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17. G.R. No. 80256 October 2, 1992BANKERS & MANUFACTURERS ASSURANCE CORP., petitioner,vsCOURT OS APPEALS, F. E. ZUELLIG & CO., INC. and E. RAZON, INC., respondents.

MELO, J.: After the Court of Appeals in CA-G.R. CV No. 08226 (July 8, 1987, Kapunan, Puno (P), Marigomen, JJ.) affirmed

the dismissal by Branch XVI of the Regional Trial Court of Manila of petitioner's complaint for recovery of theamount it had paid its insured concerning the loss of a portion of a shipment, petitioner has interposed theinstant petition for review on certiorari .Petitioner presents the following bare operative facts: 108 cases of copper tubings were imported byAli Trading Company. The tubings were insured by petitioner and arrived in Manila on board and vessel S/S

"Oriental Ambassador" on November 4, 1978, and turned over the private respondent E. Razon, the Manilaarrastre operator upon discharge at the waterfront. The carrying vessel is represented in the Philippines by itsagent, the other private respondent, F. E. Zuellig and Co., Inc., Upon inspection by the importer, the shipmentwas allegedly found to have sustained loses by way of theft and pilferage for which petitioner, as insurer,compensated the importer in the amount of P31,014.00.Petitioner, in subrogation of the importer-consignee and on the basis of what it asserts had been alreadyestablished that a portion of that shipment was lost through theft and pilferage forthwith concludes thattheburden of proof of proving a case of non-liability shifted to private respondents, one of whom, the carrier,

being obligated to exercise extraordinary diligence in the transport and care of the shipment. The implicationof petitioner's statement is that private respondents have not shown why they are not liable. The premises ofthe argument of petitioner may be well-taken but the conclusions are not borne out or supported by therecord.It must be underscored that the shipment involved in the case at bar was "containerized". The goods under

this arrangement are stuffed, packed, and loaded by the shipper at a place of his choice, usually his ownwarehouse, in the absence of the carrier. The container is sealed by the shipper and thereafter picked up bythe carrier. Consequently, the recital of the bill of lading for goods thus transported ordinarily would declare"Said to Contain", "Shipper's Load and Count", "Full Container Load", and the amount or quantity of goods inthe container in a particular package is only prima facie evidence of the amount or quantity which may be

overthrown by parol evidence.A shipment under this arrangement is not inspected or inventoried by the carrier whose duty is only totransport and deliver the containers in the same condition as when the carrier received and accepted thecontainers for transport. In the case at bar, the copper tubings were placed in three containers. Upon arrival inManila on November 4, 1978, the shipment was discharged in apparent good order and condition and fromthe pier's docking apron, the containers were shifted to the container yard of Pier 3 for safekeeping. Three

weeks later, one of the container vans, said to contain 19 cases of the cargo, was "stripped" in the presence ofpetitioner's surveyors, and three cases were found to be in bad order. The 19 cases of the van stripped werethen kept inside Warehouse No. 3 of Pier 3 pending delivery. It should be stressed at this point, that the three

cases found in bad order are not the cases for which the claim below was presented, for although the threecases appeared to be in bad order, the contents remained good and intact.The two other container vans were not moved from the container yard and they were not stripped. OnDecember 8, 1978, the cargo was released to the care of the consignee's authorized customs broker, the RGS

Customs Brokerage. The broker, accepting the shipment without exception as to bad order, causedelivery of the vans to the consignee's warehouse in Makati. It was at that place, when the contentwo containers were removed and inspected, that petitioner's surveyors reported, that checked agpacking list, the shipment in Container No. OOLU2552969 was short of seven cases ( seUnder the prevailing circumstances, it is therefore, not surprising why the Court of Appeals in su

trial court, simply quoted the latter, thus:It must be also considered that the subject container was not stripped of its content at the pier zonunstripped containers (together with the 19 cases removed from the stripped third container) wereto, and received by, the customs broker for the consignee without any exception or notation of bashortlanding (Exhs. 1, 2 and 3 Vessel). If there was any suspicion or indication of irregularity or tpilferage, plaintiff or consignee's representatives should have noted the same on the gate passes

that some form of protest form part of the documents concerning the shipment. Yet, no such step The shipment appears to have been delivered to the customs broker in good order and condition complete save for the three cases noted as being apparently in bad order.Consider further that the stripping of the subject container was done at the consignee's warehousaccording to plaintiff's surveyor, the loss of the seven cases was discovered. The evidence is not whether the defendants' representative were notified of, and were present at, the unsealing and othe container in the bodega. Nor is the evidence clear how much time elapsed between the releaseshipment from the pier and the stripping of the containers at consignee bodega. All these fail to dpossibility that the loss in question could have taken place after the container had left the pier. (p21, Rollo )Verily, if any of the vans found in bad condition, or if any inspection of the goods was to be donedetermine the condition thereof, the same should have been done at the pierside, the pier warehoany time and place while the vans were under the care and custody of the carrier or of the arrastreUnfortunately for petitioner, even as one of the three vans was inspected and stripped, the two oth

and the contents of the owner previously stripped were accepted without exception as to any suporder or condition by petitioner's own broker. To all appearances, therefore, the shipment was accpetitioner in good order.It logically follows that the case at bar presents no occasion for the necessity of discussing the drequired of a carrier or of the theory of prima facie liability of the carrier, for from all indidid not suffer loss or damage while it was under the care of the carrier, or of the arrastre operator,added.WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals AFFagainst petitioner.SO ORDERED.

18. JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY,(G.R. No. 52159, December 22, 1989)

FACTS:

Petitioner Pilapil, on board respondents bus was hit above his eye by a stone hurled by

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bystander. Respondents personnel lost no time in bringing him to a hospital, but eventually petitionerpartially lost his left eyes vision and sustained a permanent scar.

Thus, Petitioner lodged an action for recovery of damages before the Court of First Instance of Camarines

Sur which the latter granted. On appeal, the Court of Appeals reversed said decision.

ISSUE:

Whether or not common carriers assume risks to passengers such as the stoning in this case?

HELD:

In consideration of the right granted to it by the public to engage in the business of transporting passengersand goods, a common carrier does not give its consent to become an insurer of any and all risks to passengersand goods. It merely undertakes to perform certain duties to the public as the law imposes, and holds itselfliable for any breach thereof.

x x x

While the law requires the highest degree of diligence from common carriers in the safe transport of their

passengers and creates a presumption of negligenceagainst them, it does not, however, make the carrier an

insurer of the absolute safety of its passengers.

x x x

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful actsor negligence of other passengers or of strangers, if the common carrier's employees through the exercise ofthe diligence of a good father of a family could have prevented or stopped the act or omission.

Clearly under the above provision, a tort committed by a stranger which causesinjury to a passenger does not

accord the latter a cause of action against the carrier. The negligence for which a common carrier is heldresponsible is the negligent omission by the carrier's employees to prevent the tort from being committedwhen the same could have been foreseen and prevented by them. Further, under the same provision, it is tobe noted that when the violation of the contract is due to the willful acts of strangers, as in the instant case,the degree of care essential to be exercised by the common carrier for the protection of its passenger is onlythat of a good father of a family.

19. FORTUITOUS EVENT: EXEMPTION FROM LIABILITY

FORTUNE EXPRESS, INC. VS. COURT OF APPEALS305 SCRA 14

Facts: A bus of Fortune Express, Inc. (FEI) figured in an accident with a jeepney which resulted in the death of

several passengers including two Maranaos. It was found out that a Maranao owns said jeepney Maranaos were planning to take revenge by burning some of FEIs buses. The operations manager oadvised to take precautionary measures but just the same, three armed Maranaos were able to seizFEI and set it on fire.

Issue: Whether the seizure of the bus was a fortuitous event which Fortune Express, Inc could noliable.

