G.R. No. 186312. June 29, 2010.

SPOUSES DANTE CRUZ and LEONORA CRUZ, petitioners, vs.

SUN HOLIDAYS, INC., respondent.
Civil Law; Common Carriers; Definition of Common Carriers.As De
Guzman instructs, Article 1732 of the Civil Code defining common carriers
has deliberately refrained from making distinctions on whether the carrying of
persons or goods is the carriers principal business, whether it is offered on a
regular basis, or whether it is offered to the general public. The intent of the
law is thus to not consider such distinctions. Otherwise, there is no telling
how many other distinctions may be concocted by unscrupulous
businessmen engaged in the carrying of persons or goods in order to avoid
the legal obligations and liabilities of common carriers.
Same; Same; Degree of Diligence Required; From the nature of their
business and for reasons of public policy, common carriers are bound to
observe extraordinary diligence for the safety of the passengers transported
by them, according to all the circumstances of each case.Under the Civil
Code, common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence for the safety of
the passengers transported by them, according to all the circumstances of
each case. They are 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.
Same; Same; Negligence; Presumption of Negligence; When a passenger
dies or is injured in the discharge of a contract of carriage, it is presumed
that the common carrier is at fault or negligent.When a passenger dies or
is injured in the discharge of a contract of carriage, it is presumed that the
common carrier is at fault or negligent. In fact, there is even no need for the
court to make an express finding of fault or negligence on the part of the
common carrier. This statutory presumption may only be overcome by
evidence that the carrier exercised extraordinary diligence.

* THIRD DIVISION.

390

390

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

Same; Same; Same; Fortuitous Event; Element of a Fortuitous

Event.The elements of a fortuitous event are: (a) the cause of the
unforeseen and unexpected occurrence, or the failure of the debtors to
comply with their obligations, must have been independent of human will; (b)
the event that constituted the caso fortuito must have been impossible to
foresee or, if foreseeable, impossible to avoid; (c) the occurrence must have
been such as to render it impossible for the debtors to fulfill their obligation in
a normal manner; and (d) the obligor must have been free from any
participation in the aggravation of the resulting injury to the creditor.
Same; Same; Same; Same; To fully free a common carrier from any
liability, the fortuitous event must have been the proximate and only cause of
the loss.To fully free a common carrier from any liability, the fortuitous
event must have been the proximate and only cause of the loss. And it
should have exercised due diligence to prevent or minimize the loss before,
during and after the occurrence of the fortuitous event.
Same; Same; Same; Damages; Liability of a common carrier in breach
of its contract of carriage resulting in the death of a passenger.Article
1764 vis--vis Article 2206 of the Civil Code holds the common carrier in
breach of its contract of carriage that results in the death of a passenger liable
to pay the following: (1) indemnity for death, (2) indemnity for loss of
earning capacity and (3) moral damages

PETITION for review on certiorari of a decision of the Court of

Appeals.
The facts are stated in the opinion of the Court.
Fortun, Narvasa & Salazar for petitioners.
Sycip, Salazar, Hernandez & Gatmaitan for respondent.
CARPIO-MORALES,J.:
Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint
on January 25, 2001[1] against Sun Holidays, Inc.
_______________
[1] Records, pp. 2-6.

391

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Cruz vs. Sun Holidays, Inc.

391

(respondent) with the Regional Trial Court (RTC) of Pasig City for
damages arising from the death of their son Ruelito C. Cruz (Ruelito) who
perished with his wife on September 11, 2000 on board the boat M/B
Coco Beach III that capsized en route to Batangas from Puerto Galera,
Oriental Mindoro where the couple had stayed at Coco Beach Island
Resort (Resort) owned and operated by respondent.
The stay of the newly wed Ruelito and his wife at the Resort from
September 9 to 11, 2000 was by virtue of a tour package-contract with
respondent that included transportation to and from the Resort and the
point of departure in Batangas.
Miguel C. Matute (Matute),[2] a scuba diving instructor and one of the
survivors, gave his account of the incident that led to the filing of the
complaint as follows:
Matute stayed at the Resort from September 8 to 11, 2000. He was
originally scheduled to leave the Resort in the afternoon of September 10,
2000, but was advised to stay for another night because of strong winds
and heavy rains.
On September 11, 2000, as it was still windy, Matute and 25 other
Resort guests including petitioners son and his wife trekked to the other
side of the Coco Beach mountain that was sheltered from the wind where
they boarded M/B Coco Beach III, which was to ferry them to Batangas.
Shortly after the boat sailed, it started to rain. As it moved farther
away from Puerto Galera and into the open seas, the rain and wind got
stronger, causing the boat to tilt from side to side and the captain to step
forward to the front, leaving the wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two big waves
which came one after the other, M/B Coco Beach III capsized putting all
passengers underwater.
_______________
[2] TSN of September 12, 2002, pp. 2-22.

