G.R. No. 147246 August 19, 2003. ASIA LIGHTERAGE AND SHIPPING, INC., petitioner, vs.

COURT O PRUDENTIAL GUARANTEE AND ASSURANCE, INC., respondents.

APPEALS !"#

On appeal is the Court of Appeals' May 11, 2000 Decision1 in CA-G. . C! "o. #$1$% and &e'ruary 21, 2001 esolution2 affir(in) *ith (odification the April +, 1$$# Decision , of the -C of Manila *hich found petitioner lia'le to pay private respondent the a(ount of inde(nity and attorney's fees. &irst, the facts. On .une 1,, 1$$0, ,,1%0 (etric tons of /etter 0estern 0hite 0heat in 'ul1, valued at 234#2,,1$2.,% # *as shipped 'y Maru'eni A(erican Corporation of 5ortland, Ore)on on 'oard the vessel M6! "7O C8M/9D92M !-2+ for delivery to the consi)nee, General Millin) Corporation in Manila, evidenced 'y /ill of :adin) "o. 5-D6Man-#.%-he ship(ent *as insured 'y the private respondent 5rudential Guarantee and Assurance, 9nc. a)ainst loss or da(a)e for 51#,+21,;;1.;% under Marine Car)o is1 "ote " 11<%$6$0.+ On .uly 2%, 1$$0, the carryin) vessel arrived in Manila and the car)o *as transferred to the custody of the petitioner Asia :i)htera)e and 3hippin), 9nc. -he petitioner *as contracted 'y the consi)nee as carrier to deliver the car)o to consi)nee's *arehouse at /o. 2)on), 5asi) City. On Au)ust 1%, 1$$0, $00 (etric tons of the ship(ent *as loaded on 'ar)e 53-39 999, evidenced 'y :i)htera)e eceipt "o. 0,+#; for delivery to consi)nee. -he car)o did not reach its destination. 9t appears that on Au)ust 1;, 1$$0, the transport of said car)o *as suspended due to a *arnin) of an inco(in) typhoon. On Au)ust 22, 1$$0, the petitioner proceeded to pull the 'ar)e to 7n)ineerin) 9sland off /aseco to see1 shelter fro( the approachin) typhoon. 53-39 999 *as tied do*n to other 'ar)es *hich arrived ahead of it *hile *eatherin) out the stor( that ni)ht. A fe* days after, the 'ar)e developed a list 'ecause of a hole it sustained after hittin) an unseen protu'erance underneath the *ater. -he petitioner filed a Marine 5rotest on Au)ust 2<, 1$$0. < 9t li1e*ise secured the services of Gaspar 3alva)in) Corporation *hich refloated the 'ar)e.$ -he hole *as then patched *ith clay and ce(ent. -he 'ar)e *as then to*ed to 93:O&& ter(inal 'efore it finally headed to*ards the consi)nee's *harf on 3epte('er %, 1$$0. 2pon reachin) the 3ta. Mesa spill*ays, the 'ar)e a)ain ran a)round due to stron) current. -o avoid the co(plete sin1in) of the 'ar)e, a portion of the )oods *as transferred to three other 'ar)es.10 -he ne=t day, 3epte('er +, 1$$0, the to*in) 'its of the 'ar)e 'ro1e. 9t san1 co(pletely, resultin) in the total loss of the re(ainin) car)o.11 A second Marine 5rotest *as filed on 3epte('er ;, 1$$0.12 On 3epte('er 1#, 1$$0, a 'iddin) *as conducted to dispose of the da(a)ed *heat retrieved and loaded on the three other 'ar)es. 1, -he total proceeds fro( the sale of the salva)ed car)o *as 5201,,;$.;%.1# On the sa(e date, 3epte('er 1#, 1$$0, consi)nee sent a clai( letter to the petitioner, and another letter dated 3epte('er 1<, 1$$0 to the private respondent for the value of the lost car)o. On .anuary ,0, 1$$1, the private respondent inde(nified the consi)nee in the a(ount of 5#,10#,+%#.22.1%-hereafter, as su'ro)ee, it sou)ht recovery of said a(ount fro( the petitioner, 'ut to no avail. On .uly ,, 1$$1, the private respondent filed a co(plaint a)ainst the petitioner for recovery of the a(ount of inde(nity, attorney's fees and cost of suit.1+ 5etitioner filed its ans*er *ith counterclai(.1; -he e)ional -rial Court ruled in favor of the private respondent. -he dispositive portion of its Decision states> $HERE ORE, pre(ises considered, ?ud)(ent is here'y rendered orderin) defendant Asia :i)htera)e @ 3hippin), 9nc. lia'le to pay plaintiff 5rudential Guarantee @ Assurance Co., 9nc. the su( of 5#,10#,+%#.22 *ith interest fro( the date co(plaint *as filed on .uly ,, 1$$1 until fully satisfied plus 10A of the a(ount a*arded as and for attorney's fees. Defendant's counterclai( is here'y D93M9337D. 0ith costs a)ainst defendant.1< 5etitioner appealed to the Court of Appeals insistin) that it is not a co((on carrier. -he appellate court affir(ed the decision of the trial court *ith (odification. -he dispositive portion of its decision reads> 0B7 7&O 7, the decision appealed fro( is here'y A&&9 M7D *ith (odification in the sense that the salva)e value of 5201,,;$.;% shall 'e deducted fro( the a(ount of 5#,10#,+%#.22. Costs a)ainst appellant. 3O O D7 7D. 5etitioner's Motion for econsideration dated .une ,, 2000 *as li1e*ise denied 'y the appellate court in a esolution pro(ul)ated on &e'ruary 21, 2001. Bence, this petition. 5etitioner su'(its the follo*in) errors alle)edly co((itted 'y the appellate court, viz>1$ C1D -B7 CO2 - O& A557A:3 D7C9D7D -B7 CA37 A E2O 9" A 0A8 "O- 9" ACCO D 09-B :A0 A"D6O 09-B -B7 A55:9CA/:7 D7C939O"3 O& -B7 325 7M7 CO2 - 0B7" 9- B7:D -BA- 57-9-9O"7 93 A COMMO" CA 97 . C2D -B7 CO2 - O& A557A:3 D7C9D7D -B7 CA37 A E2O 9" A 0A8 "O- 9" ACCO D 09-B :A0 A"D6O 09-B -B7 A55:9CA/:7 D7C939O"3 O& -B7 325 7M7 CO2 - 0B7" 9- A&&9 M7D -B7 &9"D9"G O& -B7 :O07 CO2 - A E2O -BA- O" -B7 /A393 O& -B7 5 O!939O"3 O& -B7 C9!9: COD7 A55:9CA/:7 -O COMMO" CA 97 3, FTHE LOSS OF THE CARGO IS, THEREFORE, BORNE BY THE CARRIER IN ALL CASES EXCEPT IN THE FIVE (5) CASES ENUMERATED.F C,D -B7 CO2 - O& A557A:3 D7C9D7D -B7 CA37 A E2O 9" A 0A8 "O- 9" ACCO D 09-B :A0 A"D6O 09-B -B7 A55:9CA/:7 D7C939O"3 O& -B7 325 7M7 CO2 - 0B7" 9- 7&&7C-9!7:8 CO"C:2D7D -BA57-9-9O"7 &A9:7D -O 7G7 C937 D27 D9:9G7"C7 A"D6O 0A3 "7G:9G7"- 9" 9-3 CA 7 A"D C23-OD8 O& -B7 CO"39G"77'3 CA GO. -he issues to 'e resolved are> C1D 0hether the petitioner is a co((on carrierH and, C2D Assu(in) the petitioner is a co((on carrier, *hether it e=ercised e=traordinary dili)ence in its care and custody of the consi)nee's car)o. O" t%& '()st (ssu&, *& )u+& t%!t ,&t(t(o"&) (s ! -o..o" -!))(&). Article 1;,2 of the Civil Code defines co o! c"##i$#% as persons, corporations, fir(s or associations en)a)ed in the 'usiness of carryin) or transportin) passen)ers or )oods or 'oth, 'y land, *ater, or air, for co(pensation, offerin) their services to the pu'lic. 5etitioner contends that it is not a co((on carrier 'ut a private carrier. Alle)edly, it has no fi=ed and pu'licly 1no*n route, (aintains no ter(inals, and issues no tic1ets. 9t points out that it is not o'li)ed to carry indiscri(inately for any person. 9t is not 'ound to carry )oods unless it consents. 9n short, it does not hold out its services to the )eneral pu'lic.20 0e disa)ree.

9n D& Gu/.!" 0s. Cou)t o' A,,&!+s,21 *e held that the definition of co o! c"##i$#% in Article 1;,2 of the Civil Code (a1es no distinction 'et*een one *hose principal 'usiness activity is the carryin) of persons or )oods or 'oth, and one *ho does such carryin) only as an ancillary activity. 0e also did not distin)uish 'et*een a person or enterprise offerin) transportation service on a re)ular or scheduled 'asis and one offerin) such service on an occasional, episodic or unscheduled 'asis. &urther, *e ruled that Article 1;,2 does not distin)uish 'et*een a carrier offerin) its services to the &$!$#"' ()*'ic, and one *ho offers services or solicits 'usiness only fro( a narro* se)(ent of the )eneral population. 9n the case at 'ar, the principal 'usiness of the petitioner is that of li)htera)e and draya)e 22 and it offers its 'ar)es to the pu'lic for carryin) or transportin) )oods 'y *ater for co(pensation. 5etitioner is clearly a co((on carrier. 9n D& Gu/.!", %)(#",2, *e considered private respondent 7rnesto CendaIa to 'e a co((on carrier even if his principal occupation *as not the carria)e of )oods for others, 'ut that of 'uyin) used 'ottles and scrap (etal in 5an)asinan and sellin) these ite(s in Manila. 0e therefore hold that petitioner is a co((on carrier *hether its carryin) of )oods is done on an irre)ular rather than scheduled (anner, and *ith an only li(ited clientele. A co((on carrier need not have fi=ed and pu'licly 1no*n routes. "either does it have to (aintain ter(inals or issue tic1ets. -o 'e sure, petitioner fits the test of a co((on carrier as laid do*n in 1!s-os 0s. Cou)t o' A,,&!+s.2# -he test to deter(ine a co((on carrier is F*hether the )iven underta1in) is a part of the 'usiness en)a)ed in 'y the carrier *hich he has held out to the )eneral pu'lic as his occupation rather than the Juantity or e=tent of the 'usiness transacted.F 2% 9n the case at 'ar, the petitioner ad(itted that it is en)a)ed in the 'usiness of shippin) and li)htera)e, 2+ offerin) its 'ar)es to the pu'lic, despite its li(ited clientele for carryin) or transportin) )oods 'y *ater for co(pensation.2; On the second issue, *e uphold the findin)s of the lo*er courts that petitioner failed to e=ercise e=traordinary dili)ence in its care and custody of the consi)nee's )oods. Co((on carriers are 'ound to o'serve e=traordinary dili)ence in the vi)ilance over the )oods transported 'y the(. 2< -hey are presu(ed to have 'een at fault or to have acted ne)li)ently if the )oods are lost, destroyed or deteriorated. 2$ -o overco(e the presu(ption of ne)li)ence in the case of loss, destruction or deterioration of the )oods, the co((on carrier (ust prove that it e=ercised e=traordinary dili)ence. -here are, ho*ever, e=ceptions to this rule. Article 1;,# of the Civil Code enu(erates the instances *hen the presu(ption of ne)li)ence does not attach> Art. 1;,#. Co((on carriers are responsi'le for the loss, destruction, or deterioration of the )oods, unless the sa(e is due to any of the follo*in) causes only> C1D &lood, stor(, earthJua1e, li)htnin), or other natural disaster or cala(ityH C2D Act of the pu'lic ene(y in *ar, *hether international or civilH C,D Act or o(ission of the shipper or o*ner of the )oodsH C#D -he character of the )oods or defects in the pac1in) or in the containersH C%D Order or act of co(petent pu'lic authority. 9n the case at 'ar, the 'ar)e co(pletely san1 after its to*in) 'its 'ro1e, resultin) in the total loss of its car)o. 5etitioner clai(s that this *as caused 'y a typhoon, hence, it should not 'e held lia'le for the loss of the car)o. Bo*ever, petitioner failed to prove that the typhoon is the pro=i(ate and only cause of the loss of the )oods, and that it has e=ercised due dili)ence 'efore, durin) and after the occurrence of the typhoon to prevent or (ini(iKe the loss. ,0 -he evidence sho* that, even 'efore the to*in) 'its of the 'ar)e 'ro1e, it had already previously sustained da(a)e *hen it hit a sun1en o'?ect *hile doc1ed at the 7n)ineerin) 9sland. 9t even suffered a hole. Clearly, this could not 'e solely attri'uted to the typhoon. -he partly-su'(er)ed vessel *as refloated 'ut its hole *as patched *ith only clay and ce(ent. -he patch *or1 *as (erely a provisional re(edy, not enou)h for the 'ar)e to sail safely. -hus, *hen petitioner persisted to proceed *ith the voya)e, it rec1lessly e=posed the car)o to further da(a)e. A portion of the cross-e=a(ination of Alfredo Cunanan, car)o-surveyor of -an-Gatue Ad?ust(ent Co., 9nc., states> C O33-7GAM9"A-9O" /8 A--8. DO"" :77>,1 === === === J - Can you tell us *hat else transpired after that incidentL a - After the first accident, throu)h the initiative of the 'ar)e o*ners, they tried to pull out the 'ar)e fro( the place of the accident, and 'rin) it to the anchor ter(inal for safety, then after decidin) if the vessel is sta'iliKed, they tried to pull it to the consi)nee's *arehouse, no* *hile on route another accident occurred, no* this ti(e the 'ar)e totally hittin) so(ethin) in the course. J - 8ou said there *as another accident, can you tell the court the nature of the second accidentL a - -he sin1in), sir. J - Can you tell the nature . . . can you tell the court, if you 1no* *hat caused the sin1in)L a - Mostly it *as related to the first accident 'ecause there *as already a *hole (%ic) on the 'otto( part of the 'ar)e. === === === -his is not all. 5etitioner still headed to the consi)nee's *harf despite 1no*led)e of an inco(in) typhoon. Durin) the ti(e that the 'ar)e *as headin) to*ards the consi)nee's *harf on 3epte('er %, 1$$0, typhoon F:olen)F has already entered the 5hilippine area of responsi'ility.,2 A part of the testi(ony of o'ert /oyd, Car)o Operations 3upervisor of the petitioner, reveals> D9 7C--7GAM9"A-9O" /8 A--8. :77>,, === === === J "o*, Mr. 0itness, did it not occur to you it (i)ht 'e safer to ?ust allo* the /ar)e to lie *here she *as instead of to*in) itL a 3ince that ti(e that the /ar)e *as refloated, GMC CGeneral Millin) Corporation, the consi)neeD as 9 have said *as in a hurry for their )oods to 'e delivered at their 0harf since they needed 'adly the *heat that *as loaded in 53-39,. 9t *as needed 'adly 'y the consi)nee. J - And this is the reason *hy you to*ed the /ar)e as you didL a - 8es, sir. === === ===

C O33-7GAM9"A-9O" /8 A--8. 9G"AC9O>,# === === === J - And then fro( 93:O&& -er(inal you proceeded to the pre(ises of the GMCL A( 9 correctL a - -he ne=t day, in the (ornin), *e hired for additional t*o C2D tu)'oats as 9 have stated. J - Despite of the threats of an inco(in) typhoon as you testified a *hile a)oL a - 9t is already in an inner portion of 5asi) iver. -he typhoon *ould 'e co(in) and it *ould 'e dan)erous if *e are in the vicinity of Manila /ay. J - /ut the fact is, the typhoon *as inco(in)L 8es or noL a - 8es. J And yet as a standard operatin) procedure of your Co(pany, you have to secure a sort of Certification to deter(ine the *eather condition, a( 9 correctL a - 8es, sir. J - 3o, (ore or less, you had the 1no*led)e of the inco(in) typhoon, ri)htL a - 8es, sir. J - And yet you proceeded to the pre(ises of the GMCL a - 93:O&& -er(inal is far fro( Manila /ay and anyti(e even *ith the typhoon if you are already inside the vicinity or inside 5asi) entrance, it is a safe place to to* upstrea(. Accordin)ly, the petitioner cannot invo1e the occurrence of the typhoon as force (a?eure to escape lia'ility for the loss sustained 'y the private respondent. 3urely, (eetin) a typhoon head-on falls short of due dili)ence reJuired fro( a co((on carrier. More i(portantly, the officers6e(ployees the(selves of petitioner ad(itted that *hen the to*in) 'its of the vessel 'ro1e that caused its sin1in) and the total loss of the car)o upon reachin) the 5asi) iver, it *as no lon)er affected 'y the typhoon. -he typhoon then is not the pro=i(ate cause of the loss of the car)oH a hu(an factor, i+$+, ne)li)ence had intervened. IN 2IE$ THEREO , the petition is D7"97D. -he Decision of the Court of Appeals in CA-G. . C! "o. #$1$% dated May 11, 2000 and its esolution dated &e'ruary 21, 2001 are here'y A&&9 M7D. Costs a)ainst petitioner. 3O O D7 7D.

G.R. No. 139636 No0&.4&) 23, 2004. 2ICTOR5 LINER, INC., petitioner, vs. ROSALITO GA66AD, APRIL ROSSAN P. GA66AD, ROI RO7ANO P. GA66AD !"# DIANA RANCES P. GA66AD, respondents. 5NARES8SANTIAGO, J.9 Assailed in this petition for revie* on certiorari is the April 11, 200, decision 1 of the Court of Appeals in CA-G. . C! "o. +,2$0 *hich affir(ed *ith (odification the "ove('er +, 1$$< decision 2 of the e)ional -rial Court of -u)ue)arao, Ca)ayan, /ranch % findin) petitioner !ictory :iner, 9nc. lia'le for 'reach of contract of carria)e in Civil Case "o. %02,. -he facts as testified 'y respondent osalito Ga((ad sho* that on March 1#, 1$$+, his *ife Marie Grace 5a)ulayanGa((ad,, *as on 'oard an air-conditioned !ictory :iner 'us 'ound for -u)ue)arao, Ca)ayan fro( Manila. At a'out ,>00 a.(., the 'us *hile runnin) at a hi)h speed fell on a ravine so(e*here in /aran)ay /alilin), 3ta. &e, "ueva !iKcaya, *hich resulted in the death of Marie Grace and physical in?uries to other passen)ers. # On May 1#, 1$$+, respondent heirs of the deceased filed a co(plaint% for da(a)es arisin) fro( culpa contractual a)ainst petitioner. 9n its ans*er, + the petitioner clai(ed that the incident *as purely accidental and that it has al*ays e=ercised e=traordinary dili)ence in its %0 years of operation. After several re-settin)s, ; pretrial *as set on April 10, 1$$;. < &or failure to appear on the said date, petitioner *as declared as in default. $ Bo*ever, on petitionerMs (otion10 to lift the order of default, the sa(e *as )ranted 'y the trial court. 11 At the pre-trial on May +, 1$$;, petitioner did not *ant to ad(it the proposed stipulation that the deceased *as a passen)er of the !ictory :iner /us *hich fell on the ravine and that she *as issued 5assen)er -ic1et "o. $;;;<%. espondents, for their part, did not accept petitionerMs proposal to pay 5%0,000.00.12 After respondent osalito Ga((ad co(pleted his direct testi(ony, cross-e=a(ination *as scheduled for "ove('er 1;, 1$$; 1, 'ut (oved to Dece('er <, 1$$;,1# 'ecause the parties and the counsel failed to appear. On Dece('er <, 1$$;, counsel of petitioner *as a'sent despite due notice and *as dee(ed to have *aived ri)ht to cross-e=a(ine respondent osalito.1% 5etitionerMs (otion to reset the presentation of its evidence to March 2%, 1$$<1+ *as )ranted. Bo*ever, on March 2#, 1$$<, the counsel of petitioner sent the court a tele)ra(1; reJuestin) postpone(ent 'ut the tele)ra( *as received 'y the trial court on March 2%, 1$$<, after it had issued an order considerin) the case su'(itted for decision for failure of petitioner and counsel to appear.1< On "ove('er +, 1$$<, the trial court rendered its decision in favor of respondents, the dispositive portion of *hich reads> 0B7 7&O 7, pre(ises considered and in the interest of ?ustice, ?ud)(ent is here'y rendered in favor of the plaintiffs and a)ainst the defendant !ictory :iner, 9ncorporated, orderin) the latter to pay the follo*in)> 1. Actual Da(a)es -------------------- 5 122,000.00 2. Death 9nde(nity --------------------- %0,000.00 ,. 7=e(plary and Moral Da(a)es----- #00,000.00 #. Co(pensatory Da(a)es ---------- 1,%00,000.00 %. AttorneyMs &ees --------------------- 10A of the total a(ount )ranted +. Cost of the 3uit. 3O O D7 7D.1$ On appeal 'y petitioner, the Court of Appeals affir(ed the decision of the trial court *ith (odification as follo*s> N-Ohe Decision dated 0+ "ove('er 1$$< is here'y MOD9&97D to reflect that the follo*in) are here'y ad?ud)ed in favor of plaintiffs-appellees> 1. Actual Da(a)es in the a(ount of 5<<,2;0.00H 2. Co(pensatory Da(a)es in the a(ount of 51,1,%,%,+,10H ,. Moral and 7=e(plary Da(a)es in the a(ount of 5#00,000.00H and #. AttorneyMs fees eJuivalent to 10A of the su( of the actual, co(pensatory, (oral, and e=e(plary da(a)es herein ad?ud)ed. -he court a JuoMs ?ud)(ent of the cost of the suit a)ainst defendant-appellant is here'y A&&9 M7D. 3O O D7 7D.20 epresented 'y a ne* counsel, petitioner on May 21, 200, filed a (otion for reconsideration prayin) that the case 'e re(anded to the trial court for cross- e=a(ination of respondentsM *itness and for the presentation of its evidenceH or in the alternative, dis(iss the respondentsM co(plaint.21 9nvo1in) A57G Minin), 9nc. v. Court of Appeals, 22 petitioner ar)ues, inter alia, that the decision of the trial court should 'e set aside 'ecause the ne)li)ence of its for(er counsel, Atty. Antonio /. 5a)uiri)an, in failin) to appear at the scheduled hearin)s and (ove for reconsideration of the orders declarin) petitioner to have *aived the ri)ht to cross-e=a(ine respondentsM *itness and ri)ht to present evidence, deprived petitioner of its day in court. On Au)ust 21, 200,, the Court of Appeals denied petitionerMs (otion for reconsideration. 2, Bence, this petition for revie* principally 'ased on the fact that the (ista1e or )ross ne)li)ence of its counsel deprived petitioner of due process of la*. 5etitioner also ar)ues that the trial courtMs a*ard of da(a)es *ere *ithout 'asis and should 'e deleted. -he issues for resolution are> C1D *hether petitionerMs counsel *as )uilty of )ross ne)li)enceH C2D *hether petitioner should 'e held lia'le for 'reach of contract of carria)eH and C,D *hether the a*ard of da(a)es *as proper. 9t is settled that the ne)li)ence of counsel 'inds the client. -his is 'ased on the rule that any act perfor(ed 'y a counsel *ithin the scope of his )eneral or i(plied authority is re)arded as an act of his client. ConseJuently, the (ista1e or ne)li)ence of counsel (ay result in the rendition of an unfavora'le ?ud)(ent a)ainst the client. Bo*ever, the application of the )eneral rule to a )iven case should 'e loo1ed into and adopted accordin) to the surroundin) circu(stances o'tainin). -hus, e=ceptions to the fore)oin) have 'een reco)niKed 'y the court in cases *here rec1less or )ross ne)li)ence of counsel deprives the client of due process of la*, or *hen its application *ill result in outri)ht deprivation of the clientMs li'erty or property or *here the interests of ?ustice so reJuire, and accord relief to the client *ho suffered 'y reason of the la*yerMs )ross or palpa'le (ista1e or ne)li)ence. 2# -he e=ceptions, ho*ever, are not present in this case. -he record sho*s that Atty. 5a)uiri)an filed an Ans*er and 5re-trial /rief for petitioner. Althou)h initially declared as in default, Atty. 5a)uiri)an successfully (oved for the settin) aside of the order of default. 9n fact, petitioner *as represented 'y Atty. 5a)uiri)an at the pre-trial *ho proposed settle(ent for 5%0,000.00. Althou)h Atty. 5a)uiri)an failed to file (otions for reconsideration of the orders declarin) petitioner to have *aived the ri)ht to cross-e=a(ine

respondentsM *itness and to present evidence, he nevertheless, filed a ti(ely appeal *ith the Court of Appeals assailin) the decision of the trial court. Bence, petitionerMs clai( that it *as denied due process lac1s 'asis. 5etitioner too is not entirely 'la(eless. 5rior to the issuance of the order declarin) it as in default for not appearin) at the pre-trial, three notices Cdated Octo'er 2,, 1$$+,2% .anuary ,0, 1$$;,2+ and March 2+, 1$$;,2;D reJuirin) attendance at the pre-trial *ere sent and duly received 'y petitioner. Bo*ever, it *as only on April 2;, 1$$;, after the issuance of the April 10, 1$$; order of default for failure to appear at the pre-trial *hen petitioner, throu)h its finance and ad(inistrative (ana)er, e=ecuted a special po*er of attorney2< authoriKin) Atty. 5a)uiri)an or any (e('er of his la* fir( to represent petitioner at the pre-trial. 5etitioner is )uilty, at the least, of contri'utory ne)li)ence and fault cannot 'e i(puted solely on previous counsel. -he case of A57G Minin), 9nc., invo1ed 'y petitioner is not on all fours *ith the case at 'ar. 9n A57G, the ne)li)ent counsel not only allo*ed the adverse decision a)ainst his client to 'eco(e final and e=ecutory, 'ut deli'erately (isrepresented in the pro)ress report that the case *as still pendin) *ith the Court of Appeals *hen the sa(e *as dis(issed 1+ (onths a)o. 2$ -hese circu(stances are a'sent in this case 'ecause Atty. 5a)uiri)an ti(ely filed an appeal fro( the decision of the trial court *ith the Court of Appeals. 9n Gold :ine -ransit, 9nc. v. a(os,,0 the Court *as si(ilarly confronted *ith the issue of *hether or not the client should 'ear the adverse conseJuences of its counselMs ne)li)ence. 9n that case, Gold :ine -ransit, 9nc. CGold :ineD and its la*yer failed to appear at the pre-trial despite notice and *as declared as in default. After the plaintiffMs presentation of evidence e= parte, the trial court rendered decision orderin) Gold :ine to pay da(a)es to the heirs of its deceased passen)er. -he decision 'eca(e final and e=ecutory 'ecause counsel of Gold :ine did not file any appeal. &indin) that Goldline *as not denied due process of la* and is thus 'ound 'y the ne)li)ence of its la*yer, the Court held as follo*s P -his leads us to the Juestion of *hether the ne)li)ence of counsel *as so )ross and rec1less that petitioner *as deprived of its ri)ht to due process of la*. 0e do not 'elieve so. 9t cannot 'e denied that the reJuire(ents of due process *ere o'served in the instant case. 5etitioner *as never deprived of its day in court, as in fact it *as afforded every opportunity to 'e heard. -hus, it is of record that notices *ere sent to petitioner and that its counsel *as a'le to file a (otion to dis(iss the co(plaint, an ans*er to the co(plaint, and even a pre-trial 'rief. 0hat *as irretrieva'ly lost 'y petitioner *as its opportunity to participate in the trial of the case and to adduce evidence in its 'ehalf 'ecause of ne)li)ence. 9n the application of the principle of due process, *hat is sou)ht to 'e safe)uarded a)ainst is not the lac1 of previous notice 'ut the denial of the opportunity to 'e heard. -he Juestion is not *hether petitioner succeeded in defendin) its ri)hts and interests, 'ut si(ply, *hether it had the opportunity to present its side of the controversy. !erily, as petitioner retained the services of counsel of its choice, it should, as far as this suit is concerned, 'ear the conseJuences of its choice of a faulty option. 9ts plea that it *as deprived of due process echoes on hollo* )round and certainly cannot elicit approval nor sy(pathy. -o cater to petitionerMs ar)u(ents and reinstate its petition for relief fro( ?ud)(ent *ould put a pre(iu( on the ne)li)ence of its for(er counsel and encoura)e the non-ter(ination of this case 'y reason thereof. -his is one case *here petitioner has to 'ear the adverse conseJuences of its counselMs act, for a client is 'ound 'y the action of his counsel in the conduct of a case and he cannot thereafter 'e heard to co(plain that the result (i)ht have 'een different had his counsel proceeded differently. -he rationale for the rule is easily discerni'le. 9f the ne)li)ence of counsel 'e ad(itted as a reason for openin) cases, there *ould never 'e an end to a suit so lon) as a ne* counsel could 'e hired every ti(e it is sho*n that the prior counsel had not 'een sufficiently dili)ent, e=perienced or learned.,1 3i(ilarly, in Macalala) v. O('uds(an,,2 a 5hilippine 5ostal Corporation e(ployee char)ed *ith dishonesty *as not a'le to file an ans*er and position paper. Be *as found )uilty solely on the 'asis of co(plainantMs evidence and *as dis(issed *ith forfeiture of all 'enefits and disJualification fro( )overn(ent service. Challen)in) the decision of the O('uds(an, the e(ployee contended that the )ross ne)li)ence of his counsel deprived hi( of due process of la*. 9n de'un1in) his contention, the Court said P "either can he clai( that he is not 'ound 'y his la*yerMs actionsH it is only in case of )ross or palpa'le ne)li)ence of counsel *hen the courts can step in and accord relief to a client *ho *ould have suffered there'y. 9f every perceived (ista1e, failure of dili)ence, lac1 of e=perience or insufficient le)al 1no*led)e of the la*yer *ould 'e ad(itted as a reason for the reopenin) of a case, there *ould 'e no end to controversy. &unda(ental to our ?udicial syste( is the principle that every liti)ation (ust co(e to an end. 9t *ould 'e a clear (oc1ery if it *ere other*ise. Access to the courts is )uaranteed, 'ut there (ust 'e a li(it to it. !ie*ed vis-Q-vis the fore)oin) ?urisprudence, to sustain petitionerMs ar)u(ent that it *as denied due process of la* due to ne)li)ence of its counsel *ould set a dan)erous precedent. 9t *ould ena'le every party to render inutile any adverse order or decision throu)h the si(ple e=pedient of alle)in) )ross ne)li)ence on the part of its counsel. -he Court *ill not countenance such a farce *hich contradicts lon)-settled doctrines of trial and procedure.,, Anent the second issue, petitioner *as correctly found lia'le for 'reach of contract of carria)e. A co((on carrier is 'ound to carry its passen)ers safely as far as hu(an care and foresi)ht can provide, usin) the ut(ost dili)ence of very cautious persons, *ith due re)ard to all the circu(stances. 9n a contract of carria)e, it is presu(ed that the co((on carrier *as at fault or *as ne)li)ent *hen a passen)er dies or is in?ured. 2nless the presu(ption is re'utted, the court need not even (a1e an e=press findin) of fault or ne)li)ence on the part of the co((on carrier. -his statutory presu(ption (ay only 'e overco(e 'y evidence that the carrier e=ercised e=traordinary dili)ence.,# 9n the instant case, there is no evidence to re'ut the statutory presu(ption that the pro=i(ate cause of Marie GraceMs death *as the ne)li)ence of petitioner. Bence, the courts 'elo* correctly ruled that petitioner *as )uilty of 'reach of contract of carria)e. "evertheless, the a*ard of da(a)es should 'e (odified. Article 1;+#,% in relation to Article 220+,+ of the Civil Code, holds the co((on carrier in 'reach of its contract of carria)e that results in the death of a passen)er lia'le to pay the follo*in)> C1D inde(nity for death, C2D inde(nity for loss of earnin) capacity, and C,D