Held: A fortuitous event is an occurrence which could not be foreseen or which though foreseen, This factor of unforeseen-ability is lacking in this case for despite the report that the Maranaos wto burn FEIs buses, nothing was really done by FEI to protect the safety of the passengers.

20. Gacal vs. Philippine Airlines(183 SCRA 189, G.R. No. 55300 March 16, 1990)

Facts: Plaintiffs Franklin Gacal, his wife and three others were passengers of PAL plane at Davaa flight to Manila, not knowing that the flight, were Commander Zapata with other members of MLiberation Front. They were armed with grenades and pistols. After take off, the members of MNa hijacking and directed the pilot to fly directly to Libya, later to Sabah. They were, however, forZamboanga airport for refueling, because the plane did not have enough fuel to make direct flighWhen the plane began to taxi at the runaway of Zamboanga airport, it was met by two armored camilitary.

An armored car subsequently bumped the stairs leading inside the plane. That commenced the bbetween the military and the hijackers, which led ultimately to the liberation of the planes survivinpassengers with the final score of ten passengers and three hijackers dead.

Issue: Whether or not hijacking is a case fortuito or force majeure, which would exempt an aircrliability for, damages to its passengers and personal belongings that were lost during the inciden

Held: In order to constitute a caso fortuito that would exempt from liability underArt 1174 of theis necessary that the following elements must occur: (a) the cause of the breach of obligation musindependent of human will; (b) the event must be unforeseeable or unavoidable; (c) the event muto render it impossible for the debtor to fulfill his obligation in a normal manner; (d) the debtor mfrom any participation in or aggravation of the injury to the creditor.

Applying the above guidelines, the failure to transport the petitioners safely from Davao to Manthe skyjacking incident staged buy the MNLF without connection to the private respondent, hencindependent of will of PAL or its passengers.

The events rendered it impossible for PAL to perform its obligation in a normal manner and it canfaulted for negligence on the duty performed by the military. The existence of force majeure hasestablished thus exempting PAL from payment of damages.

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21. MARANAN VS PEREZ20 SCRA 412

FACTS:Rogelio Corachea, a passenger in a taxicab ownedand operated by Pascual Perez, was stabbed and killed bythe driver, Simeon Valenzuela. Valenzuela was foundguilty for homicide by the Court of First Instance and wassentenced to suffer Imprisonment and to indemnify theheirs of the deceased in the sum of P6000. While pending

appeal, mother of deceased filed an action in the Court ofFirst Instance of Batangas to recover damages from Perezand Valenzuela. Defendant Perez claimed that the deathwas a caso fortuito for which the carrier was not liable. Thecourt a quo, after trial, found for the plaintiff and awardedher P3,000 as damages against defendant Perez. The claimagainst defendant Valenzuela was dismissed. From thisruling, both plaintiff and defendant Perez appealed to thisCourt, the former asking for more damages and the latterinsisting on non-liability.

Defendant-appellant relied solely on the rulingenunciated in Gillaco vs. Manila Railroad Co. that thecarrier is under no absolute liability for assaults of itsemployees upon the passengers.

ISSUE:Was the contention of the defendant valid?

RULING:No. The attendant facts and controlling law of thatcase and the one at bar were very different. In the Gillacocase, the passenger was killed outside the scope and thecourse of duty of the guilty employee. The Gillaco case wasdecided under the provisions of the Civil Code of 1889which, unlike the present Civil Code, did not impose uponcommon carriers absolute liability for the safety ofpassengers against willful assaults or negligent actscommitted by their employees. The death of the passenger

in the Gillaco case was truly a fortuitous event whichexempted the carrier from liability. It is true that Art. 1105of the old Civil Code on fortuitous events has beensubstantially reproduced in Art. 1174 of the Civil Code of

the Philippines but both articles clearly remove from theirexempting effect the case where the law expressly providesfor liability in spite of the occurrence of force majeure. TheCivil Code provisions on the subject of Common Carriersare new and were taken from Anglo-American Law. Thebasis of the carrier's liability for assaults on passengerscommitted by its drivers rested either on the doctrine ofrespondent superior or the principle that it was thecarrier's implied duty to transport the passenger safely.Under the second view, upheld by the majority and also bythe later cases, it was enough that the assault happens

within the course of the employee's duty. It was no defensefor the carrier that the act was done in excess of authorityor in disobedience of the carrier's orders. The carrier'sliability here was absolute in the sense that it practicallysecured the passengers from assaults committed by its ownemployees.

22. G.R. No. L-8034 November 18, 1955CORNELIA A. DE GILLACO, ET AL., plaintiffs-appellees,vs.MANILA RAILROAD COMPANY, defendant-appellant.First Assistant Corporate Counsel Federico C. Alikpala and Attorney Higino R. Francisco for appellRestituto Luna for appellees. REYES, J.B.L., J.: The Manila Railroad Company has appealed from a judgment of the Court of First Instance of Lasentencing it to pay P4,000 damages to the appellees herein, the widow and children of the late TGillaco, shot by an employee of the Company in April, 1946.The judgment was rendered upon the following stipulation of facts:That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas Gillaco, husband of the plpassenger in the early morning train of the Manila Railroad Company from Calamba, Laguna toThat when the train reached the Paco Railroad station, Emilio Devesa, a train guard of the ManilCompany assigned in the Manila-San Fernando, La Union Line, happened to be in said station wsame 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 baJapanese occupation;That because of this personal grudge, Devesa shot Gillaco with the carbine furnished to him by tRailroad 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 DeveIt is also undisputed that Devesa was convicted with homicide by final judgment of the Court ofAppellant's contention is that, on the foregoing facts, no liability attaches to it as employer of the Devesa; that it is not responsible subsidiary ex delicto, under Art. 103 of the Revised Penacrime was not committed while the slayer was in the actual performance of his ordinary duties an

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nor is it responsible ex contractu, since the complaint did not aver sufficient facts to establish such liability,and no negligence on appellant's party was shown. The Court below held the Railroad company responsible onthe ground that a contract of transportation implies protection of the passengers against acts of personalviolence by the agents or employees of the carrier.There can be no quarrel with the principle that a passenger is entitled to protection from personal violence bythe carrier or its agents or employees, since the contract of transportation obligates the carrier to transport apassenger safely to his destination. But under the law of the case, this responsibility extends only to those thatthe carrier could foresee or avoid through the exercise of the degree of car and diligence required of it.Discussing the basis of a carrier's liability under the old Civil Code of 1889 (which was in force in 1946, whenGillaco was shot) this Court said in Lasam vs. Smith (45 Phil., 657):In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the

defendant's liability, if any, is contractual, is well settled by previous decisions of the court, beginning with thecase of Rakes vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractualliability and contractual liability has been so ably and exhaustively discussed in various other cases thatnothing further need here be said upon that subject. (See Cangco vs. Manila Railroad Co., 38 Phil., 768; ManilaRailroad vs. Compaia Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia vs. Manila ElectricRailroad & Light Co., 40 Phil., 706). It is sufficient to reiterate that the source of the defendant's legal liability isthe contract of carriage; that by entering into that contract he bound himself to carry the plaintiff safely andsecurely to their destination; and that having failed to do so he is liable in damages unless he shows that thefailure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads asfollows:"No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, withthe exception of the cases in which the law expressly provides otherwise and those in which the obligationitself imposes such liability."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 latter had nomeans to ascertain or anticipate that the two would meet, nor could it reasonably foresee every personalrancor that might exist between each one of its many employees and any one of the thousands of eventualpassengers riding in its trains. The shooting in question was therefore "caso fortuito" within the definition ofarticle 105 of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; andpursuant to established doctrine, the resulting breach of appellant's contract of safe carriage with the lateTomas Gillaco was excused thereby.No doubt that a common carrier is held to a very high degree of care and diligence in the protection of itspassengers; but, considering the vast and complex activities of modern rail transportation, to require ofappellant that it should guard against all possible misunderstanding between each and every one of itsemployees and every passenger that might chance to ride in its conveyances at any time, strikes us asdemanding diligence beyond what human care and foresight can provide.The lower Court and the appellees both relied on the American authorities that particularly hold carriers to beinsurers of the safety of their passengers against willful assault and intentional ill treatment on the part oftheir servants, it being immaterial that the act should be one of private retribution on the part of the servant,