392

392

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

The passengers, who had put on their life jackets, struggled to get out
of the boat. Upon seeing the captain, Matute and the other passengers
who reached the surface asked him what they could do to save the
people who were still trapped under the boat. The captain replied
Iligtas niyo na lang ang sarili niyo (Just save yourselves).
Help came after about 45 minutes when two boats owned by Asia

Divers in Sabang, Puerto Galera passed by the capsized M/B Coco

Beach III. Boarded on those two boats were 22 persons, consisting of
18 passengers and four crew members, who were brought to Pisa Island.
Eight passengers, including petitioners son and his wife, died during the
incident.
At the time of Ruelitos death, he was 28 years old and employed as
a contractual worker for Mitsui Engineering & Shipbuilding Arabia, Ltd.
in Saudi Arabia, with a basic monthly salary of $900.[3]
Petitioners, by letter of October 26, 2000,[4] demanded
indemnification from respondent for the death of their son in the amount
of at least P4,000,000.
Replying, respondent, by letter dated November 7, 2000,[5] denied
any responsibility for the incident which it considered to be a fortuitous
event. It nevertheless offered, as an act of commiseration, the amount of
P10,000 to petitioners upon their signing of a waiver.
As petitioners declined respondents offer, they filed the Complaint,
as earlier reflected, alleging that respondent, as a common carrier, was
guilty of negligence in allowing M/B Coco Beach III to sail
notwithstanding storm warning bulletins issued by the Philippine
Atmospheric, Geophysical and
_______________
[3] Vide TSN of May 2, 2002, pp. 5-7; records, p. 4.
[4] Records, pp. 19-20.
[5] Id., at pp. 21-22.

393

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393

Cruz vs. Sun Holidays, Inc.

Astronomical Services Administration (PAGASA) as early as 5:00 a.m.

of September 11, 2000.[6]
In its Answer,[7] respondent denied being a common carrier, alleging
that its boats are not available to the general public as they only ferry
Resort guests and crew members. Nonetheless, it claimed that it
exercised the utmost diligence in ensuring the safety of its passengers;
contrary to petitioners allegation, there was no storm on September 11,
2000 as the Coast Guard in fact cleared the voyage; and M/B Coco
Beach III was not filled to capacity and had sufficient life jackets for its
passengers. By way of Counterclaim, respondent alleged that it is entitled
to an award for attorneys fees and litigation expenses amounting to not
less than P300,000.
Carlos Bonquin, captain of M/B Coco Beach III, averred that the

Resort customarily requires four conditions to be met before a boat is

allowed to sail, to wit: (1) the sea is calm, (2) there is clearance from the
Coast Guard, (3) there is clearance from the captain and (4) there is
clearance from the Resorts assistant manager.[8] He added that M/B
Coco Beach III met all four conditions on September 11, 2000,[9] but a
subasco or squall, characterized by strong winds and big waves,
suddenly occurred, causing the boat to capsize.[10]
By Decision of February 16, 2005,[11] Branch 267 of the Pasig RTC
dismissed petitioners Complaint and respondents Counterclaim.
Petitioners Motion for Reconsideration having been denied by Order
dated September 2, 2005,[12] they appealed to the Court of Appeals.
_______________
[6] Vide Complaint, supra note 1.
[7] Records, pp. 28-35.
[8] Vide TSN of February 4, 2003, pp. 6-7.
[9] Id., at p. 8.
[10] TSN of March 4, 2003, pp. 5-6.
[11] Records, pp. 488-496.
[12] Id., at pp. 581-585.

394

394

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

By Decision of August 19, 2008,[13] the appellate court denied

petitioners appeal, holding, among other things, that the trial court
correctly ruled that respondent is a private carrier which is only required
to observe ordinary diligence; that respondent in fact observed
extraordinary diligence in transporting its guests on board M/B Coco
Beach III; and that the proximate cause of the incident was a squall, a
fortuitous event.
Petitioners Motion for Reconsideration having been denied by
Resolution dated January 16, 2009,[14] they filed the present Petition for
Review.[15]
Petitioners maintain the position they took before the trial court,
adding that respondent is a common carrier since by its tour package, the
transporting of its guests is an integral part of its resort business. They
inform that another division of the appellate court in fact held respondent
liable for damages to the other survivors of the incident.
Upon the other hand, respondent contends that petitioners failed to
present evidence to prove that it is a common carrier; that the Resorts
ferry services for guests cannot be considered as ancillary to its business

as no income is derived therefrom; that it exercised extraordinary

diligence as shown by the conditions it had imposed before allowing M/B
Coco Beach III to sail; that the incident was caused by a fortuitous event
without any contributory negligence on its part; and that the other case
wherein the appellate court held it liable for damages involved different
plaintiffs, issues and evidence.[16]
The petition is impressed with merit.
_______________
[13] Penned by Associate Justice Normandie B. Pizarro, with the concurrence of

