitting of the victim by a strong force. The abrasions could
be produced when a person falls from a moving vehicles
(sic) and rubs parts of her body against a cement road
pavement. . . .
Erlinda Mariles (sic) sustained external lesions such as
contusion on the left parietal region of the skull; hematoma
on the right upper lid; and abrasions (sic) on the left knee.
Her internal lesions were: hematoma on the left thorax;

The cause of death of Erlinda or Florida Estomo (also

called as per autopsy of Dr. Panlasiqui was due to shock
due to internal hemorrhage, ruptured spleen and trauma. . . .
Caridad Pascua suffered physical injuries as follows (p.
101, Record on Appeal):
. . . lacerated wound on the forehead and occipital region,
hematoma on the forehead, multiple abrasions on the
forearm, right upper arm, back and right leg. . . .

. . . The point of collision was a cement pave-portion of the

Highway, about six (6) meters wide, with narrow shoulders
with grasses beyond which are canals on both sides. The
road was straight and points 200 meters north and south of
the point of collision are visible and unobstructed.
Purportedly, the point of impact or collision (Exh. "K-4",
Pascua on the sketch Exh. "K"-Pascua) was on the western
lane of the highway about 3 feet (or one yard) from the
center line as shown by the bedris (sic), dirt and soil
(obviously from the undercarriage of both vehicles) as well
as paint, marron (sic) from the Rabbit bus and greenish
from the jeepney. The point of impact encircled and marked
with the letter "X" in Exh. "K"-4 Pascua, had a diameter of
two meters, the center of which was about two meters from
the western edge of cement pavement of the roadway.
Pictures taken by witness Bisquera in the course of the
investigation showed the relative positions of the point of
impact and center line (Exh. "P"-Pascua) the back of the
Rabbit bus (Exh. "P"-1-Pascua"), the lifeless body of
Catalina Pascua (Exh. "P-2 Pascua"), and the damaged
front part of the Rabbit bus (Exh. "P-3 Pascua"). No skid
marks of the Rabbit bus was found in the vicinity of the
collision, before or after the point of impact. On the other
hand, there was a skid mark about 45 meters long
purportedly of the jeepney from the eastern shoulder of the
road south of, and extending up to the point of impact.
At the time and in the vicinity of the accident, there were
no vehicles following the jeepney, neither were there
oncoming vehicles except the bus. The weather condition
of that day was fair.
After conducting the investigation, the police filed with the
Municipal Court of San Manuel, Tarlac, a criminal
complaint against the two drivers for Multiple Homicide.
At the preliminary investigation, a probable cause was
found with respect to the case of Manalo, thus, his case was
elevated to the Court of First Instance. However, finding no

130

sufficiency of evidence as regards the case of delos Reyes,

the Court dismissed it. Manalo was convicted and
sentenced to suffer imprisonment. Not having appealed, he
served his sentence.
Complaints for recovery of damages were then filed before
the Court of First Instance of Pangasinan. In Civil Case No.
1136, spouses Casiano Pascua and Juana Valdez sued as
heirs of Catalina Pascua while Caridad Pascua sued in her
behalf. In Civil Case No. 1139, spouses Manuel Millares
and Fidencia Arcica sued as heirs of Erlinda Meriales. In
Civil Case No. 1140, spouses Mariano Estomo and
Dionisia Sarmiento also sued as heirs of Adelaida Estomo.
In all three cases, spouses Mangune and Carreon, Manalo,
Rabbit and delos Reyes were all impleaded as defendants.
Plaintiffs anchored their suits against spouses Mangune and
Carreon and Manalo on their contractual liability. As
against Rabbit and delos Reyes, plaintiffs based their suits
on their culpability for a quasi-delict. Filriters Guaranty
Assurance Corporation, Inc. was also impleaded as
additional defendant in Civil Case No. 1136 only.
For the death of Catalina Pascua, plaintiffs in Civil Case
No. 1136 sought to collect the aggregate amount of
P70,060.00 in damages, itemized as follows: P500.00 for
burial expenses; P12,000.00 for loss of wages for 24 years;
P10,000.00 for exemplary damages; P10,000.00 for moral
damages; and P3,000.00 for attorney's fees. In the same
case, plaintiff Caridad Pascua claimed P550.00 for medical
expenses; P240.00 for loss of wages for two months;
P2,000.00 for disfigurement of her face; P3,000.00 for
physical pain and suffering; P2,500.00 as exemplary
damages and P2,000.00 for attorney's fees and expenses of
litigation.
In Civil Case No. 1139, plaintiffs demanded P500.00 for
burial expenses; P6,000.00 for the death of Erlinda,
P63,000.00 for loss of income; P10,000.00 for moral
damages and P3,000.00 for attorney's fees or total of
P80,000.00.
In Civil Case No. 1140, plaintiffs claimed P500.00 for
burial expenses; P6,000.00 for the death of Adelaide,
P56,160.00 for loss of her income or earning capacity;
P10,000.00 for moral damages; and P3,000.00 for
attorney's fees.
Rabbit filed a cross-claim in the amount of P15,000.00 for
attorney's fees and expenses of litigation. On the other
hand, spouses Mangune and Carreon filed a cross-claim in
the amount of P6,168.00 for the repair of the jeepney and
P3,000.00 for its non-use during the period of repairs.
On December 27, 1978, the trial court rendered its decision
finding Manalo negligent, the dispositive portion of which
reads (pp. 113-114, Record on Appeal):
PREMISES CONSIDERED, this Court is of the opinion
and so holds:

1)
That defendants Isidro Mangune, Guillerma
Carreon and Tranquilino Manalo thru their negligence,
breached contract of carriage with their passengers the
plaintiffs' and/or their heirs, and this Court renders
judgment ordering said defendants, jointly and severally, to
pay the plaintiffs
a)
In Civil Case No. 1136, for the death of Catalina
Pascua, to pay her heirs the amounts of P12,000.00 for
indemnity for loss of her life; P41,760.00 for loss of
earnings; P324.40 for actual expenses and P2,000.00 for
moral damages;
b)
In the same Civil Case No.1136 for the injuries of
Caridad Pascua, to pay her the amounts of P240.00 for loss
of wages, P328.20 for actual expenses and P500.00 for
moral damages;
c)
In Civil Case No.1139 for the death of Erlinda
Meriales, to pay her heirs (the plaintiffs) the amount of
P12,000.00 for indemnity for loss of her life; P622.00
for actual expenses, P60,480.00 for loss of wages or
income and P2,000.00 for moral damages;
d)
In Civil Case No. 1140, for the death of Erlinda
(also called Florida or Adelaida Estomo), to pay her heirs
(the plaintiff the amount of P12,000.00 for indemnity for
the loss of her life; P580.00 for actual expenses;
P53,160.00 for loss of wages or income and P2,000.00 for
moral damages.
2)
The defendant Filriters Guaranty Insurance Co.,
having contracted to ensure and answer for the obligations
of defendants Mangune and Carreon for damages due their
passengers, this Court renders judgment against the said
defendants Filriters Guaranty Insurance Co., jointly and
severally with said defendants (Mangune and Carreon) to
pay the plaintiffs the amount herein above adjudicated in
their favor in Civil Case No. 1136 only. All the amounts
awarded said plaintiff, as set forth in paragraph one (1)
hereinabove;
3)
On the cross claim of Phil. Rabbit Bus Lines, Inc.
ordering the defendant, Isidro Mangune, Guillerma Carreon
and Tranquilino Manalo, to pay jointly and severally, crossclaimant Phil. Rabbit Bus Lines, Inc., the amounts of
P216.27 as actual damages to its Bus No. 753 and
P2,173.60 for loss of its earning.
All of the above amount, shall bear legal interest from the
filing of the complaints.
Costs are adjudged against defendants Mangune, Carreon
and Manalo and Filriters Guaranty.
SO ORDERED
On appeal, the Intermediate Appellate Court reversed the
above-quoted decision by finding delos Reyes negligent,
the dispositive portion of which reads (pp. 55-57, Rollo):

131

WHEREFORE, PREMISES CONSIDERED, the lower

court's decision is hereby REVERSED as to item No. 3 of
the decision which reads:

a)

Indemnity for loss of life

P12,000.00

3)
On the cross claim of Philippine Rabbit Bus
Lines, Inc. ordering the defendants Isidro Mangune,
Guillerma Carreon and Tranquilino Manalo, to pay jointly
and severally, the amounts of P216.27 as actual damages to
its Bus No. 753 and P2,173.60 for loss of its earnings.

b)

Loss of Salary or Earning Capacity

20,000.00

c)

Actual damages (burial expenses)

500.00

and another judgment is hereby rendered in favor of

plaintiffs-appellants Casiana Pascua, Juan Valdez and
Caridad Pascua, ordering the Philippine Rabbit Bus Lines,
Inc. and its driver Tomas delos Reyes to pay the former
jointly and severally damages in amounts awarded as
follows:

d)

Moral damages

e)

Exemplary damages

f)

Attorney's fees

3,000.00

15,000.00
15,000.00

For the death of Catalina Pascua, the parents and/or heirs

are awarded

Total

Civil Case No. 1136

For the death of Florida Sarmiento Estomo:

a)

Indemnity for the loss of life

P12,000.00

Civil Case No. 1140

b)

Loss of Salaries or earning capacity

14,000.00

c)

Actual damages (burial expenses)

800.00

d)

For moral damages

10,000.00

e)

Exemplary damages

f)

For attorney's fees

3,000.00

3,000.00

Total

P38,200.00 (sic)

P65,500.00

a)

Indemnity for loss of life

P12,000.00

b)

Loss of Salary or Earning capacity

20,000.00

c)

Actual damages (burial expenses)

500.00

d)

Moral damages

e)

Exemplary damages

f)

Attorney's fees

3,000.00

3,000.00
3,000.00

For the physical injuries suffered by Caridad Pascua:

Total

Civil Case No. 1136

With costs against the Philippine Rabbit Bus Lines, Inc.

a)

Actual

damages
P550.00

b)

Moral damages (disfigurement of the

face and physical suffering

c)

(hospitalization

Exemplary damages

expenses)

SO ORDERED.

The issue is who is liable for the death and physical injuries
suffered by the passengers of the jeepney?
2,000.00
The trial court, in declaring that Manalo was negligent,
considered the following (p. 106, Record on Appeal):

Total

P41,500.00

The motion for reconsideration was denied. Hence, the

present petition.

8,000.00

P10,550.00

For the death of Erlinda Arcega Meriales. the parents

and/or heirs:
Civil Case No. 1139

(1)
That the unrebutted testimony of his passenger
plaintiff Caridad Pascua that a long ways (sic) before
reaching the point of collision, the Mangune jeepney was
"running fast" that his passengers cautioned driver Manalo
to slow down but did not heed the warning: that the right
rear wheel was detached causing the jeepney to run to the

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eastern shoulder of the road then back to the concrete

pavement; that driver Manalo applied the brakes after
which the jeepney made a U-turn (half-turn) in such a
manner that it inverted its direction making it face South
instead of north; that the jeepney stopped on the western
lane of the road on the right of way of the oncoming Phil.
Rabbit Bus where it was bumped by the latter;

21354, May 20, 1966, 17 SCRA 224. 1 Thus, the

respondent court erred in applying said doctrine.

(2)
The likewise unrebutted testimony of Police
Investigator Tacpal of the San Manuel (Tarlac) Police who,
upon responding to the reported collission, found the real
evidence thereat indicate in his sketch (Exh. K, Pascua ),
the tracks of the jeepney of defendant Mangune and
Carreon running on the Eastern shoulder (outside the
concrete paved road) until it returned to the concrete road at
a sharp angle, crossing the Eastern lane and the (imaginary)
center line and encroaching fully into the western lane
where the collision took place as evidenced by the point of
impact;

. . . the jeepney had already executed a complete turnabout

and at the time of impact was already facing the western
side of the road. Thus the jeepney assumed a new frontal
position vis a vis, the bus, and the bus assumed a new role
of defensive driving. The spirit behind the presumption of
guilt on one who bumps the rear end of another vehicle is
for the driver following a vehicle to be at all times prepared
of a pending accident should the driver in front suddenly
come to a full stop, or change its course either through
change of mind of the front driver, mechanical trouble, or
to avoid an accident. The rear vehicle is given the
responsibility of avoiding a collision with the front vehicle
for it is the rear vehicle who has full control of the situation
as it is in a position to observe the vehicle in front of it.

(3)
The observation of witness Police Corporal
Cacalda also of the San Manuel Police that the path of the
jeepney they found on the road and indicated in the sketch
(Exh. K-Pascua) was shown by skid marks which he
described as "scratches on the road caused by the iron of
the jeep, after its wheel was removed;"
(4)
His conviction for the crime of Multiple
Homicide and Multiple Serious Physical Injuries with
Damage to Property thru Reckless Imprudence by the Court
of First Instance of Tarlac (Exh. 24-Rabbit) upon the
criminal Information by the Provincial Fiscal of Tarlac
(Exh. 23-Rabbit), as a result of the collision, and his
commitment to prison and service of his sentence (Exh. 25Rabbit) upon the finality of the decision and his failure to
appeal therefrom; and
(5)
The application of the doctrine of res-ipsa
loquitar (sic) attesting to the circumstance that the collision
occured (sic) on the right of way of the Phil. Rabbit Bus.
The respondent court had a contrary opinion. Applying
primarily (1) the doctrine of last clear chance, (2) the
presumption that drivers who bump the rear of another
vehicle guilty and the cause of the accident unless
contradicted by other evidence, and (3) the substantial
factor test. concluded that delos Reyes was negligent.
The misappreciation of the facts and evidence and the
misapplication of the laws by the respondent court warrant
a reversal of its questioned decision and resolution.
We reiterate that "[t]he principle about "the last clear"
chance, would call for application in a suit between the
owners and drivers of the two colliding vehicles. It does not
arise where a passenger demands responsibility from the
carrier to enforce its contractual obligations. For it would
be inequitable to exempt the negligent driver of the jeepney
and its owners on the ground that the other driver was
likewise guilty of negligence." This was Our ruling in
Anuran, et al. v. Buo et al., G.R. Nos. L-21353 and L-

On the presumption that drivers who bump the rear of

another vehicle guilty and the cause of the accident, unless
contradicted by other evidence, the respondent court said
(p. 49, Rollo):

The above discussion would have been correct were it not

for the undisputed fact that the U-turn made by the jeepney
was abrupt (Exhibit "K," Pascua). The jeepney, which was
then traveling on the eastern shoulder, making a straight,
skid mark of approximately 35 meters, crossed the eastern
lane at a sharp angle, making a skid mark of approximately
15 meters from the eastern shoulder to the point of impact
(Exhibit "K" Pascua). Hence, delos Reyes could not have
anticipated the sudden U-turn executed by Manalo. The
respondent court did not realize that the presumption was
rebutted by this piece of evidence.
With regard to the substantial factor test, it was the opinion
of the respondent court that (p. 52, Rollo):
. . . It is the rule under the substantial factor test that if the
actor's conduct is a substantial factor in bringing about
harm to another, the fact that the actor neither foresaw nor
should have foreseen the extent of the harm or the manner
in which it occurred does not prevent him from being liable
(Restatement, Torts, 2d). Here, We find defendant bus
running at a fast speed when the accident occurred and did
not even make the slightest effort to avoid the
accident, . . . . The bus driver's conduct is thus a substantial
factor in bringing about harm to the passengers of the
jeepney, not only because he was driving fast and did not
even attempt to avoid the mishap but also because it was
the bus which was the physical force which brought about
the injury and death to the passengers of the jeepney.
The speed of the bus was calculated by respondent court as
follows (pp. 54-55, Rollo):
According to the record of the case, the bus departed from
Laoag, Ilocos Norte, at 4:00 o'clock A.M. and the accident
took place at approximately around 12:30 P.M., after
travelling roughly for 8 hours and 30 minutes. Deduct from
this the actual stopover time of two Hours (computed from
the testimony of the driver that he made three 40-minute

133

stop-overs), We will have an actual travelling time of 6

hours and 30 minutes.
Under the circumstances, We calculate that the LaoagTarlac route (365 kms.) driving at an average of 56 km. per
hour would take 6 hours and 30 minutes. Therefore, the
average speed of the bus, give and take 10 minutes, from
the point of impact on the highway with excellent visibility
factor would be 80 to 90 kms. per hour, as this is the place
where buses would make up for lost time in traversing busy
city streets.
Still, We are not convinced. It cannot be said that the bus
was travelling at a fast speed when the accident occurred
because the speed of 80 to 90 kilometers per hour,
assuming such calculation to be correct, is yet within the
speed limit allowed in highways. We cannot even fault
delos Reyes for not having avoided the collision. As
aforestated, the jeepney left a skid mark of about 45 meters,
measured from the time its right rear wheel was detached
up to the point of collision. Delos Reyes must have noticed
the perilous condition of the jeepney from the time its right
rear wheel was detached or some 90 meters away,
considering that the road was straight and points 200
meters north and south of the point of collision, visible and
unobstructed. Delos Reyes admitted that he was running
more or less 50 kilometers per hour at the time of the
accident. Using this speed, delos Reyes covered the
distance of 45 meters in 3.24 seconds. If We adopt the
speed of 80 kilometers per hour, delos Reyes would have
covered that distance in only 2.025 seconds. Verily, he had
little time to react to the situation. To require delos Reyes to
avoid the collision is to ask too much from him. Aside from
the time element involved, there were no options available
to him. As the trial court remarked (pp. 107-108, Record on
Appeal):
. . . They (plaintiffs) tried to impress this Court that
defendant de los Reyes, could have taken either of two
options: (1) to swerve to its right (western shoulder) or (2)
to swerve to its left (eastern lane), and thus steer clear of
the Mangune jeepney. This Court does not so believe,
considering the existing exigencies of space and time.
As to the first option, Phil. Rabbit's evidence is convincing
and unrebutted that the Western shoulder of the road was
narrow and had tall grasses which would indicate that it
was not passable. Even plaintiffs own evidence, the
pictures (Exhs. P and P-2, Pascua) are mute confirmation of
such fact. Indeed, it can be noticed in the picture (Exh. P-2,
Pascua) after the Rabbit bus came to a full stop, it was
tilted to right front side, its front wheels resting most
probably on a canal on a much lower elevation that of the
shoulder or paved road. It too shows that all of the wheels
of the Rabbit bus were clear of the roadway except the
outer left rear wheel. These observation appearing in said
picture (Exh P-2, Pascua) clearly shows coupled with the
finding the Rabbit bus came to a full stop only five meters
from the point of impact (see sketch, Exh. K-Pascua)
clearly show that driver de los Reyes veered his Rabbit bus
to the right attempt to avoid hitting the Mangune's jeepney.
That it was not successful in fully clearing the Mangune

jeepney as its (Rabbit's) left front hit said jeepney (see

picture Exh. 10-A-Rabbit) must have been due to
limitations of space and time.
Plaintiffs alternatively claim that defendant delos Reyes of
the Rabbit bus could also have swerved to its left (eastern
lane) to avoid bumping the Mangune jeepney which was
then on the western lane. Such a claim is premised on the
hypothesis (sic) that the eastern lane was then empty. This
claim would appear to be good copy of it were based alone
on the sketch made after the collision. Nonetheless, it loses
force it one were to consider the time element involved, for
moments before that, the Mangune jeepney was crossing
that very eastern lane at a sharp angle. Under such a
situation then, for driver delos Reyes to swerve to the
eastern lane, he would run the greater risk of running
smack in the Mangune jeepney either head on or broadside.
After a minute scrutiny of the factual matters and duly
proven evidence, We find that the proximate cause of the
accident was the negligence of Manalo and spouses
Mangune and Carreon. They all failed to exercise the
precautions that are needed precisely pro hac vice.
In culpa contractual, the moment a passenger dies or is
injured, the carrier is presumed to have been at fault or to
have acted negligently, and this disputable presumption
may only be overcome by evidence that he had observed
extra-ordinary diligence as prescribed in Articles 1733,
1755 and 1756 of the New Civil Code 2 or that the death or
injury of the passenger was due to a fortuitous event 3
(Lasam v. Smith, Jr., 45 Phil. 657).
The negligence of Manalo was proven during the trial by
the unrebutted testimonies of Caridad Pascua, Police
Investigator Tacpal, Police Corporal Cacalda, his
(Manalo's) conviction for the crime of Multiple Homicide
and Multiple Serious Injuries with Damage to Property thru
Reckless Imprudence, and the application of the doctrine of
res ipsa loquitur supra. The negligence of spouses Mangune
and Carreon was likewise proven during the trial (p. 110,
Record on Appeal):
To escape liability, defendants Mangune and Carreon
offered to show thru their witness Natalio Navarro, an
alleged mechanic, that he periodically checks and maintains
the jeepney of said defendants, the last on Dec. 23, the day
before the collision, which included the tightening of the
bolts. This notwithstanding the right rear wheel of the
vehicle was detached while in transit. As to the cause
thereof no evidence was offered. Said defendant did not
even attempt to explain, much less establish, it to be one
caused by a caso fortuito. . . .
In any event, "[i]n an action for damages against the carrier
for his failure to safely carry his passenger to his
destination, an accident caused either by defects in the
automobile or through the negligence of its driver, is not a
caso fortuito which would avoid the carriers liability for
damages (Son v. Cebu Autobus Company, 94 Phil. 892
citing Lasam, et al. v. Smith, Jr., 45 Phil. 657; Necesito, etc.
v. Paras, et al., 104 Phil. 75).

134

BELLOSILLO, J.:
The trial court was therefore right in finding that Manalo
and spouses Mangune and Carreon were negligent.
However, its ruling that spouses Mangune and Carreon are
jointly and severally liable with Manalo is erroneous The
driver cannot be held jointly and severally liable with the
carrier in case of breach of the contract of carriage. The
rationale behind this is readily discernible. Firstly, the
contract of carriage is between the carrier and the
passenger, and in the event of contractual liability, the
carrier is exclusively responsible therefore to the passenger,
even if such breach be due to the negligence of his driver
(see Viluan v. The Court of Appeals, et al., G.R. Nos. L21477-81, April 29, 1966, 16 SCRA 742). In other words,
the carrier can neither shift his liability on the contract to
his driver nor share it with him, for his driver's negligence
is his. 4 Secondly, if We make the driver jointly and
severally liable with the carrier, that would make the
carrier's liability personal instead of merely vicarious and
consequently, entitled to recover only the share which
corresponds to the driver, 5 contradictory to the explicit
provision of Article 2181 of the New Civil Code. 6
We affirm the amount of damages adjudged by the trial
court, except with respect to the indemnity for loss of life.
Under Article 1764 in relation to Article 2206 of the New
Civil Code, the amount of damages for the death of a
passenger is at least three thousand pesos (P3,000.00). The
prevailing jurisprudence has increased the amount of
P3,000.00 to P30,000.00 (see Heirs of Amparo delos
Santos, et al. v. Honorable Court of Appeals, et al., G.R.
No. 51165, June 21, 1990 citing De Lima v. Laguna
Tayabas Co., G.R. Nos. L-35697-99, April 15, 1988, 160
SCRA 70).
ACCORDINGLY, the petition is hereby GRANTED. The
decision of the Intermediate Appellate Court dated July 29,
1983 and its resolution dated November 28, 1983 are SET
ASIDE. The decision of the Court of First Instance dated
December 27, 1978 is REINSTATED MODIFICATION
that only Isidro Mangune, Guillerma Carreon and Filriters
Guaranty Assurance Corporation, Inc. are liable to the
victims or their heirs and that the amount of indemnity for
loss of life is increased to thirty thousand pesos
(P30,000.00).
SO ORDERED.
PAL v. CA
Sep 15, 1993
G.R. No. L-82619 September 15, 1993
PHILIPPINE AIRLINES, INC., petitioner,
vs.
COURT OF APPEALS and PEDRO
respondents.
Leighton R. Liazon for petitioner.
Balmes L. Ocampo for private respondent.

ZAPATOS,

This petition for review in certiorari seeks to annul and set

aside the decision of the then Intermediate Appellant Court,
1 now Court of Appeals, dated 28 February 1985, in ACG.R. CV No. 69327 ("Pedro Zapatos v. Philippine Airlines,
Inc.") affirming the decision of the then Court of first
Instance, now Regional Trial Court, declaring Philippine
Airlines, Inc., liable in damages for breach of contract.
On 25 November 1976, private respondent filed a
complaint for damages for breach of contract of carriage 2
against Philippine Airlines, Inc. (PAL), before the then
Court of First Instance, now Regional Trial Court, of
Misamis Occidental, at Ozamiz City. According to him, on
2 August 1976, he was among the twenty-one (21)
passengers of PAL Flight 477 that took off from Cebu
bound for Ozamiz City. The routing of this flight was
Cebu-Ozamiz-Cotabato. While on flight and just about
fifteen (15) minutes before landing at Ozamiz City, the
pilot received a radio message that the airport was closed
due to heavy rains and inclement weather and that he
should proceed to Cotabato City instead.
Upon arrival at Cotabato City, the PAL Station Agent
informed the passengers of their options to return to Cebu
on flight 560 of the same day and thence to Ozamiz City on
4 August 1975, or take the next flight to Cebu the following
day, or remain at Cotabato and take the next available flight
to Ozamiz City on 5 August 1975. 3 The Station Agent
likewise informed them that Flight 560 bound for Manila
would make a stop-over at Cebu to bring some of the
diverted passengers; that there were only six (6) seats
available as there were already confirmed passengers for
Manila; and, that the basis for priority would be the checkin sequence at Cebu.
Private respondent chose to return to Cebu but was not
accommodated because he checked-in as passenger No. 9
on Flight 477. He insisted on being given priority over the
confirmed passengers in the accommodation, but the
Station Agent refused private respondent's demand
explaining that the latter's predicament was not due to
PAL's own doing but to be a force majeure. 4
Private respondent tried to stop the departure of Flight 560
as his personal belongings, including a package containing
a camera which a certain Miwa from Japan asked him to
deliver to Mrs. Fe Obid of Gingoog City, were still on
board. His plea fell on deaf ears. PAL then issued to private
respondent a free ticket to Iligan city, which the latter
received under protest. 5 Private respondent was left at the
airport and could not even hitch a ride in the Ford Fiera
loaded with PAL personnel. 6 PAL neither provided private
respondent with transportation from the airport to the city
proper nor food and accommodation for his stay in
Cotabato City.
The following day, private respondent purchased a PAL
ticket to Iligan City. He informed PAL personnel that he
would not use the free ticket because he was filing a case
against PAL. 7 In Iligan City, private respondent hired a car

135

from the airport to Kolambugan, Lanao del Norte, reaching

Ozamiz City by crossing the bay in a launch. 8 His personal
effects including the camera, which were valued at
P2,000.00 were no longer recovered.
On 13 January 1977, PAL filed its answer denying that it
unjustifiably refused to accommodate private respondent. 9
It alleged that there was simply no more seat for private
respondent on Flight 560 since there were only six (6) seats
available and the priority of accommodation on Flight 560
was based on the check-in sequence in Cebu; that the first
six (6) priority passengers on Flight 477 chose to take
Flight 560; that its Station Agent explained in a courteous
and polite manner to all passengers the reason for PAL's
inability to transport all of them back to Cebu; that the
stranded passengers agreed to avail of the options and had
their respective tickets exchanged for their onward trips;
that it was
only the private respondent who insisted on being given
priority in the accommodation; that pieces of checked-in
baggage and had carried items of the Ozamiz City
passengers were removed from the aircraft; that the reason
for their pilot's inability to land at Ozamis City airport was
because the runway was wet due to rains thus posing a
threat to the safety of both passengers and aircraft; and, that
such reason of force majeure was a valid justification for
the pilot to bypass Ozamiz City and proceed directly to
Cotabato City.
On 4 June 1981, the trial court rendered its decision 10 the
dispositive portion of which states:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant Philippine AirLines, Inc.
ordering the latter to pay:
(1)
As actual damages, the sum of Two Hundred
Pesos (P200.00) representing plaintiff's expenses for
transportation, food and accommodation during his
stranded stay at Cotabato City; the sum of Forty-Eight
Pesos (P48.00) representing his flight fare from Cotabato
City to Iligan city; the sum of Five Hundred Pesos
(P500.00) representing plaintiff's transportation expenses
from Iligan City to Ozamiz City; and the sum of Five
Thousand Pesos (P5,000.00) as loss of business
opportunities during his stranded stay in Cotabato City;
(2)
As moral damages, the sum of Fifty Thousand
Pesos (P50,000.00) for plaintiff's hurt feelings, serious
anxiety, mental anguish and unkind and discourteous
treatment perpetrated by defendant's employees during his
stay as stranded passenger in Cotabato City;
(3)
As exemplary damages, the sum of Ten Thousand
Pesos (P10,000.00) to set a precedent to the defendant
airline that it shall provide means to give comfort and
convenience to stranded passengers;

PAL appealed to the Court of Appeals which on 28

February 1985, finding no reversible error, affirmed the
judgment of the court a quo. 11
PAL then sought recourse to this Court by way of a petition
for review on certiorari 12 upon the following issues: (1)
Can the Court of Appeals render a decision finding
petitioner (then defendant-appellant in the court below)
negligent and, consequently, liable for damages on a
question of substance which was neither raised on a
question nor proved at the trial? (2) Can the Court of
Appeals award actual and moral damages contrary to the
evidence and established jurisprudence? 13
An assiduous examination of the records yields no valid
reason for reversal of the judgment on appeal; only a
modification of its disposition.
In its petition, PAL vigorously maintains that private
respondent's principal cause of action was its alleged denial
of private respondent's demand for priority over the
confirmed passengers on Flight 560. Likewise, PAL points
out that the complaint did not impute to PAL neglect in
failing to attend to the needs of the diverted passengers;
and, that the question of negligence was not and never put
in issue by the pleadings or proved at the trial.
Contrary to the above arguments, private respondent's
amended complaint touched on PAL's indifference and
inattention to his predicament. The pertinent portion of the
amended complaint 14 reads:
10.
That by virtue of the refusal of the defendant
through its agent in Cotabato to accommodate (sic) and
allow the plaintiff to take and board the plane back to Cebu,
and by accomodating (sic) and allowing passengers from
Cotabato for Cebu in his stead and place, thus forcing the
plaintiff against his will, to be left and stranded in
Cotabato, exposed to the peril and danger of muslim rebels
plundering at the time, the plaintiff, as a consequence,
(have) suffered mental anguish, mental torture, social
humiliation, bismirched reputation and wounded feeling, all
amounting to a conservative amount of thirty thousand
(P30,000.00) Pesos.
To substantiate this aspect of apathy, private respondent
testified 15
A
I did not even notice that I was I think the last
passenger or the last person out of the PAL employees and
army personnel that were left there. I did not notice that
when I was already outside of the building after our
conversation.
Q

What did you do next?

(4)
The sum of Three Thousand Pesos (P3,000.00) as
attorney's fees;

A
I banished (sic) because it seems that there was a
war not far from the airport. The sound of guns and the
soldiers were plenty.

(5)

To pay the costs of this suit.

136

After that what did you do?

A
I tried to look for a transportation that could bring
me down to the City of Cotabato.

Q
Are you not aware that one fellow passenger even
claimed that he was given Hotel accommodation because
they have no money?

xxx

Were you able to go there?

A
I was at about 7:00 o'clock in the evening more
or less and it was a private jeep that I boarded. I was even
questioned why I and who am (sic) I then. Then I explained
my side that I am (sic) stranded passenger. Then they
brought me downtown at Cotabato.
Q
During your conversation with the Manager were
you not offered any vehicle or transportation to Cotabato
airport downtown?
A
In fact I told him (Manager) now I am by-passed
passenger here which is not my destination what can you
offer me. Then they answered, "it is not my fault. Let us
forget that."
Q
In other words when the Manager told you that
offer was there a vehicle ready?
A
Not yet. Not long after that the Ford Fiera loaded
with PAL personnel was passing by going to the City of
Cotabato and I stopped it to take me a ride because there
was no more available transportation but I was not
accommodated.
Significantly, PAL did not seem to mind the introduction of
evidence which focused on its alleged negligence in caring
for its stranded passengers. Well-settled is the rule in
evidence that the protest or objection against the admission
of evidence should be presented at the time the evidence is
offered, and that the proper time to make protest or
objection to the admissibility of evidence is when the
question is presented to the witness or at the time the
answer thereto is given. 16 There being no objection, such
evidence becomes property of the case and all the parties
are amenable to any favorable or unfavorable effects
resulting from the evidence. 17
PAL instead attempted to rebut the aforequoted testimony.
In the process, it failed to substantiate its counter allegation
for want of concrete proof 18

xxx

xxx

A
No, sir, that was never offered to me. I said, I
tried to stop them but they were already riding that PAL
pick-up jeep, and I was not accommodated.
Having joined in the issue over the alleged lack of care it
exhibited towards its passengers, PAL cannot now turn
around and feign surprise at the outcome of the case. When
issues not raised by the pleadings are tried by express or
implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings. 19
With regard to the award of damages affirmed by the
appellate court, PAL argues that the same is unfounded. It
asserts that it should not be charged with the task of
looking after the passengers' comfort and convenience
because the diversion of the flight was due to a fortuitous
event, and that if made liable, an added burden is given to
PAL which is over and beyond its duties under the contract
of carriage. It submits that granting arguendo that
negligence exists, PAL cannot be liable in damages in the
absence of fraud or bad faith; that private respondent failed
to apprise PAL of the nature of his trip and possible
business losses; and, that private respondent himself is to
be blamed for unreasonably refusing to use the free ticket
which PAL issued.
The contract of air carriage is a peculiar one. Being imbued
with public interest, the law requires common carriers 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.
20 In Air France v. Carrascoso, 21 we held that
A contract to transport passengers is quite different in kind
and degree from any other contractual relation. And this,
because of the relation which an air carrier sustains with the
public. Its business is mainly with the travelling public. It
invites people to avail of the comforts and advantages it
offers. The contract of air carriage, therefore, generates a
relation attended with a public duty . . . . ( emphasis
supplied).

Atty. Rubin O. Rivera PAL's counsel:

Q
You said PAL refused to help you when you were
in Cotabato, is that right?
Private respondent:
A

Yes.

Q
Did you ask them to help you regarding any offer
of transportation or of any other matter asked of them?
A
Yes, he (PAL PERSONNEL) said what is? It is
not our fault.

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. 22 Hence, PAL necessarily would still have to
exercise extraordinary diligence in safeguarding the
comfort, convenience and safety of its stranded passengers

137

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. As the appellate court correctly ruled

While the failure of plaintiff in the first instance to reach

his destination at Ozamis City in accordance with the
contract of carriage was due to the closure of the airport on
account of rain and inclement weather which was radioed
to defendant 15 minutes before landing, it has not been
disputed by defendant airline that Ozamis City has no allweather airport and has to cancel its flight to Ozamis City
or by-pass it in the event of inclement weather. Knowing
this fact, it becomes the duty of defendant to provide all
means of comfort and convenience to its passengers when
they would have to be left in a strange place in case of such
by-passing. The steps taken by defendant airline company
towards this end has not been put in evidence, especially
for those 7 others who were not accommodated in the
return trip to Cebu, only 6 of the 21 having been so
accommodated. It appears that plaintiff had to leave on the
next flight 2 days later. If the cause of non-fulfillment of
the contract is due to a fortuitous event, it has to be the sole
and only cause (Art. 1755 CC., Art. 1733 C.C.) Since part
of the failure to comply with the obligation of common
carrier to deliver its passengers safely to their destination
lay in the defendant's failure to provide comfort and
convenience to its stranded passengers using extra-ordinary
diligence, the cause of non-fulfillment is not solely and
exclusively due to fortuitous event, but due to something
which defendant airline could have prevented, defendant
becomes liable to plaintiff. 23
While we find PAL remiss in its duty of extending utmost
care to private respondent while being stranded in Cotabato
City, there is no sufficient basis to conclude that PAL failed
to inform him about his non-accommodation on Flight 560,
or that it was inattentive to his queries relative thereto.

Aforesaid Report being an entry in the course of business is

prima facie evidence of the facts therein stated. Private
respondent, apart from his testimony, did not offer any
controverting evidence. If indeed PAL omitted to give
information about the options available to its diverted
passengers, it would have been deluged with complaints.
But, only private respondent complained
Atty. Rivera (for PAL)
Q
I understand from you Mr. Zapatos that at the
time you were waiting at Cotabato Airport for the decision
of PAL, you were not informed of the decision until after
the airplane left is that correct?
A
COURT:
Q
What do you mean by "yes"? You meant you
were not informed?
A
Yes, I was not informed of their decision, that
they will only accommodate few passengers.
Q
Aside from you there were many other stranded
passengers?
A

3.
Of the fifteen stranded passengers two pax
elected to take F478 on August 05, three pax opted to take
F442 August 03. The remaining ten (10) including subject
requested that they be instead accommodated (sic) on F446
CBO-IGN the following day where they intended to take
the surface transportation to OZC. Mr. Pedro Zapatos had
by then been very vocal and boiceterous (sic) at the counter
and we tactfully managed to steer him inside the Station
Agent's office. Mr. Pedro Zapatos then adamantly insisted
that all the diverted passengers should have been given
priority over the originating passengers of F560 whether
confirmed or otherwise. We explained our policies and after
awhile he seemed pacified and thereafter took his ticket (inlieued (sic) to CBO-IGN, COCON basis), at the counter in
the presence of five other passengers who were waiting for
their tickets too. The rest of the diverted pax had left earlier
after being assured their tickets will be ready the following
day. 24

I believed, yes.

Q
And you want us to believe that PAL did not
explain (to) any of these passengers about the decision
regarding those who will board the aircraft back to Cebu?
A

No, Sir.

Q
Despite these facts Mr. Zapatos did any of the
other passengers complained (sic) regarding that incident?
xxx

On 3 August 1975, the Station Agent reported to his Branch

Manager in Cotabato City that

Yes.

xxx

xxx

A
There were plenty of argument and I was one of
those talking about my case.
Q
Did you hear anybody complained (sic) that he
has not been informed of the decision before the plane left
for Cebu?
A

No. 25

Admittedly, private respondent's insistence on being given

priority in accommodation was unreasonable considering
the fortuitous event and that there was a sequence to be
observed in the booking, i.e., in the order the passengers
checked-in at their port of origin. His intransigence in fact
was the main cause for his having to stay at the airport
longer than was necessary.
Atty. Rivera:

138

Q
And, you were saying that despite the fact that
according to your testimony there were at least 16
passengers who were stranded there in Cotabato airport
according to your testimony, and later you said that there
were no other people left there at that time, is that correct?
A
Yes, I did not see anyone there around. I think I
was the only civilian who was left there.
Q
place?

Why is it that it took you long time to leave that

A
26

Because I was arguing with the PAL personnel.

Anent the plaint that PAL employees were disrespectful and

inattentive toward private respondent, the records are bereft
of evidence to support the same. Thus, the ruling of
respondent Court of Appeals in this regard is without basis.
27 On the contrary, private respondent was attended to not
only by the personnel of PAL but also by its Manager." 28

Trans-Asia Shipping v. CA Mar 4, 1996

[G.R. No. 118126. March 4, 1996]
TRANS-ASIA SHIPPING LINES, INC., petitioner, vs.
COURT OF APPEALS and ATTY. RENATO T. ARROYO,
respondents.
DECISION
DAVIDE, JR., J.:
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 vessels voyage and the
consequent delay in that vessels 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.

In the light of these findings, we find the award of moral

damages of Fifty Thousand Pesos (P50,000.00)
unreasonably excessive; hence, we reduce the same to Ten
Thousand Pesos (P10,000.00). Conformably herewith, the
award of exemplary damages is also reduced to five
Thousand Pesos (5,000.00). Moral damages are not
intended to enrich the private respondent. They are awarded
only to enable the injured party to obtain means, diversion
or amusements that will serve to alleviate the moral
suffering he has undergone by reason of the defendant's
culpable action. 29
With regard to the award of actual damages in the amount
of P5,000.00 representing private respondent's alleged
business losses occasioned by his stay at Cotabato City, we
find the same unwarranted. Private respondent's testimony
that he had a scheduled business "transaction of shark liver
oil supposedly to have been consummated on August 3,
1975 in the morning" and that "since (private respondent)
was out for nearly two weeks I missed to buy about 10
barrels of shark liver oil," 30 are purely speculative. Actual
or compensatory damages cannot be presumed but must be
duly proved with reasonable degree of certainty. A court
cannot rely on speculation, conjecture or guesswork as to
the fact and amount of damages, but must depend upon
competent proof that they have suffered and on evidence of
the actual amount thereof. 31
WHEREFORE the decision appealed from is AFFIRMED
with modification however that the award of moral
damages of Fifty Thousand Pesos (P50,000.00) is reduced
to Ten Thousand Pesos (P10,000.00) while the exemplary
damages of Ten Thousand Pesos (P10,000.00) is also
reduced to Five Thousand Pesos (P5,000.00). The award of
actual damages in the amount Five Thousand Pesos
(P5,000.00) representing business losses occasioned by
private respondent's being stranded in Cotabato City is
deleted.

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 petitioners
formulation of the issue imprecise. As this Court sees it,
what stands for resolution is a common carriers 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 x x x 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.
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 acceded [sic] to their request and thus the
vessel headed back to Cebu City.

SO ORDERED.

139

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.
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]
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 respondents mental distress. He
further alleged that by reason of the petitioners 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 damage&arising from bad
faith, breach of contract and from tort, with the former
arising from the petitioners 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 non-performance 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 defendants
employees, the complaint is DISMISSED. Defendants
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:
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 employee 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 vessels 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, want only 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]

140

Unsatisfied, the private respondent appealed to the Court of

Appeals (CA-G.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 courts 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 plaintiffappellant:
1.
2.
3.
4.

P20,000.00 as moral damages;

P10,000.00 as exemplary damages;
P5,000.00 as attorneys fees;
Cost of suit.

SO ORDERED.[12]
It did not, however, allow the grant of damages for the
delay in the performance of the petitioners 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
vessels 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
respondents 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. Defendant-appellee averred:
x x x The dropping of the vessels anchor after running
slowly on only one engine when it departed earlier must
have alarmed some nervous passengers x x x

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 defendant-appellee. 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 defendantappellee.
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, defendant-appellee 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 in 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. Defendantappellee should have made certain that the vessel [could]
complete the voyage before starting [to] sail. Anything less
than this, the vessel [could not] sail x x x 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, x x x 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.

141

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. Defendantappellee may call him a very panicky passenger or a
nervous person, but this will not relieve defendantappellee 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 vessels 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 x
x x 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
vessels 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 adrift 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 is 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]

142

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 petitioners 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:

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 petitioners other vessel the following day,
using the ticket he had purchased for the previous days
voyage.
Any further delay then in the private respondents 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 of the vessel
and passengers was never at stake because the sea was
calm in the vicinity where it stopped as faithfully
recorded in the vessels log book (Exhibit 4). Hence, the
petitioner concludes, the private respondent was merely
over-reacting to the situation obtaining then.[31]

This article applies suppletorily pursuant to Article 1766 of

the Civil Code.

We hold that the petitioners defense cannot exculpate it

nor mitigate its liability. On the contrary, such a claim
demonstrates beyond cavil the petitioners lack of genuine
concern for the safety of its passengers. It was, perhaps,
only providential that 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 at 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.

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 petitioners failure to observe
extraordinary diligence. Article 698 must then be read

We cannot, however, give our affirmance to the award of

attorneys 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.[34] Hence, to

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.

143

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 case - and 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 Courts decision was
devoid of any statement regarding attorneys 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 attorneys fees pursuant to
Article 2208 of the Civil Code. It states:
Article 2208. In the absence of stipulation, attorney s fees
and expenses of litigation, other than judicial costs cannot
be recovered except:

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
as prescribed in Articles 1733 and 1755 of the Civil Code.
The records are bereft of any proof to show that Baliwag
exercised extraordinary diligence. On the contrary, the
evidence demonstrates its driver's recklessness. Leticia
Garcia testified that the bus was running at a very high
speed despite the drizzle and the darkness of the highway.
The passengers pleaded for its driver to slow down, but
their plea was ignored. Leticia also revealed that the driver
was smelling of liquor. She could smell him as she was
seated right behind the driver. Another passenger, Felix
Cruz testified that immediately before the collision, the bus
driver was conversing with a co-employee. All these prove
the bus driver's wanton disregard for the physical safety of
his passengers, which make Baliwag as a common carrier
liable for damages under Article 1759 of the Civil Code.