impelled by personal malice toward the passenger (10 Am. Jur. 108; Ed. Note to Gassenheimer vs. Wester R.Co. 40 LRA (NS), p. 999, et seq .) But as can be inferred from the previous jurisprudence of this Court , the CivilCode of 1889 did not impose such absolute liability (Lasam vs. Smith, supra ). The liability of a carrier as an

insurer was not recognized in this jurisdiction (Government vs. Inchausti & Co., 40 Phil.,Co. vs. Naviera Filipina, 38 Off. Gaz., 1020).Another very important consideration that must be borne in mind is that, when the crime took plaguard Devesa had no duties to discharge in connection with the transportation of the deceased frto Manila. The stipulation of facts is clear that when Devesa shot and killed Gillaco, Devesa wasguard the Manila-San Fernando (La Union) trains, and he was at Paco Station awaiting transportTutuban, the starting point of the train that he was engaged to guard. In fact, his tour of duty was 9:00 a.m., two hours after the commission of the crime. Devesa was therefore under no obligasafeguard the passenger of the Calamba-Manila train, where the deceased was riding; and the kilwas not done in line of duty. The position of Devesa at the time was that of another would be passtranger also awaiting transportation, and not that of an employee assigned to discharge any of th

that the Railroad had assumed by its contract with the deceased. As a result, Devesa's assault candeemed in law a breach of Gillaco's contract of transportation by a servant or employee of the caragree with the position taken by the Supreme Court of Texas in a similar case, where it held:The only good reason for making the carrier responsible for the misconduct of the servant perpetrown interest, and not in that of his employer, or otherwise within the scope of his employment, isservant is clothed with the delegated authority, and charge with the duty by the carrier, to executundertaking with the passenger. And it cannot be said, we think, that there is any such delegationemployees at a station with reference to passenger embarking at another or traveling on the train.we are speaking only of the principle which holds a carrier responsible for wrong done to passengservants acting in their own interest, and not in that of the employer. That principle is not the ordirule, respondent superior, by which the employer is held responsible only for act or omissionsin the scope of his employment; but the only reason in our opinion for a broader liability arises frthat the servant, in mistreating the passenger wholly for some private purpose of his own, in the vviolates the contractual obligation of the employer for the performance of which he has put the emhis place. The reason does not exist where the employee who committed the assault was never in which it became his duty to his employer to represent him in discharging any duty of the latter towpassenger. The proposition that the carrier clothes every employee engaged in the transportation with the comprehensive duty of protecting every passenger with whom he may in any way come and hereby makes himself liable for every assault commited by such servant, without regard to twhether or not the passenger has come within the sphere of duty of that servant as indicated by themployment, is regarded as not only not sustained by the authorities, but as being unsound and oboth to the employer and the employee. (Houston & T. C. R. Co. vs. Bush, 32 LRA (NS), p. 1205Wherefore, the judgment appealed from is reversed and the complaint ordered dismissed, withouordered.

23. Bachelor Express v. CAFactsBus No. 800 was owned by Bachelor Express, Inc. (Bachelor) and driven by Cresencio Rivera Th

from Davao on its way to Cagayan de Oro City. En route, the bus picked up a passenger. A few mpassenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic passengers. When the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were founthe road. Beter was dead due to head injuries while Rauraut was suffering from severe injuries, w

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her death later. The passenger assailant alighted from the bus and ran toward the bushes but was killed by thepolice. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut filed a complaint for "sum of money"against Bachelor, its alleged owner Samson Yasay, and Rivera.

In their answer, the petitioners denied liability for the death of Beter and Rautraut, alleging the following:1) that the driver was able to transport his passengers safely to their respective places of destination exceptBeter and Rautraut who jumped off the bus without the knowledge and consent;2that Bachelor exercised due diligence in the choice of its employees to avoid as much as possible accidents;3) said stampede was very much beyond the control of the defendants; and4) petitioners were not parties to the incident complained of as it was an act of a third party who is not in anyway connected with the defendants and of which the latter have no control and supervision

RTC: dismissed case; CA: reversed

Petitioners maintain that they were not negligent since:1) the commotion was triggered by th e act of the passenger who ran amuck and stabbed another passengerof the bus;2) that presumably out of fear and moved by that human instinct of self-preservation Beter and Rautraut jumped off the bus while the bus was still running resulting in their untimely death;3) that they should not be liable for the acts of third person over whom they have no control or supervision

Issue: W/N Bachelor is liable (since accident was NOT force majeure)? Yes, Petition DismissedHeld:1) There is no doubt that Bachelor is a common carrier. Hence, it is bound to carry its passengers safely as faras human care and foresight can provide using the utmost diligence of very cautious persons, with a dueregard for all the circumstances.

In the case at bar, Beter and Rautraut were passengers of a bus belonging to petitioner Bachelor Express, Inc.and, while passengers of the bus, suffered injuries which caused their death. Article 1756 provides thatBachelor Express, Inc. is presumed to have acted negligently, unless it can prove that it had observedextraordinary diligence in accordance with Articles 1733 and 1755.

2) Bachelor denies liability by contending that the death of the said passengers was caused by a third personwho was beyond its control and supervision. In order to overcome the presumption of fault or negligenceunder the law, Bachelor must prove that the vehicular incident resulting in the death of passengers Beter andRautraut was caused by force majeure over which the common carrier did not have any control. The elementsof FM are:(1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with hisobligation, must be independent of the human will. (2) It must be impossible to foresee the event whichconstitutes 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 normalmanner(4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to thecreditor.

However, to be absolved from liability, it is not enough that the accident was caused by force majcommon carrier must still prove that it was not negligent in causing the injuries resulting from su

ITCAB: Facts show that Bachelor was unable to disprove negligence since:1) the bus driver did not immediately stop the bus at the height of the commotion; 2) the bus was from a full stop ;3) the victims fell from the bus door when it was opened or gave way while the bus was still runn4) the conductor panicked and blew his whistle after people had already fallen off the bus; and5) the bus was not properly equipped with doors in accordance with law, it is clear that the petitiofailed to overcome the presumption of fault and negligence found in the law governing common

Finally, the mere fact that common carri ers are not insurers of their passengers does not hois obligated to observe extraordinary diligence in transporting safely the passengers to their destiheld in Batangas Laguna Tayabas Co. v IAC)

24. Williams vs Yatco

25. PAL vs CA

26. G.R. No. 118664. Augu st 7, 1998]JAPAN AIRLINES, petitioner, vs. THE COURT OF APPEALS ENRIQUE AGANA, MARIA AADALIA B. FRANCISCO and JOSE MIRANDA, respondents .D E C I S I O NROMERO, J.:Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking thedecision of the Court of Appeals ,[1] which affirmed with modification the award of damages mcourt in favor of herein private respondents Enrique Agana, Maria Angela Nina Agana, Adelia FJose Miranda.On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francibound for Manila. Likewise, on the same day private respondents Enrique Agana, Maria Angeland Adelia Francisco left Los Angeles , California for Manila via JAL flight No. JL 061. As an itravelling on the said airline, b oth flights were to make an overnight stopover at Narita, Japan, expense, thereafter proceeding to Manila the following day.Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikkonight. The next day, private respondents, on the final leg of their journey, went to the airport to ttheir flight to Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketedAquino International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, trip to Manila was cancelled indefinitely.To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passeflight No. 741 due to depart on June 16, 1991 and also paid for the hotel expenses for their unexp

http://sc.judiciary.gov.ph/jurisprudence/1998/aug1998/118664.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1998/aug1998/118664.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1998/aug1998/118664.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1998/aug1998/118664.htm#_edn1

