#1 BALIWAG TRANSIT CORPORATION vs. COURT OF APPEALS

GR No. 80447, January 31, 1989

Melencio-Herrera, J.

FACTS: George, the son of Sotero Cailipan and Zenaida Lopez, was a passenger on a Baliwag Bus when he suffered multiply serious physical injuries when he was thrown off said bus driven in a careless and reckless manner by Leonardo Cruz. As a result, George was confined in the hospital for treatment, incurring medical expenses borne by his parents. Consequently, Sotero and Zenaida filed a complaint against Baliwag Transit.

Petitioner alleged that the cause of the injuries sustained by George was solely attributable to his own act because he suddenly stood up from his seat and headed for the door of the bus and jumpled off while the bus was in motion. Baliwag then filed a third-party complaint against Fortune Insurance and Surety, which claimed limited liability.

Baliwag and Fortune each filed motions to dismiss on the ground that George, in consideration of the sum of P8,020.50 had executed a “Release of Claims”. The motions were denied.

After trial, the RTC dismissed the complaint ruling that since the contract of carriage is between Baliwag and George, who is of legal age, had the exclusive right to execute the release of claims despite the fact that he is still a student and dependent on his parents for support. The CA revered the RTC.

ISSUE: Whether the Release of Claims executed by George has force and effect

HELD: YES. Since the suit is one of breach of contract of carriage, the Release of Claims executed by him, as the injured party, discharging Fortune Insurance and Baliwag from any liability is valid. He was then of legal age and had the capacity to do acts with legal effect. Significantly, the contact of carriage was actually between George, as the paying passenger, and Baliwag as the common carrier. As such carrier, Baliwag was bound to carry its passengers safely as far as human foresight could provide, and is liable for injuries to them through the negligence or willful acts of its employees. Thus, George had the right to be safely brought to his destination and Baliwag had the correlative obligation to do so. In the absence of any contract of carriage between Baliwag and George’s parents, the latter are not real parties-in-interest in an action for breach of carriage of contract.

2. British Airways, Inc. v. CA, et al.,GR. No. 92288, February 9, 1993.

FACTS

On February 15, 1981, respondent First International Trading and General Services Co., a duly licensed domestic recruitment agency, received a telex message from its principal ROLACO engineering and Contracting Services in Saudi Arabia to recruit Filipino contract workers. In March 1981, ROLACO paid petitioner British Airways airfare tickets for 93 contract workers to transport them to Jeddah on or before March 30, 1981. Thereafter, respondent was informed that petitioners had forwarded 93 prepaid tickets. However, petitioner failed to fly the 93 workers, thereby compelling respondent to purchase airline tickets from other airlines as the workers must leave immediately because their visas are valid for only 45 days.

During the first week of June 1981, respondent were informed that prepaid tickets had been received again for the transportation of the 27 workers. However, after booking flights and confirming seats, only 9 workers were able to board. Other bookings were cancelled and rebooked several times, while respondent had paid travel taxes as required by petitioner. The other workers were only able to leave finally after respondent had bought tickets from other airlines.

As a result, respondent filed a complaint for damages against petitioner for its repeated failure to transport its contract workers despite confirmed bookings and payment of travel taxes. Petitioner contends that respondent has no cause of action because there has been no perfected contract of carriage existing between them as no ticket has ever been issued to respondent. RTC rendered judgment in favor of plaintiff, herein respondent. The decision was affirmed by CA.

ISSUE

Whether there is an existing contract of carriage between the parties.

HELD

Yes. In the instant case, a contract to carry (at some future time) is involved, one which is perfected by mere consent. Petitioner’s consent was manifested by its acceptance of the Prepaid ticket advice and even if a PTA is merely an advice from the sponsors that an airline is authorized to issue a ticket and thus no ticket was yet issued, the fact remains that the passage had already been paid for by the principal and the petitioner had accepted that payment. Accordingly, there could be no more pretensions as to the existence of an oral contract of carriage imposing reciprocal obligations on both parties. Facts clearly show that petitioner was remiss in its obligation to transport the workers on their flight and they had knowledge that time was of the essence in fulfilling such obligation. Hence, SC ruled in favor of respondents.

3. British Ariways, Inc. vs. Court of Appeals

GR No. 92288 February 9, 1993

FACTS:

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Private respondent First International Trading and General Services Co., a placement agency, received a telex message from its principal ROLACO Engineering and Contracting Services in Saudi Arabia to recruit Filipino contract workers in behalf of said principal. ROLACO paid to the Jeddah branch of petitioner British Airways, Inc., airfare tickets for 93 contract workers for the latter to be transported to Jeddah on or before March 30, 1981.

Upon receiving such notice, FITGS instructed its travel agent, ADB Travel and Tours, to book the 93 workers with petitioner but the latter failed to fly said workers, forcing FITGS to purchase airline tickets from other airlines so that the 93 workers could leave immediately. Same incident occurred in the first week of June, 1981 when FITGS was informed by ROLACO of its need for 27 workers. FITGS but only instructed ADB Travel to book the 27 but only 16 got confirmed seats. Of the 16, only 9 were able to board on time while the 7 were rebooked which bookings were again cancelled by petitioner without any prior notice. Due to the repeated failure to transport contract workers, ROLACO cancelled the hiring of the remaining recruited workers. FITGS demanded compensation from petitioner for the damages incurred.

ISSUE:

Whether or not there was no perfected contract of carriage

HELD:

No, there was a perfected contract of carriage and FITGS has a cause of action against petitioner. Petitioner’s repeated failures to transport private respondent’s workers in its flight despite confirmed booking of said workers clearly constitutes breach of contract and bad faith on its part.

There are two aspects to a contract of common carriage of passengers, namely: (1) the contract “to carry at some future time”, which is consensual and, (2) the contract of common carriage itself which is a real contract for not until the carrier is actually used can the carrier be said to have already assumed the obligation of a carrier. In the instant case, the contract to carry is the one involved which is consensual and which was violated by petitioner’s failure to perform its obligation.

5. Bascos vs. Court of AppealsGR No. 101089, April 7, 1993Campos, Jr., J.:

Facts:

Rodolfo Cipriano, representing CIPTRADE, entered into a hauling contract with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter’s 2000m/tons of soya bean meal from

Manila to Calamba. CIPTRADE subcontracted with petitioner Estrellita Bascos to transport and deliver the 400 sacks of soya beans. Petitioner failed to deliver the cargo, and as a consequence, Cipriano paid Jibfair the amount of goods lost in accordance with their contract. Cipriano demanded reimbursement from petitioner but the latter refused to pay. Cipriano filed a complaint for breach of contract of carriage. Petitioner denied that there was no contract of carriage since CIPTRADE leased her cargo truck, and that the hijacking was a force majeure. The trial court ruled against petitioner.

Issues:

(1) Was petitioner a common carrier?

(2) Was the hijacking referred to a force majeure?

Held:

(1) Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or association 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 test to determine a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted." In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the same.

(2) Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption. The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her

FGU vs. G.P. Sarmiento Trucking Corp. et.al.

300 SCRA 661

FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.

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FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes: P204, 450.00. FGU, in turn, being the subrogee of the rights and interests of the insured sought reimbursement of the amount, from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver with the Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental. GPS, instead of submitting its evidence, filed with leave of court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier. The RTC and CA both ruled in favor of the Respondent. 

ISSUES: WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.

HELD: The decision of the lower courts insofar as Lambert M. Eroles is concerned is affirmed but assailed decision with regard to GPS trucking is reversed. It, is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in the amount of P204, 450.00

Obligations and Contracts Terms:

• expectation interest- the interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed• reliance interest- the interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made • Restitution interest- which is his interest in having restored to him any benefit that he has conferred on the other party.• Subrogee- the person or entity that assumes the legal right to attempt to collect a claim of another (subrogor) in return for paying the other's expenses or debts which the other claims against a third party. A subrogee is usually the insurance company which has insured the party whose expenses were paid.