1. When exemplary damages are awarded;

2. When the defendants act or omission has compelled the
plaintiff to litigate with third 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 attorneys fees.[37] In sum,
for lack of factual and legal basis, the award of attorneys
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 attorneys fees which is hereby SET
ASIDE.
Costs against the petitioner.
SO ORDERED.
Baliwag Transit v. CA
May 15, 1996
[G.R. No. 116110. May 15,1996]
BALIWAG TRANSIT, INC., petitioner, vs. COURT OF
APPEALS, SPOUSES ANTONIO GARCIA & LETICIA
GARCIA, A & J TRADING, AND JULIO RECONTIQUE,
respondents.
SYLLABUS
1. CIVIL LAW; CONTRACTS; SPECIAL CONTRACTS;
COMMON CARRIERS; LIABILITY FOR DAMAGES;
ESTABLISHED IN CASE AT BAR. As a common
carrier, Baliwag breached its contract of carriage when it
failed to deliver its passengers, Leticia and Allan Garcia to
their destination safe and sound. A common carrier is
bound to carry its passengers safely as far as human care
and foresight can provide, using the utmost diligence of a
very cautious person, with due regard for 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

2. ID.; ID.; ID.; ID.; LAND TRANSPORTATION AND

TRAFFIC CODE; SECTION 34(g) THEREOF;
SUBSTANTIALLY COMPLIED WITH IN CASE AT
BAR. Baliwag cannot evade its liability by insisting that
the accident was caused solely by the negligence of A & J
Trading and Julio Recontique. It harps on their alleged non
use of early warning device as testified to by Col. Demetrio
dela Cruz, the station commander of Gapan, Nueva Ecija
who investigated the incident, and Francisco Romano, the
bus conductor. The records do not bear out Baliwag's
contention. Col. dela Cruz and Romano testified that they
did not see any early warning device at the scene of the
accident. They were referring to the triangular reflectorized
plates in red and yellow issued by the Land Transportation
Office. However, the evidence shows that Recontique and
Ecala placed a kerosene lamp or torch at the edge of the
road, near the rear portion of the truck to serve as an early
warning device. This substantially complies with Section
34 (g) of the Land Transportation and Traffic Code, to wit:
"(g) lights and reflector when parked or disabled.
Appropriate parking lights or flares visible one hundred
meters away shall be displayed at the corner of the vehicle
whenever such vehicle is parked on highways or in places
that are not well-lighted or, is placed in such manner as to
endanger passing traffic. Furthermore, every motor vehicle
shall be provided at all times with built-in reflectors or
other similar warning devices either pasted, painted or
attached at its front and back which shall likewise be
visible at night at least one hundred meters away. No
vehicle not provided with any of the requirements
mentioned in this subsection shall be registered." Baliwag's
argument that the kerosene lamp or torch does not
substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early
warning device of the triangular reflectorized plates variety
but also parking lights or flares visible one hundred meters
away. Indeed, Col. dela Cruz himself admitted that a
kerosene lamp is an acceptable substitute for the
reflectorized plates. No negligence, therefore, may be
imputed to A & J Trading and its driver, Recontique.
3. ID.; DAMAGES; To PROVE ACTUAL DAMAGES,
THE BEST EVIDENCE AVAILABLE TO THE PARTIES

144

MUST BE PRESENTED. The propriety of the amount

awarded as hospitalization and medical fees. The award of
P25,000.00 is not supported by the evidence on record.
The Garcias presented receipts marked as Exhibits "B-1 "
to "B-42" but their total amounted only to P5,017.74. To
be sure, Leticia testified as to the extra amount spent for her
medical needs but without more reliable evidence, her lone
testimony cannot justify the award of P25,000.00. To prove
actual damages, the best evidence available to the injured
party must be presented. The court cannot rely on
uncorroborated testimony whose truth is suspect, but must
depend upon competent proof that damages have been
actually suffered. Thus, we reduce the actual damages for
medical and hospitalization expenses to P5,017.74.
4. ID.; ID.; MORAL DAMAGES; RECOVERABLE IF
THE CARRIER THROUGH ITS AGENT, ACTED
FRAUDULENTLY OR IN BAD FAITH. The award of
moral damages is in accord with law. In a breach of
contract of carriage, moral damages are recoverable if the
carrier, through its agent, acted fraudulently or in bad faith.
The evidence shows the gross negligence of the driver of
Baliwag bus which amounted to bad faith. Without doubt,
Leticia and Allan experienced physical suffering, mental
anguish and serious anxiety by reason of the accident.
APPEARANCES OF COUNSEL
Leopoldo C. Sta. Maria for Baliwag Transit, Inc.
Arturo D. Vallar for Sps. Antonio & Leticia Garcia.
Allan A. Leynes for A & J Trading, and Julio Recontique.
DECISION
PUNO, J.:
This is a petition for certiorari to review the Decision[1] of
the Court of Appeals in CA-G.R. CV-31246 awarding
damages in favor of the spouses Antonio and Leticia Garcia
for breach of contract of carriage.[2] filed by the spouses
Garcia questioning the same Court of Appeals' Decision
which reduced their award of damages. On November 13,
1995, we denied their petition for review.
The records show that on July 31, 1980, Leticia Garcia, and
her five-year old son, Allan Garcia, boarded Baliwag
Transit Bus No. 2036 bound for Cabanatuan City driven by
Jaime Santiago. They took the seat behind the driver.
At about 7:30 in the evening, in Malimba, Gapan, Nueva
Ecija, the bus passengers saw a cargo truck parked at the
shoulder of the national highway. Its left rear portion jutted
to the outer lane, the shoulder of the road was too narrow to
accommodate the whole truck. A kerosene lamp appeared
at the edge of the road obviously to serve as a warning
device. The truck driver, Julio Recontique, and his helper,
Arturo Escala, were then replacing a flat tire. The truck is
owned by respondent A & J Trading.
Bus driver Santiago was driving at an inordinately fast
speed and failed to notice the truck and the kerosene lamp
at the edge of the road. Santiago's passengers urged him to
slow down but he paid them no heed. Santiago even

carried animated conversations with his co-employees

while driving. When the danger of collision became
imminent, the bus passengers shouted "Babangga tayo!".
Santiago stepped on the brake, but it was too late. His bus
rammed into the stalled cargo truck. It caused the instant
death of Santiago and Escala, and injury to several others.
Leticia and Allan Garcia were among the injured
passengers.
Leticia suffered a fracture in her pelvis and right leg. They
rushed her to the provincial hospital in Cabanatuan City
where she was given emergency treatment. After three
days, she was transferred to the National Orthopedic
Hospital where she was confined for more than a month.[3]
She underwent an operation for partial hip prosthesis.[4]
Allan, on the other hand, broke a leg. He was also given
emergency treatment at the provincial hospital.
Spouses Antonio and Leticia Garcia sued Baliwag Transit,
Inc., A & J Trading and Julio Recontique for damages in
the Regional Trial Court of Bulacan.[5] Leticia sued as an
injured passenger of Baliwag and as mother of Allan. At
the time of the complaint, Allan was a minor, hence, the
suit initiated by his parents in his favor.
Baliwag, A & J Trading and Recontique disclaimed
responsibility for the mishap. Baliwag alleged that the
accident was caused solely by the fault and negligence of A
& J Trading and its driver, Recontique. Baliwag charged
that Recontigue failed to place an early warning device at
the corner of the disabled cargo truck to warn oncoming
vehicles.[6] On the other hand, A & J Trading and
Recontique alleged that the accident was the result of the
negligence and reckless driving of Santiago, bus driver of
Baliwag.[7]
After hearing, the trial court found all the defendants liable,
thus:
xxx

xxx

xxx

"In view thereof, the Court holds that both defendants

should be held liable; the defendant Baliwag Transit, Inc.
for having failed to deliver the plaintiff and her son to their
point of destination safely in violation of plaintiff's and
defendant Baliwag Transit's contractual relation.
The defendant A & J and Julio Recontique for failure to
provide its cargo truck with an early warning device in
violation of the Motor Vehicle Law."[8]
The trial court ordered Baliwag, A & J Trading and
Recontique to pay jointly and severally the Garcia spouses
the following:
(1) P25,000.00 hospitalization and
medication fee, (2) P450,000.00 loss of earnings in eight
(8) years, (3) P2,000.00 for the hospitalization of their son
Allan Garcia, (4) P50,000.00 moral damages, and (5)
P30,000.00 attorney's fee.[9]
On appeal, the Court of Appeals modified the trial court's
Decision by absolving A & J Trading from liability and by

145

reducing the award of attorney's fees to P10,000.00 and

loss of earnings to P300,000.00, respectively.[10]
Baliwag filed the present petition for review raising the
following issues:
1.
Did the Court of Appeals err in absolving A & J
Trading from liability and holding Baliwag solely liable for
the injuries suffered by Leticia and Allan Garcia in the
accident?
2.
Is the amount of damages awarded by the Court of
Appeals to the Garcia spouses correct?
We affirm the factual findings of the Court of Appeals.
I
As a common carrier, Baliwag breached its contract of
carriage when it failed to deliver its passengers, Leticia and
Allan Garcia to their destination safe and sound. A
common carrier is bound to carry its passengers safely as
far as human care and foresight can provide, using the
utmost diligence of a very cautious person, with due regard
for all the circumstances.[11] 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 as prescribed in Articles 1733 and
1755 of the Civil Code.[12]

Baliwag cannot evade its liability by insisting that the

accident was caused solely by the negligence of A & J
Trading and Julio Recontique. It harps on their alleged non
use of an early warning device as testified to by Col.
Demetrio dela Cruz, the station commander of Gapan,
Nueva Ecija who investigated the incident, and Francisco
Romano, the bus conductor.
The records do not bear out Baliwag's contention. Col.
dela Cruz and Romano testified that they did not see any
early warning device at the scene of the accident.[16] They
were referring to the triangular reflectorized plates in red
and yellow issued by the Land Transportation Office.
However, the evidence shows that Recontique and Ecala
placed a kerosene lamp or torch at the edge of the road,
near the rear portion of the truck to serve as an early
warning device.[17] This substantially complies with
Section 34 (g) of the Land Transportation and Traffic Code,
to wit:
(g) Lights and reflector when parked or disabled.
Appropriate parking lights or flares visible one hundred
meters away shall be displayed at the corner of the vehicle
whenever such vehicle is parked on highways or in places
that are not well-lighted or, is placed in such manner as to
endanger passing traffic. Furthermore, every motor vehicle
shall be provided at all times with built-in reflectors or
other similar warning devices either pasted, painted or
attached at its front and back which shall likewise be
visible at night at least one hundred meters away. No
vehicle not provided with any of the requirements
mentioned in this subsection shall be registered. (Italics
supplied)

The records are bereft of any proof to show that Baliwag

exercised extraordinary diligence. On the contrary, the
evidence demonstrates its driver's recklessness. Leticia
Garcia testified that the bus was running at a very high
speed despite the drizzle and the darkness of the highway.
The passengers pleaded for its driver to slow down, but
their plea was ignored.[13] Leticia also revealed that the
driver was smelling of liquor.[14] She could smell him as
she was seated right behind the driver. Another passenger,
Felix Cruz testified that immediately before the collision,
the bus driver was conversing with a co-employee.[15] All
these prove the bus driver's wanton disregard for the
physical safety of his passengers, which makes Baliwag as
a common carrier liable for damages under Article 1759 of
the Civil Code:

Baliwag's argument that the kerosene lamp or torch does

not substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early
warning device of the triangular reflectorized plates variety
but also parking lights or flares visible one hundred meters
away. Indeed, Col. dela Cruz himself admitted that a
kerosene lamp is an acceptable substitute for the
reflectorized plates.[18] No negligence, therefore, may be
imputed to A & J Trading and its driver, Recontique.

Art. 1759. Common carriers are liable for the death of or

injuries to passengers through the negligence or willfull
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.

In the case at bar, both the injured passengers of the

Baliwag involved in the accident testified that they saw
some sort of kerosene or a torch on the rear portion of the
truck before the accident. Baliwag Transit's conductor
attempted to defeat such testimony by declaring that he
noticed no early warning device in front of the truck.

This liability of the common carriers do not cease upon

proof that they exercised all the diligence of a good father
of a family in the selection or supervision of their
employees.

Anent this factual issue, the analysis of evidence made by

the Court of Appeals deserves our concurrence, viz:
xxx

xxx

xxx

Among the testimonies offered by the witnesses who were

present at the scene of the accident, we rule to uphold the
affirmative testimonies given by the two injured passengers
and give less credence to the testimony of the bus

146

conductor who solely testified that no such early warning

device exists.

actually suffered[20] Thus, we reduce the actual damages

for medical and hospitalization expenses to P5,017.74.

The testimonies of injured passengers who may well be

considered as disinterested witness appear to be natural and
more probable than the testimony given by Francisco
Romano who is undoubtedly interested in the outcome of
the case, being the conductor of the defendant-appellant
Baliwag Transit Inc.

Second, we find as reasonable the award of P300,000.00

representing Leticia's lost earnings. Before the accident,
Leticia was engaged in embroidery, earning P5,000.00 per
month.[21] Her injuries forced her to stop working.
Considering the nature and extent of her injuries and the
length of time it would take her to recover,[22] we find it
proper that Baliwag should compensate her lost income for
five (5) years.[23]

It must be borne in mind that the situation then prevailing

at the time of the accident was admittedly drizzly and all
dark. This being so, it would be improbable and perhaps
impossible on the part of the truck helper without the torch
nor the kerosene to remove the flat tires of the truck.
Moreover, witness including the bits conductor himself
admitted that the passengers shouted, that they are going to
bump before the collision which consequently caused the
bus driver to apply the brake 3 to 4 meters away from the
truck. Again, without the kerosene nor the torch in front of
the truck, it would be improbable for the driver, more so the
passengers to notice the truck to be bumped by the bus
considering the darkness of the place at the time of the
accident.
xxx
x

xxx

xx

While it is true that the investigating officer testified that he

found no early warning device at the time of his
investigation, We rule to give less credence to such
testimony insofar as he himself admitted on cross
examination that he did not notice the presence of any
kerosene lamp at the back of the truck because when he
arrived at the scene of the accident, there were already
many people surrounding the place (TSN, Aug, 22, 1989, p.
13). He further admitted that there exists a probability that
the lights of the truck may have been smashed by the bus at
the time of the accident considering the location of the
truck where its rear portion was connected with the front
portion of the bus (TSN, March 29, 1985, pp. 11-13).
Investigator's testimony therefore did not confirm nor deny
the existence of such warning device, making his testimony
of little probative value.[19]
II
We now review the amount of damages awarded to the
Garcia spouses.
First, the propriety of the amount awarded as
hospitalization and medical fees. The award of P25,000.00
is not supported by the evidence on record. The Garcias
presented receipts marked as Exhibits B-1 to B 42 but
their total amounted only to P5,017.74. To be sure, Leticia
testified as to the extra amount spent for her medical needs
but without more reliable evidence, her lone testimony
cannot justify the award of P25,000.00. To prove actual
damages, the best evidence available to the injured party
must be presented.
The court cannot rely on
uncorroborated testimony whose truth is suspect, but must
depend upon competent proof that damages have been

Third, the award of moral damages is in accord with law.

In a breach of contract of carriage, moral damages are
recoverable if the carrier, through its agent, acted
fraudulently or in bad faith.[24] The evidence shows the
gross negligence of the driver of Baliwag bus which
amounted to bad faith. Without doubt, Leticia and Allan
experienced physical suffering, mental anguish and serious
anxiety by reason of the accident. Leticia underwent an
operation to replace her broken hip bone with a metal plate.
She was confined at the National Orthopedic Hospital for
45 days. The young Allan was also confined in the hospital
for his foot injury. Contrary to the contention of Baliwag,
the decision of the trial court as affirmed by the Court of
Appeals awarded moral damages to Antonio and Leticia
Garcia not in their capacity as parents of Allan. Leticia was
given moral damages as an injured party. Allan was also
granted moral damages as an injured party but because of
his minority, the award in his favor has to be given to his
father who represented him in the suit.
Finally, we find the award of attorney's fees justified. The
complaint for damages was instituted by the Garcia spouses
on December 15, 1982, following the unjustified refusal of
Baliwag to settle their claim.
The Decision was
promulgated by the trial court only on January 29, 1991 or
about nine years later. Numerous pleadings were filed
before the trial court, the appellate court and to this Court.
Given the complexity of the case and the amount of
damages involved,[25] the award of attorney's fee for
P10,000.00 is just and reasonable.
IN VIEW WHEREOF, the Decision of the respondent
Court of Appeals in CA-G.R. CV-31246 is AFFIRMED
with the MODIFICATION reducing the actual damages for
hospitalization and medical fees to P5,017.74. No costs.
SO ORDERED.
Negros NavigationCo., v. CA Nov 7, 1997
[G.R. No. 110398. November 7, 1997]
NEGROS NAVIGATION CO., INC., petitioner, vs. THE
COURT OF APPEALS, RAMON MIRANDA, SPS.
RICARDO and VIRGINIA DE LA VICTORIA,
respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision of
the Court of Appeals affirming with modification the

147

Regional Trial Courts award of damages to private

respondents for the death of relatives as a result of the
sinking of petitioners vessel.
In April of 1980, private respondent Ramon Miranda
purchased from the Negros Navigation Co., Inc. four
special cabin tickets (#74411, 74412, 74413 and 74414) for
his wife, daughter, son and niece who were going to
Bacolod City to attend a family reunion. The tickets were
for Voyage No. 457-A of the M/V Don Juan, leaving
Manila at 1:00 p.m. on April 22, 1980.
The ship sailed from the port of Manila on schedule.
At about 10:30 in the evening of April 22, 1980, the Don
Juan collided off the Tablas Strait in Mindoro, with the M/T
Tacloban City, an oil tanker owned by the Philippine
National Oil Company (PNOC) and the PNOC Shipping
and Transport Corporation (PNOC/STC). As a result, the
M/V Don Juan sank. Several of her passengers perished in
the sea tragedy. The bodies of some of the victims were
found and brought to shore, but the four members of
private respondents families were never found.

WHEREFORE, in view of the foregoing, judgment is

hereby rendered in favor of the plaintiffs, ordering all the
defendants to pay jointly and severally to the plaintiffs
damages as follows:
To Ramon Miranda:
P42,025.00 for actual damages;
P152,654.55
as compensatory damages for loss of
earning capacity of his wife;
P90,000.00
as compensatory damages for wrongful
death of three (3) victims;
P300,000.00 as moral damages;
P50,000.00
as exemplary damages, all in the total
amount of P634,679.55; and
P40,000.00 as attorneys fees.
To Spouses Ricardo and Virginia de la Victoria:

Private respondents filed a complaint on July 16, 1980 in

the Regional Trial Court of Manila, Branch 34, against the
Negros Navigation, the Philippine National Oil Company
(PNOC), and the PNOC Shipping and Transport
Corporation (PNOC/STC), seeking damages for the death
of Ardita de la Victoria Miranda, 48, Rosario V. Miranda,
19, Ramon V. Miranda, Jr., 16, and Elfreda de la Victoria,
26.

P12,000.00 for actual damages;

In its answer, petitioner admitted that private respondents

purchased ticket numbers 74411, 74412, 74413 and 74414;
that the ticket numbers were listed in the passenger
manifest; and that the Don Juan left Pier 2, North Harbor,
Manila on April 22, 1980 and sank that night after being
rammed by the oil tanker M/T Tacloban City, and that, as a
result of the collision, some of the passengers of the M/V
Don Juan died. Petitioner, however, denied that the four
relatives of private respondents actually boarded the vessel
as shown by the fact that their bodies were never recovered.
Petitioner further averred that the Don Juan was seaworthy
and manned by a full and competent crew, and that the
collision was entirely due to the fault of the crew of the
M/T Tacloban City.

P20,000.00
as exemplary damages, all in the total
amount of P320,899.00; and

On January 20, 1986, the PNOC and petitioner Negros

Navigation Co., Inc. entered into a compromise agreement
whereby petitioner assumed full responsibility for the
payment and satisfaction of all claims arising out of or in
connection with the collision and releasing the PNOC and
the PNOC/STC from any liability to it. The agreement was
subsequently held by the trial court to be binding upon
petitioner, PNOC and PNOC/STC. Private respondents did
not join in the agreement.
After trial, the court rendered judgment on February 21,
1991, the dispositive portion of which reads as follows:

P158,899.00
earning capacity;

as compensatory damages for loss of

P30,000.00 as compensatory damages for wrongful death;

P100,000.00 as moral damages;

P15,000.00 as attorneys fees.

On appeal, the Court of Appeals[1] affirmed the decision of
the Regional Trial Court with modification
1. Ordering and sentencing defendants-appellants, jointly
and severally, to pay plaintiff-appellee Ramon Miranda the
amount of P23,075.00 as actual damages instead of
P42,025.00;
2. Ordering and sentencing defendants-appellants, jointly
and severally, to pay plaintiff-appellee Ramon Miranda the
amount of P150,000.00, instead of P90,000.00, as
compensatory damages for the death of his wife and two
children;
3. Ordering and sentencing defendants-appellants, jointly
and severally, to pay plaintiffs-appellees Dela Victoria
spouses the amount of P50,000.00, instead of P30,000.00,
as compensatory damages for the death of their daughter
Elfreda Dela Victoria;
Hence this petition, raising the following issues:
(1) whether the members of private respondents families
were actually passengers of the Don Juan;

148

(2) whether the ruling in Mecenas v. Court of Appeals,[2]

finding the crew members of petitioner to be grossly
negligent in the performance of their duties, is binding in
this case;
(3)
whether the total loss of the M/V Don Juan
extinguished petitioners liability; and
(4) whether the damages awarded by the appellate court
are excessive, unreasonable and unwarranted.
First. The trial court held that the fact that the victims were
passengers of the M/V Don Juan was sufficiently proven by
private respondent Ramon Miranda, who testified that he
purchased tickets numbered 74411, 74412, 74413, and
74414 at P131.30 each from the Makati office of petitioner
for Voyage No. 47-A of the M/V Don Juan, which was
leaving Manila on April 22, 1980. This was corroborated
by the passenger manifest (Exh. E) on which the numbers
of the tickets and the names of Ardita Miranda and her
children and Elfreda de la Victoria appear.
Petitioner contends that the purchase of the tickets does not
necessarily mean that the alleged victims actually took the
trip. Petitioner asserts that it is common knowledge that
passengers purchase tickets in advance but do not actually
use them. Hence, private respondent should also prove the
presence of the victims on the ship. The witnesses who
affirmed that the victims were on the ship were biased and
unreliable.
This contention is without merit. Private respondent Ramon
Miranda testified that he personally took his family and his
niece to the vessel on the day of the voyage and stayed with
them on the ship until it was time for it to leave. There is no
reason he should claim members of his family to have
perished in the accident just to maintain an action. People
do not normally lie about so grave a matter as the loss of
dear ones.
It would be more difficult for private
respondents to keep the existence of their relatives if indeed
they are alive than it is for petitioner to show the contrary.
Petitioners only proof is that the bodies of the supposed
victims were not among those recovered from the site of
the mishap. But so were the bodies of the other passengers
reported missing not recovered, as this Court noted in the
Mecenas[3] case.
Private respondent Mirandas testimony was corroborated
by Edgardo Ramirez. Ramirez was a seminarian and one
of the survivors of the collision. He testified that he saw
Mrs. Miranda and Elfreda de la Victoria on the ship and
that he talked with them. He knew Mrs. Miranda who was
his teacher in the grade school. He also knew Elfreda who
was his childhood friend and townmate. Ramirez said he
was with Mrs. Miranda and her children and niece from
7:00 p.m. until 10:00 p.m. when the collision happened and
that he in fact had dinner with them. Ramirez said he and
Elfreda stayed on the deck after dinner and it was there
where they were jolted by the collision of the two vessels.
Recounting the moments after the collision, Ramirez
testified that Elfreda ran to fetch Mrs. Miranda. He

escorted her to the room and then tried to go back to the

deck when the lights went out. He tried to return to the
cabin but was not able to do so because it was dark and
there was a stampede of passengers from the deck.
Petitioner casts doubt on Ramirez testimony, claiming that
Ramirez could not have talked with the victims for about
three hours and not run out of stories to tell, unless Ramirez
had a storehouse of stories. But what is incredible about
acquaintances thrown together on a long journey staying
together for hours on end, in idle conversation precisely to
while the hours away?
Petitioner also points out that it took Ramirez three (3) days
before he finally contacted private respondent Ramon
Miranda to tell him about the fate of his family. But it is
not improbable that it took Ramirez three days before
calling on private respondent Miranda to tell him about the
last hours of Mrs. Miranda and her children and niece, in
view of the confusion in the days following the collision as
rescue teams and relatives searched for survivors.
Indeed, given the facts of this case, it is improper for
petitioner to even suggest that private respondents relatives
did not board the ill-fated vessel and perish in the accident
simply because their bodies were not recovered.
Second. In finding petitioner guilty of negligence and in
failing to exercise the extraordinary diligence required of it
in the carriage of passengers, both the trial court and the
appellate court relied on the findings of this Court in
Mecenas v. Intermediate Appellate Court,[4] which case
was brought for the death of other passengers. In that case
it was found that although the proximate cause of the
mishap was the negligence of the crew of the M/T Tacloban
City, the crew of the Don Juan was equally negligent as it
found that the latters master, Capt. Rogelio Santisteban,
was playing mahjong at the time of collision, and the
officer on watch, Senior Third Mate Rogelio De Vera,
admitted that he failed to call the attention of Santisteban to
the imminent danger facing them. This Court found that
Capt. Santisteban and the crew of the M/V Don Juan failed
to take steps to prevent the collision or at least delay the
sinking of the ship and supervise the abandoning of the
ship.
Petitioner Negros Navigation was found equally negligent
in tolerating the playing of mahjong by the ship captain and
other crew members while on board the ship and failing to
keep the M/V Don Juan seaworthy so much so that the ship
sank within 10 to 15 minutes of its impact with the M/T
Tacloban City.
In addition, the Court found that the Don Juan was
overloaded. The Certificate of Inspection, dated August
27, 1979, issued by the Philippine Coast Guard
Commander at Iloilo City stated that the total number of
persons allowed on the ship was 864, of whom 810 are
passengers, but there were actually 1,004 on board the
vessel when it sank, 140 persons more than the maximum
number that could be safely carried by it.

149

Taking these circumstances together, and the fact that the

M/V Don Juan, as the faster and better-equipped vessel,
could have avoided a collision with the PNOC tanker, this
Court held that even if the Tacloban City had been at fault
for failing to observe an internationally-recognized rule of
navigation, the Don Juan was guilty of contributory
negligence. Through Justice Feliciano, this Court held:
The grossness of the negligence of the Don Juan is
underscored when one considers the foregoing
circumstances in the context of the following facts: Firstly,
the Don Juan was more than twice as fast as the
Tacloban City. The Don Juans top speed was 17 knots;
while that of the Tacloban City was 6.3. knots. Secondly,
the Don Juan carried the full complement of officers and
crew members specified for a passenger vessel of her class.
Thirdly, the Don Juan was equipped with radar which
was functioning that night. Fourthly, the Don Juans
officer on-watch had sighted the Tacloban City on his
radar screen while the latter was still four (4) nautical miles
away. Visual confirmation of radar contact was established
by the Don Juan while the Tacloban City was still 2.7
miles away. In the total set of circumstances which existed
in the instant case, the Don Juan, had it taken seriously
its duty of extraordinary diligence, could have easily
avoided the collision with the Tacloban City. Indeed, the
Don Juan might well have avoided the collision even if it
had exercised ordinary diligence merely.
It is true that the Tacloban City failed to follow Rule 18
of the International Rules of the Road which requires two
(2) power-driven vessels meeting end on or nearly end on
each to alter her course to starboard (right) so that each
vessel may pass on the port side (left) of the other. The
Tacloban City, when the two (2) vessels were only threetenths (0.3) of a mile apart, turned (for the second time)
15o to port side while the Don Juan veered hard to
starboard. . . . [But] route observance of the International
Rules of the Road will not relieve a vessel from
responsibility if the collision could have been avoided by
proper care and skill on her part or even by a departure
from the rules.
In the petition at bar, the Don Juan having sighted the
Tacloban City when it was still a long way off was
negligent in failing to take early preventive action and in
allowing the two (2) vessels to come to such close quarters
as to render the collision inevitable when there was no
necessity for passing so near to the Tacloban City as to
create that hazard or inevitability, for the Don Juan could
choose its own distance. It is noteworthy that the
Tacloban City, upon turning hard to port shortly before
the moment of collision, signalled its intention to do so by
giving two (2) short blasts with its horn. The Don Juan
gave no answering horn blast to signal its own intention
and proceeded to turn hard to starboard.
We conclude that Capt. Santisteban and Negros Navigation
are properly held liable for gross negligence in connection
with the collision of the Don Juan and Tacloban City
and the sinking of the Don Juan leading to the death of
hundreds of passengers. . . .[5]

Petitioner criticizes the lower courts reliance on the

Mecenas case, arguing that, although this case arose out of
the same incident as that involved in Mecenas, the parties
are different and trial was conducted separately. Petitioner
contends that the decision in this case should be based on
the allegations and defenses pleaded and evidence adduced
in it or, in short, on the record of this case.
The contention is without merit. What petitioner contends
may be true with respect to the merits of the individual
claims against petitioner but not as to the cause of the
sinking of its ship on April 22, 1980 and its liability for
such accident, of which there can only be one truth.
Otherwise, one would be subscribing to the sophistry: truth
on one side of the Pyrenees, falsehood on the other!
Adherence to the Mecenas case is dictated by this Courts
policy of maintaining stability in jurisprudence in
accordance with the legal maxim stare decisis et non
quieta movere (Follow past precedents and do not disturb
what has been settled.) Where, as in this case, the same
questions relating to the same event have been put forward
by parties similarly situated as in a previous case litigated
and decided by a competent court, the rule of stare decisis
is a bar to any attempt to relitigate the same issue.[6] In
Woulfe v. Associated Realties Corporation,[7] the Supreme
Court of New Jersey held that where substantially similar
cases to the pending case were presented and applicable
principles declared in prior decisions, the court was bound
by the principle of stare decisis. Similarly, in State ex rel.
Tollinger v. Gill,[8] it was held that under the doctrine of
stare decisis a ruling is final even as to parties who are
strangers to the original proceeding and not bound by the
judgment under the res judicata doctrine. The Philadelphia
court expressed itself in this wise: Stare decisis simply
declares that, for the sake of certainty, a conclusion reached
in one case should be applied to those which follow, if the
facts are substantially the same, even though the parties
may be different.[9] Thus, in J. M. Tuason v. Mariano,
supra, this Court relied on its rulings in other cases
involving different parties in sustaining the validity of a
land title on the principle of stare decisis et non quieta
movere.
Indeed, the evidence presented in this case was the same as
those presented in the Mecenas case, to wit:
Document
This case
Decision of Commandant
Exh. 11-B-NN/X
Phil. Coast Guard in BMI Case
No. 415-80 dated 3/26/81
Decision of the Minister
Exh. ZZ
of National Defense dated 3/12/82
Resolution on the motion
Exh. AAA
for
reconsideration
(private respondents)

150

Mecenas case
Exh. 10[10]

Exh. 11[11]
Exh. 13[12]
of

the

decision of the Minister of

National Defense dated 7/24/84
Certificate of inspection
Exh. 19-NN
dated 8/27/79
Certificate of Stability
Exh. 19-D-NN
dated 12/16/76

Mr. and Mrs. de la Victoria is likewise reasonable and

should be affirmed.
Exh. 1-A[13]
Exh. 6-A[14]

Nor is it true that the trial court merely based its decision
on the Mecenas case. The trial court made its own
independent findings on the basis of the testimonies of
witnesses, such as Senior Third Mate Rogelio de Vera, who
incidentally gave substantially the same testimony on
petitioners behalf before the Board of Marine Inquiry. The
trial court agreed with the conclusions of the then Minister
of National Defense finding both vessels to be negligent.
Third. The next issue is whether petitioner is liable to pay
damages notwithstanding the total loss of its ship. The
issue is not one of first impression. The rule is wellentrenched in our jurisprudence that a shipowner may be
held liable for injuries to passengers notwithstanding the
exclusively real and hypothecary nature of maritime law if
fault can be attributed to the shipowner.[15]
In Mecenas, this Court found petitioner guilty of
negligence in (1) allowing or tolerating the ship captain and
crew members in playing mahjong during the voyage, (2)
in failing to maintain the vessel seaworthy and (3) in
allowing the ship to carry more passengers than it was
allowed to carry. Petitioner is, therefore, clearly liable for
damages to the full extent.
Fourth.
Petitioner contends that, assuming that the
Mecenas case applies, private respondents should be
allowed to claim only P43,857.14 each as moral damages
because in the Mecenas case, the amount of P307,500.00
was awarded to the seven children of the Mecenas couple.
Under petitioners formula, Ramon Miranda should receive
P43,857.14, while the De la Victoria spouses should receive
P97,714.28.
Here is where the principle of stare decisis does not apply
in view of differences in the personal circumstances of the
victims. For that matter, differentiation would be justified
even if private respondents had joined the private
respondents in the Mecenas case. The doctrine of stare
decisis works as a bar only against issues litigated in a
previous case. Where the issue involved was not raised nor
presented to the court and not passed upon by the court in
the previous case, the decision in the previous case is not
stare decisis of the question presently presented.[16] The
decision in the Mecenas case relates to damages for which
petitioner was liable to the claimants in that case.
In the case at bar, the award of P300,000.00 for moral
damages is reasonable considering the grief petitioner
Ramon Miranda suffered as a result of the loss of his entire
family. As a matter of fact, three months after the collision,
he developed a heart condition undoubtedly caused by the
strain of the loss of his family. The P100,000.00 given to

As for the amount of civil indemnity awarded to private

respondents, the appellate courts award of P50,000.00 per
victim should be sustained. The amount of P30,000.00
formerly set in De Lima v. Laguna Tayabas Co.,[17] Heirs
of Amparo delos Santos v. Court of Appeals,[18] and
Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate
Court[19] as benchmark was subsequently increased to
P50,000.00 in the case of Sulpicio Lines, Inc. v. Court of
Appeals,[20] which involved the sinking of another
interisland ship on October 24, 1988.
We now turn to the determination of the earning capacity of
the victims. With respect to Ardita Miranda, the trial court
awarded damages computed as follows:[21]
In the case of victim Ardita V. Miranda whose age at the
time of the accident was 48 years, her life expectancy was
computed to be 21.33 years, and therefore, she could have
lived up to almost 70 years old. Her gross earnings for
21.33 years based on P10,224.00 per annum, would be
P218,077.92. Deducting therefrom 30% as her living
expenses, her net earnings would be P152,654.55, to which
plaintiff Ramon Miranda is entitled to compensatory
damages for the loss of earning capacity of his wife. In
considering 30% as the living expenses of Ardita Miranda,
the Court takes into account the fact that plaintiff and his
wife were supporting their daughter and son who were both
college students taking Medicine and Law respectively.
In accordance with the ruling in Villa-Rey Transit, Inc. v.
Court of Appeals,[22] we think the life expectancy of
Ardita Miranda was correctly determined to be 21.33 years,
or up to age 69. Petitioner contends, however, that Mrs.
Miranda would have retired from her job as a public school
teacher at 65, hence her loss of earning capacity should be
reckoned up to 17.33 years only.
The accepted formula for determining life expectancy is 2/3
multiplied by (80 minus the age of the deceased). It may
be that in the Philippines the age of retirement generally is
65 but, in calculating the life expectancy of individuals for
the purpose of determining loss of earning capacity under
Art. 2206(1) of the Civil Code, it is assumed that the
deceased would have earned income even after retirement
from a particular job. In this case, the trial court took into
account the fact that Mrs. Miranda had a masters degree
and a good prospect of becoming principal of the school in
which she was teaching. There was reason to believe that
her income would have increased through the years and she
could still earn more after her retirement, e.g., by becoming
a consultant, had she not died. The gross earnings which
Mrs. Miranda could reasonably be expected to earn were it
not for her untimely death was, therefore, correctly
computed by the trial court to be P218,077.92 (given a
gross annual income of P10,224.00 and life expectancy of
21.33 years).
Petitioner contends that from the amount of gross earnings,
60% should be deducted as necessary living expenses, not

151

merely 30% as the trial court allowed. Petitioner contends

that 30% is unrealistic, considering that Mrs. Mirandas
earnings would have been subject to taxes, social security
deductions and inflation.
We agree with this contention. In Villa-Rey Transit, Inc. v.
Court of Appeals,[23] the Court allowed a deduction of
P1,184.00 for living expenses from the P2,184.00 annual
salary of the victim, which is roughly 54.2% thereof. The
deceased was 29 years old and a training assistant in the
Bacnotan Cement Industries. In People v. Quilaton,[24] the
deceased was a 26-year old laborer earning a daily wage.
The court allowed a deduction of P120,000.00 which was
51.3% of his annual gross earnings of P234,000.00. In
People v. Teehankee,[25] the court allowed a deduction of
P19,800.00, roughly 42.4% thereof from the deceaseds
annual salary of P46,659.21. The deceased, Maureen
Hultman, was 17 years old and had just received her first
paycheck as a secretary. In the case at bar, we hold that a
deduction of 50% from Mrs. Mirandas gross earnings
(P218,077.92) would be reasonable, so that her net earning
capacity should be P109,038.96. There is no basis for
supposing that her living expenses constituted a smaller
percentage of her gross income than the living expenses in
the decided cases. To hold that she would have used only
a small part of her income for herself, a larger part going to
the support of her children would be conjectural and
unreasonable.
As for Elfreda de la Victoria, the trial court found that, at
the time of her death, she was 26 years old, a teacher in a
private school in Malolos, Bulacan, earning P6,192.00 per
annum. Although a probationary employee, she had
already been working in the school for two years at the
time of her death and she had a general efficiency rating of
92.85% and it can be presumed that, if not for her untimely
death, she would have become a regular teacher. Hence,
her loss of earning capacity is P111,456.00, computed as
follows:
net earning capacity (x) = life expectancy x
[ gross
annual income less reasonable & necessary living expenses
(50%) ]
x
P3,096.00]

[ 2 (80-26) ]

[P6,192.00

3
=
=

36

3,096.00

P111,456.00

On the other hand, the award of actual damages in the

amount of P23,075.00 was determined by the Court of
Appeals on the basis of receipts submitted by private
respondents. This amount is reasonable considering the
expenses incurred by private respondent Miranda in
organizing three search teams to look for his family,
spending for transportation in going to places such as
Batangas City and Iloilo, where survivors and the bodies of
other victims were found, making long distance calls,

erecting a monument in honor of the four victims, spending

for obituaries in the Bulletin Today and for food, masses
and novenas.
Petitioners contention that the expenses for the erection of
a monument and other expenses for memorial services for
the victims should be considered included in the indemnity
for death awarded to private respondents is without merit.
Indemnity for death is given to compensate for violation of
the rights of the deceased, i.e., his right to life and physical
integrity.[26] On the other hand, damages incidental to or
arising out of such death are for pecuniary losses of the
beneficiaries of the deceased.
As for the award of attorneys fees, we agree with the Court
of Appeals that the amount of P40,000.00 for private
respondent Ramon Miranda and P15,000.00 for the de la
Victoria spouses is justified. The appellate court correctly
held:
The Mecenas case cannot be made the basis for
determining the award for attorneys fees. The award
would naturally vary or differ in each case. While it is
admitted that plaintiff-appellee Ramon Miranda who is
himself a lawyer, represented also plaintiffs-appellees Dela
Victoria spouses, we note that separate testimonial evidence
were adduced by plaintiff-appellee Ramon Miranda (TSN,
February 26, 1982, p. 6) and plaintiffs-appellees spouses
Dela Victoria (TSN, August 13, 1981, p. 43). Considering
the amount of work and effort put into the case as indicated
by the voluminous transcripts of stenographic notes, we
find no reason to disturb the award of P40,000.00 for
plaintiff-appellee Ramon Miranda and P15,000.00 for
plaintiffs-appellees Dela Victoria spouses.[27]
The award of exemplary damages should be increased to
P300,000.00 for Ramon Miranda and P100,000.00 for the
de la Victoria spouses in accordance with our ruling in the
Mecenas case:
Exemplary damages are designed by our civil law to permit
the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or
deterrents against such behaviour. In requiring compliance
with the standard of extraordinary diligence, a standard
which is in fact that of the highest possible degree of
diligence, from common carriers and in creating a
presumption of negligence against them, the law seeks to
compel them to control their employees, to tame their
reckless instincts and to force them to take adequate care of
human beings and their property. The Court will take
judicial notice of the dreadful regularity with which
grievous maritime disasters occur in our waters with
massive loss of life. The bulk of our population is too poor
to afford domestic air transportation. So it is that
notwithstanding the frequent sinking of passenger vessels
in our waters, crowds of people continue to travel by sea.
This Court is prepared to use the instruments given to it by
the law for securing the ends of law and public policy. One
of those instruments is the institution of exemplary
damages; one of those ends, of special importance in an

152

archipelagic state like the Philippines, is the safe and

reliable carriage of people and goods by sea.[28]
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED with modification and petitioner is
ORDERED to pay private respondents damages as follows:
To private respondent Ramon Miranda:
P23,075.00

for actual damages;

P109,038.96
as compensatory damages for
loss of earning capacity of his wife;
P150,000.00
as compensatory damages for
wrongful death of three (3) victims;
P300,000.00

as moral damages;

P300,000.00
as exemplary damages, all in
the total amount of P882,113.96; and
P40,000.00

as attorneys fees.

To private respondents Spouses Ricardo and Virginia de la

Victoria:
P12,000.00

for actual damages;

P111,456.00
loss of earning capacity;

as compensatory damages for

P50,000.00
wrongful death;

as compensatory damages for

P100,000.00

as moral damages;

P100,000.00
as exemplary damages, all in
the total amount of P373,456.00; and
P15,000.00

as attorneys fees.

AGANA, ADALIA B.
MIRANDA, respondents.
DECISION
ROMERO, J.:

FRANCISCO

and

JOSE

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 NAIAs 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.

Petitioners are further ordered to pay costs of suit.

In the event the Philippine National Oil Company and/or
the PNOC Shipping and Transport Corporation pay or are
required to pay all or a portion of the amounts adjudged,
petitioner Negros Navigation Co., Inc. shall reimburse
either of them such amount or amounts as either may have
paid, and in the event of failure of Negros Navigation Co.,
Inc., to make the necessary reimbursement, PNOC and/or
PNOC/STC shall be entitled to a writ of execution without
need of filing another action.
SO ORDERED.
JAL v. CA
Aug 7, 1998
[G.R. No. 118664. August 7, 1998]
JAPAN AIRLINES, petitioner, vs. THE COURT OF
APPEALS ENRIQUE AGANA, MARIA ANGELA NINA

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

153

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 damages and pay attorneys
fees in the amount of Two Hundred Thousand Pesos
(P200,000.00), and to pay the costs of suit.
Undaunted, JAL appealed the decision before the Court of
Appeals, which, however, with the exception of lowering
the damages awarded affirmed the trial courts 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 attorneys
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 in PAL 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, PALs diversion of its flight due to inclement
weather was a fortuitous event.
Nonetheless, such
occurrence did not terminate PALs 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 carriers
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

154

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 the fortuitous
event was accompanied by neglect and malfeasance by the
carriers 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 NAIAs 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 attorneys fees of
P50,000.00 plus costs.
SO ORDERED.

Limited Liability;
1757; 1758

Lara v. Valencia
G.R. No. L-9907

Validity

of

Stipulations

June 30, 1958

June 30, 1958

LOURDES J. LARA, ET AL., plaintiffs-appellants,

vs.
BRIGIDO R. VALENCIA, defendant-appellant.
Castillo, Cervantes, Occea, Lozano, Montana, Cunanan,
Sison and Castillo and Eligio G. Lagman for defendantappellant.
Donato C. Endriga and Emigdio Dakanay for plaintiffsappellants.
BAUTISTA ANGELO, J.:
This is an action for damages brought by plaintiffs against
defendant in the Court of First Instance of Davao for the
death of one Demetrio Lara, Sr. allegedly caused by the
negligent act of defendant. Defendant denied the charge of
negligence and set up certain affirmative defenses and a
counterclaim.
The court after hearing rendered judgment ordering
defendant to pay the plaintiffs the following amount: (a)
P10,000 as moral damages; (b) P3,000 as exemplary
damages; and (c) P1,000 as attorney's fees, in addition to
the costs of action. Both parties appealed to this Court
because the damages claimed in the complaint exceed the
sum of P50,000.
In their appeal, plaintiffs claim that the court a quo erred in
disregarding their claim of P41,400 as actual or
compensatory damages and in awarding as attorneys' fees
only the sum of P1,000 instead of P3,000 as agreed upon
between plaintiffs and their counsel. Defendant, on the
other hand, disputes the finding of the court a quo that the
oath of Demetrio Lara, Sr. was due to the negligence of
defendant and the portion of the judgment which orders
dependant to pay to plaintiffs moral and exemplary
damages as well as attorneys' fees, said defendant
contending that the court should have declared that the
death of Lara was due to unavoidable accident.
The deceased was an inspector of the Bureau of Forestry
stationed in Davao with an annual salary of P1,800. The
defendant is engaged in the business of exporting logs from
his lumber concession in Cotabato. Lara went to said
concession upon instructions of his chief to classify the

155

logs of defendant which were about to be loaded on a ship

anchored in the port of Parang. The work Lara of lasted for
six days during which he contracted malaria fever. In the
morning of January 9, 1954, Lara who then in a hurry to
return to Davao asked defendant if he could take him in his
pick-up as there was then no other means of transportation,
to which defendant agreed, and in that same morning the
pick-up left Parang bound for Davao taking along six
passengers, including Lara.

the Government. Defendant merely accommodated them

and did not charge them any fee for the service. It was also
their understanding that upon reaching barrio Samoay, the
passengers would alight and transfer to a bus that regularly
makes the trip to Davao but unfortunately there was none
available at the time and so the same passengers, including
Lara, again requested the defendant to drive them to Davao.
Defendant again accommodated them and upon reaching
Km. 96, Lara accidentally fell suffering fatal injuries.

The pick-up has a front seat where the driver and two
passengers can be accommodated and the back has a steel
flooring enclosed with a steel walling of 16 to 17 inches tall
on the sides and with a 19 inches tall walling at the back.
Before leaving Parang, the sitting arrangement was as
follows: defendant was at the wheel and seated with him in
the front seat were Mrs. Valencia and Nicanor Quinain; on
the back of the pick-up were two improvised benches
placed on each side, and seated on the right bench were
Ricardo Alojipan and Antonio Lagahit, and on the left one
Bernardo and Pastor Geronimo. A person by the name of
Leoning was seated on a box located on the left side while
in the middle Lara sat on a bag. Before leaving Parang,
defendant invited Lara to sit with him on the front seat but
Lara declined. It was their understanding that upon
reaching barrio Samoay, Cotabato, the passengers were to
alight and take a bus bound for Davao, but when they
arrived at that place, only Bernardo alighted and the other
passengers requested defendant to allow them to ride with
him up to Davao because there was then no available bus
that they could take in going to that place. Defendant again
accommodated the passengers.

It therefore appears that the deceased, as well his

companions who rode in the pick-up of defendant, were
merely accommodation passengers who paid nothing for
the service and so they can be considered as invited guests
within the meaning of the law. As accommodation
passengers or invited guests, defendant as owner and driver
of the pick-up owes to them merely the duty to exercise
reasonable care so that they may be transported safely to
their destination. Thus, "The rule is established by the
weight of authority that the owner or operator of an
automobile owes the duty to an invited guest to exercise
reasonable care in its operation, and not unreasonably to
expose him to danger and injury by increasing the hazard of
travel. This rule, as frequently stated by the courts, is that
an owner of an automobile owes a guest the duty to
exercise ordinary or reasonable care to avoid injuring him.
Since one riding in an automobile is no less a guest because
he asked for the privilege of doing so, the same obligation
of care is imposed upon the driver as in the case of one
expressly invited to ride" (5 Am. Jur., 626-627). Defendant,
therefore, is only required to observe ordinary care, and is
not in duty bound to exercise extraordinary diligence as
required of a common carrier by our law (Articles 1755 and
1756, new Civil Code).