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overnight stay. On June 16, 1991, much to the dismay of the private respondents, their long anticipated flightto Manila was again cancelled due to NAIAs indefinite closure. At this point, JAL informed the privaterespondents that it would no longer defray their hotel and accommodation expense during their stay in Narita.Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to pay fortheir accommodations and meal expenses from their personal funds from June 16 to June 21, 1991. Theirunexpected stay in Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.Obviously, still reeling from the experience, private respondents, on July 25, 1991, commenced an action fordamages against JAL before the Regional Trial Court of Quezon City, Branch 104 .[2] To support their claim,private respondents asserted that JAL failed to live up to its duty to provide care and comfort to its strandedpassengers when it refused to pay for their hotel and accommodation expenses from June 16 to 21, 1991 atNarita, Japan. In other words, they insisted that JAL was obligated to shoulder their expenses as long as they

were still stranded in Narita. On the other hand, JAL denied this allegation and averred that airlinepassengers have no vested right to these amenities in case a flight is cancelled due to force majeure. On June 18, 1992, the trial court rendered its judgment in favor of private respondents holding JAL liable fordamages, viz.:WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan Airlines to pay theplaintiffs Enrique Agana, Adalia B. Francisco and Maria Angela Nina Agana the sum of One million TwoHundred forty-six Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda the sum ofThree Hundred Twenty Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual, moral andexemplary damages and pay attorneys fees in the amount of Two Hundred Thousand Pesos ( P200,000.00),and to pay the costs of suit. Undaunted, JAL appealed the decision before the Court of Appeals, which, however, with the exception oflowering the damages awarded affirmed the trial courts finding ,[3] thus:Thus, the award of moral damages should be as it is hereby reduce d to P200,000.00 for each of the plaintiffs,the exemplary damages to P 300,000.00 and the attorneys fees to P100,000.00 plus the costs.WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby AFFIRMED in all otherrespects. JAL filed a motion for reconsideration which proved futile and unavailing . [4] Failing in its bid to reconsider the decision, JAL has now filed this instant petition.The issue to be resolved is whether JAL, as a common carrier has the obligation to shoulder the hotel andmeal expenses of its stranded passengers until they have reached their final destination, even if the delaywere caused by force majeure . To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL from proceeding to Manila onschedule. Likewise, private respondents concede that such event can be considered as force majeure sincetheir delayed arrival in Manila was not imputable to JAL .[5] However, private respondents contend that while JAL cannot be held responsible for the delayed arrival inManila, it was nevertheless liable for their living expenses during their unexpected stay in Narita since airlineshave the obligation to ensure the comfort and convenience of its passengers. While we sympathize with theprivate respondents plight, we are unable to accept this contention. We are not unmindful of the fact that in a plethora of cases we have consistently ruled that a contract totransport passengers is quite different in kind and degree from any other contractual relation. It is safe toconclude that it is a relationship imbued with public interest. Failure on the part of the common carrier to liveup to the exacting standards of care and diligence renders it liable for any damages that may be sustained by

its passengers. However, this is not to say that common carriers are absolutely responsible for aldamages even if the same were caused by a fortuitous event. To rule otherwise would render theforce majeure, as an exception from any liability, illusory and ineffective. Accordingly, there is no question that when a party is unable to fulfill his obligation because of majeure, the general rule is that he cannot be held liable for damages for non -performwhen JAL was prevented from resuming its flight to Manila due to the effects of Mt. Pinatubo eruwhatever losses or damages in the form of hotel and meal expenses the stranded passengers incube charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of respondents for unexpected overnight stay on June 15, 1991.Admittedly, to be stranded for almost a week in a foreign land was an exasperating experience forespondents. To be sure, they underwent distress and anxiety during their unanticipated stay in

their predicament was not due to the fault or negligence of JAL but the closure of NAIA to internflights. Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the amenities opassengers by reason of a fortuitous event is too much of a burden to assume.Furthermore, it has been held that airline passengers must take such risks incident to the mode of this regard, adverse weather conditions or extreme climatic changes are some of the perils involvtravel, the consequences of which the passenger must assume or expect. After all, common carrthe insurer of all risks .[8] Paradoxically, the Court of Appeals, despite the presence of force majeure, still ruledour decision in PAL v. Court of Appeals ,[9] thus:The position taken by PAL in this case clearly illustrates its failure to grasp the exacting slaw. Undisputably, PALs diversion of its flight due to inclement weather was a fortuitous event.such occurrence did not terminate PALs contract with its passengers. Being in the busthe sole one to operate in the country, PAL is deemed equipped to deal with situations as in the cabar. What we said in one case once again must be stressed, i.e., the relation of carrier and passencontinues until the latter has been landed at the port of destination and has left the carriers prePAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfortand safety of its stranded passengers until they have reached their final destinati on. On this scorfailed considering the then ongoing battle between government forces and Muslim rebels in Cotathe fact that the private respondent was a stranger to the place. The reliance is misplaced. The factual background of the PAL case is different from the instant that case there was indeed a fortuitous event resulting in the diversion of the PAL flight. Howevunforeseen diversion was worsened when private respondents (p assenger) was left at tnot even hitch a ride in a Ford Fiera loaded with PAL personnel, [10] not to mention the apPAL station manager as to the predicament of the stranded passengers . [11] In light of thheld that if the fortuitous event was accompanie d by neglect and malfeasance by the carrieaction for damages against the carrier is permissible. Unfortunately, for private respondents, nonconditions are present in the instant petition.We are not prepared, however, to completely absolve petitioner JAL from any liability. It must bprivate respondents bought tickets from the United States with Manila as their final destination.

was no longer required to defray private respondents living expenses during their staythe fortuitous event, JAL had the duty to make the necessary arrangements to transport private on the first available connecting flight to Manila. Petitioner JAL reneged on its obligation to lookcomfort and convenience of its passengers when it declassified private respondents from transit pa

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to new passengers as a result of which private respondents were obliged to make the necessaryarrangements themselves for the next flight to Manila. Private respondents were placed on thewaiting list from June 20 to June 24. To assure themselves of a seat on an available flight, they werecompelled to stay in the airport the whole day of June 22, 1991 and it was only at 8:00 p.m. of the aforesaiddate that they were advised that they could be accommodated in said flight which flew at about 9:00 a.m. thenext day.We are not oblivious to the fact that the cancellation of JAL flights to Manila from June 15 to June 21, 1991caused considerable disruption in passenger booking and reservation. In fact, it would be unreasonable toexpect, considering NAIAs closure, that JAL flight operations would be normal on the days affected.Nevertheless, this does not excuse JAL from its obligation to make the necessary arrangements to transportprivate respondents on its first available flight to Manila. After all, it had a contract to transport private

respondents from the United States to Manila as their final destination.Consequently, the award of nominal damages is in order. Nominal damages are adjudicated in order that aright of a plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized andnot for the purpose of indemnifying any loss suffered by him . [12] The court may award nominal damages inevery obligation arising from any source enumerated in Article 1157, or in every case where any property righthas been invaded .[13] WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated December 22, 1993 ishereby MODIFIED. The award of actual, moral and exemplary damages is hereby DELETED. Petitioner JAL isordered to pay each of the private respondents nominal damages in the sum of P100,000.00 each includingattorneys fees of P50,000.00 plus costs.