(oral da(a)es. 9n the present case, respondent heirs of the deceased are entitled to inde(nity for the death of Marie Grace *hich under current ?urisprudence is fi=ed at 5%0,000.00.,; -he a*ard of co(pensatory da(a)es for the loss of the deceasedMs earnin) capacity should 'e deleted for lac1 of 'asis. As a rule, docu(entary evidence should 'e presented to su'stantiate the clai( for da(a)es for loss of earnin) capacity. /y *ay of e=ception, da(a)es for loss of earnin) capacity (ay 'e a*arded despite the a'sence of docu(entary evidence *hen C1D the deceased is self-e(ployed earnin) less than the (ini(u( *a)e under current la'or la*s, and ?udicial notice (ay 'e ta1en of the fact that in the deceasedMs line of *or1 no docu(entary evidence is availa'leH or C2D the deceased is e(ployed as a daily *a)e *or1er earnin) less than the (ini(u( *a)e under current la'or la*s. ,< 9n 5eople v. Oco,,$ the evidence presented 'y the prosecution to recover da(a)es for loss of earnin) capacity *as the 'are testi(ony of the deceasedMs *ife that her hus'and *as earnin) 5<,000.00 (onthly as a le)al researcher of a private corporation. &indin) that the deceased *as neither self-e(ployed nor e(ployed as a daily-*a)e *or1er earnin) less than the (ini(u( *a)e under the la'or la*s e=istin) at the ti(e of his death, the Court held that testi(onial evidence alone is insufficient to ?ustify an a*ard for loss of earnin) capacity. :i1e*ise, in 5eople v. Carai),#0 da(a)es for loss of earnin) capacity *as not a*arded 'ecause the circu(stances of the , deceased did not fall *ithin the reco)niKed e=ceptions, and e=cept for the testi(ony of their *ives, no docu(entary proof a'out their inco(e *as presented 'y the prosecution. -hus P -he testi(onial evidence sho*s that 5lacido A)ustin, o'erto aa)as, and Melencio Castro .r. *ere not self-e(ployed or e(ployed as daily-*a)e *or1ers earnin) less than the (ini(u( *a)e under the la'or la*s e=istin) at the ti(e of their death. 5lacido A)ustin *as a 3ocial 3ecurity 3yste( e(ployee *ho received a (onthly salary of 5%,000. o'erto aa)as *as the 5resident of 3inclair 3ecurity and Allied 3ervices, a fa(ily o*ned corporation, *ith a (onthly co(pensation of 5,0,000. Melencio Castro .r. *as a ta=i driver of "e* ocale= *ith an avera)e daily earnin) of 5%00 or a (onthly earnin) of 5;,%00. Clearly, these cases do not fall under the e=ceptions *here inde(nity for loss of earnin) capacity can 'e )iven despite lac1 of docu(entary evidence. -herefore, for lac1 of docu(entary proof, no inde(nity for loss of earnin) capacity can 'e )iven in these cases. C7(phasis suppliedD Bere, the trial court and the Court of Appeals co(puted the a*ard of co(pensatory da(a)es for loss of earnin) capacity only on the 'asis of the testi(ony of respondent osalito that the deceased *as ,$ years of a)e and a 3ection Chief of the /ureau of 9nternal evenue, -u)uer)arao District Office *ith a salary of 5<,,0<<.00 per annu( *hen she died. #1 "o other evidence *as presented. -he a*ard is clearly erroneous 'ecause the deceasedMs earnin)s does not fall *ithin the e=ceptions. Bo*ever, the fact of loss havin) 'een esta'lished, te(perate da(a)es in the a(ount of 5%00,000.00 should 'e a*arded to respondents. 2nder Article 222# of the Civil Code, te(perate or (oderate da(a)es, *hich are (ore than no(inal 'ut less than co(pensatory da(a)es, (ay 'e recovered *hen the court finds that so(e pecuniary loss has 'een suffered 'ut its a(ount can not, fro( the nature of the case, 'e proved *ith certainty. 9n 5leno v. Court of Appeals, #2 the Court sustained the trial courtMs a*ard of 5200,000.00 as te(perate da(a)es in lieu of actual da(a)es for loss of earnin) capacity 'ecause the inco(e of the victi( *as not sufficiently proven, thus P -he trial court 'ased the a(ounts of da(a)es a*arded to the petitioner on the follo*in) circu(stances>... FAs to the loss or i(pair(ent of earnin) capacity, there is no dou't that 5leno is an entNreOpreneur and the founder of his o*n corporation, the Mayon Cera(ics Corporation. 9t appears also that he is an industrious and resourceful person *ith several pro?ects in line, and *ere it not for the incident, (i)ht have pushed the( throu)h. On the day of the incident, 5leno *as drivin) ho(e*ard *ith )eolo)ist :on)ley after an ocular inspection of the site of the Mayon Cera(ics Corporation. Bis actual inco(e ho*ever has not 'een sufficiently esta'lished so that this Court cannot a*ard actual da(a)es, 'ut, an a*ard of te(perate or (oderate da(a)es (ay still 'e (ade on loss or i(pair(ent of earnin) capacity. -hat 5leno sustained a per(anent defor(ity due to a shortened left le) and that he also suffers fro( dou'le vision in his left eye is also esta'lished. /ecause of this, he suffers fro( so(e inferiority co(ple= and is no lon)er active in 'usiness as *ell as in social life. 9n si(ilar cases as in /orro(eo v. Manila 7lectric ailroad Co., ## 5hil 1+%H Coria)e, et al. v. :-/ Co., et al., :-110,;, Dec. 2$, 1$+0, and in Araneta, et al. v. Arre)lado, et al., :-11,$#, 3ept. $, 1$%<, the proper a*ard of da(a)es *ere )iven.F... 0e rule that the lo*er courtMs a*ards of da(a)es are (ore consonant *ith the factual circu(stances of the instant case. -he trial courtMs findin)s of facts are clear and *ell-developed. 7ach ite( of da(a)es is adeJuately supported 'y evidence on record. Article 222# of the Civil Code *as li1e*ise applied in the recent cases of 5eople v. 3in)h #, and 5eople v. Al(edilla,## to ?ustify the a*ard of te(perate da(a)es in lieu of da(a)es for loss of earnin) capacity *hich *as not su'stantiated 'y the reJuired docu(entary proof. Anent the a*ard of (oral da(a)es, the sa(e cannot 'e lu(ped *ith e=e(plary da(a)es 'ecause they are 'ased on different ?ural foundations.#% -hese da(a)es are different in nature and reJuire separate deter(ination. #+ 9n culpa contractual or 'reach of contract, (oral da(a)es (ay 'e recovered *hen the defendant acted in 'ad faith or *as )uilty of )ross ne)li)ence Ca(ountin) to 'ad faithD or in *anton disre)ard of contractual o'li)ations and, as in this case, *hen the act of 'reach of contract itself constitutes the tort that results in physical in?uries. /y special rule in Article 1;+# in relation to Article 220+ of the Civil Code, (oral da(a)es (ay also 'e a*arded in case the death of a passen)er results fro( a 'reach of carria)e. #; On the other hand, e=e(plary da(a)es, *hich are a*arded 'y *ay of e=a(ple or correction for the pu'lic )ood (ay 'e recovered in contractual o'li)ations if the defendant acted in *anton, fraudulent, rec1less, oppressive, or (alevolent (anner.#< espondents in the instant case should 'e a*arded (oral da(a)es to co(pensate for the )rief caused 'y the death of the deceased resultin) fro( the petitionerMs 'reach of contract of carria)e. &urther(ore, the petitioner failed to prove that it e=ercised the e=traordinary dili)ence reJuired for co((on carriers, it is presu(ed to have acted rec1lessly. #$ -hus, the a*ard of e=e(plary

da(a)es is proper. 2nder the circu(stances, *e find it reasona'le to a*ard respondents the a(ount of 5100,000.00 as (oral da(a)es and 5100,000.00 as e=e(plary da(a)es. -hese a(ounts are not e=cessive.%0 -he actual da(a)es a*arded 'y the trial court reduced 'y the Court of Appeals should 'e further reduced. 9n 5eople v. Du'an, %1 it *as held that only su'stantiated and proven e=penses or those that appear to have 'een )enuinely incurred in connection *ith the death, *a1e or 'urial of the victi( *ill 'e reco)niKed. A list of e=penses C7=hi'it F.FD, %2 and the contract6receipt for the construction of the to(' C7=hi'it F&FD%, in this case, cannot 'e considered co(petent proof and cannot replace the official receipts necessary to ?ustify the a*ard. Bence, actual da(a)es should 'e further reduced to 5;<,1+0.00, %# *hich *as the a(ount supported 'y official receipts. 5ursuant to Article 220<%% of the Civil Code, attorneyMs fees (ay also 'e recovered in the case at 'ar *here e=e(plary da(a)es are a*arded. -he Court finds the a*ard of attorneyMs fees eJuivalent to 10A of the total a(ount ad?ud)ed a)ainst petitioner reasona'le. &inally, in 7astern 3hippin) :ines, 9nc. v. Court of Appeals, %+ it *as held that *hen an o'li)ation, re)ardless of its source, i.e., la*, contracts, Juasi-contracts, delicts or Juasi-delicts is 'reached, the contravenor can 'e held lia'le for pay(ent of interest in the concept of actual and co(pensatory da(a)es, su'?ect to the follo*in) rules, to *it P 1. 0hen the o'li)ation is 'reached, and it consists in the pay(ent of a su( of (oney, i.e., a loan or for'earance of (oney, the interest due should 'e that *hich (ay have 'een stipulated in *ritin). &urther(ore, the interest due shall itself earn le)al interest fro( the ti(e it is ?udicially de(anded. 9n the a'sence of stipulation, the rate of interest shall 'e 12A per annu( to 'e co(puted fro( default, i.e., fro( ?udicial or e=tra?udicial de(and under and su'?ect to the provisions of Article 11+$ of the Civil Code. 2. 0hen an o'li)ation, not constitutin) a loan or for'earance of (oney, is 'reached, an interest on the a(ount of da(a)es a*arded (ay 'e i(posed at the discretion of the court at the rate of +A per annu(. "o interest, ho*ever, shall 'e ad?ud)ed on unliJuidated clai(s or da(a)es e=cept *hen or until the de(and can 'e esta'lished *ith reasona'le certainty. Accordin)ly, *here the de(and is esta'lished *ith reasona'le certainty, the interest shall 'e)in to run fro( the ti(e the clai( is (ade ?udicially or e=tra?udicially CArt. 11+$, Civil CodeD 'ut *hen such certainty cannot 'e so reasona'ly esta'lished at the ti(e the de(and is (ade, the interest shall 'e)in to run only fro( the date the ?ud)(ent of the court is (ade Cat *hich ti(e the Juantification of da(a)es (ay 'e dee(ed to have 'een reasona'ly ascertainedD. -he actual 'ase for the co(putation of le)al interest shall, in any case, 'e on the a(ount finally ad?ud)ed. ,. 0hen the ?ud)(ent of the court a*ardin) a su( of (oney 'eco(es final and e=ecutory, the rate of le)al interest, *hether the case falls under para)raph 1 or para)raph 2, a'ove, shall 'e 12A per annu( fro( such finality until its satisfaction, this interi( period 'ein) dee(ed to 'e 'y then an eJuivalent to a for'earance of credit. C7(phasis suppliedD. 9n the instant case, petitioner should 'e held lia'le for pay(ent of interest as da(a)es for 'reach of contract of carria)e. Considerin) that the a(ounts paya'le 'y petitioner has 'een deter(ined *ith certainty only in the instant petition, the interest due shall 'e co(puted upon the finality of this decision at the rate of 12A per annu( until satisfaction, per para)raph , of the aforecited rule.%; 0B7 7&O 7, in vie* of all the fore)oin), the petition is partially )ranted. -he April 11, 200, decision of the Court of Appeals in CA-G. . C! "o. +,2$0, *hich (odified the decision of the e)ional -rial Court of -u)ue)arao, Ca)ayan in Civil Case "o. %02,, is A&&9 M7D *ith MOD9&9CA-9O". As (odified, petitioner !ictory :iner, 9nc., is ordered to pay respondents the follo*in)> C1D 5%0,000.00 as inde(nity for the death of Marie Grace 5a)ulayan-Ga((adH C2D 5100,000.00 as (oral da(a)esH C,D 5100,000.00 as e=e(plary da(a)esH C#D 5;<,1+0.00 as actual da(a)esH C%D 5%00,000.00 as te(perate da(a)esH C+D 10A of the total a(ount as attorneyMs feesH and the costs of suit. &urther(ore, the total a(ount ad?ud)ed a)ainst petitioner shall earn interest at the rate of 12A per annu( co(puted fro( the finality of this decision until fully paid. 3O O D7 7D.

G.R. No. 1374:1 ;!"u!)< 24, 2006. LOADSTAR SHIPPING CO., INC., 5etitioner, vs.PIONEER ASIA INSURANCE CORP., espondent.

&or revie* on certiorari are C1D the D&-(s(o"1 dated Octo'er 1%, 2002 and C2D the R&so+ut(o"2 dated &e'ruary 2;, 200,, of the Court of Appeals in CA-G. . C! "o. #0$$$, *hich affir(ed *ith (odification the Decision , dated &e'ruary 1%, 1$$, of the e)ional -rial Court of Manila, /ranch < in Civil Case "o. <+-,;$%;. -he pertinent facts are as follo*s> 5etitioner :oadstar 3hippin) Co., 9nc. C:oadstar for 'revityD is the re)istered o*ner and operator of the vessel M,V -$"%$'. 9t holds office at 12$# o(ualdeK 3t., 5aco, Manila. On .une +, 1$<#, :oadstar entered into a voya)echarter *ith "orthern Mindanao -ransport Co(pany, 9nc. for the carria)e of +%,000 'a)s of ce(ent fro( 9li)an City to Manila. -he shipper *as 9li)an Ce(ent Corporation, *hile the consi)nee in Manila *as Mar1et Developers, 9nc. On .une 2#, 1$<#, +;,%00 'a)s of ce(ent *ere loaded on 'oard M,V -$"%$' and sto*ed in the car)o holds for delivery to the consi)nee. -he ship(ent *as covered 'y petitionerMs /ill of :adin)# dated .une 2,, 1$<#. 5rior to the voya)e, the consi)nee insured the ship(ent of ce(ent *ith respondent 5ioneer Asia 9nsurance Corporation for 51,#00,000, for *hich respondent issued Marine Open 5olicy "o. MO5-00+ dated 3epte('er 1;, 1$<0, coverin) all ship(ents (ade on or after 3epte('er ,0, 1$<0. % At 12>%0 in the afternoon of .une 2#, 1$<#, M,V -$"%$' left 9li)an City for Manila in )ood *eather. Bo*ever, at #>,1 in the (ornin) of .une 2%, 1$<#, Captain !icente C. Montera, (aster of M,V -$"%$', ordered the vessel to 'e forced a)round. ConseJuently, the entire ship(ent of ce(ent *as )ood as )one due to e=posure to sea *ater. 5etitioner thus failed to deliver the )oods to the consi)nee in Manila. -he consi)nee de(anded fro( petitioner full rei('urse(ent of the cost of the lost ship(ent. 5etitioner, ho*ever, refused to rei('urse the consi)nee despite repeated de(ands."onetheless, on March 11, 1$<%, respondent insurance co(pany paid the consi)nee 51,#00,000 plus an additional a(ount of 5%00,000, the value of the lost ship(ent of ce(ent. 9n return, the consi)nee e=ecuted a :oss and 3u'ro)ation eceipt in favor of respondent concernin) the latterMs su'ro)ation ri)hts a)ainst petitioner. Bence, on Octo'er 1%, 1$<+, respondent filed a co(plaint doc1eted as Civil Case "o. <+-,;$%;, a)ainst petitioner *ith the e)ional -rial Court of Manila, /ranch <. 9t alle)ed that> C1D the M,V -$"%$' *as not sea*orthy at the co((ence(ent of the voya)eH C2D the *eather and sea conditions then prevailin) *ere usual and e=pected for that ti(e of the year and as such, *as an ordinary peril of the voya)e for *hich the M,V -$"%$' should have 'een nor(ally a'le to cope *ithH and C,D petitioner *as ne)li)ent in the selection and supervision of its a)ents and e(ployees then (annin) the M,V -$"%$'. 9n its Ans*er, petitioner alle)ed that no fault nor ne)li)ence could 'e attri'uted to it 'ecause it e=ercised due dili)ence to (a1e the ship sea*orthy, as *ell as properly (anned and eJuipped. 5etitioner insisted that the failure to deliver the su'?ect car)o to the consi)nee *as due to .o#c$ "/$)#$. 5etitioner clai(ed it could not 'e held lia'le for an act or o(ission not directly attri'uta'le to it. On &e'ruary 1%, 1$$,, the -C rendered a Decision in favor of respondent, to *it> 0B7 7&O 7, in vie* of the fore)oin), ?ud)(ent is here'y rendered in favor of plaintiff and a)ainst defendant :oadstar 3hippin) Co., 9nc. orderin) the latter to pay as follo*s> 1. -o pay plaintiff the su( of 51,$00,000.00 *ith le)al rate of interest per annu( fro( date of co(plaint until fully paidH 2. -o pay the su( eJual to 2%A of the clai( as and for attorneyMs fees and liti)ation e=pensesH and, ,. -o pay the costs of suit. 9- 93 3O O D7 7D.+ -he -C reasoned that petitioner, as a co((on carrier, 'ears the 'urden of provin) that it e=ercised e=traordinary dili)ence in its vi)ilance over the )oods it transported. -he trial court e=plained that in case of loss or destruction of the )oods, a statutory presu(ption arises that the co((on carrier *as ne)li)ent unless it could prove that it had o'served e=traordinary dili)ence. 5etitionerMs defense of .o#c$ "/$)#$ *as found 'ereft of factual 'asis. -he -C called attention to the 5AG-A3A report that at the ti(e of the incident, tropical stor( FA%i"!&F had (oved a*ay fro( the 5hilippines. &urther, records sho*ed that the sea and *eather conditions in the area of Binu'aan, "e)ros Occidental fro( <>00 p.(. of .une 2#, 1$<# to <>00 a.(. the ne=t day *ere sli)ht and s(ooth. -hus, the trial court concluded that the cause of the loss *as not tropical stor( F A%i"!&F or any other .o#c$ "/$)#$, 'ut )ross ne)li)ence of petitioner. 5etitioner appealed to the Court of Appeals. 9n its Decision dated Octo'er 1%, 2002, the Court of Appeals affir(ed the -C Decision *ith (odification that :oadstar shall only pay the su( of 10A of the total clai( for attorneyMs fees and liti)ation e=penses. 9t ruled, 0B7 7&O 7, pre(ises considered, the Decision dated &e'ruary 1%, 1$$,, of the e)ional -rial Court of Manila, "ational Capital .udicial e)ion, /ranch <, in Civil Case "o. <+-,;$%; is here'y A&&9 M7D *ith the MOD9&9CA-9O" that the appellant shall only pay the su( of 10A of the total clai( as and for attorneyMs fees and liti)ation e=penses. Costs a)ainst the appellant. 3O O D7 7D.; 5etitionerMs Motion for econsideration *as denied.< -he instant petition is anchored no* on the follo*in) assi)n(ents of error> 9 -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" BO:D9"G -BA- 57-9-9O"7 93 A COMMO" CA 97 2"D7 A -9C:7 1;,2 O& -B7 C9!9: COD7. 99 A332M9"G ARGUENDO -BA- 57-9-9O"7 93 A COMMO" CA 97 , -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" BO:D9"G -BA- -B7 5 OG9MA-7 CA237 O& -B7 :O33 O& CA GO 0A3 "O- A &O -29-O23 7!7"- /2- 0A3 A::7G7D:8 D27 -O -B7 &A9:2 7 O& 57-9-9O"7 -O 7G7 C937 7G- AO D9"A 8 D9:9G7"C7. 999 -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" A&&9 M9"G -B7 A0A D /8 -B7 - 9A: CO2 - O& A--O "78M3 &773 A"D :9-9GA-9O" 7G57"373 9" &A!O O& B7 79" 735O"D7"-. $ On the first and second issues, petitioner contends that at the ti(e of the voya)e the carrierMs voya)e-charter *ith the shipper converted it into a private carrier. -hus, the presu(ption of ne)li)ence a)ainst co((on carriers could not apply. 5etitioner further avers that the stipulation in the voya)e-charter holdin) it free fro( lia'ility is valid and 'inds the respondent. 9n any event, petitioner insists that it had e=ercised e=traordinary dili)ence and that the pro=i(ate cause of the loss of the car)o *as a fortuitous event. 0ith re)ard to the third issue, petitioner points out that the a*ard of attorneyMs fees and liti)ation e=penses appeared only in the dispositive portion of the -C Decision *ith nary a ?ustification. 5etitioner (aintains that the Court of Appeals thus erred in affir(in) the a*ard.