When they continued their trip, the sitting arrangement of

the passengers remained the same, Lara being seated on a
bag in the middle with his arms on a suitcase and his head
cove red by a jacket. Upon reaching Km. 96, barrio
Catidtuan, Lara accidentally fell from the pick-up and as a
result he suffered serious injuries. Valencia stopped the
pick-up to see what happened to Lara. He sought the help
of the residents of that place and applied water to Lara but
to no avail. They brought Lara to the nearest place where
they could find a doctor and not having found any they
took him to St. Joseph's Clinic of Kidapawan. But when
Lara arrived he was already dead. From there they
proceeded to Davao City and immediately notified the local
authorities. An investigation was made regarding the
circumstances surrounding the death of Lara but no
criminal action was taken against defendant.
It should be noted that the deceased went to the lumber
concession of defendant in Parang, Cotabato upon
instructions of his chief in order to classify the logs of
defendant which were then ready to be exported and to be
loaded on a ship anchored in the port of Parang. It took
Lara six days to do his work during which he contracted
malaria fever and for that reason he evinced a desire to
return immediately to Davao. At that time, there was no
available bus that could take him back to Davao and so he
requested the defendant if he could take him in his own
pick-up. Defendant agreed and, together with Lara, other
passengers tagged along, most of them were employees of

The question that now arises is: Is there enough evidence to

show that defendant failed to observe ordinary care or
diligence in transporting the deceased from Parang to
Davao on the date in question?
The trial court answered the question in the affirmative but
in so doing it took into account only the following facts:
No debe perderse de vista el hecho, que los negocios de
exportacion de trozos del demandado tiene un volumen de
P1,200. Lara era empleado de la Oficina de Montes,
asalariado por el gobierno, no pagado por el demandado
para classificar los trozos exportados; debido a los trabajos
de classificacion que duro 6 dias, en su ultimo dia Lara no
durmio toda la noche, al dia siguiente, Lara fue atacado de
malaria, tenia inflamada la cara y cuerpo, sufria dolores de
cabeza con erupciones en la cara y cuerpo; que en la
manana, del dia 2 de enero de 1954, fecha en que Lara salio
de Davao para Parang, en aeroplano para clasificar los
trozos del demandado, el automobil de este condujo a aquel
al aerodromo de Davao.
xxx

xxx

xxx

El viaje de Cotabato a Davao no es menos de 8 horas, su

carretera esta en malas condiciones, desnivelada, con
piedras salientes y baches, que hacen del vehiculo no

156

estable en su marcha. Lara estaba enfermo de cierta

gravedad, tenia el cuerpo y cara inflamados, atacado de
malaria, con dolores de cabeza y con erupciones en la cara
y cuerpo.
A la vista de estos hechos, el demandado debia de saber que
era sumamente peligroso llevar 5 pasajeros en la parte
trasera del pick-up; particularmente, para la salud de Lara;
el permitirlo, el demandado no ha tomado las precausiones,
para evitar un posible accidente fatal. La negative de Lara
de ocupar el asiento delantero del pick-up no constituye a
juicio del Juzgado una defensa, pues el demendado
conociendo el estado delicado de salud de Lara, no debio
de haber permitido que aquel regrese a Davao en su pickup; si querria prestar a aquel un favor, debio de haver
provisto a Lara de un automobil para su regrese a Davao,
ya que el demendado es un millionario; si no podia prestar
a aquel este favor, debio de haver dejado a Lara en Samuay
para coger aquel un camion de pasajero de Cotabato a
Davao.
Even if we admit as true the facts found by the trial court,
still we find that the same are not sufficient to show that
defendant has failed to take the precaution necessary to
conduct his passengers safely to their place of destination
for there is nothing there to indicate that defendant has
acted with negligence or without taking the precaution that
an ordinary prudent man would have taken under similar
circumstances. It should be noted that Lara went to the
lumber concession of defendant in answer to a call of duty
which he was bound to perform because of the requirement
of his office and he contracted the malaria fever in the
course of the performance of that duty. It should also be
noted that defendant was not in duty bound to take the
deceased in his own pick-up to Davao because from Parang
to Cotabato there was a line of transportation that regularly
makes trips for the public, and if defendant agreed to take
the deceased in his own car, it was only to accommodate
him considering his feverish condition and his request that
he be so accommodated. It should also be noted that the
passengers who rode in the pick-up of defendant took their
respective seats therein at their own choice and not upon
indication of defendant with the particularity that defendant
invited the deceased to sit with him in the front seat but
which invitation the deceased declined. The reason for this
can only be attributed to his desire to be at the back so that
he could sit on a bag and travel in a reclining position
because such was more convenient for him due to his
feverish condition. All the circumstances therefore clearly
indicate that defendant had done what a reasonable prudent
man would have done under the circumstances.
There is every reason to believe that the unfortunate
happening was only due to an unforeseen accident accused
by the fact that at the time the deceased was half asleep and
must have fallen from the pick-up when it ran into some
stones causing it to jerk considering that the road was then
bumpy, rough and full of stones.
The finding of the trial court that the pick-up was running
at more than 40 kilometers per hour is not supported by the
evidence. This is a mere surmise made by the trial court

considering the time the pick-up left barrio Samoay and the
time the accident occured in relation to the distance
covered by the pick-up. And even if this is correct, still we
say that such speed is not unreasonable considering that
they were traveling on a national road and the traffic then
was not heavy. We may rather attribute the incident to lack
of care on the part of the deceased considering that the
pick-up was open and he was then in a crouching position.
Indeed, the law provides that "A passenger must observe
the diligence of a good father of a family to avoid injury to
himself" (Article 1761, new Civil Code), which means that
if the injury to the passenger has been proximately caused
by his own negligence, the carrier cannot be held liable.
All things considered, we are persuaded to conclude that
the accident occurred not due to the negligence of
defendant but to circumstances beyond his control and so
he should be exempt from liability.
Wherefore, the decision appealed from is reversed, without
pronouncement as to costs.
Paras, C. J., Bengzon, Reyes, A., Concepcion, Reyes, J. B.
L., Endencia and Felix, JJ., concur.
Bataclan v. Medina Oct 22,1957
G.R. No. L-10126
October 22, 1957
SALUD VILLANUEVA VDA. DE BATACLAN and the
minors NORMA, LUZVIMINDA, ELENITA, OSCAR and
ALFREDO BATACLAN, represented by their Natural
guardian, SALUD VILLANUEVA VDA. DE BATACLAN,
plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.
Lope E. Adriano, Emmanuel Andamo and Jose R.
Francisco for plaintiffs-appellants.
Fortunato Jose for defendant and appellant.
MONTEMAYOR, J.:
Shortly after midnight, on September 13, 1952 bus no. 30
of the Medina Transportation, operated by its owner
defendant Mariano Medina under a certificate of public
convenience, left the town of Amadeo, Cavite, on its way to
Pasay City, driven by its regular chauffeur, Conrado
Saylon. There were about eighteen passengers, including
the driver and conductor. Among the passengers were Juan
Bataclan, seated beside and to the right of the driver, Felipe
Lara, sated to the right of Bataclan, another passenger
apparently from the Visayan Islands whom the witnesses
just called Visaya, apparently not knowing his name, seated
in the left side of the driver, and a woman named Natalia
Villanueva, seated just behind the four last mentioned. At
about 2:00 o'clock that same morning, while the bus was
running within the jurisdiction of Imus, Cavite, one of the
front tires burst and the vehicle began to zig-zag until it fell
into a canal or ditch on the right side of the road and turned
turtle. Some of the passengers managed to leave the bus the
best way they could, others had to be helped or pulled out,
while the three passengers seated beside the driver, named

157

Bataclan, Lara and the Visayan and the woman behind

them named Natalia Villanueva, could not get out of the
overturned bus. Some of the passengers, after they had
clambered up to the road, heard groans and moans from
inside the bus, particularly, shouts for help from Bataclan
and Lara, who said they could not get out of the bus. There
is nothing in the evidence to show whether or not the
passengers already free from the wreck, including the
driver and the conductor, made any attempt to pull out or
extricate and rescue the four passengers trapped inside the
vehicle, but calls or shouts for help were made to the
houses in the neighborhood. After half an hour, came about
ten men, one of them carrying a lighted torch made of
bamboo with a wick on one end, evidently fueled with
petroleum. These men presumably approach the overturned
bus, and almost immediately, a fierce fire started, burning
and all but consuming the bus, including the four
passengers trapped inside it. It would appear that as the bus
overturned, gasoline began to leak and escape from the
gasoline tank on the side of the chassis, spreading over and
permeating the body of the bus and the ground under and
around it, and that the lighted torch brought by one of the
men who answered the call for help set it on fire.

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

That same day, the charred bodies of the four deemed

passengers inside the bus were removed and duly identified
that of Juan Bataclan. By reason of his death, his widow,
Salud Villanueva, in her name and in behalf of her five
minor children, brought the present suit to recover from
Mariano Medina compensatory, moral, and exemplary
damages and attorney's fees in the total amount of P87,150.
After trial, the Court of First Instance of Cavite awarded
P1,000 to the plaintiffs plus P600 as attorney's fee, plus
P100, the value of the merchandise being carried by
Bataclan to Pasay City for sale and which was lost in the
fire. The plaintiffs and the defendants appealed the decision
to the Court of Appeals, but the latter endorsed the appeal
to us because of the value involved in the claim in the
complaint.

We agree with the trial court that the case involves a breach
of contract of transportation for hire, the Medina
Transportation having undertaken to carry Bataclan safely
to his destination, Pasay City. We also agree with the trial
court that there was negligence on the part of the defendant,
through his agent, the driver Saylon. There is evidence to
show that at the time of the blow out, the bus was speeding,
as testified to by one of the passengers, and as shown by
the fact that according to the testimony of the witnesses,
including that of the defense, from the point where one of
the front tires burst up to the canal where the bus
overturned after zig-zaging, there was a distance of about
150 meters. The chauffeur, after the blow-out, must have
applied the brakes in order to stop the bus, but because of
the velocity at which the bus must have been running, its
momentum carried it over a distance of 150 meters before it
fell into the canal and turned turtle.

Our new Civil Code amply provides for the responsibility

of common carrier to its passengers and their goods. For
purposes of reference, we are reproducing the pertinent
codal provisions:
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 extra ordinary 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. 1759. 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 order 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.
ART. 1763. A common carrier responsible for injuries
suffered by a passenger on account of the willful 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.

There is no question that under the circumstances, the

defendant carrier is liable. The only question is to what
degree. The trial court was of the opinion that the
proximate cause of the death of Bataclan was not the
overturning of the bus, but rather, the fire that burned the
bus, including himself and his co-passengers who were
unable to leave it; that at the time the fire started, Bataclan,
though he must have suffered physical injuries, perhaps
serious, was still alive, and so damages were awarded, not
for his death, but for the physical injuries suffered by him.
We disagree. A satisfactory definition of proximate cause is
found in Volume 38, pages 695-696 of American
jurisprudence, cited by plaintiffs-appellants in their brief. It
is as follows:
. . . '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.' And more comprehensively, 'the proximate legal
cause is that acting first and producing the injury, either

158

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
effecting 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 ordinary
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 may be that ordinarily, when a passenger bus overturns,
and pins down a passenger, merely causing him physical
injuries, if through some event, unexpected and
extraordinary, the overturned bus is set on fire, say, by
lightning, or if some highwaymen after looting the vehicle
sets it on fire, and the passenger is burned to death, one
might still contend that the proximate cause of his death
was the fire and not the overturning of the vehicle. But in
the present case under the circumstances obtaining in the
same, we do not hesitate to hold that the proximate cause
was the overturning of the bus, this for the reason that when
the vehicle turned not only on its side but completely on its
back, the leaking of the gasoline from the tank was not
unnatural or unexpected; that the coming of the men with a
lighted torch was in response to the call for help, made not
only by the passengers, but most probably, by the driver
and the conductor themselves, and that because it was dark
(about 2:30 in the morning), the rescuers had to carry a
light with them, and coming as they did from a rural area
where lanterns and flashlights were not available; and what
was more natural than that said rescuers should innocently
approach the vehicle to extend the aid and effect the rescue
requested from them. In other words, the coming of the
men with a torch was to be expected and was a natural
sequence of the overturning of the bus, the trapping of
some of its passengers and the call for outside help. What is
more, the burning of the bus can also in part be attributed to
the negligence of the carrier, through is driver and its
conductor. According to the witness, the driver and the
conductor were on the road walking back and forth. They,
or at least, the driver should and must have known that in
the position in which the overturned bus was, gasoline
could and must have leaked from the gasoline tank and
soaked the area in and around the bus, this aside from the
fact that gasoline when spilled, specially over a large area,
can be smelt and directed even from a distance, and yet
neither the driver nor the conductor would appear to have
cautioned or taken steps to warn the rescuers not to bring
the lighted torch too near the bus. Said negligence on the
part of the agents of the carrier come under the codal
provisions above-reproduced, particularly, Articles 1733,
1759 and 1763.
As regard the damages to which plaintiffs are entitled,
considering the earning capacity of the deceased, as well as
the other elements entering into a damage award, we are
satisfied that the amount of SIX THOUSAND (P6,000)
PESOS would constitute satisfactory compensation, this to
include compensatory, moral, and other damages. We also
believe that plaintiffs are entitled to attorney's fees, and
assessing the legal services rendered by plaintiffs' attorneys

not only in the trial court, but also in the course of the
appeal, and not losing sight of the able briefs prepared by
them, the attorney's fees may well be fixed at EIGHT
HUNDRED (P800) PESOS for the loss of merchandise
carried by the deceased in the bus, is adequate and will not
be disturbed.
There is one phase of this case which disturbs if it does not
shock us. According to the evidence, one of the passengers
who, because of the injuries suffered by her, was
hospitalized, and while in the hospital, she was visited by
the defendant Mariano Medina, and in the course of his
visit, she overheard him speaking to one of his bus
inspectors, telling said inspector to have the tires of the bus
changed immediately because they were already old, and
that as a matter of fact, he had been telling the driver to
change the said tires, but that the driver did not follow his
instructions. If this be true, it goes to prove that the driver
had not been diligent and had not taken the necessary
precautions to insure the safety of his passengers. Had he
changed the tires, specially those in front, with new ones,
as he had been instructed to do, probably, despite his
speeding, as we have already stated, the blow out would not
have occurred. All in all, there is reason to believe that the
driver operated and drove his vehicle negligently, resulting
in the death of four of his passengers, physical injuries to
others, and the complete loss and destruction of their
goods, and yet the criminal case against him, on motion of
the fiscal and with his consent, was provisionally
dismissed, because according to the fiscal, the witnesses on
whose testimony he was banking to support the complaint,
either failed or appear or were reluctant to testify. But the
record of the case before us shows the several witnesses,
passengers, in that bus, willingly and unhesitatingly
testified in court to the effect of the said driver was
negligent. In the public interest the prosecution of said
erring driver should be pursued, this, not only as a matter of
justice, but for the promotion of the safety of passengers on
public utility buses. Let a copy of this decision be furnished
the Department of Justice and the Provincial Fiscal of
Cavite.
In view of the foregoing, with the modification that the
damages awarded by the trial court are increased from
ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND
(P6,000) PESOS, and from SIX HUNDRED PESOS TO
EIGHT HUNDRED (P800) PESOS, for the death of
Bataclan and for the attorney's fees, respectively, the
decision appealed is from hereby affirmed, with costs.
Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo,
Labrador, Concepcion, Reyes, J. B. L., Endencia, and Felix,
JJ., concur.
Maranan v. Perez June 26,1967
G.R. No. L-22272
June 26, 1967
ANTONIA MARANAN, plaintiff-appellant,
vs.
PASCUAL PEREZ, ET AL., defendants.
PASCUAL PEREZ, defendant appellant.

159

Pedro Panganiban for plaintiff-appellant.

Magno T. Bueser for defendant-appellant.

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)

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

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 the Gillaco 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

160

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.
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 award moral
damages in addition to compensatory damages, 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
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.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
Zaldivar, Sanchez and Castro, JJ., concur.
Baliwag Transit v. CA
May 5,1996
[G.R. No. 116110. May 15,1996]
BALIWAG TRANSIT, INC., petitioner, vs. COURT OF
APPEALS, SPOUSES ANTONIO GARCIA & LETICIA
GARCIA, A & J TRADING, AND JULIO RECONTIQUE,
respondents.
SYLLABUS
1. CIVIL LAW; CONTRACTS; SPECIAL CONTRACTS;
COMMON CARRIERS; LIABILITY FOR DAMAGES;
ESTABLISHED IN CASE AT BAR. As a common
carrier, Baliwag breached its contract of carriage when it
failed to deliver its passengers, Leticia and Allan Garcia to
their destination safe and sound. A common carrier is
bound to carry its passengers safely as far as human care
and foresight can provide, using the utmost diligence of a
very cautious person, with due regard for 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
as prescribed in Articles 1733 and 1755 of the Civil Code.
The records are bereft of any proof to show that Baliwag
exercised extraordinary diligence. On the contrary, the
evidence demonstrates its driver's recklessness. Leticia
Garcia testified that the bus was running at a very high
speed despite the drizzle and the darkness of the highway.
The passengers pleaded for its driver to slow down, but
their plea was ignored. Leticia also revealed that the driver
was smelling of liquor. She could smell him as she was
seated right behind the driver. Another passenger, Felix
Cruz testified that immediately before the collision, the bus
driver was conversing with a co-employee. All these prove
the bus driver's wanton disregard for the physical safety of
his passengers, which make Baliwag as a common carrier
liable for damages under Article 1759 of the Civil Code.
2. ID.; ID.; ID.; ID.; LAND TRANSPORTATION AND
TRAFFIC CODE; SECTION 34(g) THEREOF;
SUBSTANTIALLY COMPLIED WITH IN CASE AT
BAR. Baliwag cannot evade its liability by insisting that
the accident was caused solely by the negligence of A & J
Trading and Julio Recontique. It harps on their alleged non
use of early warning device as testified to by Col. Demetrio
dela Cruz, the station commander of Gapan, Nueva Ecija
who investigated the incident, and Francisco Romano, the
bus conductor. The records do not bear out Baliwag's
contention. Col. dela Cruz and Romano testified that they
did not see any early warning device at the scene of the
accident. They were referring to the triangular reflectorized
plates in red and yellow issued by the Land Transportation
Office. However, the evidence shows that Recontique and

161

Ecala placed a kerosene lamp or torch at the edge of the

road, near the rear portion of the truck to serve as an early
warning device. This substantially complies with Section
34 (g) of the Land Transportation and Traffic Code, to wit:
"(g) lights and reflector when parked or disabled.
Appropriate parking lights or flares visible one hundred
meters away shall be displayed at the corner of the vehicle
whenever such vehicle is parked on highways or in places
that are not well-lighted or, is placed in such manner as to
endanger passing traffic. Furthermore, every motor vehicle
shall be provided at all times with built-in reflectors or
other similar warning devices either pasted, painted or
attached at its front and back which shall likewise be
visible at night at least one hundred meters away. No
vehicle not provided with any of the requirements
mentioned in this subsection shall be registered." Baliwag's
argument that the kerosene lamp or torch does not
substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early
warning device of the triangular reflectorized plates variety
but also parking lights or flares visible one hundred meters
away. Indeed, Col. dela Cruz himself admitted that a
kerosene lamp is an acceptable substitute for the
reflectorized plates. No negligence, therefore, may be
imputed to A & J Trading and its driver, Recontique.
3. ID.; DAMAGES; To PROVE ACTUAL DAMAGES,
THE BEST EVIDENCE AVAILABLE TO THE PARTIES
MUST BE PRESENTED. The propriety of the amount
awarded as hospitalization and medical fees. The award of
P25,000.00 is not supported by the evidence on record.
The Garcias presented receipts marked as Exhibits "B-1 "
to "B-42" but their total amounted only to P5,017.74. To
be sure, Leticia testified as to the extra amount spent for her
medical needs but without more reliable evidence, her lone
testimony cannot justify the award of P25,000.00. To prove
actual damages, the best evidence available to the injured
party must be presented. The court cannot rely on
uncorroborated testimony whose truth is suspect, but must
depend upon competent proof that damages have been
actually suffered. Thus, we reduce the actual damages for
medical and hospitalization expenses to P5,017.74.
4. ID.; ID.; MORAL DAMAGES; RECOVERABLE IF
THE CARRIER THROUGH ITS AGENT, ACTED
FRAUDULENTLY OR IN BAD FAITH. The award of
moral damages is in accord with law. In a breach of
contract of carriage, moral damages are recoverable if the
carrier, through its agent, acted fraudulently or in bad faith.
The evidence shows the gross negligence of the driver of
Baliwag bus which amounted to bad faith. Without doubt,
Leticia and Allan experienced physical suffering, mental
anguish and serious anxiety by reason of the accident.
APPEARANCES OF COUNSEL
Leopoldo C. Sta. Maria for Baliwag Transit, Inc.
Arturo D. Vallar for Sps. Antonio & Leticia Garcia.
Allan A. Leynes for A & J Trading, and Julio Recontique.
DECISION
PUNO, J.:

This is a petition for certiorari to review the Decision[1] of

the Court of Appeals in CA-G.R. CV-31246 awarding
damages in favor of the spouses Antonio and Leticia Garcia
for breach of contract of carriage.[2] filed by the spouses
Garcia questioning the same Court of Appeals' Decision
which reduced their award of damages. On November 13,
1995, we denied their petition for review.
The records show that on July 31, 1980, Leticia Garcia, and
her five-year old son, Allan Garcia, boarded Baliwag
Transit Bus No. 2036 bound for Cabanatuan City driven by
Jaime Santiago. They took the seat behind the driver.
At about 7:30 in the evening, in Malimba, Gapan, Nueva
Ecija, the bus passengers saw a cargo truck parked at the
shoulder of the national highway. Its left rear portion jutted
to the outer lane, the shoulder of the road was too narrow to
accommodate the whole truck. A kerosene lamp appeared
at the edge of the road obviously to serve as a warning
device. The truck driver, Julio Recontique, and his helper,
Arturo Escala, were then replacing a flat tire. The truck is
owned by respondent A & J Trading.
Bus driver Santiago was driving at an inordinately fast
speed and failed to notice the truck and the kerosene lamp
at the edge of the road. Santiago's passengers urged him to
slow down but he paid them no heed. Santiago even
carried animated conversations with his co-employees
while driving. When the danger of collision became
imminent, the bus passengers shouted "Babangga tayo!".
Santiago stepped on the brake, but it was too late. His bus
rammed into the stalled cargo truck. It caused the instant
death of Santiago and Escala, and injury to several others.
Leticia and Allan Garcia were among the injured
passengers.
Leticia suffered a fracture in her pelvis and right leg. They
rushed her to the provincial hospital in Cabanatuan City
where she was given emergency treatment. After three
days, she was transferred to the National Orthopedic
Hospital where she was confined for more than a month.[3]
She underwent an operation for partial hip prosthesis.[4]
Allan, on the other hand, broke a leg. He was also given
emergency treatment at the provincial hospital.
Spouses Antonio and Leticia Garcia sued Baliwag Transit,
Inc., A & J Trading and Julio Recontique for damages in
the Regional Trial Court of Bulacan.[5] Leticia sued as an
injured passenger of Baliwag and as mother of Allan. At
the time of the complaint, Allan was a minor, hence, the
suit initiated by his parents in his favor.
Baliwag, A & J Trading and Recontique disclaimed
responsibility for the mishap. Baliwag alleged that the
accident was caused solely by the fault and negligence of A
& J Trading and its driver, Recontique. Baliwag charged
that Recontigue failed to place an early warning device at
the corner of the disabled cargo truck to warn oncoming
vehicles.[6] On the other hand, A & J Trading and
Recontique alleged that the accident was the result of the

162

negligence and reckless driving of Santiago, bus driver of

Baliwag.[7]
After hearing, the trial court found all the defendants liable,
thus:
xxx

xxx

xxx

"In view thereof, the Court holds that both defendants

should be held liable; the defendant Baliwag Transit, Inc.
for having failed to deliver the plaintiff and her son to their
point of destination safely in violation of plaintiff's and
defendant Baliwag Transit's contractual relation.
The defendant A & J and Julio Recontique for failure to
provide its cargo truck with an early warning device in
violation of the Motor Vehicle Law."[8]
The trial court ordered Baliwag, A & J Trading and
Recontique to pay jointly and severally the Garcia spouses
the following:
(1) P25,000.00 hospitalization and
medication fee, (2) P450,000.00 loss of earnings in eight
(8) years, (3) P2,000.00 for the hospitalization of their son
Allan Garcia, (4) P50,000.00 moral damages, and (5)
P30,000.00 attorney's fee.[9]
On appeal, the Court of Appeals modified the trial court's
Decision by absolving A & J Trading from liability and by
reducing the award of attorney's fees to P10,000.00 and
loss of earnings to P300,000.00, respectively.[10]
Baliwag filed the present petition for review raising the
following issues:
1.
Did the Court of Appeals err in absolving A & J
Trading from liability and holding Baliwag solely liable for
the injuries suffered by Leticia and Allan Garcia in the
accident?
2.
Is the amount of damages awarded by the Court of
Appeals to the Garcia spouses correct?
We affirm the factual findings of the Court of Appeals.
I
As a common carrier, Baliwag breached its contract of
carriage when it failed to deliver its passengers, Leticia and
Allan Garcia to their destination safe and sound. A
common carrier is bound to carry its passengers safely as
far as human care and foresight can provide, using the
utmost diligence of a very cautious person, with due regard
for all the circumstances.[11] 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 as prescribed in Articles 1733 and
1755 of the Civil Code.[12]

The records are bereft of any proof to show that Baliwag

exercised extraordinary diligence. On the contrary, the
evidence demonstrates its driver's recklessness. Leticia
Garcia testified that the bus was running at a very high
speed despite the drizzle and the darkness of the highway.
The passengers pleaded for its driver to slow down, but
their plea was ignored.[13] Leticia also revealed that the
driver was smelling of liquor.[14] She could smell him as
she was seated right behind the driver. Another passenger,
Felix Cruz testified that immediately before the collision,
the bus driver was conversing with a co-employee.[15] All
these prove the bus driver's wanton disregard for the
physical safety of his passengers, which makes Baliwag as
a common carrier liable for damages under Article 1759 of
the Civil Code:
Art. 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or willfull
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 do not cease upon
proof that they exercised all the diligence of a good father
of a family in the selection or supervision of their
employees.
Baliwag cannot evade its liability by insisting that the
accident was caused solely by the negligence of A & J
Trading and Julio Recontique. It harps on their alleged non
use of an early warning device as testified to by Col.
Demetrio dela Cruz, the station commander of Gapan,
Nueva Ecija who investigated the incident, and Francisco
Romano, the bus conductor.
The records do not bear out Baliwag's contention. Col.
dela Cruz and Romano testified that they did not see any
early warning device at the scene of the accident.[16] They
were referring to the triangular reflectorized plates in red
and yellow issued by the Land Transportation Office.
However, the evidence shows that Recontique and Ecala
placed a kerosene lamp or torch at the edge of the road,
near the rear portion of the truck to serve as an early
warning device.[17] This substantially complies with
Section 34 (g) of the Land Transportation and Traffic Code,
to wit:
(g) Lights and reflector when parked or disabled.
Appropriate parking lights or flares visible one hundred
meters away shall be displayed at the corner of the vehicle
whenever such vehicle is parked on highways or in places
that are not well-lighted or, is placed in such manner as to
endanger passing traffic. Furthermore, every motor vehicle
shall be provided at all times with built-in reflectors or
other similar warning devices either pasted, painted or
attached at its front and back which shall likewise be
visible at night at least one hundred meters away. No
vehicle not provided with any of the requirements
mentioned in this subsection shall be registered. (Italics
supplied)

163

Baliwag's argument that the kerosene lamp or torch does

not substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early
warning device of the triangular reflectorized plates variety
but also parking lights or flares visible one hundred meters
away. Indeed, Col. dela Cruz himself admitted that a
kerosene lamp is an acceptable substitute for the
reflectorized plates.[18] No negligence, therefore, may be
imputed to A & J Trading and its driver, Recontique.

many people surrounding the place (TSN, Aug, 22, 1989, p.

13). He further admitted that there exists a probability that
the lights of the truck may have been smashed by the bus at
the time of the accident considering the location of the
truck where its rear portion was connected with the front
portion of the bus (TSN, March 29, 1985, pp. 11-13).
Investigator's testimony therefore did not confirm nor deny
the existence of such warning device, making his testimony
of little probative value.[19]
II

Anent this factual issue, the analysis of evidence made by

the Court of Appeals deserves our concurrence, viz:
xxx

xxx

xxx

In the case at bar, both the injured passengers of the

Baliwag involved in the accident testified that they saw
some sort of kerosene or a torch on the rear portion of the
truck before the accident. Baliwag Transit's conductor
attempted to defeat such testimony by declaring that he
noticed no early warning device in front of the truck.
Among the testimonies offered by the witnesses who were
present at the scene of the accident, we rule to uphold the
affirmative testimonies given by the two injured passengers
and give less credence to the testimony of the bus
conductor who solely testified that no such early warning
device exists.
The testimonies of injured passengers who may well be
considered as disinterested witness appear to be natural and
more probable than the testimony given by Francisco
Romano who is undoubtedly interested in the outcome of
the case, being the conductor of the defendant-appellant
Baliwag Transit Inc.
It must be borne in mind that the situation then prevailing
at the time of the accident was admittedly drizzly and all
dark. This being so, it would be improbable and perhaps
impossible on the part of the truck helper without the torch
nor the kerosene to remove the flat tires of the truck.
Moreover, witness including the bits conductor himself
admitted that the passengers shouted, that they are going to
bump before the collision which consequently caused the
bus driver to apply the brake 3 to 4 meters away from the
truck. Again, without the kerosene nor the torch in front of
the truck, it would be improbable for the driver, more so the
passengers to notice the truck to be bumped by the bus
considering the darkness of the place at the time of the
accident.
xxx
x

We now review the amount of damages awarded to the

Garcia spouses.

xxx

xx

While it is true that the investigating officer testified that he

found no early warning device at the time of his
investigation, We rule to give less credence to such
testimony insofar as he himself admitted on cross
examination that he did not notice the presence of any
kerosene lamp at the back of the truck because when he
arrived at the scene of the accident, there were already

First, the propriety of the amount awarded as

hospitalization and medical fees. The award of P25,000.00
is not supported by the evidence on record. The Garcias
presented receipts marked as Exhibits B-1 to B 42 but
their total amounted only to P5,017.74. To be sure, Leticia
testified as to the extra amount spent for her medical needs
but without more reliable evidence, her lone testimony
cannot justify the award of P25,000.00. To prove actual
damages, the best evidence available to the injured party
must be presented.
The court cannot rely on
uncorroborated testimony whose truth is suspect, but must
depend upon competent proof that damages have been
actually suffered[20] Thus, we reduce the actual damages
for medical and hospitalization expenses to P5,017.74.
Second, we find as reasonable the award of P300,000.00
representing Leticia's lost earnings. Before the accident,
Leticia was engaged in embroidery, earning P5,000.00 per
month.[21] Her injuries forced her to stop working.
Considering the nature and extent of her injuries and the
length of time it would take her to recover,[22] we find it
proper that Baliwag should compensate her lost income for
five (5) years.[23]
Third, the award of moral damages is in accord with law.
In a breach of contract of carriage, moral damages are
recoverable if the carrier, through its agent, acted
fraudulently or in bad faith.[24] The evidence shows the
gross negligence of the driver of Baliwag bus which
amounted to bad faith. Without doubt, Leticia and Allan
experienced physical suffering, mental anguish and serious
anxiety by reason of the accident. Leticia underwent an
operation to replace her broken hip bone with a metal plate.
She was confined at the National Orthopedic Hospital for
45 days. The young Allan was also confined in the hospital
for his foot injury. Contrary to the contention of Baliwag,
the decision of the trial court as affirmed by the Court of
Appeals awarded moral damages to Antonio and Leticia
Garcia not in their capacity as parents of Allan. Leticia was
given moral damages as an injured party. Allan was also
granted moral damages as an injured party but because of
his minority, the award in his favor has to be given to his
father who represented him in the suit.
Finally, we find the award of attorney's fees justified. The
complaint for damages was instituted by the Garcia spouses
on December 15, 1982, following the unjustified refusal of

164

Baliwag to settle their claim.

The Decision was
promulgated by the trial court only on January 29, 1991 or
about nine years later. Numerous pleadings were filed
before the trial court, the appellate court and to this Court.
Given the complexity of the case and the amount of
damages involved,[25] the award of attorney's fee for
P10,000.00 is just and reasonable.
IN VIEW WHEREOF, the Decision of the respondent
Court of Appeals in CA-G.R. CV-31246 is AFFIRMED
with the MODIFICATION reducing the actual damages for
hospitalization and medical fees to P5,017.74. No costs.
SO ORDERED.
Fabre v. CA
July 26,1996
[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. LOPEZ, JULIUS
CAESAR GARCIA, ROSARIO MA. V. ORTIZ,
MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO
MARA-MARA, TERESITA REGALA, MELINDA
TORRES,
MARELLA
MIJARES,
JOSEFA
CABATINGAN, MARA NADOC, DIANE MAYO, TESS
PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ,
LIZA MAYO, CARLOS RANARIO, ROSAMARIA T.
RADOC and BERNADETTE FERRER, respondents.
DECISION
MENDOZA, J.:
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. Scholasticas 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 oclock 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 oclock in the evening. Petitioner Porfirio Cabil
drove the minibus.
The usual route to Caba, La Union was through Carmen,
Pangasinan. However, the bridge at Carmen was under
repair, so that petitioner Cabil, who was unfamiliar with the
area (it being his first trip to La Union), was forced to take
a detour through the town of Ba-ay in Lingayen,
Pangasinan. At 11:30 that night, petitioner Cabil came
upon a sharp curve on the highway, running on a south to
east direction, which he described as siete. The road was
slippery because it was raining, causing the bus, which was
running at the speed of 50 kilometers per hour, to skid to
the left road shoulder. The bus hit the left traffic steel brace
and sign along the road and rammed the fence of one Jesus
Escano, then turned over and landed on its left side, coming
to a full stop only after a series of impacts. The bus came
to rest off the road. A coconut tree which it had hit fell on
it and smashed its front portion.
Several passengers were injured. Private respondent
Amyline Antonio was thrown on the floor of the bus and
pinned down by a wooden seat which came off after being
unscrewed. It took three persons to safely remove her from
this position. She was in great pain and could not move.
The driver, petitioner Cabil, claimed he did not see the
curve until it was too late. He said he was not familiar with
the area and he could not have seen the curve despite the
care he took in driving the bus, because it was dark and
there was no sign on the road. He said that he saw the
curve when he was already within 15 to 30 meters of it. He
allegedly slowed down to 30 kilometers per hour, but it was
too late.
The Lingayen police investigated the incident the next day,
November 3, 1984. On the basis of their finding they filed
a criminal complaint against the driver, Porfirio Cabil. The
case was later filed with the Lingayen Regional Trial Court.
Petitioners Fabre paid Jesus Escano P1,500.00 for the
damage to the latters fence. On the basis of Escanos
affidavit of desistance the case against petitioners Fabre
was dismissed.
Amyline Antonio, who was seriously injured, brought this
case in the RTC of Makati, Metro Manila. As a result of
the accident, she is now suffering from paraplegia and is
permanently paralyzed from the waist down. During the
trial she described the operations she underwent and
adduced evidence regarding the cost of her treatment and
therapy. Immediately after the accident, she was taken to
the Nazareth Hospital in Ba-ay, Lingayen. As this hospital
was not adequately equipped, she was transferred to the
Sto. Nio Hospital, also in the town of Ba-ay, where she
was given sedatives. An x-ray was taken and the damage to

165

her spine was determined to be too severe to be treated

there. She was therefore brought to Manila, first to the
Philippine General Hospital and later to the Makati Medical
Center where she underwent an operation to correct the
dislocation of her spine.
In its decision dated April 17, 1989, the trial court found
that:
No convincing evidence was shown that the minibus was
properly checked for travel to a long distance trip and that
the driver was properly screened and tested before being
admitted for employment.
Indeed, all the evidence
presented have shown the negligent act of the defendants
which ultimately resulted to the accident subject of this
case.
Accordingly, it gave judgment for private respondents
holding:
Considering that plaintiffs Word for the World Christian
Fellowship, Inc. and Ms. Amyline Antonio were the only
ones who adduced evidence in support of their claim for
damages, the Court is therefore not in a position to award
damages to the other plaintiffs.

5) P10,000.00 as attorneys fees; and

6) Costs of suit.
The Court of Appeals sustained the trial courts finding that
petitioner Cabil failed to exercise due care and precaution
in the operation of his vehicle considering the time and the
place of the accident. The Court of Appeals held that the
Fabres were themselves presumptively negligent. Hence,
this petition. Petitioners raise the following issues:
I.
WHETHER OR NOT PETITIONERS WERE
NEGLIGENT.
II. WHETHER OR NOT PETITIONERS WERE LIABLE
FOR THE INJURIES SUFFERED BY PRIVATE
RESPONDENTS.
III. WHETHER OR NOT DAMAGES CAN BE
AWARDED AND IN THE POSITIVE, UP TO WHAT
EXTENT.

1) P93,657.11 as compensatory and actual damages;

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 Antonios
earnings, is without factual basis as there is no assurance
that she would be regularly earning these amounts.

2) P500,000.00 as the reasonable amount of loss of earning

capacity of plaintiff Amyline Antonio;

With the exception of the award of damages, the petition is

devoid of merit.

3) P20,000.00 as moral damages;

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.

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:

4) P20,000.00 as exemplary damages; and

5) 25% of the recoverable amount as attorneys fees;
6) Costs of suit.
SO ORDERED.
The Court of Appeals affirmed the decision of the trial
court with respect to Amyline Antonio but dismissed it with
respect to the other plaintiffs on the ground that they failed
to prove their respective claims. The Court of Appeals
modified the award of damages as follows:
1) P93,657.11 as actual damages;
2) P600,000.00 as compensatory damages;
3) P50,000.00 as moral damages;
4) P20,000.00 as exemplary damages;

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

166

meters ahead.[3] By then it was too late for him to avoid

falling off the road. Given the conditions of the road and
considering that the trip was Cabils first one outside of
Manila, Cabil should have driven his vehicle at a moderate
speed. There is testimony[4] that the vehicles passing on
that portion of the road should only be running 20
kilometers per hour, so that at 50 kilometers per hour, Cabil
was running at a very high speed.

by the negligence either of the locomotive engineer or the

automobile driver.[9]

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.

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.

Pursuant to Arts. 2176 and 2180 of the Civil Code his

negligence gave rise to the presumption that his employers,
the Fabres, were themselves negligent in the selection and
supervision of their employee.
Due diligence in selection of employees is not satisfied by
finding that the applicant possessed a professional drivers
license. The employer should also examine the applicant
for his qualifications, experience and record of service.[5]
Due diligence in supervision, on the other hand, requires
the formulation of rules and regulations for the guidance of
employees and the issuance of proper instructions as well
as actual implementation and monitoring of consistent
compliance with the rules.[6]
In the case at bar, the Fabres, in allowing Cabil to drive the
bus to La Union, apparently did not consider the fact that
Cabil had been driving for school children only, from their
homes to the St. Scholasticas College in Metro Manila.[7]
They had hired him only after a two-week apprenticeship.
They had tested him for certain matters, such as whether he
could remember the names of the children he would be
taking to school, which were irrelevant to his qualification
to drive on a long distance travel, especially considering
that the trip to La Union was his first. The existence of
hiring procedures and supervisory policies cannot be
casually invoked to overturn the presumption of negligence
on the part of an employer.[8]
Petitioners argue that they are not liable because (1) an
earlier departure (made impossible by the congregations
delayed meeting) could have averted the mishap and (2)
under the contract, the WWCF was directly responsible for
the conduct of the trip. Neither of these contentions hold
water. The hour of departure had not been fixed. Even if it
had been, the delay did not bear directly on the cause of the
accident. With respect to the second contention, it was held
in an early case that:
[A] person who hires a public automobile and gives the
driver directions as to the place to which he wishes to be
conveyed, but exercises no other control over the conduct
of the driver, is not responsible for acts of negligence of the
latter or prevented from recovering for injuries suffered
from a collision between the automobile and a train, caused

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]

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 bound 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 exercised 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 wilful acts of the
formers employees, although such employees may have
acted beyond the scope of their authority or in violation of
the orders of the common carriers.
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 finding 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

167

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
Cabils gross negligence amounted to bad faith.[12]
Amyline Antonios testimony, as well as the testimonies of
her father and co-passengers, 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 attorneys 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 attorneys 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, in
Bachelor 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:

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 in
Gutierrez vs. Gutierrez, 56 Phil. 177, that in 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 the carrier in case of breach of the
contract of carriage. The rationale behind this is readily
discernible. Firstly, the contract of carriage is between the
carrier and the passenger, and in the event of contractual
liability, the carrier is exclusively responsible therefore to
the passenger, even if such breach be due to the negligence
of his driver (see Viluan v. The Court of Appeals, et al.,
G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742) . . .
[22]
As in the case of BLTB, private respondents in this case
and her co-plaintiffs 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 the award of
damages. Petitioners are ORDERED to PAY jointly and
severally the private respondent Amyline Antonio the
following amounts:
1) P93,657.11 as actual damages;
2) P500,000.00 as the reasonable amount of loss of earning
capacity of plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;

168

4) P20,000.00 as exemplary damages;

5) 25% of the recoverable amount as attorneys fees; and

compensatory damages, P40,000.00 for hospital and

medical expenses, P18,270.00 for burial expenses plus such
amounts as may be fixed by the trial court for exemplary
damages and attorneys fees.

6) costs of suit.
SO ORDERED.
Mallari v. CA
Jan 31,2000
[G.R. No. 128607. January 31, 2000]
ALFREDO MALLARI SR. and ALFREDO MALLARI
JR., petitioners, vs. COURT OF APPEALS and
BULLETIN PUBLISHING CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
ALFREDO MALLARI SR. and ALFREDO MALLARI
JR. in this petition for review on certiorari seek to set aside
the Decision of the Court of Appeals[1] which reversed the
court a quo and adjudged petitioners to be liable for
damages due to negligence as a common carrier resulting in
the death of a passenger.
On 14 October 1987, at about 5:00 o'clock in the morning,
the passenger jeepney driven by petitioner Alfredo Mallari
Jr. and owned by his co-petitioner Alfredo Mallari Sr.
collided with the delivery van of respondent Bulletin
Publishing Corp. (BULLETIN, for brevity) along the
National Highway in Barangay San Pablo, Dinalupihan,
Bataan. Petitioner Mallari Jr. testified that he went to the
left lane of the highway and overtook a Fiera which had
stopped on the right lane. Before he passed by the Fiera, he
saw the van of respondent BULLETIN coming from the
opposite direction. It was driven by one Felix Angeles. The
sketch of the accident showed that the collision occurred
after Mallari Jr. overtook the Fiera while negotiating a
curve in the highway. The points of collision were the left
rear portion of the passenger jeepney and the left front side
of the delivery van of BULLETIN. The two (2) right
wheels of the delivery van were on the right shoulder of the
road and pieces of debris from the accident were found
scattered along the shoulder of the road up to a certain
portion of the lane travelled by the passenger jeepney. The
impact caused the jeepney to turn around and fall on its left
side resulting in injuries to its passengers one of whom was
Israel Reyes who eventually died due to the gravity of his
injuries. Manikan
On 16 December 1987 Claudia G. Reyes, the widow of
Israel M. Reyes, filed a complaint for damages with the
Regional Trial Court of Olongapo City against Alfredo
Mallari Sr. and Alfredo Mallari Jr., and also against
BULLETIN, its driver Felix Angeles, and the N.V.
Netherlands Insurance Company. The complaint alleged
that the collision which resulted in the death of Israel Reyes
was caused by the fault and negligence of both drivers of
the passenger jeepney and the Bulletin Isuzu delivery van.
The complaint also prayed that the defendants be ordered
jointly and severally to pay plaintiff P1,006,777.40 in

The trial court found that the proximate cause of the

collision was the negligence of Felix Angeles, driver of the
Bulletin delivery van, considering the fact that the left front
portion of the delivery truck driven by Felix Angeles hit
and bumped the left rear portion of the passenger jeepney
driven by Alfredo Mallari Jr. Hence, the trial court ordered
BULLETIN and Felix Angeles to pay jointly and severally
Claudia G. Reyes, widow of the deceased victim, the sums
of P42,106.93 for medical expenses; P8,600.00 for funeral
and burial expenses; P1,006,777.40 for loss of earning
capacity; P5,000.00 for moral damages and P10,000.00 for
attorneys fees. The trial court also ordered N.V.
Netherlands Insurance Company to indemnify Claudia G.
Reyes P12,000.00 as death indemnity and P2,500.00 for
funeral expenses which when paid should be deducted from
the liabilities of respondent BULLETIN and its driver Felix
Angeles to the plaintiff. It also dismissed the complaint
against the other defendants Alfredo Mallari Sr. and
Alfredo Mallari Jr.
On appeal the Court of Appeals modified the decision of
the trial court and found no negligence on the part of
Angeles and consequently of his employer, respondent
BULLETIN. Instead, the appellate court ruled that the
collision was caused by the sole negligence of petitioner
Alfredo Mallari Jr. who admitted that immediately before
the collision and after he rounded a curve on the highway,
he overtook a Fiera which had stopped on his lane and that
he had seen the van driven by Angeles before overtaking
the Fiera. The Court of Appeals ordered petitioners Mallari
Jr. and Mallari Sr. to compensate Claudia G. Reyes
P1,006,777.50 for loss of earning capacity, P50,000.00 as
indemnity for death and P10,000.00 for attorneys fees. It
absolved from any liability respondent BULLETIN, Felix
Angeles and N.V. Netherlands Insurance Company. Hence
this petition. Oldmis o
Petitioners contend that there is no evidence to show that
petitioner Mallari Jr. overtook a vehicle at a curve on the
road at the time of the accident and that the testimony of
Angeles on the overtaking made by Mallari Jr. was not
credible and unreliable. Petitioner also submits that the trial
court was in a better position than the Court of Appeals to
assess the evidence and observe the witnesses as well as
determine their credibility; hence, its finding that the
proximate cause of the collision was the negligence of
respondent Angeles, driver of the delivery van owned by
respondent BULLETIN, should be given more weight and
consideration.
We cannot sustain petitioners. Contrary to their allegation
that there was no evidence whatsoever that petitioner
Mallari Jr. overtook a vehicle at a curve on the road at the
time of or before the accident, the same petitioner himself
testified that such fact indeed did occur Q:.......And what was that accident all about?