27. G.R. No. L-55347 October 4, 1985PHILIPPINE NATIONAL RAILWAYS, petitioner,vs.THE HONORABLE COURT OF APPEALS and ROSARIO TUPANG, respondents.

Arturo Samaniego for private respondent.

ESCOLIN, J.: Invoking the principle of state immunity from suit, the Philippine National Railways, PNR for short, institutedthis petition for review on certiorari to set aside the decision of the respondent Appellate Court which heldpetitioner PNR liable for damages for the death of Winifredo Tupang, a paying passenger who fell off a trainoperated by the petitioner.The pertinent facts are summarized by the respondent court as follows:The facts show that on September 10, 1972, at about 9:00 o'clock in the evening, Winifredo Tupang, husbandof plaintiff Rosario Tupang, boarded 'Train No. 516 of appellant at Libmanan, Camarines Sur, as a payingpassenger bound for Manila. Due to some mechanical defect, the train stopped at Sipocot, Camarines Sur, forrepairs, taking some two hours before the train could resume its trip to Manila. Unfortunately, upon passing

Iyam Bridge at Lucena, Quezon, Winifredo Tupang fell off the train resulting in his death.The train did not stopdespite the alarm raised by the other passengers that somebody fell from the train. Instead, the trainconductor Perfecto Abrazado, called the station agent at Candelaria, Quezon, and requested for verification of

the information. Police authorities of Lucena City were dispatched to the Iyam Bridge where theylifeless body of Winifredo Tupang.As shown by the autopsy report, Winifredo Tupang died of cardio-respiratory failure due to mashemorrhage due to traumatic injury [Exhibits B and C, Folder of Exhibits],Tupang was later burcemetery of Lucena City by the local police authorities. [Rollo, pp. 91-92]Upon complaint filed by the deceased's widow, Rosario Tupang, the then Court of First Instance otrial, held the petitioner PNR liable for damages for breach of contract of carriage and ordered "toplaintiff the sum of P12,000,00 for the death of Winifredo Tupang, plus P20,000.00 for loss of hicapacity and the further sum of P10,000.00 as moral damages, and P2,000.00 as attorney's fees, aOn appeal, the Appellate Court sustained the holding of the trial court that the PNR did not exerutmost diligence required by law of a common carrier. It further increased the amount adjudicatedcourt by ordering PNR to pay the plaintiff an additional sum of P5,000.00 as exemplary damagesMoving for reconsideration of the above decision, the PNR raised for the first time, as a defense, of state immunity from suit. It alleged that it is a mere agency of the Philippine government withor separate personality of its own, and that its funds are governmental in character and, therefore,to garnishment or execution. The motion was denied; the respondent court ruled that the ground acould not be raised for the first time on appeal.Hence, this petition for review.The petition is devoid of merit. The PNR was created under Rep. Act 4156, as amended. Section Act provides:The Philippine national Railways shall have the following powers:a. To do all such other things and to transact all such business directly or indirectly necessary, inconducive to the attainment of the purpose of the corporation; andb. Generally, to exercise all powers of a corporation under the Corporation Law.Under the foregoing section, the PNR has all the powers, the characteristics and attributes of a co

under the Corporation Law. There can be no question then that the PNR may sue and be sued andsubjected to court processes just like any other corporation. 2 The petitioner's contention that the funds of the PNR are not subject to garnishment or execution raises a question of first impression. In Philippine National Railways v. Union de MaquinistasJustice Fernando, later Chief Justice, said. "The main issue posed in this certiorari proceeding, wthe funds of the Philippine National Railways, could be garnished or levied upon on execution wtwo recent decisions, the Philippine National Bank v. Court of Industrial Relations [81 SNational Bank v. Hon. Judge Pabalan [83 SCRA 595]. This Court in both cases answered theaffirmative. There was no legal bar to garnishment or execution. The argument based on non-suastate allegedly because the funds are governmental in character was unavailing.So it must be agaIn support of the above conclusion, Justice Fernando cited the Court's holding in PhilipCourt of Industrial Relations , to wit: "The premise that the funds could be spoken of as public be accepted in the sense that the People's Homesite and Housing Corporation was a governmententity. It does not follow though that they were exempt from garnishment. National ShiCorporation v. Court of Industrial Relations is squarely in point. As was explicitly stated in Justice, later Chief Justice, Concepcion: "The allegation to the effect that the funds of the NASSCfunds of the government, and that, as such, the same may not be garnished, attached or levied upuntenable for, as a government- owned and controlled corporation, the NASSCO has a personalit

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distinct and separate from that of the Government. It has-pursuant to Section 2 of Executive Order No. 356,dated October 23, 1950 * * *, pursuant to which the NASSCO has been established- 'all the powers of acorporation under the Corporation Law * * *. 4 As far back as 1941, this Court in the case of Manila Hotel Employees Association v. Manila Hotel Co ., 5 laiddown the rule that "when the government enters into commercial business, it abandons its sovereign capacityand is to be treated like any other corporation. [Bank of the U.S. v. Planters' Bank, 9 Waitch 904, 6 L. ed. 244].By engaging in a particular business through the instrumentality of a corporation the government divestsitself pro hac vice of its sovereign character, so as to render the corporation subject to the rules of lawgoverning private corporations. 6 Of Similar import is the pronouncement in Prisco v. CIR ,' that "when thegovernment engages in business, it abdicates part of its sovereign prerogatives and descends to the level of acitizen, ... . " In fine, the petitioner PNR cannot legally set up the doctrine of non-suability as a bar to the

plaintiff's suit for damages.The appellate court found, the petitioner does not deny, that the train boarded by the deceased WinifredoTupang was so over-crowded that he and many other passengers had no choice but to sit on the openplatforms between the coaches of the train. It is likewise undisputed that the train did not even slow downwhen it approached the Iyam Bridge which was under repair at the time, Neither did the train stop, despitethe alarm raised by other passengers that a person had fallen off the train at lyam Bridge. 7 The petitioner has the obligation to transport its passengers to their destinations and to observe extraordinarydiligence in doing so. Death or any injury suffered by any of its passengers gives rise to the presumption that itwas negligent in the performance of its obligation under the contract of carriage. Thus, as correctly ruled bythe respondent court, the petitioner failed to overthrow such presumption of negligence with clear andconvincing evidence.But while petitioner failed to exercise extraordinary diligence as required by law, 8 it appears that thedeceased was chargeable with contributory negligence. Since he opted to sit on the open platform betweenthe coaches of the train, he should have held tightly and tenaciously on the upright metal bar found at the sideof said platform to avoid falling off from the speeding train. Such contributory negligence, while not exemptingthe PNR from liability, nevertheless justified the deletion of the amount adjudicated as moral damages. By thesame token, the award of exemplary damages must be set aside. Exemplary damages may be allowed only incases where the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. 9Therebeing no evidence of fraud, malice or bad faith on the part of petitioner, the grant of exemplary damagesshould be discarded.WHEREFORE, the decision of the respondent appellate court is hereby modified by eliminating therefrom theamounts of P10,000.00 and P5,000.00 adjudicated as moral and exemplary damages, respectively. No costs.SO ORDERED.