7. Asia Lighterage and Shipping Inc. v. CA Gr, No. 147246, August 19, 2003

FACTS:

Petitioner was contracted as carrier by a corporation from Portland, Oregon to deliver a cargo to the consignee's warehouse at Pasig City. The cargo, however, never reached the consignee as the barge that carried the cargo sank completely, resulting in damage to the cargo. Private respondent, as insurer, indemnified the consignee for the lost cargo and thus, as subrogee, sought recovery from petitioner. Both the trial court and the appellate

court ruled in favor of private respondent. The Court ruled in favor of private respondent. Whether or not petitioner is a common carrier, the Court ruled in the affirmative. The principal business of petitioner is that of lighterage and drayage, offering its barges to the public, although for limited clientele, for carrying or transporting goods by water for compensation. Whether or not petitioner failed to exercise extraordinary diligence in its care and custody of the consignee's goods, the Court also ruled in the affirmative. The barge completely sank after its towing bits broke, resulting in the loss of the cargo. Petitioner failed to prove that the typhoon was the proximate and only cause of the loss and that it has exercised due diligence before, during and after the occurrence. HCISED

ISSUE:

Whether or Not the petitioner is a common carrier.

RULING: YES.

Petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner, and with an only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets. To be sure, petitioner fits the test of a common carrier as laid down in Bascos vs. Court of Appeals. The test to determine a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted." In the case at bar, the petitioner admitted that it is engaged in the business of shipping and lighterage, offering its barges to the public, despite its limited clientele for carrying or transporting goods by water for compensation.

Article 1732 of the Civil Code defines common carriers as 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. Petitioner contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed and publicly known route, maintains no terminals, and issues no tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not bound to carry goods unless it consents. In short, it does not hold out its services to the general public. In De Guzman vs. Court of Appeals, we held that the definition of common carriers in Article 1732 of the Civil Code 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. We also did not distinguish 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. Further, we ruled that Article 1732 does not distinguish between a carrier offering its services to the general public, and one who offers services or solicits business only from a narrow segment of the general population. Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. They are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. To overcome the presumption

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of negligence in the case of loss, destruction or deterioration of the goods, deterioration of the goods, the common carrier must prove that it exercised extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code enumerates the instances when the presumption of negligence does not attach: Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of competent public authority.

In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss of its cargo. Petitioner claims that this was caused by a typhoon, hence, it should not be held liable for the loss of the cargo. However, petitioner failed to prove that the typhoon is the proximate and only cause of the loss of the goods, and that it has exercised due diligence before, during and after the occurrence of the typhoon to prevent or minimize the loss. The evidence show that, even before the towing bits of the barge broke, it had already previously sustained damage when it hit a sunken object while docked at the Engineering Island. It even suffered a hole. Clearly, this could not be solely attributed to the typhoon. The partly-submerged vessel was refloated but its hole was patched with only clay and cement. The patch work was merely a provisional remedy, not enough for the barge to sail safely. Thus, when petitioner persisted to proceed with the voyage, it recklessly exposed the cargo to further damage.

G.R. No. 138334. August 25, 2003] ESTELA L. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS AND CARAVAN TRAVEL & TOURS

FACTS: In May 1991, petitioner Estela L. Crisostomo contracted the services of Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed Jewels of Europe. Meriam Menor, companys ticketing manager and Crisostomo’s niece, went to her aunts residence on June 12, 1991 to deliver petitioners travel documents and plane tickets. Petitioner, in turn, gave Menor the full payment for the package tour. Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on Saturday, two hours before her flight on board British Airways.

Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the first leg of her journey from Manila to Hongkong. To petitioners dismay, she discovered that the flight she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight scheduled on June 14, 1991.

Upon petitioners return from Europe, she demanded from respondent the reimbursement of P61,421.70, representing the difference between the sum she paid for Jewels of Europe and the amount she owed respondent for the British Pageant tour. Despite several demands, respondent company refused to reimburse the amount, contending that the same was non-refundable.[1] Petitioner

was thus constrained to file a complaint against respondent for breach of contract of carriage and damages.

The trial court held that respondent was negligent in erroneously advising petitioner of her departure date through its employee, Menor, who was not presented as witness to rebut petitioners testimony. However, petitioner should have verified the exact date and time of departure by looking at her ticket and should have simply not relied on Menors verbal representation. The trial court thus declared that petitioner was guilty of contributory negligence and accordingly, deducted 10% from the amount being claimed as refund.

Respondent appealed to the Court of Appeals, which likewise found both parties to be at fault. However, the appellate court held that petitioner is more negligent than respondent because as a lawyer and well-traveled person, she should have known better than to simply rely on what was told to her. This being so, she is not entitled to any form of damages. Petitioner also forfeited her right to the Jewels of Europe tour and must therefore pay respondent the balance of the price for the British Pageant tour.

ISSUE: W/N respondent did not observe the standard of care required of a common carrier when it informed her wrongly of the flight schedule.

HELD: NO. Respondent is not a common carrier but a travel agency. It is thus not bound under the law to observe extraordinary diligence in the performance of its obligation, as petitioner claims. Respondent’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours.The object of petitioners contractual relation with respondent is the latters service of arranging and facilitating petitioners booking, ticketing and accommodation in the package tour. In contrast, the object of a contract of carriage is the transportation of passengers or goods. In the case at bar, the evidence on record shows that respondent company performed its duty diligently and did not commit any contractual breach. Hence, petitioner cannot recover and must bear her own damage. WHEREFORE, the instant petition is DENIED for lack of merit.

Santos v. SibugG.R. No. L-26815; May 26, 1981Melencio-Herrera, J.:

Facts: Vidad was a jeepney operator. Santos, the owner of a passenger jeep without a certificate of public convenience, transferred his jeepney to Vidad in order to avail of the latter’s privilege to operate a public convenience. Vidad executed a re-transfer document presumably to be registered when they decide that the jeepney be withdrawn from the arrangement.

Respondent Sibug was bumped by a jeepney driven by Gragas and operated by Vidad. Sibug filed a complaint for damages against Vidad and Gragas with the CFI of Manila Branch XVIII. Judgment was rendered against Vidad et al. Acting on the judgment, the sheriff levied on the jeepney belonging to Santos and scheduled an auction sale. Santos submitted a third-party complaint, alleging that he was the real owner of the jeepney.

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Later, Santos instituted an action for damages and injunction, with preliminary mandatory injunction against Sibug, Vidad and the sheriff with the CFI of Manila Branch X. Branch X issued a restraining order enjoining the sheriff from conducting the auction sale. Later, Branch X upheld Santos’ ownership and permanently enjoined the auction sale. Sibug appealed from the decision of Branch X. The Court of Appeals nullified the appealed decision.

Issues: Whether or not the nullification by the CA of the decision enjoining the auction sale is valid.

Ruling: Yes.

In asserting his rights of ownership of the jeepney, Santos admitted his participation in the illegal and pernicious practice in the transportation business known as the “kabit system”. Although Santos, as the kabit, was the true owner as against Vidad, the latter, as the registered owner/operator and grantee of the franchise, is directly and primarily responsible and liable for the damages caused to Sibug, the injured party, as a consequence of the negligent or careless operation of the vehicle. This ruling is based on the principle that the

operator of record is considered the operator of the vehicle in contemplation of law as regards the public and third persons even if the vehicle involved in the accident had been sold to another where such sale had not been approved by the then Public Service Commission.

The levy on execution against the jeepney should be enforced so that the judgment in the Branch XVII case may be satisfied, notwithstanding the fact that the secret ownership of the vehicle belonged to another. Santos should not be allowed to defeat the levy on his vehicle and to avoid his responsibilities as a kabit owner for he had led the public to believe that the vehicle belonged to Vidad. This is one way of curbing the pernicious kabit system that facilitates the commission of fraud against the travelling public. Santos’ remedy, as the real owner of the vehicle, is to go against Vidad, the actual operator who was responsible for the accident, for the recovery of whatever damages Santos may suffer by reason of the execution.

Property belonging to a stranger is not ordinarily subject to levy. However, legally speaking, it was not a "stranger's property" that was levied upon by the Sheriff pursuant to the judgment rendered by Branch XVII. The vehicle was, in fact, registered in the name of Vidad, one of the judgment debtors.

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LA MALLORCA VS. CA

Plaintiffs together with their three minor daughters rode the bus of the appellant going to Anao, Pampanga. After reaching their destination, it stopped to allow passengers to get off, including the plaintiffs and their children. After alighting from the bus, the father, Mariano Beltran, placed his family in the pedestrian sidewalk and returned to the bus to get their bayong that was left inside. While he was on the running board of the bus, waiting for the conductor to hand him over the bayong, the bus started to move forward without any signal from the conductor, sensing that the bus was in motion again, Beltran jumped off the bus, and it was in that time that he saw his four year old daughter lying dead on the ground. Plaintiffs sue defendant for damages for the death of their child. TC ruled in favor of the plaintiffs, CA affirmed; Hence this petition.

