NATIONAL DEVELOPMENT COMPANY vs.

COURT OF APPEALS
August 19, 1988, No. L-49469

FACTS: A memorandum agreement entered into between defendants NDC and MCP,
defendant NDC as the first preferred mortgagee of three ocean going vessels including one with
the name 'Dona Nati' appointed defendant MCP as its agent to manage and operate said vessel
for and in its behalf and account. Vessel Dofia Nati figured in a collision with a Japanese vessel
'SS Yasushima Maru' as a result of which 550 bales of aforesaid cargo of American raw cotton
were lost and/or destroyed. The plaintiff as insurer, paid to the Riverside Mills Corporation as
holder of the negotiable bills of lading duly. The plaintiff as insurer paid to Guilcon the total loss
as holder of the duly endorsed bill of lading. The plaintiff had paid as insurer the total to the
consignees or their successors-in-interest, for the said lost or damaged cargoes. Hence, plaintiff
filed this complaint to recover said amount from the defendants-NDC and MCP as owner and
ship agent respectively, of the said 'Dofia Nati' vessel.

The Development Insurance and Surety Corporation filed before the then Court of First Instance
of Manila an action for the recovery of the sum of P364,915.86 plus attorney's fees of
P10,000.00 against NDC and MCP.

The trial court ordered the defendants MCP and NDC to pay jointly and solidarity to DISC the
sum of P364,915.86 plus the legal rate of interest and attorney's fees. The Court of Appeals
affirmed in toto the decision of the trial court. Hence these appeals by certiorari.

ISSUE: Which laws govern the loss and destruction of goods due to collision of vessels outside
Philippine waters?

RULING: The collision falls among matters not specifically regulated by the Civil Code but the
Code of Commerce which deal exclusively with collision of vessels. Article 827 of the Code
provides that if the collision is imputable to both vessels, each one shall suffer its own damages
and both shall be solidarily responsible for the losses and damages suffered by their cargoes.
Also under the said code, the shipowner or carrier, is not exempt from liability for damages
arising from collision due to the fault or negligence of the captain. Primary liability is imposed on
the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster
or captain is merely the representative of the owner who has the actual or constructive control
over the conduct of the voyage

Under the circumstances, MCP cannot escape liability. The agent, even though he may not be
the owner of the vessel, is liable to the shippers and owners of the cargo transported by it, for
losses and damages occasioned to such cargo, without prejudice, however, to his rights against
the owner of the ship, to the extent of the value of the vessel, its equipment, and the freight
Negligence of the captains of the colliding vessel being the cause of the collision, and the
cargoes not being jettisoned to save some of the cargoes and the vessel, the trial court and the
Court of Appeals acted correctly in not applying the law on averages (Articles 806 to 818, Code
of Commerce).
SAN ILDEFONSO LINES, INC. vs. COURT OF APPEALS
[G.R. No. 119771. April 24, 1998]

FACTS: A Toyota Lite Ace Van being driven by its owner Annie U. Jao and a passenger bus of
herein petitioner San Ildefonso Lines, Inc. (hereafter, SILI) figured in a vehicular mishap totally
wrecking the Toyota van and injuring Ms. Jao and her two (2) passengers in the process.

A criminal case was thereafter filed with the Regional Trial Court of Pasig charging the driver of
the bus, herein petitioner Eduardo Javier, with reckless imprudence resulting in damage to
property with multiple physical injuries. About four (4) months later, Pioneer Insurance and
Surety Corporation (PISC), as insurer of the van and subrogee, filed a case for damages
against petitioner SILI with the Regional Trial Court of Manila seeking to recover the sums it
paid the assured under a motor vehicle insurance policy as well as other damages. The
defendant filed a Manifestation and Motion to Suspend Civil Proceedings grounded on the
pendency of the criminal case against petitioner Javier in the Pasig RTC and the failure of
respondent PISC to make a reservation to file a separate damage suit in said criminal action.
This was denied by the Manila Regional Trial Court. Hence, this petition for review after a
motion for reconsideration of said respondent court judgment was denied.

ISSUES:
1. Whether or not an independent civil action based on quasi-delict under Article 2176 of
the Civil Code can be filed if no reservation was made in a pending criminal case.
2. Whether or not a subrogee of an offended party maintain an independent civil action
during the pendency of a criminal action when no reservation of the right to file an
independent civil action was made in the criminal action and despite the fact that the
private complainant is actively participating through a private prosecutor in the
aforementioned criminal case

RULING: NO.