&or its part, respondent dis(isses as factual issues the inJuiry on C1D *hether the loss of the car)o *as due to .o#c$ "/$)#$ or due to petitionerMs failure to e=ercise e=traordinary dili)enceH and C2D *hether respondent is entitled to recover attorneyMs fees and e=penses of liti)ation. espondent further counters that the Court of Appeals *as correct *hen it held that petitioner *as a co((on carrier despite the charter of the *hole vessel, since the charter *as li(ited to the ship only. 5refatorily, *e stress that the findin) of fact 'y the trial court, *hen affir(ed 'y the Court of Appeals, is not revie*a'le 'y this Court in a petition for revie* on certiorari. Bo*ever, the conclusions derived fro( such factual findin) are not necessarily pure issues of fact *hen they are ine=trica'ly intert*ined *ith the deter(ination of a le)al issue. 9n such instances, the conclusions (ade (ay 'e raised in a petition for revie* 'efore this Court.10 -he threshold issues in this case are> C1D Given the circu(stances of this case, is petitioner a co((on or a private carrierL and C2D 9n either case, did petitioner e=ercise the reJuired dili)ence i+$., the e=traordinary dili)ence of a co((on carrier or the ordinary dili)ence of a private carrierL Article 1;,2 of the Civil Code defines a Fco((on carrierF as follo*s> Article 1;,2. Co((on carriers are persons, corporations, fir(s or associations en)a)ed in the 'usiness of carryin) or transportin) passen)ers or )oods or 'oth, 'y land, *ater, or air, for co(pensation, offerin) their services to the pu'lic. 5etitioner is a corporation en)a)ed in the 'usiness of transportin) car)o 'y *ater and for co(pensation, offerin) its services indiscri(inately to the pu'lic. -hus, *ithout dou't, it is a co((on carrier. Bo*ever, petitioner entered into a voya)e-charter *ith the "orthern Mindanao -ransport Co(pany, 9nc. "o*, had the voya)e-charter converted petitioner into a private carrierL 0e thin1 not. -he voya)e-charter a)ree(ent 'et*een petitioner and "orthern Mindanao -ransport Co(pany, 9nc. did not in any *ay convert the co((on carrier into a private carrier. 0e have already resolved this issue *ith finality in P'"!0$#% P#o1)c0%, I!c+ v+ Co)#0 o. A(($"'%11 *here *e ruled that> 9t is therefore i(perative that a pu'lic carrier shall re(ain as such, not*ithstandin) the charter of the *hole or portion of a vessel 'y one or (ore persons, provided the charter is li(ited to the ship only, as in the case of a ti(e-charter or voya)e-charter. 9t is only *hen the charter includes 'oth the vessel and its cre*, as in a 'are'oat or de(ise that a co((on carrier 'eco(es private, at least insofar as the particular voya)e coverin) the charter-party is concerned. 9ndu'ita'ly, a shipo*ner in a ti(e or voya)e charter retains possession and control of the ship, althou)h her holds (ay, for the (o(ent, 'e the property of the charterer.12 Confor(a'ly, petitioner re(ains a co((on carrier not*ithstandin) the e=istence of the charter a)ree(ent *ith the "orthern Mindanao -ransport Co(pany, 9nc. since the said charter is li(ited to the ship only and does not involve 'oth the vessel and its cre*. As elucidated in P'"!0$#% P#o1)c0%, its charter is only a voya)e-charter, not a 'are'oat charter. As a co((on carrier, petitioner is reJuired to o'serve e=traordinary dili)ence in the vi)ilance over the )oods it transports. 1, 0hen the )oods placed in its care are lost, petitioner is presu(ed to have 'een at fault or to have acted ne)li)ently. 5etitioner therefore has the 'urden of provin) that it o'served e=traordinary dili)ence in order to avoid responsi'ility for the lost car)o.1# 9n Co ("!i" M"#i0i " v+ Co)#0 o. A(($"'%,1% *e said>R it is incu('ent upon the co((on carrier to prove that the loss, deterioration or destruction *as due to accident or so(e other circu(stances inconsistent *ith its lia'ility.. . . -he e=traordinary dili)ence in the vi)ilance over the )oods tendered for ship(ent reJuires the co((on carrier to 1no* and to follo* the reJuired precaution for avoidin) da(a)e to, or destruction of the )oods entrusted to it for safe carria)e and delivery. 9t reJuires co((on carriers to render service *ith the )reatest s1ill and foresi)ht and Fto use all reasona'le (eans to ascertain the nature and characteristics of )oods tendered for ship(ent, and to e=ercise due care in the handlin) and sto*a)e, includin) such (ethods as their nature reJuires.F1+ Article 1;,# enu(erates the instances *hen a carrier (i)ht 'e e=e(pt fro( lia'ility for the loss of the )oods. -hese are> C1D &lood, stor(, earthJua1e, li)htnin), or other natural disaster or cala(ityH C2D Act of the pu'lic ene(y in *ar, *hether international or civilH C,D Act or o(ission of the shipper or o*ner of the )oodsH C#D -he character of the )oods or defects in the pac1in) or in the containersH and C%D Order or act of co(petent pu'lic authority. 1; 5etitioner clai(s that the loss of the )oods *as due to a fortuitous event under para)raph 1. 8et, its clai( is not su'stantiated. On the contrary, *e find supported 'y evidence on record the conclusion of the trial court and the Court of Appeals that the loss of the entire ship(ent of ce(ent *as due to the )ross ne)li)ence of petitioner. ecords sho* that in the evenin) of .une 2#, 1$<#, the sea and *eather conditions in the vicinity of "e)ros Occidental *ere cal(. -he records reveal that petitioner too1 a shortcut route, instead of the usual route, *hich e=posed the voya)e to une=pected haKard. 5etitioner has only itself to 'la(e for its (is?ud)(ent. 5etitioner heavily relies on Ho $ I!%)#"!c$ Co+ v+ A $#ic"! S0$" %2i( A&$!ci$%, I!c+ 1< and V"'$!z)$'" H"#13oo1 "!1 I!1)%0#i"' S)(('4, I!c. v+ Co)#0 o. A(($"'%.1$ -he said cases involved a private carrier, not a co((on carrier. Moreover, the issue in 'oth cases is not the effect of a voya)e-charter on a co((on carrier, 'ut the validity of a stipulation a'solvin) the private carrier fro( lia'ility in case of loss of the car)o attri'uta'le to the ne)li)ence of the private carrier. :astly, on the third issue, *e find consistent *ith la* and prevailin) ?urisprudence the Court of AppealsM a*ard of attorneyMs fees and e=penses of liti)ation eJuivalent to ten percent C10AD of the total clai(. -he contract 'et*een the parties in this case contained a stipulation that in case of suit, attorneyMs fees and e=penses of liti)ation shall 'e li(ited to only ten percent C10AD of the total (onetary a*ard. Given the circu(stances of this case, *e dee( the said a(ount ?ust and eJuita'le. $HERE ORE, the petition is DENIED. -he assailed Decision dated Octo'er 1%, 2002 and the esolution dated &e'ruary 2;, 200,, of the Court of Appeals in CA-G. . C! "o. #0$$$, are A IR6ED. Costs a)ainst petitioner. SO ORDERED. G.R. No. 13:334 August 23, 2003. ESTELA L. CRISOSTO6O, 5etitioner, vs. T%& Cou)t o' A,,&!+s !"# CARA2AN TRA2EL = TOURS INTERNATIONAL, INC., espondents. 9n May 1$$1, petitioner 7stela :. Crisosto(o contracted the services of respondent Caravan -ravel and -ours 9nternational, 9nc. to arran)e and facilitate her 'oo1in), tic1etin) and acco((odation in a tour du''ed F.e*els of 7uropeF. -he pac1a)e tour included

the countries of 7n)land, Bolland, Ger(any, Austria, :iechstenstein, 3*itKerland and &rance at a total cost of 5;#,,22.;0. 5etitioner *as )iven a %A discount on the a(ount, *hich included airfare, and the 'oo1in) fee *as also *aived 'ecause petitionerMs niece, Meria( Menor, *as respondent co(panyMs tic1etin) (ana)er. 5ursuant to said contract, Menor *ent to her auntMs residence on .une 12, 1$$1 P a 0ednesday P to deliver petitionerMs travel docu(ents and plane tic1ets. 5etitioner, in turn, )ave Menor the full pay(ent for the pac1a)e tour. Menor then told her to 'e at the "inoy AJuino 9nternational Airport C"A9AD on 3aturday, t*o hours 'efore her fli)ht on 'oard /ritish Air*ays. 0ithout chec1in) her travel docu(ents, petitioner *ent to "A9A on 3aturday, .une 1%, 1$$1, to ta1e the fli)ht for the first le) of her ?ourney fro( Manila to Bon)1on). -o petitionerMs dis(ay, she discovered that the fli)ht she *as supposed to ta1e had already departed the previous day. 3he learned that her plane tic1et *as for the fli)ht scheduled on .une 1#, 1$$1. 3he thus called up Menor to co(plain. 3u'seJuently, Menor prevailed upon petitioner to ta1e another tour P the F/ritish 5a)eantF P *hich included 7n)land, 3cotland and 0ales in its itinerary. &or this tour pac1a)e, petitioner *as as1ed ane* to pay 234;<%.00 or 520,<<1.00 Cat the then prevailin) e=chan)e rate of 52+.+0D. 3he )ave respondent 234,00 or 5;,$<0.00 as partial pay(ent and co((enced the trip in .uly 1$$1. 2pon petitionerMs return fro( 7urope, she de(anded fro( respondent the rei('urse(ent of 5+1,#21.;0, representin) the difference 'et*een the su( she paid for F.e*els of 7uropeF and the a(ount she o*ed respondent for the F/ritish 5a)eantF tour. Despite several de(ands, respondent co(pany refused to rei('urse the a(ount, contendin) that the sa(e *as nonrefunda'le.1 5etitioner *as thus constrained to file a co(plaint a)ainst respondent for 'reach of contract of carria)e and da(a)es, *hich *as doc1eted as Civil Case "o. $2-1,, and raffled to /ranch %$ of the e)ional -rial Court of Ma1ati City. 9n her co(plaint,2 petitioner alle)ed that her failure to ?oin F.e*els of 7uropeF *as due to respondentMs fault since it did not clearly indicate the departure date on the plane tic1et. espondent *as also ne)li)ent in infor(in) her of the *ron) fli)ht schedule throu)h its e(ployee Menor. 3he insisted that the F/ritish 5a)eantF *as (erely a su'stitute for the F.e*els of 7uropeF tour, such that the cost of the for(er should 'e properly set-off a)ainst the su( paid for the latter. &or its part, respondent co(pany, throu)h its Operations Mana)er, Concepcion Chipeco, denied responsi'ility for petitionerMs failure to ?oin the first tour. Chipeco insisted that petitioner *as infor(ed of the correct departure date, *hich *as clearly and le)i'ly printed on the plane tic1et. -he travel docu(ents *ere )iven to petitioner t*o days ahead of the scheduled trip. 5etitioner had only herself to 'la(e for (issin) the fli)ht, as she did not 'other to read or confir( her fli)ht schedule as printed on the tic1et. espondent e=plained that it can no lon)er rei('urse the a(ount paid for F.e*els of 7uropeF, considerin) that the sa(e had already 'een re(itted to its principal in 3in)apore, :otus -ravel :td., *hich had already 'illed the sa(e even if petitioner did not ?oin the tour. :otusM 7uropean tour or)aniKer, 9nsi)ht 9nternational -ours :td., deter(ines the cost of a pac1a)e tour 'ased on a (ini(u( nu('er of pro?ected participants. &or this reason, it is accepted industry practice to disallo* refund for individuals *ho failed to ta1e a 'oo1ed tour., :astly, respondent (aintained that the F/ritish 5a)eantF *as not a su'stitute for the pac1a)e tour that petitioner (issed. -his tour *as independently procured 'y petitioner after realiKin) that she (ade a (ista1e in (issin) her fli)ht for F.e*els of 7uropeF. 5etitioner *as allo*ed to (a1e a partial pay(ent of only 234,00.00 for the second tour 'ecause her niece *as then an e(ployee of the travel a)ency. ConseJuently, respondent prayed that petitioner 'e ordered to pay the 'alance of 512,$01.00 for the F/ritish 5a)eantF pac1a)e tour. After due proceedin)s, the trial court rendered a decision,# the dispositive part of *hich reads> 0B7 7&O 7, pre(ises considered, ?ud)(ent is here'y rendered as follo*s> 1. Orderin) the defendant to return and6or refund to the plaintiff the a(ount of &ifty -hree -housand "ine Bundred 7i)hty "ine 5esos and &orty -hree Centavos C5%,,$<$.#,D *ith le)al interest thereon at the rate of t*elve percent C12AD per annu( startin) .anuary 1+, 1$$2, the date *hen the co(plaint *as filedH 2. Orderin) the defendant to pay the plaintiff the a(ount of &ive -housand C5%,000.00D 5esos as and for reasona'le attorneyMs feesH ,. Dis(issin) the defendantMs counterclai(, for lac1 of (eritH and #. 0ith costs a)ainst the defendant.3O O D7 7D.% -he trial court held that respondent *as ne)li)ent in erroneously advisin) petitioner of her departure date throu)h its e(ployee, Menor, *ho *as not presented as *itness to re'ut petitionerMs testi(ony. Bo*ever, petitioner should have verified the e=act date and ti(e of departure 'y loo1in) at her tic1et and should have si(ply not relied on MenorMs ver'al representation. -he trial court thus declared that petitioner *as )uilty of contri'utory ne)li)ence and accordin)ly, deducted 10A fro( the a(ount 'ein) clai(ed as refund. espondent appealed to the Court of Appeals, *hich li1e*ise found 'oth parties to 'e at fault. Bo*ever, the appellate court held that petitioner is (ore ne)li)ent than respondent 'ecause as a la*yer and *ell-traveled person, she should have 1no*n 'etter than to si(ply rely on *hat *as told to her. -his 'ein) so, she is not entitled to any for( of da(a)es. 5etitioner also forfeited her ri)ht to the F.e*els of 7uropeF tour and (ust therefore pay respondent the 'alance of the price for the F/ritish 5a)eantF tour. -he dispositive portion of the ?ud)(ent appealed fro( reads as follo*s> 0B7 7&O 7, pre(ises considered, the decision of the e)ional -rial Court dated Octo'er 2+, 1$$% is here'y 7!7 37D and 37- A39D7. A ne* ?ud)(ent is here'y 7"-7 7D reJuirin) the plaintiff-appellee to pay to the defendant-appellant the a(ount of 512,$01.00, representin) the 'alance of the price of the /ritish 5a)eant 5ac1a)e -our, the sa(e to earn le)al interest at the rate of 39G 57 C7"- C+AD per annu(, to 'e co(puted fro( the ti(e the counterclai( *as filed until the finality of this decision. After this decision 'eco(es final and e=ecutory, the rate of -07:!7 57 C7"- C12AD interest per annu( shall 'e additionally i(posed on the total o'li)ation until pay(ent thereof is satisfied. -he a*ard of attorneyMs fees is D7:7-7D. Costs a)ainst the plaintiffappellee. 3O O D7 7D.+

2pon denial of her (otion for reconsideration,; petitioner filed the instant petition under ule #% on the follo*in) )rounds> 9 9t is respectfully su'(itted that the Bonora'le Court of Appeals co((itted a reversi'le error in reversin) and settin) aside the decision of the trial court 'y rulin) that the petitioner is not entitled to a refund of the cost of unavailed F.e*els of 7uropeF tour she 'ein) eJually, if not (ore, ne)li)ent than the private respondent, for in the contract of carria)e the co((on carrier is o'li)ed to o'serve ut(ost care and e=tra-ordinary dili)ence *hich is hi)her in de)ree than the ordinary dili)ence reJuired of the passen)er. -hus, even if the petitioner and private respondent *ere 'oth ne)li)ent, the petitioner cannot 'e considered to 'e eJually, or *orse, (ore )uilty than the private respondent. At 'est, petitionerMs ne)li)ence is only contri'utory *hile the private respondent Nis )uiltyO of )ross ne)li)ence (a1in) the principle of pari delicto inapplica'le in the caseH 99 -he Bonora'le Court of Appeals also erred in not rulin) that the F.e*els of 7uropeF tour *as not indivisi'le and the a(ount paid therefor refunda'leH 999 -he Bonora'le Court erred in not )rantin) to the petitioner the conseJuential da(a)es due her as a result of 'reach of contract of carria)e.< 5etitioner contends that respondent did not o'serve the standard of care reJuired of a co((on carrier *hen it infor(ed her *ron)ly of the fli)ht schedule. 3he could not 'e dee(ed (ore ne)li)ent than respondent since the latter is reJuired 'y la* to e=ercise e=traordinary dili)ence in the fulfill(ent of its o'li)ation. 9f she *ere ne)li)ent at all, the sa(e is (erely contri'utory and not the pro=i(ate cause of the da(a)e she suffered. Ber loss could only 'e attri'uted to respondent as it *as the direct conseJuence of its e(ployeeMs )ross ne)li)ence. 5etitionerMs contention has no (erit. /y definition, a contract of carria)e or transportation is one *here'y a certain person or association of persons o'li)ate the(selves to transport persons, thin)s, or ne*s fro( one place to another for a fi=ed price.$ 3uch person or association of persons are re)arded as carriers and are classified as private or special carriers and co((on or pu'lic carriers.10 A co((on carrier is defined under Article 1;,2 of the Civil Code as persons, corporations, fir(s or associations en)a)ed in the 'usiness of carryin) or transportin) passen)ers or )oods or 'oth, 'y land, *ater or air, for co(pensation, offerin) their services to the pu'lic. 9t is o'vious fro( the a'ove definition that respondent is not an entity en)a)ed in the 'usiness of transportin) either passen)ers or )oods and is therefore, neither a private nor a co((on carrier. espondent did not underta1e to transport petitioner fro( one place to another since its covenant *ith its custo(ers is si(ply to (a1e travel arran)e(ents in their 'ehalf. espondentMs services as a travel a)ency include procurin) tic1ets and facilitatin) travel per(its or visas as *ell as 'oo1in) custo(ers for tours. 0hile petitioner concededly 'ou)ht her plane tic1et throu)h the efforts of respondent co(pany, this does not (ean that the latter ipso facto is a co((on carrier. At (ost, respondent acted (erely as an a)ent of the airline, *ith *ho( petitioner ulti(ately contracted for her carria)e to 7urope. espondentMs o'li)ation to petitioner in this re)ard *as si(ply to see to it that petitioner *as properly 'oo1ed *ith the airline for the appointed date and ti(e. Ber transport to the place of destination, (ean*hile, pertained directly to the airline. -he o'?ect of petitionerMs contractual relation *ith respondent is the latterMs service of arran)in) and facilitatin) petitionerMs 'oo1in), tic1etin) and acco((odation in the pac1a)e tour. 9n contrast, the o'?ect of a contract of carria)e is the transportation of passen)ers or )oods. 9t is in this sense that the contract 'et*een the parties in this case *as an ordinary one for services and not one of carria)e. 5etitionerMs su'(ission is pre(ised on a *ron) assu(ption. -he nature of the contractual relation 'et*een petitioner and respondent is deter(inative of the de)ree of care reJuired in the perfor(ance of the latterMs o'li)ation under the contract. &or reasons of pu'lic policy, a co((on carrier in a contract of carria)e is 'ound 'y la* to carry passen)ers as far as hu(an care and foresi)ht can provide usin) the ut(ost dili)ence of very cautious persons and *ith due re)ard for all the circu(stances.11 As earlier stated, ho*ever, respondent is not a co((on carrier 'ut a travel a)ency. 9t is thus not 'ound under the la* to o'serve e=traordinary dili)ence in the perfor(ance of its o'li)ation, as petitioner clai(s. 3ince the contract 'et*een the parties is an ordinary one for services, the standard of care reJuired of respondent is that of a )ood father of a fa(ily under Article 11;, of the Civil Code. 12 -his connotes reasona'le care consistent *ith that *hich an ordinarily prudent person *ould have o'served *hen confronted *ith a si(ilar situation. -he test to deter(ine *hether ne)li)ence attended the perfor(ance of an o'li)ation is> did the defendant in doin) the alle)ed ne)li)ent act use that reasona'le care and caution *hich an ordinarily prudent person *ould have used in the sa(e situationL 9f not, then he is )uilty of ne)li)ence.1, 9n the case at 'ar, the lo*er court found Menor ne)li)ent *hen she alle)edly infor(ed petitioner of the *ron) day of departure. 5etitionerMs testi(ony *as accepted as indu'ita'le evidence of MenorMs alle)ed ne)li)ent act since respondent did not call Menor to the *itness stand to refute the alle)ation. -he lo*er court applied the presu(ption under ule 1,1, 3ection , CeD 1# of the ules of Court that evidence *illfully suppressed *ould 'e adverse if produced and thus considered petitionerMs uncontradicted testi(ony to 'e sufficient proof of her clai(. On the other hand, respondent has consistently denied that Menor *as ne)li)ent and (aintains that petitionerMs assertion is 'elied 'y the evidence on record. -he date and ti(e of departure *as le)i'ly *ritten on the plane tic1et and the travel papers *ere delivered t*o days in advance precisely so that petitioner could prepare for the trip. 9t perfor(ed all its o'li)ations to ena'le petitioner to ?oin the tour and e=ercised due dili)ence in its dealin)s *ith the latter. 0e a)ree *ith respondent. espondentMs failure to present Menor as *itness to re'ut petitionerMs testi(ony could not )ive rise to an inference unfavora'le to the for(er. Menor *as already *or1in) in &rance at the ti(e of the filin) of the co(plaint, 1% there'y (a1in) it physically i(possi'le for respondent to present her as a *itness. -hen too, even if it *ere possi'le for respondent to secure MenorMs testi(ony, the presu(ption under ule 1,1, 3ection ,CeD *ould still not apply. -he opportunity and possi'ility for o'tainin) MenorMs testi(ony 'elon)ed to 'oth parties, considerin) that Menor *as not ?ust respondentMs e(ployee, 'ut also petitionerMs niece. 9t *as thus error for the lo*er court to invo1e the presu(ption that respondent *illfully suppressed evidence under ule 1,1, 3ection ,CeD. 3aid presu(ption *ould lo)ically 'e inoperative if the evidence is not intentionally o(itted 'ut is si(ply unavaila'le, or *hen the sa(e could have 'een o'tained 'y 'oth parties.1+

9n su(, *e do not a)ree *ith the findin) of the lo*er court that MenorMs ne)li)ence concurred *ith the ne)li)ence of petitioner and resultantly caused da(a)e to the latter. MenorMs ne)li)ence *as not sufficiently proved, considerin) that the only evidence presented on this score *as petitionerMs uncorro'orated narration of the events. 9t is *ell-settled that the party alle)in) a fact has the 'urden of provin) it and a (ere alle)ation cannot ta1e the place of evidence. 1; 9f the plaintiff, upon *ho( rests the 'urden of provin) his cause of action, fails to sho* in a satisfactory (anner facts upon *hich he 'ases his clai(, the defendant is under no o'li)ation to prove his e=ception or defense.1< Contrary to petitionerMs clai(, the evidence on record sho*s that respondent e=ercised due dili)ence in perfor(in) its o'li)ations under the contract and follo*ed standard procedure in renderin) its services to petitioner. As correctly o'served 'y the lo*er court, the plane tic1et1$ issued to petitioner clearly reflected the departure date and ti(e, contrary to petitionerMs contention. -he travel docu(ents, consistin) of the tour itinerary, vouchers and instructions, *ere li1e*ise delivered to petitioner t*o days prior to the trip. espondent also properly 'oo1ed petitioner for the tour, prepared the necessary docu(ents and procured the plane tic1ets. 9t arran)ed petitionerMs hotel acco((odation as *ell as food, land transfers and si)htseein) e=cursions, in accordance *ith its avo*ed underta1in). -herefore, it is clear that respondent perfor(ed its prestation under the contract as *ell as everythin) else that *as essential to 'oo1 petitioner for the tour. Bad petitioner e=ercised due dili)ence in the conduct of her affairs, there *ould have 'een no reason for her to (iss the fli)ht. "eedless to say, after the travel papers *ere delivered to petitioner, it 'eca(e incu('ent upon her to ta1e ordinary care of her concerns. -his undou'tedly *ould reJuire that she at least read the docu(ents in order to assure herself of the i(portant details re)ardin) the trip. -he ne)li)ence of the o'li)or in the perfor(ance of the o'li)ation renders hi( lia'le for da(a)es for the resultin) loss suffered 'y the o'li)ee. &ault or ne)li)ence of the o'li)or consists in his failure to e=ercise due care and prudence in the perfor(ance of the o'li)ation as the nature of the o'li)ation so de(ands. 20 -here is no fi=ed standard of dili)ence applica'le to each and every contractual o'li)ation and each case (ust 'e deter(ined upon its particular facts. -he de)ree of dili)ence reJuired depends on the circu(stances of the specific o'li)ation and *hether one has 'een ne)li)ent is a Juestion of fact that is to 'e deter(ined after ta1in) into account the particulars of each case.21 -he lo*er court declared that respondentMs e(ployee *as ne)li)ent. -his factual findin), ho*ever, is not supported 'y the evidence on record. 0hile factual findin)s 'elo* are )enerally conclusive upon this court, the rule is su'?ect to certain e=ceptions, as *hen the trial court overloo1ed, (isunderstood, or (isapplied so(e facts or circu(stances of *ei)ht and su'stance *hich *ill affect the result of the case.22 9n the case at 'ar, the evidence on record sho*s that respondent co(pany perfor(ed its duty dili)ently and did not co((it any contractual 'reach. Bence, petitioner cannot recover and (ust 'ear her o*n da(a)e. 0B7 7&O 7, the instant petition is D7"97D for lac1 of (erit. -he decision of the Court of Appeals in CA-G. . C! "o. %1$,2 is A&&9 M7D. Accordin)ly, petitioner is ordered to pay respondent the a(ount of 512,$01.00 representin) the 'alance of the price of the /ritish 5a)eant 5ac1a)e -our, *ith le)al interest thereon at the rate of +A per annu(, to 'e co(puted fro( the ti(e the counterclai( *as filed until the finality of this Decision. After this Decision 'eco(es final and e=ecutory, the rate of 12A per annu( shall 'e i(posed until the o'li)ation is fully settled, this interi( period 'ein) dee(ed to 'e 'y then an eJuivalent to a for'earance of credit.2, 3O O D7 7D.

G.R. No. 146426 ;u"& 27, 2006. CARGOLI T SHIPPING, INC. 5etitioner, vs. L. ACUARIO 6AR>ETING CORP. !"# S>5LAND 1RO>ERAGE, INC., espondents. -his is a petition for revie* on certiorari of the .uly +, 2000 Decision 1 of the Court of Appeals in CA-G. . C! "o. %%++#, *hich affir(ed the ?ud)(ent2 of the e)ional -rial Court of Caloocan City, /ranch 121, in Civil Case "o. C-1+120 in so far as it found petitioner Car)olift 3hippin), 9nc. CFCar)oliftFD lia'le, as third-party defendant, for actual da(a)es in the su( of 5$;,021.20, as *ell as the "ove('er 2<, 2000 esolution, denyin) the (otion for reconsideration.

-he antecedent facts of the case are as follo*s> 3o(eti(e in March 1$$,, respondent :. Acuario Mar1etin) Corp., CFAcuarioFD and respondent 31yland /ro1era)e, 9nc., CF31ylandFD entered into a ti(e charter a)ree(ent # *here'y Acuario leased to 31yland its :. Acuario 99 'ar)e for use 'y the latter in transportin) electrical posts fro( Manila to :i(ay, /ataan. At the sa(e ti(e, 31yland also entered into a separate contract% *ith petitioner Car)olift, for the latterMs tu)'oats to to* the aforesaid 'ar)e. 9n accordance *ith the fore)oin) contracts, petitionerMs tu)'oat M6- /ee?ay left the Manila 3outh Bar'or on April 1, 1$$, *ith AcuarioMs 'ar)e in to*. 9t reached the port of :i(ay, /ataan on April ,, 1$$,, *hereupon M6- /ee?ay disen)a)ed and once a)ain set sail for Manila. 5etitionerMs other tu)'oat, the M6- Count, re(ained in /ataan to secure the 'ar)e for unloadin). Off-loadin) operations *ent under*ay until April ;, 1$$,, *hen operations *ere interrupted for the ne=t t*o days to )ive *ay to the o'servance of the lenten season. -he unloadin) of the car)o *as concluded on April 12, 1$$,, 'y *hich ti(e M6- /ee?ay had )one 'ac1 to /ataan for the return trip. -he M6- /ee?ay and the 'ar)e returned to the port of Manila on April 1,, 1$$,. On the sa(e day, the 'ar)e *as 'rou)ht to AcuarioMs shipyard *here it *as alle)edly discovered 'y AcuarioMs dry-doc1in) officer, Guiller(o "acu, .r., that the 'ar)e *as listin) due to a lea1 in its hull. Accordin) to "acu, he *as infor(ed 'y the s1ipper of the tu)'oat that the da(a)e *as sustained in /ataan. -o confir( the sa(e, "acu ordered an under*ater survey of the 'ar)e and prepared a da(a)e report dated April 1#, 1$$,. "o representative of 31yland *as present durin) the inspection althou)h it *as furnished *ith a copy of the said report. -he 'ar)e *as conseJuently dry-doc1ed for repairs at the 0estern 3hipyard fro( April 1+ to April 2+, 1$$,. Acuario spent the total su( of 5$;,021.20 for the repairs.+ 5ursuant to its contract *ith 31yland *hich provided that FCaDny da(a)e or loss on the 'ar)e due to the fault or ne)li)ence of charterers shall 'e the responsi'ility of the CcDharterer or his representative,F ; Acuario *rote 31yland see1in) rei('urse(ent of its repair costs, failin) *hich, it filed a co(plaint for da(a)es a)ainst 31yland 'efore the e)ional -rial Court of Caloocan City, *here the case *as doc1eted as Civil Case "o. C-1+120 and raffled to /ranch 121. 31yland, in turn, filed a third-party co(plaint < a)ainst petitioner alle)in) that it *as responsi'le for the da(a)e sustained 'y the 'ar)e. Accordin) to Acuario and its *itnesses, the *eather in /ataan shifted drastically at da*n of April ;, 1$$, *hile the 'ar)e *as doc1ed at the :i(ay port ei)ht (eters a*ay fro( the stone *all. Due to stron) *inds and lar)e *aves, the 'ar)e repeatedly hit its hull on the *all, thus pro(ptin) the 'ar)e patron to alert the tu)'oat captain of the M6- Count to to* the 'ar)e farther out to sea. Bo*ever, the tu)'oat failed to pull the 'ar)e to a safer distance due to en)ine (alfunction, there'y causin) the 'ar)e to sustain a hole in its hull. &ortunately, no part of the car)o *as lost even if only half of it had 'een unloaded at that ti(e.$ On the other hand, petitioner and 31yland denied that the 'ar)e had 'een da(a)ed. One of its *itnesses, 3alvador D. Oca(po, clai(ed that he *as involved in all aspects of the operation and that no accident of any sort *as 'rou)ht to his 1no*led)e. Be alle)ed that the 'ar)e patron and tu) (aster (ade no (ention of any (ariti(e casualty durin) the clearin) of the vessels at the 5hilippine 5orts Authority in :i(ay, /ataan. -he 'ar)e *as in )ood condition and *as not da(a)ed *hen it *as turned over to Acuario on April 1,, 1$$,.109n due course, the trial court pro(ul)ated its decision dated .une 10, 1$$+, the dispositive part of *hich reads> 0B7 7&O 7, pre(ises considered, ?ud)(ent is here'y rendered as follo*s> 1. Orderin) the defendant 31yland /ro1era)e to pay to the plaintiff :. Acuario Mar1etin) Corporation the cost of repairs of the 'ar)e :. Acuario 99 in the a(ount of 5$;,021.20 and to see1 rei('urse(ent fro( the third-party defendant Car)olift 3hippin)H 2. Orderin) the defendant to pay attorneyMs fees in the a(ount of 52#,2%%.,0 and to see1 rei('urse(ent thereof fro( the third-party defendantH and ,. Orderin) the defendant to pay the costs of suit su'?ect to rei('urse(ent fro( the third-party defendant. 3O O D7 7D.11 -he trial court )ave credence to the testi(onies of AcuarioMs *itnesses that the 'ar)e sustained da(a)e *hile it *as 'ein) chartered 'y 31yland. 9t held that the positive testi(onies of AcuarioMs *itnesses, coupled *ith docu(entary evidence detailin) the nature and e=tent of the da(a)e as *ell as the repairs done on the 'ar)e, should prevail over the 'are denials of 31yland and petitioner. 9t also noted that t*o of the latterMs three *itnesses *ere not in :i(ay, /ataan *hen the incident happened. -he trial court further held that 31yland *as lia'le under its ti(e charter a)ree(ent *ith Acuario pursuant to Article 11%$ of the Civil Code *hich states that Fcontracts have the force of la* 'et*een the contractin) parties.F 31yland (ust 'ear the conseJuences of the tu)'oatMs incapacity to respond to the 'ar)eMs reJuest for assistance 'ecause Acuario had no control in the selection of the tu)'oats used 'y 31yland. /ut since the ulti(ate fault lies *ith petitioner, ?ustice de(ands that the latter rei('urse 31yland for *hatever it (ay 'e ad?ud)ed to pay Acuario.12 /oth 31yland and petitioner elevated the (atter to the Court of Appeals *hich, on .uly +, 2000, rendered the assailed Decision affir(in) the trial court, 'ut deletin) the a*ard of attorneyMs fees. 2pon denial of its (otion for reconsideration, 1, petitioner 'rou)ht the instant petition raisin) the follo*in) issues> 9 0B7-B7 -B7 CO2 - O& A557A:3 7 7D 9" A&&9 M9"G -B7 &9"D9"G O& -B7 - 9A: CO2 - -BA- :. AC2A 9O 99 323-A9"7D DAMAG7 A"D -BA- 9- 0A3 323-A9"7D D2 9"G 9-3 CBA -7 -O 735O"D7"- 3S8:A"D. 99 A332M9"G -BA- :. AC2A 9O 99 32&&7 7D DAMAG7, 0B7-B7 -B7 CO2 - O& A557A:3 7 7D 9" 25BO:D9"G -B7 - 9A: CO2 - D7C939O" BO:D9"G 57-9-9O"7 :9A/:7 -B7 7&O . 1# -he petition lac1s (erit. On the first assi)ned error, petitioner is as1in) this Court to resolve factual issues that have already 'een settled 'y the courts 'elo*. -he Juestion of *hether the 'ar)e had 'een da(a)ed durin) its charter to 31yland is a factual (atter, the deter(ination of *hich (ay not 'e )enerally distur'ed on appeal. Euestions of fact are not revie*a'le 'y this Court e=cept under certain e=ceptional circu(stances.1% "o such e=ceptional circu(stance e=ists in the case at 'ar. On the contrary, the factual conclusions reached 'y the courts 'elo* are consistent *ith the evidence on record. AcuarioMs *itnesses testified that stron) *inds and *aves caused the 'ar)e to 'u(p into the *alls of the pier *here it *as 'erthed for unloadin). 5etitionerMs tu)'oat failed to to* it farther a*ay due to en)ine 'rea1do*n, thus causin) the 'ar)e to sustain a hole in its