169

A:.......Well, what happened, sir, is that at about that time

5:00 oclock in that morning of October 14 while I was
negotiating on the highway at San Pablo, Dinalupihan,
Bataan, I was then following a blue Ford Fierra and my
distance behind was about twenty (20) feet and then I
passed that blue Ford Fierra. I overtook and when I was
almost on the right lane of the highway towards Olongapo
City there was an oncoming delivery van of the Bulletin
Publishing Corporation which bumped the left rear portion
of the jeepney which I was driving and as a result of which
the jeepney x x x turned around and fell on its left side and
as a result of which some of my passengers including me
were injured, sir x x x x
Q:.......Before you overtook the Ford Fierra jeepney did you
look x x x whether there was any vehicle coming towards
you?
A:.......Yes, sir.
Q:.......Did you see the Bulletin van or the Press van
coming towards you?
A:.......Yes, sir.
Q:.......At the moment the Ford Fierra xxx stop(ped) and in
overtaking the Fierra, did you not have an option to stop
and not to overtake the Ford Fierra?
A:.......Well, at the time when the Ford Fierra stopped in
front of me I slowed down with the intention of applying
the brake, however, when I saw the oncoming vehicle
which is the Press van is very far x x x which is 100 feet
distance, x x x it is sufficient to overtake the Ford Fierra so
I overt(ook) it x x x x
Q:.......You said that you took into consideration the speed
of the oncoming Press van but you also could not estimate
the speed of the press van because it was dark at that time,
which of these statements are true? Ncm
A:.......What I wanted to say, I took into consideration the
speed of the oncoming vehicle, the Press van, although at
the moment I could not estimate the speed of the oncoming
vehicle x x x x[2]
The Court of Appeals correctly found, based on the sketch
and spot report of the police authorities which were not
disputed by petitioners, that the collision occurred
immediately after petitioner Mallari Jr. overtook a vehicle
in front of it while traversing a curve on the highway.[3]
This act of overtaking was in clear violation of Sec. 41,
pars. (a) and (b), of RA 4136 as amended, otherwise known
as The Land Transportation and Traffic Code which
provides:
Sec. 41. Restrictions on overtaking and passing. - (a) The
driver of a vehicle shall not drive to the left side of the
center line of a highway in overtaking or passing another
vehicle proceeding in the same direction, unless such left
side is clearly visible and is free of oncoming traffic for a

sufficient distance ahead to permit such overtaking or

passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass
another vehicle proceeding in the same direction when
approaching the crest of a grade, nor upon a curve in the
highway, where the drivers view along the highway is
obstructed within a distance of five hundred feet ahead
except on a highway having two or more lanes for
movement of traffic in one direction where the driver of a
vehicle may overtake or pass another vehicle:
Provided That on a highway, within a business or
residential district, having two or more lanes for movement
of traffic in one direction, the driver of a vehicle may
overtake or pass another vehicle on the right.
The rule is settled that a driver abandoning his proper lane
for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and
not to proceed if he cannot do so in safety.[4] When a
motor vehicle is approaching or rounding a curve, there is
special necessity for keeping to the right side of the road
and the driver does not have the right to drive on the left
hand side relying upon having time to turn to the right if a
car approaching from the opposite direction comes into
view.[5] Ncmmis
In the instant case, by his own admission, petitioner Mallari
Jr. already saw that the BULLETIN delivery van was
coming from the opposite direction and failing to consider
the speed thereof since it was still dark at 5:00 o'clock in
the morning mindlessly occupied the left lane and overtook
two (2) vehicles in front of it at a curve in the highway.
Clearly, the proximate cause of the collision resulting in the
death of Israel Reyes, a passenger of the jeepney, was the
sole negligence of the driver of the passenger jeepney,
petitioner Alfredo Mallari Jr., who recklessly operated and
drove his jeepney in a lane where overtaking was not
allowed by traffic rules. Under Art. 2185 of the Civil Code,
unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the
time of the mishap he was violating a traffic regulation. As
found by the appellate court, petitioners failed to present
satisfactory evidence to overcome this legal presumption.
The negligence and recklessness of the driver of the
passenger jeepney is binding against petitioner Mallari Sr.,
who admittedly was the owner of the passenger jeepney
engaged as a common carrier, considering the fact that in
an action based on 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 for the payment
of damages sought by the passenger. Under Art. 1755 of the
Civil Code, 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. Moreover, under
Art. 1756 of the Civil Code, in case of death or injuries to
passengers, a common carrier is presumed to have been at
fault or to have acted negligently, unless it proves that it
observed extraordinary diligence. Further, pursuant to Art.

170

1759 of the same Code, it is liable for the death of or

injuries to passengers through the negligence or willful acts
of the formers employees. This liability of the common
carrier does not cease upon proof that it exercised all the
diligence of a good father of a family in the selection of its
employees. Clearly, by the contract of carriage, the carrier
jeepney owned by Mallari Sr. assumed the express
obligation to transport the passengers to their destination
safely and to observe extraordinary diligence with due
regard for all the circumstances, and any injury or death
that might be suffered by its passengers is right away
attributable to the fault or negligence of the carrier. Scnc
m
The monetary award ordered by the appellate court to be
paid by petitioners to the widow of the deceased passenger
Israel M. Reyes of P1,006,777.50 for loss of earning
capacity, P50,000.00 as civil indemnity for death, and
P10,000.00 for attorneys fees, all of which were not
disputed by petitioners, is a factual matter binding and
conclusive upon this Court.
WHEREFORE, the Petition is DENIED and the Decision
of the Court of Appeals dated 20 September 1995 reversing
the decision of the trial court being in accord with law and
evidence is AFFIRMED. Consequently, petitioners are
ordered jointly and severally to pay Claudia G. Reyes
P1,006,777.50 for loss of earning capacity, P50,000.00 as
civil indemnity for death, and P10,000.00 for attorneys
fees. Costs against petitioners.
SO ORDERED.

H
1762

Contributory Negligence of Pax

1761;

Cangco v. MRR
Oct 14,1918
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

171

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.

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 of respondeat 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 extracontractual 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

Upon this point the Court said:

172

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 extra-contractual 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 extracontractual 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 non-contractual 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 well-defined
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

173

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.

174

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.

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.

The true explanation of such cases is to be found by

directing the attention to the relative spheres of contractual
and extra-contractual obligations. The field of noncontractual 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 extra-contractual 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 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.)

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

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:

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

175

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 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.
Arellano, C.J., Torres, Street and Avancea, JJ., concur.
Del Prado v. MRR Mar 7, 1929
G.R. No. L-29462
March 7, 1929

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, 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

IGNACIO DEL PRADO, plaintiff-appellee,

176

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.

177

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.
Malcolm, Villamor, Ostrand, Romualdez and Villa-Real,
JJ., concur.
Brias v. People Nov 25,1983
G.R. No. L-30309 November 25, 1983
CLEMENTE BRIAS, petitioner,
vs.
THE PEOPLE OF THE PHILIPPINES and HONORABLE
COURT OF APPEALS, respondents.
Mariano R. Abad for petitioner.
The Solicitor General for respondents.

GUTIERREZ, JR., J.:

This is a petition to review the decision of respondent Court
of Appeals, now Intermediate Appellate Court, affirming
the decision of the Court of First Instance of Quezon, Ninth
Judicial District, Branch 1, which found the accused
Clemente Brias guilty of the crime of DOUBLE
HOMICIDE THRU RECKLESS IMPRUDENCE prior the
deaths of Martina Bool and Emelita Gesmundo.
The information charged the accused-appellant. and others
as follows:
That on or about the 6th day of January, 1957, in the
Municipality of Tiaong, Province of Quezon, Philippines,
and within the jurisdiction of this Hon. Court, the said
accused Victor Milan, Clemente Brias and Hermogenes
Buencamino, being then persons in charge of passenger
Train No. 522-6 of the Manila Railroad Company, then
running from Tagkawayan to San Pablo City, as engine
driver, conductor and assistant conductor, respectively,
wilfully and unlawfully drove and operated the same in a
negligent, careless and imprudent manner, without due
regard to existing laws, regulations and ordinances, that

although there were passengers on board the passenger

coach, they failed to provide lamps or lights therein, and
failed to take the necessary precautions for the safety of
passengers and to prevent accident to persons and damage
to property, causing by such negligence, carelessness and
imprudence, that when said passenger Train No. 522-6 was
passing the railroad tracks in the Municipality of Tiaong,
Quezon, two of its passengers, Martina Bool, an old
woman, and Emelita Gesmundo, a child about three years
of age, fell from the passenger coach of the said train, as a
result of which, they were over run, causing their
instantaneous death. "
The facts established by the prosecution and accepted by
the respondent court as basis for the decision are
summarized as follows:
The evidence of the prosecution tends to show that in the
afternoon of January 6, 1957, Juanito Gesmundo bought a
train ticket at the railroad station in Tagkawayan, Quezon
for his 55-year old mother Martina Bool and his 3-year old
daughter Emelita Gesmundo, who were bound for Barrio
Lusacan, Tiaong, same province. At about 2:00 p.m., Train
No. 522 left Tagkawayan with the old woman and her
granddaughter among the passengers. At Hondagua the
train's complement were relieved, with Victor Millan taking
over as engineman, Clemente Brias as conductor, and
Hermogenes Buencamino as assistant conductor. Upon
approaching Barrio Lagalag in Tiaong at about 8:00 p.m. of
that same night, the train slowed down and the conductor
shouted 'Lusacan', 'Lusacan'. Thereupon, the old woman
walked towards the left front door facing the direction of
Tiaong, carrying the child with one hand and holding her
baggage with the other. When Martina and Emelita were
near the door, the train suddenly picked up speed. As a
result the old woman and the child stumbled and they were
seen no more. It took three minutes more before the train
stopped at the next barrio, Lusacan, and the victims were
not among the passengers who disembarked thereat .t.
hqw
Next morning, the Tiaong police received a report that two
corpses were found along the railroad tracks at Barrio
Lagalag. Repairing to the scene to investigate, they found
the lifeless body of a female child, about 2 feet from the
railroad tracks, sprawled to the ground with her belly down,
the hand resting on the forehead, and with the back portion
of the head crushed. The investigators also found the corpse
of an old woman about 2 feet away from the railroad tracks
with the head and both legs severed and the left hand
missing. The head was located farther west between the
rails. An arm was found midway from the body of the child
to the body of the old woman. Blood, pieces of scattered
brain and pieces of clothes were at the scene. Later, the
bodies were Identified as those of Martina Bool and
Emelita Gesmundo. Among the personal effects found on
Martina was a train ticket (Exhibits "B").
On January 7, 1957, the bodies of the deceased were
autopsied by Dr. Pastor Huertas, the Municipal Health
Officer of Tiaong. Dr. Huertas testified on the cause of
death of the victims as follows: t.hqw

178

FISCAL YNGENTE:
Q What could have caused the death of those women?
A

Shock.

Q What could have caused that shock?

A

Traumatic injury.

What could have caused traumatic injury?

The running over by the wheel of the train.

Q
With those injuries, has a person a chance to
survive?

hereby acquits them of the crime charged in the

information and their bail bonds declared cancelled.
As to the responsibility of the Manila Railroad Company in
this case, this will be the subject of court determination in
another proceeding.
On appeal, the respondent Court of Appeals affirmed the
judgment of the lower court.
During the pendency of the criminal prosecution in the
Court of First Instance of Quezon, the heirs of the deceased
victims filed with the same court, a separate civil action for
damages against the Manila Railroad Company entitled
"Civil Case No. 5978, Manaleyo Gesmundo, et al., v.
Manila Railroad Company". The separate civil action was
filed for the recovery of P30,350.00 from the Manila
Railroad Company as damages resulting from the accident.

A No chance to survive.
Q

What would you say death would come?

The accused-appellant alleges that the Court of Appeals

made the following errors in its decision:

Instantaneous.

I t.hqw

Q
How about the girl, the young girl about four
years old, what could have caused the death?
A

Shock too.

What could have caused the shock?

THE HONORABLE COURT OF APPEALS ERRED IN

CONVICTING PETITIONER-APPELLANT UNDER
THE FACTS AS FOUND BY SAID COURT; and
II t.hqw

A
Compound fracture of the skull and going out of
the brain.
Q
What could have caused the fracture of the skull
and the going out of the brain?
A
That is the impact against a steel object. (TSN.,
pp. 81-82, July 1, 1959)
The Court of First Instance of Quezon convicted defendantappellant Clemente Brias for double homicide thru
reckless
imprudence
but
acquitted
Hermogenes
Buencamino and Victor Millan The dispositive portion of
the decision reads: t.hqw
WHEREFORE, the court finds the defendant Clemente
Brias guilty beyond doubt of the crime of double
homicide thru reckless imprudence, defined and punished
under Article 305 in connection with Article 249 of the
Revised Penal Code, and sentences him to suffer six (6)
months and one (1) day of prision correccional to
indemnify the heirs of the deceased Martina Bool and
Emelita Gesmundo in the amounts of P6,000 and P3,000,
respectively, with subsidiary imprisonment in case of
insolvency not to exceed one-third of the principal penalty,
and to pay the costs.
For lack of sufficient evidence against the defendant
Hermogenes Buencamino and on the ground of reasonable
doubt in the case of defendant Victor Millan the court

THE HONORABLE COURT OF APPEALS ERRED IN

INCLUDING THE PAYMENT OF DEATH INDEMNITY
BY THE
PETITIONERAPPELLANT,
WITH
SUBSIDIARY IMPRISONMENT IN CASE OF
INSOLVENCY, AFTER THE HEIRS OF THE
DECEASED HAVE ALREADY COMMENCED A
SEPARATE CIVIL ACTION FOR DAMAGES AGAINST
THE RAILROAD COMPANY ARISING FROM THE
SAME MISHAP.
We see no error in the factual findings of the respondent
court and in the conclusion drawn from those findings.
It is undisputed that the victims were on board the second
coach where the petitioner-appellant was assigned as
conductor and that when the train slackened its speed and
the conductor shouted "Lusacan, Lusacan", they stood up
and proceeded to the nearest exit. It is also undisputed that
the train unexpectedly resumed its regular speed and as a
result "the old woman and the child stumbled and they
were seen no more.
In finding petitioner-appellant negligent, respondent Court
t.hqw
xxx

xxx

xxx

The appellant's announcement was premature and

erroneous, for it took a full three minutes more before the
next barrio of Lusacan was reached. In making the
erroneous and premature announcement, appellant was
negligent. He ought to have known that train passengers

179

invariably prepare to alight upon notice from the conductor

that the destination was reached and that the train was
about to stop. Upon the facts, it was the appellant's
negligent act which led the victims to the door. Said acts
virtually exposed the victims to peril, for had not the
appellant mistakenly made the announcement, the victims
would be safely ensconced in their seats when the train
jerked while picking up speed, Although it might be argued
that the negligent act of the appellant was not the
immediate cause of, or the cause nearest in time to, the
injury, for the train jerked before the victims stumbled, yet
in legal contemplation appellant's negligent act was the
proximate cause of the injury. As this Court held in Tucker
v. Milan, CA G.R. No. 7059-R, June 3, 1953: 'The
proximate cause of the injury is not necessarily the
immediate cause of, or the cause nearest in time to, the
injury. It is only when the causes are independent of each
other that the nearest is to be charged with the disaster. So
long as there is a natural, direct and continuous sequence
between the negligent act the injury (sic) that it can
reasonably be said that but for the act the injury could not
have occurred, such negligent act is the proximate cause of
the injury, and whoever is responsible therefore is liable for
damages resulting therefrom. One who negligently creates
a dangerous condition cannot escape liability for the natural
and probable consequences thereof, although the act of a
third person, or an act of God for which he is not
responsible intervenes to precipitate the loss.
xxx

xxx

xxx

It is a matter of common knowledge and experience about

common carriers like trains and buses that before reaching
a station or flagstop they slow down and the conductor
announces the name of the place. It is also a matter of
common experience that as the train or bus slackens its
speed, some passengers usually stand and proceed to the
nearest exit, ready to disembark as the train or bus comes to
a full stop. This is especially true of a train because
passengers feel that if the train resumes its run before they
are able to disembark, there is no way to stop it as a bus
may be stopped.
It was negligence on the conductor's part to announce the
next flag stop when said stop was still a full three minutes
ahead. As the respondent Court of Appeals correctly
observed, "the appellant's announcement was premature
and erroneous.
That the announcement was premature and erroneous is
shown by the fact that immediately after the train slowed
down, it unexpectedly accelerated to full speed. Petitionerappellant failed to show any reason why the train suddenly
resumed its regular speed. The announcement was made
while the train was still in Barrio Lagalag.
The proximate cause of the death of the victims was the
premature and erroneous announcement of petitioner'
appelant Brias. This announcement prompted the victims
to stand and proceed to the nearest exit. Without said
announcement, the victims would have been safely seated
in their respective seats when the train jerked as it picked

up speed. The connection between the premature and

erroneous announcement of petitioner-appellant and the
deaths of the victims is direct and natural, unbroken by any
intervening efficient causes.
Petitioner-appellant also argues that it was negligence per
se for Martina Bool to go to the door of the coach while the
train was still in motion and that it was this negligence that
was the proximate cause of their deaths.
We have carefully examined the records and we agree with
the respondent court that the negligence of petitionerappellant in prematurely and erroneously announcing the
next flag stop was the proximate cause of the deaths of
Martina Bool and Emelita Gesmundo. Any negligence of
the victims was at most contributory and does not exculpate
the accused from criminal liability.
With respect to the second assignment of error, the
petitioner argues that after the heirs of Martina Bool and
Emelita Gesmundo had actually commenced the separate
civil action for damages in the same trial court during the
pendency of the criminal action, the said court had no more
power to include any civil liability in its judgment of
conviction.
The source of the obligation sought to be enforced in Civil
Case No. 5978 is culpa contractual, not an act or omission
punishable by law. We also note from the appellant's
arguments and from the title of the civil case that the party
defendant is the Manila Railroad Company and not
petitioner-appellant Brias Culpa contractual and an act or
omission punishable by law are two distinct sources of
obligation.
The petitioner-appellant argues that since the information
did not allege the existence of any kind of damages
whatsoever coupled by the fact that no private prosecutors
appeared and the prosecution witnesses were not
interrogated on the issue of damages, the trial court erred in
awarding death indemnity in its judgment of conviction.
A perusal of the records clearly shows that the
complainants in the criminal action for double homicide
thru reckless imprudence did not only reserve their right to
file an independent civil action but in fact filed a separate
civil action against the Manila Railroad Company.
The trial court acted within its jurisdiction when, despite
the filing with it of the separate civil action against the
Manila Railroad Company, it still awarded death indemnity
in the judgment of conviction against the petitionerappellant.
It is well-settled that when death occurs as a result of the
commission of a crime, the following items of damages
may be recovered: (1) an indemnity for the death of the
victim; (2) an indemnity for loss of earning capacity of the
deceased; (3) moral damages; (4) exemplary damages; (5)
attorney's fees and expenses of litigation, and (6) interest in
proper cases.

180

The indemnity for loss of earning capacity, moral damages,

exemplary damages, attorney's fees, and interests are
recoverable separately from and in addition to the fixed
slim of P12,000.00 corresponding to the indemnity for the
sole fact of death. This indemnity arising from the fact of
death due to a crime is fixed whereas the others are still
subject to the determination of the court based on the
evidence presented. The fact that the witnesses were not
interrogated on the issue of damages is of no moment
because the death indemnity fixed for death is separate and
distinct from the other forms of indemnity for damages.

Caloocan City, paying thereto the docket fee of one

thousand two hundred fifty-two pesos (P1,252.00) and the
legal research fee of two pesos (P2.00).[8] In particular,
private respondent prayed for an award of P692,680.00,
allegedly representing the value of the fishing nets, boat
equipment and cargoes of M/V Maria Efigenia XV, with
interest at the legal rate plus 25% thereof as attorneys fees.
Meanwhile, during the pendency of the case, petitioner
PNOC Shipping and Transport Corporation sought to be
substituted in place of LSC as it had already acquired
ownership of the Petroparcel.[9]

WHEREFORE, the judgment appealed from is modified in

that the award for death indemnity is increased to
P12,000.00 for the death of Martina Bool instead of
P6,000.00 and P12,000.00 for the death of Emelita
Gesmundo instead of P3,000.00, but deleting the subsidiary
imprisonment in case of insolvency imposed by the lower
court. The judgment is AFFIRMED in all other respects.

For its part, private respondent later sought the amendment

of its complaint on the ground that the original complaint
failed to plead for the recovery of the lost value of the hull
of M/V Maria Efigenia XV.[10] Accordingly, in the
amended complaint, private respondent averred that M/V
Maria Efigenia XV had an actual value of P800,000.00 and
that, after deducting the insurance payment of P200,000.00,
the amount of P600,000.00 should likewise be claimed.
The amended complaint also alleged that inflation resulting
from the devaluation of the Philippine peso had affected the
replacement value of the hull of the vessel, its equipment
and its lost cargoes, such that there should be a reasonable
determination thereof. Furthermore, on account of the
sinking of the vessel, private respondent supposedly
incurred unrealized profits and lost business opportunities
that would thereafter be proven.[11]

SO ORDERED.1wph1.t
PNOC v. CA
Oct 4,1985
[G.R. No. 107518. October 8, 1998]
PNOC SHIPPING AND TRANSPORT CORPORATION,
petitioner, vs. HONORABLE COURT OF APPEALS and
MARIA
EFIGENIA
FISHING
CORPORATION,
respondents.
DECISION
ROMERO, J.:
A party is entitled to adequate compensation only for such
pecuniary loss actually suffered and duly proved.[1]
Indeed, basic is the rule that to recover actual damages, the
amount of loss must not only be capable of proof but must
actually be proven with a reasonable degree of certainty,
premised upon competent proof or best evidence obtainable
of the actual amount thereof.[2] The claimant is duty-bound
to point out specific facts that afford a basis for measuring
whatever compensatory damages are borne.[3] A court
cannot merely rely on speculations, conjectures, or
guesswork as to the fact and amount of damages[4] as well
as hearsay[5] or uncorroborated testimony whose truth is
suspect.[6] Such are the jurisprudential precepts that the
Court now applies in resolving the instant petition.
The records disclose that in the early morning of September
21, 1977, the M/V Maria Efigenia XV, owned by private
respondent Maria Efigenia Fishing Corporation, was
navigating the waters near Fortune Island in Nasugbu,
Batangas on its way to Navotas, Metro Manila when it
collided with the vessel Petroparcel which at the time was
owned by the Luzon Stevedoring Corporation (LSC).
After investigation was conducted by the Board of Marine
Inquiry, Philippine Coast Guard Commandant Simeon N.
Alejandro rendered a decision finding the Petroparcel at
fault. Based on this finding by the Board and after
unsuccessful demands on petitioner,[7] private respondent
sued the LSC and the Petroparcel captain, Edgardo
Doruelo, before the then Court of First Instance of

Subsequently, the complaint was further amended to

include petitioner as a defendant[12] which the lower court
granted in its order of September 16, 1985.[13] After
petitioner had filed its answer to the second amended
complaint, on February 5, 1987, the lower court issued a
pre-trial order[14] containing, among other things, a
stipulations of facts, to wit:
1. On 21 September 1977, while the fishing boat `M/V
MARIA EFIGENIA owned by plaintiff was navigating in
the vicinity of Fortune Island in Nasugbu, Batangas, on its
way to Navotas, Metro Manila, said fishing boat was hit by
the LSCO tanker Petroparcel causing the former to sink.
2.
The Board of Marine Inquiry conducted an
investigation of this marine accident and on 21 November
1978, the Commandant of the Philippine Coast Guard, the
Honorable Simeon N. Alejandro, rendered a decision
finding the cause of the accident to be the reckless and
imprudent manner in which Edgardo Doruelo navigated the
LSCO Petroparcel and declared the latter vessel at fault.
3.
On 2 April 1978, defendant Luzon Stevedoring
Corporation (LUSTEVECO), executed in favor of PNOC
Shipping and Transport Corporation a Deed of Transfer
involving several tankers, tugboats, barges and pumping
stations, among which was the LSCO Petroparcel.
4.
On the same date on 2 April 1979 (sic), defendant
PNOC STC again entered into an Agreement of Transfer
with co-defendant Lusteveco whereby all the business
properties and other assets appertaining to the tanker and
bulk oil departments including the motor tanker LSCO

181

Petroparcel of defendant Lusteveco were sold to PNOC

STC.
5.
The aforesaid agreement stipulates, among others,
that PNOC-STC assumes, without qualifications, all
obligations arising from and by virtue of all rights it
obtained over the LSCO `Petroparcel.
6.
On 6 July 1979, another agreement between
defendant LUSTEVECO and PNOC-STC was executed
wherein Board of Marine Inquiry Case No. 332 (involving
the sea accident of 21 September 1977) was specifically
identified and assumed by the latter.
7.
On 23 June 1979, the decision of Board of Marine
Inquiry was affirmed by the Ministry of National Defense,
in its decision dismissing the appeal of Capt. Edgardo
Doruelo and Chief mate Anthony Estenzo of LSCO
`Petroparcel.
8.
LSCO `Petroparcel is presently owned and operated
by PNOC-STC and likewise Capt. Edgardo Doruelo is still
in their employ.
9.
As a result of the sinking of M/V Maria Efigenia
caused by the reckless and imprudent manner in which
LSCO Petroparcel was navigated by defendant Doruelo,
plaintiff suffered actual damages by the loss of its fishing
nets, boat equipments (sic) and cargoes, which went down
with the ship when it sank the replacement value of which
should be left to the sound discretion of this Honorable
Court.
After trial, the lower court[15] rendered on November 18,
1989 its decision disposing of Civil Case No. C-9457 as
follows:
WHEREFORE, and in view of the foregoing, judgment is
hereby rendered in favor of the plaintiff and against the
defendant PNOC Shipping & Transport Corporation, to pay
the plaintiff:
a.
The sum of P6,438,048.00 representing the value of
the fishing boat with interest from the date of the filing of
the complaint at the rate of 6% per annum;
b.
and
c.

The sum of P50,000.00 as and for attorneys fees;

The costs of suit.

private respondent per Exhibit A, a certificate of ownership

issued by the Philippine Coast Guard showing that M/V
Maria Efigenia XV was a wooden motor boat constructed
in 1965 with 128.23 gross tonnage. According to him, at
the time the vessel sank, it was then carrying 1,060 tubs
(baeras) of assorted fish the value of which was never
recovered. Also lost with the vessel were two cummins
engines (250 horsepower), radar, pathometer and compass.
He further added that with the loss of his flagship vessel in
his fishing fleet of fourteen (14) vessels, he was constrained
to hire the services of counsel whom he paid P10,000 to
handle the case at the Board of Marine Inquiry and
P50,000.00 for commencing suit for damages in the lower
court.
As to the award of P6,438,048.00 in actual damages, the
lower court took into account the following pieces of
documentary evidence that private respondent proffered
during trial:
(a)
Exhibit A certified xerox copy of the certificate of
ownership of M/V Maria Efigenia XV;
(b)
Exhibit B a document titled Marine Protest
executed by Delfin Villarosa, Jr. on September 22, 1977
stating that as a result of the collision, the M/V Maria
Efigenia XV sustained a hole at its left side that caused it to
sink with its cargo of 1,050 baeras valued at P170,000.00;
(c)
Exhibit C a quotation for the construction of a 95footer trawler issued by Isidoro A. Magalong of I. A.
Magalong Engineering and Construction on January 26,
1987 to Del Rosario showing that construction of such
trawler would cost P2,250,000.00;
(d) Exhibit D pro forma invoice No. PSPI-05/87-NAV
issued by E.D. Daclan of Power Systems, Incorporated on
January 20, 1987 to Del Rosario showing that two (2) units
of CUMMINS Marine Engine model N855-M, 195 bhp. at
1800 rpm. would cost P1,160,000.00;
(e) Exhibit E quotation of prices issued by Scan Marine
Inc. on January 20, 1987 to Del Rosario showing that a unit
of Furuno Compact Daylight Radar, Model FR-604D,
would cost P100,000.00 while a unit of Furuno Color
Video Sounder, Model FCV-501 would cost P45,000.00 so
that the two units would cost P145,000.00;

SO ORDERED.

(f)
Exhibit F quotation of prices issued by Seafgear
Sales, Inc. on January 21, 1987 to Del Rosario showing that
two (2) rolls of nylon rope (5 cir. X 300fl.) would cost
P140,000.00; two (2) rolls of nylon rope (3 cir. X 240fl.),
P42,750.00; one (1) binocular (7 x 50), P1,400.00, one (1)
compass (6), P4,000.00 and 50 pcs. of floats, P9,000.00 or
a total of P197, 150.00;

In arriving at the above disposition, the lower court cited

the evidence presented by private respondent consisting of
the testimony of its general manager and sole witness,
Edilberto del Rosario.
Private respondents witness
testified that M/V Maria Efigenia XV was owned by

(g) Exhibit G retainer agreement between Del Rosario

and F. Sumulong Associates Law Offices stipulating an
acceptance fee of P5,000.00, per appearance fee of
P400.00, monthly retainer of P500.00, contingent fee of
20% of the total amount recovered and that attorneys fee to

The counterclaim is hereby DISMISSED for lack of merit.

Likewise, the case against defendant Edgardo Doruelo is
hereby DISMISSED, for lack of jurisdiction.

182

be awarded by the court should be given to Del Rosario;

and
(h) Exhibit H price quotation issued by Seafgear Sales,
Inc. dated April 10, 1987 to Del Rosario showing the cost
of poly nettings as: 50 rolls of 400/18 3kts. 100md x
100mtrs., P70,000.00; 50 rolls of 400/18 5kts. 100md x
100mtrs., P81,500.00; 50 rolls of 400/18 8kts. 100md x
100mtrs., P116,000.00, and 50 rolls of 400/18 10kts.
100md x 100mtrs., P146,500 and banera (tub) at P65.00 per
piece or a total of P414,065.00
The lower court held that the prevailing replacement value
of P6,438,048.00 of the fishing boat and all its equipment
would regularly increase at 30% every year from the date
the quotations were given.
On the other hand, the lower court noted that petitioner
only presented Lorenzo Lazaro, senior estimator at PNOC
Dockyard & Engineering Corporation, as sole witness and
it did not bother at all to offer any documentary evidence to
support its position. Lazaro testified that the price
quotations submitted by private respondent were
excessive and that as an expert witness, he used the
quotations of his suppliers in making his estimates.
However, he failed to present such quotations of prices
from his suppliers, saying that he could not produce a
breakdown of the costs of his estimates as it was a sort of
secret scheme. For this reason, the lower court concluded:
Evidently, the quotation of prices submitted by the
plaintiff relative to the replacement value of the fishing
boat and its equipments in the tune of P6,438,048.00 which
were lost due to the recklessness and imprudence of the
herein defendants were not rebutted by the latter with
sufficient evidence. The defendants through their sole
witness Lorenzo Lazaro relied heavily on said witness bare
claim that the amount afore-said is excessive or bloated, but
they did not bother at all to present any documentary
evidence to substantiate such claim. Evidence to be
believed, must not only proceed from the mouth of the
credible witness, but it must be credible in itself. (Vda. de
Bonifacio vs. B. L. T. Bus Co., Inc. L-26810, August 31,
1970).
Aggrieved, petitioner filed a motion for the reconsideration
of the lower courts decision contending that: (1) the lower
court erred in holding it liable for damages; that the lower
court did not acquire jurisdiction over the case by paying
only P1,252.00 as docket fee; (2) assuming that plaintiff
was entitled to damages, the lower court erred in awarding
an amount greater than that prayed for in the second
amended complaint; and (3) the lower court erred when it
failed to resolve the issues it had raised in its memorandum.
[16] Petitioner likewise filed a supplemental motion for
reconsideration expounding on whether the lower court
acquired jurisdiction over the subject matter of the case
despite therein plaintiffs failure to pay the prescribed
docket fee.[17]
On January 25, 1990, the lower court declined
reconsideration for lack of merit.[18] Apparently not

having received the order denying its motion for

reconsideration, petitioner still filed a motion for leave to
file a reply to private respondents opposition to said
motion.[19] Hence, on February 12, 1990, the lower court
denied said motion for leave to file a reply on the ground
that by the issuance of the order of January 25, 1990, said
motion had become moot and academic.[20]
Unsatisfied with the lower courts decision, petitioner
elevated the matter to the Court of Appeals which,
however, affirmed the same in toto on October 14, 1992.
[21] On petitioners assertion that the award of
P6,438,048.00 was not convincingly proved by competent
and admissible evidence, the Court of Appeals ruled that it
was not necessary to qualify Del Rosario as an expert
witness because as the owner of the lost vessel, it was well
within his knowledge and competency to identify and
determine the equipment installed and the cargoes loaded
on the vessel. Considering the documentary evidence
presented as in the nature of market reports or quotations,
trade journals, trade circulars and price lists, the Court of
Appeals held, thus:
Consequently, until such time as the Supreme Court
categorically rules on the admissibility or inadmissibility of
this class of evidence, the reception of these documentary
exhibits (price quotations) as evidence rests on the sound
discretion of the trial court. In fact, where the lower court
is confronted with evidence which appears to be of
doubtful admissibility, the judge should declare in favor of
admissibility rather than of non-admissibility (The
Collector of Palakadhari, 124 [1899], p. 43, cited in
Francisco, Revised Rules of Court, Evidence, Volume VII,
Part I, 1990 Edition, p. 18). Trial courts are enjoined to
observe the strict enforcement of the rules of evidence
which crystallized through constant use and practice and
are very useful and effective aids in the search for truth and
for the effective administration of justice.
But in
connection with evidence which may appear to be of
doubtful relevancy or incompetency or admissibility, it is
the safest policy to be liberal, not rejecting them on
doubtful or technical grounds, but admitting them unless
plainly irrelevant, immaterial or incompetent, for the reason
that their rejection places them beyond the consideration of
the court. If they are thereafter found relevant or
competent, can easily be remedied by completely
discarding or ignoring them. (Banaria vs. Banaria, et al.,
C.A. No. 4142, May 31, 1950; cited in Francisco, Supra).
[Underscoring supplied].
Stressing that the alleged inadmissible documentary
exhibits were never satisfactorily rebutted by appellants
own sole witness in the person of Lorenzo Lazaro, the
appellate court found that petitioner ironically situated
itself in an inconsistent posture by the fact that its own
witness, admittedly an expert one, heavily relies on the
very same pieces of evidence (price quotations) appellant
has so vigorously objected to as inadmissible evidence.
Hence, it concluded:
x x x. The amount of P6,438,048.00 was duly established
at the trial on the basis of appellees documentary exhibits

183

(price quotations) which stood uncontroverted, and which

already included the amount by way of adjustment as
prayed for in the amended complaint. There was therefore
no need for appellee to amend the second amended
complaint in so far as to the claim for damages is
concerned to conform with the evidence presented at the
trial. The amount of P6,438,048.00 awarded is clearly
within the relief prayed for in appellees second amended
complaint.
On the issue of lack of jurisdiction, the respondent court
held that following the ruling in Sun Insurance Ltd. v.
Asuncion,[22] the additional docket fee that may later on
be declared as still owing the court may be enforced as a
lien on the judgment.
Hence, the instant recourse.
In assailing the Court of Appeals decision, petitioner posits
the view that the award of P6,438,048 as actual damages
should have been in light of these considerations, namely:
(1) the trial court did not base such award on the actual
value of the vessel and its equipment at the time of loss in
1977; (2) there was no evidence on extraordinary inflation
that would warrant an adjustment of the replacement cost
of the lost vessel, equipment and cargo; (3) the value of the
lost cargo and the prices quoted in respondents
documentary evidence only amount to P4,336,215.00; (4)
private respondents failure to adduce evidence to support
its claim for unrealized profit and business opportunities;
and (5) private respondents failure to prove the extent and
actual value of damages sustained as a result of the 1977
collision of the vessels.[23]
Under Article 2199 of the Civil Code, actual or
compensatory damages are those awarded in satisfaction of,
or in recompense for, loss or injury sustained. They
proceed from a sense of natural justice and are designed to
repair the wrong that has been done, to compensate for the
injury inflicted and not to impose a penalty.[24] In actions
based on torts or quasi-delicts, actual damages include all
the natural and probable consequences of the act or
omission complained of.[25] There are two kinds of actual
or compensatory damages: one is the loss of what a person
already possesses (dao emergente), and the other is the
failure to receive as a benefit that which would have
pertained to him (lucro cesante).[26] Thus:
Where goods are destroyed by the wrongful act of the
defendant the plaintiff is entitled to their value at the time
of destruction, that is, normally, the sum of money which
he would have to pay in the market for identical or
essentially similar goods, plus in a proper case damages for
the loss of use during the period before replacement. In
other words, in the case of profit-earning chattels, what has
to be assessed is the value of the chattel to its owner as a
going concern at the time and place of the loss, and this
means, at least in the case of ships, that regard must be had
to existing and pending engagements.x x x.
x x x. If the market value of the ship reflects the fact that it
is in any case virtually certain of profitable employment,

then nothing can be added to that value in respect of

charters actually lost, for to do so would be pro tanto to
compensate the plaintiff twice over. On the other hand, if
the ship is valued without reference to its actual future
engagements and only in the light of its profit-earning
potentiality, then it may be necessary to add to the value
thus assessed the anticipated profit on a charter or other
engagement which it was unable to fulfill. What the court
has to ascertain in each case is the `capitalised value of the
vessel as a profit-earning machine not in the abstract but in
view of the actual circumstances, without, of course,
taking into account considerations which were too remote
at the time of the loss.[27] [Underscoring supplied].
As stated at the outset, to enable an injured party to recover
actual or compensatory damages, he is required to prove
the actual amount of loss with reasonable degree of
certainty premised upon competent proof and on the best
evidence available.[28] The burden of proof is on the party
who would be defeated if no evidence would be presented
on either side.
He must establish his case by a
preponderance of evidence which means that the evidence,
as a whole, adduced by one side is superior to that of the
other.[29] In other words, damages cannot be presumed and
courts, in making an award must point out specific facts
that could afford a basis for measuring whatever
compensatory or actual damages are borne.[30]
In this case, actual damages were proven through the sole
testimony of private respondents general manager and
certain pieces of documentary evidence. Except for Exhibit
B where the value of the 1,050 baeras of fish were pegged
at their September 1977 value when the collision happened,
the pieces of documentary evidence proffered by private
respondent with respect to items and equipment lost show
similar items and equipment with corresponding prices in
early 1987 or approximately ten (10) years after the
collision. Noticeably, petitioner did not object to the
exhibits in terms of the time index for valuation of the lost
goods and equipment. In objecting to the same pieces of
evidence, petitioner commented that these were not duly
authenticated and that the witness (Del Rosario) did not
have personal knowledge on the contents of the writings
and neither was he an expert on the subjects thereof.[31]
Clearly ignoring petitioners objections to the exhibits, the
lower court admitted these pieces of evidence and gave
them due weight to arrive at the award of P6,438,048.00 as
actual damages.
The exhibits were presented ostensibly in the course of Del
Rosarios testimony. Private respondent did not present
any other witnesses especially those whose signatures
appear in the price quotations that became the bases of the
award. We hold, however, that the price quotations are
ordinary private writings which under the Revised Rules of
Court should have been proffered along with the testimony
of the authors thereof. Del Rosario could not have testified
on the veracity of the contents of the writings even though
he was the seasoned owner of a fishing fleet because he
was not the one who issued the price quotations. Section
36, Rule 130 of the Revised Rules of Court provides that a

184

witness can testify only to those facts that he knows of his

personal knowledge.
For this reason, Del Rosarios claim that private respondent
incurred losses in the total amount of P6,438,048.00 should
be admitted with extreme caution considering that, because
it was a bare assertion, it should be supported by
independent evidence. Moreover, because he was the
owner of private respondent corporation[32] whatever
testimony he would give with regard to the value of the lost
vessel, its equipment and cargoes should be viewed in the
light of his self-interest therein. We agree with the Court of
Appeals that his testimony as to the equipment installed
and the cargoes loaded on the vessel should be given
credence[33] considering his familiarity thereto. However,
we do not subscribe to the conclusion that his valuation of
such equipment, cargo and the vessel itself should be
accepted as gospel truth.[34] We must, therefore, examine
the documentary evidence presented to support Del
Rosarios claim as regards the amount of losses.
The price quotations presented as exhibits partake of the
nature of hearsay evidence considering that the persons
who issued them were not presented as witnesses.[35] Any
evidence, whether oral or documentary, is hearsay if its
probative value is not based on the personal knowledge of
the witness but on the knowledge of another person who is
not on the witness stand. Hearsay evidence, whether
objected to or not, has no probative value unless the
proponent can show that the evidence falls within the
exceptions to the hearsay evidence rule.[36] On this point,
we believe that the exhibits do not fall under any of the
exceptions provided under Sections 37 to 47 of Rule 130.
[37]
It is true that one of the exceptions to the hearsay rule
pertains to commercial lists and the like under Section
45, Rule 130 of the Revised Rules on Evidence. In this
respect, the Court of Appeals considered private
respondents exhibits as commercial lists. It added,
however, that these exhibits should be admitted in evidence
until such time as the Supreme Court categorically rules
on the admissibility or inadmissibility of this class of
evidence because the reception of these documentary
exhibits (price quotations) as evidence rests on the sound
discretion of the trial court.[38] Reference to Section 45,
Rule 130, however, would show that the conclusion of the
Court of Appeals on the matter was arbitrarily arrived at.
This rule states:
Commercial lists and the like. Evidence of statements of
matters of interest to persons engaged in an occupation
contained in a list, register, periodical, or other published
compilation is admissible as tending to prove the truth of
any relevant matter so stated if that compilation is
published for use by persons engaged in that occupation
and is generally used and relied upon by them there.
Under Section 45 of the aforesaid Rule, a document is a
commercial list if: (1) it is a statement of matters of
interest to persons engaged in an occupation; (2) such
statement is contained in a list, register, periodical or other

published compilation; (3) said compilation is published for

the use of persons engaged in that occupation, and (4) it is
generally used and relied upon by persons in the same
occupation.
Based on the above requisites, it is our considered view that
Exhibits B, C, D, E, F and H[39] are not commercial lists
for these do not belong to the category of other published
compilations under Section 45 aforequoted. Under the
principle of ejusdem generis, (w)here general words
follow an enumeration of persons or things, by words of a
particular and specific meaning, such general words are not
to be construed in their widest extent, but are to be held as
applying only to persons or things of the same kind or class
as those specifically mentioned.[40] The exhibits
mentioned are mere price quotations issued personally to
Del Rosario who requested for them from dealers of
equipment similar to the ones lost at the collision of the two
vessels. These are not published in any list, register,
periodical or other compilation on the relevant subject
matter. Neither are these market reports or quotations
within the purview of commercial lists as these are not
standard handbooks or periodicals, containing data of
everyday professional need and relied upon in the work of
the occupation.[41] These are simply letters responding to
the queries of Del Rosario. Thus, take for example Exhibit
D which reads:
January 20, 1987
PROFORMA INVOICE NO. PSPI-05/87-NAV
MARIA EFIGINIA FISHING CORPORATION
Navotas, Metro Manila
Attention: MR. EDDIE DEL ROSARIO
Gentlemen:
In accordance to your request, we are pleased to quote our
Cummins Marine Engine, to wit.
Two (2) units CUMMINS Marine Engine model N855-M,
195 bhp.
at 1800 rpm., 6-cylinder in-line, 4-stroke cycle, natural
aspirated, 5 in. x 6 in. bore and stroke, 855 cu. In.
displacement, keel-cooled, electric starting coupled with
Twin-Disc Marine gearbox model MG-509, 4.5:1 reduction
ratio, includes oil cooler, companion flange, manual and
standard accessories as per attached sheet.
Price FOB Manila - - - - - - - - - - - - - - - P 580,000.00/unit
Total FOB Manila - - - - - - - - - - - - - - - P 1,160,000.00
vvvvvvvvv
TERMS :

CASH

DELIVERY :

60-90 days from date of order.

VALIDITY

Subject to our final confirmation.

185

WARRANTY :
defect.

One (1) full year against factory

Very truly yours,

POWER SYSTEMS, INC.
(Sgd.)
E. D. Daclan
To be sure, letters and telegrams are admissible in evidence
but these are, however, subject to the general principles of
evidence and to various rules relating to documentary
evidence.[42] Hence, in one case, it was held that a letter
from an automobile dealer offering an allowance for an
automobile upon purchase of a new automobile after
repairs had been completed, was not a price current or
commercial list within the statute which made such items
presumptive evidence of the value of the article specified
therein. The letter was not admissible in evidence as a
commercial list even though the clerk of the dealer
testified that he had written the letter in due course of
business upon instructions of the dealer.[43]
But even on the theory that the Court of Appeals correctly
ruled on the admissibility of those letters or
communications when it held that unless plainly
irrelevant, immaterial or incompetent, evidence should
better be admitted rather than rejected on doubtful or
technical grounds,[44] the same pieces of evidence,
however, should not have been given probative weight.
This is a distinction we wish to point out. Admissibility of
evidence refers to the question of whether or not the
circumstance (or evidence) is to considered at all.[45] On
the other hand, the probative value of evidence refers to the
question of whether or not it proves an issue.[46] Thus, a
letter may be offered in evidence and admitted as such but
its evidentiary weight depends upon the observance of the
rules on evidence. Accordingly, the author of the letter
should be presented as witness to provide the other party to
the litigation the opportunity to question him on the
contents of the letter. Being mere hearsay evidence, failure
to present the author of the letter renders its contents
suspect. As earlier stated, hearsay evidence, whether
objected to or not, has no probative value. Thus:
The courts differ as to the weight to be given to hearsay
evidence admitted without objection. Some hold that when
hearsay has been admitted without objection, the same may
be considered as any other properly admitted testimony.
Others maintain that it is entitled to no more consideration
than if it had been excluded.
The rule prevailing in this jurisdiction is the latter one. Our
Supreme Court held that although the question of
admissibility of evidence can not be raised for the first time
on appeal, yet if the evidence is hearsay it has no probative
value and should be disregarded whether objected to or not.
`If no objection is made quoting Jones on Evidence - `it
(hearsay) becomes evidence by reason of the want of such
objection even though its admission does not confer upon it
any new attribute in point of weight. Its nature and quality
remain the same, so far as its intrinsic weakness and
incompetency to satisfy the mind are concerned, and as

opposed to direct primary evidence, the latter always

prevails.
The failure of the defense counsel to object to the
presentation of incompetent evidence, like hearsay
evidence or evidence that violates the rules of res inter alios
acta, or his failure to ask for the striking out of the same
does not give such evidence any probative value. But
admissibility of evidence should not be equated with
weight of evidence. Hearsay evidence whether objected to
or not has no probative value.[47]
Accordingly, as stated at the outset, damages may not be
awarded on the basis of hearsay evidence.[48]
Nonetheless, the non-admissibility of said exhibits does not
mean that it totally deprives private respondent of any
redress for the loss of its vessel. This is because in
Lufthansa German Airlines v. Court of Appeals,[49] the
Court said:
In the absence of competent proof on the actual damage
suffered, private respondent is `entitled to nominal damages
which, as the law says, is adjudicated in order that a right of
the plaintiff, which has been violated or invaded by
defendant, may be vindicated and recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered. [Underscoring supplied].
Nominal damages are awarded in every obligation arising
from law, contracts, quasi-contracts, acts or omissions
punished by law, and quasi-delicts, or in every case where
property right has been invaded.[50] Under Article 2223 of
the Civil Code, (t)he adjudication of nominal damages
shall preclude further contest upon the right involved and
all accessory questions, as between the parties to the suit, or
their respective heirs and assigns.
Actually, nominal damages are damages in name only and
not in fact. Where these are allowed, they are not treated as
an equivalent of a wrong inflicted but simply in recognition
of the existence of a technical injury.[51] However, the
amount to be awarded as nominal damages shall be equal
or at least commensurate to the injury sustained by private
respondent considering the concept and purpose of such
damages.[52] The amount of nominal damages to be
awarded may also depend on certain special reasons extant
in the case.[53]
Applying now such principles to the instant case, we have
on record the fact that petitioners vessel Petroparcel was at
fault as well as private respondents complaint claiming the
amount of P692,680.00 representing the fishing nets, boat
equipment and cargoes that sunk with the M/V Maria
Efigenia XV. In its amended complaint, private respondent
alleged that the vessel had an actual value of P800,000.00
but it had been paid insurance in the amount of
P200,000.00 and, therefore, it claimed only the amount of
P600,000.00. Ordinarily, the receipt of insurance payments
should diminish the total value of the vessel quoted by
private respondent in his complaint considering that such
payment is causally related to the loss for which it claimed

186

compensation. This Court believes that such allegations in

the original and amended complaints can be the basis for
determination of a fair amount of nominal damages
inasmuch as a complaint alleges the ultimate facts
constituting the plaintiff's cause of action.[54] Private
respondent should be bound by its allegations on the
amount of its claims.
With respect to petitioners contention that the lower court
did not acquire jurisdiction over the amended complaint
increasing the amount of damages claimed to P600,000.00,
we agree with the Court of Appeals that the lower court
acquired jurisdiction over the case when private respondent
paid the docket fee corresponding to its claim in its original
complaint. Its failure to pay the docket fee corresponding
to its increased claim for damages under the amended
complaint should not be considered as having curtailed the
lower courts jurisdiction. Pursuant to the ruling in Sun
Insurance Office, Ltd. (SIOL) v. Asuncion,[55] the unpaid
docket fee should be considered as a lien on the judgment
even though private respondent specified the amount of
P600,000.00 as its claim for damages in its amended
complaint.
Moreover, we note that petitioner did not question at all the
jurisdiction of the lower court on the ground of insufficient
docket fees in its answers to both the amended complaint
and the second amended complaint. It did so only in its
motion for reconsideration of the decision of the lower
court after it had received an adverse decision. As this
Court held in Pantranco North Express, Inc. v. Court of
Appeals,[56] participation in all stages of the case before
the trial court, that included invoking its authority in asking
for affirmative relief, effectively barred petitioner by
estoppel from challenging the courts jurisdiction. Notably,
from the time it filed its answer to the second amended
complaint on April 16, 1985,[57] petitioner did not question
the lower courts jurisdiction. It was only on December 29,
1989[58] when it filed its motion for reconsideration of the
lower courts decision that petitioner raised the question of
the lower courts lack of jurisdiction. Petitioner thus
foreclosed its right to raise the issue of jurisdiction by its
own inaction.
WHEREFORE, the challenged decision of the Court of
Appeals dated October 14, 1992 in CA-G. R. CV No.
26680 affirming that of the Regional Trial Court of
Caloocan City, Branch 121, is hereby MODIFIED insofar
as it awarded actual damages to private respondent Maria
Efigenia Fishing Corporation in the amount of
P6,438,048.00 for lack of evidentiary bases therefor.
Considering the fact, however, that: (1) technically
petitioner sustained injury but which, unfortunately, was
not adequately and properly proved, and (2) this case has
dragged on for almost two decades, we believe that an
award of Two Million (P2,000,000.00)[59] in favor of
private respondent as and for nominal damages is in order.
No pronouncement as to costs.
SO ORDERED.