Associate Justices Edgardo P. Cruz and Fernanda Lampas-Peralta; CA Rollo, pp.

135-147.
[14] Id., at pp. 190-191.
[15] Rollo, pp. 18-31.
[16] Vide Comment, id., at pp. 60-81.

395

VOL. 622, JUNE 29, 2010

395

Cruz vs. Sun Holidays, Inc.

Petitioners correctly rely on De Guzman v. Court of Appeals[17] in

characterizing respondent as a common carrier.
The Civil Code defines common carriers in the following terms:
Article1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for compensation,
offering their services to the public.
The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity (in local idiom, as a
sideline). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a regular
or scheduled basis and one offering such service on an occasional, episodic
or unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the general public, i.e., the general
community or population, and one who offers services or solicits business
only from a narrow segment of the general population. We think that
Article 1733 deliberately refrained from making such distinctions.
So understood, the concept of common carrier under Article 1732 may
be seen to coincide neatly with the notion of public service, under the
Public Service Act (Commonwealth Act No. 1416, as amended) which at
least partially supplements the law on common carriers set forth in the Civil
Code. Under Section 13, paragraph (b) of the Public Service Act, public

service includes:
. . . every person that now or hereafter may own, operate,
manage, or control in the Philippines, for hire or compensation, with
general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common
carrier, railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both, with or without fixed
route and whatever may be its classification, freight or carrier service
of any class, express service, steamboat, or steamship line, pontines,
ferries and wa_______________

[17] G.R. No. L-47822, December 22, 1988, 168 SCRA 612.
396

396

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

ter craft, engaged in the transportation of passengers or freight or both,

shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant,
canal, irrigation system, gas, electric light, heat and power, water supply and
power petroleum, sewerage system, wire or wireless communications
systems, wire or wireless broadcasting stations and other similar public
services . . .[18] (emphasis and underscoring supplied.)

Indeed, respondent is a common carrier. Its ferry services are so

intertwined with its main business as to be properly considered ancillary
thereto. The constancy of respondents ferry services in its resort
operations is underscored by its having its own Coco Beach boats. And
the tour packages it offers, which include the ferry services, may be
availed of by anyone who can afford to pay the same. These services are
thus available to the public.
That respondent does not charge a separate fee or fare for its ferry
services is of no moment. It would be imprudent to suppose that it
provides said services at a loss. The Court is aware of the practice of
beach resort operators offering tour packages to factor the transportation
fee in arriving at the tour package price. That guests who opt not to avail
of respondents ferry services pay the same amount is likewise
inconsequential. These guests may only be deemed to have overpaid.
As De Guzman instructs, Article 1732 of the Civil Code defining
common carriers has deliberately refrained from making distinctions on
whether the carrying of persons or goods is the carriers principal
business, whether it is offered on a regular basis, or whether it is offered

to the general public. The intent of the law is thus to not consider such
distinctions. Otherwise, there is no telling how many other distinctions
may be concocted by unscrupulous businessmen engaged in the carrying
of persons or goods in order to avoid the legal obligations and liabilities of
common carriers.
_______________
[18] Id., at pp. 617-618.

397

VOL. 622, JUNE 29, 2010

397

Cruz vs. Sun Holidays, Inc.

Under the Civil Code, common carriers, from the nature of their
business and for reasons of public policy, are bound to observe
extraordinary diligence for the safety of the passengers transported by
them, according to all the circumstances of each case.[19] They are 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.[20]
When a passenger dies or is injured in the discharge of a contract of
carriage, it is presumed that the common carrier is at fault or negligent. In
fact, there is even no need for the court to make an express finding of
fault or negligence on the part of the common carrier. This statutory
presumption may only be overcome by evidence that the carrier
exercised extraordinary diligence.[21]
Respondent nevertheless harps on its strict compliance with the
earlier mentioned conditions of voyage before it allowed M/B Coco
Beach III to sail on September 11, 2000. Respondents position does
not impress.
The evidence shows that PAGASA issued 24-hour public weather
forecasts and tropical cyclone warnings for shipping on September 10
and 11, 2000 advising of tropical depressions in Northern Luzon which
would also affect the province of Mindoro.[22] By the testimony of Dr.
Frisco Nilo, supervising weather specialist of PAGASA, squalls are to be
expected under such weather condition.[23]
A very cautious person exercising the utmost diligence would thus not
brave such stormy weather and put other peoples lives at risk. The
extraordinary diligence required of
_______________
[19] CIVIL CODE , Art. 1733.
[20] Id., Art. 1755.