28. ISAAC vs. AL AMMEN TransFACTS:

May 31, 1951: Cesar Isaac boarded Bus No. 31 from Ligao, Albay bound for Pili, Camarines Sur and seated

himself on the left side resting his left arm on the window sill but with his left elbow outside the windowBefore reaching his destination, a pick-up car at full speed and was running outside of its proper lane camefrom the opposite direction

The driver of the bus swerved the bus to the very extreme right of the road until its front and reargone over the pile of stones or gravel situated on the rampart of the road.The bus could not bus farther right and run over a greater portion of the pile of gravel, the peak oabout 3 feet high, without endangering the safety of his passengers.Despite efforts, the rear left side of the bus was hit by the pick-up carHe was rushed to a hospital in Iriga, Camarines Sur where he was given blood transfusion to savAfter 4 days, he was transferred to another hospital in Tabaco, Albay, where he under went treatmmonthsLater, he was moved to the Orthopedic Hospital where he was operated on and stayed for anotherHe incurred expenses of P623.40, excluding medical fees which were paid by A.L. Ammen TranTrial Court: Dismissed the complaint - collision occurred due to the negligence of the driver of t

ISSUE: W/N if there is no negligence on the part of the common carrier but that the accident resuinjuries is due to causes which are inevitable and which could not have been avoided or anticipanotwithstanding the exercise of that high degree of care and skill which the carrier is bound to exsafety of his passengers neither the common carrier nor the driver is liable therefor

HELD: YES. Appealed decision is AFFIRMED.

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, aobserve extra ordinary diligence in the vigilance over the goods and for the safety ofthe passengers transported by them according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734,1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is furthearticles 1755 and 1756 Ooom.

ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foprovide, using the utmost diligence of very cautious persons, with a due regard for all the circum

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have bor to have acted negligently, unless they prove that they observed extraordinary diligence as presarticles 1733 and 1755.

principles governing the liability of a common carrier:the liability of a carrier is contractual and arises upon breach of its obligation. There is breach if iextraordinary diligence according to all circumstances of each casea carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, havregard for all the circumstances

a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to, pabeing its duty to prove that it exercised extraordinary diligencethe carrier is not an insurer against all risks of travel

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where a carrier's employee is confronted with a sudden emergency, the fact that he is obliged to act quicklyand without a chance for deliberation must be taken into account, and he is held to the some degree of carethat he would otherwise be required to exercise in the absence of such emergency but must exercise onlysuch care as any ordinary prudent person would exercise under like circumstances and conditions, and thefailure on his part to exercise the best judgment the case renders possible does not establish lack of care andskill on his partConsidering all the circumstances, we are persuaded to conclude that the driver of the bus has done what aprudent man could have done to avoid the collisionIt is true that Isaac's contributory negligence cannot relieve A.L. Ammen of itsliability but will only entitle it toa reduction of the amount of damage caused (Article 1762, new Civil Code), but this is a circumstance whichfurther militates against the position taken by Isaac

29. G.R. No. 144723 February 27, 2006

LARRY ESTACION, Petitioner,vs.NOE BERNARDO, thru and his guardian ad l i t em ARLIE BERNARDO, CECILIABANDOQUILLO and GEMINIANO QUINQUILLERA, Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari filed by Larry Estacion (petitioner) seeking toannul the Decision dated April 17, 200 01 of the Court of Appeals (CA) in CA-GR CV No.41447 which affirmed in toto the decision of the Regional Trial Court (RTC) of DumagueteCity, Branch 41, Negros Oriental, holding petitioner and his driver Bienvenido Gerosano(Gerosano) liable for damages for the injury sustained by Noe Bernardo (respondent Noe).

Also assailed is the appellate court s Resolution dated August 16, 2000 2 denying petitionersmotion for reconsideration.

In the afternoon of October 16, 1982, respondent Noe was going home to Dumaguete fromCebu, via Bato and Tampi. At Tampi, he boarded a Ford Fiera passenger jeepney with plateno. NLD 720 driven by respondent Geminiano Quinquillera (Quinquillera), owned byrespondent Cecilia Bandoquillo (Bandoquillo), and was seated on the extension seat placedat the center of the Fiera. From San Jose , an old woman wanted to ride, so respondent Noe

offered his seat. Since the Fiera was already full, respondent Noe hung or stood on the leftrear carrier of the vehicle. Somewhere along Barangay Sto. Nio, San Jose, NegrosOriental, between kilometers 13 and 14, the Fiera began to slow down and then stopped by

the right shoulder of the road to pick up passengers. Suddenly, an Isuzu cargo truck, oby petitioner and driven by Gerosano, which was traveling in the same direction, hit tend portion of the Fiera where respondent Noe was standing. Due to the tremendous the cargo truck smashed respondent Noe against the Fiera crushing his legs and feet wmade him fall to the ground. A passing vehicle brought him to the SillimanMedical Center where his lower left leg was amputated.

Police investigation reports showed that respondent Noe was one of the 11 passenthe Fiera who suffered injuries; that when the Fiera stopped to pick up a passenger,the cargo truck bumped the rear left portion of the Fiera; that only one tire mark fr

front right wheel of the cargo truck was seen on the road. A sketch of the accident wadrawn by investigator Mateo Rubia showing the relative positions of the two vehicledistances from the shoulder of the road and the skid marks of the right front wheel of truck measuring about 48 feet.

On February 18, 1993, respondent Noe, through his guardian ad litem Awith the RTC of Dumaguete City a complain t3 for damages arising frompetitioner as the registered owner of the cargo truck and his driver Gerosano. He allegthat the proximate cause of his injuries and suffering was the reckless imprudence ofGerosano and petitioners negligence in the selection of a reckless driver and for opervehicle that was not roadworthy. He prayed for actual damages, loss of income, moraand exemplary damages , attorneys f ees, litigation expenses and costs of suit.

Petitioner and his driver Gerosano filed their Answe r 4 denying the material complaint. They, in turn, filed a third party complain t5 against respondents BQuinquillera, as owner and driver respectively of the Fiera. They alleged that it was treckless imprudence of respondent driver Quinquillera and his clear violation of the rules and regulations which was the proximate cause of the accident and asked forindemnification for whatever damages they would be sentenced to pay. RespondentsBandoquillo and Quinquillera filed their Answer to the third party complaint asking fdismissal of the third party complaint and for payment of attorneys fees.

Driver Gerosano was charged criminally for reckless imprudence resulting to multiplphysical injuries with damage to property before the Municipal Circuit Trial Court (MPamplona-Amlan and San Jose, Negros Oriental. On November 16, 1987, the MCTCrendered its decisio n 6 finding him guilty of the crime charged and was sentencedmonths and one day to two years and four months and to pay the costs.

On February 18, 1993, the RTC rendered its judgment in the civil case ,7portion of which reads:

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WHEREFORE, in view of the foregoing, judgment is hereby rendered, ordering defendantsGerosano and Estacion, to pay plaintiff, j ointly or solidarily, the following:

1. P129,584.20 for actual damages in the form of medical and hospitalization expenses;

2. P50,000.00 for moral damages, consisting of mental anguish, moral shock, seriousanxiety and wounded feelings;

3. P 10,000.00 for attorneys fees; and

4. P5,000.00 for litigation expenses.

SO ORDERED .8

The trial court ruled that the negligence of Gerosano, petitioners driver, is the direct andproximate cause of the incident and of the injuries suffered by respondent Noe; thatGerosanos gross negligence and reckless imprudence had been confirmed by theJudgment in Criminal Case No. 463; that based on the findings of the police investigator, thefaulty brakes caused the cargo truck to bump the Fiera; that the Traffic Accident Reportshowed that the tire mark of the cargo truck measuring 48 feet is visibly imprinted on theroad where the incident took place indicating that the said vehicle was speeding fast; thatthe existence of one tire mark of the cargo truck proved that the said vehicle had a faultybrake, otherwise, it would have produced two tire marks on the road; and that thephotographs taken right after the incident also showed who the guilty party was.

The trial court did not give credence to the argument of petitioner and his driver that thetruck was properly checked by a mechanic before it was dispatched for a trip. It found thatpetitioner is negligent in maintaining his vehicle in good condition to prevent any accident tohappen; that petitioner is liable under Article 2180 of the Civil Code as employer of driverGerosano for being negligent in the selection and supervision of his driver as well as formaintaining and operating a vehicle that was not roadworthy; and that petitioner and hisdriver are solidarily liable for all the natural and probable consequences of their negligentacts or omissions. The trial court dismissed the third party complaint filed by petitioner andhis driver against respondents Bandoquillo and Quinquillera.