Dangwa v. CA
G.R. No. 95582

Oct 7,1991
October 7, 1991

DANGWA TRANSPORTATION CO., INC. and

THEODORE LARDIZABAL y MALECDAN, petitioners,
vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT,
EMILIA
CUDIAMAT
BANDOY,
FERNANDO
CUDLAMAT, MARRIETA CUDIAMAT, NORMA
CUDIAMAT,
DANTE
CUDIAMAT,
SAMUEL
CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the
late Pedrito Cudiamat represented by Inocencia Cudiamat,
respondents.
Francisco S. Reyes Law Office for petitioners.
Antonio C. de Guzman for private respondents.

REGALADO, J.:p
On May 13, 1985, private respondents filed a complaint 1
for damages against petitioners for the death of Pedrito
Cudiamat as a result of a vehicular accident which occurred
on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet.
Among others, it was alleged that on said date, while
petitioner Theodore M. Lardizabal was driving a passenger
bus belonging to petitioner corporation in a reckless and
imprudent manner and without due regard to traffic rules
and regulations and safety to persons and property, it ran
over its passenger, Pedrito Cudiamat. However, instead of
bringing Pedrito immediately to the nearest hospital, the
said driver, in utter bad faith and without regard to the
welfare of the victim, first brought his other passengers and
cargo to their respective destinations before banging said
victim to the Lepanto Hospital where he expired.
On the other hand, petitioners alleged that they had
observed and continued to observe the extraordinary
diligence required in the operation of the transportation
company and the supervision of the employees, even as
they add that they are not absolute insurers of the safety of
the public at large. Further, it was alleged that it was the
victim's own carelessness and negligence which gave rise
to the subject incident, hence they prayed for the dismissal
of the complaint plus an award of damages in their favor by
way of a counterclaim.
On July 29, 1988, the trial court rendered a decision,
effectively in favor of petitioners, with this decretal
portion:
IN VIEW OF ALL THE FOREGOING, judgment is hereby
pronounced that Pedrito Cudiamat was negligent, which
negligence was the proximate cause of his death.
Nonetheless, defendants in equity, are hereby ordered to
pay the heirs of Pedrito Cudiamat the sum of P10,000.00
which approximates the amount defendants initially offered
said heirs for the amicable settlement of the case. No costs.

187

SO ORDERED. 2
Not satisfied therewith, private respondents appealed to the
Court of Appeals which, in a decision 3 in CA-G.R. CV
No. 19504 promulgated on August 14, 1990, set aside the
decision of the lower court, and ordered petitioners to pay
private respondents:
1.
The sum of Thirty Thousand (P30,000.00) Pesos
by way of indemnity for death of the victim Pedrito
Cudiamat;
2.
The sum of Twenty Thousand (P20,000.00) by
way of moral damages;
3.
The sum of Two Hundred Eighty Eight Thousand
(P288,000.00) Pesos as actual and compensatory damages;
4.

However, respondent court, in arriving at a different

opinion, declares that:
From the testimony of appellees'own witness in the person
of Vitaliano Safarita, it is evident that the subject bus was at
full stop when the victim Pedrito Cudiamat boarded the
same as it was precisely on this instance where a certain
Miss Abenoja alighted from the bus. Moreover, contrary to
the assertion of the appellees, the victim did indicate his
intention to board the bus as can be seen from the
testimony of the said witness when he declared that Pedrito
Cudiamat was no longer walking and made a sign to board
the bus when the latter was still at a distance from him. It
was at the instance when Pedrito Cudiamat was closing his
umbrella at the platform of the bus when the latter made a
sudden jerk movement (as) the driver commenced to
accelerate the bus.

The costs of this suit. 4

Petitioners' motion for reconsideration was denied by the

Court of Appeals in its resolution dated October 4, 1990, 5
hence this petition with the central issue herein being
whether respondent court erred in reversing the decision of
the trial court and in finding petitioners negligent and liable
for the damages claimed.
It is an established principle that the factual findings of the
Court of Appeals as a rule are final and may not be
reviewed by this Court on appeal. However, this is subject
to settled exceptions, one of which is when the findings of
the appellate court are contrary to those of the trial court, in
which case a reexamination of the facts and evidence may
be undertaken. 6
In the case at bar, the trial court and the Court of Appeal
have discordant positions as to who between the petitioners
an the victim is guilty of negligence. Perforce, we have had
to conduct an evaluation of the evidence in this case for the
prope calibration of their conflicting factual findings and
legal conclusions.
The lower court, in declaring that the victim was negligent,
made the following findings:
This Court is satisfied that Pedrito Cudiamat was negligent
in trying to board a moving vehicle, especially with one of
his hands holding an umbrella. And, without having given
the driver or the conductor any indication that he wishes to
board the bus. But defendants can also be found wanting of
the necessary diligence. In this connection, it is safe to
assume that when the deceased Cudiamat attempted to
board defendants' bus, the vehicle's door was open instead
of being closed. This should be so, for it is hard to believe
that one would even attempt to board a vehicle (i)n motion
if the door of said vehicle is closed. Here lies the
defendant's lack of diligence. Under such circumstances,
equity demands that there must be something given to the
heirs of the victim to assuage their feelings. This, also
considering that initially, defendant common carrier had
made overtures to amicably settle the case. It did offer a
certain monetary consideration to the victim's heirs. 7

Evidently, the incident took place due to the gross

negligence of the appellee-driver in prematurely stepping
on the accelerator and in not waiting for the passenger to
first secure his seat especially so when we take into account
that the platform of the bus was at the time slippery and wet
because of a drizzle. The defendants-appellees utterly failed
to observe their duty and obligation as common carrier to
the end that they should observe extra-ordinary diligence in
the vigilance over the goods and for the safety of the
passengers transported by them according to the
circumstances of each case (Article 1733, New Civil Code).
8
After a careful review of the evidence on record, we find no
reason to disturb the above holding of the Court of Appeals.
Its aforesaid findings are supported by the testimony of
petitioners' own witnesses. One of them, Virginia Abalos,
testified on cross-examination as follows:
Q It is not a fact Madam witness, that at bunkhouse 54, that
is before the place of the incident, there is a crossing?
A The way going to the mines but it is not being pass(ed)
by the bus.
Q And the incident happened before bunkhouse 56, is that
not correct?
A It happened between 54 and 53 bunkhouses. 9
The bus conductor, Martin Anglog, also declared:
Q When you arrived at Lepanto on March 25, 1985, will
you please inform this Honorable Court if there was anv
unusual incident that occurred?
A When we delivered a baggage at Marivic because a
person alighted there between Bunkhouse 53 and 54.
Q What happened when you delivered this passenger at this
particular place in Lepanto?

188

A When we reached the place, a passenger alighted and I

signalled my driver. When we stopped we went out because
I saw an umbrella about a split second and I signalled again
the driver, so the driver stopped and we went down and we
saw Pedrito Cudiamat asking for help because he was lying
down.
Q How far away was this certain person, Pedrito Cudiamat,
when you saw him lying down from the bus how far
was he?
A It is about two to three meters.
Q On what direction of the bus was he found about three
meters from the bus, was it at the front or at the back?

It is not negligence per se, or as a matter of law, for one

attempt to board a train or streetcar which is moving
slowly. 14 An ordinarily prudent person would have made
the attempt board the moving conveyance under the same
or similar circumstances. The fact that passengers board
and alight from slowly moving vehicle is a matter of
common experience both the driver and conductor in this
case could not have been unaware of such an ordinary
practice.
The victim herein, by stepping and standing on the platform
of the bus, is already considered a passenger and is entitled
all the rights and protection pertaining to such a contractual
relation. Hence, it has been held that the duty which the
carrier passengers owes to its patrons extends to persons
boarding cars as well as to those alighting therefrom. 15

A At the back, sir. 10 (Emphasis supplied.)

The foregoing testimonies show that the place of the
accident and the place where one of the passengers alighted
were both between Bunkhouses 53 and 54, hence the
finding of the Court of Appeals that the bus was at full stop
when the victim boarded the same is correct. They further
confirm the conclusion that the victim fell from the
platform of the bus when it suddenly accelerated forward
and was run over by the rear right tires of the vehicle, as
shown by the physical evidence on where he was thereafter
found in relation to the bus when it stopped. Under such
circumstances, it cannot be said that the deceased was
guilty of negligence.
The contention of petitioners that the driver and the
conductor had no knowledge that the victim would ride on
the bus, since the latter had supposedly not manifested his
intention to board the same, does not merit consideration.
When the bus is not in motion there is no necessity for a
person who wants to ride the same to signal his intention to
board. A public utility bus, once it stops, is in effect making
a continuous offer to bus riders. Hence, it becomes the duty
of the driver and the conductor, every time the bus stops, to
do no act that would have the effect of increasing the peril
to a passenger while he was attempting to board the same.
The premature acceleration of the bus in this case was a
breach of such duty. 11
It is the duty of common carriers of passengers, including
common carriers by railroad train, streetcar, or motorbus, to
stop their conveyances a reasonable length of time in order
to afford passengers an opportunity to board and enter, and
they are liable for injuries suffered by boarding passengers
resulting from the sudden starting up or jerking of their
conveyances while they are doing so. 12
Further, even assuming that the bus was moving, the act of
the victim in boarding the same cannot be considered
negligent under the circumstances. As clearly explained in
the testimony of the aforestated witness for petitioners,
Virginia Abalos, th bus had "just started" and "was still in
slow motion" at the point where the victim had boarded and
was on its platform. 13

Common carriers, from the nature of their business and

reasons of public policy, are bound to observe extraordina
diligence for the safety of the passengers transported by the
according to all the circumstances of each case. 16 A
common carrier is bound to carry the passengers safely as
far as human care and foresight can provide, using the
utmost diligence very cautious persons, with a due regard
for all the circumstances. 17
It has also been repeatedly held that 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 by
the passenger. By contract of carriage, the carrier assumes
the express obligation to transport the passenger to his
destination safely and 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. 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 Civil Code. 18
Moreover, the circumstances under which the driver and
the conductor failed to bring the gravely injured victim
immediately to the hospital for medical treatment is a
patent and incontrovertible proof of their negligence. It
defies understanding and can even be stigmatized as callous
indifference. The evidence shows that after the accident the
bus could have forthwith turned at Bunk 56 and thence to
the hospital, but its driver instead opted to first proceed to
Bunk 70 to allow a passenger to alight and to deliver a
refrigerator, despite the serious condition of the victim. The
vacuous reason given by petitioners that it was the wife of
the deceased who caused the delay was tersely and
correctly confuted by respondent court:
... The pretension of the appellees that the delay was due to
the fact that they had to wait for about twenty minutes for
Inocencia Cudiamat to get dressed deserves scant
consideration. It is rather scandalous and deplorable for a
wife whose husband is at the verge of dying to have the
luxury of dressing herself up for about twenty minutes

189

before attending to help her distressed and helpless

husband. 19
Further, it cannot be said that the main intention of
petitioner Lardizabal in going to Bunk 70 was to inform the
victim's family of the mishap, since it was not said bus
driver nor the conductor but the companion of the victim
who informed his family thereof. 20 In fact, it was only
after the refrigerator was unloaded that one of the
passengers thought of sending somebody to the house of
the victim, as shown by the testimony of Virginia Abalos
again, to wit:
Q
Why, what happened to your refrigerator at that
particular time?
A
I asked them to bring it down because that is the
nearest place to our house and when I went down and asked
somebody to bring down the refrigerator, I also asked
somebody to call the family of Mr. Cudiamat.
COURT:
Q
Why did you ask somebody to call the family of
Mr. Cudiamat?
A
Because Mr. Cudiamat met an accident, so I ask
somebody to call for the family of Mr. Cudiamat.
Q
But nobody ask(ed) you to call for the family of
Mr. Cudiamat?
A

No sir. 21

With respect to the award of damages, an oversight was,

however, committed by respondent Court of Appeals in
computing the actual damages based on the gross income
of the victim. The rule is that the amount recoverable by the
heirs of a victim of a tort is not the loss of the entire
earnings, but rather the loss of that portion of the earnings
which the beneficiary would have received. In other words,
only net earnings, not gross earnings, are to be considered,
that is, the total of the earnings less expenses necessary in
the creation of such earnings or income and minus living
and other incidental expenses. 22
We are of the opinion that the deductible living and other
expense of the deceased may fairly and reasonably be fixed
at P500.00 a month or P6,000.00 a year. In adjudicating the
actual or compensatory damages, respondent court found
that the deceased was 48 years old, in good health with a
remaining productive life expectancy of 12 years, and then
earning P24,000.00 a year. Using the gross annual income
as the basis, and multiplying the same by 12 years, it
accordingly awarded P288,000. Applying the aforestated
rule on computation based on the net earnings, said award
must be, as it hereby is, rectified and reduced to
P216,000.00. However, in accordance with prevailing
jurisprudence, the death indemnity is hereby increased to
P50,000.00. 23

WHEREFORE, subject to the above modifications, the

challenged judgment and resolution of respondent Court of
Appeals are hereby AFFIRMED in all other respects.
SO ORDERED.
Fortune Express v. Ca
Mar 18,1999
[G.R. No. 119756. March 18, 1999]
FORTUNE EXPRESS, INC., petitioner, vs. COURT OF
APPEALS, PAULIE U. CAORONG, and minor children
YASSER KING CAORONG, ROSE HEINNI and PRINCE
ALEXANDER, all surnamed CAORONG, and represented
by their mother PAULIE U. CAORONG, respondents.
DECISION
MENDOZA, J.:
This is an appeal by petition for review on certiorari of the
decision, dated July 29, 1994, of the Court of Appeals,
which reversed the decision of the Regional Trial Court,
Branch VI, Iligan City. The aforesaid decision of the trial
court dismissed the complaint of private respondents
against petitioner for damages for breach of contract of
carriage filed on the ground that petitioner had not
exercised the required degree of diligence in the operation
of one of its buses. Atty. Talib Caorong, whose heirs are
private respondents herein, was a passenger of the bus and
was killed in the ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private
respondent Paulie Caorong is the widow of Atty. Caorong,
while private respondents Yasser King, Rose Heinni, and
Prince Alexander are their minor children.
On November 18, 1989, a bus of petitioner figured in an
accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney,
including two Maranaos. Crisanto Generalao, a volunteer
field agent of the Constabulary Regional Security Unit No.
X, conducted an investigation of the accident. He found
that the owner of the jeepney was a Maranao residing in
Delabayan, Lanao del Norte and that certain Maranaos
were planning to take revenge on the petitioner by burning
some of its buses. Generalao rendered a report on his
findings to Sgt. Reynaldo Bastasa of the Philippine
Constabulary Regional Hearquarters at Cagayan de Oro.
Upon the instruction of Sgt. Bastasa, he went to see
Diosdado Bravo, operations manager of petitioner, at its
main office in Cagayan de Oro City. Bravo assured him
that the necessary precautions to insure the safety of lives
and property would be taken.[1]
At about 6:45 P.M. on November 22, 1989, three armed
Maranaos who pretended to be passengers, seized a bus of
petitioner at Linamon, Lanao del Norte while on its way to
Iligan City. Among the passengers of the bus was Atty.
Caorong. The leader of the Maranaos, identified as one
Bashier Mananggolo, ordered the driver, Godofredo
Cabatuan, to stop the bus on the side of the highway.
Mananggolo then shot Cabatuan on the arm, which caused

190

him to slump on the steering wheel. Then one of the

companions of Mananggolo started pouring gasoline inside
the bus, as the other held the passengers at bay with a
handgun. Mananggolo then ordered the passengers to get
off the bus. The passengers, including Atty. Caorong,
stepped out of the bus and went behind the bushes in a field
some distance from the highway.[2]
However, Atty. Caorong returned to the bus to retrieve
something from the overhead rack. At that time, one of the
armed men was pouring gasoline on the head of the driver.
Cabatuan, who had meantime regained consciousness,
heard Atty. Caorong pleading with the armed men to spare
the driver as he was innocent of any wrong doing and was
only trying to make a living. The armed men were,
however, adamant as they repeated their warning that they
were going to burn the bus along with its driver. During
this exchange between Atty. Caorong and the assailants,
Cabatuan climbed out of the left window of the bus and
crawled to the canal on the opposite side of the highway.
He heard shots from inside the bus. Larry de la Cruz, one
of the passengers, saw that Atty. Caorong was hit. Then the
bus was set on fire. Some of the passengers were able to
pull Atty. Caorong out of the burning bus and rush him to
the Mercy Community Hospital in Iligan City, but he died
while undergoing operation.[3]
The private respondents brought this suit for breach of
contract of carriage in the Regional Trial Court, Branch VI,
Iligan City. In his decision, dated December 28, 1990, the
trial court dismissed the complaint, holding as follows:
The fact that defendant, through Operations Manager
Diosdado Bravo, was informed of the rumors that the
Moslems intended to take revenge by burning five buses of
defendant is established since the latter also utilized
Crisanto Generalaos as a witness. Yet despite this
information, the plaintiffs charge, defendant did not take
proper precautions. . . . Consequently, plaintiffs now fault
the defendant for ignoring the report. Their position is that
the defendant should have provided its buses with security
guards. Does the law require common carriers to install
security guards in its buses for the protection and safety of
its passengers? Is the failure to post guards an omission of
the duty to exercise the diligence of a good father of the
family which could have prevented the killing of Atty.
Caorong? To our mind, the diligence demanded by law
does not include the posting of security guards in buses. It
is an obligation that properly belongs to the State. Besides,
will the presence of one or two security guards suffice to
deter a determined assault of the lawless and thus prevent
the injury complained of? Maybe so, but again, perhaps
not. In other words, the presence of a security guard is not
a guarantee that the killing of Atty. Caorong would have
been definitely avoided.
.
Accordingly, the failure of defendant to accord faith and
credit to the report of Mr. Generalao and the fact that it did
not provide security to its buses cannot, in the light of the
circumstances, be characterized as negligence.

Finally, the evidence clearly shows that the assailants did

not have the least intention of harming any of the
passengers. They ordered all the passengers to alight and
set fire on the bus only after all the passengers were out of
danger. The death of Atty. Caorong was an unexpected and
unforseen occurrence over which defendant had no control.
Atty. Caorong performed an act of charity and heroism in
coming to the succor of the driver even in the face of
danger. He deserves the undying gratitude of the driver
whose life he saved. No one should blame him for an act
of extraordinary charity and altruism which cost his life.
But neither should any blame be laid on the doorstep of
defendant. His death was solely due to the willful acts of
the lawless which defendant could neither prevent nor stop.
.
WHEREFORE, in view of the foregoing, the complaint is
hereby dismissed. For lack of merit, the counter-claim is
likewise dismissed. No cost.[4]
On appeal, however, the Court of Appeals reversed. It
held:
In the case at bench, how did defendant-appellee react to
the tip or information that certain Maranao hotheads were
planning to burn five of its buses out of revenge for the
deaths of two Maranaos in an earlier collision involving
appellees bus? Except for the remarks of appellees
operations manager that we will have our action . . . . and
Ill be the one to settle it personally, nothing concrete
whatsoever was taken by appellee or its employees to
prevent the execution of the threat. Defendant-appellee
never adopted even a single safety measure for the
protection of its paying passengers. Were there available
safeguards? Of course, there were: one was frisking
passengers particularly those en route to the area where the
threats were likely to be carried out such as where the
earlier accident occurred or the place of influence of the
victims or their locality. If frisking was resorted to, even
temporarily, . . . . appellee might be legally excused from
liability. Frisking of passengers picked up along the route
could have been implemented by the bus conductor; for
those boarding at the bus terminal, frisking could have been
conducted by him and perhaps by additional personnel of
defendant-appellee. On hindsight, the handguns and
especially the gallon of gasoline used by the felons all of
which were brought inside the bus would have been
discovered, thus preventing the burning of the bus and the
fatal shooting of the victim.
Appellees argument that there is no law requiring it to
provide guards on its buses and that the safety of citizens is
the duty of the government, is not well taken. To be sure,
appellee is not expected to assign security guards on all of
its buses; if at all, it has the duty to post guards only on its
buses plying predominantly Maranao areas. As discussed
in the next preceding paragraph, the least appellee could
have done in response to the report was to adopt a system
of verification such as frisking of passengers boarding its
buses. Nothing, and to repeat, nothing at all, was done by

191

defendant-appellee to protect its innocent passengers from

the danger arising from the Maranao threats. It must be
observed that frisking is not a novelty as a safety measure
in our society. Sensitive places in fact, nearly all
important places have applied this method of security
enhancement. Gadgets and devices are available in the
market for this purpose. It would not have weighed much
against the budget of the bus company if such items were
made available to its personnel to cope up with situations
such as the Maranao threats.

(C) THAT PUBLIC RESPONDENT COURT OF

APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER COULD HAVE PROVIDED ADEQUATE
SECURITY IN PREDOMINANTLY MUSLIM AREAS
AS PART OF ITS DUTY TO OBSERVE EXTRAORDINARY DILIGENCE AS A COMMON CARRIER.

In view of the constitutional right to personal privacy, our

pronouncement in this decision should not be construed as
an advocacy of mandatory frisking in all public
conveyances. What we are saying is that given the
circumstances obtaining in the case at bench that: (a) two
Maranaos died because of a vehicular collision involving
one of appellees vehicles; (b) appellee received a written
report from a member of the Regional Security Unit,
Constabulary Security Group, that the tribal/ethnic group of
the two deceased were planning to burn five buses of
appellee out of revenge; and (c) appellee did nothing
absolutely nothing for the safety of its passengers
travelling in the area of influence of the victims, appellee
has failed to exercise the degree of diligence required of
common carriers. Hence, appellee must be adjudged liable.

Art. 1763 of the Civil Code provides that a common carrier

is responsible for injuries suffered by a passenger on
account of the wilful acts of other passengers, if the
employees of the common carrier could have prevented the
act the exercise of the diligence of a good father of a
family. In the present case, it is clear that because of the
negligence of petitioners employees, the seizure of the bus
by Mananggolo and his men was made possible.

Had petitioner and its employees been vigilant they would

not have failed to see that the malefactors had a large
quantity of gasoline with them. Under the circumstances,
simple precautionary measures to protect the safety of
passengers, such as frisking passengers and inspecting their
baggages, preferably with non-intrusive gadgets such as
metal detectors, before allowing them on board could have
been employed without violating the passengers
constitutional rights. As this Court intimated in Gacal v.
Philippine Air Lines, Inc.,[6] a common carrier can be held
liable for failing to prevent a hijacking by frisking
passengers and inspecting their baggages.

WHEREFORE, the decision appealed from is hereby

REVERSED and another rendered ordering defendantappellee to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorneys
fees; and
Costs against defendant-appellee.[5]
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN
REVERSING THE DECISION OF THE REGIONAL
TRIAL COURT DATED DECEMBER 28, 1990
DISMISSING THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE
RESPONDENTS BY ORDERING PETITIONER TO PAY
THE GARGANTUAN SUM OF P3,449,649.20 PLUS
P500.00 PER APPEARANCE AS ATTORNEYS FEES,
AS WELL AS DENYING PETITIONERS MOTION FOR
RECONSIDERATION AND THE SUPPLEMENT TO
SAID MOTION, WHILE HOLDING, AMONG OTHERS,
THAT PETITIONER BREACHED THE CONTRACT OF
CARIAGE BY ITS FAILURE TO EXERCISE THE
REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS
WERE SO GRAVE, IRRESISTIBLE, VIOLENT, AND
FORCEFUL, AS TO BE REGARDED AS CASO
FORTUITO; AND

The instant petition has no merit.

First. Petitioners Breach of the Contract of Carriage

Despite warning by the Philippine Constabulary at Cagayan

de Oro that the Maranaos were planning to take revenge on
the petitioner by burning some of its buses and the
assurance of petitioners operation manager, Diosdado
Bravo, that the necessary precautions would be taken,
petitioner did nothing to protect the safety of its passengers.

From the foregoing, it is evident that petitioners

employees failed to prevent the attack on one of petitioners
buses because they did not exercise the diligence of a good
father of a family. Hence, petitioner should be held liable
for the death of Atty. Caorong.
Second. Seizure of Petitioners Bus not a Case of Force
Majeure
The petitioner contends that the seizure of its bus by the
armed assailants was a fortuitous event for which it could
not be held liable.
Art. 1174 of the Civil Code defines a fortuitous even as an
occurrence which could not be foreseen or which though
foreseen, is inevitable. In Yobido v. Court of Appeals,[7]
we held that to be considered as force majeure, it is
necessary that: (1) the cause of the breach of the obligation
must be independent of the human will; (2) the event must
be either unforeseeable or unavoidable; (3) the occurrence
must be such as to render it impossible for the debtor to
fulfill the obligation in a normal manner; and (4) the

192

obligor must be free of participation in, or aggravation of,

the injury to the creditor. The absence of any of the
requisites mentioned above would prevent the obligor from
being excused from liability.
Thus, in Vasquez v. Court of Appeals,[8] it was held that
the common carrier was liable for its failure to take the
necessary precautions against an approaching typhoon, of
which it was warned, resulting in the loss of the lives of
several passengers. The event was foreseeable, and, thus,
the second requisite mentioned above was not fulfilled.
This ruling applies by analogy to the present case. Despite
the report of PC agent Generalao that the Maranaos were
going to attack its buses, petitioner took no steps to
safeguard the lives and properties of its passengers. The
seizure of the bus of the petitioner was foreseeable and,
therefore, was not a fortuitous event which would exempt
petitioner from liability.
Petitioner invokes the ruling in Pilapil v. Court of
Appeals[9] and De Guzman v. Court of Appeals[10] in
support of its contention that the seizure of its bus by the
assailants constitutes force majeure. In Pilapil v. Court of
Appeals,[11] it was held that a common carrier is not liable
for failing to install window grills on its buses to protect
passengers from injuries caused by rocks hurled at the bus
by lawless elements. On the other hand, in De Guzman v.
Court of Appeals,[12] it was ruled that a common carrier is
not responsible for goods lost as a result of a robbery which
is attended by grave or irresistible threat, violence, or force.
It is clear that the cases of Pilapil and De Guzman do not
apply to the present case. Art. 1755 of the Civil Code
provides that a common carrier is bound to carry the
passengers as far as human care and foresight can provide,
using the utmost diligence of very cautious person, with
due regard for all the circumstances. Thus, we held in
Pilapil and De Guzman that the respondents therein were
not negligent in failing to take special precautions against
threats to the safety of passengers which could not be
foreseen, such as tortious or criminal acts of third persons.
In the present case, this factor of unforeseeablility (the
second requisite for an event to be considered force
majeure) is lacking. As already stated, despite the report of
PC agent Generalao that the Maranaos were planning to
burn some of petitioners buses and the assurance of
petitioners operations manager (Diosdado Bravo) that the
necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers.
Third. Deceased not Guilty of Contributory Negligence
The petitioner contends that Atty. Caorong was guilty of
contributory negligence in returning to the bus to retrieve
something. But Atty. Caorong did not act recklessly. It
should be pointed out that the intended targets of the
violence were petitioner and its employees, not its
passengers. The assailants motive was to retaliate for the
loss of life of two Maranaos as a result of the collision
between petitioners bus and the jeepney in which the two
Maranaos were riding. Mananggolo, the leader of the
group which had hijacked the bus, ordered the passengers

to get off the bus as they intended to burn it and its driver.
The armed men actually allowed Atty. Caorong to retrieve
something from the bus. What apparently angered them
was his attempt to help the driver of the bus by pleading for
his life. He was playing the role of the good Samaritan.
Certainly, this act cannot be considered an act of
negligence, let alone recklessness.
Fourth. Petitioner Liable to Private Respondents for
Damages
We now consider the question of damages that the heirs of
Atty. Caorong, private respondents herein, are entitled to
recover from the petitioner.
Indemnity for Death. Art. 1764 of the Civil Code, in
relation to Art. 2206 thereof, provides for the payment of
indemnity for the death of passengers caused by the
breached of contract of carriage by a common carrier.
Initially fixed in Art. 2206 at P3,000.00, the amount of the
said indemnity for death has through the years been
gradually increased in view of the declining value of the
peso. It is presently fixed at P50,000.00.[13] Private
respondents are entitled to this amount.
Actual damages. Art. 2199 provides that Except as
provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. The trial court
found that the private respondents spent P30,000.00 for the
wake and burial of Atty. Caorong.[14] Since petitioner does
not question this finding of the trial court, it is liable to
private respondents in the said amount as actual damages.
Moral Damages. Under Art. 2206, the spouse, legitimate
and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish
by reason of the death of the deceased. The trial court
found that private respondent Paulie Caorong suffered pain
from the death of her husband and worry on how to provide
support for their minor children, private respondents Yasser
King, Rose Heinni, and Prince Alexander.[15] The
petitioner likewise does not question this finding of the trial
court. Thus, in accordance with recent decisions of this
Court,[16] we hold that the petitioner is liable to the private
respondents in the amount of P100,000.00 as moral
damages for the death of Atty. Caorong.
Exemplary Damages. Art. 2232 provides that in contracts
and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner. In the present
case, the petitioner acted in a wanton and reckless manner.
Despite warning that the Maranaos were planning to take
revenge against the petitioner by burning some of its buses,
and contrary to the assurance made by its operations
manager that the necessary precautions would be taken, the
petitioner and its employees did nothing to protect the
safety of passengers. Under the circumstances, we deem it
reasonable to award private respondents exemplary
damages in the amount of P100,000.00.[17]

193

Attorneys Fees. Pursuant to Art. 2208, attorneys fees may

be recovered when, as in the instant case, exemplary
damages are awarded. In the recent case of Sulpicio Lines,
Inc. v. Court of Appeals,[18] we held an award of
P50,000.00 as attorneys fees to be reasonable. Hence, the
private respondents are entitled to attorneys fees in that
amount.
Compensation for Loss of Earning Capacity. Art. 1764 of
the Civil Code, in relation to Art. 2206 thereof, provides
that in addition to the indemnity for death arising from the
breach of contract of carriage by a common carrier, the
defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter. The formula established in decided
cases for computing net earning capacity is as follows:[19]

7) costs of suits.
SO ORDERED.
Isaac v. Al Ammen 101 PHIL 1046
August 23, 1957
G.R. No. L-9671
CESAR L. ISAAC, plaintiff-appellant,
vs.
A. L. AMMEN TRANSPORTATION
defendant-appellee.

CO.,

INC.,

Angel S. Gamboa for appellant.

Manuel O. Chan for appellee.
BAUTISTA ANGELO, J.:

Gross
Necessary
Net earning = Life
x Annual - Living
Capacity
Expectancy Income
Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied
by the difference of eighty (80) and the age of the deceased.
[20] Since Atty. Caorong was 37 years old at the time of his
death,[21] he had a life expectancy of 28 2/3 more years.
[22] His projected gross annual income, computed based on
his monthly salary of P11,385.00[23] as a lawyer in the
Department of Agrarian Reform at the time of his death,
was P148,005.00.[24] allowing for necessary living
expenses of fifty percent (50%)[25]of his projected gross
annual income, his total earning capacity amounts to
P2,121,404.90.[26] Hence, the petitioner is liable to the
private respondents in the said amount as compensation for
loss of earning capacity.
WHEREFORE, the decision, dated July 29, 1994, of the
Court of Appeals is hereby AFFIRMED with the
MODIFICATION that petitioner Fortune Express, Inc. is
ordered to pay the following amounts to private
respondents Paulie, Yasser King, Rose Heinni, and Prince
Alexander Caorong:
1. death indemnity in the amount of fifty thousand pesos
(P50,000.00);
2. actual damages in the amount of thirty thousand pesos
(P30,000.00);
3. moral damages in the amount of one hundred thousand
pesos(P100,000.00);
4. exemplary damages in the amount of one hundred
thousand pesos (P100,000.00);
5. attorneys fees in the amount of fifty thousand pesos
(P50,000.00);
6. compensation for loss of earning capacity in the amount
of two million one hundred twenty-one thousand four
hundred four pesos and ninety centavos (P2,121,404.90);
and

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

194

defendant could not foresee or, though foreseen, was

inevitable.

goods and for the safety of the passengers transported by

them according to all the circumstances of each case.

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.

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.

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

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

195

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.

196

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A.,

Labrador, Concepcion, Endencia and Felix, JJ., concur.

Responsibility for Acts of Strangers and Co-pax

1763

MRR v. Ballesteros Apr 29,1966

G.R. No. L-19161
April 29, 1966
MANILA RAILROAD COMPANY, petitioner,
vs.
MACARIA BALLESTEROS, TIMOTEO CAMAYO,
JOSE REYES and JULIAN MAIMBAN, JR., respondents.
Gov't Corp. Counsel S. M. Gopengco and Atty. R. G.
Fernando, for petitioner.
George G. Arbolario, for respondents.
MAKALINTAL, J.:
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.
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.
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 P200,000.1wph1.t

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

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:

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:

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

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

197

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.

GERUNDIO B. CASTAO, and the COURT OF

APPEALS, respondents.
Felipe G. Tac-an counsel for petitioner.

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 claimants was reasonable and should be
accepted. His advice, however, was not favorably acted
upon, petitioner obviously preferring to litigate.
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.
The writ prayed for is denied, with costs against petitioner.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L.,
Barrera, Dizon, Regala, Bengzon, J.P., and Sanchez, JJ.,
concur.
Bacarro v. Castao Nov 5,1982
G.R. No. L-34597 November 5, 1982
ROSITO Z. BACARRO, WILLIAM SEVILLA, and
FELARIO MONTEFALCON, petitioners,
vs.

Gerundio B. Castao counsel for private respondent.

RELOVA, J.:
Appeal taken by petitioners from a decision of the Court of
Appeals, affirming that of the Court of First Instance of
Misamis Occidental, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered, ordering the
defendants to jointly and severally pay to the plaintiff the
sum of (1) P973.10 for medical treatment and
hospitalization; (2) P840.20 for loss of salary during
treatment; and (3) P2,000.00 for partial permanent
deformity, with costs against the defendants.
The facts are set forth in the decision of the Court of
Appeals, from which We quote:
... In the afternoon of April 1, 1960, he (appellee) boarded
the said jeep as a paying passenger at Oroquieta bound for
Jimenez, Misamis Occidental. It was then fined to capacity,
with twelve (12) passengers in all. 'The jeep was running
quite fast and the jeep while approaching the (Sumasap)
bridge there was a cargo truck which blew its horn for a
right of way. The jeep gave way but did not change
speed. ... When the jeep gave way it turned to the right and
continued running with the same speed. In so doing ...the
driver was not able to return the jeep to the proper place ...
instead, it ran obliquely towards the canal; that is why, we
fell to the ditch. ... When the jeep was running in the side of
the road for few meters, naturally, the jeep was already
inclined and two passengers beside me were the ones who
pushed me. I was pushed by the two passengers beside me;
that is why, when I was clinging, my leg and half of my
body were outside the jeep when it reached the canal. ...
My right leg was sandwiched by the body of the jeep and
the right side of the ditch. ... My right leg was broken.' He
was rushed to the Saint Mary's Hospital where he stayed
for about two (2) months. 'My right leg is now shorter by
one and one-half inches causing me to use specially made
shoes. ... I could not squat for a long time; I could not kneel
for a long time; and I could not even sit for a long time
because I will suffer cramp. ... With my three fingers I am
still uneasy with my three fingers in my right hand. There is
a feeling of numbness with my three fingers even right
now.
xxx

xxx

xxx

From appellee's version just set out, it appears that after he

boarded the jeep in question at Oroquieta, it was driven by
defendant Montefalcon at around forty (40) kilometers per
hour bound for Jimenez; that while approaching Sumasap
Bridge at the said speed, a cargo truck coming from behind
blew its horn to signal its intention to overtake the jeep;

198

that the latter, without changing its speed, gave way by

swerving to the right, such that both vehicles ran side by
side for a distance of around twenty (20) meters, and that
thereafter as the jeep was left behind, its driver was unable
to return it to its former lane and instead it obliquely or
diagonally ran down an inclined terrain towards the right
until it fell into a ditch pinning down and crushing
appellee's right leg in the process.
Throwing the blame for this accident on the driver of the
cargo truck, appellants, in turn, state the facts to be as
follows:

hour even at the time the overtaking cargo truck was

running side by side for about twenty (20) meters and at
which time he even shouted to the driver of the truck.
Hereunder is the testimony of private respondent Gerundio
B. Castao on this point:
Q At that time when you rode that jeep on your way to
Jimenez, you said that the jeep was running quite fast for a
jeep, is that correct?
A Yes, sir.
xxx

In the afternoon of April 1, 1960, plaintiff Gerundio

Castao boarded the said jeepney at Oroquieta bound for
Jimenez, Misamis occidental. While said jeepney was
negotiating the upgrade approach of the Sumasap Bridge at
Jimenez, Misamis Occidental and at a distance of about 44
meters therefrom, a cargo truck, owned and operated by a
certain Te Tiong alias Chinggim, then driven by Nicostrato
Digal, a person not duly licensed to drive motor vehicles,
overtook the jeepney so closely that in the process of
overtaking sideswiped the jeepney, hitting the reserve tire
placed at the left side of the jeepney with the hinge or bolt
of the siding of the cargo truck, causing the jeepney to
swerve from its course and after running 14 meters from
the road it finally fell into the canal. The right side of the
jeep fell on the right leg of the plaintiff-appellee, crushing
said leg against the ditch resulting in the injury to plaintiffappellee consisting of a broken right thigh.
and take the following stand: 'The main defense of
defendants appellants is anchored on the fact that the
jeepney was sideswiped by the overtaking cargo truck'
(Appellants' Brief, pp. 3-4, 7).
It must be admitted, out of candor, that there is evidence of
the sideswiping relied upon by appellants. ....

xxx

xxx

Q When you said that it is quite fast for a jeep, do you

mean to tell this Court that the speed of that jeep could not
be made by that particular jeepney?
A
It can be made but it will not be very safe for that
kind of transportation to run that kind of speed.
Q What was the speed of that jeep in terms of miles or
kilometers per hour?
A About 40 kilometers or about that time during that trip
per hour.
Q And you said also that there was a cargo truck that was
behind the jeep, is that correct, while you were already
approaching the Sumasap bridge?
A

Yes.

xxx

xxx

xxx

Q How about the speed of that truck as the jeep you were
riding was approaching the Sumasap bridge? What was the
speed of that truck, fast or not fast?

This appeal by certiorari to review the decision of

respondent Court of Appeals asserts that the latter decided
questions of substance which are contrary to law and the
approved decisions of this Court. Petitioners alleged that
respondent Court of Appeals erred (1) in finding
contributory negligence on the part of jeepney driver
appellant Montefalcon for having raced with the overtaking
cargo truck to the bridge instead of slackening its speed,
when the person solely responsible for the sideswiping is
the unlicensed driver of the overtaking cargo truck; (2) in
finding the jeepney driver not to have exercised
extraordinary diligence, human care, foresight and utmost.
diligence of very cautious persons, when the diligence
required pursuant to Article 1763 of the New Civil Code is
only that of a good father of a family since the injuries were
caused by the negligence of a stranger; and (3) in not
considering that appellants were freed from any liability
since the accident was due to fortuitous event - the
sideswiping of the jeepney by the overtaking cargo truck.

A Naturally, the truck when it asks for a clearance that he

will overtake it will run fast.

We are not persuaded. The fact is, petitioner-driver

Montefalcon did not slacken his speed but instead
continued to run the jeep at about forty (40) kilometers per

A When the truck was asking for a clearance it was yet

about less than 100 meters from the bridge when he was
asking for a clearance to overtake.

xxx

xxx

xxx

Q Now comparing the speed that you mentioned that the

jeep was negotiating in that place and the cargo truck,
which ran faster-the jeep or the cargo truck?
xxx

xxx

xxx

A Naturally, the truck was a little bit faster because he was

able to overtake.
xxx

xxx

xxx

Q Now, how far more or less was the jeep from the bridge
when the truck was about to or in the process of overtaking
the jeep you were riding?

199

xxx

xxx

xxx

A I do not know why but I know it slowly got to the canal

but I do not know why it goes there.

Q Do you remember the distance when the truck and the

jeep were already side by side as they approach the bridge
in relation to the bridge?

xxx

xxx

Q You said when the jeep was about to be lodged in the

canal, you stated that the jeep was running upright, is that a
fact?

xxx

xxx

A They were about fifty meters ... from fifty to thirty

meters when they were side by side from the bridge.
xxx

xxx

xxx

Q .... You said before that the jeep and the truck were
running side by side for a few meters, is that correct?

xxx

xxx

A Yes.
Q
So that the terrain was more or less level because
the jeep was already running upright, is that not correct?
A The jeep was running on its wheels but it is running on
the side, the side was inclining until it reached the ditch.

A Yes, sir.
Q I am asking you now, how long were they running side
by side-the jeep and the cargo truck?

Q You mean to tell the Court that from the entire of the
fifteen meters distance from the side of the road up to the
place where the jeep was finally lodged that place is
inclining towards the right?

A About 20 meters, they were running side by side.

Q And after running side by side for 20 meters, the jeep and
its passengers went to the canal?
A Yes.
Q You said on direct examinaton that when the jeep (should
be truck) was blowing its horn and asking for a way, you
said that the jeep gave way and turned to the right and did
not recover its position and the jeep fell into the ditch, is
that what you said before?
A The jeep did not recover. It was not able to return to the
center of the road. It was running outside until it reached
the canal, running diagonally.
Q When the jeep gave way to the cargo truck, the jeep was
at the right side of the road?
A Already on the right side of the road.
Q And this jeep was running steadily at the right side of the
road.
A Yes, sir.
xxx

xxx

xxx

Q When the jeep gave way to the cargo truck and it kept its
path to the right, it was still able to maintain that path to the
right for about twenty meters and while the jeep and the
cargo truck were running side by side?
A

Yes.

Q When the truck and the jeep were already running side
by side and after having run twenty meters side by side, do
you know why the jeep careened to the ditch or to the
canal?

A When the jeep left the road it was already inclining

because it was running part side of the road which is
inclining. (Transcript of March 25 and 26, 1963).
Thus, had Montefalcon slackened the speed of the jeep at
the time the truck was overtaking it, instead of running side
by side with the cargo truck, there would have been no
contact and accident. He should have foreseen that at the
speed he was running, the vehicles were getting nearer the
bridge and as the road was getting narrower the truck
would be to close to the jeep and would eventually
sideswiped it. Otherwise stated, he should have slackened
his jeep when he swerved it to the right to give way to the
truck because the two vehicles could not cross the bridge at
the same time.
The second assigned error is centered on the alleged failure
on the part of the jeepney driver to exercise extraordinary
diligence, human care, foresight and utmost diligence of a
very cautious person, when the diligence required pursuant
to Article 1763 of the Civil Code is only that of a good
father of a family. Petitioners contend that the proximate
cause of the accident was the negligence of the driver of the
truck. However, the fact is, there was a contract of carriage
between the private respondent and the herein petitioners in
which case the Court of Appeals correctly applied Articles
1733, 1755 and 1766 of the Civil Code which require the
exercise of extraordinary diligence on the part of petitioner
Montefalcon.
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.
Art. 1755. A common carrier is bound to carry the
Passengers safely as far as human care and foresight can

200

provide, using the utmost diligence of very cautious

persons, with a due regard for all the circumstances.
Art. 1766. In all matters not regulated by this Code, the
rights and obligations of common carriers shall be
governed by the Code of Commerce and by special laws.
Indeed, the hazards of modern transportation demand
extraordinary diligence. A common carrier is vested with
public interest. Under the new Civil Code, instead of being
required to exercise mere ordinary diligence a common
carrier is exhorted to carry the passengers safely as far as
human care and foresight can provide "using the utmost
diligence of very cautious persons." (Article 1755). Once a
passenger in the course of travel is injured, or does not
reach his destination safely, the carrier and driver are
presumed to be at fault.
The third assigned error of the petitioners would find fault
upon respondent court in not freeing petitioners from any
liability, since the accident was due to a fortuitous event.
But, We repeat that the alleged fortuitous event in this case
- the sideswiping of the jeepney by the cargo truck, was
something which could have been avoided considering the
narrowness of the Sumasap Bridge which was not wide
enough to admit two vehicles. As found by the Court of
Appeals, Montefalcon contributed to the occurrence of the
mishap.
WHEREFORE, the decision of the respondent Court of
Appeals, dated September 30,1971, is hereby AFFIRMED.
With costs.
SO ORDERED.
Gacal v. PAL
Mar 15,1990
G.R. No. L-55300 March 15, 1990
FRANKLIN G. GACAL and CORAZON M. GACAL, the
latter assisted by her husband, FRANKLIN G. GACAL,
petitioners,
vs.
PHILIPPINE AIR LINES, INC., and THE HONORABLE
PEDRO SAMSON C. ANIMAS, in his capacity as
PRESIDING JUDGE of the COURT OF FIRST
INSTANCE OF SOUTH COTABATO, BRANCH I,
respondents.
Vicente A. Mirabueno for petitioners.
Siguion Reyna, Montecillo & Ongsiako for private
respondent.