hull. -hese testi(onies *ere duly supported and corro'orated 'y docu(entary evidence detailin) the da(a)e and repairs done on the 'ar)e.1+ On the other hand, petitioner and 31ylandMs denial that there *as incle(ent *eather in the early hours of April ;, 1$$, and that the 'ar)e sustained no da(a)e on this occasion *ere not supported 'y evidence to overco(e the positive alle)ations of AcuarioMs *itnesses *ho *ere present at the place and ti(e of the incident. -he cate)orical declaration of AcuarioMs *itnesses re)ardin) the events *hich led to the da(a)e on the 'ar)e shifted the 'urden of evidence on petitioner and 31yland. -hey could have easily disproved AcuarioMs clai(s 'y presentin) co(petent proof that there *as no *eather distur'ance on that day or, 'y presentin) the testi(ony of individuals *ho have personal 1no*led)e of the events *hich transpired. Moreover, the ina'ility of petitionerMs and 31ylandMs *itnesses to uneJuivocally declare that it *as still the M6- Count that secured the 'ar)e durin) the resu(ption of off-loadin) operations casts suspicion on their credi'ility. As aptly o'served 'y the trial court, such hesitation on the part of its *itnesses is indicative of uncertainty, if not a propensity to *ithhold infor(ation that could 'e unfavora'le to their cause.1; -o our (ind, therefore, the trial court ri)htly concluded that petitionerMs M6- Count indeed encountered (echanical trou'le, as asserted 'y Acuario. -he fact that petitioner did not cate)orically deny the alle)ation of (echanical trou'le only serves to stren)then the trial courtMs conclusion. 5etitionerMs assertion that it is contrary to hu(an e=perience for the 'ar)e to have (ade the return trip to Manila if it sustained the alle)ed da(a)e deserves short shrift. -he trial court found that the da(a)e on the 'ar)e *as not too e=tensive as to render it incapa'le of stayin) afloat and 'ein) used in operation. "either *as it i(possi'le for the 'ar)eMs car)o to re(ain intact and unda(a)ed durin) the *eather distur'ance. Apart fro( the fact that the car)o *hich consisted of *ooden electric poles are, 'y nature, not easily da(a)ed 'y adverse *eather,1< part of it had already 'een unloaded *hen the unfortunate incident occurred. ConseJuently, *e find no co)ent reason to distur' the lo*er courtsM findin) that the 'ar)e sustained a hole in its hull *hen petitionerMs tu)'oat failed to to* it to a safer distance as the *eather chan)ed in the port of :i(ay. -his Court is 'ound 'y the factual deter(inations of the appellate court especially *hen these are supported 'y su'stantial evidence and (erely affir( those of the trial court,1$ as in this case. -here is no sho*in) here that the inferences (ade 'y the Court of Appeals *ere (anifestly (ista1en, or that the appealed ?ud)(ent *as 'ased on a (isapprehension of facts, or that the appellate court overloo1ed certain relevant, undisputed facts *hich, if properly considered, *ould ?ustify a different conclusion. 20 -hus, a reversal of the factual findin)s in this case is un*arranted. As for the second assi)ned error, petitioner asserts that it could not 'e held lia'le for the da(a)e sustained 'y AcuarioMs 'ar)e 'ecause the latter sou)ht to recover upon its contract *ith 31yland, to *hich petitioner *as not a party. 3ince it had no contractual relation *ith Acuario, only 31yland should 'e held lia'le under the contract. /esides, 31yland contractually assu(ed the ris1 that the tu)'oat (i)ht encounter en)ine trou'le *hen it ac1no*led)ed in its contract *ith petitioner that the latterMs vessels *ere in )ood order and in sea*orthy condition. At any rate, it *as neither ne)li)ent in the perfor(ance of its o'li)ation nor the pro=i(ate cause of the da(a)e. 0e do not a)ree. 9t *as not Acuario that see1s to hold petitioner lia'le for the da(a)e to the 'ar)e, as the for(er in fact sued only 31yland pursuant to their charter a)ree(ent. 9t *as 31yland that i(pleaded petitioner as third-party defendant considerin) that 31yland *as 'ein) held accounta'le for the da(a)e attri'uta'le to petitioner. 9n other *ords, petitioner *as not sued under 31ylandMs charter a)ree(ent *ith Acuario, 'ut pursuant to its separate underta1in) *ith 31yland. 3trictly spea1in), therefore, petitioner is not 'ein) held lia'le under any charter a)ree(ent *ith Acuario. ConseJuently, it is not correct for petitioner to assert that Acuario could not recover da(a)es fro( it due to lac1 of privity of contract 'et*een the(. 9t is not Acuario that is see1in) da(a)es fro( petitioner 'ut 31yland, *ith *ho( it undou'tedly had a ?uridical tie. 0hile Acuario could hold 31yland lia'le under its charter a)ree(ent, 31yland in turn could enforce lia'ility on petitioner 'ased on the latterMs o'li)ation to 31yland. 9n other *ords, petitioner is 'ein) held lia'le 'y 31yland and not 'y Acuario. -hus, in the perfor(ance of its contractual o'li)ation to 31yland, petitioner *as reJuired to o'serve the due dili)ence of a )ood father of the fa(ily. -his (uch *as held in the old 'ut still relevant case of B"$# S$!io# 5 Co+6% S)cc$%%o#% v+ L" Co ("!i" M"#i0i "21 *here the Court e=plained that a tu) and its o*ners (ust o'serve ordinary dili)ence in the perfor(ance of its o'li)ation under a contract of to*a)e. -he ne)li)ence of the o'li)or in the perfor(ance of the o'li)ation renders hi( lia'le for da(a)es for the resultin) loss suffered 'y the o'li)ee. &ault or ne)li)ence of the o'li)or consists in his failure to e=ercise due care and prudence in the perfor(ance of the o'li)ation as the nature of the o'li)ation so de(ands.22 9n the case at 'ar, the e=ercise of ordinary prudence 'y petitioner (eans ensurin) that its tu)'oat is free of (echanical pro'le(s. 0hile adverse *eather has al*ays 'een a real threat to (ariti(e co((erce, the least that petitioner could have done *as to ensure that the M6- Count or any of its other tu)'oats *ould 'e a'le to secure the 'ar)e at all ti(es durin) the en)a)e(ent. -his is especially true *hen considered *ith the fact that AcuarioMs 'ar)e *as *holly dependent upon petitionerMs tu)'oat for propulsion. -he 'ar)e *as not eJuipped *ith any en)ine and needed a tu)'oat for (aneuverin).2, "eedless to say, if petitioner only su'?ected the M6- Count to a (ore ri)id chec1-up or inspection, the en)ine (alfunction could have 'een discovered or avoided. -he M6- Count *as e=clusively controlled 'y petitioner and the latter had the duty to see to it that the tu)'oat *as in )ood runnin) condition. -here is si(ply no 'asis for petitionerMs assertion that 31yland contractually assu(ed the ris1 of any en)ine trou'le that the tu)'oat (ay encounter. 31yland (erely procured petitionerMs to*in) service 'ut in no *ay assu(ed any such ris1. -hat petitionerMs ne)li)ence *as the pro=i(ate cause of the da(a)e to the 'ar)e cannot 'e dou'ted. Bad its tu)'oat 'een servicea'le, the 'ar)e could have 'een (oved a*ay fro( the stone *all *ith facility. 9t is too late in the day for petitioner to insist that the pro=i(ate cause of the da(a)e *as the 'ar)e patronMs ne)li)ence in not o'?ectin) to the position of the 'ar)e 'y the stone *all. Aside fro( the fact that the position of the 'ar)e is Juite understanda'le since off-loadin) operations *ere then still under*ay, 2# the alle)ed ne)li)ence of the 'ar)e patron is a (atter that is also 'ein) raised for the first ti(e 'efore this Court.

-hus, the da(a)e to the 'ar)e could have 'een avoided had it not 'een for the tu)'oatMs ina'ility to to* it a*ay fro( the stone *all. Considerin) that a 'ar)e has no po*er of its o*n and is totally defenseless a)ainst the rava)es of the sea, it *as incu('ent upon petitioner to see to it that it could secure the 'ar)e 'y providin) a sea*orthy tu)'oat. 5etitionerMs failure to do so did not only increase the ris1 that (i)ht have 'een reasona'ly anticipated durin) the shipside operation 'ut *as the pro=i(ate cause of the da(a)e.2% Bence, as correctly found 'y the courts 'elo*, it should ulti(ately 'e held lia'le therefor. 0B7 7&O 7, the petition is D7"97D for lac1 of (erit. -he Decision of the Court of Appeals in CA-G. . C! "o. %%++# dated .uly +, 2000 and the esolution dated "ove('er 2<, 2000, findin) petitioner Car)olift 3hippin), 9nc. lia'le, as third-party defendant, for actual da(a)es in the su( of 5$;,021.20, are A&&9 M7D.3O O D7 7D.

G.R. No. 12394: D&-&.4&) 29, 199:. IRST PHILIPPINE INDUSTRIAL CORPORATION, ,&t(t(o"&), 0s. COURT O APPEALS, HONORA1LE PATERNO 2. TAC8AN, 1ATANGAS CIT5 !"# ADORACION C. ARELLANO, (" %&) o''(-(!+ -!,!-(t< !s C(t< T)&!su)&) o' 1!t!"g!s, )&s,o"#&"ts. -his petition for revie* on c$#0io#"#i assails the Decision of the Court of Appeals dated "ove('er 2$, 1$$%, in CA-G. . 35 "o. ,+<01, affir(in) the decision of the e)ional -rial Court of /atan)as City, /ranch <#, in Civil Case "o. #2$,, *hich dis(issed petitioners' co(plaint for a 'usiness ta= refund i(posed 'y the City of /atan)as. 5etitioner is a )rantee of a pipeline concession under epu'lic Act "o. ,<;, as a(ended, to contract, install and operate oil pipelines. -he ori)inal pipeline concession *as )ranted in 1$+; 1 and rene*ed 'y the 7ner)y e)ulatory /oard in 1$$2. 23o(eti(e

in .anuary 1$$%, petitioner applied for a (ayor's per(it *ith the Office of the Mayor of /atan)as City. Bo*ever, 'efore the (ayor's per(it could 'e issued, the respondent City -reasurer reJuired petitioner to pay a local ta= 'ased on its )ross receipts for the fiscal year 1$$, pursuant to the :ocal Govern(ent Code ,. -he respondent City -reasurer assessed a 'usiness ta= on the petitioner a(ountin) to 5$%+,0;+.0# paya'le in four install(ents 'ased on the )ross receipts for products pu(ped at G53-1 for the fiscal year 1$$, *hich a(ounted to 51<1,+<1,1%1.00. 9n order not to ha(per its operations, petitioner paid the ta= under protest in the a(ount of 52,$,01$.01 for the first Juarter of 1$$,. On .anuary 20, 1$$#, petitioner filed a letter-protest addressed to the respondent City -reasurer, the pertinent portion of *hich reads> 5lease note that our Co(pany C&59CD is a pipeline operator *ith a )overn(ent concession )ranted under the 5etroleu( Act. 9t is en)a)ed in the 'usiness of transportin) petroleu( products fro( the /atan)as refineries, via pipeline, to 3ucat and .-& 5andacan -er(inals. As such, our Co(pany is e=e(pt fro( payin) ta= on )ross receipts under 3ection 1,, of the :GC of 1$$1 . . . . Moreover, -ransportation contractors are not included in the enu(eration of contractors under 3ection 1,1, 5ara)raph ChD of the :ocal Govern(ent Code. -herefore, the authority to i(pose ta= Fon contractors and other independent contractorsF under 3ection 1#,, 5ara)raph CeD of the :GC does not include the po*er to levy on transportation contractors. -he i(position and assess(ent cannot 'e cate)oriKed as a (ere fee authoriKed under 3ection 1#; of the :GC. -he said section li(its the i(position of fees and char)es on 'usiness to such a(ounts as (ay 'e co((ensurate to the cost of re)ulation, inspection, and licensin). Bence, assu(in) ar)uendo that &59C is lia'le for the license fee, the i(position thereof 'ased on )ross receipts is violative of the aforecited provision. -he a(ount of 5$%+,0;+.0# C52,$,01$.01 per JuarterD is not co((ensurate to the cost of re)ulation, inspection and licensin). -he fee is already a revenue raisin) (easure, and not a (ere re)ulatory i(position. # On March <, 1$$#, the respondent City -reasurer denied the protest contendin) that petitioner cannot 'e considered en)a)ed in transportation 'usiness, thus it cannot clai( e=e(ption under 3ection 1,, C?D of the :ocal Govern(ent Code. % On .une 1%, 1$$#, petitioner filed *ith the e)ional -rial Court of /atan)as City a co(plaint + for ta= refund *ith prayer for *rit of preli(inary in?unction a)ainst respondents City of /atan)as and Adoracion Arellano in her capacity as City -reasurer. 9n its co(plaint, petitioner alle)ed, i!0$# "'i", that> C1D the i(position and collection of the 'usiness ta= on its )ross receipts violates 3ection 1,, of the :ocal Govern(ent CodeH C2D the authority of cities to i(pose and collect a ta= on the )ross receipts of Fcontractors and independent contractorsF under 3ec. 1#1 CeD and 1%1 does not include the authority to collect such ta=es on transportation contractors for, as defined under 3ec. 1,1 ChD, the ter( FcontractorsF e=cludes transportation contractorsH and, C,D the City -reasurer ille)ally and erroneously i(posed and collected the said ta=, thus (eritin) the i((ediate refund of the ta= paid. ; -raversin) the co(plaint, the respondents ar)ued that petitioner cannot 'e e=e(pt fro( ta=es under 3ection 1,, C?D of the :ocal Govern(ent Code as said e=e(ption applies only to Ftransportation contractors and persons en)a)ed in the transportation 'y hire and co((on carriers 'y air, land and *ater.F espondents assert that pipelines are not included in the ter( Fco((on carrierF *hich refers solely to ordinary carriers such as truc1s, trains, ships and the li1e. espondents further posit that the ter( Fco((on carrierF under the said code pertains to the (ode or (anner 'y *hich a product is delivered to its destination. < On Octo'er ,, 1$$#, the trial court rendered a decision dis(issin) the co(plaint, rulin) in this *ise> . . . 5laintiff is either a contractor or other independent contractor. . . . the e=e(ption to ta= clai(ed 'y the plaintiff has 'eco(e unclear. 9t is a rule that ta= e=e(ptions are to 'e strictly construed a)ainst the ta=payer, ta=es 'ein) the life'lood of the )overn(ent. 7=e(ption (ay therefore 'e )ranted only 'y clear and uneJuivocal provisions of la*. 5laintiff clai(s that it is a )rantee of a pipeline concession under epu'lic Act ,<;. C7=hi'it AD *hose concession *as lately rene*ed 'y the 7ner)y e)ulatory /oard C7=hi'it /D. 8et neither said la* nor the deed of concession )rant any ta= e=e(ption upon the plaintiff. 7ven the :GC i(poses a ta= on franchise holders under 3ec. 1,; of the :ocal -a= Code. 3uch 'ein) the situation o'tained in this case Ce=e(ption 'ein) unclear and eJuivocalD resort to distinctions or other considerations (ay 'e of help> 1. -hat the e=e(ption )ranted under 3ec. 1,, C?D enco(passes onlyco o! c"##i$#% so as not to over'urden the ridin) pu'lic or co((uters *ith ta=es. P'"i!0i.. is not a co((on carrier, 'ut a special carrier e=tendin) its services and facilities to a sin)le specific or Fspecial custo(erF under a Fspecial contract.F 2. -he :ocal -a= Code of 1$$2 *as 'asically enacted to )ive (ore and effective local autono(y to local )overn(ents than the previous enact(ents, to (a1e the( econo(ically and financially via'le to serve the people and dischar)e their functions *ith a conco(itant o'li)ation to accept certain devolution of po*ers, . . . 3o, consistent *ith this policy even franchise )rantees are ta=ed C3ec. 1,;D and contractors are also ta=ed under 3ec. 1#, CeD and 1%1 of the Code. $ 5etitioner assailed the aforesaid decision 'efore this Court vi" a petition for revie*. On &e'ruary 2;, 1$$%, *e referred the case to the respondent Court of Appeals for consideration and ad?udication. 10On "ove('er 2$, 1$$%, the respondent court rendered a decision 11 affir(in) the trial court's dis(issal of petitioner's co(plaint. 5etitioner's (otion for reconsideration *as denied on .uly 1<, 1$$+. 12 Bence, this petition. At first, the petition *as denied due course in a esolution dated "ove('er 11, 1$$+. 1, 5etitioner (oved for a reconsideration *hich *as )ranted 'y this Court in a esolution 1# of .anuary 22, 1$$;. -hus, the petition *as reinstated. 5etitioner clai(s that the respondent Court of Appeals erred in holdin) that C1D the petitioner is not a co((on carrier or a transportation contractor, and C2D the e=e(ption sou)ht for 'y petitioner is not clear under the la*. -here is (erit in the petition. A Fco((on carrierF (ay 'e defined, 'roadly, as one *ho holds hi(self out to the pu'lic as en)a)ed in the 'usiness of transportin) persons or property fro( place to place, for co(pensation, offerin) his services to the pu'lic )enerally. Art. 1;,2 of the Civil Code defines a Fco((on carrierF as Fany person, corporation, fir( or association en)a)ed in the 'usiness of carryin) or transportin) passen)ers or )oods or 'oth, 'y land, *ater, or air, for co(pensation, offerin) their services to the pu'lic.F -he test for deter(inin) *hether a party is a co((on carrier of )oods is> 1. Be (ust 'e en)a)ed in the 'usiness of carryin) )oods for others as a pu'lic e(ploy(ent, and (ust hold hi(self out as ready to en)a)e in the transportation of )oods for person )enerally as a 'usiness and not as a casual occupationH 2. Be (ust underta1e to carry )oods of the 1ind to *hich his 'usiness is confinedH

,. Be (ust underta1e to carry 'y the (ethod 'y *hich his 'usiness is conducted and over his esta'lished roadsH and #. -he transportation (ust 'e for hire. 1% /ased on the a'ove definitions and reJuire(ents, there is no dou't that petitioner is a co((on carrier. 9t is en)a)ed in the 'usiness of transportin) or carryin) )oods, i.$. petroleu( products, for hire as a pu'lic e(ploy(ent. 9t underta1es to carry for all persons indifferently, that is, to all persons *ho choose to e(ploy its services, and transports the )oods 'y land and for co(pensation. -he fact that petitioner has a li(ited clientele does not e=clude it fro( the definition of a co((on carrier. 9n D$ G)z "! v%+ Co)#0 o. A(($"'% 1+ *e ruled that> -he a'ove article CArt. 1;,2, Civil CodeD (a1es no distinction 'et*een one *hose principal 'usiness activity is the carryin) of persons or )oods or 'oth, and one *ho does such carryin) only as an ancillary activity Cin local idio(, as a FsidelineFD. Article 1;,2 . . . avoids (a1in) any distinction 'et*een a person or enterprise offerin) transportation service on a #$&)'"# or %c2$1)'$1 *"%i% and one offerin) such service on an occ"%io!"', $(i%o1ic o# )!%c2$1)'$1 *"%i%. "either does Article 1;,2 distin)uish 'et*een a carrier offerin) its services to the F &$!$#"' ()*'ic,F i.$., the )eneral co((unity or population, and one *ho offers services or solicits 'usiness only fro( a narro* se)(ent of the )eneral population. 0e thin1 that Article 1<;; deli'erately refrained fro( (a1in) such distinctions. 3o understood, the concept of Fco((on carrierF under Article 1;,2 (ay 'e seen to coincide neatly *ith the notion of Fpu'lic service,F under the 5u'lic 3ervice Act CCo((on*ealth Act "o. 1#1+, as a(endedD *hich at least partially supple(ents the la* on co((on carriers set forth in the Civil Code. 2nder 3ection 1,, para)raph C'D of the 5u'lic 3ervice Act, Fpu'lic serviceF includes> every person that no* or hereafter (ay o*n, operate. (ana)e, or control in the 5hilippines, for hire or co(pensation, *ith )eneral or li(ited clientele, *hether per(anent, occasional or accidental, and done for )eneral 'usiness purposes, any co((on carrier, railroad, street rail*ay, traction rail*ay, su'*ay (otor vehicle, either for frei)ht or passen)er, or 'oth, *ith or *ithout fi=ed route and *hatever (ay 'e its classification, frei)ht or carrier service of any class, e=press service, stea('oat, or stea(ship line, pontines, ferries and *ater craft, $!&"&$1 i! 02$ 0#"!%(o#0"0io! o. passen)ers or frei)ht or 'oth, shipyard, (arine repair shop, *harf or doc1, ice plant, ice-refri)eration plant, canal, irri)ation syste( )as, electric li)ht heat and po*er, *ater supply and (o3$# ($0#o'$) , se*era)e syste(, *ire or *ireless co((unications syste(s, *ire or *ireless 'roadcastin) stations and other si(ilar pu'lic services. C7(phasis 3uppliedD Also, respondent's ar)u(ent that the ter( Fco((on carrierF as used in 3ection 1,, C?D of the :ocal Govern(ent Code refers only to co((on carriers transportin) )oods and passen)ers throu)h (ovin) vehicles or vessels either 'y land, sea or *ater, is erroneous. As correctly pointed out 'y petitioner, the definition of Fco((on carriersF in the Civil Code (a1es no distinction as to the (eans of transportin), as lon) as it is 'y land, *ater or air. 9t does not provide that the transportation of the passen)ers or )oods should 'e 'y (otor vehicle. 9n fact, in the 2nited 3tates, oil pipe line operators are considered co((on carriers. 1; 2nder the 5etroleu( Act of the 5hilippines C epu'lic Act ,<;D, petitioner is considered a Fco((on carrier.F -hus, Article <+ thereof provides that> Art. <+. 5ipe line concessionaire as co((on carrier. T A pipe line shall have the preferential ri)ht to utiliKe installations for the transportation of petroleu( o*ned 'y hi(, 'ut is o'li)ated to utiliKe the re(ainin) transportation capacity pro rata for the transportation of such other petroleu( as (ay 'e offered 'y others for transport, and to char)e *ithout discri(ination such rates as (ay have 'een approved 'y the 3ecretary of A)riculture and "atural esources. epu'lic Act ,<; also re)ards petroleu( operation as a pu'lic utility. 5ertinent portion of Article ; thereof provides> that everythin) relatin) to the e=ploration for and e=ploitation of petroleu( . . . and everythin) relatin) to the (anufacture, refinin), stora)e, or 0#"!%(o#0"0io! *4 %($ci"' $02o1% o. ($0#o'$) , is here'y declared to 'e a ()*'ic )0i'i04. C7(phasis 3uppliedD -he /ureau of 9nternal evenue li1e*ise considers the petitioner a Fco((on carrier.F 9n /9 ulin) "o. 0+$-<,, it declared> . . . since NpetitionerO is a pipeline concessionaire that is en)a)ed only in transportin) petroleu( products, it is considered a co((on carrier under epu'lic Act "o. ,<; . . . . 3uch 'ein) the case, it is not su'?ect to *ithholdin) ta= prescri'ed 'y evenue e)ulations "o. 1,-;<, as a(ended. &ro( the fore)oin) disJuisition, there is no dou't that petitioner is a Fco((on carrierF and, therefore, e=e(pt fro( the 'usiness ta= as provided for in 3ection 1,, C?D, of the :ocal Govern(ent Code, to *it> 3ec. 1,,. Co o! Li i0"0io!% o! 02$ T"7i!& Po3$#% o. Loc"' Gov$#! $!0 U!i0% . T 2nless other*ise provided herein, the e=ercise of the ta=in) po*ers of provinces, cities, (unicipalities, and 'aran)ays shall not e=tend to the levy of the follo*in)> === === === C?D -a=es on the )ross receipts of transportation contractors and persons en)a)ed in the transportation of passen)ers or frei)ht 'y hire and co((on carriers 'y air, land or *ater, e=cept as provided in this Code. -he deli'erations conducted in the Bouse of epresentatives on the :ocal Govern(ent Code of 1$$1 are illu(inatin)> M . AE29"O CAD. -han1 you, Mr. 3pea1er. Mr. 3pea1er, *e *ould li1e to proceed to pa)e $%, line 1. 9t states> F37C. 121 Nno* 3ec. 1,1O. Co((on :i(itations on the -a=in) 5o*ers of :ocal Govern(ent 2nits.F . . . M . AE29"O CA.D. -han1 you Mr. 3pea1er. 3till on pa)e $%, su'para)raph %, on ta=es on the 'usiness of transportation. -his appears to 'e one of those 'ein) dee(ed to 'e e=e(pted fro( the ta=in) po*ers of the local )overn(ent units. May *e 1no* the reason *hy the transportation 'usiness is 'ein) e=cluded fro( the ta=in) po*ers of the local )overn(ent unitsL M . .A!97 C7.D. Mr. 3pea1er, there is an e=ception contained in 3ection 121 Cno* 3ec. 1,1D, line 1+, para)raph %. 9t states that :G2s (ay not i(pose ta=es on the 'usiness of transportation, e=cept as other*ise provided in this code. "o*, Mr. 3pea1er, if the Gentle(an *ould care to )o to pa)e $< of /oo1 99, one can see there that provinces have the po*er to i(pose a ta= on 'usiness en?oyin) a franchise at the rate of not (ore than one-half of 1 percent of the )ross annual receipts. 3o, transportation contractors *ho are en?oyin) a franchise *ould 'e su'?ect to ta= 'y the province. -hat is the e=ception, Mr. 3pea1er. 0hat *e *ant to )uard a)ainst here, Mr. 3pea1er, is the i(position of ta=es 'y local )overn(ent units on the carrier 'usiness. :ocal )overn(ent units (ay i(pose ta=es on top of *hat is already 'ein) i(posed 'y the "ational 9nternal

evenue Code *hich is the so-called Fco((on carriers ta=.F 0e do not *ant a duplication of this ta=, so *e ?ust provided for an e=ception under 3ection 12% Nno* 3ec. 1,;O that a province (ay i(pose this ta= at a specific rate. M . AE29"O CA.D. -han1 you for that clarification, Mr. 3pea1er. . . . 1< 9t is clear that the le)islative intent in e=cludin) fro( the ta=in) po*er of the local )overn(ent unit the i(position of 'usiness ta= a)ainst co((on carriers is to prevent a duplication of the so-called Fco((on carrier's ta=.F 5etitioner is already payin) three C,AD percent co((on carrier's ta= on its )ross sales6earnin)s under the "ational 9nternal evenue Code. 1$ -o ta= petitioner a)ain on its )ross receipts in its transportation of petroleu( 'usiness *ould defeat the purpose of the :ocal Govern(ent Code. 0B7 7&O 7, the petition is here'y G A"-7D. -he decision of the respondent Court of Appeals dated "ove('er 2$, 1$$% in CA-G. . 35 "o. ,+<01 is 7!7 37D and 37- A39D7. 3O O D7 7D.