The issue in this case is whether the CA erred in holding appellant liable for quasi-delict considering that respondents’ complaints is one for breach of contract of carriage.

Supreme Court ruled that under the facts found by the CA, they have to SUSTAIN the judgment holding the petitioner liable for damages for the death of the child.

Court held that it may be pointed out that although it is true that respondents and their children had already alighted from the bus at the place designated for unloading passengers, it is also established that the father had to return to the vehicle to get his bayong. Therefore, as far as the father is concerned, he is still a passenger. It is also a recognized rule that the relation of carrier and passenger does not cease at the moment the passenger alights from carrier’s vehicle, but it continues until the passenger has had reasonable time or reasonable opportunity to leave the carrier’s premises. Aside from the aforesaid breach of contract, death of the child was caused by the negligence and want of exercise of utmost diligence on the part of the defendants, and such allegation is clearly for Quasi-delict, and such is permissible under Rule 8, Section 2 of the Revised Rules of Court.

ABOITIZ SHIPPING CORPORATION vs. HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER STEVEDORING CORPORATION

G.R. No. 84458 November 6, 1989

Facts: Anacleto Viana boarded the vessel M/V Antonia owned by Aboitiz. After said vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement dated July 26, 1975 between the third party defendant Pioneer Stevedoring Corporation and Aboitiz Shipping Corporation.

The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital where he later expired three (3) days thereafter.

The trial court ordered Aboitiz to pay the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid the Vianas. On reconsideration, the trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz to preponderantly establish a case of negligence against the crane operator. Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to respondent Court of Appeals which affirmed the findings of of the trial court.

Issue: Whether the deceased is still considered a passenger at the time the accident occurred

Held: The deceased is still a passenger. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises.  Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure.  The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage. 

It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of vessels are allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus. With respect to the bulk of cargoes and the number of passengers it can load, such vessels are capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, a ship passenger will need at least an hour as is the usual practice, to disembark from the vessel and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very short period of time. Verily, petitioner cannot categorically

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claim, through the bare expedient of comparing the period of time entailed in getting the passenger's cargoes, that the ruling in La Mallorca is inapplicable to the case at bar. On the contrary, if we are to apply the doctrine enunciated therein to the instant petition, we cannot in reason doubt that the victim Anacleto Viana was still a passenger at the time of the incident. When the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not only to bring its passengers safely to their destination but also to afford them a reasonable time to claim their baggage.

THE PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC. v. MGG MARINE SERVICES, INC. and DOROTEO GAERLAN

G.R. No. 135645. March 8, 2002.

KAPUNAN, J.:

FACTS: San Miguel Corporation insured several beer bottle cases with a total value of P5,836,222.80 with petitioner Philippine American General Insurance Company. The cargo were loaded on board the M/V Peatheray Patrick-G to be transported from Mandaue City to Bislig, Surigao del Sur. The vessel left the port of Mandaue and the weather was calm when the vessel started its voyage. The following day, the vessel subsequently sunk off and as a result thereof, the cargo belonging to San Miguel Corporation was lost.

Subsequently, San Miguel Corporation claimed the amount of its loss from petitioner. Then petitioner, as subrogee of San Miguel Corporation filed with the RTC a case for collection against private respondents to recover the amount it paid to San Miguel Corporation for the loss of the latter's cargo.

Meanwhile, the Board of Marine Inquiry conducted its own investigation to determine whether or not the captain and crew of the vessel should be held responsible for the incident. It found that the cause of the sinking of the vessel was the existence of strong winds and enormous waves, a fortuitous event that could not have been for seen at the time the vessel left the port. It was further held by the Board that said fortuitous event was the proximate and only cause of the vessel's sinking.

The RTC finding that private respondents solidarily liable for the loss of San Miguel Corporation's cargo and ordering them to pay petitioner the full amount of the lost cargo plus legal interest, attorney's fees and costs of suit. Private respondents appealed and the appellate court reversed the ruling of the RTC. It held that private respondents could not be held liable for the loss of San Miguel cargo because said loss occurred as a consequence of a fortuitous event, and that such fortuitous event was the proximate and only cause of the loss.

ISSUE: Whehter the loss of the cargo was due to the occurrence of a natural disaster, and if so, whether such natural disaster was the sole and proximate cause of the loss or whether private respondents were partly to blame for failing to exercise due diligence to prevent the loss of the cargo.

RULING: Common carriers, from the nature of their business and for reasons of public policy, are mandated to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. Owing to this high degree of diligence required of them, common carriers, as a general rule, are presumed to have been at fault or negligent if the goods transported by them are lost, destroyed or if the same deteriorated. However, this presumption of fault or negligence does not arise in the cases enumerated under Article 1734 of the Civil Code.

In order that a common carrier may be absolved from liability where the loss, destruction or deterioration of the goods is due to a natural disaster or calamity, it must further be shown that the such natural disaster or calamity was the proximate and only cause of the loss; there must be "an entire exclusion of human agency from the cause of the injury of the loss."

Moreover, even in cases where a natural disaster is the proximate and only cause of the loss, a common carrier is still required to exercise due diligence to prevent or minimize loss before, during and after the occurrence of the natural disaster, for it to be exempt from liability under the law for the loss of the goods.

The parties do not dispute that on the day the vessel sunk; it encountered strong winds and huge waves ranging from six to ten feet in height. The findings of the Board of Marine Inquiry indicate that the attendance of strong winds and huge waves was indeed fortuitous. A fortuitous event has been defined as one which could not be foreseen, or which though foreseen, is inevitable.An event is considered fortuitous if the following elements concur:

(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.

In the case at bar, it was adequately shown that before the vessel left the port, the weather is in a good condition. Thus, he could not be expected to have foreseen the unfavorable weather condition that awaited the vessel. It was the presence of the strong winds and enormous waves which caused the vessel to list, keel over, and consequently lose the cargo contained therein. Moreover, the vessel at that time was considered a seaworthy vessel. To be seaworthy, a vessel must not only be staunch and fit in the hull for the voyage to be undertaken but also must be properly equipped and for that purpose there is a duty upon the owner to provide a competent master and a crew adequate in number and competent for their duty and equals in disposition and seamanship to the ordinary in that calling.

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Since the presence of strong winds and enormous waves was shown to be the proximate and only cause of the sinking of the vessel and the loss of the cargo belonging to San Miguel Corporation, private respondents cannot be held liable for the said loss.

The assailed Decision of the CA is affirmed and the petition is denied.

JOSE PILAPIL, petitioner, vs. HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC.

PADILLA, J.:

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. Considering that the sight of his left eye was impaired, petitioner was taken to Dr. Malabanan of Iriga City where 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.

Issue:

Whether or not the Court of Appeals has decided the issue not in accord with law and whether the argument of the petitioner 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 petitioner-passenger is one such risk from which the common carrier may not exempt itself from liability is meritorious.

Held:

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. 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. Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of passengers by

common carriers to only such as human care and foresight can provide. Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier when its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the negligence on the former, because the presumption stands in the place of evidence. 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. 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.

Case 20- Fortune express inc. v. CA

Gr no. 119756, march 18, 1999

FACTS: On November 18, 1989, petitioner’s bus figured in an accident with a jeepney of a Maranao, resulting in the death of several passengers including two Maranaos. Upon investigation, it had been found that certain Maranaos were planning to take revenge on petitioner by burning some of its buses. Then on Nov. 22, three armed maranaos who pretended to be passengers seized the bus. Among the passengers was Atty. Caorong. The passengers were ordered to get off the bus. However caorong went back to retrieve something. He then pleaded with the armed men to spare the driver’s life for the maranaos intended to burn the bus with the driver. Due to hiss persistence, the driver had escaped without the maranaos noticing. This angered them. They then shot Caorong, and he died subsequently.

ISSUE: whether or not petitioner should be held liable for atty cao rong’s death

RULING:

Petitioner is liable for breach of the contract of carriage. The seizure of the bus was made possible by the negligence of petitioner’s employees. Also, such seizure was not a case of force majeure because it was not unforeseeable. There had been reports of the revenge of the maranaos yet petitioner took no steps to prevent the same.

#21 ROBERTO JUNTILLA vs. CLEMENTE FONTANAR, ET. AL.