PARAS, J.:
This is a, petition for review on certiorari of the decision of
the Court of First Instance of South Cotabato, Branch 1, *
promulgated on August 26, 1980 dismissing three (3)
consolidated cases for damages: Civil Case No. 1701, Civil
Case No. 1773 and Civil Case No. 1797 (Rollo, p. 35).

The facts, as found by respondent court, are as follows:

Plaintiffs Franklin G. Gacal and his wife, Corazon M.
Gacal, Bonifacio S. Anislag and his wife, Mansueta L.
Anislag, and the late Elma de Guzman, were then
passengers boarding defendant's BAC 1-11 at Davao
Airport for a flight to Manila, not knowing that on the same
flight, Macalinog, Taurac Pendatum known as Commander
Zapata, Nasser Omar, Liling Pusuan Radia, Dimantong
Dimarosing and Mike Randa, all of Marawi City and
members of the Moro National Liberation Front (MNLF),
were their co-passengers, three (3) armed with grenades,
two (2) with .45 caliber pistols, and one with a .22 caliber
pistol. Ten (10) minutes after take off at about 2:30 in the
afternoon, the hijackers brandishing their respective
firearms announced the hijacking of the aircraft and
directed its pilot to fly to Libya. With the pilot explaining to
them especially to its leader, Commander Zapata, of the
inherent fuel limitations of the plane and that they are not
rated for international flights, the hijackers directed the
pilot to fly to Sabah. With the same explanation, they
relented and directed the aircraft to land at Zamboanga
Airport, Zamboanga City for refueling. The aircraft landed
at 3:00 o'clock in the afternoon of May 21, 1976 at
Zamboanga Airport. When the plane began to taxi at the
runway, it was met by two armored cars of the military with
machine guns pointed at the plane, and it stopped there.
The rebels thru its commander demanded that a DC-aircraft
take them to Libya with the President of the defendant
company as hostage and that they be given $375,000 and
six (6) armalites, otherwise they will blow up the plane if
their demands will not be met by the government and
Philippine Air Lines. Meanwhile, the passengers were not
served any food nor water and it was only on May 23, a
Sunday, at about 1:00 o'clock in the afternoon that they
were served 1/4 slice of a sandwich and 1/10 cup of PAL
water. After that, relatives of the hijackers were allowed to
board the plane but immediately after they alighted
therefrom, an armored car bumped the stairs. That
commenced the battle between the military and the
hijackers which led ultimately to the liberation of the
surviving crew and the passengers, with the final score of
ten (10) passengers and three (3) hijackers dead on the spot
and three (3) hijackers captured.
City Fiscal Franklin G. Gacal was unhurt. Mrs. Corazon M.
Gacal suffered injuries in the course of her jumping out of
the plane when it was peppered with bullets by the army
and after two (2) hand grenades exploded inside the plane.
She was hospitalized at General Santos Doctors Hospital,
General Santos City, for two (2) days, spending P245.60 for
hospital and medical expenses, Assistant City Fiscal
Bonifacio S. Anislag also escaped unhurt but Mrs. Anislag
suffered a fracture at the radial bone of her left elbow for
which she was hospitalized and operated on at the San
Pedro Hospital, Davao City, and therefore, at Davao
Regional Hospital, Davao City, spending P4,500.00. Elma
de Guzman died because of that battle. Hence, the action of
damages instituted by the plaintiffs demanding the
following damages, to wit:

201

Civil Case No. 1701

City Fiscal Franklin G. Gacal and Mrs. Corazon M. Gacal
actual damages: P245.60 for hospital and medical
expenses of Mrs Gacal; P8,995.00 for their personal
belongings which were lost and not recovered; P50,000.00
each for moral damages; and P5,000.00 for attorney's fees,
apart from the prayer for an award of exemplary damages
(Record, pp. 4-6, Civil Case No. 1701).

majeure and other causes beyond the control of the

respondent Airline.
The determinative issue in this case is whether or not
hijacking or air piracy during martial law and under the
circumstances obtaining herein, is a caso fortuito or force
majeure which would exempt an aircraft from payment of
damages to its passengers whose lives were put in jeopardy
and whose personal belongings were lost during the
incident.

Civil Case No. 1773

xxx

xxx

xxx

Civil Case No. 1797

xxx

xxx

xxx

The trial court, on August 26, 1980, dismissed the

complaints finding that all the damages sustained in the
premises were attributed to force majeure.
On September 12, 1980 the spouses Franklin G. Gacal and
Corazon M. Gacal, plaintiffs in Civil Case No. 1701, filed a
notice of appeal with the lower court on pure questions of
law (Rollo, p. 55) and the petition for review on certiorari
was filed with this Court on October 20, 1980 (Rollo, p.
30).
The Court gave due course to the petition (Rollo, p. 147)
and both parties filed their respective briefs but petitioner
failed to file reply brief which was noted by the Court in
the resolution dated May 3, 1982 (Rollo, p. 183).
Petitioners alleged that the main cause of the unfortunate
incident is the gross, wanton and inexcusable negligence of
respondent Airline personnel in their failure to frisk the
passengers adequately in order to discover hidden weapons
in the bodies of the six (6) hijackers. They claimed that
despite the prevalence of skyjacking, PAL did not use a
metal detector which is the most effective means of
discovering potential skyjackers among the passengers
(Rollo, pp. 6-7).
Respondent Airline averred that in the performance of its
obligation to safely transport passengers as far as human
care and foresight can provide, it has exercised the utmost
diligence of a very cautious person with due regard to all
circumstances, but the security checks and measures and
surveillance precautions in all flights, including the
inspection of baggages and cargo and frisking of
passengers at the Davao Airport were performed and
rendered solely by military personnel who under
appropriate authority had assumed exclusive jurisdiction
over the same in all airports in the Philippines.
Similarly, the negotiations with the hijackers were a purely
government matter and a military operation, handled by
and subject to the absolute and exclusive jurisdiction of the
military authorities. Hence, it concluded that the accident
that befell RP-C1161 was caused by fortuitous event, force

Under the Civil Code, common carriers are required to

exercise extraordinary diligence in their vigilance over the
goods and for the safety of passengers transported by them,
according to all the circumstances of each case (Article
1733). They are presumed at fault or to have acted
negligently whenever a passenger dies or is injured
(Philippine Airlines, Inc. v. National Labor Relations
Commission, 124 SCRA 583 [1983]) or for the loss,
destruction or deterioration of goods in cases other than
those enumerated in Article 1734 of the Civil Code
(Eastern Shipping Lines, Inc. v. Intermediate Appellate
Court, 150 SCRA 463 [1987]).
The source of a common carrier's legal liability is the
contract of carriage, and by entering into said contract, it
binds itself to carry the passengers safely as far as human
care and foresight can provide. There is breach of this
obligation if it fails to exert extraordinary diligence
according to all the circumstances of the case in exercise of
the utmost diligence of a very cautious person (Isaac v.
Ammen Transportation Co., 101 Phil. 1046 [1957]; Juntilla
v. Fontanar, 136 SCRA 624 [1985]).
It is the duty of a common carrier to overcome the
presumption of negligence (Philippine National Railways v.
Court of Appeals, 139 SCRA 87 [1985]) and it must be
shown that the carrier had observed the required
extraordinary diligence of a very cautious person as far as
human care and foresight can provide or that the accident
was caused by a fortuitous event (Estrada v. Consolacion,
71 SCRA 523 [1976]). Thus, as ruled by this Court, no
person shall be responsible for those "events which could
not be foreseen or which though foreseen were inevitable.
(Article 1174, Civil Code). The term is synonymous with
caso fortuito (Lasam v. Smith, 45 Phil. 657 [1924]) which
is of the same sense as "force majeure" (Words and Phrases
Permanent Edition, Vol. 17, p. 362).
In order to constitute a caso fortuito or force majeure that
would exempt a person from liability under Article 1174 of
the Civil Code, it is necessary that the following elements
must concur: (a) the cause of the breach of the obligation
must be independent of the human will (the will of the
debtor or the obligor); (b) the event must be either
unforeseeable or unavoidable; (c) the event must be such as
to render it impossible for the debtor to fulfill his obligation
in a normal manner; and (d) the debtor must be free from
any participation in, or aggravation of the injury to the
creditor (Lasam v. Smith, 45 Phil. 657 [1924]; Austria v.
Court of Appeals, 39 SCRA 527 [1971]; Estrada v.

202

Consolacion, supra; Vasquez v. Court of Appeals, 138

SCRA 553 [1985]; Juan F. Nakpil & Sons v. Court of
Appeals, 144 SCRA 596 [1986]). Caso fortuito or force
majeure, by definition, are extraordinary events not
foreseeable or avoidable, events that could not be foreseen,
or which, though foreseen, are inevitable. It is, therefore,
not enough that the event should not have been foreseen or
anticipated, as is commonly believed, but it must be one
impossible to foresee or to avoid. The mere difficulty to
foresee the happening is not impossibility to foresee the
same (Republic v. Luzon Stevedoring Corporation, 21
SCRA 279 [1967]).
Applying the above guidelines to the case at bar, the failure
to transport petitioners safely from Davao to Manila was
due to the skyjacking incident staged by six (6) passengers
of the same plane, all members of the Moro National
Liberation Front (MNLF), without any connection with
private respondent, hence, independent of the will of either
the PAL or of its passengers.
Under normal circumstances, PAL might have foreseen the
skyjacking incident which could have been avoided had
there been a more thorough frisking of passengers and
inspection of baggages as authorized by R.A. No. 6235.
But the incident in question occurred during Martial Law
where there was a military take-over of airport security
including the frisking of passengers and the inspection of
their luggage preparatory to boarding domestic and
international flights. In fact military take-over was
specifically announced on October 20, 1973 by General
Jose L. Rancudo, Commanding General of the Philippine
Air Force in a letter to Brig. Gen. Jesus Singson, then
Director of the Civil Aeronautics Administration (Rollo, pp.
71-72) later confirmed shortly before the hijacking incident
of May 21, 1976 by Letter of Instruction No. 399 issued on
April 28, 1976 (Rollo, p. 72).
Otherwise stated, these events rendered it impossible for
PAL to perform its obligations in a nominal manner and
obviously it cannot be faulted with negligence in the
performance of duty taken over by the Armed Forces of the
Philippines to the exclusion of the former.
Finally, there is no dispute that the fourth element has also
been satisfied. Consequently the existence of force majeure
has been established exempting respondent PAL from the
payment of damages to its passengers who suffered death
or injuries in their persons and for loss of their baggages.
PREMISES CONSIDERED, the petition is hereby
DISMISSED for lack of merit and the decision of the Court
of First Instance of South Cotabato, Branch I is hereby
AFFIRMED.
SO ORDERED.
Fortune Express v. CA
Mar 18,1999
[G.R. No. 119756. March 18, 1999]
FORTUNE EXPRESS, INC., petitioner, vs. COURT OF
APPEALS, PAULIE U. CAORONG, and minor children

YASSER KING CAORONG, ROSE HEINNI and PRINCE

ALEXANDER, all surnamed CAORONG, and represented
by their mother PAULIE U. CAORONG, respondents.
DECISION
MENDOZA, J.:
This is an appeal by petition for review on certiorari of the
decision, dated July 29, 1994, of the Court of Appeals,
which reversed the decision of the Regional Trial Court,
Branch VI, Iligan City. The aforesaid decision of the trial
court dismissed the complaint of private respondents
against petitioner for damages for breach of contract of
carriage filed on the ground that petitioner had not
exercised the required degree of diligence in the operation
of one of its buses. Atty. Talib Caorong, whose heirs are
private respondents herein, was a passenger of the bus and
was killed in the ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private
respondent Paulie Caorong is the widow of Atty. Caorong,
while private respondents Yasser King, Rose Heinni, and
Prince Alexander are their minor children.
On November 18, 1989, a bus of petitioner figured in an
accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney,
including two Maranaos. Crisanto Generalao, a volunteer
field agent of the Constabulary Regional Security Unit No.
X, conducted an investigation of the accident. He found
that the owner of the jeepney was a Maranao residing in
Delabayan, Lanao del Norte and that certain Maranaos
were planning to take revenge on the petitioner by burning
some of its buses. Generalao rendered a report on his
findings to Sgt. Reynaldo Bastasa of the Philippine
Constabulary Regional Hearquarters at Cagayan de Oro.
Upon the instruction of Sgt. Bastasa, he went to see
Diosdado Bravo, operations manager of petitioner, at its
main office in Cagayan de Oro City. Bravo assured him
that the necessary precautions to insure the safety of lives
and property would be taken.[1]
At about 6:45 P.M. on November 22, 1989, three armed
Maranaos who pretended to be passengers, seized a bus of
petitioner at Linamon, Lanao del Norte while on its way to
Iligan City. Among the passengers of the bus was Atty.
Caorong. The leader of the Maranaos, identified as one
Bashier Mananggolo, ordered the driver, Godofredo
Cabatuan, to stop the bus on the side of the highway.
Mananggolo then shot Cabatuan on the arm, which caused
him to slump on the steering wheel. Then one of the
companions of Mananggolo started pouring gasoline inside
the bus, as the other held the passengers at bay with a
handgun. Mananggolo then ordered the passengers to get
off the bus. The passengers, including Atty. Caorong,
stepped out of the bus and went behind the bushes in a field
some distance from the highway.[2]
However, Atty. Caorong returned to the bus to retrieve
something from the overhead rack. At that time, one of the
armed men was pouring gasoline on the head of the driver.

203

Cabatuan, who had meantime regained consciousness,

heard Atty. Caorong pleading with the armed men to spare
the driver as he was innocent of any wrong doing and was
only trying to make a living. The armed men were,
however, adamant as they repeated their warning that they
were going to burn the bus along with its driver. During
this exchange between Atty. Caorong and the assailants,
Cabatuan climbed out of the left window of the bus and
crawled to the canal on the opposite side of the highway.
He heard shots from inside the bus. Larry de la Cruz, one
of the passengers, saw that Atty. Caorong was hit. Then the
bus was set on fire. Some of the passengers were able to
pull Atty. Caorong out of the burning bus and rush him to
the Mercy Community Hospital in Iligan City, but he died
while undergoing operation.[3]
The private respondents brought this suit for breach of
contract of carriage in the Regional Trial Court, Branch VI,
Iligan City. In his decision, dated December 28, 1990, the
trial court dismissed the complaint, holding as follows:
The fact that defendant, through Operations Manager
Diosdado Bravo, was informed of the rumors that the
Moslems intended to take revenge by burning five buses of
defendant is established since the latter also utilized
Crisanto Generalaos as a witness. Yet despite this
information, the plaintiffs charge, defendant did not take
proper precautions. . . . Consequently, plaintiffs now fault
the defendant for ignoring the report. Their position is that
the defendant should have provided its buses with security
guards. Does the law require common carriers to install
security guards in its buses for the protection and safety of
its passengers? Is the failure to post guards an omission of
the duty to exercise the diligence of a good father of the
family which could have prevented the killing of Atty.
Caorong? To our mind, the diligence demanded by law
does not include the posting of security guards in buses. It
is an obligation that properly belongs to the State. Besides,
will the presence of one or two security guards suffice to
deter a determined assault of the lawless and thus prevent
the injury complained of? Maybe so, but again, perhaps
not. In other words, the presence of a security guard is not
a guarantee that the killing of Atty. Caorong would have
been definitely avoided.
.
Accordingly, the failure of defendant to accord faith and
credit to the report of Mr. Generalao and the fact that it did
not provide security to its buses cannot, in the light of the
circumstances, be characterized as negligence.
Finally, the evidence clearly shows that the assailants did
not have the least intention of harming any of the
passengers. They ordered all the passengers to alight and
set fire on the bus only after all the passengers were out of
danger. The death of Atty. Caorong was an unexpected and
unforseen occurrence over which defendant had no control.
Atty. Caorong performed an act of charity and heroism in
coming to the succor of the driver even in the face of
danger. He deserves the undying gratitude of the driver
whose life he saved. No one should blame him for an act

of extraordinary charity and altruism which cost his life.

But neither should any blame be laid on the doorstep of
defendant. His death was solely due to the willful acts of
the lawless which defendant could neither prevent nor stop.
.
WHEREFORE, in view of the foregoing, the complaint is
hereby dismissed. For lack of merit, the counter-claim is
likewise dismissed. No cost.[4]
On appeal, however, the Court of Appeals reversed. It
held:
In the case at bench, how did defendant-appellee react to
the tip or information that certain Maranao hotheads were
planning to burn five of its buses out of revenge for the
deaths of two Maranaos in an earlier collision involving
appellees bus? Except for the remarks of appellees
operations manager that we will have our action . . . . and
Ill be the one to settle it personally, nothing concrete
whatsoever was taken by appellee or its employees to
prevent the execution of the threat. Defendant-appellee
never adopted even a single safety measure for the
protection of its paying passengers. Were there available
safeguards? Of course, there were: one was frisking
passengers particularly those en route to the area where the
threats were likely to be carried out such as where the
earlier accident occurred or the place of influence of the
victims or their locality. If frisking was resorted to, even
temporarily, . . . . appellee might be legally excused from
liability. Frisking of passengers picked up along the route
could have been implemented by the bus conductor; for
those boarding at the bus terminal, frisking could have been
conducted by him and perhaps by additional personnel of
defendant-appellee. On hindsight, the handguns and
especially the gallon of gasoline used by the felons all of
which were brought inside the bus would have been
discovered, thus preventing the burning of the bus and the
fatal shooting of the victim.
Appellees argument that there is no law requiring it to
provide guards on its buses and that the safety of citizens is
the duty of the government, is not well taken. To be sure,
appellee is not expected to assign security guards on all of
its buses; if at all, it has the duty to post guards only on its
buses plying predominantly Maranao areas. As discussed
in the next preceding paragraph, the least appellee could
have done in response to the report was to adopt a system
of verification such as frisking of passengers boarding its
buses. Nothing, and to repeat, nothing at all, was done by
defendant-appellee to protect its innocent passengers from
the danger arising from the Maranao threats. It must be
observed that frisking is not a novelty as a safety measure
in our society. Sensitive places in fact, nearly all
important places have applied this method of security
enhancement. Gadgets and devices are available in the
market for this purpose. It would not have weighed much
against the budget of the bus company if such items were
made available to its personnel to cope up with situations
such as the Maranao threats.

204

In view of the constitutional right to personal privacy, our

pronouncement in this decision should not be construed as
an advocacy of mandatory frisking in all public
conveyances. What we are saying is that given the
circumstances obtaining in the case at bench that: (a) two
Maranaos died because of a vehicular collision involving
one of appellees vehicles; (b) appellee received a written
report from a member of the Regional Security Unit,
Constabulary Security Group, that the tribal/ethnic group of
the two deceased were planning to burn five buses of
appellee out of revenge; and (c) appellee did nothing
absolutely nothing for the safety of its passengers
travelling in the area of influence of the victims, appellee
has failed to exercise the degree of diligence required of
common carriers. Hence, appellee must be adjudged liable.

Art. 1763 of the Civil Code provides that a common carrier

is responsible for injuries suffered by a passenger on
account of the wilful acts of other passengers, if the
employees of the common carrier could have prevented the
act the exercise of the diligence of a good father of a
family. In the present case, it is clear that because of the
negligence of petitioners employees, the seizure of the bus
by Mananggolo and his men was made possible.

Had petitioner and its employees been vigilant they would

not have failed to see that the malefactors had a large
quantity of gasoline with them. Under the circumstances,
simple precautionary measures to protect the safety of
passengers, such as frisking passengers and inspecting their
baggages, preferably with non-intrusive gadgets such as
metal detectors, before allowing them on board could have
been employed without violating the passengers
constitutional rights. As this Court intimated in Gacal v.
Philippine Air Lines, Inc.,[6] a common carrier can be held
liable for failing to prevent a hijacking by frisking
passengers and inspecting their baggages.

WHEREFORE, the decision appealed from is hereby

REVERSED and another rendered ordering defendantappellee to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorneys
fees; and
Costs against defendant-appellee.[5]
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN
REVERSING THE DECISION OF THE REGIONAL
TRIAL COURT DATED DECEMBER 28, 1990
DISMISSING THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE
RESPONDENTS BY ORDERING PETITIONER TO PAY
THE GARGANTUAN SUM OF P3,449,649.20 PLUS
P500.00 PER APPEARANCE AS ATTORNEYS FEES,
AS WELL AS DENYING PETITIONERS MOTION FOR
RECONSIDERATION AND THE SUPPLEMENT TO
SAID MOTION, WHILE HOLDING, AMONG OTHERS,
THAT PETITIONER BREACHED THE CONTRACT OF
CARIAGE BY ITS FAILURE TO EXERCISE THE
REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS
WERE SO GRAVE, IRRESISTIBLE, VIOLENT, AND
FORCEFUL, AS TO BE REGARDED AS CASO
FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF
APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER COULD HAVE PROVIDED ADEQUATE
SECURITY IN PREDOMINANTLY MUSLIM AREAS
AS PART OF ITS DUTY TO OBSERVE EXTRAORDINARY DILIGENCE AS A COMMON CARRIER.
The instant petition has no merit.
First. Petitioners Breach of the Contract of Carriage

Despite warning by the Philippine Constabulary at Cagayan

de Oro that the Maranaos were planning to take revenge on
the petitioner by burning some of its buses and the
assurance of petitioners operation manager, Diosdado
Bravo, that the necessary precautions would be taken,
petitioner did nothing to protect the safety of its passengers.

From the foregoing, it is evident that petitioners

employees failed to prevent the attack on one of petitioners
buses because they did not exercise the diligence of a good
father of a family. Hence, petitioner should be held liable
for the death of Atty. Caorong.
Second. Seizure of Petitioners Bus not a Case of Force
Majeure
The petitioner contends that the seizure of its bus by the
armed assailants was a fortuitous event for which it could
not be held liable.
Art. 1174 of the Civil Code defines a fortuitous even as an
occurrence which could not be foreseen or which though
foreseen, is inevitable. In Yobido v. Court of Appeals,[7]
we held that to be considered as force majeure, it is
necessary that: (1) the cause of the breach of the obligation
must be independent of the human will; (2) the event must
be either unforeseeable or unavoidable; (3) the occurrence
must be such as to render it impossible for the debtor to
fulfill the obligation in a normal manner; and (4) the
obligor must be free of participation in, or aggravation of,
the injury to the creditor. The absence of any of the
requisites mentioned above would prevent the obligor from
being excused from liability.
Thus, in Vasquez v. Court of Appeals,[8] it was held that
the common carrier was liable for its failure to take the
necessary precautions against an approaching typhoon, of
which it was warned, resulting in the loss of the lives of
several passengers. The event was foreseeable, and, thus,
the second requisite mentioned above was not fulfilled.

205

This ruling applies by analogy to the present case. Despite

the report of PC agent Generalao that the Maranaos were
going to attack its buses, petitioner took no steps to
safeguard the lives and properties of its passengers. The
seizure of the bus of the petitioner was foreseeable and,
therefore, was not a fortuitous event which would exempt
petitioner from liability.
Petitioner invokes the ruling in Pilapil v. Court of
Appeals[9] and De Guzman v. Court of Appeals[10] in
support of its contention that the seizure of its bus by the
assailants constitutes force majeure. In Pilapil v. Court of
Appeals,[11] it was held that a common carrier is not liable
for failing to install window grills on its buses to protect
passengers from injuries caused by rocks hurled at the bus
by lawless elements. On the other hand, in De Guzman v.
Court of Appeals,[12] it was ruled that a common carrier is
not responsible for goods lost as a result of a robbery which
is attended by grave or irresistible threat, violence, or force.
It is clear that the cases of Pilapil and De Guzman do not
apply to the present case. Art. 1755 of the Civil Code
provides that a common carrier is bound to carry the
passengers as far as human care and foresight can provide,
using the utmost diligence of very cautious person, with
due regard for all the circumstances. Thus, we held in
Pilapil and De Guzman that the respondents therein were
not negligent in failing to take special precautions against
threats to the safety of passengers which could not be
foreseen, such as tortious or criminal acts of third persons.
In the present case, this factor of unforeseeablility (the
second requisite for an event to be considered force
majeure) is lacking. As already stated, despite the report of
PC agent Generalao that the Maranaos were planning to
burn some of petitioners buses and the assurance of
petitioners operations manager (Diosdado Bravo) that the
necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers.
Third. Deceased not Guilty of Contributory Negligence
The petitioner contends that Atty. Caorong was guilty of
contributory negligence in returning to the bus to retrieve
something. But Atty. Caorong did not act recklessly. It
should be pointed out that the intended targets of the
violence were petitioner and its employees, not its
passengers. The assailants motive was to retaliate for the
loss of life of two Maranaos as a result of the collision
between petitioners bus and the jeepney in which the two
Maranaos were riding. Mananggolo, the leader of the
group which had hijacked the bus, ordered the passengers
to get off the bus as they intended to burn it and its driver.
The armed men actually allowed Atty. Caorong to retrieve
something from the bus. What apparently angered them
was his attempt to help the driver of the bus by pleading for
his life. He was playing the role of the good Samaritan.
Certainly, this act cannot be considered an act of
negligence, let alone recklessness.
Fourth. Petitioner Liable to Private Respondents for
Damages

We now consider the question of damages that the heirs of

Atty. Caorong, private respondents herein, are entitled to
recover from the petitioner.
Indemnity for Death. Art. 1764 of the Civil Code, in
relation to Art. 2206 thereof, provides for the payment of
indemnity for the death of passengers caused by the
breached of contract of carriage by a common carrier.
Initially fixed in Art. 2206 at P3,000.00, the amount of the
said indemnity for death has through the years been
gradually increased in view of the declining value of the
peso. It is presently fixed at P50,000.00.[13] Private
respondents are entitled to this amount.
Actual damages. Art. 2199 provides that Except as
provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. The trial court
found that the private respondents spent P30,000.00 for the
wake and burial of Atty. Caorong.[14] Since petitioner does
not question this finding of the trial court, it is liable to
private respondents in the said amount as actual damages.
Moral Damages. Under Art. 2206, the spouse, legitimate
and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish
by reason of the death of the deceased. The trial court
found that private respondent Paulie Caorong suffered pain
from the death of her husband and worry on how to provide
support for their minor children, private respondents Yasser
King, Rose Heinni, and Prince Alexander.[15] The
petitioner likewise does not question this finding of the trial
court. Thus, in accordance with recent decisions of this
Court,[16] we hold that the petitioner is liable to the private
respondents in the amount of P100,000.00 as moral
damages for the death of Atty. Caorong.
Exemplary Damages. Art. 2232 provides that in contracts
and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner. In the present
case, the petitioner acted in a wanton and reckless manner.
Despite warning that the Maranaos were planning to take
revenge against the petitioner by burning some of its buses,
and contrary to the assurance made by its operations
manager that the necessary precautions would be taken, the
petitioner and its employees did nothing to protect the
safety of passengers. Under the circumstances, we deem it
reasonable to award private respondents exemplary
damages in the amount of P100,000.00.[17]
Attorneys Fees. Pursuant to Art. 2208, attorneys fees may
be recovered when, as in the instant case, exemplary
damages are awarded. In the recent case of Sulpicio Lines,
Inc. v. Court of Appeals,[18] we held an award of
P50,000.00 as attorneys fees to be reasonable. Hence, the
private respondents are entitled to attorneys fees in that
amount.
Compensation for Loss of Earning Capacity. Art. 1764 of
the Civil Code, in relation to Art. 2206 thereof, provides
that in addition to the indemnity for death arising from the

206

breach of contract of carriage by a common carrier, the

defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter. The formula established in decided
cases for computing net earning capacity is as follows:[19]
Gross
Necessary
Net earning = Life
x Annual - Living
Capacity
Expectancy Income
Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied
by the difference of eighty (80) and the age of the deceased.
[20] Since Atty. Caorong was 37 years old at the time of his
death,[21] he had a life expectancy of 28 2/3 more years.
[22] His projected gross annual income, computed based on
his monthly salary of P11,385.00[23] as a lawyer in the
Department of Agrarian Reform at the time of his death,
was P148,005.00.[24] allowing for necessary living
expenses of fifty percent (50%)[25]of his projected gross
annual income, his total earning capacity amounts to
P2,121,404.90.[26] Hence, the petitioner is liable to the
private respondents in the said amount as compensation for
loss of earning capacity.
WHEREFORE, the decision, dated July 29, 1994, of the
Court of Appeals is hereby AFFIRMED with the
MODIFICATION that petitioner Fortune Express, Inc. is
ordered to pay the following amounts to private
respondents Paulie, Yasser King, Rose Heinni, and Prince
Alexander Caorong:
1. death indemnity in the amount of fifty thousand pesos
(P50,000.00);
2. actual damages in the amount of thirty thousand pesos
(P30,000.00);
3. moral damages in the amount of one hundred thousand
pesos(P100,000.00);
4. exemplary damages in the amount of one hundred
thousand pesos (P100,000.00);
5. attorneys fees in the amount of fifty thousand pesos
(P50,000.00);
6. compensation for loss of earning capacity in the amount
of two million one hundred twenty-one thousand four
hundred four pesos and ninety centavos (P2,121,404.90);
and

DECISION
VITUG, J.:
The case before the Court is an appeal from the decision
and resolution of the Court of Appeals, promulgated on 27
April 2000 and 10 October 2000, respectively, in CA-G.R.
CV No. 60720, entitled Marjorie Navidad and Heirs of the
Late Nicanor Navidad vs. Rodolfo Roman, et. al., which
has modified the decision of 11 August 1998 of the
Regional Trial Court, Branch 266, Pasig City, exonerating
Prudent Security Agency (Prudent) from liability and
finding Light Rail Transit Authority (LRTA) and Rodolfo
Roman liable for damages on account of the death of
Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock
in the evening, Nicanor Navidad, then drunk, entered the
EDSA LRT station after purchasing a token (representing
payment of the fare). While Navidad was standing on the
platform near the LRT tracks, Junelito Escartin, the security
guard assigned to the area approached Navidad. A
misunderstanding or an altercation between the two
apparently ensued that led to a fist fight. No evidence,
however, was adduced to indicate how the fight started or
who, between the two, delivered the first blow or how
Navidad later fell on the LRT tracks. At the exact moment
that Navidad fell, an LRT train, operated by petitioner
Rodolfo Roman, was coming in. Navidad was struck by
the moving train, and he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein
respondent Marjorie Navidad, along with her children, filed
a complaint for damages against Junelito Escartin, Rodolfo
Roman, the LRTA, the Metro Transit Organization, Inc.
(Metro Transit), and Prudent for the death of her husband.
LRTA and Roman filed a counterclaim against Navidad and
a cross-claim against Escartin and Prudent. Prudent, in its
answer, denied liability and averred that it had exercised
due diligence in the selection and supervision of its security
guards.
The LRTA and Roman presented their evidence while
Prudent and Escartin, instead of presenting evidence, filed a
demurrer contending that Navidad had failed to prove that
Escartin was negligent in his assigned task. On 11 August
1998, the trial court rendered its decision; it adjudged:

7) costs of suits.

WHEREFORE, judgment is hereby rendered in favor of

the plaintiffs and against the defendants Prudent Security
and Junelito Escartin ordering the latter to pay jointly and
severally the plaintiffs the following:

SO ORDERED.

a)

LRT Authority v. Marjorie Navidad

Feb 6, 2003
[G.R. No. 145804. February 6, 2003]

2)

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO

ROMAN, petitioners, vs. MARJORIE NAVIDAD, Heirs of
the Late NICANOR NAVIDAD & PRUDENT SECURITY
AGENCY, respondents.

1)

Actual damages of P44,830.00;

Compensatory damages of P443,520.00;

3)
Indemnity for the death of Nicanor Navidad in the
sum of P50,000.00;
b)

Moral damages of P50,000.00;

207

c)

Attorneys fees of P20,000;

d)

Costs of suit.

The complaint against defendants LRTA and Rodolfo

Roman are dismissed for lack of merit.
The compulsory counterclaim of LRTA and Roman are
likewise dismissed.[1]
Prudent appealed to the Court of Appeals. On 27 August
2000, the appellate court promulgated its now assailed
decision exonerating Prudent from any liability for the
death of Nicanor Navidad and, instead, holding the LRTA
and Roman jointly and severally liable thusly:
WHEREFORE, the assailed judgment is hereby
MODIFIED, by exonerating the appellants from any
liability for the death of Nicanor Navidad, Jr. Instead,
appellees Rodolfo Roman and the Light Rail Transit
Authority (LRTA) are held liable for his death and are
hereby directed to pay jointly and severally to the
plaintiffs-appellees, the following amounts:
a)

P44,830.00 as actual damages;

b)

P50,000.00 as nominal damages;

c)

P50,000.00 as moral damages;

d)
P50,000.00 as indemnity for the death of the
deceased; and
e)

P20,000.00 as and for attorneys fees.[2]

The appellate court ratiocinated that while the deceased

might not have then as yet boarded the train, a contract of
carriage theretofore had already existed when the victim
entered the place where passengers were supposed to be
after paying the fare and getting the corresponding token
therefor. In exempting Prudent from liability, the court
stressed that there was nothing to link the security agency
to the death of Navidad. It said that Navidad failed to show
that Escartin inflicted fist blows upon the victim and the
evidence merely established the fact of death of Navidad by
reason of his having been hit by the train owned and
managed by the LRTA and operated at the time by Roman.
The appellate court faulted petitioners for their failure to
present expert evidence to establish the fact that the
application of emergency brakes could not have stopped the
train.
The appellate court denied petitioners motion for
reconsideration in its resolution of 10 October 2000.
In their present recourse, petitioners recite alleged errors on
the part of the appellate court; viz:
I.

THE HONORABLE COURT OF APPEALS GRAVELY

ERRED BY DISREGARDING THE FINDINGS OF
FACTS BY THE TRIAL COURT
II.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT PETITIONERS ARE
LIABLE FOR THE DEATH OF NICANOR NAVIDAD,
JR.
III.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT RODOLFO ROMAN IS AN
EMPLOYEE OF LRTA.[3]
Petitioners would contend that the appellate court ignored
the evidence and the factual findings of the trial court by
holding them liable on the basis of a sweeping conclusion
that the presumption of negligence on the part of a common
carrier was not overcome. Petitioners would insist that
Escartins assault upon Navidad, which caused the latter to
fall on the tracks, was an act of a stranger that could not
have been foreseen or prevented. The LRTA would add
that the appellate courts conclusion on the existence of an
employer-employee relationship between Roman and
LRTA lacked basis because Roman himself had testified
being an employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court,
contended that a contract of carriage was deemed created
from the moment Navidad paid the fare at the LRT station
and entered the premises of the latter, entitling Navidad to
all the rights and protection under a contractual relation,
and that the appellate court had correctly held LRTA and
Roman liable for the death of Navidad in failing to exercise
extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both
from the nature of its business and for reasons of public
policy, is burdened with the duty of exercising utmost
diligence in ensuring the safety of passengers.[4] The Civil
Code, governing the liability of a common carrier for death
of or injury to its passengers, provides:
Article 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
Article 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles
1733 and 1755.
Article 1759. Common carriers are liable for the death of
or injuries to passengers through the negligence or willful
acts of the formers employees, although such employees
may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.

208

This liability of the common carriers does not cease upon

proof that they exercised all the diligence of a good father
of a family in the selection and supervision of their
employees.
Article 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the
common carriers employees through the exercise of the
diligence of a good father of a family could have prevented
or stopped the act or omission.
The law requires common carriers to carry passengers
safely using the utmost diligence of very cautious persons
with due regard for all circumstances.[5] Such duty of a
common carrier to provide safety to its passengers so
obligates it not only during the course of the trip but for so
long as the passengers are within its premises and where
they ought to be in pursuance to the contract of carriage.[6]
The statutory provisions render a common carrier liable for
death of or injury to passengers (a) through the negligence
or wilful acts of its employees or b) on account of wilful
acts or negligence of other passengers or of strangers if the
common carriers employees through the exercise of due
diligence could have prevented or stopped the act or
omission.[7] In case of such death or injury, a carrier is
presumed to have been at fault or been negligent, and[8] by
simple proof of injury, the passenger is relieved of the duty
to still establish the fault or negligence of the carrier or of
its employees and the burden shifts upon the carrier to
prove that the injury is due to an unforeseen event or to
force majeure.[9]
In the absence of satisfactory
explanation by the carrier on how the accident occurred,
which petitioners, according to the appellate court, have
failed to show, the presumption would be that it has been at
fault,[10] an exception from the general rule that
negligence must be proved.[11]
The foundation of LRTAs liability is the contract of
carriage and its obligation to indemnify the victim arises
from the breach of that contract by reason of its failure to
exercise the high diligence required of the common carrier.
In the discharge of its commitment to ensure the safety of
passengers, a carrier may choose to hire its own employees
or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the
common carrier is not relieved of its responsibilities under
the contract of carriage.

that has not been shown. Absent such a showing, one

might ask further, how then must the liability of the
common carrier, on the one hand, and an independent
contractor, on the other hand, be described? It would be
solidary. A contractual obligation can be breached by tort
and when the same act or omission causes the injury, one
resulting in culpa contractual and the other in culpa
aquiliana, Article 2194[14] of the Civil Code can well
apply.[15] In fine, a liability for tort may arise even under
a contract, where tort is that which breaches the contract.
[16] Stated differently, when an act which constitutes a
breach of contract would have itself constituted the source
of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been
breached by tort, thereby allowing the rules on tort to apply.
[17]
Regrettably for LRT, as well as perhaps the surviving
spouse and heirs of the late Nicanor Navidad, this Court is
concluded by the factual finding of the Court of Appeals
that there is nothing to link (Prudent) to the death of
Nicanor (Navidad), for the reason that the negligence of its
employee, Escartin, has not been duly proven x x x. This
finding of the appellate court is not without substantial
justification in our own review of the records of the case.
There being, similarly, no showing that petitioner Rodolfo
Roman himself is guilty of any culpable act or omission, he
must also be absolved from liability. Needless to say, the
contractual tie between the LRT and Navidad is not itself a
juridical relation between the latter and Roman; thus,
Roman can be made liable only for his own fault or
negligence.
The award of nominal damages in addition to actual
damages is untenable. Nominal damages are adjudicated in
order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized,
and not for the purpose of indemnifying the plaintiff for
any loss suffered by him.[18] It is an established rule that
nominal damages cannot co-exist with compensatory
damages.[19]
WHEREFORE, the assailed decision of the appellate court
is AFFIRMED with MODIFICATION but only in that (a)
the award of nominal damages is DELETED and (b)
petitioner Rodolfo Roman is absolved from liability. No
costs.
SO ORDERED.

Should Prudent be made likewise liable? If at all, that

liability could only be for tort under the provisions of
Article 2176[12] and related provisions, in conjunction
with Article 2180,[13] of the Civil Code. The premise,
however, for the employers liability is negligence or fault
on the part of the employee. Once such fault is established,
the employer can then be made liable on the basis of the
presumption juris tantum that the employer failed to
exercise diligentissimi patris families in the selection and
supervision of its employees. The liability is primary and
can only be negated by showing due diligence in the
selection and supervision of the employee, a factual matter

Liability for Quasi-Delict

China Airlines v. CA
May 18,1990
G.R. No. 45985
May 18, 1990
CHINA AIR LINES, LTD., petitioner,
vs.
COURT
OF
APPEALS,
JOSE
PAGSIBIGAN,
PHILIPPINE AIR LINES, INC. and ROBERTO
ESPIRITU, respondents.

209

G.R. No. 46036

May 18, 1990

PHILIPPINE AIR LINES, INC. and ROBERTO

ESPIRITU, petitioners,
vs.
COURT OF APPEALS, JOSE PAGSIBIGAN and CHINA
AIR LINES, LTD., respondents.
Balgos & Perez Law Offices for petitioner China Air Lines,
Ltd.
Siguion Reyna, Montecillo & Ongsiako for petitioners in
G.R. No. 46036.
Syquia Law Offices for Jose Pagsibigan.

REGALADO, J.:
These consolidated petitions seek the review of the decision
of respondent court in CA-G.R. No. 53023-R entitled "Jose
E. Pagsibigan, Plaintiff-Appellant, vs. Philippine Air Lines,
Inc. and Roberto Espiritu, Defendants-Appellants; China
Air Lines, Ltd., Defendant-Appellee," 1 the dispositive
portion of which declares:
WHEREFORE, except for a modification of the judgment
in the sense that the award of P20,000.00 in favor of the
plaintiff shall be in the concept of nominal damages instead
of exemplary damages, and that defendant China Air Lines,
Ltd. shall likewise be liable with its two co-defendants in a
joint and solidary capacity, the judgment appealed from is
hereby affirmed in all other respects, without costs. 2
The challenged decision of respondent court contains a
synthesis of the facts that spawned these cases and the
judgment of the court a quo which it affirmed with
modifications, thus:
On June 4, 1968, plaintiff Jose E. Pagsibigan, then VicePresident and General Manager of Rentokil (Phils.) Inc., a
local firm dealing in insecticides, pesticides and related
services appurtenant thereto, purchased a plane ticket for a
Manila-Taipei-Hongkong-Manila flight from the Transaire
Travel Agency. The said agency, through its Cecille Baron,
contacted the Manila Hotel branch of defendant Philippine
Air Lines which at that time was a sales and ticketing agent
of defendant China Air lines. On June 6, 1968, PAL,
through its ticketing clerk defendant Roberto Espiritu, cut
and issued PAL Ticket No. 01 7991 for a Manila-TaipeiHongkong-Manila flight. According to the plane ticket, the
plaintiff was booked on CAL CI Flight No. 812 to depart
from Manila for Taipei on June 10, 1968 at 17:20 hours
(5:20 p.m.), Exhibit A.
On June 10, 1968, one hour before the scheduled time of
the flight as stated in his ticket, the plaintiff arrived at the
airport to check in for CI Flight No. 812. Upon arriving at
the airport, the plaintiff was informed that the plane he was
supposed to take for Taipei had left at 10:20 in the morning

of that day. The PAL employees at the airport made

appropriate arrangements for the plaintiff to take PAL's
flight to Taipei the following day, June 11, 1968. The
plaintiff took said flight and arrived in Taipei around
noontime of the said date.
On July 8, 1968, the plaintiff, through counsel, made
formal demand on defendant PAL, for moral damages in
not less than P125,000.00 for what the plaintiff allegedly
suffered as a result of his failure to take the flight as stated
in his plane ticket. (Exhibit E) After a series of negotiations
among the plaintiff, PAL and CAL failed to reach an
amicable settlement, the plaintiff instituted this action in
the Court of First Instance of Rizal on September 22, 1969.
In his complaint, plaintiff prays for the recovery of
P125,000.00 as moral damages and P25,000.00 for and as
attorney's fees. The moral damages allegedly arose from
the gross negligence of defendant Roberto Espiritu in
stating on the plane ticket that the time of departure was
17:20 hours, instead of 10:20 hours which was the correct
time of departure in the revised summer schedule of CAL.
Plaintiff claims that by reason of his failure to take the
plane, he suffered besmirched reputation, embarrassment,
mental anguish, wounded feelings and sleepless nights,
inasmuch as when he went to the airport, he was
accompanied by his business associates, close friends and
relatives. He further averred that his trip to Taipei was for
the purpose of conferring with a certain Peng Siong Lim,
President of the Union Taiwan Chemical Corporation,
scheduled at 9:00 a.m. on June 11, 1968.
Defendant Philippine Air Lines alleged in its answer that
the departure time indicated by Espiritu in the ticket was
furnished and confirmed by the reservation office of
defendant China Air Lines. It further averred that CAL had
not informed PAL's Manila Hotel Branch of the revised
schedule of its flight, nor provided it with revised
timetable; that when the travel agency sought to purchase
the ticket for the plaintiff on CAL CI Flight No. 812 for
June 10, 1968, Espiritu who was then the ticketing clerk on
duty, checked with the reservation office of CAL on the
availability of space, the date and the time of said flight;
that CAL's Dory Chan informed Espiritu that the departure
time of Flight No. 812 on June 10, 1968 was at 5:20 in the
afternoon of said date. PAL asserted a cross-claim against
CAL for attorney's fees and for reimbursement of whatever
amount the court may adjudge PAL to be liable to the
plaintiff. Defendant Espiritu adopted the defenses of his codefendant PAL.
Defendant China Air Lines, for its part, disclaims liability
for the negligence and incompetence of the employees of
PAL. It avers that it had revised its schedule since April 1,
1968, the same to be effective on April 20, 1968, and the
said revised schedule was adopted only after proper petition
with and approval of the Civil Aeronautics Board of which
all airlines, including defendant PAL, were notified; that
both printed copies of the international timetable and of the
mimeographed notices of the official schedule and flight
departure schedules were distributed to all its sales agents,
including PAL, that after the effectivity of the new time
schedules, PAL's Manila Hotel office had been issuing and

210

selling tickets based on the revised time schedule; and that,

assuming that the plaintiff is entitled to recover damages,
the liability is on PAL and not on CAL. A cross-claim was
likewise asserted by CAL against its co-defendant PAL.

As a matter of fact, the other entries of time departures in

the ticket issued to the plaintiff are in accordance with the
revised schedule, and that the only error therein was with
respect to the departure from Manila on June 10, 1968.