Dissatisfied, only petitioner appealed to the CA. On April 17, 2000, the CA rendered theassailed decision which affirmed in toto the decision of the trial court. Petitioners motion forreconsideration was denied in a Resolution dated August 16, 2000.

Hence, the herein petition for review.

Petitioner submits the following issues for resolution :9

WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING THAT PETITLARRY ESTACION EXERCISED THE DUE DILIGENCE OF A GOOD FATHERFAMILY TO PREVENT DAMAGE DESPITE ABUNDANCE OF EVIDENCE TOEFFECT;

WHETHER THE COURT OF APPEALS ERRED IN NOT HOLDING THAT PETLARRY ESTACION EXERCISED DUE DILIGENCE IN THE SELECTION ANDSUPERVISION OF HIS EMPLOYEE AND IN MAINTAINING HIS CARGO TRUROADWORTHY AND IN GOOD OPERATING CONDITION;

WHETHER THE COURT OF APPEALS ERRED IN EXONERATING RESPONDCECILIA BANDOQUILLO AND GEMINIANO QUINQUILLERA.

In his Memorandum, petitioner contends that he was able to establish that he observediligence of a good father of a f amily not only in the selection of his employees but amaintaining his truck roadworthy and in good operating condition; that the CA erred exonerating respondents Bandoquillo and Quinquillera, owner and driver, respectivelFiera from liability when their negligence was the proximate cause of respondent Noeinjuries; that respondent Noes act of standing i n the rear carrier of the Fiera negligence on his part which was aggravated by the fact that respondent Quinquilleraovertook the cargo truck driven by Gerosano on the curve and suddenly cut into the llane; that due to the overloading of passengers, Gerosano was not able to see the braklights of the Fiera when it suddenly stopped to pick up passengers; that overloading iviolation of the applicable traffic rules and regulations and Article 2185 is explicit wprovides that "unless there is proof to the contrary, it is presumed that a person drivinmotor vehicle has been negligent if at the time of the mishap, he was violating any trregulation"; that since the Fiera driver was negligent, there arises a presumption thatrespondent Bandoquillo, as owner of the Fiera, is negligent in the selection and superof her employee; that assuming petitioner Estacion and his driver are not entirely blamthe negligence of Quinquillera is sufficient basis why the respective liabilities shoulddelineated vis--vis their degree of negligence consistent with Article 2179Code.

Respondent Noe filed his Memorandum alleging that the first and second issues raisefactual in nature which are beyond the ambit of a petition for review; that petitioner fovercome the presumption of negligence thus he is liable for the negligence of his dr

Gerosano; and that the third issue is best addressed to respondents Bandoquillo andQuinquillera.

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Respondents Bandoquillo and Quinquillera failed to file their memorandum despite receipt ofour Resolution requiring them to submit the same.

We find it apropos to resolve first the third issue considering that the extent of the liability ofpetitioner and his driver is dependent on whether respondents Bandoquillo and Quinquilleraare the ones negligent in the vehicular mishap that happened in the afternoon of October 16,1982 where respondent Noe was injured, resulting in the amputation of his left leg.

At the outset, the issue raised is factual in nature. Whether a person is negligent or not is aquestion of fact which we cannot pass upon in a petition for review on certiorari , as our

jurisdiction is limited to reviewing errors of law .11 As a rule, factual findings of the trial court,affirmed by the CA, are final and conclusive and may not be reviewed on appeal. Theestablished exceptions are: (1) when the inference made is manifestly mistaken, absurd orimpossible; (2) when there is grave abuse of discretion; (3) when the findings are groundedentirely on speculations, surmises or conjectures; (4) when the judgment of the CA is basedon misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the CA, inmaking its findings, went beyond the issues of the case and the same is contrary to theadmissions of both appellant and appellee; (7) when the findings of fact are conclusionswithout citation of specific evidence on which they are based; (8) when the CA manifestlyoverlooked certain relevant facts not disputed by the parties and which, if properlyconsidered, would justify a different conclusion; and (9) when the findings of fact of the CAare premised on the absence of evidence and are contradicted by the evidence on record .12

On the basis of the records of this case, we find that there is cogent reason for us to reviewthe factual findings of the lower courts to conform to the evidence on record and considerthis case as an exception to the general rule.

The trial court and the appellate court had made a finding of fact that the proximate cause ofthe injury sustained by respondent Noe was the negligent and careless driving of petitionersdriver, Gerosano, who was driving at a fast speed with a faulty brake when the accidenthappened. We see no cogent reason to disturb the trial courts finding in giving morecredence to the testimony of respondent Noe than the testimony of Gerosano, petitionerstruck driver.

The correctness of such finding is borne by the records. In his testimony, Gerosano said thathe was driving the truck at a speed of about 40 kilometers per hour ;13 that the Fiera wasbehind him but upon reaching the curve , i.e., after passing San Jose going to Dumaguete,the Fiera overtook him and blocked his way ;14 that he was 10 meters from the Fiera prior to

the impac t15

when he applied the brake s16

and tried to evade the Fiera but he still hit it .17

We agree with the trial court and the appellate court when they found that the truck wasrunning at a fast speed because if Gerosano was really driving at a speed of 40 kilometers

per hour and considering that the distance between the truck and the Fiera in front waabout 10 meters, he had more than enough time to slacken his speed and apply his breavoid hitting the Fiera. However, from the way the truck reacted to the application ofbrakes, it showed that Gerosano was driving at a fast speed because the brakes skiddelengthy 48 feet as shown in the sketch of police investigator Rubia of the tire marks vprinted on the road.

Moreover, the photographs taken after the incident and the testimony of Gerosano as extent of damage to the truck, i.e. the trucks windshield was broken and its hodamaged after the impact ,18 further support the finding of both courts that Gerosdriving at a fast pace.

The accident was further caused by the faulty brakes of the truck. Based on the sketcreport, there was only one tire mark of the right tire of the cargo truck during the incidwhich, as testified to by police investigator Rubia, meant that the brakes of the truck not aligned otherwise there would be two tire marks impressions on the roadpetitioner contends that there are other factors to explain why only one skid mark waat the place of the incident, such as the angle and edges of the road as well as the balaof the weight of the cargo laden in the truck, he failed to show that indeed those factopresent to prove his defense. Such claim cannot be given credence considering thatinvestigator Rubia testified that the body of the truck was very much on the road,over the shoulder of the road ,20 and the road was straight .21 Indeed, it is thpetitioners driver of driving the cargo truck at a fast speed coupled with faulty brakewas the proximate cause of respondent Noes injury.

Petitioners claim that right after overtaking the ca rgo truck, the Fiera driver stopped to pick up three passengers from the side of the road; that the overloading ofpassengers prevented his truck driver from determining that the Fiera had pulled overup passengers as the latters brakelig hts were obstructed by the passengers starear portion of the Fiera were not substantiated at all. Respondent Quinquillera, the drthe Fiera, testified that the distance from the curve of the road when he stopped and piup passengers was estimated to be about 80 to 90 feet .22 In fact, from theinvestigator Rubia, it showed a distance of 145 feet from the curve of the road to the stire mark (which measured about 48 feet) visibly printed on the road to the Fiera. Thismeans that the Fiera driver did not stop immediately after the curve as what petitioneclaims. Moreover, Gerosano admitted that his truck was at a distance of 10 meters prthe impact. The distance between the two vehicles was such that it would be impossibGerosano not to have seen that the Fiera had pulled over to pick up passengers.