GR No. L-45637 GUTIERREZ, JR., J.:

Facts: Plaintiff Juntilla was a passenger of a jeepney 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. Upon landing on the ground, the plaintiff momentarily lost consciousness. When he

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came to his senses, he found that he had lacerated wound on his right palm and suffered injuries on his left arm, right thigh and on his back.

Petitioner filed a case for breack of contrach with damages against Fontanar, Banzon and Camoro. Respondents claim that the incident was beyond the control of the respondents as the tire that exploded was newly bought and was only slightly used at the time it blew up. The City Court ruled in favor of petitioner but the Court of First Instance reversed it and exonerated the respondents.

ISSUE: Whether the defendants and/or their employee failed to exercise ‘utmost and/or extraordinary diligence’ required of common carriers

HELD: No. The CFI erred when it absolved the carrier from any liability upon a finding that the tire blow out is a fortuitous event. In the case at bar, there are specific acts of negligence on the part of the respondents. The evidence shows that the jeepney was running at very fast speed before the accident. There is also evidence that the passenger jeepney was overloaded at that time. While it may be true that the tire 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 cause 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.

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. 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 due regard for all the circumstances.

Honrion Lasam, Et al. v. Frank Smith, Jr.GR. No. 19495, February 2, 1924.

FACTS

Defendant is engaged in the business of carrying passengers for hire from one point to another in the province of La Union and the surrounding provinces. He undertook to convey plaintiffs from San Fernando to Currimao, Ilocos Norte, in a Ford mobile. The automobile was operated by a licensed chauffeur but later on the latter allowed his assistant, Bueno, to drive the car. The car functioned well until after crossing the Abra river of Tagudin, where the car zigzagged for a distance, left the road and went down a steep embankment. The automobile was overturned and the plaintiffs were pinned down under it, thereby causing slight injuries to Mr. Lasam and serious injuries to his wife. In the complaint filed before the trial court, it alleged that the accident was due to the defects in the automobile and the negligence of the chauffeur. The trial court held that the cause

of action rests on the defendant’s breach of contract of carriage and that it was not due to fortuitous events, and that, therefore, defendant was liable for damages.

ISSUE

Whether the accident was due to fortuitous event, thereby, absolving defendant from liability for damages

HELD

No, the accident was not due to a fortuitous event. Caso Fortuito has 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 for the debtor 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 debtor must be free from any participation in the aggravation of the injury resulting to the creditor.

As seen in the facts of the case, whether the accident was due to the defects in the automobile or to the negligence of the chauffeur, it is apparent that the accident was not an act of God or one that could not be foreseen nor avoided. It must be independent of the will of the obligor, or his employees. Hence, the Supreme Court affirmed the decision and sustained the award of damages in favor of the plaintiffs.

Gacal, et. al., vs. PAL GR No. 55300 March 15, 1990

FACTS: Plaintiffs were passengers of defendant’s BAC 111 for a flight to Manila. Unknown to them, armed members of the MNLF were on the same flight. 10 minutes after takeoff, the hijackers brandished their firearms and directed the pilot to fly to Libya. Because of fuel limitations of the plane, the hijackers directed the pilot to fly them to Sabah. With the same explanation, they relented and directed the aircraft to land at Zamboanga Airport in Zamboanga City for refueling.

Upon arriving on May 21, 1976 in Zamboanga City, the plane was met by armored cars of the military with machine guns. There was a standoff and it was only on May 23 that the passengers were served little food and drinks. In the end, 10 passengers and 3 hijackers died while 3 hijackers were captured. Gacal and Anislag were unhurt but their spouses suffered injuries and they incurred expenses for the hospitalization.

ISSUE:Whether or not respondent Airline cannot be held liable as the cause of the incident is a fortuitous event

HELD: Yes, respondent Airline cannot be held liable. The failure to transport petitioners safely from Davao to Manila was due to the skyjacking incident staged by 6 MNLF members-passengers, without

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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 baggage. But the incident in question occurred during the 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.

These events rendered it impossible for PAL to perform its obligations in a normal 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.

25. Maranan vs PerezGR No. L-22272, June 26, 1967 Bengzon, J.:

Facts:

Rogelio Corachea, a passenger in a taxicab owned and operated by Pascual Perez, was stabbed and killed by the driver, Simeon Valenzuela.  Valenzuela was found guilty for homicide by the Court of First Instance and was sentenced to suffer Imprisonment and to indemnify the heirs of the deceased in the sum of P6000.  While pending appeal, mother of deceased filed an action in the Court of First Instance of Batangas to recover damages from Perez and Valenzuela.  Defendant Perez 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. 

Defendant-appellant relied solely on the ruling enunciated in Gillaco vs. Manila Railroad Co. that the carrier is under no absolute liability for assaults of its employees upon the passengers. 

Issue:

Was the contention of the defendant valid?

Held:         

No.  The attendant facts and controlling law of that case and the one at bar were very different. In the Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty employee. 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 willful 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. The Civil Code provisions on the subject of Common Carriers are new and were taken from Anglo-American Law. The basis of the carrier's liability for assaults on passengers committed by its drivers rested either on the doctrine of respondent superior or the principle that it was the carrier's implied duty to transport the passenger safely. Under the second view, upheld by the majority and also by the later cases, it was enough that the assault happens within the course of the employee's duty. It was no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The carrier's liability here was absolute in the sense that it practically secured the passengers from assaults committed by its own employees.CORNELIA A. DE GILLACO, ET AL vs. MANILA RAILROAD COMPANYG.R. No. L-8034, November 18, 1955

Facts: That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas Gillaco, husband of the plaintiff, was a passenger in the early morning train of the Manila Railroad Company from Calamba, Laguna to Manila; That when the train reached the Paco Railroad station, Emilio Devesa, a train guard of the Manila Railroad Company assigned in the Manila-San Fernando, La Union Line, happened to be in said station waiting for the same train which would take him to Tutuban Station, where he was going to report for duty; That Emilio Devesa had a long standing personal grudge against Tomas Gillaco, same dating back during the Japanese occupation; That because of this personal grudge, Devesa shot Gillaco with the carbine furnished to him by the Manila Railroad Company for his use as such train guard, upon seeing him inside the train coach; That Tomas Gillaco died as a result of the would which he sustained from the shot fired by Devesa. It is also undisputed that Devesa was convicted with homicide by final judgment of the Court of Appeals.

Issue: Whether Manila Railroad Co. is liable to the death of Tomas Gillaco.

Held: Manila Railroad Co. is not liable.The act of guard Devesa in shooting passenger Gillaco (because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely unforeseeable by the Manila Railroad Co. The shooting in question was therefore "caso fortuito" within the definition of article 105 of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of appellant's contract of safe carriage with the late Tomas Gillaco was excused thereby. 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. Devesa's assault cannot be deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier.

Bachelor Express vs CA 188 SCRA 217

F: Bus No. 800 owned by Bachelor Express and driven by Cresencio Rivera was the situs of a stampedewhich resulted in the death of passengers Beter and Rautrat. The bus came from Davao City on its way toCagayan de Oro passing Butuan City. While in Tabon-Tabon, Butuan, the bus picked up a passenger. Apassenger suddenly stabbed a PC soldier which caused commotion and panic among the passengers. Twopassengers jumped out (finding of the TC which was reversed by the CA) of the bus and were found dead as aresult of head injuries. The passenger- assailant ran away from the bus but was killed by the police. The parentsof the dead passengers filed a complaint for a sum of money against the CC, the owner and the driver.

The CC denied liability and alleged that the driver was able to transport his passengers safely to theirrespective places of destination except for the two passengers who jumped off the bus without the knowledge

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and consent, much less, the fault of the driver; that the CC exercised due diligence in the choice of its EEs toavoid as much as possible accidents; that the incident was not a traffic or vehicular accident but was an incidentvery much beyond the control of the CC; that the CC was not a party to the incident as it was an act of a thirdparty who is not in any way connected with the CC and of which they have no control and supervision. The CCargued that the incident's proximate cause was the act of the passenger who ran amuck and which triggered offthe commotion and panic.

The TC dismissed the complaint. The CA reversed and ordered the CC, the owner and driver solidarilyliable to the heirs of the deceased.

Issue: Is petitioner liable for the deaths of the passengers?