G.R. No. 147079 D&-&.4&) 21, 2004. A. . SANCHE7 THE HON. COURT O APPEALS !"# GU INSURANCE CORPORATION, )&s,o"#&"ts.

1RO>ERAGE

INC., ,&t(t(o"&)s, 0s.

/efore this Court on a petition for C$#0io#"#i is the appellate courtMs Decision1 of Au)ust 10, 2000 reversin) and settin) aside the ?ud)(ent of /ranch 1,,, e)ional -rial Court of Ma1ati City, in Civil Case "o. $,-;+/ *hich dis(issed the co(plaint of respondent &G2 9nsurance Corporation C&G2 9nsuranceD a)ainst petitioner A.&. 3ancheK /ro1era)e, 9nc. C3ancheK /ro1era)eD. On .uly <, 1$$2, 0yeth-5har(a GM/B shipped on 'oard an aircraft of S:M oyal Dutch Airlines at Dusseldorf, Ger(any oral contraceptives consistin) of <+,<00 /listers &e(enal ta'lets, 1#,000 /listers "ordiol ta'lets and #2,000 /listers -rinordiol ta'lets for delivery to Manila in favor of the consi)nee, 0yeth-3uaco :a'oratories, 9nc.2-he &e(enal ta'lets *ere placed in 12# cartons and the "ordiol ta'lets *ere placed in 20 cartons *hich *ere pac1ed to)ether in one C1D :D, alu(inu( container, *hile the -rinordial ta'lets *ere pac1ed in t*o pallets, each of *hich contained ,0 cartons.,

0yeth-3uaco insured the ship(ent a)ainst all ris1s *ith &G2 9nsurance *hich issued Marine is1 "ote "o. #$$% pursuant to Marine Open 5olicy "o. 1,<.# 2pon arrival of the ship(ent on .uly 11, 1$$2 at the "A9A, % it *as dischar)ed F*ithout e=ceptionF+ and delivered to the *arehouse of the 5hilippine 31ylanders, 9nc. C539D located also at the "A9A for safe1eepin). ; 9n order to secure the release of the car)oes fro( the 539 and the /ureau of Custo(s, 0yeth-3uaco en)a)ed the services of 3ancheK /ro1era)e *hich had 'een its licensed 'ro1er since 1$<#. < As its custo(s 'ro1er, 3ancheK /ro1era)e calculates and pays the custo(s duties, ta=es and stora)e fees for the car)o and thereafter delivers it to 0yeth-3uaco.$ On .uly 2$, 1$$2, MitKi Morales and 7rnesto MendoKa, representatives of 3ancheK /ro1era)e, paid 539 stora)e fee a(ountin) to 5<,%;2.,% a receipt for *hich, Official eceipt "o. 01+$$2,10 *as issued. On the receipt, another representative of 3ancheK /ro1era)e, M. 3ison,11 ac1no*led)ed that he received the car)oes consistin) of three pieces in )ood condition.12 0yeth-3uaco 'ein) a re)ular i(porter, the custo(s e=a(iner did not inspect the car)oes 1, *hich *ere thereupon stripped fro( the alu(inu( containers1# and loaded inside t*o transport vehicles hired 'y 3ancheK /ro1era)e.1% A(on) those *ho *itnessed the release of the car)oes fro( the 539 *arehouse *ere u'en Alonso and -ony A1as, 1+ e(ployees of 7lite Ad?usters and 3urveyors 9nc. C7lite 3urveyorsD, a (arine and car)o surveyor and insurance clai( ad?usters fir( en)a)ed 'y 0yeth-3uaco on 'ehalf of &G2 9nsurance. 2pon instructions of 0yeth-3uaco, the car)oes *ere delivered to BiKon :a'oratories 9nc. in Antipolo City for Juality control chec1.1; -he delivery receipt, 'earin) "o. 0;0,; dated .uly 2$, 1$$2, indicated that the delivery consisted of one container *ith 1## cartons of &e(enal and "ordiol and 1 pallet containin) -rinordiol.1< On .uly ,1, 1$$2, onnie :i1as, a representative of 0yeth-3uaco, ac1no*led)ed the delivery of the car)oes 'y affi=in) his si)nature on the delivery receipt.1$ 2pon inspection, ho*ever, he, to)ether *ith u'en AlonKo of 7lite 3urveyors, discovered that ## cartons containin) &e(enal and "ordiol ta'lets *ere in 'ad order.20 Be thus placed a note a'ove his si)nature on the delivery receipt statin) that ## cartons of oral contraceptives *ere in 'ad order. -he re(ainin) 1+0 cartons of oral contraceptives *ere accepted as co(plete and in )ood order. u'en AlonKo thus prepared and si)ned, alon) *ith onnie :i1as, a survey report21 dated .uly ,1, 1$$2 statin) that #1 cartons of &e(enal ta'lets and , cartons of "ordiol ta'lets *ere F*ettedF C%icD+22 -he 7lite 3urveyors later issued Certificate "o. C3-0;,1-1%,<6$2 2, attached to *hich *as an FAnne=ed 3cheduleF *hereon it *as indicated that prior to the loadin) of the car)oes to the 'ro1erMs truc1s at the "A9A, they *ere inspected and found to 'e in Fapparent )ood condition.F2# Also noted *as that at the ti(e of delivery to the *arehouse of BiKon :a'oratories 9nc., sli)ht to heavy rains fell, *hich could account for the *ettin) of the ## cartons of &e(enal and "ordiol ta'lets.2% On Au)ust #, 1$$2, the BiKon :a'oratories 9nc. issued a Destruction eport 2+ confir(in) that ,< = ;00 'lister pac1s of &e(enal ta'lets, , = ;00 'lister pac1s of &e(enal ta'lets and , = ;00 'lister pac1s of "ordiol ta'lets *ere heavily da(a)ed *ith *ater and e(itted foul s(ell. On Au)ust %, 1$$2, 0yeth-3uaco issued a "otice of Materials e?ection 2; of ,< cartons of &e(enal and , cartons of "ordiol on the )round that they *ere Fdelivered to BiKon :a'oratories *ith heavy *ater da(a)ed C %icD causin) the cartons to sa))ed C%icD e(ittin) a foul order and easily attracted flies.F2< 0yeth-3uaco later de(anded, 'y letter 2$ of Au)ust 2%, 1$$2, fro( 3ancheK /ro1era)e the pay(ent of51$1,,<#.2% representin) the value of its loss arisin) fro( the da(a)ed ta'lets. As the 3ancheK /ro1era)e refused to heed the de(and, 0yeth-3uaco filed an insurance clai( a)ainst &G2 9nsurance *hich paid 0yeth-3uaco the a(ount of 51<1,#,1.#$ in settle(ent of its clai( under Marine is1 "ote "u('er #$$%. 0yeth-3uaco thus issued 3u'ro)ation eceipt,0 in favor of &G2 9nsurance. On de(and 'y &G2 9nsurance for pay(ent of the a(ount of 51<1,#,1.#$ it paid 0yeth-3uaco, 3ancheK /ro1era)e, 'y letter,1 of .anuary ;, 1$$,, disclai(ed lia'ility for the da(a)ed )oods, positin) that the da(a)e *as due to i(proper and insufficient e=port pac1a)in)H that *hen the sealed containers *ere opened outside the 539 *arehouse, it *as discovered that so(e of the loose cartons *ere *et,,2 pro(ptin) its C3ancheK /ro1era)eMsD representative Morales to infor( the 9(port-7=port Assistant of 0yeth3uaco, a(ir Calicdan, a'out the condition of the car)oes 'ut that the latter advised to still deliver the( to BiKon :a'oratories *here an ad?uster *ould assess the da(a)e.,, Bence, the filin) 'y &G2 9nsurance of a co(plaint for da(a)es 'efore the e)ional -rial Court of Ma1ati City a)ainst the 3ancheK /ro1era)e. -he trial court, 'y Decision,# of .uly 2$, 1$$+, dis(issed the co(plaint, holdin) that the 3urvey eport prepared 'y the 7lite 3urveyors is 'ereft of any evidentiary support and a (ere product of pure )uess*or1.,% On appeal, the appellate court reversed the decision of the trial court, it holdin) that the 3ancheK /ro1era)e en)a)ed not only in the 'usiness of custo(s 'ro1era)e 'ut also in the transportation and delivery of the car)o of its clients, hence, a co((on carrier *ithin the conte=t of Article 1;,2 of the "e* Civil Code.,+ "otin) that 0yeth-3uaco adduced evidence that the car)oes *ere delivered to petitioner in )ood order and condition 'ut *ere in a da(a)ed state *hen delivered to 0yeth-3uaco, the appellate court held that 3ancheK /ro1era)e is presu(ed ne)li)ent and upon it rested the 'urden of provin) that it e=ercised e=traordinary ne)li)ence not only in instances *hen ne)li)ence is directly proven 'ut also in those cases *hen the cause of the da(a)e is not 1no*n or un1no*n.,; -he appellate court thus disposed> 9" -B7 :9GB- O& A:: -B7 &O 7GO9"G, the appeal of the Appellant is G A"-7D. -he Decision of the Court a Juo is 7!7 37D. Another Decision is here'y rendered in favor of the Appellant and a)ainst the Appellee as follo*s> 1. -he Appellee is here'y ordered to pay the Appellant the principal a(ount of 51<1, #,1.#$, *ith interest thereupon at the rate of +A per annu(, fro( the date of the Decision of the Court, until the said a(ount is paid in fullH 2. -he Appellee is here'y ordered to pay to the Appellant the a(ount of 520,000.00 as and 'y *ay of attorneyMs feesH and ,. -he counterclai(s of the Appellee are D93M9337D.,< 3ancheK /ro1era)eMs Motion for econsideration havin) 'een denied 'y the appellate courtMs esolution of Dece('er <, 2000 *hich *as received 'y petitioner on .anuary %, 2001, it co(es to this Court on petition for certiorari filed on March +, 2001. 9n the (ain, petitioner asserts that the appellate court co((itted )rave and reversi'le error tanta(ount to a'use of discretion *hen it found petitioner a Fco((on carrierF *ithin the conte=t of Article 1;,2 of the "e* Civil Code. espondent &G2 9nsurance avers in its Co((ent that the proper course of action *hich petitioner should have ta1en *as to file a petition for revie* on certiorari since the sole office of a *rit of certiorari is the correction of errors of ?urisdiction includin) the

co((ission of )rave a'use of discretion a(ountin) to lac1 or e=cess of ?urisdiction and does not include correction of the appellate courtMs evaluation of the evidence and factual findin)s thereon. On the (erits, respondent &G2 9nsurance contends that petitioner, as a co((on carrier, failed to overco(e the presu(ption of ne)li)ence, it 'ein) docu(ented that petitioner *ithdre* fro( the *arehouse of 539 the su'?ect ship(ent entirely in )ood order and condition.,$ -he petition fails. ule #% is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i+$+, re)ardless of the nature of the action or proceedin)s involved, (ay 'e appealed to this Court 'y filin) a petition for revie*, *hich *ould 'e 'ut a continuation of the appellate process over the ori)inal case.#0 -he esolution of the Court of Appeals dated Dece('er <, 2000 denyin) the (otion for reconsideration of its Decision of Au)ust 10, 2000 *as received 'y petitioner on .anuary %, 2001. 3ince petitioner failed to appeal *ithin 1% days or on or 'efore .anuary 20, 2001, the appellate courtMs decision had 'eco(e final and e=ecutory. -he filin) 'y petitioner of a petition for certiorari on March +, 2001 cannot serve as a su'stitute for the lost re(edy of appeal. 9n another vein, the rule is *ell settled that in a petition for certiorari, the petitioner (ust prove not (erely reversi'le error 'ut also )rave a'use of discretion a(ountin) to lac1 or e=cess of ?urisdiction. 5etitioner alle)es that the appellate court erred in reversin) and settin) aside the decision of the trial court 'ased on its findin) that petitioner is lia'le for the da(a)e to the car)o as a co((on carrier. 0hat petitioner is ascri'in) is an error of ?ud)(ent, not of ?urisdiction, *hich is properly the su'?ect of an ordinary appeal. 0here the issue or Juestion involves or affects the *isdo( or le)al soundness of the decision P not the ?urisdiction of the court to render said decision P the sa(e is 'eyond the province of a petition for c$#0io#"#i.#1 -he supervisory ?urisdiction of this Court to issue a c$#0 *rit cannot 'e e=ercised in order to revie* the ?ud)(ent of lo*er courts as to its intrinsic correctness, either upon the la* or the facts of the case.#2 5rocedural technicalities aside, the petition still fails. -he appellate court did not err in findin) petitioner, a custo(s 'ro1er, to 'e also a co((on carrier, as defined under Article 1;,2 of the Civil Code, to *it> Art. 1;,2. Co((on carriers are persons, corporations, fir(s or associations en)a)ed in the 'usiness of carryin) or transportin) passen)ers or )oods or 'oth, 'y land, *ater, or air, for co(pensation, offerin) their services to the pu'lic. Anacleto &. 3ancheK, .r., the Mana)er and 5rincipal /ro1er of 3ancheK /ro1era)e, hi(self testified that the services the fir( offers include the delivery of )oods to the *arehouse of the consi)nee or i(porter. A--8. &:O 73> E> 0hat are the functions of these license 'ro1ers, license custo(s 'ro1erL 09-"733> As custo(s 'ro1er, *e calculate the ta=es that has to 'e paid in car)os, and those upon approval of the i(porter, *e prepare the entry to)ether for processin) and clai(s fro( custo(s and finally deliver the )oods to the *arehouse of the i(porter.#, Article 1;,2 does not distin)uish 'et*een one *hose principal 'usiness activity is the carryin) of )oods and one *ho does such carryin) only as an ancillary activity. ## -he contention, therefore, of petitioner that it is not a co((on carrier 'ut a custo(s 'ro1er *hose principal function is to prepare the correct custo(s declaration and proper shippin) docu(ents as reJuired 'y la* is 'ereft of (erit. 9t suffices that petitioner underta1es to deliver the )oods for pecuniary consideration. 9n this li)ht, petitioner as a co((on carrier is (andated to o'serve, under Article 1;,,#% of the Civil Code, e=traordinary dili)ence in the vi)ilance over the )oods it transports accordin) to all the circu(stances of each case. 9n the event that the )oods are lost, destroyed or deteriorated, it is presu(ed to have 'een at fault or to have acted ne)li)ently, unless it proves that it o'served e=traordinary dili)ence.#+ -he concept of Fe=tra-ordinary dili)enceF *as e=plained in Co ("!i" M"#i0i " v+ Co)#0 o. A(($"'%>#; -he e=traordinary dili)ence in the vi)ilance over the )oods tendered for ship(ent reJuires the co((on carrier to 1no* and to follo* the reJuired precaution for avoidin) da(a)e to, or destruction of the )oods entrusted to it for sale, carria)e and delivery. 9t reJuires co((on carriers to render service *ith the )reatest s1ill and foresi)ht and Fto use all reasona'le (eans to ascertain the nature and characteristics of )oods tendered for ship(ent, and to e=ercise due care in the handlin) and sto*a)e, includin) such (ethods as their nature reJuires.F#< 9n the case at 'ar, it *as esta'lished that petitioner received the car)oes fro( the 539 *arehouse in "A9A in )ood order and conditionH#$ and that upon delivery 'y petitioner to BiKon :a'oratories 9nc., so(e of the car)oes *ere found to 'e in 'ad order, as noted in the Delivery eceipt%0 issued 'y petitioner, and as indicated in the 3urvey eport of 7lite 3urveyors %1 and the Destruction eport of BiKon :a'oratories, 9nc.%2 9n an atte(pt to free itself fro( responsi'ility for the da(a)e to the )oods, petitioner posits that they *ere da(a)ed due to the fault or ne)li)ence of the shipper for failin) to properly pac1 the( and to the inherent characteristics of the )oods%,H and that it should not 'e faulted for follo*in) the instructions of Calicdan of 0yeth-3uaco to proceed *ith the delivery despite infor(ation conveyed to the latter that so(e of the cartons, on e=a(ination outside the 539 *arehouse, *ere found to 'e *et. %# 0hile para)raph "o. # of Article 1;,# %% of the Civil Code e=e(pts a co((on carrier fro( lia'ility if the loss or da(a)e is due to the character of the )oods or defects in the pac1in) or in the containers, the rule is that if the i(proper pac1in) is 1no*n to the carrier or his e(ployees or is apparent upon ordinary o'servation, 'ut he nevertheless accepts the sa(e *ithout protest or e=ception not*ithstandin) such condition, he is not relieved of lia'ility for the resultin) da(a)e.%+ 9f the clai( of petitioner that so(e of the cartons *ere already da(a)ed upon delivery to it *ere true, then it should naturally have received the car)o under protest or *ith reservations duly noted on the receipt issued 'y 539. /ut it (ade no such protest or reservation.%; Moreover, as o'served 'y the appellate court, if indeed petitionerMs e(ployees only e=a(ined the car)oes outside the 539 *arehouse and found so(e to 'e *et, they *ould certainly have )one 'ac1 to 539, sho*ed to the *arehouse(an the da(a)e, and de(anded then and there for /ad Order docu(ents or a certification confir(in) the da(a)e. %< Or, petitioner *ould have presented, as *itness, the e(ployees of the 539 fro( *ho( Morales and Do(in)o too1 delivery of the car)o to prove that, indeed, part of the car)oes *as already da(a)ed *hen the container *as alle)edly opened outside the *arehouse.%$ 5etitioner )oes on to posit that contrary to the report of 7lite 3urveyors, no rain fell that day. 9nstead, it asserts that so(e of the car)oes *ere already *et on delivery 'y 539 outside the 539 *arehouse 'ut such not*ithstandin) Calicdan directed Morales to proceed *ith the delivery to BiKon :a'oratories, 9nc. 0hile Calicdan testified that he received the purported telephone call of Morales on .uly 2$, 1$$2, he failed to specifically declare *hat ti(e he received the call. As to *hether the call *as (ade at the 539 *arehouse *hen the ship(ent *as stripped fro( the

airport containers, or *hen the car)oes *ere already in transit to Antipolo, it is not deter(ina'le. Aside fro( that phone call, petitioner ad(itted that it had no docu(entary evidence to prove that at the ti(e it received the car)oes, a part of it *as *et, da(a)ed or in 'ad condition.+0 -he #-pa)e *eather data furnished 'y 5AGA3A+1 on reJuest of 3ancheK /ro1era)e hardly i(presses, no *itness havin) identified it and interpreted the technical ter(s thereof. -he possi'ility on the other hand that, as found 'y BiKon :a'oratories, 9nc., the oral contraceptives *ere da(a)ed 'y rain*ater *hile in transit to Antipolo City is (ore li1ely then. 3ancheK hi(self testified that in the past, there *as a si(ilar instance *hen the ship(ent of 0yeth-3uaco *as also found to 'e *et 'y rain. A--8. &:O 73> E> 0as there any instance that a ship(ent of this nature, oral contraceptives, that arrived at the "A9A *ere da(a)ed and clai(ed 'y the 0yeth-3uaco *ithout any JuestionL 09-"733> A> 8es sir, there *as an instance that one cartoon C%icD *ere *etted C%icD 'ut 0yeth-3uaco did not clai( anythin) a)ainst us. A--8. &:O 73> E> BO0 93 9-L 09-"733> A> 0e e=perienced, there *as a ti(e that *e e=perienced that there *as a cartoon C %icD *etted C%icD up to the 'otto( are *et specially durin) rainy season.+2 3ince petitioner received all the car)oes in )ood order and condition at the ti(e they *ere turned over 'y the 539 *arehouse(an, and upon their delivery to BiKon :a'oratories, 9nc. a portion thereof *as found to 'e in 'ad order, it *as incu('ent on petitioner to prove that it e=ercised e=traordinary dili)ence in the carria)e of the )oods. 9t did not, ho*ever. Bence, its presu(ed ne)li)ence under Article 1;,% of the Civil Code re(ains unre'utted. 0B7 7&O 7, the Au)ust 10, 2000 Decision of the Court of Appeals is here'y A&&9 M7D. Costs a)ainst petitioner. 3O O D7 7D.

G.R. No. 13:060 S&,t&.4&) 1, 2004. $ILLIA6 TIU, #o("g 4us("&ss u"#&) t%& "!.& !"# st<+& o' ?D@ Roug% R(#&)s,? !"# 2IRGILIO TE LAS PIAAS petitioners, vs.PEDRO A. ARRIESGADO, 1EN;A6IN CONDOR, SERGIO PEDRANO !"# PHILIPPINE PHOENIB SURET5 AND INSURANCE, INC., respondents. -his is a petition for revie* on certiorari under ule #% of the ules of Court fro( the Decision 1 of the Court of Appeals in CA-G. . C! "o. %#,%# affir(in) *ith (odification the Decision 2 of the -C, ;th .udicial e)ion, Ce'u City, /ranch 20, in Civil Case "o. C7/-%$+, for 'reach of contract of carria)e, da(a)es and attorneyMs fees, and the esolution dated &e'ruary 2+, 1$$$ denyin) the (otion for reconsideration thereof. -he follo*in) facts are undisputed> At a'out 10>00 p.(. of March 1%, 1$<;, the car)o truc1 (ar1ed FCondor Bollo* /loc1s and General MerchandiseF 'earin) plate nu('er G/5-+;% *as loaded *ith fire*ood in /o)o, Ce'u and left for Ce'u City. 2pon reachin) 3itio A))ies, 5o'lacion, Co(postela, Ce'u, ?ust as the truc1 passed over a 'rid)e, one of its rear tires e=ploded. -he driver, 3er)io 5edrano, then par1ed alon) the ri)ht side of the national hi)h*ay and re(oved the da(a)ed tire to have it vulcaniKed at a near'y shop, a'out ;00 (eters a*ay. ,5edrano left his helper, .ose Mitante, .r. to 1eep *atch over the stalled vehicle, and instructed the latter to place a spare tire si= fatho(s a*ay # 'ehind the stalled truc1 to serve as a *arnin) for onco(in) vehicles. -he truc1Ms tail li)hts *ere also left on. 9t *as a'out 12>00 a.(., March 1+, 1$<;. At a'out #>#% a.(., DM ou)h iders

passen)er 'us *ith plate nu('er 5/5-;2# driven 'y !ir)ilio -e :aspiIas *as cruisin) alon) the national hi)h*ay of 3itio A))ies, 5o'lacion, Co(postela, Ce'u. -he passen)er 'us *as also 'ound for Ce'u City, and had co(e fro( Maya, Daan'antayan, Ce'u. A(on) its passen)ers *ere the 3pouses 5edro A. Arries)ado and &elisa 5epito Arries)ado, *ho *ere seated at the ri)ht side of the 'us, a'out , or # places fro( the front seat. As the 'us *as approachin) the 'rid)e, :aspiIas sa* the stalled truc1, *hich *as then a'out 2%( a*ay. %Be applied the 'rea1s and tried to s*erve to the left to avoid hittin) the truc1. /ut it *as too lateH the 'us ra((ed into the truc1Ms left rear. -he i(pact da(a)ed the ri)ht side of the 'us and left several passen)ers in?ured. 5edro Arries)ado lost consciousness and suffered a fracture in his ri)ht colles. + Bis *ife, &elisa, *as 'rou)ht to the Danao City Bospital. 3he *as later transferred to the 3outhern 9sland Medical Center *here she died shortly thereafter.; espondent 5edro A. Arries)ado then filed a co(plaint for 'reach of contract of carria)e, da(a)es and attorneyMs fees 'efore the e)ional -rial Court of Ce'u City, /ranch 20, a)ainst the petitioners, DM ou)h iders 'us operator 0illia( -iu and his driver, !ir)ilio -e :aspiIas on May 2;, 1$<;. -he respondent alle)ed that the passen)er 'us in Juestion *as cruisin) at a fast and hi)h speed alon) the national road, and that petitioner :aspiIas did not ta1e precautionary (easures to avoid the accident.< -hus> +. -hat the accident resulted to the death of the plaintiffMs *ife, &elisa 5epito Arries)ado, as evidenced 'y a Certificate of Death, a =ero= copy of *hich is hereto attached as inte)ral part hereof and (ar1ed as A""7G P FAF, and physical in?uries to several of its passen)ers, includin) plaintiff hi(self *ho suffered a FCO::73 & AC-2 7 9GB-,F per Medical Certificate, a =ero= copy of *hich is hereto attached as inte)ral part hereof and (ar1ed as A""7G P F/F hereof. ;. -hat due to the rec1less and i(prudent drivin) 'y defendant -e :aspiIas of the said ou)h iders passen)er 'us, plaintiff and his *ife, &elisa 5epito Arries)ado, failed to safely reach their destination *hich *as Ce'u City, the pro=i(ate cause of *hich *as defendant-driverMs failure to o'serve ut(ost dili)ence reJuired of a very cautious person under all circu(stances. <. -hat defendant 0illia( -iu, 'ein) the o*ner and operator of the said ou)h iders passen)er 'us *hich fi)ured in the said accident, *herein plaintiff and his *ife *ere ridin) at the ti(e of the accident, is therefore directly lia'le for the 'reach of contract of carria)e for his failure to transport plaintiff and his *ife safely to their place of destination *hich *as Ce'u City, and *hich failure in his o'li)ation to transport safely his passen)ers *as due to and in conseJuence of his failure to e=ercise the dili)ence of a )ood father of the fa(ily in the selection and supervision of his e(ployees, particularly defendant-driver -e :aspiIas.$ -he respondent prayed that ?ud)(ent 'e rendered in his favor and that petitioners 'e conde(ned to pay the follo*in) da(a)es> 1D. -o pay to plaintiff, ?ointly and severally, the a(ount of 5,0,000.00 for the death and unti(ely de(ise of plaintiffMs *ife, &elisa 5epito Arries)adoH 2D. -o pay to plaintiff, ?ointly and severally, the a(ount of 5,<,##1.%0, representin) actual e=penses incurred 'y the plaintiff in connection *ith the death6'urial of plaintiffMs *ifeH ,D. -o pay to plaintiff, ?ointly and severally, the a(ount of 51,11,.<0, representin) (edical6hospitaliKation e=penses incurred 'y plaintiff for the in?uries sustained 'y hi(H #D. -o pay to plaintiff, ?ointly and severally, the a(ount of 5%0,000.00 for (oral da(a)esH %D. -o pay to plaintiff, ?ointly and severally, the a(ount of 5%0,000.00 'y *ay of e=e(plary da(a)esH +D. -o pay to plaintiff, ?ointly and severally, the a(ount of 520,000.00 for attorneyMs feesH ;D. -o pay to plaintiff, ?ointly and severally, the a(ount of 5%,000.00 for liti)ation e=penses. 5:A9"-9&& &2 -B7 5 A83 &O 32CB O-B7 7:97&3 A"D 7M7D973 9" :A0 A"D 7E29-8. 10 -he petitioners, for their part, filed a -hird-5arty Co(plaint 11 on Au)ust 21, 1$<; a)ainst the follo*in)> respondent 55399, petitioner -iuMs insurerH respondent /en?a(in Condor, the re)istered o*ner of the car)o truc1H and respondent 3er)io 5edrano, the driver of the truc1. -hey alle)ed that petitioner :aspiIas *as ne)otiatin) the uphill cli(' alon) the national hi)h*ay of 3itio A))ies, 5o'lacion, Co(postela, in a (oderate and nor(al speed. 9t *as further alle)ed that the truc1 *as par1ed in a slanted (anner, its rear portion al(ost in the (iddle of the hi)h*ay, and that no early *arnin) device *as displayed. 5etitioner :aspiIas pro(ptly applied the 'ra1es and s*erved to the left to avoid hittin) the truc1 head-on, 'ut despite his efforts to avoid da(a)e to property and physical in?uries on the passen)ers, the ri)ht side portion of the 'us hit the car)o truc1Ms left rear. -he petitioners further alle)ed, thus> %. -hat the car)o truc1 (entioned in the aforeJuoted para)raph is o*ned and re)istered in the na(e of the third-party defendant /en?a(in Condor and *as left unattended 'y its driver 3er)io 5edrano, one of the third-party defendants, at the ti(e of the incidentH +. -hat third-party defendant 3er)io 5edrano, as driver of the car)o truc1 *ith (ar1ed CsicD FCondor Bollo* /loc1s @ General Merchandise,F *ith 5late "o. G/5-+;% *hich *as rec1lessly and i(prudently par1ed alon) the national hi)h*ay of Co(postela, Ce'u durin) the vehicular accident in Juestion, and third-party defendant /en?a(in Condor, as the re)istered o*ner of the car)o truc1 *ho failed to e=ercise due dili)ence in the selection and supervision of third-party defendant 3er)io 5edrano, are ?ointly and severally lia'le to the third-party plaintiffs for *hatever lia'ility that (ay 'e ad?ud)ed a)ainst said thirdparty plaintiffs or are directly lia'le of CsicD the alle)ed death of plaintiffMs *ifeH ;. -hat in addition to all that are stated a'ove and in the ans*er *hich are intended to sho* rec1less i(prudence on the part of the third-party defendants, the third-party plaintiffs here'y declare that durin) the vehicular accident in Juestion, third-party defendant *as clearly violatin) 3ection ,#, par. C)D of the :and -ransportation and -raffic CodeRR 10. -hat the aforesaid passen)er 'us, o*ned and operated 'y third-party plaintiff 0illia( -iu, is covered 'y a co((on carrier lia'ility insurance *ith Certificate of Cover "o. 0%#$#0 issued 'y 55399, Ce'u City /ranch, in favor of third-party plaintiff 0illia( -iu *hich covers the period fro( .uly 22, 1$<+ to .uly 22, 1$<; and that the said insurance covera)e *as valid, 'indin) and su'sistin) durin) the ti(e of the afore(entioned incident CAnne= FAF as part hereofDH 11. -hat after the aforesaid alle)ed incident, third-party plaintiff notified third-party defendant 5hilippine 5hoeni= 3urety and 9nsurance, 9nc., of the alle)ed incident hereto (entioned, 'ut to no availH 12. -hat )rantin), et ar)uendo et ar)uendi, if herein third-party plaintiffs *ill 'e adversely ad?ud)ed, they stand to pay da(a)es sou)ht 'y the plaintiff and therefore could also loo1 up to the 5hilippine 5hoeni= 3urety and 9nsurance, 9nc., for contri'ution, inde(nification and6or rei('urse(ent of any lia'ility or o'li)ation that they (i)ht N'eO ad?ud)ed per insurance covera)e duly entered into 'y and 'et*een third-party plaintiff 0illia( -iu and third-party defendant 55399.HR12 -he respondent 55399, for its part, ad(itted that it had an e=istin) contract *ith petitioner -iu, 'ut averred that it had already attended to and settled the clai(s of those *ho *ere in?ured durin) the incident. 1, 9t could not accede to the clai( of respondent