"Sec. 3. When civil action may proceed independently. -- In the cases provided for in Articles 32,
33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which has
been reserved may be brought by the offended party, shall proceed independently of the
criminal action, and shall require only a preponderance of evidence."

There is no dispute that these so-called "independent civil actions" based on the
aforementioned Civil Code articles are the exceptions to the primacy of the criminal action over
the civil action as set forth in Section 2 of Rule 111. However, it is easily deducible from the
present wording of Section 3 as brought about by the 1988 amendments to the Rules on
Criminal Procedure -- particularly the phrase " which has been reserved" -- that the
"independent" character of these civil actions does not do away with the reservation
requirement. In other words, prior reservation is a condition sine qua non before any of these
independent civil actions can be instituted and thereafter have a continuous determination apart
from or simultaneous with the criminal action.

Clearly then, private respondent PISC, as subrogee under Article 2207 of the Civil Code, is not
exempt from the reservation requirement with respect to its damages suit based on quasi-delict
arising from the same act or omission of petitioner Javier complained of in the criminal case. As
private respondent PISC merely stepped into the shoes of Ms. Jao (as owner of the insured
Toyota van), then it is bound to observe the procedural requirements which Ms. Jao ought to
follow had she herself instituted the civil case.
 DR. NINEVETCH CRUZ vs. COURT OF APPEALS and LYDIA UMALI

FACTS: Lydia was examined by the petitioner at the Perpetual Help Clinic and General
Hospital who found a "myoma" in her uterus, and scheduled her for a hysterectomy operation.
Because of the untidy state of the clinic, Rowena tried to persuade her mother, Lydia, not to
proceed with the operation. The following day, before her mother was wheeled into the
operating room, Rowena asked the petitioner if the operation could be postponed which the
petitioner declined.

Lydia underwent the operation. Petitioner asked Rowena and the other relatives to buy blood for
Lydia. Unfortunately, they were not able to comply with petitioner's order as there was no more
type "A" blood available in the blood bank. Thereafter, a person arrived to donate blood which
was later transfused to Lydia. Rowena then noticed her mother, who was attached to an oxygen
tank, gasping for breath. Lydia's unstable condition necessitated her transfer to the San Pablo
District Hospital so she could be connected to a respirator and further examined. The transfer to
the San Pablo City District Hospital was without the prior consent of Rowena nor of the other
relatives. Upon Lydia's arrival at the San Pablo District Hospital, she was wheeled into the
operating room and the petitioner and Dr. Ercillo re-operated on her. The attending physicians
summoned Dr. Bartolome Angeles, head of the Obstetrics and Gynecology Department of the
San Pablo District Hospital. However, when Dr. Angeles arrived, Lydia was already in shock and
possibly dead as her blood pressure was already 0/0. In the morning, Lydia Umali was
pronounced dead.

Rowena charged Petitioner with reckless imprudence resulting in homicide with the MTCC. The
MTCC found sufficient basis to conclude that petitioner was indeed negligent in the performance
of the operation. RTC affirmed the decision of the lower court.

ISSUE: Whether or not petitioner is negligent in the conduct of the operation.

RULING: No but petitioner is still civilly liable for the death of Lydia Umali.

Immediately apparent from a review of the records of this case is the absence of any expert
testimony on the matter of the standard of care employed by other physicians of good standing
in the conduct of similar operations. The prosecution's expert witnesses only testified as to the
possible cause of death but did not venture to illuminate the court on the matter of the standard
of care that petitioner should have exercised. Whether a physician or surgeon has exercised the
requisite degree of skill and care in the treatment of his patient is, in the generality of cases, a
matter of expert opinion. Expert testimony should have been offered to prove that the
circumstances cited by the courts below are constitutive of conduct falling below the standard of
care employed by other physicians in good standing when performing the same operation.

In litigations involving medical negligence, the plaintiff has the burden of establishing appellant's
negligence and for a reasonable conclusion of negligence which the plaintiff failed to prove.