Held : Yes. Bachelor Express as a CC is bound to carry its passengers safely as far as human care andforesight can provide using the utmost diligence of very cautious person, with due regard for all thecircumstances. In this case where passengers suffered injuries which caused their death, under 1756,the CC is presumed to have acted negligently unless it can prove that it had observed extraordinarydiligence. The CC raised the defense of caso fortuito. Art. 1174 provides that no person shall beresponsible for those events which could not be foreseen or which though foreseen were inevitable. InLasam vs Smith, the SC held that a caso fortuito must have the following elements: (1) The cause ofthe unforeseen and unexpected occurrence must be independent of the human will; (2) It must beimpossible to foresee the event; (3) The occurrence must be so as to render it impossible for thedebtor to fulfill his obligation in a normal manner; and (4) The obligor must be free from anyparticipation in the aggravation of the injury resulting to the creditor. The running amuck of thepassenger was the proximate cause of the incident and is within the context of force majeure.

However, in order that a CC may be absolved from liability in case of force majeure, it is notenough that the accident was caused by force majeure. The CC must still prove that it was notnegligent in causing the injuries resulting from such accident. It must prove that there was nonegligence or lack of care and diligence on the part of the CC.

The TC and the CA had conflicting findings of fact. The SC upheld the findings of the CA--the driver did not immediately stop the bus at the height of the commotion; the bus was speeding froma full stop; the victims fell from the bus door when it was opened or gave way while the bus was stillrunning; the conductor panicked and blew his whistle after people had already fallen off the bus; thebus was not properly equipped with doors in accordance with law. It is therefore clear that thepetitioners have failed to overcome the presumption of fault and negligence found in the lawgoverning CCs.

The CC's argument that it is not an insurer of its passengers deserves no merit in view of thefailure of the CC to prove that the deaths of the 2 passengers were exclusively due to force majeureand not to the failure of the CC to observe extra-ordinary diligence in transporting safely thepassengers to their destinations as warranted by law.

G.R. No. L-9671             August 23, 1957 CESAR L. ISAAC, plaintiff-appellant, vs. A. L. AMMEN TRANSPORTATION CO., INC., defendant-appellee.

BAUTISTA ANGELO, J.:

FACTS: The 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.

ISSUE: Was the bus driver negligent?

HELD: NO. 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 sudden 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.

Compañia Maritima v. CA and ConcepcionG.R. No. L-31379; August 29, 1988Fernan, C.J.:

Facts: Concepcion hired petitioner to ship construction equipment from Manila to Cagayan De Oro City. While the payloader was being unloaded off MV Cebu, the swivel pin of the heel block of the port block of Hatch No. 2 gave way, causing the payloader to fall and sustain damage. Concepcion’s company demanded a replacement of the payloader and notified petitioner of its claim for damages.

Petitioner shipped the payloader to Manila where it was weighed and determined to be 5 tons heavier than declared in the Bill of Lading. Petitioner denied the claim for damages, contending that had Concepcion declared the actual weight of the payloader, damage to the ship as well as to the payloader could have been prevented. Concepcion filed an action for damages against petitioner. Trial Court dismissed the complaint. The CA reversed the lower court’s decision and ordered the petitioner to pay damages.

Issue: Whether or not Concepcion’s act of furnishing the petitioner with an inaccurate weight was the proximate and only cause of the damage to the payloader.

Ruling: No. 12

Common carriers are presumed to have been at fault or to have acted negligently in case the goods transported by them are lost, destroyed or had deteriorated. Mere proof of delivery to the carrier of the goods in good order and their arrival at the destination in bad order makes out a prima facie case against the common carrier so that if no explanation is given as to how the loss, deterioration, or destruction of the goods occurred, the common carrier must be held responsible.

Here, petitioner, upon the testimonies of its own crew, failed to take the necessary and adequate precautions for avoiding damage to, or destruction of, the payloader entrusted to it for safe carriage and

delivery. Thus it cannot be reasonably concluded that the damage was due to the alleged misrepresentation of Concepcion as to the correct weight of the payloader.

The weights stated in the bill of lading is prima facie evidence of the amount received and the fact that the weighing was done by another will not relieve the common carrier where it accepted such weight and entered it on the bill of lading. The damage caused to the machinery could have been avoided by the exercise of reasonable skill and attention on the carriers part in overseeing the unloading of the heavy equipment.

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BRIÑAS VS. PEOPLE ET. AL.

The case is a petition to review the decision of the TC which found the accused guilty of homicide though reckless imprudence for the deaths for the deaths of Martina Bool, 55 yrs of age and Emelita Gesmundo, three years of age. Facts shows that at around 8pm, the train slowed down at station in barrio lagalag and after the conductor shouted, ‘lusacan’ ‘lusacan’, the old woman and her grand daughter with a train ticket walked towards the left front door, train suddenly picked-up speed and as the consequence, the old woman and child stumbled and fell from the tracks and was seen no more. It was only in the next morning that the police discovered their bodies two feet from the rail road tracks.

The issue in this case is whether the CA erred in convicting appellant under such facts and whether CA erred in including payment of death indemnity after heirs have already commenced a separate civil action for damages against MRC.

In both issues, NO.

It is established from the facts, that the proximate cause of the victims’ deaths was the premature and erroneous announcement, the victim would be safe in their seats. Any negligence on the part on the part of the victim was at most, contributory, and does not exculpate accused from liability. With regards to the second issue, the source of obligation sought to be enforced in the civil case in question was culpa contractual, not an act or omission punishable by law, from the title of the case itself, party defendant itself is Manila Railroad Company and not Briñas - Such are two distinct obligation. Moreover, complainants did not only reserve their right to file an independent civil action but in fact filed a separate civil action against MRC.

BATANGAS LAGUNA TAYABAS BUS COMPANY & ARMANDO PON vs.INTERMEDIATE APPELLATE COURT, THE HEIRS OF PAZ VDA. DE PAMFILO, THE HEIRS OF NORMA NERI, and BAYLON SALES and NENA VDA. DE ROSALES

G.R. Nos. 74387-90 November 14, 1988

Facts:

A collision between Bus No. 1046 of BLTB driven by Armando Pon and Bus No. 404 of Superlines Transportation Company driven by Ruben Dasco resulted in the death of Aniceto Rosales, Francisco Pamfilo and Romeo Neri and in several injuries to Nena Rosales (wife of Anecito) and Baylon Sales, all passengers of the BLTB6. The evidence shows that as BLTB Bus No. 1046 was negotiating the bend of the highway, it tried to overtake a Ford Fiera car just as Bus No. 404 of Superlines was coming from the opposite direction. Seeing thus, Pon made a belated attempt to slacken the speed of his bus and tried to return to his proper lane. It was an unsuccessful try as the two (2) buses collided with each other.

Defendants BLTB and Superlines, together with their drivers Pon and Dasco, denied liability by claiming that they exercised due care and diligence and shifted the fault, against each other. They all interposed counterclaims against the plaintiffs and crossclaims against each other.

After trial on the merits, the lower court exonerated defendants Superlines and its driver Dasco from liability and attributed sole responsibility to defendants BLTB and its driver Pon, and ordered them jointly and severally to pay damages to the plaintiffs. Defendants BLTB and Armando Pon appealed from the decision of the lower court to respondent appellate court which affirmed with modification the judgment of the lower court.

Held:

The proximate cause of the collision resulting in the death of three and injuries to two of the passengers of BLTB was the sole negligence of the driver of the BLTB Bus, who recklessly operated and drove said bus in a lane where overtaking is not allowed by Traffic Rules and Regulations. The highway was divided into two lanes by a continuous yellow strip which the driver of the BLTB bus admitted in his cross-examination highway signifies a no-overtaking zone. It is well settled that a driver abandoning his proper lane for the purpose of overtaking another vehicle in ordinary situation has the duty to see that the road is clear and not to proceed if he can not do so in safety

Such negligence and recklessness is binding against petitioner BLTB, more so when We consider the fact 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 for the payment of the damages sought by the passenger. By the contract of carriage, the carrier BLTB assumed the express obligation to transport the passengers to their destination safely and to observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by its passengers is right away attributable to the fault or negligence of the carrier (Art. 1756, New Civil Code).

BATANGAS TRANSPORTATION COMPANY v.GREGORIO CAGUIMBAL, PANCRACIO CAGUIMBAL, MARIA MARANAN DE CAGUIMBAL, BIÑAN TRANSPORTATION COMPANY and MARCIANO ILAGAN, respondents.

G.R. No. L-22985. January 24, 1968.