Arries)ado, as such clai( *as *ay 'eyond scheduled inde(nity as contained in the contract of insurance. 1# After parties presented their respective evidence, the trial court ruled in favor of respondent Arries)ado. -he dispositive portion of decision reads> 0B7 7&O 7, in vie* of the fore)oin), ?ud)(ent is here'y rendered in favor of plaintiff as a)ainst defendant 0illia( -iu orderin) the latter to pay the plaintiff the follo*in) a(ounts> 1 - -he su( of &9&-8 -BO23A"D 573O3 C5%0,000.00D as (oral da(a)esH 2 - -he su( of &9&-8 -BO23A"D 573O3 C5%0,000.00D as e=e(plary da(a)esH , - -he su( of -B9 -8-79GB- -BO23A"D &O2 B2"D 7D &O -8-O"7 573O3 C5,<,##1.00D as actual da(a)esH # - -he su( of -07"-8 -BO23A"D 573O3 C520,000.00D as attorneyMs feesH % - -he su( of &9!7 -BO23A"D 573O3 C5%,000.00D as costs of suitH 3O O D7 7D.1% Accordin) to the trial court, there *as no dispute that petitioner 0illia( -iu *as en)a)ed in 'usiness as a co((on carrier, in vie* of his ad(ission that DM ou)h ider passen)er 'us *hich fi)ured in the accident *as o*ned 'y hi(H that he had 'een en)a)ed in the transportation 'usiness for 2% years *ith a sole proprietorshipH and that he o*ned ,# 'uses. -he trial court ruled that if petitioner :aspiIas had not 'een drivin) at a fast pace, he could have easily s*erved to the left to avoid hittin) the truc1, thus, avertin) the unfortunate incident. 9t then concluded that petitioner :aspiIas *as ne)li)ent. -he trial court also ruled that the a'sence of an early *arnin) device near the place *here the truc1 *as par1ed *as not sufficient to i(pute ne)li)ence on the part of respondent 5edrano, since the tail li)hts of the truc1 *ere fully on, and the vicinity *as *ell li)hted 'y street la(ps. 1+ 9t also found that the testi(ony of petitioner -iu, that he 'ased the selection of his driver :aspiIas on efficiency and in-service trainin), and that the latter had 'een so far an efficient and )ood driver for the past si= years of his e(ploy(ent, *as insufficient to prove that he o'served the dili)ence of a )ood father of a fa(ily in the selection and supervision of his e(ployees. After the petitionerMs (otion for reconsideration of the said decision *as denied, the petitioners elevated the case to the Court of Appeals on the follo*in) issues> 9 0B7-B7 -B9 D 5A -8 D7&7"DA"- 37 G9O 57D A"O 0A3 7CS:733 A"D 9M5 2D7"- 0B7" B7 5A S7D -B7 CA GO - 2CS 9" A" O/:9E27 MA""7 H 99 0B7-B7 -B7 -B9 D 5A -8 D7&7"DA"-3 A 7 .O9"-:8 A"D 37!7 A::8 :9A/:7 D9 7C-:8 -O 5:A9"-9&&A557::77 O -O D7&7"DA"-3-A557::A"-3 &O 0BA-7!7 :9A/9:9-8 -BA- MA8 /7 AD.2DG7D -O -B7 3A9D D7&7"DA"-3-A557::A"-3H 999 0B7-B7 D7&7"DA"--A557::A"- !9 G9:9O -7 :A359UA3 0A3 G29:-8 O& G O33 "7G:9G7"C7H 9! 0B7-B7 D7&7"DA"--A557::A"- 09::9AM -92 BAD 7G7 C937D -B7 D27 D9:9G7"C7 O& A GOOD &A-B7 O& A &AM9:8 9" -B7 37:7C-9O" A"D 3257 !939O" O& B93 D 9!7 3H ! G A"-9"G &O -B7 3AS7 O& A G2M7"- -BA- D7&7"DA"--A557::A"- 09::9AM -92 93 :9A/:7 -O 5:A9"-9&&A557::77, 0B7-B7 -B7 7 93 :7GA: A"D &AC-2A: /A393 9" A0A D9"G 7GC7339!7 MO A: DAMAG73, 7GN7OM5:A 8 DAMAG73, A--O "78M3 &773 A"D :9-9GA-9O" 7G57"373 -O 5:A9"-9&&-A557::77H !9 0B7-B7 -B9 D 5A -8 D7&7"DA"- 5B9:9559"7 5BO7"9G 32 7-8 A"D 9"32 A"C7, 9"C. 93 :9A/:7 -O D7&7"DA"-- A557::A"- 09::9AM -92.1; -he appellate court rendered ?ud)(ent affir(in) the trial courtMs decision *ith the (odification that the a*ards for (oral and e=e(plary da(a)es *ere reduced to 52%,000. -he dispositive portion reads> 0B7 7&O 7, the appealed Decision dated "ove('er +, 1$$% is here'y MOD9&97D such that the a*ards for (oral and e=e(plary da(a)es are each reduced to 52%,000.00 or a total of 5%0,000.00 for 'oth. -he ?ud)(ent is A&&9 M7D in all other respects. 3O O D7 7D.1< Accordin) to the appellate court, the action of respondent Arries)ado *as 'ased not on Juasi-delict 'ut on 'reach of contract of carria)e. As a co((on carrier, it *as incu('ent upon petitioner -iu to prove that e=traordinary dili)ence *as o'served in ensurin) the safety of passen)ers durin) transportation. 3ince the latter failed to do so, he should 'e held lia'le for respondent Arries)adoMs clai(. -he CA also ruled that no evidence *as presented a)ainst the respondent 55399, and as such, it could not 'e held lia'le for respondent Arries)adoMs clai(, nor for contri'ution, inde(nification and6or rei('urse(ent in case the petitioners *ere ad?ud)ed lia'le. -he petitioners no* co(e to this Court and ascri'e the follo*in) errors co((itted 'y the appellate court> 9. -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" "O- D7C:A 9"G 735O"D7"-3 /7".AM9" CO"DO A"D 37 G9O 57D A"O G29:-8 O& "7G:9G7"C7 A"D B7"C7, :9A/:7 -O 735O"D7"- 57D O A. A 973GADO O -O 57-9-9O"7 3 &O 0BA-7!7 :9A/9:9-8 -BA- MA8 /7 AD.2DG7D AGA9"3- -B7M. 99. -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" &9"D9"G 57-9-9O"7 3 G29:-8 O& "7G:9G7"C7 A"D B7"C7, :9A/:7 -O 735O"D7"- 57D O A. A 973GADO. 999. -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" &9"D9"G 57-9-9O"7 09::9AM -92 :9A/:7 &O 7G7M5:A 8 DAMAG73, A--O "78M3 &773 A"D :9-9GA-9O" 7G57"373. 9!. -B7 BO"O A/:7 CO2 - O& A557A:3 7 7D 9" "O- &9"D9"G 735O"D7"- 5B9:9559"7 5BO7"9G 32 7-8 A"D 9"32 A"C7, 9"C. :9A/:7 -O 735O"D7"- 57D O A. A 973GADO O -O 57-9-9O"7 09::9AM -92.1$ Accordin) to the petitioners, the appellate court erred in failin) to appreciate the a'sence of an early *arnin) device and6or 'uilt-in reflectors at the front and 'ac1 of the car)o truc1, in clear violation of 3ection ,#, par. C)D of the :and -ransportation and -raffic Code. -hey aver that such violation is only a proof of respondent 5edranoMs ne)li)ence, as provided under Article 21<% of the "e* Civil Code. -hey also Juestion the appellate courtMs failure to ta1e into account that the truc1 *as par1ed in an o'liJue (anner, its rear portion al(ost at the center of the road. As such, the pro=i(ate cause of the incident *as the )ross rec1lessness and i(prudence of respondent 5edrano, creatin) the presu(ption of ne)li)ence on the part of respondent Condor in supervisin) his e(ployees, *hich presu(ption *as not re'utted. -he petitioners then contend that respondents Condor and 5edrano should 'e held ?ointly and severally lia'le to respondent Arries)ado for the pay(ent of the latterMs clai(. -he petitioners, li1e*ise, aver that e=pert evidence should have 'een presented to prove that petitioner :aspiIas *as drivin) at a very fast speed, and that the CA could not reach such conclusion 'y (erely considerin) the da(a)es on the car)o truc1. 9t *as also pointed out that petitioner -iu presented evidence that he had e=ercised the dili)ence of a )ood father of a fa(ily in the

selection and supervision of his drivers. -he petitioners further alle)e that there is no le)al and factual 'asis to reJuire petitioner -iu to pay e=e(plary da(a)es as no evidence *as presented to sho* that the latter acted in a fraudulent, rec1less and oppressive (anner, or that he had an active participation in the ne)li)ent act of petitioner :aspiIas. &inally, the petitioners contend that respondent 55399 ad(itted in its ans*er that *hile it had attended to and settled the clai(s of the other in?ured passen)ers, respondent Arries)adoMs clai( re(ained unsettled as it *as 'eyond the scheduled inde(nity under the insurance contract. -he petitioners ar)ue that said respondent 55399 should have settled the said clai( in accordance *ith the scheduled inde(nity instead of ?ust denyin) the sa(e. On the other hand, respondent Arries)ado ar)ues that t*o of the issues raised 'y the petitioners involved Juestions of fact, not revie*a'le 'y the 3upre(e Court> the findin) of ne)li)ence on the part of the petitioners and their lia'ility to hi(H and the a*ard of e=e(plary da(a)es, attorneyMs fees and liti)ation e=penses in his favor. 9nvo1in) the principle of eJuity and ?ustice, respondent Arries)ado pointed out that if there *as an error to 'e revie*ed in the CA decision, it should 'e )eared to*ards the restoration of the (oral and e=e(plary da(a)es to5%0,000 each, or a total of 5100,000 *hich *as reduced 'y the Court of Appeals to 52%,000 each, or a total of only 5%0,000. espondent Arries)ado also alle)ed that respondents Condor and 5edrano, and respondent 5hoeni= 3urety, are parties *ith *ho( he had no contract of carria)e, and had no cause of action a)ainst. 9t *as pointed out that only the petitioners needed to 'e sued, as driver and operator of the ill-fated 'us, on account of their failure to 'rin) the Arries)ado 3pouses to their place of destination as a)reed upon in the contract of carria)e, usin) the ut(ost dili)ence of very cautious persons *ith due re)ard for all circu(stances. espondents Condor and 5edrano point out that, as correctly ruled 'y the Court of Appeals, the pro=i(ate cause of the unfortunate incident *as the fast speed at *hich petitioner :aspiIas *as drivin) the 'us o*ned 'y petitioner -iu. Accordin) to the respondents, the alle)ation that the truc1 *as not eJuipped *ith an early *arnin) device could not in any *ay have prevented the incident fro( happenin). 9t *as also pointed out that respondent Condor had al*ays e=ercised the due dili)ence reJuired in the selection and supervision of his e(ployees, and that he *as not a party to the contract of carria)e 'et*een the petitioners and respondent Arries)ado. espondent 55399, for its part, alle)es that contrary to the alle)ation of petitioner -iu, it settled all the clai(s of those in?ured in accordance *ith the insurance contract. 9t further avers that it did not deny respondent Arries)adoMs clai(, and e(phasiKes that its lia'ility should 'e *ithin the scheduled li(its of inde(nity under the said contract. -he respondent concludes that *hile it is true that insurance contracts are contracts of inde(nity, the (easure of the insurerMs lia'ility is deter(ined 'y the insuredMs co(pliance *ith the ter(s thereof. T%& Cou)t@s Ru+("g At the outset, it (ust 'e stressed that this Court is not a trier of facts. 20 &actual findin)s of the Court of Appeals are final and (ay not 'e revie*ed on appeal 'y this Court, e=cept *hen the lo*er court and the CA arrived at diverse factual findin)s. 21 -he petitioners in this case assail the findin) of 'oth the trial and the appellate courts that petitioner :aspiIas *as drivin) at a very fast speed 'efore the 'us o*ned 'y petitioner -iu collided *ith respondent CondorMs stalled truc1. -his is clearly one of fact, not revie*a'le 'y the Court in a petition for revie* under ule #%. 22 On this )round alone, the petition is destined to fail. Bo*ever, considerin) that novel Juestions of la* are li1e*ise involved, the Court resolves to e=a(ine and rule on the (erits of the case. Petitioner Laspias was negligent in driving the Ill-fated bus 9n his testi(ony 'efore the trial court, petitioner :aspiIas clai(ed that he *as traversin) the t*o-lane road at Co(postela, Ce'u at a speed of only forty C#0D to fifty C%0D 1ilo(eters per hour 'efore the incident occurred. 2, Be also ad(itted that he sa* the truc1 *hich *as par1ed in an Fo'liJue positionF at a'out 2% (eters 'efore i(pact, 2#and tried to avoid hittin) it 'y s*ervin) to the left. Bo*ever, even in the a'sence of e=pert evidence, the da(a)e sustained 'y the truc1 2% itself supports the findin) of 'oth the trial court and the appellate court, that the DM ou)h ider 'us driven 'y petitioner :aspiIas *as travelin) at a fast pace. 3ince he sa* the stalled truc1 at a distance of 2% (eters, petitioner :aspiIas had (ore than enou)h ti(e to s*erve to his left to avoid hittin) itH that is, if the speed of the 'us *as only #0 to %0 1ilo(eters per hour as he clai(ed. As found 'y the Court of Appeals, it is easier to 'elieve that petitioner :aspiIas *as drivin) at a very fast speed, since at #>#% a.(., the hour of the accident, there *ere no onco(in) vehicles at the opposite direction. 5etitioner :aspiIas could have s*erved to the left lane *ith proper clearance, and, thus, could have avoided the truc1.2+ 9nstinct, at the very least, *ould have pro(pted hi( to apply the 'rea1s to avert the i(pendin) disaster *hich he (ust have foreseen *hen he cau)ht si)ht of the stalled truc1. As *e had occasion to reiterate> A (an (ust use co((on sense, and e=ercise due reflection in all his actsH it is his duty to 'e cautious, careful and prudent, if not fro( instinct, then throu)h fear of recurrin) punish(ent. Be is responsi'le for such results as anyone (i)ht foresee and for acts *hich no one *ould have perfor(ed e=cept throu)h culpa'le a'andon. Other*ise, his o*n person, ri)hts and property, and those of his fello* 'ein)s, *ould ever 'e e=posed to all (anner of dan)er and in?ury. 2; 0e a)ree *ith the follo*in) findin)s of the trial court, *hich *ere affir(ed 'y the CA on appeal> A close study and evaluation of the testi(onies and the docu(entary proofs su'(itted 'y the parties *hich have direct 'earin) on the issue of ne)li)ence, this Court as sho*n 'y preponderance of evidence that defendant !ir)ilio -e :aspiIas failed to o'serve e=traordinary dili)ence as a driver of the co((on carrier in this case. 9t is Juite hard to accept his version of the incident that he did not see at a reasona'le distance ahead the car)o truc1 that *as par1ed *hen the ou)h ider N/usO ?ust ca(e out of the 'rid)e *hich is on an CsicD N(oreO elevated position than the place *here the car)o truc1 *as par1ed. 0ith its headli)hts fully on, defendant driver of the ou)h ider *as in a vanta)e position to see the car)o truc1 ahead *hich *as par1ed and he could ?ust easily have avoided hittin) and 'u(pin) the sa(e 'y (aneuverin) to the left *ithout hittin) the said car)o truc1. /esides, it is CsicD sho*n that there *as still (uch roo( or space for the ou)h ider to pass at the left lane of the said national hi)h*ay even if the car)o truc1 had occupied the entire ri)ht lane thereof. 9t is not true that if the ou)h ider *ould proceed to pass throu)h the left lane it *ould fall into a canal considerin) that there *as (uch space for it to pass *ithout hittin) and 'u(pin) the car)o truc1 at the left lane of said national hi)h*ay. -he records, further, sho*ed that there *as no inco(in) vehicle at the opposite lane of the national hi)h*ay *hich *ould have prevented the ou)h ider fro( not s*ervin) to its left in order to avoid hittin) and 'u(pin) the par1ed car)o truc1. /ut the evidence sho*ed that the ou)h ider

instead of s*ervin) to the still spacious left lane of the national hi)h*ay plo*ed directly into the par1ed car)o truc1 hittin) the latter at its rear portionH and thus, the CsicD causin) da(a)es not only to herein plaintiff 'ut to the car)o truc1 as *ell. 2< 9ndeed, petitioner :aspiIasM ne)li)ence in drivin) the 'us is apparent in the records. /y his o*n ad(ission, he had ?ust passed a 'rid)e and *as traversin) the hi)h*ay of Co(postela, Ce'u at a speed of #0 to %0 1ilo(eters per hour 'efore the collision occurred. -he (a=i(u( speed allo*ed 'y la* on a 'rid)e is only ,0 1ilo(eters per hour. 2$ And, as correctly pointed out 'y the trial court, petitioner :aspiIas also violated 3ection ,% of the :and -ransportation and -raffic Code, A "o. #1,+, as a(ended> 3ec. ,%. R$%0#ic0io! "% 0o %($$1. P CaD Any person drivin) a (otor vehicle on a hi)h*ay shall drive the sa(e at a careful and prudent speed, not )reater nor less than is reasona'le and proper, havin) due re)ard for the traffic, the *idth of the hi)h*ay, and or any other condition then and there e=istin)H and no person shall drive any (otor vehicle upon a hi)h*ay at such speed as to endan)er the life, li(' and property of any person, nor at a speed )reater than *ill per(it hi( to 'rin) the vehicle to a stop *ithin the assured clear distance ahead.,0 2nder Article 21<% of the Civil Code, a person drivin) a vehicle is presu(ed ne)li)ent if at the ti(e of the (ishap, he *as violatin) any traffic re)ulation.,1 Petitioner Tiu failed to overcome the presumption of negligence against him as one engaged in the business Of common carriage -he rules *hich co((on carriers should o'serve as to the safety of their passen)ers are set forth in the Civil Code, Articles 1;,,,,2 1;%%,, and 1;%+.,# 9n this case, respondent Arries)ado and his deceased *ife contracted *ith petitioner -iu, as o*ner and operator of DM ou)h iders 'us service, for transportation fro( Maya, Daan'antayan, Ce'u, to Ce'u City for the price of 51<.00.,% 9t is undisputed that the respondent and his *ife *ere not safely transported to the destination a)reed upon. 9n actions for 'reach of contract, only the e=istence of such contract, and the fact that the o'li)or, in this case the co((on carrier, failed to transport his passen)er safely to his destination are the (atters that need to 'e proved. ,+ -his is 'ecause under the said contract of carria)e, the petitioners assu(ed the e=press o'li)ation to transport the respondent and his *ife to their destination safely and to o'serve e=traordinary dili)ence *ith due re)ard for all circu(stances. ,; Any in?ury suffered 'y the passen)ers in the course thereof is i((ediately attri'uta'le to the ne)li)ence of the carrier. ,<2pon the happenin) of the accident, the presu(ption of ne)li)ence at once arises, and it 'eco(es the duty of a co((on carrier to prove that he o'served e=traordinary dili)ence in the care of his passen)ers.,$ 9t (ust 'e stressed that in reJuirin) the hi)hest possi'le de)ree of dili)ence fro( co((on carriers and in creatin) a presu(ption of ne)li)ence a)ainst the(, the la* co(pels the( to cur' the rec1lessness of their drivers.#0 0hile evidence (ay 'e su'(itted to overco(e such presu(ption of ne)li)ence, it (ust 'e sho*n that the carrier o'served the reJuired e=traordinary dili)ence, *hich (eans that the carrier (ust sho* the ut(ost dili)ence of very cautious persons as far as hu(an care and foresi)ht can provide, or that the accident *as caused 'y fortuitous event. #1 As correctly found 'y the trial court, petitioner -iu failed to conclusively re'ut such presu(ption. -he ne)li)ence of petitioner :aspiIas as driver of the passen)er 'us is, thus, 'indin) a)ainst petitioner -iu, as the o*ner of the passen)er 'us en)a)ed as a co((on carrier.#2 The Doctrine of Last Clear Chance Is Inapplicable in theCase at ar Contrary to the petitionerMs contention, the principle of last clear chance is inapplica'le in the instant case, as it only applies in a suit 'et*een the o*ners and drivers of t*o collidin) vehicles. 9t does not arise *here a passen)er de(ands responsi'ility fro( the carrier to enforce its contractual o'li)ations, for it *ould 'e ineJuita'le to e=e(pt the ne)li)ent driver and its o*ner on the )round that the other driver *as li1e*ise )uilty of ne)li)ence.#, -he co((on la* notion of last clear chance per(itted courts to )rant recovery to a plaintiff *ho has also 'een ne)li)ent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. Accordin)ly, it is difficult to see *hat role, if any, the co((on la* of last clear chance doctrine has to play in a ?urisdiction *here the co((on la* concept of contri'utory ne)li)ence as an a'solute 'ar to recovery 'y the plaintiff, has itself 'een re?ected, as it has 'een in Article 21;$ of the Civil Code. ## -hus, petitioner -iu cannot escape lia'ility for the death of respondent Arries)adoMs *ife due to the ne)li)ence of petitioner :aspiIas, his e(ployee, on this score. !espondents Pedrano and Condor were li"ewise #egligent 9n 5hoeni= Construction, 9nc. v. 9nter(ediate Appellate Court,#% *here therein respondent Dionisio sustained in?uries *hen his vehicle ra((ed a)ainst a du(p truc1 par1ed as1e*, the Court ruled that the i(proper par1in) of a du(p truc1 *ithout any *arnin) li)hts or reflector devices created an unreasona'le ris1 for anyone drivin) *ithin the vicinity, and for havin) created such ris1, the truc1 driver (ust 'e held responsi'le. 9n rulin) a)ainst the petitioner therein, the Court elucidated, thus> R 9n our vie*, DionisioMs ne)li)ence, althou)h later in point of ti(e than the truc1 driverMs ne)li)ence, and therefore closer to the accident, *as not an efficient intervenin) or independent cause. 0hat the petitioners descri'e as an Fintervenin) causeF *as no (ore than a foreseea'le conseJuence of the ris1 created 'y the ne)li)ent (anner in *hich the truc1 driver had par1ed the du(p truc1. 9n other *ords, the petitioner truc1 driver o*ed a duty to private respondent Dionisio and others si(ilarly situated not to i(pose upon the( the very ris1 the truc1 driver had created. DionisioMs ne)li)ence *as not that of an independent and overpo*erin) nature as to cut, as it *ere, the chain of causation in fact 'et*een the i(proper par1in) of the du(p truc1 and the accident, nor to sever the ?uris vinculu( of lia'ility. R 0e hold that private respondent DionisioMs ne)li)ence *as Fonly contri'utory,F that the Fi((ediate and pro=i(ate causeF of the in?ury re(ained the truc1 driverMs Flac1 of due care.FR#+ 9n this case, 'oth the trial and the appellate courts failed to consider that respondent 5edrano *as also ne)li)ent in leavin) the truc1 par1ed as1e* *ithout any *arnin) li)hts or reflector devices to alert onco(in) vehicles, and that such failure created the presu(ption of ne)li)ence on the part of his e(ployer, respondent Condor, in supervisin) his e(ployees properly and adeJuately. As *e ruled in 5o'lete v. &a'ros>#; 9t is such a fir(ly esta'lished principle, as to have virtually for(ed part of the la* itself, that the ne)li)ence of the e(ployee )ives rise to the presu(ption of ne)li)ence on the part of the e(ployer. -his is the presu(ed ne)li)ence in the selection and supervision of e(ployee. -he theory of presu(ed ne)li)ence, in contrast *ith the A(erican doctrine of respondeat superior, *here the ne)li)ence of the e(ployee is conclusively presu(ed to 'e the ne)li)ence of the e(ployer, is clearly deduci'le fro( the last para)raph of Article 21<0 of the Civil Code *hich provides that the responsi'ility therein (entioned shall cease if the e(ployers prove that they o'served all the dili)ence of a )ood father of a fa(ily to prevent da(a)es. R#< -he petitioners *ere correct in invo1in) respondent 5edranoMs failure to o'serve Article 9!, 3ec ,#C)D, provides> A "o. #1,+, *hich

C)D Li&20% 32$! ("#8$1 o# 1i%"*'$1+ P Appropriate par1in) li)hts or flares visi'le one hundred (eters a*ay shall 'e displayed at a corner of the vehicle *henever such vehicle is par1ed on hi)h*ays or in places that are not *ell-li)hted or is placed in such (anner as to endan)er passin) traffic. -he (anner in *hich the truc1 *as par1ed clearly endan)ered onco(in) traffic on 'oth sides, considerin) that the tire 'lo*out *hich stalled the truc1 in the first place occurred in the *ee hours of the (ornin). -he Court can only no* sur(ise that the unfortunate incident could have 'een averted had respondent Condor, the o*ner of the truc1, eJuipped the said vehicle *ith li)hts, flares, or, at the very least, an early *arnin) device. #$ Bence, *e cannot su'scri'e to respondents Condor and 5edranoMs clai( that they should 'e a'solved fro( lia'ility 'ecause, as found 'y the trial and appellate courts, the pro=i(ate cause of the collision *as the fast speed at *hich petitioner :aspiIas drove the 'us. -o accept this proposition *ould 'e to co(e too close to *ipin) out the funda(ental principle of la* that a (an (ust respond for the foreseea'le conseJuences of his o*n ne)li)ent act or o(ission. 9ndeed, our la* on Juasi-delicts see1s to reduce the ris1s and 'urdens of livin) in society and to allocate the( a(on) its (e('ers. -o accept this proposition *ould 'e to *ea1en the very 'onds of society. %0 The Liabilit$ of !espondent PP%II as Insurer -he trial court in this case did not rule on the lia'ility of respondent 55399, *hile the appellate court ruled that, as no evidence *as presented a)ainst it, the insurance co(pany is not lia'le. A perusal of the records *ill sho* that *hen the petitioners filed the -hird-5arty Co(plaint a)ainst respondent 55399, they failed to attach a copy of the ter(s of the insurance contract itself. Only Certificate of Cover "o. 0%#$#0%1 issued in favor of FMr. 0illia( -iu, :ahu), Ce'u CityF si)ned 'y Cos(e B. /oniel *as appended to the third-party co(plaint. -he date of issuance, .uly 22, 1$<+, the period of insurance, fro( .uly 22, 1$<+ to .uly 22, 1$<;, as *ell as the follo*in) ite(s, *ere also indicated therein>
3CB7D2:7D !7B9C:7 MOD7: MAS7 9suKu &or*ard -857 /OD8 /us MO-O +;;<,+ O& CO:O 'lue (i=ed /:- &9:7 "O.