[21] Diaz v. Court of Appeals, G.R. No. 149749, July 25, 2006, 496 SCRA 468, 472.
[22] Vide records, pp. 268-276.
[23] Vide TSN of December 13, 2001, pp. 3-19.

398

398

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

common carriers demands that they take care of the goods or lives
entrusted to their hands as if they were their own. This respondent failed
to do.
Respondents insistence that the incident was caused by a fortuitous
event does not impress either.
The elements of a fortuitous event are: (a) the cause of the
unforeseen and unexpected occurrence, or the failure of the debtors to
comply with their obligations, must have been independent of human will;
(b) the event that constituted the caso fortuito must have been
impossible to foresee or, if foreseeable, impossible to avoid; (c) the
occurrence must have been such as to render it impossible for the debtors
to fulfill their obligation in a normal manner; and (d) the obligor must have
been free from any participation in the aggravation of the resulting injury
to the creditor.[24]
To fully free a common carrier from any liability, the fortuitous event
must have been the proximate and only cause of the loss. And it should
have exercised due diligence to prevent or minimize the loss before,
during and after the occurrence of the fortuitous event.[25]
Respondent cites the squall that occurred during the voyage as the
fortuitous event that overturned M/B Coco Beach III. As reflected
above, however, the occurrence of squalls was expected under the
weather condition of September 11, 2000. Moreover, evidence shows
that M/B Coco Beach III suffered engine trouble before it capsized and
sank.[26] The incident was, therefore, not completely free from human
intervention.
The Court need not belabor how respondents evidence likewise fails
to demonstrate that it exercised due diligence to
_______________
[24] Lea Mer Industries, Inc. v. Malayan Insurance Co., Inc., G.R. No. 161745,

September 30, 2005, 471 SCRA 698, 707-708.

[25] Ibid.
[26] Records, pp. 279-280.

399

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399

Cruz vs. Sun Holidays, Inc.

prevent or minimize the loss before, during and after the occurrence of the
squall.
Article 1764[27] vis--vis Article 2206[28] of the Civil Code holds the
common carrier in breach of its contract of carriage that results in the
death of a passenger liable to pay the following: (1) indemnity for death,
(2) indemnity for loss of earning capacity and (3) moral damages.
Petitioners are entitled to indemnity for the death of Ruelito which is
fixed at P50,000.[29]
As for damages representing unearned income, the formula for its
computation is:
_______________
[27] 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.
[28] Art. 2206.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. In addition:
(1)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; such indemnity
shall in every case be assessed and awarded by the court, unless the deceased on
account of permanent physical disability not caused by the defendant, had no
earning capacity at the time of his death;
(2)If the deceased was obliged to give support according to the provisions of
article 291, the recipient who is not an heir called to the decedent's inheritance by
the law of testate or intestate succession, may demand support from the person
causing the death, for a period not exceeding five years, the exact duration to be
fixed by the court;
(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.
[29] Tiu v. Arriesgado, G.R. No. 138060, September 1, 2004, 437 SCRA 426, 451-

452.

400

400

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

Net Earning Capacity = life expectancy x (gross annual income reasonable and necessary living expenses).
Life expectancy is determined in accordance with the formula:
2 / 3 x [80 age of deceased at the time of death][30]

The first factor, i.e., life expectancy, is computed by applying the

formula (2/3 x [80 age at death]) adopted in the American Expectancy
Table of Mortality or the Actuarial of Combined Experience Table of
Mortality.[31]
The second factor is computed by multiplying the life expectancy by
the net earnings of the deceased, i.e., the total earnings less expenses
necessary in the creation of such earnings or income and less living and
other incidental expenses.[32] The loss is not equivalent to the entire
earnings of the deceased, but only such portion as he would have used to
support his dependents or heirs. Hence, to be deducted from his gross
earnings are the necessary expenses supposed to be used by the
deceased for his own needs.[33]
In computing the third factornecessary living expense, Smith Bell
Dodwell Shipping Agency Corp. v. Borja[34] teaches that when, as in
this case, there is no showing that the living expenses constituted the
smaller percentage of the gross income, the living expenses are fixed at
half of the gross income.
Applying the above guidelines, the Court determines Ruelitos life
expectancy as follows:
_______________
[30] Candano Shipping Lines, Inc. v. Sugata-on, G.R. No. 163212, March 13,

2007, 578 SCRA 221, 235.