After due trial, the Court a quo rendered judgment laying

the blame for the erroneous entry in the ticket as to the time
of departure to defendant Roberto Espiritu, ticketing agent
of defendant PAL, and that no employee of CAL
contributed to such erroneous entry. It was further ruled
that the plaintiff had no reason to claim moral damages but
may be entitled to recover exemplary damages. The
dispositive portion of the decision makes the following
adjudication:

However, in proving that the fault lied with Espiritu,

defendant CAL derives no solace nor gains an advantage. It
may not claim exemption from liability by reason thereof.
Espiritu was an employee of PAL and whatever negligence
was committed by him is attributable to PAL. It is an
admitted fact that PAL is an authorized agent of CAL. In
this relationship, the responsibility of defendant PAL for
the tortious act of its agent or representative is
inescapable. . . .

WHEREFORE, premises considered, judgment is hereby

rendered sentencing the defendants Philippine Air Lines,
Inc. and Roberto Espiritu, to pay to plaintiff Jose
Pagsibigan jointly and severally, by way of exemplary
damages, the sum of Twenty Thousand Pesos (P20,000.00)
plus Two Thousand Pesos (P2,000.00) as reimbursement
for attorney's fees and the costs.

xxx

The complaint is dismissed with respect to the defendant

China Air Lines, Ltd. The cross-claim filed by defendant
PAL and Espiritu against defendant CAL as well as the
cross-claim filed by the defendant CAL against defendant
PAL and Espiritu are also hereby dismissed. 3
From said decision of the court below, all the parties,
except China Air Lines, Ltd. appealed to respondent court
which, however, sustained the ruling of the trial court
denying Pagsibigan's claim for moral damages. It
concluded that Roberto Espiritu did not act with malice or
in bad faith in making a wrong entry of the time of
departure on the ticket, and that the mistake committed by
Espiritu appears to be an honest one done in good faith.
Respondent court also ruled out the claim for exemplary
damages for lack of legal basis. Nonetheless, as earlier
noted, it awarded Pagsibigan P20,000.00 as nominal
damages, under Article 2221 of the Civil Code, for the
vindication of a legal wrong committed against him. As
regards the liability of the parties, respondent court held:
There can be little question as to the liability of PAL and
Espiritu for the damage caused to the plaintiff due to the
erroneous entry in the plane ticket made by the latter. They
seek to justify the erroneous statement as to the time of
departure on the ground that such was the time given by
Dory Chan to Espiritu when the latter called up for the
reservation in favor of plaintiff. Aside from the fact that
Dory Chan had vigorously disclaimed having given such
information to Espiritu, We are convinced that, as the trial
court had found, CAL had no share in the error committed
by Espiritu in indicating the time of departure of Flight No.
812. PAL had shown through the testimony of Carmen
Ibazeta Gallaga, ticket representative of PAL at the Manila
Hotel Office, that they received circulars and timetables of
airlines in the PAL main office. It further appears that on
two occasions, defendant PAL cut and issued tickets for
CAL based on the new schedule even before June 10, 1968.

xxx

xxx

A similar principle is recognized in our Civil Code in its

Art. 2180 . . . . Unlike in the doctrine of respondeat
superior, however, the Civil Code permits the employer to
escape this liability upon proof of having observed all the
diligence of a good father of a family to prevent the
damage. We find the evidence of defendant CAL to be
insufficient to overcome the presumption of negligence on
its part for the act done by defendant Roberto Espiritu.
(Emphasis supplied)
The liability for the damage sustained by the plaintiff
should, therefore, be borne by all of the defendants in a
joint and solidary capacity (Art. 2194). The liability of an
employer under Art. 2180 is primary and direct. . . .
xxx

xxx

xxx

It appearing that defendant CAL, as employer or principal,

did not contribute to the negligence committed by
defendants PAL and Roberto Espiritu, its liability to the
plaintiff could be passed on to said defendants. Defendant
CAL, however, did not take an appeal and did not,
therefore, take exception to the dismissal of its cross-claim
against defendants PAL and Espiritu. This serves as an
obstacle for a rendition of judgment favorable to CAL on
its said counterclaim. 4
In its petition for review on certiorari in G.R. No. L-45985,
petitioner China Air Lines, Ltd. (CAL) relied on the
following grounds:
1.
A principal cannot be held liable, much less
solidarily, for the negligence of the sub-agent, where the
former never participated in, ratified or authorized the
latter's act or omission.
2.
Dismissal of the cross-claim of petitioner against
the private respondents Philippine Air Lines, Inc. and
Roberto Espiritu will not prevent the release of the
petitioner from liability to the private respondent
Pagsibigan.
3.
The award of damages was unwarranted both
legally and factually. 5

211

On their part, petitioners Philippine Air Lines, Inc. (PAL)

and Roberto Espiritu made the following submissions in
G.R. No. L-46036, to wit:

defendant PAL as its authorized sales agent and/or ticketing

agent, such that China Airlines Ltd. is here impleaded as
being the principal of defendant PAL;

1.
The respondent Court of Appeals erred in not
holding that respondent China Air Lines, Ltd., being the
principal, is solely liable to respondent Pagsibigan.

5.
That at all pertinent times, particularly in June of
1968, defendant Roberto Espiritu has been in the employ of
defendant PAL at its sales counter at the PAL Manila Hotel
branch office and is here impleaded as defendant as being
the proximate malfeasor in this cause of action;

2.
The respondent Court of Appeals erred in
awarding respondent Pagsibigan the sum of P20,000.00 as
nominal damages. 6
In G.R. No. L-45985, respondent Pagsibigan contends, by
way of refutation, that CAL's liability is based on breach of
contract of transportation which was the proximate result of
the negligence and/or error committed by PAL and Espiritu;
that even assuming that CAL has no share in the negligence
of PAL and Espiritu, the liability of CAL does not cease
upon proof that it exercised all the diligence of a good
father of a family in the selection and supervision of its
employees. Traversing such contentions, CAL argues that it
can not be made liable under Article 2180 of the Civil Code
because of the absence of employer-employee relationship
between it and PAL.
On the other hand, in G.R. No. L-46036, respondent
Pagsibigan claims that PAL is liable under Article 1909 of
the said code which holds an agent responsible not only for
fraud but also for negligence which shall be judged with
more or less rigor by the courts, according to whether the
agency was or was not for a compensation. PAL, however,
maintains that for lack of privity with Pagsibigan, the suit
for breach of contract should have been directed against
CAL.
What surfaces as a procedural maneuver taken by
respondent Pagsibigan in the course of the proceedings in
these cases has confused the real issues in the controversy
subject of both petitions before us.
Respondent Pagsibigan has opted to seek redress by
pursuing two remedies at the same time, that is, to enforce
the civil liability of CAL for breach of contract and,
likewise, to recover from PAL and Espiritu for tort or culpa
aquiliana. What he has overlooked is the proscription
against double recovery under Article 2177 of the Civil
Code which, while not preventing recourse to any
appropriate remedy, prevents double relief for a single
wrong.
To avoid inequitable effects under such confluence of
remedies, the true nature of the action instituted by
respondent Pagsibigan must be determined. A careful
perusal of the complaint of respondent Pagsibigan will
readily disclose that the allegations thereof clearly and
unmistakably make out a case for a quasi-delict in this
wise:
4.
That at all pertinent times particularly in June of
1968, defendant China Air Lines Ltd. has been operating
regular scheduled flights to and from Manila, and has
offered accommodations thereon through, among others,

xxx

xxx

xxx

12.
That plaintiff missed the initial Manila-Taipei leg
(CI Flight 812) on June 10, 1968, as set forth in his ticket
(Annex "A") solely and exclusively by reason of gross
incompetence and inexcusable negligence amounting to
bad faith of defendant PAL acting, through its sales
representative, the defendant Roberto Espiritu, of its
Manila Hotel branch office in the discharge of its duties
as sales agent and/or ticketing agent for defendant China
Airlines Ltd. as principal.
13.
That as a direct result of culpable incompetence
and negligence of defendant Roberto Espiritu as sales
representative of defendant PAL, plaintiff was unable to
attend to previously scheduled business commitments in
Taipei . . . resulting in direct and indirect prejudice to
plaintiff that has yet to be fully assessed; (Emphasis
supplied) 7
xxx

xxx

xxx

Had the intention of respondent Pagsibigan been to

maintain an action based on breach of contract of carriage,
he could have sued CAL alone considering that PAL is not
a real party to the contract. Moreover, in cases of such
nature, the aggrieved party does not have to prove that the
common carrier was at fault or was negligent. All he has to
prove is the existence of the contract and the fact of its nonperformance by the carrier. 8
The records disclose that the trial court delved much into
the issues of who was at fault, and its decision is primarily
anchored on its factual findings regarding the civil liability
arising from culpa aquiliana of the erring party, to this
effect:
Plaintiff said that the erroneous entry in his ticket which
made it appear that his CAL flight of June 10, 1968 was to
be at 5:20 in the afternoon was due to the fault or
negligence of PAL's Roberto Espiritu, a co-defendant
herein, as well as the employees of the defendant CAL. In
making CAL co-responsible, plaintiff appears to rely on the
doctrine that the principal is responsible for the act of an
agent done within the scope of the agency.
There is no proof extant that any of the employees of PAL
had contributed to the erroneous entry in plaintiffs PAL
ticket for Taipei which placed his time of departure to 5:20
o'clock in the afternoon of June 10, 1968. Only defendant
Roberto Espiritu appears to be solely and exclusively
responsible for such error and therefor the conclusion

212

becomes inevitable that CAL must be absolved from any

blame because defendant Roberto Espiritu who committed
the error is not an employee or agent of the defendant CAL.
9

had approved the revised schedule of flights, PAL was duly

informed thereof and, in fact, PAL's Manila Hotel branch
office had been issuing and selling tickets based on the
revised time schedule before June 10, 1968.

It, therefore, becomes evident that respondent Pagsibigan,

having sensed that he can not hold CAL liable on a quasidelict, decided on appeal to instead make a sinistral detour,
so to speak, by claiming that his action against CAL is
based on a breach of contract of carriage.

PAL's main defense is that it is only an agent. As a general

proposition, an agent who duly acts as such is not
personally liable to third persons. However, there are
admitted exceptions, as in this case where the agent is
being sued for damages arising from a tort committed by
his employee.

We can not permit respondent Pagsibigan to change his

theory at this stage; it would be unfair to the adverse party
who would have no more opportunity to present further
evidence, material to the new theory, which it could have
done had it been aware earlier of the new theory at the time
of the hearing before the trial court. 10
There is indeed no basis whatsoever to hold CAL liable on
a quasi-delict or culpa aquiliana. As hereinbefore stated, the
court a quo absolved CAL of any liability for fault or
negligence. This finding was shared by respondent court
when it concluded that defendant CAL did not contribute to
the negligence committed by therein defendants-appellants
PAL and Roberto Espiritu.
Respondent Pagsibigan insists that CAL was barred from
proving that it observed due diligence in the selection and
supervision of its employees. This argument is obviously
misplaced. CAL is not the employer of PAL or Espiritu. In
Duavit vs. The Hon. Court of Appeals, et al., 11 we have
stressed the need of first establishing the existence of an
employer-employee relationship before an employer may
be vicariously liable under Article 2180 of the Civil Code.
With respect to PAL and Espiritu, they disclaim any
liability on the theory that the former is merely an agent of
CAL and that the suit should have been directed against
CAL alone. There is no question that the contractual
relation between both airlines is one of agency. Suffice it to
say, however, that in an action premised on the employee's
negligence, whereby respondent Pagsibigan seeks recovery
for the resulting damages from both PAL and Espiritu
without qualification, what is sought to be imposed is the
direct and primary liability of PAL as an employer under
said Article 2180.
When an injury is caused by the negligence of an
employee, there instantly arises a presumption of law that
there was negligence on the part of the employer either in
the selection of the employee or in the supervision over him
after such selection. The presumption, however, may be
rebutted by a clear showing on the part of the employer that
it has exercised the care and diligence of a good father of a
family in the selection and supervision of his employee. 12
Hence, to escape solidary liability for the quasi-delict
committed by Espiritu, it is imperative that PAL must
adduce sufficient proof that it exercised such degree of
care. PAL failed to overcome the presumption. As found by
respondent court, CAL had revised its schedule of flights
since April 1, 1968; that after the Civil Aeronautics Board

The respondent court found that the mistake committed by

Espiritu was done in good faith. While there is no evidence
that he acted with malice, we can not entirely condone his
actuations. As an employee of PAL, the nature of his
functions requires him to observe for the protection of the
interests of another person that degree of care, precaution
and vigilance which the circumstances justly demand. He
committed a clear neglect of duty.
Ergo, for his negligence, Espiritu is primarily liable to
respondent Pagsibigan under Article 2176 of the Civil
Code. For the failure of PAL to rebut the legal presumption
of negligence in the selection and supervision of its
employee, it is also primarily liable under Article 2180 of
the same code which explicitly provides that employers
shall be liable for the damages caused by their employees
and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in
any business or industry.
Under the aforesaid provision, all that is required is that the
employee, by his negligence, committed a quasi-delict
which caused damage to another, and this suffices to hold
the employer primarily and solidarity responsible for the
tortious act of the employee. PAL, however, can demand
from Espiritu reimbursement of the amount which it will
have to pay the offended party's claim. 13
On the issue of damages, we agree, except as to the
amount, that nominal damages may be awarded to
respondent Pagsibigan to vindicate the legal wrong
committed against him. It appearing that the wrong
committed was immediately rectified when PAL promptly
booked him for the next morning's flight to Taipei where he
arrived before noon of June 11, 1968 and was able to attend
his scheduled conference, and considering the concept and
purpose of nominal damages, the award of P20,000.00
must accordingly be reduced to an amount equal or at least
commensurate to the injury sustained.
WHEREFORE, the decision of respondent Court of
Appeals is MODIFIED accordingly. China Air Lines, Ltd.
is hereby absolved from liability. Philippine Air Lines, Inc.
and Roberto Espiritu are declared jointly and severally
liable to pay the sum of P10,000.00 by way of nominal
damages, without prejudice to the right of Philippine Air
Lines, Inc. to recover from Roberto Espiritu reimbursement
of the damages that it may pay respondent Jose Pagsibigan.
SO ORDERED.

213

Calalas v. CA
May 31,2000
[G.R. No. 122039. May 31, 2000]
VICENTE CALALAS, petitioner, vs. COURT OF
APPEALS,
ELIZA
JUJEURCHE
SUNGA and
FRANCISCO SALVA, respondents.
D E C I S I ON
MENDOZA, J.:
This is a petition for review on certiorari of the decision[1]
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.

On appeal to the Court of Appeals, the ruling of the lower

court was reversed on the ground that Sungas 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;

The facts, as found by the Court of Appeals, are as follows:

(3) P10,000.00 as attorneys fees; and

At 10 oclock 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. Sclaw

(4) P1,000.00 as expenses of litigation; and

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. Korte
The lower court rendered judgment against Salva as thirdparty 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. Rtcspped

(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. Sdaadsc
The petition has no merit.
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 of res
judicata does not apply. Missdaa
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 Verena were liable for quasidelict for the damage caused to petitioners 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

214

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. Slxmis
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 petitioners 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 preexisting 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: Slxsc
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. Scslx
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 petitioners

contention. Slx
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:
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.
Second, it is undisputed that petitioners driver took in
more passengers than the allowed seating capacity of the
jeepney, a violation of 32(a) of the same law. It provides:
Mesm
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.
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. Calrky
We find it hard to give serious thought to petitioners
contention that Sungas 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 petitioners 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 debtors 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. Kycalr
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:
Kyle
Plaintiff-appellant at the time of the accident was a firstyear college student in that school year 1989-1990 at the

215

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."
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 x x x has a defect already."
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.
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. Sungas contention that petitioners
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. Exsm
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.

FELICIANO, J:
In the early morning of 15 November 1975 at about 1:30
a.m. private respondent Leonardo Dionisio was on his
way home he lived in 1214-B Zamora Street, Bangkal,
Makati from a cocktails-and-dinner meeting with his
boss, the general manager of a marketing corporation.
During the cocktails phase of the evening, Dionisio had
taken "a shot or two" of liquor. Dionisio was driving his
Volkswagen car and had just crossed the intersection of
General Lacuna and General Santos Streets at Bangkal,
Makati, not far from his home, and was proceeding down
General Lacuna Street, when his car headlights (in his
allegation) suddenly failed. He switched his headlights on
"bright" and thereupon he saw a Ford dump truck looming
some 2-1/2 meters away from his car. The dump truck,
owned by and registered in the name of petitioner Phoenix
Construction Inc. ("Phoenix"), was parked on the right
hand side of General Lacuna Street (i.e., on the right hand
side of a person facing in the same direction toward which
Dionisio's car was proceeding), facing the oncoming traffic.
The dump truck was parked askew (not parallel to the street
curb) in such a manner as to stick out onto the street, partly
blocking the way of oncoming traffic. There were no lights
nor any so-called "early warning" reflector devices set
anywhere near the dump truck, front or rear. The dump
truck had earlier that evening been driven home by
petitioner Armando U. Carbonel, its regular driver, with the
permission of his employer Phoenix, in view of work
scheduled to be carried out early the following morning,
Dionisio claimed that he tried to avoid a collision by
swerving his car to the left but it was too late and his car
smashed into the dump truck. As a result of the collision,
Dionisio suffered some physical injuries including some
permanent facial scars, a "nervous breakdown" and loss of
two gold bridge dentures.
Dionisio commenced an action for damages in the Court of
First Instance of Pampanga basically claiming that the legal
and proximate cause of his injuries was the negligent
manner in which Carbonel had parked the dump truck
entrusted to him by his employer Phoenix. Phoenix and
Carbonel, on the other hand, countered that the proximate
cause of Dionisio's injuries was his own recklessness in
driving fast at the time of the accident, while under the
influence of liquor, without his headlights on and without a
curfew pass. Phoenix also sought to establish that it had
exercised due rare in the selection and supervision of the
dump truck driver.

SO ORDERED.
Phoenix Construction v. IAC Mar 10, 1987
G.R. No. L-65295 March 10, 1987
PHOENIX CONSTRUCTION, INC. and ARMANDO U.
CARBONEL, petitioners,
vs.
THE INTERMEDIATE APPELLATE COURT and
LEONARDO DIONISIO, respondents.

The trial court rendered judgment in favor of Dionisio and

against Phoenix and Carbonel and ordered the latter:
(1)
To pay plaintiff jointly and severally the sum of P
15,000.00 for hospital bills and the replacement of the lost
dentures of plaintiff;
(2)
To pay plaintiff jointly and severally the sum of P
1,50,000.-00 as loss of expected income for plaintiff
brought about the accident in controversy and which is the
result of the negligence of the defendants;

216

(3)
To pay the plaintiff jointly and severally the sum
of P 10,000. as moral damages for the unexpected and
sudden withdrawal of plaintiff from his lifetime career as a
marketing man; mental anguish, wounded feeling, serious
anxiety, social humiliation, besmirched reputation, feeling
of economic insecurity, and the untold sorrows and
frustration in life experienced by plaintiff and his family
since the accident in controversy up to the present time;
(4)
To pay plaintiff jointly and severally the sum of P
10,000.00 as damages for the wanton disregard of
defendants to settle amicably this case with the plaintiff
before the filing of this case in court for a smaller amount.
(5)
To pay the plaintiff jointly and severally the sum
of P 4,500.00 due as and for attorney's fees; and
(6)

The cost of suit. (Emphasis supplied)

Phoenix and Carbonel appealed to the Intermediate

Appellate Court. That court in CA-G.R. No. 65476
affirmed the decision of the trial court but modified the
award of damages to the following extent:
1.
The award of P15,000.00 as compensatory
damages was reduced to P6,460.71, the latter being the
only amount that the appellate court found the plaintiff to
have proved as actually sustained by him;
2.
The award of P150,000.00 as loss of expected
income was reduced to P100,000.00, basically because
Dionisio had voluntarily resigned his job such that, in the
opinion of the appellate court, his loss of income "was not
solely attributable to the accident in question;" and
3.
The award of P100,000.00 as moral damages was
held by the appellate court as excessive and unconscionable
and hence reduced to P50,000.00.
The award of P10,000.00 as exemplary damages and
P4,500.00 as attorney's fees and costs remained untouched.
This decision of the Intermediate Appellate Court is now
before us on a petition for review.
Both the trial court and the appellate court had made fairly
explicit findings of fact relating to the manner in which the
dump truck was parked along General Lacuna Street on the
basis of which both courts drew the inference that there was
negligence on the part of Carbonel, the dump truck driver,
and that this negligence was the proximate cause of the
accident and Dionisio's injuries. We note, however, that
both courts failed to pass upon the defense raised by
Carbonel and Phoenix that the true legal and proximate
cause of the accident was not the way in which the dump
truck had been parked but rather the reckless way in which
Dionisio had driven his car that night when he smashed into
the dump truck. The Intermediate Appellate Court in its
questioned decision casually conceded that Dionisio was
"in some way, negligent" but apparently failed to see the
relevance of Dionisio's negligence and made no further

mention of it. We have examined the record both before the

trial court and the Intermediate Appellate Court and we find
that both parties had placed into the record sufficient
evidence on the basis of which the trial court and the
appellate court could have and should have made findings
of fact relating to the alleged reckless manner in which
Dionisio drove his car that night. The petitioners Phoenix
and Carbonel contend that if there was negligence in the
manner in which the dump truck was parked, that
negligence was merely a "passive and static condition" and
that private respondent Dionisio's recklessness constituted
an intervening, efficient cause determinative of the accident
and the injuries he sustained. The need to administer
substantial justice as between the parties in this case,
without having to remand it back to the trial court after
eleven years, compels us to address directly the contention
put forward by the petitioners and to examine for ourselves
the record pertaining to Dionisio's alleged negligence
which must bear upon the liability, or extent of liability, of
Phoenix and Carbonel.
There are four factual issues that need to be looked into: (a)
whether or not private respondent Dionisio had a curfew
pass valid and effective for that eventful night; (b) whether
Dionisio was driving fast or speeding just before the
collision with the dump truck; (c) whether Dionisio had
purposely turned off his car's headlights before contact with
the dump truck or whether those headlights accidentally
malfunctioned moments before the collision; and (d)
whether Dionisio was intoxicated at the time of the
accident.
As to the first issue relating to the curfew pass, it is clear
that no curfew pass was found on the person of Dionisio
immediately after the accident nor was any found in his car.
Phoenix's evidence here consisted of the testimony of
Patrolman Cuyno who had taken Dionisio, unconscious, to
the Makati Medical Center for emergency treatment
immediately after the accident. At the Makati Medical
Center, a nurse took off Dionisio's clothes and examined
them along with the contents of pockets together with
Patrolman Cuyno. 1 Private respondent Dionisio was not
able to produce any curfew pass during the trial. Instead, he
offered the explanation that his family may have misplaced
his curfew pass. He also offered a certification (dated two
years after the accident) issued by one Major Benjamin N.
Libarnes of the Zone Integrated Police Intelligence Unit of
Camp Olivas, San Fernando, Pampanga, which was said to
have authority to issue curfew passes for Pampanga and
Metro Manila. This certification was to the effect that
private respondent Dionisio had a valid curfew pass. This
certification did not, however, specify any pass serial
number or date or period of effectivity of the supposed
curfew pass. We find that private respondent Dionisio was
unable to prove possession of a valid curfew pass during
the night of the accident and that the preponderance of
evidence shows that he did not have such a pass during that
night. The relevance of possession or non-possession of a
curfew pass that night lies in the light it tends to shed on
the other related issues: whether Dionisio was speeding
home and whether he had indeed purposely put out his
headlights before the accident, in order to avoid detection

217

and possibly arrest by the police in the nearby police station

for travelling after the onset of curfew without a valid
curfew pass.
On the second issue whether or not Dionisio was
speeding home that night both the trial court and the
appellate court were completely silent.
The defendants in the trial court introduced the testimony
of Patrolman Cuyno who was at the scene of the accident
almost immediately after it occurred, the police station
where he was based being barely 200 meters away.
Patrolman Cuyno testified that people who had gathered at
the scene of the accident told him that Dionisio's car was
"moving fast" and did not have its headlights on. 2
Dionisio, on the other hand, claimed that he was travelling
at a moderate speed at 30 kilometers per hour and had just
crossed the intersection of General Santos and General
Lacuna Streets and had started to accelerate when his
headlights failed just before the collision took place. 3
Private respondent Dionisio asserts that Patrolman Cuyno's
testimony was hearsay and did not fag within any of the
recognized exceptions to the hearsay rule since the facts he
testified to were not acquired by him through official
information and had not been given by the informants
pursuant to any duty to do so. Private respondent's
objection fails to take account of the fact that the testimony
of Patrolman Cuyno is admissible not under the official
records exception to the hearsay rule 4 but rather as part of
the res gestae. 5 Testimonial evidence under this exception
to the hearsay rule consists of excited utterances made on
the occasion of an occurrence or event sufficiently startling
in nature so as to render inoperative the normal reflective
thought processes of the observer and hence made as a
spontaneous reaction to the occurrence or event, and not the
result of reflective thought. 6
We think that an automobile speeding down a street and
suddenly smashing into a stationary object in the dead of
night is a sufficiently startling event as to evoke
spontaneous, rather than reflective, reactions from
observers who happened to be around at that time. The
testimony of Patrolman Cuyno was therefore admissible as
part of the res gestae and should have been considered by
the trial court. Clearly, substantial weight should have been
ascribed to such testimony, even though it did not, as it
could not, have purported to describe quantitatively the
precise velocity at winch Dionisio was travelling just
before impact with the Phoenix dump truck.
A third related issue is whether Dionisio purposely turned
off his headlights, or whether his headlights accidentally
malfunctioned, just moments before the accident. The
Intermediate Appellate Court expressly found that the
headlights of Dionisio's car went off as he crossed the
intersection but was non-committal as to why they did so. It
is the petitioners' contention that Dionisio purposely shut
off his headlights even before he reached the intersection so
as not to be detected by the police in the police precinct
which he (being a resident in the area) knew was not far
away from the intersection. We believe that the petitioners'

theory is a more credible explanation than that offered by

private respondent Dionisio i.e., that he had his
headlights on but that, at the crucial moment, these had in
some mysterious if convenient way malfunctioned and
gone off, although he succeeded in switching his lights on
again at "bright" split seconds before contact with the dump
truck.
A fourth and final issue relates to whether Dionisio was
intoxicated at the time of the accident. The evidence here
consisted of the testimony of Patrolman Cuyno to the effect
that private respondent Dionisio smelled of liquor at the
time he was taken from his smashed car and brought to the
Makati Medical Center in an unconscious condition. 7 This
testimony has to be taken in conjunction with the admission
of Dionisio that he had taken "a shot or two" of liquor
before dinner with his boss that night. We do not believe
that this evidence is sufficient to show that Dionisio was so
heavily under the influence of liquor as to constitute his
driving a motor vehicle per se an act of reckless
imprudence. 8 There simply is not enough evidence to
show how much liquor he had in fact taken and the effects
of that upon his physical faculties or upon his judgment or
mental alertness. We are also aware that "one shot or two"
of hard liquor may affect different people differently.
The conclusion we draw from the factual circumstances
outlined above is that private respondent Dionisio was
negligent the night of the accident. He was hurrying home
that night and driving faster than he should have been.
Worse, he extinguished his headlights at or near the
intersection of General Lacuna and General Santos Streets
and thus did not see the dump truck that was parked askew
and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and
the Intermediate Appellate Court that the legal and
proximate cause of the accident and of Dionisio's injuries
was the wrongful or negligent manner in which the
dump truck was parked in other words, the negligence of
petitioner Carbonel. That there was a reasonable
relationship between petitioner Carbonel's negligence on
the one hand and the accident and respondent's injuries on
the other hand, is quite clear. Put in a slightly different
manner, the collision of Dionisio's car with the dump truck
was a natural and foreseeable consequence of the truck
driver's negligence.
The petitioners, however, urge that the truck driver's
negligence was merely a "passive and static condition" and
that private respondent Dionisio's negligence was an
"efficient intervening cause and that consequently
Dionisio's negligence must be regarded as the legal and
proximate cause of the accident rather than the earlier
negligence of Carbonel. We note that the petitioners'
arguments are drawn from a reading of some of the older
cases in various jurisdictions in the United States but we
are unable to persuade ourselves that these arguments have
any validity for our jurisdiction. We note, firstly, that even
in the United States, the distinctions between "cause" and
"condition" which the 'petitioners would have us adopt

218

have already been "almost entirely discredited." Professors

and Keeton make this quite clear:
Cause and condition. Many courts have sought to
distinguish between the active "cause" of the harm and the
existing "conditions" upon which that cause operated. If the
defendant has created only a passive static condition which
made the damage possible, the defendant is said not to be
liable. But so far as the fact of causation is concerned, in
the sense of necessary antecedents which have played an
important part in producing the result it is quite impossible
to distinguish between active forces and passive situations,
particularly since, as is invariably the case, the latter are the
result of other active forces which have gone before. The
defendant who spills gasoline about the premises creates a
"condition," but the act may be culpable because of the
danger of fire. When a spark ignites the gasoline, the
condition has done quite as much to bring about the fire as
the spark; and since that is the very risk which the
defendant has created, the defendant will not escape
responsibility. Even the lapse of a considerable time during
which the "condition" remains static will not necessarily
affect liability; one who digs a trench in the highway may
still be liable to another who fans into it a month afterward.
"Cause" and "condition" still find occasional mention in the
decisions; but the distinction is now almost entirely
discredited. So far as it has any validity at all, it must refer
to the type of case where the forces set in operation by the
defendant have come to rest in a position of apparent
safety, and some new force intervenes. But even in such
cases, it is not the distinction between "cause" and
"condition" which is important but the nature of the risk
and the character of the intervening cause. 9
We believe, secondly, that the truck driver's negligence far
from being a "passive and static condition" was rather an
indispensable and efficient cause. The collision between the
dump truck and the private respondent's car would in an
probability not have occurred had the dump truck not been
parked askew without any warning lights or reflector
devices. The improper parking of the dump truck created an
unreasonable risk of injury for anyone driving down
General Lacuna Street and for having so created this risk,
the truck driver must be held responsible. In our view,
Dionisio's negligence, although later in point of time than
the truck driver's negligence and therefore closer to the
accident, was not an efficient intervening or independent
cause. What the Petitioners describe as an "intervening
cause" was no more than a foreseeable consequent manner
which the truck driver had parked the dump truck. In other
words, the petitioner truck driver owed a duty to private
respondent Dionisio and others similarly situated not to
impose upon them the very risk the truck driver had
created. Dionisio's negligence was not of an independent
and overpowering nature as to cut, as it were, the chain of
causation in fact between the improper parking of the dump
truck and the accident, nor to sever the juris vinculum of
liability. It is helpful to quote once more from Professor
and Keeton:
Foreseeable Intervening Causes. If the intervening cause is
one which in ordinary human experience is reasonably to

be anticipated or one which the defendant has reason to

anticipate under the particular circumstances, the defendant
may be negligence among other reasons, because of failure
to guard against it; or the defendant may be negligent only
for that reason. Thus one who sets a fire may be required to
foresee that an ordinary, usual and customary wind arising
later wig spread it beyond the defendant's own property,
and therefore to take precautions to prevent that event. The
person who leaves the combustible or explosive material
exposed in a public place may foresee the risk of fire from
some independent source. ... In all of these cases there is an
intervening cause combining with the defendant's conduct
to produce the result and in each case the defendant's
negligence consists in failure to protect the plaintiff against
that very risk.
Obviously the defendant cannot be relieved from liability
by the fact that the risk or a substantial and important part
of the risk, to which the defendant has subjected the
plaintiff has indeed come to pass. Foreseeable intervening
forces are within the scope original risk, and hence of the
defendant's negligence. The courts are quite generally
agreed that intervening causes which fall fairly in this
category will not supersede the defendant's responsibility.
Thus it has been held that a defendant will be required to
anticipate the usual weather of the vicinity, including all
ordinary forces of nature such as usual wind or rain, or
snow or frost or fog or even lightning; that one who leaves
an obstruction on the road or a railroad track should foresee
that a vehicle or a train will run into it; ...
The risk created by the defendant may include the
intervention of the foreseeable negligence of others. ... [The
standard of reasonable conduct may require the defendant
to protect the plaintiff against 'that occasional negligence
which is one of the ordinary incidents of human life, and
therefore to be anticipated.' Thus, a defendant who blocks
the sidewalk and forces the plaintiff to walk in a street
where the plaintiff will be exposed to the risks of heavy
traffic becomes liable when the plaintiff is run down by a
car, even though the car is negligently driven; and one who
parks an automobile on the highway without lights at night
is not relieved of responsibility when another negligently
drives into it. --- 10
We hold that private respondent Dionisio's negligence was
"only contributory," that the "immediate and proximate
cause" of the injury remained the truck driver's "lack of due
care" and that consequently respondent Dionisio may
recover damages though such damages are subject to
mitigation by the courts (Article 2179, Civil Code of the
Philippines).
Petitioners also ask us to apply what they refer to as the
"last clear chance" doctrine. The theory here of petitioners
is that while the petitioner truck driver was negligent,
private respondent Dionisio had the "last clear chance" of
avoiding the accident and hence his injuries, and that
Dionisio having failed to take that "last clear chance" must
bear his own injuries alone. The last clear chance doctrine
of the common law was imported into our jurisdiction by

219

Picart vs. Smith 11 but it is a matter for debate whether, or

to what extent, it has found its way into the Civil Code of
the Philippines. The historical function of that doctrine in
the common law was to mitigate the harshness of another
common law doctrine or rule that of contributory
negligence. 12 The common law rule of contributory
negligence prevented any recovery at all by a plaintiff who
was also negligent, even if the plaintiff's negligence was
relatively minor as compared with the wrongful act or
omission of the defendant. 13 The common law notion of
last clear chance permitted courts to grant recovery to a
plaintiff who had also been negligent provided that the
defendant had the last clear chance to avoid the casualty
and failed to do so. 14 Accordingly, it is difficult to see
what role, if any, the common law last clear chance
doctrine has to play in a jurisdiction where the common law
concept of contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected, as it has
been in Article 2179 of the Civil Code of the Philippines.
15
Is there perhaps a general concept of "last clear chance"
that may be extracted from its common law matrix and
utilized as a general rule in negligence cases in a civil law
jurisdiction like ours? We do not believe so. Under Article
2179, the task of a court, in technical terms, is to determine
whose negligence the plaintiff's or the defendant's
was the legal or proximate cause of the injury. That task is
not simply or even primarily an exercise in chronology or
physics, as the petitioners seem to imply by the use of
terms like "last" or "intervening" or "immediate." The
relative location in the continuum of time of the plaintiff's
and the defendant's negligent acts or omissions, is only one
of the relevant factors that may be taken into account. Of
more fundamental importance are the nature of the
negligent act or omission of each party and the character
and gravity of the risks created by such act or omission for
the rest of the community. The petitioners urge that the
truck driver (and therefore his employer) should be
absolved from responsibility for his own prior negligence
because the unfortunate plaintiff failed to act with that
increased diligence which had become necessary to avoid
the peril precisely created by the truck driver's own
wrongful act or omission. To accept this proposition is to
come too close to wiping out the fundamental principle of
law that a man must respond for the forseeable
consequences of his own negligent act or omission. Our
law on quasi-delicts seeks to reduce the risks and burdens
of living in society and to allocate them among the
members of society. To accept the petitioners' pro-position
must tend to weaken the very bonds of society.
Petitioner Carbonel's proven negligence creates a
presumption of negligence on the part of his employer
Phoenix 16 in supervising its employees properly and
adequately. The respondent appellate court in effect found,
correctly in our opinion, that Phoenix was not able to
overcome this presumption of negligence. The
circumstance that Phoenix had allowed its truck driver to
bring the dump truck to his home whenever there was work
to be done early the following morning, when coupled with
the failure to show any effort on the part of Phoenix to

supervise the manner in which the dump truck is parked

when away from company premises, is an affirmative
showing of culpa in vigilando on the part of Phoenix.
Turning to the award of damages and taking into account
the comparative negligence of private respondent Dionisio
on one hand and petitioners Carbonel and Phoenix upon the
other hand, 17 we believe that the demands of substantial
justice are satisfied by allocating most of the damages on a
20-80 ratio. Thus, 20% of the damages awarded by the
respondent appellate court, except the award of P10,000.00
as exemplary damages and P4,500.00 as attorney's fees and
costs, shall be borne by private respondent Dionisio; only
the balance of 80% needs to be paid by petitioners
Carbonel and Phoenix who shall be solidarity liable
therefor to the former. The award of exemplary damages
and attorney's fees and costs shall be borne exclusively by
the petitioners. Phoenix is of course entitled to
reimbursement from Carbonel. 18 We see no sufficient
reason for disturbing the reduced award of damages made
by the respondent appellate court.
WHEREFORE, the decision of the respondent appellate
court is modified by reducing the aggregate amount of
compensatory damages, loss of expected income and moral
damages private respondent Dionisio is entitled to by 20%
of such amount. Costs against the petitioners.
SO ORDERED.
PNR v. CA
Oct 15, 2007
PHILIPPINE NATIONAL RAILWAYS and VIRGILIO J.
BORJA,
Petitioners,
- versus -

COURT OF APPEALS (Second Division), CORAZON C.

AMORES, MA. EMILIE A. MOJICA, CECILE C. SISON,
DINO C. AMORES, LARISA C. AMORES, ARMAND
JINO C. AMORES and JOHN C. AMORES,
Respondents.
G.R. No. 157658
Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:
October 15, 2007

220

x-----------------------------------------------------------------------------------x

DECISION
NACHURA, J.:

Before the Court is a petition for review on certiorari under

Rule 45 of the 1997 Rules of Civil Procedure, as amended,
seeking to annul and set aside the Decision[1] of the Court
of Appeals (CA) in CA-G.R. CV No. 54906 which reversed
the Decision[2] of the Regional Trial Court (RTC) of
Manila, Branch 28, in Civil Case No. 92-61987.

beat the approaching train. They admitted that there was no

crossing bar at the site of the accident because it was
merely a barangay road.[11] PNR stressed that it exercised
the diligence of a good father of a family in the selection
and supervision of the locomotive driver and train engineer,
Borja, and that the latter likewise used extraordinary
diligence and caution to avoid the accident. Petitioners
further asserted that respondents had the last clear chance
to avoid the accident but recklessly failed to do so.
After trial on the merits, on August 22, 1996, the RTC
rendered judgment in favor of the petitioners, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered
dismissing the complaint of the plaintiffs and the
defendants counterclaim.
The costs shall be halved and paid equally by the

The factual antecedents are as follows:

parties.

In the early afternoon of April 27, 1992, Jose Amores

(Amores) was traversing the railroad tracks in Kahilum II
Street, Pandacan, Manila. Before crossing the railroad
track, he stopped for a while then proceeded accordingly.
[3] Unfortunately, just as Amores was at the intersection, a
Philippine National Railways (PNR) train with locomotive
number T-517 turned up and collided with the car.[4]

The counsel for the defendants is hereby ordered to

inform this court who is the legal representative of the
deceased defendant, Virgilio Borja, within ten (10) days
from receipt of a copy of this decision.

At the time of the mishap, there was neither a signal nor a

crossing bar at the intersection to warn motorists of an
approaching train. Aside from the railroad track, the only
visible warning sign at that time was the defective standard
signboard STOP, LOOK and LISTEN wherein the sign
Listen was lacking while that of Look was bent.[5] No
whistle blow from the train was likewise heard before it
finally bumped the car of Amores.[6] After impact, the car
was dragged about ten (10) meters beyond the center of the
crossing.[7] Amores died as a consequence thereof.

The RTC rationalized that the proximate cause of the

collision was Amores fatal misjudgment and the reckless
course of action he took in crossing the railroad track even
after seeing or hearing the oncoming train.

On July 22, 1992, the heirs of Amores, consisting of

his surviving wife and six children, herein respondents,
filed a Complaint for Damages[8] against petitioners PNR
and Virgilio J. Borja (Borja), PNRs locomotive driver at
the time of the incident, before the RTC of Manila. The
case was raffled to Branch 28 and was docketed as Civil
Case No. 92-61987. In their complaint, respondents
averred that the trains speedometer was defective, and that
the petitioners negligence was the proximate cause of the
mishap for their failure to take precautions to prevent injury
to persons and property despite the dense population in the
vicinity. They then prayed for actual and moral damages,
as well as attorneys fees.[9]
In their Answer,[10] the petitioners denied the
allegations, stating that the train was railroad-worthy and
without any defect. According to them, the proximate cause
of the death of Amores was his own carelessness and
negligence, and Amores wantonly disregarded traffic rules
and regulations in crossing the railroad tracks and trying to

SO ORDERED.[12]

On appeal, the CA reversed the RTC decision, as

follows:
WHEREFORE, the assailed Decision of the
Regional Trial Court of Manila, Branch 28 is hereby
REVERSED. The defendants PNR and the estate of
Virgilio J. Borja are jointly and severally liable to pay
plaintiffs the following:
1)
The amount of P122,300.00 for the cost of
damage to the car; and,
2)

The amount of P50,000 as moral damages.

For lack of official receipts for funeral expenses and

specimen of the last pay slip of the deceased, the claim for
reimbursement of funeral expenses and claim for payment
of support is hereby DENIED for lack of basis. Costs
against Defendants.
SO ORDERED.[13]

221

In reversing the trial courts decision, the appellate

court found the petitioners negligent. The court based the
petitioners negligence on the failure of PNR to install a
semaphore or at the very least, to post a flagman,
considering that the crossing is located in a thickly
populated area. Moreover, the signboard Stop, Look and
Listen was found insufficient because of its defective
condition as described above. Lastly, no negligence could
be attributed to Amores as he exercised reasonable
diligence in crossing the railroad track.
Aggrieved by this reversal, the petitioners filed the present
petition for review on certiorari, raising the following
grounds:
I
THE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION IN RENDERING ITS
DECISION REVERSING THE DECISION OF THE
REGIONAL TRIAL COURT OF MANILA BRANCH 28,
IN NOT TAKING INTO CONSIDERATION THE
PROVISION OF SECTION 42, R.A. 4136 OF THE LAND
TRANSPORTATION AND TRAFFIC CODE.
II
THE DECISION OF THE COURT OF APPEALS IS
CONTRARY TO THE EVIDENCE ON RECORD
ADDUCED IN THE TRIAL ON THE MERIT IN CIVIL
CASE NO. 92-61987.[14]

The petitioners insist that Amores must have heard

the trains whistle and heeded the warning but, noting that
the train was still a distance away and moving slowly, he
must have calculated that he could beat it to the other side
of the track before the train would arrive at the intersection.
The petitioners likewise add that the train was railroadworthy and that its defective speedometer did not affect the
trains operation. Lastly, they insist that evidence showed
sufficient warning signs strategically installed at the
crossing to alert both motorists and pedestrians.
Respondents, on the other hand, argue that the cause
of the accident was petitioners carelessness, imprudence
and laxity in failing to provide a crossing bar and keeper at
the Kahilum II railway intersection. Considering that
Kahilum II Street is in the middle of a thickly populated
squatters area, and many pedestrians cross the railroad
track, notwithstanding the fact that it is a public street and a
main thoroughfare utilized in going to Herran Street, the
presence of adequate warning signals would have
prevented the untimely death of Amores. Another crucial
point raised by the respondents is the manner in which
Borja applied the brakes of the train only when the
locomotive was already very near Amores car, as admitted
by witness Querimit. Finally, respondents claim that
Borjas failure to blow the locomotives horn, pursuant to
the usual practice of doing the same 100 meters before

reaching the Kahilum II crossing point is an earmark of

recklessness on the part of the petitioners.
The petition must fail.
The only issue to be resolved in the present case is whether
the appellate court was correct in ascribing negligence on
the part of the petitioners. It was ascertained beyond
quandary that the proximate cause of the collision is the
negligence and imprudence of the petitioner PNR and its
locomotive driver, Borja, in operating the passenger train.
As the action is predicated on negligence, the relevant
provision is Article 2176 of the New Civil Code, which
states that:
Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there was
no pre-existing contractual relation between the parties, is
called quasi-delict and is governed by the provisions of this
chapter.

We have thoroughly reviewed the records of the case and

we find no cogent reason to reverse the appellate courts
decision. Negligence has been defined as the failure to
observe for the protection of the interests of another person
that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person
suffers injury.[15] Using the aforementioned philosophy, it
may be reliably concluded that there is no hard and fast rule
whereby such degree of care and vigilance is calibrated; it
is dependent upon the circumstances in which a person
finds himself. All that the law requires is that it is
perpetually compelling upon a person to use that care and
diligence expected of sensible men under comparable
circumstances.[16]
We hold that the petitioners were negligent when the
collision took place. The transcript of stenographic notes
reveals that the train was running at a fast speed because
notwithstanding the application of the ordinary and
emergency brakes, the train still dragged the car some
distance away from the point of impact. Evidence likewise
unveils the inadequate precautions taken by petitioner PNR
to forewarn the public of the impending danger. Aside from
not having any crossing bar, no flagman or guard to man
the intersection at all times was posted on the day of the
incident. A reliable signaling device in good condition, not
just a dilapidated Stop, Look and Listen signage because
of many years of neglect, is needed to give notice to the
public. It is the responsibility of the railroad company to
use reasonable care to keep the signal devices in working
order. Failure to do so would be an indication of
negligence.
As held in the case of Philippine National Railway v.
Brunty,[17] it may broadly be stated that railroad
companies owe to the public a duty of exercising a

222

reasonable degree of care to avoid injury to persons and

property at railroad crossings, which duties pertain both to
the operation of trains and to the maintenance of the
crossings. Moreover, every corporation constructing or
operating a railway shall make and construct at all points
where such railway crosses any public road, good,
sufficient, and safe crossings, and erect at such points, at
sufficient elevation from such road as to admit a free
passage of vehicles of every kind, a sign with large and
distinct letters placed thereon, to give notice of the
proximity of the railway, and warn persons of the necessity
of looking out for trains.[18] The failure of the PNR to put
a cross bar, or signal light, flagman or switchman, or
semaphore is evidence of negligence and disregard of the
safety of the public, even if there is no law or ordinance
requiring it, because public safety demands that said device
or equipment be installed.
The petitioners insist that a train has a right-of-way in a
railroad crossing under the existing laws. They derive their
theory from Section 42 (d), Article III of R.A. 4136,
otherwise known as the Land Transportation and Traffic
Code, which states that:
The driver of a vehicle upon a highway shall bring to a full
stop such vehicle before traversing any through highway
or railroad crossing: Provided, That when it is apparent that
no hazard exists, the vehicle may be slowed down to five
miles per hour instead of bringing it to a full stop.

or at the very least, to post a flagman or watchman to warn

the public of the passing train amounts to negligence.[19]
In view of the foregoing, We will now discuss the liability
of petitioner PNR. Article 2180[20] of the New Civil Code
discusses the liability of the employer once negligence or
fault on the part of the employee has been established. The
employer is actually liable on the assumption of juris
tantum that the employer failed to exercise diligentissimi
patris families in
the selection and supervision of its employees. The liability
is primary and can only be negated by showing due
diligence in the selection and supervision of the employee,
a factual matter that has not been demonstrated.[21] Even
the existence of hiring procedures and supervisory
employees cannot be incidentally invoked to overturn the
presumption of negligence on the part of the employer.[22]
WHEREFORE, the petition is DENIED. The Decision of
the Court of Appeals dated March 31, 2003 in CA-G.R. CV
No. 54906 is hereby AFFIRMED.
SO ORDERED.
Dy Teban v. Jose Ching, Liberty Forest Feb 4, 2008
DY TEBAN TRADING, INC.,
G.R. No. 161803
Petitioner,
Present:
YNARES-

They claim that motorists are enjoined by law to stop, look

and listen before crossing railroad tracks and that a heavier
responsibility rests upon the motorists in avoiding accidents
at level crossings.
It is true that one driving an automobile must use his
faculties of seeing and hearing when nearing a railroad
crossing. However, the obligation to bring to a full stop
vehicles moving in public highways before traversing any
through street only accrues from the time the said
through street or crossing is so designated and signposted. From the records of the case, it can be inferred that
Amores exercised all the necessary precautions required of
him as to avoid injury to himself and to others. The
witnesses testimonies showed that Amores slackened his
speed, made a full stop, and then proceeded to cross the
tracks when he saw that there was no impending danger to
his life. Under these circumstances, we are convinced that
Amores did everything, with absolute care and caution, to
avoid the collision.
It is settled that every person or motorist crossing a railroad
track should use ordinary prudence and alertness to
determine the proximity of a train before attempting to
cross. We are persuaded that the circumstances were
beyond the control of Amores for no person would sacrifice
his precious life if he had the slightest opportunity to evade
the catastrophe. Besides, the authority in this jurisdiction is
that the failure of a railroad company to install a semaphore

SANTIAGO, J.,
Chairper
son,
- versus MARTINEZ,

AUSTRIACORONA,*

NACHURA, and
REYES, JJ.
JOSE CHING AND/OR LIBERTY
FOREST, INC. and CRESILITO
Promulgated:
M. LIMBAGA,
Respondents.
February 4, 2008
x-------------------------------------------------x
DECISION

REYES, R.T., J.:

THE vehicular collision resulting in damages and injuries

in this case could have been avoided if the stalled prime
mover with trailer were parked properly and equipped with
an early warning device. It is high time We sounded the
call for strict enforcement of the law and regulation on
traffic and vehicle registration. Panahon na para mahigpit
na ipatupad ang batas at regulasyon sa trapiko at
pagpapatala ng sasakyan.