However, we agree with petitioner that respondent Noes act of standing of the Fiera exposing himself to bodily injury is in itself negligence on his part. We fithe trial court and the CA erred when they failed to consider that respondent Noe was

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guilty of contributory negligence. Contributory negligence is conduct on the part of theinjured party, contributing as a legal cause to the harm he has suffered, which falls belowthe standard to which he is required to conform for his own protection. 23

It has been established by the testimony of respondent Noe that he was with four or fiveother persons standing on the rear carrier of the Fiera since it was already full. RespondentNoes act of standing on the left rear carrier portion of the Fiera showed his lack of ordinarycare and foresight that such act could cause him harm or put his life in danger. It has beenheld that "to hold a person as having contributed to his injuries, it must be shown that heperformed an act that brought about his injuries in disregard of warning or signs of animpending danger to health and body .24 Respondent Noes act of hanging on the Fiera isdefinitely dangerous to his life and limb.

We likewise find merit in petitioners contention that respondent Quinquillera, the Fieradriver, was also negligent. There is merit to petitioners claim that there was overloadingwhich is in violation of traffic rules and regulations. Respondent Noe himself had testifiedthat he was standing at the rear portion of the Fiera because the Fiera was already full.Respondent Quinquillera should not have taken more passengers than what the Fiera canaccommodate. If the Fiera was not overloaded, respondent Noe would not have beenstanding on the rear carrier and sustained such extent of injury.

Furthermore, we find that respondent Quinquillera was negligent in allowing respondent Noeto stand on the Fieras rear portion. Section 32(c) of Article III of Republic Act No. 4136,otherwise known as "The Land Transportation and Traffic Code" provides:

(c) Riding on running boards No driver shall allow any person to ride on running board,step board or mudguard of his motor vehicle for any purpose while the vehicle is in motion.

Respondent Quinquilleras act of permitting respondent Noe to hang on the rear portion ofthe Fiera in such a dangerous position creates undue risk of harm to respondent Noe.Quinquillera failed to observe that degree of care, precaution and vigilance that thecircumstances justly demand. Thus, respondent Noe suffered injury .25Since respondentQuinquillera is negligent, there arises a presumption of negligence on the part of hisemployer, respondent Bandoquillo, in supervising her employees properly. Suchpresumption was not rebutted at all by Bandoquillo. Thus, the CA erred in affirming thedismissal of the third party complaint filed by petitioner against respondents Quinquillera andBandoquillo.

Petitioner contends that he was able to establish that he exercised the due diligence of agood father of a family in the selection of his employees as well as in the maintenance of hiscargo truck in good operating condition. He claims that in addition to looking at Gerosanosdrivers license, he accompanied the latter in his first two trips, during which he ascertained

Gerosanos competen ce as a driver, petitioner being a driver himself; that the truGerosano has never figured in any accident prior to the incident involved; that upon hacquisition of the cargo truck on March 16, 1982, only 7 months prior to the incident,same was thoroughly checked up and reconditioned; and that he had in his employ amechanic who conducted periodic check-ups of the engine and brake system of the ctruck.

We are not persuaded.

Article 2180 of the Civil Code provides:

Art. 2180. The obl igation imposed by Article 2176 is demandable not only for oneor omissions, but also for those of persons for whom one is responsible.

x x x

Employers shall be liable for the damages caused by their employees and householdhelpers acting within the scope of their assigned tasks, even though the former are noengaged in any business or industry.

x x x

The responsibility treated of in this article shall cease when the persons herein mentioprove that they observed all the diligence of a good father of a family to prevent dam

As the employer of Gerosano, petitioner is primarily and solidarily liable for thedelict committed by the former. Petitioner is presumed to be negligent in the selectiosupervision of his employee by operation of law and may be relieved of responsibilitynegligent acts of his driver, who at the time was acting within the scope of his assignonly if he can show that he observed all the diligence of a good father of a family to pdamage .26

In Yambao v. Zuniga ,27 we have clarified the meaning of the diligence of a good ffamily, thus:

The "diligence of a good father" referred to in the last paragraph of the aforecited statmeans diligence in the selection and supervision of employees. Thus, when an emplowhile performing his duties, causes damage to persons or property due to his ownnegligence, there arises the juris tantum presumption that the employer is negin the selection of the employee or in the supervision over him after the selection.employer to avoid the solidary liability for a tort committed by his employee, an

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employer must rebut the presumption by presenting adequate and convincing proofthat in the selection and supervision of his employee, he or she exercises the careand diligence of a good father of a family. x x x

Petitioners claim that she exercised due diligence in the selection and supervision of herdriver, Venturina, deserves but scant consideration. Her allegation that before she hiredVenturina she required him to submit his drivers li cense and clearances is worthless,in view of her failure to offer in evidence certified true copies of said license andclearances . Bare allegations, unsubstantiated by evidence, are not equivalent to proofunder the rules of evidence. x x x

In any case, assuming arguendo that Venturina did submit his license and clearances whenhe applied with petitioner in January 1992, the latter still fails the test of due diligence in theselection of her bus driver. Case law teaches that for an employer to have exercised thediligence of a good father of a family, he should not be satisfied with the applicantsmere possession of a professional drivers license; he must also carefully examinethe applicant for employment as to his qualifications, his experience and record ofservice . Petitioner failed to present convincing proof that she went to this extent of verifyingVenturinas qualifications, safety record, and driving history. The presumption juris tantumthat there was negligence in the selection of her bus driver, thus, remains unrebutted.

Nor did petitioner show that she exercised due supervision over Venturina after hisselection. For as pointed out by the Court of Appeals, petitioner did not present any proofthat she drafted and implemented training programs and guidelines on road safety forher employees. In fact, the record is bare of any showing that petitioner requiredVenturina to attend periodic seminars on road safety and traffic efficiency. Hence,petitioner cannot claim exemption from any liability arising from the recklessness ornegligence of Venturina.

In sum, petitioners liability to private respondents for the negligent and imprudent acts of herdriver, Venturina, under Article 2180 of the Civil Code is both manifest and clear. Petitioner,having failed to rebut the legal presumption of negligence in the selection and supervision ofher driver, is responsible for damages, the basis of the liability being the relationship of paterfamilias or on the employers own negligence. x x x28 (Emphasis supplied)

Petitioner failed to show that he examined driver Gerosano as to his qualifications,experience and service records. In fact, the testimony of driver Gerosano in his cross-examination showed the non-observance of these requirements. Gerosano testified that

petitioner was his first employer in Dumaguete and that he was accepted by petitioner onthe very day he applied for the j ob ;29 that his drivers license was issued in Mindanao wherehe came from 30 and that while petitioner asked him about his driving record in Mindanao, he

did not present any document of his driving record .31 Such admission clearlpetitioner did not exercise due diligence in the selection of his driver Gerosano.

Moreover, the fact that petitioners driver Gerosano was driving in an efficient mannepetitioner was with him in his first two trips would not conclusively establish that Gewas not at all reckless. It could not be considered as due diligence in the supervision driver to exempt petitioner from liability. In the supervision of his driver, petitioner mthat he had formulated training programs and guidelines on road safety for his driver the records failed to show. We find that petitioner failed to rebut the presumption ofnegligence in the selection and supervision of his employees.

Moreover, there was also no proof that he exercised diligence in maintaining his cargroadworthy and in good operating condition. While petitioners mechanic driver testihe made a routine check up on October 15, 1982, one day before the mishap happeneand found the truck operational, there was no record of such inspection.

Turning now to the award of damages, since there was contributory negligence on theof respondent Noe, petitioners liability should be mitigated in accordance with Articof the Civil Code which provides:

When the plaintiff s own negligence was the immediate and proximate cause of hicannot recover damages. But if his negligence was only contributory, the immediate aproximate cause of the injury being the defendants lack of due care, the plaintiff mayrecover damages, but the courts shall mitigate the damages to be awarded.

The underlying precept of the above article on contributory negligence is that a pla