[31] Lambert v. Heirs of Ray Castillon, G.R. No. 160709, February 23, 2005, 452

SCRA 285, 294.

[32] Ibid.
[33] Magbanua v. Tabusares, Jr., G.R. No. 152134, June 4, 2004, 431 SCRA 99,

104.
[34] G.R. No. 143008, June 10, 2002, 383 SCRA 341, 351.

401

VOL. 622, JUNE 29, 2010

Cruz vs. Sun Holidays, Inc.
Life expectancy = 2/3 x [80 - age of deceased at the time of death]
2/3 x [80 - 28]

401

2/3 x [52]
Life expectancy = 35

Documentary evidence shows that Ruelito was earning a basic

monthly salary of $900[35] which, when converted to Philippine peso
applying the annual average exchange rate of $1 = P44 in 2000,[36]
amounts to P39,600. Ruelitos net earning capacity is thus computed as
follows:
Net Earning Capacity = life expectancy x (gross annual income reasonable and necessary living expenses).
= 35 x (P475,200 - P237,600)
= 35 x (P237,600)
Net Earning Capacity = P8,316,000

Respecting the award of moral damages, since respondent common

carriers breach of contract of carriage resulted in the death of
petitioners son, following Article 1764 vis--vis Article 2206 of the Civil
Code, petitioners are entitled to moral damages.
Since respondent failed to prove that it exercised the extraordinary
diligence required of common carriers, it is presumed to have acted
recklessly, thus warranting the award too of exemplary damages, which
are granted in contractual obligations if the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.[37]
_______________
[35] Vide records, pp. 258-259.
[36]For reference, vide

Reference

Bangko Sentral ng Pilipinas Treasury Department

Exchange

Rate

Bulletins

at

www.bsp.gov.ph/dbank_reports/ExchangeRates.
[37] Vide Yobido v. Court of Appeals, 346 Phil. 1, 13; 281 SCRA 1, 12 (1997).

402

402

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

Under the circumstances, it is reasonable to award petitioners the

amount of P100,000 as moral damages and P100,000 as exemplary
damages.[38]
Pursuant to Article 2208[39] of the Civil Code, attorney's fees may

also be awarded where exemplary damages are awarded. The Court

finds that 10% of the total amount adjudged against respondent is
reasonable for the purpose.
Finally, Eastern Shipping Lines, Inc. v. Court of Appeals[40]
teaches that when an obligation, regardless of its source, i.e., law,
contracts, quasi-contracts, delicts or quasi-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 extrajudi_______________
[38] Vide Victory Liner, Inc. v. Gammad, G.R. No. 159636, November 25, 2004,

444 SCRA 355, 370.

[39] Art.2208.In the absence of stipulation, attorney's fees and expenses of

litigation, other than judicial costs, cannot be recovered, except:

(1)When exemplary damages are awarded;
[40] G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95-97.

403

VOL. 622, JUNE 29, 2010

403

Cruz vs. Sun Holidays, Inc.

cially (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. (emphasis supplied).
Since the amounts payable by respondent have been determined with
certainty only in the present petition, the interest due shall be computed
upon the finality of this decision at the rate of 12% per annum until
satisfaction, in accordance with paragraph number 3 of the immediately
cited guideline in Eastern Shipping Lines, Inc.
WHEREFORE, the Court of Appeals Decision of August 19, 2008 is
REVERSED and SET ASIDE. Judgment is rendered in favor of
petitioners ordering respondent to pay petitioners the following: (1)
P50,000 as indemnity for the death of Ruelito Cruz; (2) P8,316,000 as
indemnity for Ruelitos loss of earning capacity; (3) P100,000 as moral
damages; (4) P100,000 as exemplary damages; (5) 10% of the total
amount adjudged against respondent as attorneys fees; and (6) the costs
of suit.
The total amount adjudged against respondent shall earn interest at the
rate of 12% per annum computed from the finality of this decision until
full payment.
SO ORDERED.
Brion, Bersamin, Abad** and Villarama, Jr., JJ., concur.
_______________
** Additional member per Special Order No. 843 dated May 17, 2010.
404

404

SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

Judgment reversed and set aside.

Note.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. (Philippine
Airlines, Inc vs. Court of Appeals, 566 SCRA 124 [2008])
o0o

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