CONCEPCION, C.J.:

FACTS: An accident happened between BTCO bus which is 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 am and the bus of the Biñan Transportation Company driven by Marciano Ilagan, was coming from the opposite direction (north-bound) and also a calesa managed by Benito Makahiya, which was then ahead of the Biñan bus. 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, the calesa was at a distance of several meters facing the BTCO bus coming from the opposite direction; that at the same time the Biñan bus was about 100 meters away likewise going northward and following the direction of the calesa; that upon seeing the Biñan bus the driver of the BTCO bus dimmed his light as established by Magno Ilaw, the very conductor of the Biñan bus at the time of the accident; that as the calesa and the BTCO bus were passing each other from the opposite directions, the Biñan bus following the

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calesa swerved to its left in an attempt to pass between the BTCO bus and the calesa; the Biñan 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 total wrecked; The BTCO bus suffered damages for the repair of its damaged portion.

          As a result thereof, 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 Biñan and its driver, Marciano Ilagan. Subsequently, the Caguimbals amended their complaint, to include therein, as defendants, said Biñan and Ilagan.

          After appropriate proceedings, the Court of First Instance of dismissed the complaint insofar as the BTCO is concerned, without prejudice to plaintiff's right to sue Biñan. On appeal taken by the Caguimbals, the Court of Appeals reversed said decision and rendered judgment sentencing the BTCO, Biñan and Ilagan to, jointly and severally, pay to the plaintiffs the aggregate sum of P10,500.00 and the costs in both instances.

ISSUE: Whether the Court of Appeals erred in finding BTCO liable for damages.

RULING: No. The recklessness of defendant was a major factor in the occurrence of the accident which resulted, inter alia, in the death of Pedro Caguimbal. Indeed, as driver of the Biñan 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 Biñan bus hit the left side of the BTCO bus and then the calesa. 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.

         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 "calesa", driven by Makahiya, a few meters away, coming from the opposite direction, with the Biñan bus about 100 meters behind the rig cruising at a good speed. It is true that the driver of the Biñan bus should have slowed down or stopped, and, hence, was reckless in not doing so; but, he had no especial obligations toward the passengers of the BTCO unlike Perez whose duty was to exercise "utmost" or "extraordinary" diligence for their safety. Perez was thus under obligation to avoid a situation which would be hazardous for his passengers, and, make their safety dependent upon the diligence of the Biñan 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.

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. 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. The decision appealed is affirmed with the costs of this instance against Batangas Transportation Company.

ALFREDO MALLARI SR. and ALFREDO MALLARI JR., petitioners, vs. COURT OF APPEALS and BULLETIN PUBLISHING CORPORATION

BELLOSILLO, J.:

Facts:

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. On 16

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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 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. 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.

Issue:

Whether or not there was no evidence that petitioner Mallari Jr. overtook a vehicle at a curve on the road at the time of or before the accident.

Held:

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. 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. 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. 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. 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.

Case 40 – PAL v. CA Gr no. 82619, September 15, 1993

FACTS:

Pedro Zapatos was among the 21 passengers of PAL flight 447 that took off from Cebu, headed for Ozamiz City. Due to heavy rains, the airport at Ozamiz City was closed . hence it proceeded to Cotabato City instead. The passengers were given the option to return to Cebu the same day or the day after, then head for Ozamiz City. However Zapatos insisted that he be accommodated to the first trip to cebu. He wasn’t allowed because of the priority of the check-in sequence in Cebu, there being a limited number only of seats. Subsequently, he was left in the airport while there was an ongoing war which was not too far. He was not transported nor accommodated by Pal personnel.

ISSUE: Whether or not PAL may be held liable

RULING : Pal is liable for moral and exemplary damages, but not actual damages not proven. The diversion of its flight due to bad weather was a fortuitous event. Nonetheless such occurrence did not terminate PAL’s contract with its passengers. Its relation continues until the latter has been landed at the port of destination and has left the carrier’s premises. Hence PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort and safety of its stranded passengers until they have reached their final destination.

#41 ABETO vs. PHILIPPINE AIRLINES, INC.

GR No. L-28692, July 30, 1982 Relova, J.

FACTS: Judge Quirico Abeto boarded the Philippine Air Lines’ PI-CI133 plane at Mandurriao Airport for Manila. 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, its was ascertained that the plane crashed at Mt. Baco, Province of Mindoro. All passengers, including Judge Abeto, must have been killed instantly and their remains were scattered all over the area.

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 contended that the plane at the time of the crash was airworthy for the purpose of conveying passengers across the county. There was no navigational error but no negligence or malfeasance on the part of the pilot. Appellant argues that the crash was fortuitous even and, therefore, appellant cannot be held liable under the provisions of article 1174 of the New Civil Code.

The trial court held that the defendant did not exercise extraordinary diligence or prudence as far as human foresight can provide imposed upon by the Law.

ISSUE: Whether or not the defendant is liable for violation of its contract of carriage

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HELD: YES. 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."

In the case at bar, it is clear that the pilot did not follow the designated route for his flight between Romblon and Manila. 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 due regard for all the circumstances, and any injury that might be suffered by the passenger is right aways attributable to the fault or negligence of the carrier.

Ong Yiu vs. CA GR No. L-40597 June 29, 1979

FACTS:

Petitioner was a passenger of PAL from Mactan Cebu bound for Butuan City where he was to attend the trial of a civil case. He checked in 1 piece of luggage. Upon arriving in Butuan City, petitioner could no longer find his blue maleta. A message was sent to PAL, Cebu regarding the missing luggage and it was found out that the luggage had been over carried to Manila. Instructions were given for the luggage to be immediately forwarded to Butuan City on the first available flight.

The next day, petitioner failed to retrieve the luggage. The porter clerk of the airport handled the luggage to Emilio Dagorro, a driver of a “colorum” car, who used to drive for petitioner so that he could take the luggage to the latter as it contained vital documents. Ong Yiu received the maleta but realized that some of its contents were missing. Petitioner then refused to accept the luggage and demanded from PAL that they produce his luggage intact and that he be compensated for actual and moral damages

ISSUE:

Whether or not PAL acted in bad faith

HELD: No, PAL had not acted in bad faith. It was the duty of PAL to look for petitioner’s luggage which had been miscarried and PAL exerted due diligence in complying with such duty.

45. Citadel lines, Inc. vs. Court of AppealsGR No. 88092, April 25, 1990Regalado, J.: Facts:              

Petitioner is the general agent of the vessel “Cardigan Bay/ Straight Enterprises”, while private respondent Manila Wine Merchants, Inc. as the consignee is the importer of the subject shipment of Dunhill cigarettes from England.On or about March 17,1979, the vessel “Cardigan” loaded on board at England for carriage to Manila, 180 Filbrate cartons of mixed British manufactured cigarettes called “Dunhill International Filter” & “Dunhill International Menthol”, as evidenced by a Bill of Lading. Clause 6 of the bills of lading issued by the carrier states to limit the latter’s liability to US$2.00 per kilo.The shipment arrived at the port of Manila Pier 13 and the container van was received by E. Razon an arrastre. Thereafter, the container van containing two shipments was stripped. One shipment was delivered and the other, containing the cigarettes were placed in two containers due to the lack of space, both of them duly padlocked and sealed by the representative of the carrier.On May 1, 1979, the carrier’s headchecker discovered that one of the container van had a different padlock and the sealed was tampered with. It was found out that 90 cases of the cigarettes were missing. Based on the investigation conducted by the arrastre, the cargo was not formally turned over by the carrier.The consignee filed a complaint against the carrier demanding P315,000 which is the market value of the goods. The carrier admitted the loss in its reply letter but alleged that the said matter is under the control of the arrastre therefore, the consignee filed a complaint against the arrastre. The lower court decided to absolve the arrastre form any liability. CA affirmed the decision of the lower court. Issue: 

Whether or not the stipulation limiting the liability of the carrier contained in the bill of lading is binding on the consignee. Held: 

Yes, the stipulation is valid. Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. Furthermore, a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.In this case, the award of P315,000 based on the alleged market value of the goods is erroneous. It is provided in Clause 6 that its liability is limited to US$2.00/kilo. The consignee also admits in the

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memorandum that the value of the goods does not appear in the bill of lading. Hence, the stipulation on the carrier’s limited liability applies.The bill of lading shows that 120 cartons weight 2,978 kilos or 24.82kilos/carton. Since 90 cartons were lost and the weight of said cartons is 2,233.80, the carrier’s liability amounts only to US$4,467.60.The judgment of CA is hereby modified.