Nevertheless, this Court finds the petitioner civilly liable for the death of Lydia Umali for while a
conviction of a crime requires proof beyond reasonable doubt, only a preponderance of
evidence is required to establish civil liability. A precious life has been lost and the
circumstances leading thereto exacerbated the grief of those left behind. The heirs of the
deceased continue to feel the loss of their mother up to the present time and this Court is aware
that no amount of compassion and commiseration nor words of bereavement can suffice to
assuage the sorrow felt for the loss of a loved one. Certainly, the award of moral and exemplary
damages in favor of the heirs of Lydia Umali are proper in the instant case.
China Airlines vs Court of Appeals
FACTS: Private respondents planned to travel to Los Angeles, California. Initially, Morelia Travel
Agency ("Morelia") booked private respondents' flight with CAL. Morelia scheduled the flight for
Manila-Taipei-Los Angeles. On discovering that Morelia charged higher rates than American
Express Travel Service Philippines ("Amexco"), private respondents dropped the services of
Morelia. Instead, private respondents engaged the services of Amexco through Lao who was an
Amexco cardholder.

Amexco issued to private respondents the confirmed tickets for flight of CAL. On the same day,
CAL called up Morelia to reconfirm the reservations of private respondents. Morelia cancelled
the reservations of private respondents.

Private respondents were at the airport to board CAL Flight 632 but CAL personnel prevented
them from boarding the airplane because their names were not in the passengers' manifest.
CAL cancelled the reservations when Morelia revoked the booking it had made for private
respondents. Private respondents were only able to leave for Los Angeles the following day on
a different airline, Northwest Airlines ("Northwest").

Private respondents filed with the Regional Trial Court a complaint for damages against CAL
and Amexco. Private respondents alleged in their complaint that the one-day delay in their flight
to Los Angeles caused them to lose business opportunities entitling them to actual, moral and
exemplary damages and attorney's fees. The Regional Trial Court issued its decision in favor of
private respondents. CAL appealed to the Court of Appeals but affirmed the decision of the
Regional Trial Court.

ISSUE:

Whether or not petitioner is liable for the damages despite the fact that the petitioner did all the
acts that an airline company is supposed to do under the circumstances present in the instant
case.

RULING:

The petition is partly meritorious.

Breach of its Contract of Carriage. The nature of an airline's contract of carriage partakes of two
types, namely: (1) a contract to deliver a cargo or merchandise to its destination, and (2) a
contract to transport passengers to their destination. In this case, when CAL confirmed the
reservations, it bound itself to transport private respondents on its flight on 13 June 1990. The
confirmed tickets issued by Amexco to private respondents upon CAL's confirmation of the
reservations are undeniable proof of the contract of carriage between CAL and private
respondents. CAL did not allow private respondents, who were then in possession of the
confirmed tickets, from boarding its airplane because their names were not in the passengers'
manifest. Clearly, CAL breached its contract of carriage with private respondents. We, however,
rule out bad faith by CAL.

Absence of Bad Faith.Bad faith is in essence a question of intention. In ascertaining the

intention of the person accused of acting in bad faith, the courts must carefully examine the
evidence as to the conduct and outward acts from which the inward motive may be determined.
In tha case at bar, no bad faith that exists.

Damages. CAL's negligence caused it to breach its contract of carriage. CAL's negligence is,
however, not so gross to amount to bad faith. Mere negligence, even if it causes the plaintiff to
suffer mental anguish or serious fright, is not a ground for awarding moral damages.

The liability would not include moral damages. Not every case of mental anguish, fright or
serious anxiety calls for the award of moral damages.

CAL was not in bad faith and its employees did not act in a wanton, fraudulent, reckless,
oppressive or malevolent manner. The award of exemplary damages is therefore unwarranted
in this case.

Private respondents' remaining claim is for actual damages. However, private respondents did
not shell out any money for their CAL tickets. Therefore, there is no liability for actual damages.

The court may award nominal damages in every obligation arising from any source enumerated
in Article 1157 of the Civil Code,72 or in any case where there is an invasion of any property
right. We find P5,000 as a reasonable award of nominal damages to each of the private
respondents.

The fact that private respondents were compelled to litigate and incur expenses to protect and
enforce their claim does not justify the award of attorney's fees. The court may award attorney's
fees only in the instances mentioned in Article 2208 of the Civil Code, and this case is not one of
them. Moreover, when there is no basis to award moral and exemplary damages, there is also
no basis to award attorney's fees.