223

Before Us is a petition for review on certiorari of the

Decision[1] of the Court of Appeals (CA) modifying
that[2] of the Regional Trial Court (RTC) in
Butuan City finding private respondents Liberty Forest,
Inc. and Cresilito Limbaga liable to petitioner Dy Teban
Trading, Inc. for damages.

On August 7, 2001, the RTC rendered a decision in

favor of petitioner Dy Teban Trading, Inc. with a fallo
reading:

Facts

a) That defendants Liberty Forest, Inc. and Cresilito M.

Limbaga pay, jointly and solidarily, plaintiff Dy Teban
Trading, Inc. the amounts of P279,832.00 as actual and
compensatory damages, P30,000.00 as attorneys fees and
P5,000.00 as expenses of litigation;
b) That all money claims of plaintiff Rogelio C. Ortiz are
dismissed;
c) That defendant Jose Ching is absolved from any civil
liability or the case against him dismissed;
d)
That the counterclaim of all the defendants is
dismissed; and
e) That defendants Liberty Forest, Inc. and Cresilito M.
Limbaga to pay, jointly and solidarily, the costs.

On July 4, 1995, at around 4:45 a.m., Rogelio Ortiz, with

helper Romeo Catamora, was driving a Nissan van owned
by petitioner Dy Teban Trading, Inc. along the National
Highway in Barangay Sumilihon, Butuan City, going to
Surigao City. They were delivering commercial ice to
nearby barangays and municipalities. A Joana Paula
passenger bus was cruising on the opposite lane towards
the van. In between the two vehicles was a parked prime
mover with a trailer, owned by private respondent Liberty
Forest, Inc.[3]
The night before, at around 10:00 p.m., the prime mover
with trailer suffered a tire blowout. The driver, private
respondent Cresilito Limbaga, parked the prime mover
askew occupying a substantial portion of the national
highway, on the lane of the passenger bus. He parked the
prime mover with trailer at the shoulder of the road with
the left wheels still on the cemented highway and the right
wheels on the sand and gravel shoulder of the highway.[4]
The prime mover was not equipped with triangular,
collapsible reflectorized plates, the early warning device
required under Letter of Instruction No. 229. As substitute,
Limbaga placed a banana trunk with leaves on the front and
the rear portion of the prime mover to warn incoming
motorists. It is alleged that Limbaga likewise placed
kerosene lighted tin cans on the front and rear of the trailer.
[5]
To avoid hitting the parked prime mover occupying its lane,
the incoming passenger bus swerved to the right, onto the
lane of the approaching Nissan van. Ortiz saw two bright
and glaring headlights and the approaching passenger bus.
He pumped his break slowly, swerved to the left to avoid
the oncoming bus but the van hit the front of the stationary
prime mover. The passenger bus hit the rear of the prime
mover.[6]
Ortiz and Catamora only suffered minor injuries. The
Nissan van, however, became inoperable as a result of the
incident. After the collision, SPO4 Teofilo Pame conducted
an investigation and submitted a police traffic incident
investigation report.[7]
On October 31, 1995, petitioner Nissan van owner filed a
complaint for damages[8] against private respondents
prime mover owner and driver with the RTC in Butuan
City. The Joana Paula passenger bus was not impleaded as
defendant in the complaint.
RTC Disposition

WHEREFORE, judgment is hereby rendered

directing, ordaining and ordering:

SO ORDERED.[9]

The RTC held that the proximate cause of the three-way

vehicular collision was improper parking of the prime
mover on the national highway and the absence of an early
warning device on the vehicle, thus:
The court finds that the proximate cause of the incidents is
the negligence and carelessness attributable to the
defendants. When the trailer being pulled by the prime
mover suffered two (2) flat tires at Sumilihon, the prime
mover and trailer were parked haphazardly, as the right
tires of the prime mover were the only ones on the sand and
gravel shoulder of the highway while the left tires and all
the tires of the trailer were on the cemented pavement of
the highway, occupying almost the whole of the right lane
on the direction the prime mover and trailer were traveling.
The statement of Limbaga that he could not park the prime
mover and trailer deeper into the sand and gravel shoulder
of the highway to his right because there were banana
plants is contradicted by the picture marked Exhibit F.
The picture shows that there was ample space on the
shoulder. If defendant Limbaga was careful and prudent
enough, he should have the prime mover and trailer
traveled more distance forward so that the bodies of the
prime mover and trailer would be far more on the shoulder
rather than on the cemented highway when they were
parked. x x x The court has some doubts on the statement
of witness-driver Limbaga that there were banana trunks
with leaves and lighted tin cans with crude oil placed 3
strides in front of the prime mover and behind the trailer
because the testimonies of witnesses Rogelio C. Ortiz,
driver of the ice van, Romeo D. Catamora, helper of the ice
van, and Police Traffic Investigator SPO3 Teofilo M. Pame
show that there were no banana trunks with leaves and
lighted tin cans at the scene of the incident. But even

224

assuming that there were banana trunks with leaves but

they were placed close to the prime mover and trailer as
they were placed 3 strides away which to the mind of the
court is equivalent approximately to 3 meters and with this
distance, approaching vehicles would have no sufficient
time and space to make a complete stop, especially if the
vehicles are heavy and loaded. If there were lighted tin
cans, it was not explained by the defendants why the driver,
especially driver witness Ortiz, did not see them.
xxxx
Defendant Liberty Forest, Inc. did not exercise the
diligence of a good father of a family in managing and
running its business. The evidence on record shows that it
failed to provide its prime mover and trailer with the
required early warning devices with reflectors and it did
not keep proper maintenance and condition of the prime
mover and the trailer. The circumstances show that the
trailer were provided with wornout tires and with only one
(1) piece of spare tire. The pictures marked Exhibit 3
and 4 show that two (2) flat tires suffered by the trailer
and these two (2) tires were attached to one of the two (2)
I-beams or axles attached to the rear of the trailer which
axle is very near but behind the other axle and with the
location of the 2 I-beams, it would have the other I-beam
that would have suffered the flat tires as it has to bear the
brunt of weight of the D-8 bulldozer. The bulldozer was
not loaded directly above the two (2) I-beams as 2 I-beams,
as a pair, were attached at the far rear end of the trailer.
xxxx
However, defendant Jose Ching should be absolved
of any liability as there is no showing that he is the
manager or CEO of defendant Liberty Forest, Inc. Although
in the answer, it is admitted that he is an officer of the
defendant corporation, but it is not clarified what kind of
position he is holding, as he could be an officer as one of
the members of the Board of Directors or a cashier and
treasurer of the corporation. Witness Limbaga in his
testimony mentioned a certain Boy Ching as the Manager
but it was never clarified whether or not Boy Ching and
defendant Jose Ching is one and the same person.[10]
Private respondents appealed to the CA.
CA Disposition

The dismissal of the case against Jose Ching, the

counterclaim of defendants-appellants/appellees and the
money claim of Rogelio Ortiz STANDS.
SO ORDERED.[11]
In partly reversing or partly modifying the RTC decision,
the CA held that the proximate cause of the vehicular
collision was the failure of the Nissan van to give way or
yield to the right of way of the passenger bus, thus:

It was stated that the Joana Paula bus in trying to avoid a

head-on collision with the truck, sideswept the parked
trailer loaded with bulldozer.
Evidently, the driver of the Joana Paula bus was
aware of the presence on its lane of the parked trailer with
bulldozer. For this reason, it proceeded to occupy what was
left of its lane and part of the opposite lane. The truck
occupying the opposite lane failed to give way or yield the
right of way to the oncoming bus by proceeding with the
same speed. The two vehicles were, in effect, trying to beat
each other in occupying a single lane. The bus was the first
to occupy the said lane but upon realizing that the truck
refused to give way or yield the right of way, the bus, as a
precaution, geared to its right where the trailer was parked.
Unfortunately, the bus miscalculated its distance from the
parked trailer and its rear right side hit the protruding blade
of the bulldozer then on the top of the parked trailer. The
impact of the collision on its right rear side with the blade
of the bulldozer threw the bus further to the opposite lane,
landing its rear portion on the shoulder of the opposite lane.
xxxx
Facts of the case reveal that when Ortiz, the driver
of the truck, failed to give the Joana Paula bus the space on
the road it needed, the latter vehicle scraped its rear right
side on the protruded bulldozer blade and the impact threw
the bus directly on the path of the oncoming truck. This
made plaintiffs-appellants/appellees conclude that the Joana
Paula bus occupied its lane which forced Ortiz, the driver
of the truck, to swerve to its left and ram the front of the
parked trailer.

On August 28, 2003, the CA reversed the RTC decision,

disposing as follows:

xxxx

WHEREFORE, premises considered, the decision

dated August 7, 2001 of the Regional Trial Court, Branch 2,
Butuan City in Civil Case No. 4360 is hereby PARTLY
MODIFIED
by
absolving
the
defendantsappellants/appellees of any liability to plaintiffsappellants/appellees by reason of the incident on July 4,
1995.

The trailer was parked because its two (2) rear-left

tires were blown out. With a bulldozer on top of the trailer
and two (2) busted tires, it would be dangerous and quite
impossible for the trailer to further park on the graveled
shoulder of the road. To do so will cause the flat car to tilt
and may cause the bulldozer to fall from where it was
mounted. In fact, it appeared that the driver of the trailer

225

tried its best to park on the graveled shoulder since the

right-front tires were on the graveled shoulder of the road.
The lower court erred in stating that the Joana Paula
bus swerved to the left of the truck because it did not see
the parked trailer due to lack of warning sign of danger of
any kind that can be seen from a distance. The damage
suffered by the Joana Paula bus belied this assessment. As
stated before, the Joana Paula bus, with the intention of
passing first which it did, first approached the space beside
the parked trailer, veered too close to the parked trailer
thereby hitting its rear right side on the protruding
bulldozer blade. Since the damage was on the rear right
most of the bus, it was clearly on the space which was wide
enough for a single passing vehicle but not sufficient for
two (2) passing vehicles. The bus was thrown right to the
path of the truck by the impact of the collision of its rear
right side with the bulldozer blade.[12]

The CA disagreed with the RTC that the prime mover

did not have an early warning device. The appellate court
accepted the claim of private respondent that Limbaga
placed kerosene lighted tin cans on the front and rear of the
trailer which, in Baliwag Transit, Inc. v. Court of Appeals,
[13] may act as substitute early warning device. The CA
stated:
Likewise, it was incorrect for the lower court to
state that there was no warning sign of danger of any kind,
most probably referring to the absence of the triangular
reflectorized plates. The police sketch clearly indicated the
stack of banana leaves placed at the rear of the parked
trailer. The trailers driver testified that they placed
kerosene lighted tin can at the back of the parked trailer.
A pair of triangular reflectorized plates is not the
only early warning device allowed by law. The Supreme
Court (in Baliwag Transit, Inc. v. Court of Appeals) held
that:
x x x Col. Dela Cruz and Romano testified that
they did not see any early warning device at the scene of
the accident. They were referring to the triangular
reflectorized plates in red and yellow issued by the Land
Transportation Office. However, the evidence shows that
Recontique and Ecala placed a kerosene lamp or torch at
the edge of the road, near the rear portion of the truck to
serve as an early warning device. This substantially
complies with Section 34(g) of the Land Transportation and
Traffic Code x x x
Baliwags argument that the kerosene lamp or torch
does not substantially comply with the law is untenable.
The aforequoted law clearly allows the use not only of an
early warning device of the triangular reflectorized plates
variety but also parking lights or flares visible one hundred
meters away. x x x.

This Court holds that the defendantsappellants/appellees were not negligent in parking the
trailer on the scene of the accident. It would have been
different if there was only one flat tire and defendantappellant/appellee Limbaga failed to change the same and
left immediately.
As such, defendants-appellants/appellees are not
liable for the damages suffered by plaintiffsappellants/appellees.
Whatever damage plaintiffsappellants/appellees suffered, they alone must bear them.
[14]

Issues
Petitioner raises two issues[15] for Our
consideration, to wit:
I.
THE HONORABLE COURT OF APPEALS, WITHOUT
ANY
AVAILABLE
CONCRETE
EVIDENCE,
ERRONEOUSLY DETERMINED THAT THERE WERE
EARLY WARNING DEVICES PLACED IN FRONT OF
THE
DEFENDANT-APPELLANTS/APPELLEES
TRUCK AND FLAT CAR TO WARN PLAINTIFFAPPELLANT/APPELLEE ROGELIO ORTIZ OF THEIR
PRESENCE.
II.
WITH DUE RESPECT, IT IS HIGH TIME TO ENFORCE
THE LAW ON EARLY WARNING DEVICES IN THE
PUBLIC INTEREST.
Our Ruling
The petition is meritorious.
The meat of the petition is whether or not the prime mover
is liable for the damages suffered by the Nissan van. The
RTC ruled in the affirmative holding that the proximate
cause of the vehicular collision was the negligence of
Limbaga in parking the prime mover on the national
highway without an early warning device on the vehicle.
The CA reversed the RTC decision, holding that the
proximate cause of the collision was the negligence of
Ortiz in not yielding to the right of way of the passenger
bus.
Article 2176 of the Civil Code provides that whoever by act
or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict. To
sustain a claim based on quasi-delict, the following
requisites must concur: (a) damage suffered by plaintiff; (b)
fault or negligence of defendant; and (c) connection of

226

cause and effect between the fault or negligence of

defendant and the damage incurred by plaintiff.[16]
There is no dispute that the Nissan van suffered
damage. That is borne by the records and conceded by the
parties.
The outstanding issues are negligence and
proximate cause. Tersely put, the twin issues are:
(a)
whether or not prime mover driver Limbaga was negligent
in parking the vehicle; and (b) whether or not his
negligence was the proximate cause of the damage to the
Nissan van.
Limbaga was negligent in parking the prime mover on the
national highway; he failed to prevent or minimize the risk
to oncoming motorists.
Negligence is defined as the failure to observe for the
protection of the interests of another person that degree of
care, precaution, and vigilance which the circumstances
justly demand, whereby such other person suffers injury.
[17] The Supreme Court stated the test of negligence in the
landmark case Picart v. Smith[18] as follows:
The test by which to determine the existence or negligence
in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinary person
would have used in the same situation? If not, then he is
guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct
of the discreet paterfamilias of the Roman law. The
existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the
situation before him. The law considers what would be
reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.
(Underscoring supplied)
The test of negligence is objective. We measure the act or
omission of the tortfeasor with that of an ordinary
reasonable person in the same situation. The test, as
applied to this case, is whether Limbaga, in parking the
prime mover, used that reasonable care and caution which
an ordinary reasonable person would have used in the same
situation.
We find that Limbaga was utterly negligent in parking the
prime mover askew on the right side of the national
highway. The vehicle occupied a substantial portion of the
national road on the lane of the passenger bus. It was
parked at the shoulder of the road with its left wheels still
on the cemented highway and the right wheels on the sand
and gravel shoulder of the highway. It is common sense
that the skewed parking of the prime mover on the national
road posed a serious risk to oncoming motorists. It was
incumbent upon Limbaga to take some measures to prevent
that risk, or at least minimize it.
We are unable to agree with the CA conclusion it
would have been dangerous and quite impossible to further

park the prime mover on the graveled shoulder of the road

because the prime mover may tilt and the bulldozer may
fall off. The photographs taken after the incident show
that it could have been possible for Limbaga to park the
prime mover completely on the shoulder of the national
road without risk to oncoming motorists. We agree with
the RTC observation on this point, thus:
x x x The statement of Limbaga that he could not
park the prime mover and trailer deeper into the sand and
gravel shoulder of the highway to his right because there
were banana plants is contradicted by the picture marked
Exhibit F. The picture shows that there was ample space
on the shoulder. If defendant Limbaga was careful and
prudent enough, he should have the prime mover and trailer
traveled more distance forward so that the bodies of the
prime mover and trailer would be far more on the shoulder
rather than on the cemented highway when they were
parked. Although at the time of the incident, it was about
4:45 in the morning and it was drizzling but there is
showing that it was pitch dark that whoever travels along
the highway must be extra careful. If the Joana Paula bus
swerved to the lane on which the Nissan ice van was
properly traveling, as prescribed by Traffic Rules and
Regulations, it is because the driver of the bus did not see
at a distance the parked prime mover and trailer on the bus
proper lane because there was no warning signs of danger
of any kind that can be seen from a distance.[19]
Limbaga also failed to take proper steps to minimize
the risk posed by the improperly parked prime mover. He
did not immediately inform his employer, private
respondent Liberty Forest, Inc., that the prime mover
suffered two tire blowouts and that he could not have them
fixed because he had only one spare tire. Instead of calling
for help, Limbaga took it upon himself to simply place
banana leaves on the front and rear of the prime mover to
serve as warning to oncoming motorists. Worse, Limbaga
slept on the prime mover instead of standing guard beside
the vehicle. By his own account, Limbaga was sleeping on
the prime mover at the time of the collision and that he was
only awakened by the impact of the Nissan van and the
passenger bus on the prime mover.[20]
Limbaga also admitted on cross-examination that it was his
first time to drive the prime mover with trailer loaded with
a D-8 caterpillar bulldozer.[21] We find that private
respondent Liberty Forest, Inc. was utterly negligent in
allowing a novice driver, like Limbaga, to operate a
vehicle, such as a truck loaded with a bulldozer, which
required highly specialized driving skills. Respondent
employer clearly failed to properly supervise Limbaga in
driving the prime mover.
The RTC noted that private respondent Liberty Forest, Inc.
also failed to keep the prime mover in proper condition at
the time of the collision. The prime mover had worn out
tires. It was only equipped with one spare tire. It was for
this reason that Limbaga was unable to change the two
blown out tires because he had only one spare. The

227

bulldozer was not even loaded properly on the prime

mover, which caused the tire blowouts.
All told, We agree with the RTC that private respondent
Limbaga was negligent in parking the prime mover on the
national highway. Private respondent Liberty Forest, Inc.
was also negligent in failing to supervise Limbaga and in
ensuring that the prime mover was in proper condition.
The case of Baliwag Transit, Inc. v. Court of Appeals is
inapplicable; Limbaga did not put lighted kerosene tin cans
on the front and rear of the prime mover.
Anent the absence of an early warning device on the prime
mover, the CA erred in accepting the bare testimony of
Limbaga that he placed kerosene lighted tin cans on the
front and rear of the prime mover. The evidence on records
belies such claim. The CA reliance on Baliwag Transit,
Inc. v. Court of Appeals[22] as authority for the proposition
that kerosene lighted tin cans may act as substitute early
warning device is misplaced.
First, the traffic incident report did not mention any lighted
tin cans on the prime mover or within the immediate
vicinity of the accident. Only banana leaves were placed
on the prime mover. The report reads:
VIII RESULT OF INVESTIGATION: A Joana
Paula Bus, with Body No. 7788, with Plate No. LVA-137,
driven by one Temestocles Relova v. Antero, of legal age,
married and a resident of San Roque, Kitcharao, Agusan
del Norte, while traveling along the National Highway,
coming from the east going to the west direction, as it
moves along the way and upon reaching Brgy. Sumilihon,
Butuan City to evade bumping to the approaching Nissan
Ice Van with Plate No. PNT-247, driven by one Rogelio
Cortez y Ceneza. As the result, the Joana Paula Bus
accidentally busideswept (sic) to the parked Prime Mover
with Trailer loaded with Bulldozer without early warning
device, instead placing only dry banana leaves three (3)
meters at the rear portion of the Trailer, while failure to
place at the front portion, and the said vehicle occupied the
whole lane. As the result, the Joana Paula Bus hit to the
left edge blade of the Bulldozer. Thus, causing the said bus
swept to the narrow shouldering, removing the rear four (4)
wheels including the differential and injuring the abovestated twelve (12) passengers and damaged to the right side
fender above the rear wheel. Thus, causing damage on it.
While the Nissan Ice Van in evading, accidentally swerved
to the left lane and accidentally bumped to the front bumper
of the parked Prime Mover with Trailer loaded with
Bulldozer. Thus, causing heavy damage to said Nissan Ice
Van including the cargoes of the said van.[23]
Second, SPO4 Pame, who investigated the collision,
testified[24] that only banana leaves were placed on the
front and rear of the prime mover. He did not see any
lighted tin cans in the immediate vicinity of the collision.

Third, the claim of Limbaga that he placed lighted tin cans

on the front and rear of the prime mover belatedly surfaced
only during his direct examination. No allegation to this
effect was made by private respondents in their Answer to
the complaint for damages. Petitioners counsel promptly
objected to the testimony of Limbaga, thus:
ATTY. ROSALES:
Q. Now you mentioned about placing some word signs in
front and at the rear of the prime mover with trailer, will
you please describe to us what this word signs are?
A. We placed a piece of cloth on tin cans and filled them
with crude oil. And these tin cans were lighted and they are
like torches. These two lights or torches were placed in
front and at the rear side of the prime mover with trailer.
After each torch, we placed banana trunk. The banana
trunk is placed between the two (2) torches and the prime
mover, both on the rear and on the front portion of the
prime mover.
Q. How far was the lighted tin cans with wick placed in
front of the prime mover.
ATTY. ASIS:
At this point, we will be objecting to questions
particularly referring to the alleged tin cans as some of the
warning-sign devices, considering that there is no
allegation to that effect in the answer of the defendants.
The answer was just limited to the numbers 4 & 5 of the
answer. And, therefore, if we follow the rule of the binding
effect of an allegation in the complaint, then the party will
not be allowed to introduce evidence to attack jointly or
rather the same, paragraph 5 states, warning device
consisting of 3 banana trunks, banana items and leaves
were filed. He can be cross-examined in the point, Your
Honor.
COURT:
Q. Put that on record that as far as this tin cans are
concerned, the plaintiffs are interposing continuing
objections. But the Court will allow the question.[25]

We thus agree with the RTC that Limbaga did not place
lighted tin cans on the front and rear of the prime mover.
We give more credence to the traffic incident report and the
testimony of SPO4 Pame that only banana leaves were
placed on the vehicle. Baliwag Transit, Inc. v. Court of
Appeals[26] thus finds no application to the case at bar.
The skewed parking of the prime mover was the proximate
cause of the collision.
Proximate cause is defined as 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.
More
comprehensively, proximate cause is that cause acting first
and producing the injury, either immediately or by setting
other events in motion, all constituting a natural and

228

continuous chain of events, each having a close causal

connection with its immediate predecessor, the final event
in the chain immediately effecting the injury as 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.[27]
There is no exact mathematical formula to determine
proximate cause. It is based upon mixed considerations of
logic, common sense, policy and precedent.[28] Plaintiff
must, however, establish a sufficient link between the act or
omission and the damage or injury. That link must not be
remote or far-fetched; otherwise, no liability will attach.
The damage or injury must be a natural and probable result
of the act or omission. In the precedent-setting Vda. de
Bataclan v. Medina,[29] this Court discussed the necessary
link that must be established between the act or omission
and the damage or injury, viz.:

It may be that ordinarily, when a passenger bus overturns,

and pins down a passenger, merely causing him physical
injuries, if through some event, unexpected and
extraordinary, the overturned bus is set on fire, say, by
lightning, or if some highwaymen after looting the vehicle
sets it on fire, and the passenger is burned to death, one
might still contend that the proximate cause of his death
was the fire and not the overturning of the vehicle. But in
the present case and under the circumstances obtaining in
the same, we do not hesitate to hold that the proximate
cause of the death of Bataclan was the overturning of the
bus, this for the reason that when the vehicle turned not
only on its side but completely on its back, the leaking of
the gasoline from the tank was not unnatural or unexpected;
that the coming of the men with a lighted torch was in
response to the call for help, made not only by the
passengers, but most probably, by the driver and the
conductor themselves, and that because it was very dark
(about 2:30 in the morning), the rescuers had to carry a
light with them; and coming as they did from a rural area
where lanterns and flashlights were not available, they had
to use a torch, the most handy and available; and what was
more natural than that said rescuers should innocently
approach the overturned vehicle to extend the aid and effect
the rescue requested from them. In other words, the
coming of the men with the torch was to be expected and
was natural sequence of the overturning of the bus, the
trapping of some of its passengers bus, the trapping of
some of its passengers and the call for outside help.
The ruling in Bataclan has been repeatedly cited in
subsequent cases as authority for the proposition that the
damage or injury must be a natural or probable result of the
act or omission. Here, We agree with the RTC that the
damage caused to the Nissan van was a natural and
probable result of the improper parking of the prime mover
with trailer. As discussed, the skewed parking of the prime
mover posed a serious risk to oncoming motorists.

Limbaga failed to prevent or minimize that risk. The

skewed parking of the prime mover triggered the series of
events that led to the collision, particularly the swerving of
the passenger bus and the Nissan van.
Private respondents Liberty Forest, Inc. and Limbaga are
liable for all damages that resulted from the skewed
parking of the prime mover. Their liability includes those
damages resulting from precautionary measures taken by
other motorist in trying to avoid collision with the parked
prime mover. As We see it, the passenger bus swerved to
the right, onto the lane
of the Nissan van, to avoid colliding with the improperly
parked prime mover. The driver of the Nissan van, Ortiz,
reacted swiftly by swerving to the left, onto the lane of the
passenger bus, hitting the parked prime mover. Ortiz
obviously would not have swerved if not for the passenger
bus abruptly occupying his vans lane. The passenger bus,
in turn, would not have swerved to the lane of the Nissan
van if not for the prime mover improperly parked on its
lane. The skewed parking is the proximate cause of the
damage to the Nissan van.
In Phoenix Construction, Inc. v. Intermediate Appellate
Court,[30] this Court held that a similar vehicular collision
was caused by the skewed parking of a dump truck on the
national road, thus:
The conclusion we draw from the factual circumstances
outlined above is that private respondent Dionisio was
negligent the night of the accident. He was hurrying home
that night and driving faster than he should have been.
Worse, he extinguished his headlights at or near the
intersection of General Lacuna and General Santos Streets
and thus did not see the dump truck that was parked askew
and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and
the Intermediate Appellate Court that the legal and
proximate cause of the accident and of Dionisios injuries
was the wrongful or negligent manner in which the dump
truck was parked in other words, the negligence of
petitioner Carbonel.
That there was a reasonable
relationship between petitioner Carbonels negligence on
the one hand and the accident and respondents injuries on
the other hand, is quite clear. Put in a slightly different
manner, the collision of Dionisios car with the dump truck
was a natural and foreseeable consequence of the truck
drivers negligence.
xxxx
We believe, secondly, that the truck drivers negligence far
from being a passive and static condition was rather an
indispensable and efficient cause. The collision between
the dump truck and the private respondents car would in
all probability not have occurred had the dump truck not
been parked askew without any warning lights or reflector
devices. The improper parking of the dump truck created
an unreasonable risk of injury for anyone driving down

229

General Lacuna Street and for having so created this risk,

the truck driver must be held responsible. In our view,
Dionisios negligence, although later in point of time than
the truck drivers negligence and, therefore, closer to the
accident, was not an efficient intervening or independent
cause. What the Petitioner describes as an intervening
cause was no more than a foreseeable consequence of the
risk created by the negligent manner in which the truck
driver had parked the dump truck. In other words, the
petitioner truck driver owed a duty to private respondent
Dionisio and others similarly situated not to impose upon
them the very risk the truck driver had created. Dionisios
negligence was not of an independent and overpowering
nature as to cut, as it were, the chain of causation in fact
between the improper parking of the dump truck and the
accident, nor to sever the juris vinculum of liability. x x x
(Underscoring supplied)
We cannot rule on the proportionate or contributory
liability of the passenger bus, if any, because it was not a
party to the case; joint tortfeasors are solidarily liable.
The CA also faults the passenger bus for the vehicular
collision. The appellate court noted that the passenger bus
was aware of the presence of the prime mover on its lane,
but it still proceeded to occupy the lane of the Nissan van.
The passenger bus also miscalculated its distance from the
prime mover when it hit the vehicle.
We cannot definitively rule on the proportionate or
contributory liability of the Joana Paula passenger bus vis-vis the prime mover because it was not a party to the
complaint for damages. Due process dictates that the
passenger bus must be given an opportunity to present its
own version of events before it can be held liable. Any
contributory or proportionate liability of the passenger bus
must be litigated in a separate action, barring any defense
of prescription or laches. Insofar as petitioner is concerned,
the proximate cause of the collision was the improper
parking of the prime mover. It was the improper parking of
the prime mover which set in motion the series of events
that led to the vehicular collision.
Even granting that the passenger bus was at fault, its fault
will not necessarily absolve private respondents from
liability. If at fault, the passenger bus will be a joint
tortfeasor along with private respondents. The liability of
joint tortfeasors is joint and solidary. This means that
petitioner may hold either of them liable for damages from
the collision.
In Philippine National Construction
Corporation v. Court of Appeals,[31] this Court held:
According to the great weight of authority, where the
concurrent or successive negligent acts or omission of two
or more persons, although acting independently of each
other, are, in combination, the direct and proximate cause
of a single injury to a third person and it is impossible to
determine in what proportion each contributed to the injury,
either is responsible for the whole injury, even though his
act alone might not have caused the entire injury, or the

same damage might have resulted from the acts of the other
tort-feasor x x x.
In Far Eastern Shipping Company v. Court of Appeals, the
Court declared that the liability of joint tortfeasors is joint
and solidary, to wit:
It may be said, as a general rule, that negligence in order to
render a person liable need not be the sole cause of an
injury. It is sufficient that his negligence, concurring with
one or more efficient causes other than plaintiffs, is the
proximate cause of the injury. Accordingly, where several
causes combine to produce injuries, a person is not relieved
from liability because he is responsible for only one of
them, it being sufficient that the negligence of the person
charged with injury is an efficient cause without which the
injury would not have resulted to as great an extent, and
that such cause is not attributable to the person injured. It
is no defense to one of the concurrent tortfeasors that the
injury would not have resulted from his negligence alone,
without the negligence or wrongful acts of the other
concurrent tortfeasors. Where several causes producing an
injury are concurrent and each is an efficient cause without
which the injury would not have happened, the injury may
be attributed to all or any of the causes and recovery may
be had against any or all of the responsible persons
although under the circumstances of the case, it may appear
that one of them was more culpable, and that the duty owed
by them to the injured person was not the same. No actors
negligence ceases to be a proximate cause merely because
it does not exceed the negligence of other actors. Each
wrongdoer is responsible for the entire result and is liable
as though his acts were the sole cause of the injury.
There is no contribution between joint tortfeasors whose
liability is solidary since both of them are liable for the
total damage. Where the concurrent or successive negligent
acts or omissions of two or more persons, although acting
independently, are in combination with the direct and
proximate cause of a single injury to a third person, it is
impossible to determine in what proportion each
contributed to the injury and either of them is responsible
for the whole injury. Where their concurring negligence
resulted in injury or damage to a third party, they become
joint tortfeasors and are solidarily liable for the resulting
damage under Article 2194 of the Civil Code.
(Underscoring supplied)

All told, all the elements of quasi delict have been

proven by clear and convincing evidence. The CA erred in
absolving private respondents from liability for the
vehicular collision.
Final Note
It is lamentable that the vehicular collision in this case
could have been easily avoided by following basic traffic
rules and regulations and road safety standards. In

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hindsight, private respondent Limbaga could have

prevented the three-way vehicular collision if he had
properly parked the prime mover on the shoulder of the
national road. The improper parking of vehicles, most
especially along the national highways, poses a serious and
unnecessary risk to the lives and limbs of other motorists
and passengers. Drivers owe a duty of care to follow basic
traffic rules and regulations and to observe road safety
standards. They owe that duty not only for their own
safety, but also for that of other motorists. We can prevent
most vehicular accidents by simply following basic traffic
rules and regulations.

QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of
the Revised Rules of Court of the decision of the Court of
Appeals in CA-G.R. CV
No. 32864, which affirmed the decision of the Regional
Trial Court, Branch 85, Quezon City in Civil Case No. Q89-3048.
I
The Court of Appeals found:

We also note a failure of implementation of basic safety

standards, particularly the law on early warning devices.
This applies even more to trucks and big vehicles, which
are prone to mechanical breakdown on the national
highway. The law, as crafted, requires vehicles to be
equipped with triangular reflectorized plates.[32] Vehicles
without the required early warning devices are ineligible
for registration.[33] Vehicle owners may also be arrested
and fined for non-compliance with the law.[34]

The Land Transportation Office (LTO) owes a duty to the

public to ensure that all vehicles on the road meet basic and
minimum safety features, including that of early warning
devices. It is most unfortunate that We still see dilapidated
and rundown vehicles on the road with substandard safety
features. These vehicles not only pose a hazard to the
safety of their occupants but that of other motorists. The
prime mover truck in this case should not have been
granted registration because it failed to comply with the
minimum safety features required for vehicles on the road.

On October 23, 1988, plaintiff Tito Duran Tabuquilde

(hereinafter, "Tito") and his three-year old daughter
Jennifer Anne boarded the M/V Dona Marilyn at North
Harbor, Manila, bringing with them several pieces of
luggage.
In the morning of October 24, 1988, the M/V Dona
Marilyn, while in transit, encountered inclement weather
which caused huge waves due to Typhoon Unsang.
Notwithstanding the fact that Storm Signal No. 2 had been
raised by the PAG-ASA authorities over Leyte as early as
5:30 P.M. of October 23, 1988 and which signal was raised
to Signal No. 3 by 10 P.M. of the same day, the ship captain
ordered the vessel to proceed to Tacloban when prudence
dictated that he should have taken it to the nearest port for
shelter, thus violating his duty to exercise extraordinary
diligence in the carrying of passengers safely to their
destination.

It is, indeed, time for traffic enforcement agencies and the

LTO to strictly enforce all pertinent laws and regulations
within their mandate.

At about the same time, plaintiff-appellee Angelina

Tabuquilde (hereinafter, "Angelina") mother of Jennifer
Anne, contacted the Sulpicio Office to verify radio reports
that the vessel M/V Dona Marilyn was missing. Employees
of said Sulpicio Lines assured her that the ship was merely
"hiding" thereby assuaging her anxiety.

WHEREFORE, the petition is GRANTED. The

Court of Appeals decision dated August 28, 2003 is hereby
SET ASIDE. The RTC decision dated August 7, 2001 is
REINSTATED IN FULL.

At around 2:00 P.M. of October 24, 1988, said vessel

capsized, throwing plaintiff-appellee Tito and Jennifer
Anne, along with hundreds of passengers, into the
tumultuous sea.

SO ORDERED.

Tito tried to keep himself and his daughter afloat but to no

avail as the waves got stronger and he was subsequently
separated from his daughter despite his efforts.

He found himself on Almagro Island in Samar the next day

at round (sic) 11:00 A.M. and immediately searched for his
daughter among the survivors in the island, but the search
proved fruitless.

Liability for Injury to Stevedores

Sulpicio Lines v. CA
July 14, 1995
G.R. No. 113578 July 14, 1995
SULPICIO LINES, INC., Petitioner,
vs.
The Honorable COURT OF APPEALS and TITO DURAN
TABUQUILDE and ANGELINA DE PAZ TABUQUILDE,
respondents.

In the meantime, Angelina tried to seek the assistance of

the Sulpicio Lines in Manila to no avail, the latter refusing
to entertain her and hundreds of relatives of the other
passengers who waited long hours outside the Manila
Office. Angelina spent sleepless nights worrying about her
husband Tito and daughter Jennifer Anne in view of the

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refusal of Sulpicio Lines to release a verification of the

sinking of the ship.
On October 26, 1988, Tito and other survivors in the
Almagro Island were fetched and were brought to Tacloban
Medical Center for treatment.
On October 31, 1988, Tito reported the loss of his daughter,
was informed that the corpse of a child with his daughter's
description had been found. Subsequently, Tito wrote a
letter to his wife, reporting the sad fact that Jennifer Anne
was dead. Angelina suffered from shock and severe grief
upon receipt of the news.
On November 3, 1988, the coffin bearing the corpse of
Jennifer Anne was buried in Tanauan, Leyte.
On November 24, 1988, a claim for damages was filed by
Tito with the defendant Sulpicio Lines in connection with
the death of the plaintiff-appellee's daughter and the loss of
Tito's belongings worth P27,580.00. (Appellees' Brief, pp.
2-4) ( Rollo, pp. 52-54).
On January 3, 1991, the trial court rendered a decision in
Civil Case No. Q-89-3048 in favor of the plaintiffs Tito
Duran Tabuquilde and Angelina de Paz Tabuquilde (private
respondents herein) and against defendant Sulpicio Lines,
Inc. (petitioner herein) ordering defendant to pay
P27,580.00 as actual damages, P30,000.00 for the death of
Jennifer Tabuquilde, P100,000.00 as moral damages,
P50,000.00 as exemplary damages, and P50,000.00 as
attorney's fees, and costs.
Petitioner appealed to the Court of Appeals which affirmed
the decision of the trial court. Petitioner then filed a motion
for reconsideration which was denied. Hence, this petition.
II
Generally, the findings of fact of the trial court are entitled
to great weight and not disturbed except for cogent reasons
(Gatmaitan v. Court of Appeals, 200 SCRA 37 [1991]). One
of the accepted reasons is when the findings of fact are not
supported by the evidence (Sandoval Shipyard, Inc. v.
Clave, 94 SCRA 472 [1979]). Corollary to this is the rule
that actual or compensatory damages, to be recovered, must
be proved; otherwise, if the proof is flimsy, no damages
will be awarded (Dichoso v. Court of Appeals, 192 SCRA
169 [1990]).
In the case at bench, the trial court merely mentioned the
fact of the loss and the value of the contents of the pieces of
baggage without stating the evidence on which it based its
findings. There is no showing that the value of the contents
of the lost pieces of baggage was based on the bill of lading
or was previously declared by respondent Tito D.
Tabuquilde before he boarded the ship. Hence, there can be
no basis to award actual damages in the amount of
P27,850.00.
The Court of Appeals was correct in confirming the award
of damages for the death of the daughter of private

respondents, a passenger on board the stricken vessel of

petitioner. It is true that under Article 2206 of the Civil
Code of the Philippines, only deaths caused by a crime as
quasi delict are entitled to actual and compensatory
damages without the need of proof of the said damages.
Said Article provides:
The amount of damages for death caused by a crime or
quasi delict shall be at least Three Thousand Pesos, even
though there may have been mitigating circumstances. . . .
Deducing alone from said provision, one can conclude that
damages arising from culpa contractual are not
compensable without proof of special damages sustained
by the heirs of the victim.
However, the Civil Code, in Article 1764 thereof, expressly
makes Article 2206 applicable "to the death of a passenger
caused by the breach of contract by a common carrier."
Accordingly, a common carrier is liable for actual or
compensatory damages under Article 2206 in relation to
Article 1764 of the Civil Code for deaths of its passengers
caused by the breach of the contract of transportation.
The trial court awarded an indemnity of P30,000.00 for the
death of the daughter of private respondents. The award of
damages under Article 2206 has been increased to
P50,000.00 (People v. Flores, 237 SCRA 653 [1994]).
With respect to the award of moral damages, the general
rule is that said damages are not recoverable in culpa
contractual except when the presence of bad faith was
proven (Trans World Air Lines v. Court of Appeals, 165
SCRA 143 [1988]). However, in breach of contract of
carriage, moral damages may be recovered when it results
in the death of a passenger (Philippine Rabbit Bus Lines,
Inc. v. Esguerra, 117 SCRA 741 [1982]; Vasquez v. Court
of Appeals, 138 SCRA 553 [1985]).
With respect to the award of exemplary damages, Article
2232 of the Civil Code of the Philippines gives the Court
the discretion to grant said damages in breach of contract
when the defendant acted in a wanton, fraudulent and
reckless manner (Air France v. Carrascoso, 18 SCRA 155
[1966]).
Furthermore, in the case of Mecenas v. Court of Appeals,
180 SCRA 83 (1989), we ruled that:
. . . . The Court will take judicial notice of the dreadful
regularity with which grievous maritime disasters occur in
our waters with massive loss of life. The bulk of our
population is too poor to afford domestic air transportation.
So it is that notwithstanding the frequent sinking of
passenger in our waters, crowds of people continue to
travel by sea. This Court is prepared to use the instruments
given to it by the law for securing the ends of law and
public policy. One of those instruments is the institution of
exemplary damages; one of those ends, of special
importance in an archipelagic state like the Philippines, is
the safe and reliable carriage of people and goods by sea. . .
. (at p. 100).

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A common carrier is obliged to transport its passengers to

their destinations with the utmost diligence of a very
cautious person (Laguna Tayabas Bus Co. v. Tiongson, 16
SCRA 940 [1966]). The trial court found that petitioner
failed to exercise the extraordinary diligence required of a
common carrier, which resulted in the sinking of the M/V
Dona Marilyn.
The trial court correctly concluded that the sinking of M/V
Dona Marilyn was due to gross negligence, thus:
. . . [i]t is undisputed that Typhoon Unsang entered the
Philippine Area of Responsibility on October 21, 1988. The
rain in Metro Manila started after lunch of October 23,
1988, and at about 5:00 p.m. Public Storm Signal No. 1
was hoisted over Metro Manila, Signal No. 2 in Leyte and
Signal No. 3 in Samar. But at 10:00 o'clock (sic) in the
morning of October 23, 1988, Public Storm Signal No. 1
was already hoisted over the province of Leyte, which is
the destination of M/V Dona Marilyn. This was raised to
Signal No. 2 at 4:00 p.m. and Signal No. 3 at 10:00 p.m. on
the same date. The following day, October 24, 1988, at 4:00
a.m. and 10:00 a.m., Storm Signal No. 3 remained hoisted
in Leyte. At 4 p.m. on October 24, 1988, Storm Signal No.
3 remained hoisted in Leyte but was reduced to Storm
Signal No. 2 (Exh. G). Signal No. 1 has maximum winds at
60 kph within 36 hours; Signal No. 2 has maximum winds
of from 60 kph to 100 kph within a period of 24 hours; and
Signal No. 3 has maximum winds of 100 kph and above
within a period of 12 hours.

The award of attorney's fees by the trial court to

respondents is also assailed by petitioner, citing Mirasol v.
De la Cruz, 84 SCRA 337 (1978). In this case, the
petitioner filed before the Municipal Court an action for
forcible entry against the private respondent. The said court
dismissed the complaint. On appeal, the Court of First
Instance of Camarines Sur sustained the decision of the
lower court, dismissed the appeal and awarded attorney's
fees in the sum of not less than P500.00 in favor of private
respondent. Upon appeal to us, we deleted the award of
attorney's fees because the text of the appealed decision
was bereft of any findings of fact and law to justify such an
award. Moreover, there was no proof, other than the bare
allegation of harassment that the adverse party had acted in
bad faith. The aforementioned decision is inapposite to the
instant case where the decision clearly mentions the facts
and the law upon which the award of attorney's fees were
based.
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED with the MODIFICATION that the award of
P27,580.00 as actual damages for the loss of the contents of
the pieces of baggage is deleted and that the award of
P30,000.00 under Article 2206 in relation Article 1764 is
increased to P50,000.00.
SO ORDERED.

Warnings of the storm signal are issued by PAG-ASA thru

DZZA, Office of Civil Defense, Philippine Navy, Coast
Guard, Radio Stations, and other offices, every six (6)
hours as soon as a cyclone enters the Philippine Area of
Responsibility.
At 10:30 a.m. on October 24, 1988, the vessel was
estimated to be between Mindoro and Masbate, and the
center of the typhoon then was around 130 degrees
longitude with maximum winds of 65 kph (Exh. G-3), with
a "radius of rough to phenomenal sea at that time of 450
kms. North and 350 kms. elsewhere; 350 kms. North center
and all throughout the rest" (p. 12, TSN, Lumalda, Feb. 19,
1990).
xxx

xxx

xxx

In the same manner, (referring to the negligence of the crew

of the ship that sank in Vasquez v. Court of Appeals, 138
SCRA 553 [1985]) the crew of the vessel M/V Dona
Marilyn took a calculated risk when it proceeded despite
the typhoon brewing somewhere in the general direction to
which the vessel was going. The crew assumed a greater
risk when, instead of dropping anchor in or at the periphery
of the Port of Calapan, or returning to the port of Manila
which is nearer, proceeded on its voyage on the assumption
that it will be able to beat and race with the typhoon and
reach its destination before it (Unsang) passes ( Rollo, pp.
45-47).

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