Everett Steamship vs CA G.R.No. 122494, October 8, 1998

Facts: Private respondent imported 3 crates of bus spare parts marked as Marco C/No. 12, Marco C/No. 13 and Marco C/No. 14, from its supplier, Maruman Trading Company, Ltd., a foreign corporation based in Inazawa, Aichi, Japan. The crates were shipped from Nagoya, Japan to Manila on board Adelfaeverette, a vessel owned by petitioner’s principal, Everett Orient Lines. Upon arrival at the port of Manila. It was discovered that the crate marked Marco C/No. 14 was missing. Private respondent claimed upon petitioner for the value of the lost cargo amounting to One million five hundred fifty two thousand five hundred Yen, the amount shown in an invoice No. MTM-941, dated Nov. 14, 1991. However, petitioner offered to pay only One hundred thousand Yen, the maximum amount stipulated under Clause 18 of the covering bill of lading which limits the liability of the petitioner. Private respondent rejected the offer and thereafter instituted a suit for collection.

Issues: Whether petitioner liable for the actual value and not the maximum value recoverable under the bill of lading. Whether the private respondent, as consignee, who is not a signatory to the bill of lading bound by the stipulations theref.

Held: the Supreme Court Reversed and set aside the ruling of Court of Appeals. The petitioner is only liable for the loss of the cargo in the amount of One hundred thousand yen pursuant to Clause 18 of the bill of lading.

NORTHRWEST V. CUENCA [14 S 1063 (1965)]

F: Nicolas Cuenca, an official delegate of Philippines to a conference in Tokyo, was transferred from firstclass to tourist class despite his first class ticket. The Northwest agent also treated him rudely in front of otherpassengers. Northwest argues that according to the Warsaw Convention, Arts. 17, 18, 19, an air carrier is liableonly in the event of (a) death of a passenger or injury suffered by him; (b) of destruction or loss of, or damageto any checked baggage/goods; & (c) delay in the transportation by air of passengers, baggage or goods.

ISSUE: W/NOT CUENCA HAS A CAUSE OF ACTION THOUGH NOT AMONG THOSEMENTIONED IN THE WC.

HELD: Yes. The said articles merely declare the carrier liable for damages in the enumerated cases, ifthe conditions therein specified are present. Neither the provisions of said articles nor others regulate orexclude liability for other breaches of contract by the carrier. Under petitioner's theory, an air carrierwould be exempt from any liability for damages in the event of its absolute refusal, in bad faith, tocomply with a contract of carriage, which is absurd.

Alitalia v. IAC

Facts: Dr. Felipa Pablo, an associate professor in the University of the Philippines and a research grantee of the Philippine Atomic Energy Agency, was invited to take part at a meeting of the Department of Research and Isotopes in Italy. She would be the second speaker on the first day of the meeting. Dr. Pablo booked passage on petitioner Alitalia. She arrived in Milan on the day before the meeting, but was told that her luggage was delayed and was in a succeeding flight from Rome to Milan. The luggage included her materials for the presentation. The succeeding flights did not carry her luggage. Desperate, she went to Rome to try to locate the luggage herself, but to no avail. She returned to Manila without attending the meeting. She demanded reparation for the damages. She rejected Alitalia’s offer of free airline tickets and commenced an action for damages. As it turned out, the luggage was actually forwarded to Ispra, but only a day after the scheduled appearance. It was returned to her after 11 months. The trial court ruled in favor of Dr. Pablo, and this was affirmed by the Court of Appeals.

Issues:

(1) Whether the Warsaw Convention should be applied to limit Alitalia’s liability

(2) Whether Dr. Pablo is entitled to nominal damages

Held:

(1) Under the Warsaw Convention, an air carrier is made liable for damages for:

a. The death, wounding or other bodily injury of a passenger if the accident causing it took place on board the aircraft or I the course of its operations of embarking or disembarking;

b. The destruction or loss of, or damage to, any registered luggage or goods, if the occurrence causing it took place during the carriage by air; and

c. Delay in the transportation by air of passengers, luggage or goods.

The convention however denies to the carrier availment of the provisions which exclude or limit his liability, if the damage is caused by his wilful misconduct, or by such default on his part as is considered to be equivalent to wilful misconduct. In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable damage. The fact is, nevertheless, that some species of injury was caused to Dr. Pablo because petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time appointed - a breach of its contract of carriage. Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage.

(2) She is not, of course, entitled to be compensated for loss or damage to her luggage. She is however entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff,

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which has been violated or invaded by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff that for any loss suffered and this Court agrees that the respondent Court of Appeals correctly set the amount thereof at PhP 40,000.00.

Pan American World Airways, Inc. v. IACG.R. No. L-70462; August 11, 1988Cortes, J.:

Facts: Sotang Bastos and Archer Productions, thru its president Rene Pangan entered into an agreement with Prime Films, San Francisco, California whereby the former bound itself to supply the latter with three films for exhibition in the United States. On his way to the Philippines, Pangan visited Guam where he also entered into a contract with Hafa Adai Organization for the exhibition of two of the films. In both contracts, Pangan undertook to provide the necessary promotional and advertising materials before the exhibition date.

Pangan prepared the materials and in preparation for his trip abroad to comply with the contracts, he purchased clutch bags, capiz lamps and four barong tagalog. Pangan purchased from Pan Am a plane ticket for passage from Manila to Guam. Before departure he checked in his 2 luggages which contained the materials earlier described and personal belongings. Pangan arrived in Guam, his 2 luggages did not, and as a consequence his agreements were cancelled. Pangan wrote Pan Am to protest. Due to Pan Am’s failure to communicate with Pangan about the action taken on his protest, the latter filed a complaint against the former for damages. The Trial Court ruled against Pan Am. Pan Am appealed the decision saying that the Trial Court erred in awarding actual damages beyond the limitation of liability set forth in the Warsaw Convention and the contract of carriage. The CA affirmed the lower court’s decision.

Issue: Whether or not the award of actual damages beyond the limitation of liability set forth in the Warsaw Convention was proper.

Ruling: No. It is obvious from the conditions printed clearly on the plane ticket issued by Pan Am that the applicability of the Warsaw Convention regarding the limitation of liability for loss of or damage to baggage is stipulated. Such provisions are part of the contract of carriage and valid and binding upon Pangan regardless of his lack of knowledge or assent to the regulation, the contract being a contract of adhesion.

Based, therefore, on the stipulations printed at the back of the ticket allowing the application of the Warsaw Convention on limitation of liability and by reason also of the fact that Pangan did not declare a higher value for his baggage and pay the corresponding additional charges, Pan Am’s liability for the lost baggage is limited to $600 ($20 x 30 kilos).

#51 SANTOS III vs. NORTHWEST ORIENT AIRLINES

GR No. 101538, June 23, 1992 Cruz, J.

FACTS: Petitioner is a minor and a resident of the Philippines. Petitioner purchased from respondent Northwest Orient Airlines (NOA) a roundtrip ticket in San Francisco, USA for his flight from San

Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20,1986. No date was specified for his return to San Francisco.

On December 19, petitioner checked in at the NOA counter in San Francisco airport for his scheduled departure to Manila. Despite a previous confirmation and re-confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. He therefore had to be wait-listed.

Petitioner sued NOA for damages in the RTC of Makati. NOA moved to dismiss on the ground of lack of jurisdiction based on Article 28(1) of the Warsaw Convention which states that:

An action for damage must be brought at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or of his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination.

The RTC granted the motion and dismissed the case. On appeal to the CA, the court affirmed the RTC decision.

ISSUES:

1) Whether or not Article 28(1) of the Warsaw Convention is constitutional2) Whether or not Philippine Courts has jurisdiction over the case

HELD:

1. YES. The Convention is a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country.

It is well-settled that courts will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination; the constitutional question must have been opportunely raised by the proper party; and the resolution of the question is unavoidably necessary to the decision of the case itself. 6

Courts generally avoid having to decide a constitutional question. This attitude is based on the doctrine of separation of powers, which enjoins upon the departments of the government a becoming respect for each other's acts.

The treaty which is the subject matter of this petition was a joint legislative-executive act. The presumption is that it was first carefully studied and determined to be constitutional before it was adopted and given the force of law in this country.

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The petitioner's allegations are not convincing enough to overcome this presumption. Apparently, the Convention considered the four places designated in Article 28 the most convenient forums for the litigation of any claim that may arise between the airline and its passenger, as distinguished from all other places. At any rate, we agree with the respondent court that this case can be decided on other grounds without the necessity of resolving the constitutional issue.