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37C-9O" 1611 A. -B9 D 5A -8 :9A/9:9-8 /. 5A337"G7 :9A/9:9-8

W:9M9-3 5%0,000.00

5er 5erson 512,000.00

5er 5%0,000

Accident

9n its Ans*er%, to the -hird-5arty Co(plaint, the respondent 55399 ad(itted the e=istence of the contract of insurance, in vie* of its failure to specifically deny the sa(e as reJuired under then 3ection <CaD, ule < of the ules of Court,%# *hich reads> 3ec. <. Bo* to contest )enuineness of such docu(ents. 0hen an action or defense is founded upon a *ritten instru(ent copied in or attached to the correspondin) pleadin) as provided in the precedin) section, the )enuineness and due e=ecution of the instru(ent shall 'e dee(ed ad(itted unless the adverse party, under oath, specifically denies the(, and sets forth *hat he clai(s to 'e the factsH 'ut the reJuire(ent of an oath does not apply *hen the adverse party does not appear to 'e a party to the instru(ent or *hen co(pliance *ith an order for inspection of the ori)inal instru(ent is refused. 9n fact, respondent 55399 did not dispute the e=istence of such contract, and ad(itted that it *as lia'le thereon. 9t clai(ed, ho*ever, that it had attended to and settled the clai(s of those in?ured durin) the incident, and set up the follo*in) as special affir(ative defenses> -hird party defendant 5hilippine 5hoeni= 3urety and 9nsurance, 9nc. here'y reiterates and incorporates 'y *ay of reference the precedin) para)raphs and further states -BA-><. 9t has attended to the clai(s of !incent Canales, Asuncion /atiancila and "eptali 5alces *ho sustained in?uries durin) the incident in Juestion. 9n fact, it settled financially their clai(s per vouchers duly si)ned 'y the( and they duly e=ecuted AffidavitNsO of Desistance to that effect, =ero= copies of *hich are hereto attached as Anne=es 1-+ respectivelyH $. 0ith respect to the clai( of plaintiff, herein ans*erin) third party defendant throu)h its authoriKed insurance ad?uster attended to said clai(. 9n fact, there *ere ne)otiations to that effect. Only that it cannot accede to the de(and of said clai(ant considerin) that the clai( *as *ay 'eyond the scheduled inde(nity as per contract entered into *ith third party plaintiff 0illia( -iu and third party defendant C5hilippine 5hoeni= 3urety and 9nsurance, 9nc.D. -hird party 5laintiff 0illia( -iu 1ne* all alon) the li(itation as earlier stated, he 'ein) an old hand in the transportation 'usinessH%%R Considerin) the ad(issions (ade 'y respondent 55399, the e=istence of the insurance contract and the salient ter(s thereof cannot 'e dispatched. 9t (ust 'e noted that after filin) its ans*er, respondent 55399 no lon)er o'?ected to the presentation of evidence 'y respondent Arries)ado and the insured petitioner -iu. 7ven in its Me(orandu( %+ 'efore the Court, respondent 55399 ad(itted the e=istence of the contract, 'ut averred as follo*s> 5etitioner -iu is insistin) that 55399 is lia'le to hi( for contri'ution, inde(nification and6or rei('urse(ent. -his has no 'asis under the contract. 2nder the contract, 55399 *ill pay all su(s necessary to dischar)e lia'ility of the insured su'?ect to the li(its of lia'ility 'ut not to e=ceed the li(its of lia'ility as so stated in the contract. Also, it is stated in the contract that in the event of accident involvin) inde(nity to (ore than one person, the li(its of lia'ility shall not e=ceed the a))re)ate a(ount so specified 'y la* to all persons to 'e inde(nified.%; As can 'e )leaned fro( the Certificate of Cover, such insurance contract *as issued pursuant to the Co(pulsory Motor !ehicle :ia'ility 9nsurance :a*. 9t *as e=pressly provided therein that the li(it of the insurerMs lia'ility for each person *as 512,000, *hile the li(it per accident *as pe))ed at 5%0,000. An insurer in an inde(nity contract for third party lia'ility is directly lia'le to the in?ured party up to the e=tent specified in the a)ree(ent 'ut it cannot 'e held solidarily lia'le 'eyond that a(ount. %< -he respondent 55399 could not then ?ust deny petitioner -iuMs clai(H it should have paid 512,000 for the death of &elisa Arries)ado,%$ and respondent Arries)adoMs hospitaliKation e=penses of 51,11,.<0, *hich the trial court found to have 'een duly supported 'y

receipts. -he total a(ount of the clai(s, even *hen added to that of the other in?ured passen)ers *hich the respondent 55399 clai(ed to have settled,+0 *ould not e=ceed the 5%0,000 li(it under the insurance a)ree(ent. 9ndeed, the nature of Co(pulsory Motor !ehicle :ia'ility 9nsurance is such that it is pri(arily intended to provide co(pensation for the death or 'odily in?uries suffered 'y innocent third parties or passen)ers as a result of the ne)li)ent operation and use of (otor vehicles. -he victi(s and6or their dependents are assured of i((ediate financial assistance, re)ardless of the financial capacity of (otor vehicle o*ners.+1 As the Court, spea1in) throu)h Associate .ustice :eonardo A. Euisu('in), e=plained in G393 v. CA>+2 Bo*ever, althou)h the victi( (ay proceed directly a)ainst the insurer for inde(nity, the third party lia'ility is only up to the e=tent of the insurance policy and those reJuired 'y la*. 0hile it is true that *here the insurance contract provides for inde(nity a)ainst lia'ility to third persons, and such persons can directly sue the insurer, the direct lia'ility of the insurer under inde(nity contracts a)ainst third party lia'ility does not (ean that the insurer can 'e held lia'le in solidu( *ith the insured and6or the other parties found at fault. &or the lia'ility of the insurer is 'ased on contractH that of the insured carrier or vehicle o*ner is 'ased on tort. R O'viously, the insurer could 'e held lia'le only up to the e=tent of *hat *as provided for 'y the contract of insurance, in accordance *ith the CM!:9 la*. At the ti(e of the incident, the schedule of inde(nities for death and 'odily in?uries, professional fees and other char)es paya'le under a CM!:9 covera)e *as provided for under the 9nsurance Me(orandu( Circular C9MCD "o. %-;< *hich *as approved on "ov 10, 1$;<. As therein provided, the (a=i(u( inde(nity for death *as 512,000.006victi(. -he schedules for (edical e=penses *ere also provided 'y said 9MC, specifically in para)raphs CCD to CGD.+, Damages to be &warded -he trial court correctly a*arded (oral da(a)es in the a(ount of 5%0,000 in favor of respondent Arries)ado. -he a*ard of e=e(plary da(a)es 'y *ay of e=a(ple or correction of the pu'lic )ood, +# is li1e*ise in order. As the Court ratiocinated in Sapalaran /us :ine v. Coronado>+% R0hile the i((ediate 'eneficiaries of the standard of e=traordinary dili)ence are, of course, the passen)ers and o*ners of car)o carried 'y a co((on carrier, they are not the only persons that the la* see1s to 'enefit. &or if co((on carriers carefully o'served the statutory standard of e=traordinary dili)ence in respect of their o*n passen)ers, they cannot help 'ut si(ultaneously 'enefit pedestrians and the passen)ers of other vehicles *ho are eJually entitled to the safe and convenient use of our roads and hi)h*ays. -he la* see1s to stop and prevent the slau)hter and (ai(in) of people C*hether passen)ers or notD on our hi)h*ays and 'uses, the very siKe and po*er of *hich see( to infla(e the (inds of their drivers. Article 22,1 of the Civil Code e=plicitly authoriKes the i(position of e=e(plary da(a)es in cases of Juasi-delicts Fif the defendant acted *ith )ross ne)li)ence.FR++ -he respondent 5edro A. Arries)ado, as the survivin) spouse and heir of &elisa Arries)ado, is entitled to inde(nity in the a(ount of 5%0,000.00.+; -he petitioners, as *ell as the respondents /en?a(in Condor and 3er)io 5edrano are ?ointly and severally lia'le for said a(ount, confor(a'ly *ith the follo*in) pronounce(ent of the Court in &a're, .r. vs. Court of Appeals>+< -he sa(e rule of lia'ility *as applied in situations *here the ne)li)ence of the driver of the 'us on *hich plaintiff *as ridin) concurred *ith the ne)li)ence of a third party *ho *as the driver of another vehicle, thus causin) an accident. 9n Anuran v. /uIo, /atan)as :a)una -aya'as /us Co. v. 9nter(ediate Appellate Court, and Metro Manila -ransit Corporation v. Court of Appeals, the 'us co(pany, its driver, the operator of the other vehicle and the driver of the vehicle *ere ?ointly and severally held lia'le to the in?ured passen)er or the latterMs heirs. -he 'asis of this allocation of lia'ility *as e=plained in !iluan v. Court of Appeals, thus> F"or should it (a1e difference that the lia'ility of petitioner N'us o*nerO sprin)s fro( contract *hile that of respondents No*ner and driver of other vehicleO arises fro( Juasi-delict. As early as 1$1,, *e already ruled in GutierreK vs. GutierreK, %+ 5hil. 1;;, that in case of in?ury to a passen)er due to the ne)li)ence of the driver of the 'us on *hich he *as ridin) and of the driver of another vehicle, the drivers as *ell as the o*ners of the t*o vehicles are ?ointly and severally lia'le for da(a)es. 3o(e (e('ers of the Court, thou)h, are of the vie* that under the circu(stances they are lia'le on Juasidelict.F+$ IN LIGHT O ALL THE OREGOING, the petition is PARTIALL5 GRANTED. -he Decision of the Court of Appeals is A IR6ED *ith 6ODI ICATIONS> C1D espondent 55399 and petitioner 0illia( -iu are O D7 7D to pay, ?ointly and severally, respondent 5edro A. Arries)ado the total a(ount of 51,,11,.<0H C2D -he petitioners and the respondents /en?a(in Condor and 3er)io 5edrano are O D7 7D to pay, ?ointly and severally, respondent 5edro A. Arries)ado 5%0,000.00 as inde(nityH 52+,##1.%0 as actual da(a)esH 5%0,000.00 as (oral da(a)esH 5%0,000.00 as e=e(plary da(a)esH and 520,000.00 as attorneyMs fees. SO ORDERED. G.R. No. 133377 O-to4&) 7, 2003 DSR8SENATOR LINES AND C. . SHARP AND CO6PAN5, INC., petitioners, vs. EDERAL PHOENIB ASSURANCE CO., INC., respondent. /efore us is a petition for revie* on c$#0io#"#i1 assailin) the Decision2 dated .une %, 1$$< of the Court of Appeals in CA-G. . C! "o. %0<,, *hich affir(ed the Decision of the -C, Manila City, /ranch 1+, in Civil Case "o. $#-+$+$$, F&ederal 5hoeni= Assurance Co(pany, 9nc. vs. D3 -3enator :ines and C.&. 3harp @ Co., 9nc.,F for da(a)es arisin) fro( the loss of car)o *hile in transit. /erde 5lants, 9nc. C/erde 5lantsD delivered +,2 units of artificial trees to C.&. 3harp and Co(pany, 9nc. CC.&. 3harpD, the General 3hip A)ent of D3 -3enator :ines, a forei)n shippin) corporation, for transportation and delivery to the consi)nee, Al-Mohr 9nternational Group, in iyadh, 3audi Ara'ia. C.&. 3harp issued 9nternational /ill of :adin) "o. 37"2 M":-2+%#< , for the car)o *ith an invoice value of 4,#,%;$.+0. 2nder the /ill of :adin), the port of dischar)e for the car)o *as at the Shor &a11an port and the port of delivery *as iyadh, 3audi Ara'ia, via 5ort Da((a(. -he car)o *as loaded in M63 FAra'ian 3enator.F &ederal 5hoeni= Assurance Co(pany, 9nc. C&ederal 5hoeni= AssuranceD insured the car)o a)ainst all ris1s in the a(ount of 5$#1,#2$.+1.# On .une ;, 1$$,, M63 FAra'ian 3enatorF left the Manila 3outh Bar'or for 3audi Ara'ia *ith the car)o on 'oard. 0hen the vessel arrived in Shor &a11an 5ort, the car)o *as reloaded on 'oard D3 -3enator :inesM feeder vessel, M6! FSapitan 3a1harov,F 'ound for 5ort Da((a(, 3audi Ara'ia. Bo*ever, *hile in transit, the vessel and all its car)o cau)ht fire. On .uly %,

1$$,, D3 -3enator :ines infor(ed /erde 5lants that M6! FSapitan 3a1harovF *ith its car)o *as )utted 'y fire and san1 on or a'out .uly #, 1$$,. On Dece('er 1+, 1$$,, C.&. 3harp issued a certification to that effect. ConseJuently, &ederal 5hoeni= Assurance paid /erde 5lants 5$#1,#2$.+1 correspondin) to the a(ount of insurance for the car)o. 9n turn /erde 5lants e=ecuted in its favor a F3u'ro)ation eceiptF% dated .anuary 1;, 1$$#. On &e'ruary <, 1$$#, &ederal 5hoeni= Assurance sent a letter to C.&. 3harp de(andin) pay(ent of 5$#1,#2$.+1 on the 'asis of the 3u'ro)ation eceipt. C.&. 3harp denied any lia'ility on the )round that such lia'ility *as e=tin)uished *hen the vessel carryin) the car)o *as )utted 'y fire. -hus, on March 11, 1$$#, &ederal 5hoeni= Assurance filed *ith the -C, /ranch 1+, Manila a co(plaint for da(a)es a)ainst D3 -3enator :ines and C.&. 3harp, prayin) that the latter 'e ordered to pay actual da(a)es of5$#1,#2$.+1, co(pensatory da(a)es of 5100,000.00 and costs. On Au)ust 22, 1$$%, the -C rendered a Decision in favor of &ederal 5hoeni= Assurance, the dispositive portion of *hich reads> F0B7 7&O 7, pre(ises considered, ?ud)(ent is here'y rendered in favor of plaintiff and a)ainst the defendants *ho are here'y ordered ?ointly and severally to pay plaintiff> 9. -he a(ount of 5$#1,#,$.+1 Cshould 'e 5$#1,#2$.+1+D *ith le)al interest of +A per annu( fro( the date of the letter of de(and of &e'ruary <, 1$$, C7GB. :D and 12A per annu( fro( the date the ?ud)(ent 'eco(es final and e=ecutory until its satisfaction C7astern 3hippin) :ines vs. Court of Appeals, G. . "o. $;#12, .uly 12, 1$$#DH 99. -he a(ount of 51%,000.00 'y *ay of reasona'le attorneyMs feesH and 999. -o pay costs. F-he counterclai( of defendants is D93M9337D. F3O O D7 7D.F; On appeal, the Court of Appeals rendered a Decision dated .une %, 1$$<, affir(in) the -C Decision, thus> F9n the present recourse, the appellant carrier *as presu(ed to have acted ne)li)ently for the fire that )utted the feeder vessel and the conseJuent loss or destruction of the car)o. Bence, the appellant carrier is lia'le for appelleeMs clai( under the "e* Civil Code of the 5hilippines. FContrary to C.&. 3harp and Co., 9nc.Ms pose, its lia'ility as ship a)ent continued and re(ained until the car)o *as delivered to the consi)nee. -he status of the appellant as ship a)ent su'sisted and its lia'ility as a ship a)ent *as co-ter(inous *ith and su'sisted as lon) as the car)o *as not delivered to the consi)nee under the ter(s of the /ill of :adin). F9" :9GB- O& A:: -B7 &O 7GO9"G, the appeal of the appellants is D93M9337D. -he Decision appealed fro( is affir(ed. 0ith costs a)ainst the appellants. F3O O D7 7D.F< On 3epte('er ;, 1$$<, the Court of Appeals denied the (otion for reconsideration of D3 -3enator :ines and C.&. 3harp, pro(ptin) the( to file *ith this Court the instant petition. 0e find the petition 'ereft of (erit. Article 1;,# of the Civil Code provides> FArt. 1;,#. Co((on carriers are responsi'le for the loss, destruction, or deterioration of the )oods, unless the sa(e is due to any of the follo*in) causes only> C1D&lood, stor(, earthJua1e, li)htnin), or other natural disaster or cala(ityH C2D Act of the pu'lic ene(y in *ar, *hether international or civilH C,D Act or o(ission of the shipper or o*ner of the )oodsH C#D -he character of the )oods or defects in the pac1in) or in the containersH C%D Order or act of co(petent pu'lic authority.F &ire is not one of those enu(erated under the a'ove provision *hich e=e(pts a carrier fro( lia'ility for loss or destruction of the car)o. 9n 7astern 3hippin) :ines, 9nc. vs. 9nter(ediate Appellate Court,$ *e ruled that since the peril of fire is not co(prehended *ithin the e=ceptions in Article 1;,#, then the co((on carrier shall 'e presu(ed to have 'een at fault or to have acted ne)li)ently, unless it proves that it has o'served the e=traordinary dili)ence reJuired 'y la*. 7ven if fire *ere to 'e considered a natural disaster *ithin the purvie* of Article 1;,#, it is reJuired under Article 1;,$ 10 of the sa(e Code that the natural disaster (ust have 'een the pro=i(ate and only cause of the loss, and that the carrier has e=ercised due dili)ence to prevent or (ini(iKe the loss 'efore, durin) or after the occurrence of the disaster. 0e have held that a co((on carrierMs duty to o'serve the reJuisite dili)ence in the ship(ent of )oods lasts fro( the ti(e the articles are surrendered to or unconditionally placed in the possession of, and received 'y, the carrier for transportation until delivered to or until the lapse of a reasona'le ti(e for their acceptance 'y the person entitled to receive the(. 0hen the )oods shipped either are lost or arrive in da(a)ed condition, a presu(ption arises a)ainst the carrier of its failure to o'serve that dili)ence, and there need not 'e an e=press findin) of ne)li)ence to hold it lia'le. 11 Co((on carriers are o'li)ed to o'serve e=traordinary dili)ence in the vi)ilance over the )oods transported 'y the(. Accordin)ly, they are presu(ed to have 'een at fault or to have acted ne)li)ently if the )oods are lost, destroyed or deteriorated. -here are very fe* instances *hen the presu(ption of ne)li)ence does not attach and these instances are enu(erated in Article 1;,#. 9n those cases *here the presu(ption is applied, the co((on carrier (ust prove that it e=ercised e=traordinary dili)ence in order to overco(e the presu(ption. 12 espondent &ederal 5hoeni= Assurance raised the presu(ption of ne)li)ence a)ainst petitioners. Bo*ever, they failed to overco(e it 'y sufficient proof of e=traordinary dili)ence. 0B7 7&O 7, the instant petition is D7"97D. -he assailed Decision of the Court of Appeals dated .une %, 1$$<, in CA-G. . C! "o. %0<,, is here'y A&&9 M7D. 3O O D7 7D. G.R. No. 92733 ;u"& :, 2000. 6ONARCH INSURANCE CO., INC., TA1ACALERA INSURANCE CO., INC !"# Ho". ;u#g& 6ANTE PURISI6A, petitioners, vs. COURT O APPEALS !"# A1OITI7 SHIPPING CORPORATION, respondents. /efore us are three consolidated petitions. G. . "o. $2;,% is a petition for revie* filed under ule #% of the ules of Court assailin) the decision of the Court of Appeals dated March 2$, 1$$0 in CA-G. . 35. Case "o. 1;#2; *hich set aside the *rit of e=ecution issued 'y the lo*er court for the full inde(nification of the clai(s of the petitioners, Monarch 9nsurance Co(pany Chereafter FMonarchFD and -a'acalera 9nsurance Co(pany, 9ncorporated Chereafter F-a'acaleraFD a)ainst private respondent, A'oitiK 3hippin) Corporation Chereafter FA'oitiKFD on the )round that the latter is entitled to the 'enefit of the li(ited lia'ility rule in (ariti(e la*H G. . "o. $#<+; is a petition for c$#0io#"#i under ule +% of the ules of Court to annul and set aside the decision of the Court of Appeals dated Au)ust 1%, 1$$0 in CA-G. . 35 "o. 20<## *hich ordered the lo*er court to stay the e=ecution of the ?ud)(ent in favor of the petitioner, Allied Guarantee 9nsurance Co(pany Chereafter FAlliedFD a)ainst A'oitiK insofar as it i(pairs the ri)hts of the other clai(ants to their pro-rata share in the insurance proceeds fro( the sin1in) of the M6! 5. A'oitiK, in accordance *ith the rule on li(ited lia'ilityH and G. . "o. $%%;< is a petition for revie* under ule #% of the ules of Court see1in) a reversal of the decision of the Court of Appeals dated Au)ust 2#, 1$$0 and its resolution dated Octo'er #, 1$$0 in C.A. G. . Civil Case "o. 1%0;1 *hich (odified the ?ud)(ent of the lo*er court's a*ard of actual da(a)es to petitioner 7Juita'le 9nsurance Corporation Chereafter F7Juita'leFD to its pro-rata share in the insurance proceeds fro( the sin1in) of the M6! 5. A'oitiK.

All cases arose fro( the loss of car)oes of various shippers *hen the M6! 5. A'oitiK, a co((on carrier o*ned and operated 'y A'oitiK, san1 on her voya)e fro( Bon) Son) to Manila on Octo'er ,1, 1$<0. 3ee1in) inde(nification for the loss of their car)oes, the shippers, their successors-in-interest, and the car)o insurers such as the instant petitioners filed separate suits a)ainst A'oitiK 'efore the e)ional -rial Courts. -he clai(s nu('ered one hundred and ten C110D for the total a(ount of 5#1,2,0,11%.00 *hich is al(ost thrice the a(ount of the insurance proceeds of 51#,%00,000.00 plus earned frei)ht of %00,000.00 accordin) to A'oitiK. -o this day, so(e of these clai(s, includin) those of herein petitioners, have not yet 'een settled. '(!( #o( )*+,-. Monarch and -a'acalera are insurance carriers of lost car)oes. -hey inde(nified the shippers and *ere conseJuently su'ro)ated to their ri)hts, interests and actions a)ainst A'oitiK, the car)o carrier. 1 /ecause A'oitiK refused to co(pensate Monarch, it filed t*o co(plaints a)ainst A'oitiK, doc1eted as Civil Cases "os. <2-2;+; and <2-2;;0. &or its part, -a'acalera also filed t*o co(plaints a)ainst the sa(e defendant, doc1eted as Civil Cases "os. <2-2;+< and <2-2;+$. As these four C#D cases had co((on causes of action, they *ere consolidated and ?ointly tried. 2' 9n Civil Case "o. <2-2;+; *here Monarch also na(ed Malaysian 9nternational 3hippin) Corporation and :iton?a Merchant 3hippin) A)ency as A'oitiK's co-defendants, Monarch sou)h recovery of 52$,;1$.<< representin) the value of three C,D pallets of )lass tu'in) that san1 *ith the M6! 5. A'oitiK, plus attorney's fees of not less than 5%,000.00, liti)ation e=penses, interest at the le)al rate on all these a(ounts, and the cost of suit. , Civil Case. "o. <2-2;;0 *as a co(plaint filed 'y Monarch a)ainst A'oitiK and codefendants Co ("&!i$ M"#i0i $ 1$% C2"#&$)#% R$)!i% and &.7. Vuelli) CMD, 9nc. for the recovery of 5,$,%$;.00 representin) the value of the one case (otor vehicle parts *hich *as lost *hen the M6! 5. A'oitiK san1 on her *ay to Manila, plus Attorney's fees of not less than 510,000.00 and cost of suit. # -a'acalera sou)ht a)ainst &ranco /el)ian 3ervices, &.7. Vuelli) and A'oitiK in Civil Case "o. <2-2;+< the recovery of 52<#,21<.00 correspondin) to the value of nine C$D cases of enault spare parts, 521,,20;.00 for the value of t*enty-five C2%D cases of door closers and 5#2,2%#.00 representin) the value of ei)hteen C1<D cases of plastic span)le, plus attorney's fees of not less than 5%0,000.00 and cost of suit. % 9n Civil Case "o. <2-2;+$, -a'acalera clai(ed fro( Bon) Son) 9sland 3hippin) Co., :td., Citadel :ines and A'oitiK inde(nification in the a(ount of 5;%,0%<.00 for the value of four C#D cartons of (otor vehicle parts foundered *ith the M6! 5. A'oitiK, plus attorney's fees of not less than 520,000.00 and cost of suit. + 9n its ans*er *ith counterclai(, A'oitiK re?ected responsi'ility for the clai(s on the )round that the sin1in) of its car)o vessel *as due to .o#c$ "/$)#$ or an act of God. ; A'oitiK *as su'seJuently declared as in default for its failure to appear durin) the pre-trial. 9ts counsel fried a (otion to set aside the order of default *ith notice of his *ithdra*al as such counsel. /efore the (otion could 'e acted upon, .ud)e /ienvenido 7?erc?to, the presidin) ?ud)e of the trial court, *as pro(oted to the then inter(ediate Appellate Court. -he cases *ere thus re-raffled to /ranch !99 of the -C of Manila presided 'y .ud)e A(ante 5. 5urisi(a, the co-petitioner in G. . "o. $2;,%. 0ithout resolvin) the pendin) (otion to set aside the order of default, the trial court set the cases for hearin). Bo*ever, since A'oitiK had repeatedly failed to appear in court, the trial court denied the said (otion and allo*ed Monarch and -a'acalera to present evidence $79("#0$. < Monarch and -a'acalera proffered in evidence the survey of 5erfect :a('ert, a surveyor co((issioned to investi)ate the possi'le cause of the sin1in) of the car)o vessel. -he survey esta'lished that on her voya)e to Manila fro( Bon) Son), the vessel did not encounter *eather so incle(ent that A'oitiK *ould 'e e=culpated fro( lia'ility for losses. 9n his note of protest, the (aster of M6! 5. A'oitiK descri'ed the *ind force encountered 'y the vessel as fro( ten C10D to fifteen C1%D 1nots, a *eather condition classified as typical and (oderate in the 3outh China 3ea at that particular ti(e of the year. -he survey added that the sea*orthiness of the vessel *as in Juestion especially 'ecause the 'reaches of the hull and the serious floodin) of t*o C2D car)o holds occurred si(ultaneously in Fseasonal *eather.F $ 9n due course, the trial court rendered ?ud)(ent a)ainst A'oitiK 'ut the co(plaint a)ainst all the other defendants *as dis(issed. A'oitiK *as held lia'le for the follo*in)> CaD in Civil Case "o. <2-2;+;, 52$,;1$.<< *ith le)al interest fro( the filin) of the co(plaint until fully paid plus attorney's fees of 5,0,000.00 and cost of suitH C'D in Civil Case "o. <2-2;+<, 5%,$,+;$.00 *ith le)al interest of 12A ($# "!!) fro( date of filin) of the co(plaint until fully paid, plus attorney's fees of 5,0,000.00, liti)ation e=penses and cost of suitH CcD in Civil Case "o. <2-2;+$, 5;%,0%<.00 *ith le)al interest of 12A ($# "!!) fro( date of filin) of the co(plaint until-fully paid, plus 5%,000.00 attorney's fees, liti)ation e=penses and cost of suit, and CdD in Civil Case "o. <2-2;;0, 5,$,%;$.++ *ith le)al interest of 12A ($# "!!) fro( date of filin) of the co(plaint until fully paid, plus attorney's fees of 5%,000.00, liti)ation e=penses and cost of suit. A'oitiK filed a (otion for reconsideration of the decision and6or for ne* trial to lift the order of default. -he court denied the (otion on Au)ust 2;, 1$<+. 10 A'oitiK appealed to the Court of Appeals 'ut the appeal *as dis(issed for its failure to file appellant's 'rief. 9t su'seJuently filed an ur)ent (otion for reconsideration of the dis(issal *ith prayer for the ad(ission of its attached appellant's 'rief. -he appellate court denied that (otion for lac1 of (erit in a esolution dated .uly <, 1$<<. 11 A'oitiK thus filed a petition for revie* 'efore this Court. Doc1eted as G. . "o. <#1%<, the petition *as denied in the esolution of Octo'er 10, 1$<< for 'ein) filed out of ti(e. A'oitiK's (otion for the reconsideration of said esolution *as si(ilarly denied. 12 7ntry of ?ud)(ent *as (ade in the case. 1, ConseJuently, Monarch and -a'acalera (oved for e=ecution of ?ud)(ent. -he trial court )ranted the (otion on April #, 1$<$ 1# and issued separate *rits of e=ecution. Bo*ever, on April 12, 1$<$, A'oitiK, invo1in) the real and hypothecary nature of lia'ility in (ariti(e la*, filed an ur)ent (otion to Juash the *rits of e=ecution. 1% Accordin) to A'oitiK, since its lia'ility is li(ited to the value of the vessel *hich *as insufficient to satisfy the a))re)ate clai(s of all 110 clai(ants, to inde(nify Monarch and -a'acalera ahead of the other clai(ants *ould 'e pre?udicial to the latter. Monarch and -a'acalera opposed the (otion to Juash. 1+ On April 1;, 1$<$, 'efore the (otion to Juash could 'e heard, the sheriff levied upon % heavy eJuip(ent o*ned 'y A'oitiK for the pu'lic auction sale. At said sale, Monarch *as the hi)hest 'idder for 1 unit &:-1%1 &or1 :ift C'i)D and 1 unit &:-2% &or1 :ift Cs(allD. -a'acalera *as also the hi)hest 'idder for 1 unit -CB -:-2%1 Byster Container :ifter, 1 unit Byster -op :ifter Cout of orderD, and 1 unit 7 -,%, Crane. -he correspondin) certificates of sale 1; *ere issued to Monarch and -a'acalera. On April 1<, 1$<$, the day 'efore the hearin) of the (otion to Juash, A'oitiK filed a supple(ent to its (otion, to add the fact that an auction sale had ta1en place. On April 1$, 1$<$, .ud)e 5urisi(a issued an order denyin) the (otion to Juash 'ut freeKin) e=ecution proceedin)s for 10 days to )ive A'oitiK ti(e to secure a restrainin) order fro( a hi)her court. 1< 7=ecution *as scheduled to resu(e to fully satisfy the ?ud)(ent *hen the )race period shall have lapsed *ithout such restrainin) order havin) 'een o'tained 'y A'oitiK.