2. NO. Since the flight involved in the case at bar is international, the same being from the United States to the Philippines and back to the US, it is subject to the provisions of the Warsaw Convention, including Article 28(1), which enumerates the four places where an action for damages may be brought.

Petitioner claims that the lower court erred in not ruling that under Article 28(1) of the Warsaw Convention, this case was properly filed in the Philippines, because Manila was the destination of the plaintiff.

The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner’s ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of carriage between the parties indicates that NOA was bound to transport petitioner to San Francisco from Manila. Manila should therefore be considered merely an agreed stopping place and not the destination. It is the ‘destination’ and not an ‘agreed stopping place’ that controls for purposes of ascertaining jurisdiction under the Convention.

Moreover, petitioner claims that the lower court erred in not ruling that under Article 28(1) of the Warsaw Convention, this case was properly filed in the Philippines because the defendant has its domicile in the Philippines.

The structure of Article 28(1), viewed as a whole, is incompatible with the plaintiff’s claim. The article, in stating that places of business are among the bases of the jurisdiction, sets out two places where an action for damages may be brought: the country where the carrier’s principal place of business is located, and the country in which it has a place of business through which the particular contract in question was made, that is, where the ticket was bought. Adopting the plaintiff’s theory would at a minimum blur these carefully drawn distinctions by creating a third intermediate category. The plaintiff’s request to adopt this basis of jurisdiction is in effect a request to create a new jurisdictional standard for the convention.

Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article 28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business where the contract was made, and the place of destination, the article clearly meant that these three other places were not comprehended in the term “domicile”.

BACHELOR EXPRESS, INCORPORATED, and CRESENCIO RIVERA vs. THE HONORABLE COURT OF APPEALS (Sixth Division), RICARDO BETER, SERGIA BETER, TEOFILO RAUTRAUT and ZOETERA RAUTRAUT

G.R. No. 85691 July 31, 1990

Facts: 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, filed a complaint for "sum of money" against Bachelor Express, Inc. its alleged owner Samson Yasay and the driver Rivera. After due trial, the trial court issued an order dismissing the complaint. Upon appeal however, the trial court's decision was reversed and set aside.

Held: (The judgment of the CA is affirmed; they failed to overcome the presumption of fault and negligence) 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).i•t•c-aüsl 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).

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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)

RAFAEL ZULUETA, ET AL., v. PAN AMERICAN WORLD AIRWAYS, INC.

G.R. No. L-28589 January 8, 1973

CONCEPCION, C.J.:

FACTS: Both parties in this case have moved for the reconsideration of the decision of this Court promulgated on February 29, 1972. Plaintiffs maintain that the decision appealed from should be affirmed in toto. The defendant, in turn, prays that the decision of this Court be "set aside with or without a new trial, and that the complaint be dismissed, with costs; or, in the alternative, that the amount of the award embodied therein be considerably reduced."

Plaintiff Rafael Zulueta was "off-loaded" at Wake Island, for having dared to retort to defendant's agent in a tone and manner matching, if not befitting his intemperate language and arrogant attitude. As a consequence, Capt. Zentner's attempt to humiliate Rafael Zulueta had boomeranged against him (Zentner), in the presence of the other passengers and the crew. Mr. Zulueta was off-loaded, not to protect the safety of the aircraft and its passengers, but to retaliate and punish him for the embarrassment and loss of face thus suffered by defendant's agent. This vindictive motive is made more manifest by the note delivered to Mr. Zulueta by defendant's airport manager at Wake Island, Mr. Sitton, stating that the former's stay therein would be "for a minimum of one week," during which he would be charged $13.30 per day. This reference to a "minimum of one week" revealed the intention to keep him there stranded that long, for no other plane, headed for Manila, was expected within said period of time, although Mr. Zulueta managed to board, days later, a plane that brought him to Hawaii, whence he flew back to the Philippines, via Japan.

ISSUE: Whether plaintiffs has right to recover either moral or exemplary damages.

RULING: The Zuluetas had a contract of carriage with the defendant, as a common carrier, pursuant to which the latter was bound, for a substantial monetary consideration paid by the former, not merely to transport them to Manila, but, also, to do so with "extraordinary diligence" or "utmost diligence." The responsibility of the common carrier, under said contract, as regards the passenger's safety, is of such a nature, affecting as it does public interest, that it "cannot be dispensed with" or even "lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise." Here, the defendant did not only fail to comply with its obligation to transport Mr. Zulueta to Manila, but, also, acted in a manner calculated to humiliate him, to chastise him, to make him suffer, to cause to him the greatest possible inconvenience, by leaving him in a desolate island, in the expectation that he would be stranded there for a "minimum of one week" and, in addition thereto, charged therefor $13.30 a day.

It is urged by the defendant that exemplary damages are not recoverable in quasi-delicts, pursuant to Article 2231 of our Civil Code, except when the defendant has acted with "gross negligence," and that there is no specific finding that it had so acted. It is obvious, however, that in off-loading plaintiff at Wake Island, under the circumstances heretofore adverted to, defendant's agents had acted with malice aforethought and evident bad faith. If "gross negligence" warrants the award of exemplary damages, with more reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad faith. Thus, in Lopez v. PANAM, the Court held that the rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral damages (Articles 2229, 2232, New Civil Code.)

PANAM impugns the award of attorney's fees upon the ground that no penalty should be imposed upon the right to litigate; that, by law, it may be awarded only in exceptional cases; that the claim for attorney's fees has not been proven; and that said defendant was justified in resisting plaintiff's claim "because it was patently exorbitant." Moreover, Article 2208 of our Civil Code expressly authorizes the award of attorney's fees "when exemplary damages are awarded," — as they are in this case —as well as "in any other case where the court deems it just and equitable that attorney's fees ... be recovered," and We so deem it just and equitable in the present case, considering the "exceptional" circumstances obtaining therein, particularly the bad faith with which defendant's agent had acted, the place where and the conditions under which Rafael Zulueta was left at Wake Island, the absolute refusal of defendant's manager in Manila to take any step whatsoever to alleviate Mr. Zulueta's predicament at Wake and have him brought to Manila — which, under their contract of carriage, was defendant's obligation to discharge with "extra-ordinary" or "utmost" diligence — and, the "racial" factor that had, likewise, tainted the decision of defendant's agent, Capt. Zentner, to off-load him at Wake Island.

AIR FRANCE, petitioner, vs. RAFAEL CARRASCOSO and THE HONORABLE COURT OF APPEALS

SANCHEZ, J.:

Facts:

The Court of First Instance of Manila sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way of moral damages and P10,000.00 as exemplary damages.

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Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, 1958. On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a 'first class' round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff traveled in 'first class', but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the 'first class' seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a 'white man', who, the Manager alleged, had a 'better right to the seat. When asked to vacate his 'first class' seat, the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, many of the Filipino passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the 'white man' and plaintiff reluctantly gave his 'first class' seat in the plane."

Issue:

Whether or not respondent was entitled to the award of moral damages.

Held:

Exemplary damages are well awarded. The Civil Code gives the Court ample power to grant exemplary damages — in contracts and quasi-contracts. The only condition is that defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner". The manner of ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in addition to moral damages. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorney's fees. The task of fixing these amounts is primarily with the trial-court. The Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give our imprimatur thereto. Because, the facts and circumstances point to the reasonableness thereof.

Case 60 – Trans World Airlines v. CA

GR no 78656, August 30, 1988

FACTS:

Rogelio Vinluan, a practicing lawyer had to travel in April, 1979 to several cities in Europe and the U.S. to attend matters involving their clients. He entered into a contract of carrieage with petitioner from new york to san Francisco for first class accommodation, wherein the reservation was confirmed. However, when Vinluan checked-in, he was informed that there were no first class seats available for him. He was downgraded to economy class. Subsequently, he noticed two white Caucasians checked- in in the first class seats due to no show. He thus filed an action for damages against petitioner.

ISSUE:

Whether or not petitioner should be liable

RULING:

Petitioner is liable for moral and exemplary damages for vinluan’s humiliation and embarrassment, and to serve as an example to discourage repetition of similar oppressive acts. Discrimination was obvious for allowing the white Caucasians to take the first class seats while downgrading him, considering he came in first. Also the switch of planes to a smaller one due to less passengers confirming and not because of maintenance problems is tantamount to bad faith of petitioner.

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