A'oitiK filed *ith the Court of Appeals a petition for c$#0io#"#i and prohi'ition *ith prayer for preli(inary in?unction and6or te(porary restrainin) order under CA-G. . "o. 35-1;#2;. 1$ On March 2$, 1$$0, the appellate court rendered a Decision the dispositive portion of *hich reads> 0B7 7&O 7, the *rit of c$#0io#"#i is here'y )ranted, annullin) the su'?ect *rits of e=ecution, auction sale, certificates of sale, and the assailed orders of respondent .ud)e dated April # and April 1$, 1$<$ insofar as the (oney value of those properties of A'oitiK, levied on e=ecution and sold at pu'lic auction, has e=ceeded the pro-rata shares of Monarch and -a'acalera in the insurance proceeds of A'oitiK in relation to the pro-rata shares of the 10+ other clai(ants. -he *rit of prohi'ition is also )ranted to en?oin respondent .ud)e, Monarch and -a'acalera fro( proceedin) further *ith e=ecution of the ?ud)(ents in Juestion insofar as the e=ecution *ould satisfy the clai(s of Monarch and -a'acalera in e=cess of their pro-rata shares and in effect reduce the 'alance of the proceeds for distri'ution to the other clai(ants to their pre?udice. -he Juestion of *hether or ho* (uch of the clai(s of Monarch and -a'acalera a)ainst the insurance proceeds has already 'een settled throu)h the *rit of e=ecution and auction sale in Juestion, 'ein) factual issues, shall 'e threshed out 'efore respondent ?ud)e. -he *rit of preli(inary in?unction issued in favor of A'oitiK, havin) served its purpose, is here'y lifted. "o pronounce(ent as to costs. 3O O D7 7D. 20 Bence, the instant petition for revie* on c$#0io#"#i *here petitioners Monarch, -a'acalera and .ud)e 5urisi(a raise the follo*in) assi)n(ent of errors> 1. -he appellate court )rievously erred in re-openin) the 5urisi(a decisions, already final and e=ecutory, on the alle)ed )round that the issue of real and hypothecary lia'ility had not 'een previously resolved 'y 5urisi(a, the appellate court, and this Bon. 3upre(e CourtH 2. -he appellate court erred *hen it resolved that A'oitiK is entitled to the li(ited real and hypothecary lia'ility of a ship o*ner, considerin) the facts on record and the la* on the (atter. ,. -he appellate court erred *hen it concluded that A'oitiK does not have to present evidence to prove its entitle(ent to the li(ited real and hypothecary lia'ility. #. -he appellate court erred in i)norin) the case of FA'oitiK 3hippin) Corp v. CA and Allied Guaranty 9nsurance Co., 9nc. CG. . "o. <<1%$D, decided 'y this Bonora'le 3upre(e Court as early as "ove('er 1,, 1$<$, considerin) that said case, no* factual and e=ecutory, is in ("#i "0$#i" *ith the instant case. %. -he appellate court erred in not concludin) that irrespective of *hether A'oitiK is entitled to li(ited hypothecary lia'ility or not, there are enou)h funds to satisfy all the clai(ants. +. -he appellate court erred *hen it concluded that A'oitiK had (ade an Fa'andon(entF as envisioned 'y Art. %<; of the Code of Co((erce. ;. -he appellate court erred *hen it concluded that other clai(ants *ould suffer if -a'acalera and Monarch *ould 'e fully paid. <. -he appellate court erred in concludin) that c$#0io#"#i *as the proper re(edy for A'oitiK. 21 '(!( #O%( )./0+ 1 )--+/ Allied as insurer-su'ro)ee of consi)nee 5ea1 5lastic and Metal 5roducts :i(ited, filed a co(plaint a)ainst A'oitiK for the recovery of 52;<,%,+.%0 representin) the value of +;+ 'a)s of 5!C co(pound and 10 'a)s of A/3 plastic lost on 'oard the M6! 5. A'oitiK, *ith le)al interest fro( the date of filin) of the co(plaint, plus attorney's fees, e=e(plary da(a)es and costs. 22 Doc1eted as Civil Case "o. 1,<+#,, the case *as heard 'efore the e)ional -rial Court of Manila, /ranch GG9!, presided 'y .ud)e 3er)io D. Ma'unay. On the other hand, 7Juita'le, as insurer-su'ro)ee of consi)nee-assured A=el Manufacturin) Corporation, filed an a(ended co(plaint a)ainst &ranco /el)ian 3ervices, &.7. Vuelli), 9nc. and A'oitiK for the recovery of 51$#,;$#.<% representin) the value of ;+ dru(s of synthetic or)anic tannin) su'stances and 1,000 1ilo)ra(s of optical 'leachin) a)ents *hich *ere also lost on 'oard the M6! 5. A'oitiK, *ith le)al interest fro( the date of filin) of the co(plaint, plus 2%A attorney's fees, e=e(plary da(a)es, liti)ation e=penses and costs of suit. 2, Doc1eted as Civil Case "o. 1,<,$+, the co(plaint *as assi)ned to the e)ional -rial Court of Manila, /ranch !999. 9n its ans*er *ith counterclai( in the t*o cases, A'oitiK disclai(ed responsi'ility for the a(ounts 'ein) recovered, alle)in) that the loss *as due to a fortuitous event or an act of God. 9t prayed for the dis(issal of the cases and the pay(ent of attorney's fees, liti)ation e=penses plus costs of suit. 9t si(ilarly relied on the defenses of .o#c$ $/$)#$, sea*orthiness of the vessel and e=ercise of due dili)ence in the carria)e of )oods as re)ards the cross-clai( of its co-defendants. 2# 9n support of its position, A'oitiK presented the testi(onies of Capt. Gerry ". acines, (aster (ariner of the M6! 5. A'oitiK, and .usto C. 9)lesias, a (eteorolo)ist of the 5hilippine At(ospheric Geophysical and Astrono(ical 3ervices Ad(inistration C5AGA3AD. -he )ist of the testi(ony of Capt. acines in the t*o cases follo*s> -he M6! 5. A'oitiK left Bon) Son) for Manila at a'out ;>,0 in the evenin) of Octo'er 2$, 1$<0 after securin) a departure clearance fro( the Bon) Son) 5ort Authority. -he departure *as delayed for t*o hours 'ecause he CCapt. acinesD *as o'servin) the direction of the stor( that crossed the /icol e)ion. Be proceeded *ith the voya)e only after 'ein) infor(ed that the stor( had a'ated. At a'out <>00 o'cloc1 in the (ornin) of Octo'er ,0, 1$<0, after (ore than t*elve C12D hours of navi)ation, the vessel suddenly encountered rou)h seas *ith *aves a'out fifteen to t*enty-five feet hi)h. Be ordered his chief en)ineer to chec1 the car)o holds. -he latter found that sea *ater had entered car)o hold "os. 1 and 2. Be i((ediately directed that *ater 'e pu(ped out 'y (eans of the vessel's 'il)e pu(p, a device capa'le of e?ectin) 1<0 )allons of *ater per (inute. -hey *ere initially successful in pu(pin) out the *ater. At +>00 a.(. of Octo'er ,1, 1$<0, ho*ever, Capt. acines received a report fro( his chief en)ineer that the *ater level in the car)o holds *as rapidly risin). Be altered the vessel's course and veered to*ards the northern tip of :uKon to prevent the vessel fro( 'ein) continuously pu((eled 'y the *aves. Despite dili)ent efforts of the officers and cre*, ho*ever, the vessel, *hich *as appro=i(ately 2%0 (iles a*ay fro( the eye of the stor(, 'e)an to list on star'oard side at 2; de)rees. Capt. acines and his cre* *ere not a'le to (a1e as (uch head*ay as they *anted 'ecause 'y 12>00 noon of the sa(e day, the car)o holds *ere already flooded *ith sea *ater that rose fro( three to t*elve feet, disa'lin) the 'il)e pu(p fro( containin) the *ater. -he M6! 5. A'oitiK san1 at a'out ;>00 p.(. of Octo'er ,1, 1$<0 at latitude 1< de)rees "orth, lon)itude 1;0 de)rees 7ast in the 3outh China 3ea in 'et*een Bon) Son), the 5hilippines and -ai*an *ith the nearest land 'ein) the northern tip of :uKon, around

2;0 (iles fro( Cape /o?eador, /an)ui, 9locos "orte. espondin) to the captain's distress call, the M6! Sapuas CCapuasD (anned 'y Capt. !ir)ilio GonKales rescued the officers and cre* of the ill-fated M6! 5. A'oitiK and 'rou)ht the( to 0aileen, -ai*an *here Capt. acines lod)ed his (arine protest dated "ove('er ,, 1$<0. .usto 9)lesias, (eteorolo)ist of 5AGA3A and another *itness of A'oitiK, testified in 'oth cases that durin) the inclusive dates of Octo'er 2<-,1, 1$<0, a stor(y *eather condition prevailed *ithin the 5hilippine area of responsi'ility, particularly alon) the sea route fro( Bon) Son) to Manila, 'ecause of tropical depression F8onin).F 2% 5AGA3A issued *eather 'ulletins fro( Octo'er 2<-,0, 1$<0 *hile the stor( *as still *ithin 5hilippine territory. "o do(estic 'ulletins *ere issued the follo*in) day *hen the stor( *hich hit 7astern 3a(ar, 3outhern EueKon and 3outhern -a)alo) provinces, had (ade its e=it to the 3outh China 3ea throu)h /ataan. Allied and 7Juita'le refuted the alle)ation that the M6! 5. A'oitiK and its car)o *ere lost due to .o#c$ "/$)#$, relyin) (ainly on the (arine protest filed 'y Capt. acines as *ell as on the /eaufort 3cale of 0ind. 9n his (arine protest under oath, Capt. acines affir(ed that the *ind force an Octo'er 2$-,0, 1$<0 *as only ten C10D to fifteen C1%D 1nots. 2nder the /eaufort 3cale of 0ind, said *ind velocity falls under scale "o. # that descri'es the sea condition as F(oderate 'reeKe,F and Fs(all *aves 'eco(in) lon)er, fairly freJuent *hite horses.F 2+ -o fortify its position, 7Juita'le presented o)elio -. /ar'oKa *ho testified that as clai(s supervisor and processor of 7Juita'le, he reco((ended pay(ent to A=el Manufacturin) Corporation as evidenced 'y the cash voucher, return chec1 and su'ro)ation receipt. /ar'oKa also presented a letter of de(and to A'oitiK *hich, ho*ever, the latter i)nored. 2; On April 2#, 1$<#, the trial court rendered a decision that disposed of Civil Case "o. 1,<+#, as follo*s> 0B7 7&O 7, ?ud)(ent is here'y rendered orderin) defendant A'oitiK 3hippin) Co(pany to pay plaintiff Allied Guarantee 9nsurance Co(pany, 9nc. the su( of 52;<,%,+.%0, *ith le)al interest thereon fro( March 10, 1$<1, then date of the filin) of the co(plaint, until fully paid, plus 5,0,000.00 as attorney's fees, *ith costs of suit. 3O O D7 7D. 2< A si(ilar decision *as arrived at in Civil Case "o. 1,<,$+, the dispositive portion of *hich reads> 0B7 7&O 7, in vie* of the fore)oin), this Court here'y renders ?ud)(ent in favor of plaintiff and a)ainst defendant A'oitiK 3hippin) Corporation, to pay the su( of 51$#,;$#.<% *ith le)al rate of interest thereon fro( &e'ruary 2;, 1$<1 until fully paidH attorney's fees of t*enty-five C2%AD percent of the total clai(, plus liti)ation e=penses and costs of liti)ation. 3O O D7 7D. 2$ 9n Civil Case "o. 1,<+#,, A'oitiK appealed to the Court of Appeals under CA-G. . C! "o. 0#121. On March 2,, 1$<;, the Court of Appeals affir(ed the decision of the lo*er court. A (otion for reconsideration of the said decision *as li1e*ise denied 'y the Court of Appeals on May ,, 1$<$. A))rieved, A'oitiK then filed a petition for revie* *ith this Court doc1eted as G. . "o. <<1%$ *hich *as denied for lac1 (erit. 7ntry of ?ud)(ent *as (ade and the lo*er court's decision in Civil Case "o. 1,<+#, 'eca(e final and e=ecutory. Allied prayed for the issuance of a *rit of e=ecution in the lo*er court *hich *as )ranted 'y the latter on April #, 1$$0. -o stay the e=ecution of the ?ud)(ent of the lo*er court, A'oitiK filed a petition for c$#0io#"#i and prohi'ition *ith preli(inary in?unction *ith the Court of Appeals doc1eted as CA-G. . 35 "o. 20<##. ,0 On Au)ust 1%, 1$$0, the Court of Appeals rendered the assailed decision, the dispositive portion of *hich reads as follo*s. 0B7 7&O 7, the challen)ed order of the respondent .ud)e dated April #, 1$$0 )rantin) the e=ecution is here'y set aside. -he respondent .ud)e is further ordered to stay the e=ecution of the ?ud)(ent insofar as it i(pairs the ri)hts of the 100 other clai(ants to the insurance proceeds includin) the ri)hts of the petitioner to pay (ore than the value of the vessel or the insurance proceeds and to desist fro( e=ecutin) the ?ud)(ent insofar as it pre?udices the pro-rata share of all clai(ants to the insurance proceeds. "o pronounce(ent as to costs. 3O O D7 7D. ,1 Bence, Allied filed the instant petition for c$#0io#"#i, "!1" )% and in?unction *ith preli(inary in?unction and6or restrainin) order 'efore this Court alle)in) the follo*in) assi)n(ent of errors> 1. espondent Court of Appeals )ravely erred in stayin) the i((ediate e=ecution of the ?ud)(ent of the lo*er court as it has no authority nor ?urisdiction to directly or indirectly alter, (odify, a(end, reverse or invalidate a final ?ud)(ent as affir(ed 'y the Bonora'le 3upre(e Court in G. . "o. <<1%$. 2. espondent Court of Appeals *ith )rave a'use of discretion a(ountin) to lac1 or e=cess of ?urisdiction, 'rushed aside the doctrine in G. . "o. <<1%$ *hich is no* the la* of the case and o'servance of ti(e honored principles of %0"#$ 1$ci%i%, #$% "1/)1ic"0" and estoppel 'y ?ud)(ent. ,. eal and hypothecary rule under Articles %<;, %$0 and <,; of the Code of Co((erce *hich is the 'asis of the Juestioned decision CAnne= FCF hereofD is *ithout application in the face of the facts found 'y the lo*er court, sustained 'y the Court of Appeals in CA-G. . "o. 0#121 and affir(ed i! 0o0o 'y the 3upre(e Court in G. . "o. <<1%$. #. C$#0io#"#i as a special re(edy is unavailin) for private respondent as there *as no )rave a'use of discretion nor lac1 or e=cess of ?urisdiction for .ud)e Ma'unay to issue the order of April #, 1$$0 *hich *as in accord *ith la* and ?urisprudence, nor *ere there intervenin) facts and6or supervenin) events that *ill ?ustify respondent court to issue a *rit of c$#0io#"#i or a restrainin) order on a final and e=ecutory ?ud)(ent of the Bonora'le 3upre(e Court. ,2 &ro( the decision of the trial court in Civil Case "o. 1,<,$+ that favored 7Juita'le, A'oitiK li1e*ise appealed to the Court of Appeals throu)h CA-G. . C! "o. 1%0;1. On Au)ust 2#, 1$$0, the Court of Appeals rendered the Decision Juotin) e=tensively its Decision in CA-G. . "o. 35-1;#2; Cno* G. . "o. $2;,%D and disposin) of the appeal as follo*s> 0B7 7&O 7, *e here'y affir( the trial court's a*ards of actual da(a)es, attorney's fees and liti)ation e=penses, *ith the e=ception of le)al interest, in favor of plaintiff-appellee 7Juita'le 9nsurance Corporation as su'ro)ee of the consi)nee for the loss of its ship(ent a'oard the M6! F5. A'oitiKF and a)ainst defendant-appellant A'oitiK 3hippin) Corporation. Bo*ever, the a(ount and pay(ent of those a*ards shall 'e su'?ect to a deter(ination of the pro-rata share of said appellee in relation to the pro-rata shares of the 10$ other clai(ants, *hich deter(ination shall 'e (ade 'y the trial court. -his case is therefore here'y ordered re(anded to the trial court *hich shall reopen the case and receive evidence to deter(ine appellee's pro-rata share as aforesaid. "o pronounce(ent as to costs. 3O O D7 7D. ,, On 3epte('er 12, 1$$0, 7Juita'le (oved to reconsider the Court of Appeals' Decision. -he Court of Appeals denied the (otion for reconsideration on Octo'er #, 1$$0. ,# ConseJuently, 7Juita'le filed *ith this Court a petition for revie* alle)in) the follo*in) assi)n(ent of errors> 1. espondent Court of Appeals, *ith )rave a'use of discretion a(ountin) to lac1 or e=cess of ?urisdiction, erroneously 'rushed aside the doctrine in G. . "o. <<1%$ *hich is no* the la* of the case as held in G. . "o. <$;%; involvin) the sa(e

and identical set of facts and cause of action relative to the sin1in) of the M6! F5. A'oitiKF and o'servance of the ti(e honored principles of %0"#$ 1$ci%i%, and estoppel 'y ?ud)(ent. 2. eal and hypothecary rule under Articles %<;, %$0 and <,; of the Code of Co((erce *hich is the 'asis of the assailed decision and resolution is *ithout application in the face of the facts found 'y the trial court *hich confor(s to the conclusion and findin) of facts arrived at in a si(ilar and identical case involvin) the sa(e incident and parties si(ilarly situated in G. . "o. <<1%$ already declared as the Fla* of the caseF in a su'seJuent decision of this Bonora'le Court in G. . "o. <$;%; pro(ul)ated on Au)ust +, 1$$0. ,. espondent Court of Appeals )ravely erred in concludin) that li(ited lia'ility rule applies in case of loss of car)oes *hen the la* itself does not distin)uishH fault of the shipo*ner or privity thereto constitutes one of the e=ceptions to the application of li(ited lia'ility under Article %<;, %$0 and <,; of the Code of Co((erce, Civil Code provisions on co((on carriers for 'reach of contract of carria)e prevails. ,% -hese three petitions in G. . "os. $2;,%, $#<+; and $%%;< *ere consolidated in the esolution of Au)ust %, 1$$1 on the )round that the petitioners Fhave identical causes of action a)ainst the sa(e respondent and si(ilar reliefs are prayed for.F ,+ -he threshold issue in these consolidated petitions is the applica'ility of the li(ited lia'ility rule in (ariti(e la* in favor of A'oitiK in order to stay the e=ecution of the ?ud)(ents for full inde(nification of the losses suffered 'y the petitioners as a result of the sin1in) of the M6! 5. A'oitiK. /efore *e can address this issue, ho*ever, there are procedural (atters that need to 'e threshed out. Fi#%0. At the outset, the Court ta1es note of the fact that in G. . "o. $2;,%, .ud)e A(ante 5urisi(a, *hose decision in the e)ional -rial Court is sou)ht to 'e upheld, is na(ed as a co-petitioner. 9n C"'1$#o! v+ So'ici0o# G$!$#"', ,; *here the petitioner in the special civil action of c$#0io#"#i and "!1" )% *as also the ?ud)e *hose order *as 'ein) assailed, the Court held that said ?ud)e had no standin) to file the petition 'ecause he *as (erely a no(inal or for(al party-respondent under 3ection % of ule +% of the ules of Court. Be should not appear as a party see1in) the reversal of a decision that is unfavora'le to the action ta1en 'y hi(. -he Court there said> .ud)e Calderon should 'e-re(inded of the *ell-1no*n doctrine that a ?ud)e should detach hi(self fro( cases *here his decision is appealed to a hi)her court for revie*. -he #"i%o! 1:$0#$ for such doctrine is the fact that a ?ud)e is not an active co('atant in such proceedin) and (ust leave the opposin) parties to contend their individual positions and for the appellate court to decide the issues *ithout his active participation. /y filin) this case, petitioner in a *ay ceased to 'e ?udicial and has 'eco(e adversarial instead. ,< 0hile the petition in G. . "o. $2;,% does not e=pressly sho* *hether or not .ud)e 5urisi(a hi(self is personally interested in the disposition of this petition or he *as ?ust inadvertently na(ed as petitioner 'y the real parties in interest, the fact that .ud)e 5urisi(a is na(ed as petitioner has not escaped this Court's notice. .ud)es and liti)ants should 'e re(inded of the 'asic rule that courts or individual ?ud)es are not supposed to 'e interested Fco('atantsF in any liti)ation they resolve. S$co!1. -he petitioners contend that the inapplica'ility of the li(ited lia'ility rule to A'oitiK has already 'een decided on 'y no less than this Court in G. . "o. <<1%$ as early as "ove('er 1,, 1$<$ *hich *as su'seJuently declared as Fla* of the caseF in G. . "o. <$;%; on Au)ust +, 1$$0. Berein petitioners cite the afore(entioned cases in support of their theory that the li(ited lia'ility rule 'ased on the real and hypothecary nature of (ariti(e la* has no application in the cases at 'ar. -he e=istence of *hat petitioners insist is already the Fla* of the caseF on the (atter of li(ited lia'ility is at 'est illusory. 5etitioners are either deli'erately (isleadin) this Court or profoundly confused. As elucidated in the case of A*oi0iz S2i((i!& Co#(o#"0io! v%+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io!, ,$ An e=a(ination of the "ove('er 1,, 1$<$ esolution in G. . "o. <<1%$ Cpp. 2<0-2<2, Ro''oD sho*s that the sa(e settles t*o principal (atters, first of *hich is that the doctrine of pri(ary ad(inistrative ?urisdiction is not applica'le thereinH and second is that a li(itation of lia'ility in said case *ould render inefficacious the e=traordinary dili)ence reJuired 'y la* of co((on carriers. 9t should 'e pointed out, ho*ever, that the li(ited lia'ility discussed in said case is not the sa(e one no* in issue at 'ar, 'ut an alto)ether different aspect. -he li(ited lia'ility settled in G. . "o. <<1%$ is that *hich attaches to car)o 'y virtue of stipulations in the /ill of :adin), popularly 1no*n as pac1a)e li(itation clauses, *hich in that case *as contained in 3ection < of the /ill of :adin) and *hich li(ited the carrier's lia'ility to 234%00.00 for the car)o *hose value *as therein sou)ht to 'e recovered. 3aid resolution did not tac1le the (atter of the :i(ited :ia'ility ule arisin) out of the real and hypothecary nature of (ariti(e la*, *hich *as not raised therein, and *hich is the principal 'one of contention in this case. 0hile the (atters threshed out in G. . "o. <<1%$, particularly those dealin) *ith the issues on pri(ary ad(inistrative ?urisdiction and the pac1a)e lia'ility li(itation provided in the /ill of :adin) are no* settled and should no lon)er 'e touched, the instant case raises a co(pletely different issue. #0 T2i#1. 5etitioners asseverate that the ?ud)(ents of the lo*er courts, already final and e=ecutory, cannot 'e directly or indirectly altered, (odified, a(ended, reversed or invalidated. -he rule that once a decision 'eco(es final and e=ecutory, it is the (inisterial duty of the court to order its e=ecution, is not an a'solute one> 0e have allo*ed the suspension of e=ecution in cases of special and e=ceptional nature *hen it 'eco(es i(perative in the hi)her interest of ?ustice. #1 -he un?ust and ineJuita'le effects upon various other clai(ants a)ainst A'oitiK should *e allo* the e=ecution of ?ud)(ents for the full inde(nification of petitioners' clai(s i(pel us to uphold the stay of e=ecution as ordered 'y the respondent Court of Appeals. 0e reiterate our pronounce(ent in A*oi0iz S2i((i!& Co#(o#"0io! v%+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io! on this very sa(e issue. -his 'rin)s us to the pri(ary Juestion herein *hich is *hether or not respondent court erred in )rantin) e=ecution of the full ?ud)(ent a*ard in Civil Case "o. 1##2% CG. . "o. <$;%;D, thus effectively denyin) the application of the li(ited lia'ility enunciated under the appropriate articles of the Code of Co((erce. . . . . Collaterally, deter(ination of the Juestion of *hether e=ecution of ?ud)(ents *hich have 'eco(e final and e=ecutory (ay 'e stayed is also an issue. 0e shall tac1le the latter issue first. -his Court has al*ays 'een consistent in its stand that the very purpose for its e=istence is to see the acco(plish(ent of the ends of ?ustice. Consistent *ith this vie*, a nu('er of decisions have ori)inated herefro(, the tenor of *hich is that no procedural consideration is sancrosanct if such shall result in the su'vertin) of ?ustice. -he ri)ht to

e=ecution after finality of a decision is certainly no e=ception to this. -hus, in C"*#i"% v+ A1i' C1,% 3C A ,%% N1<<%OD, this Court ruled that> = = = === === . . . every court havin) ?urisdiction to render a particular ?ud)(ent has inherent po*er to enforce it, and to e=ercise eJuita'le control over such enforce(ent. -he court has authority to inJuire *hether its ?ud)(ent has 'een e=ecuted, and *ill re(ove o'structions to the enforce(ent thereof. 3uch authority e=tends not only to such orders and such *rits as (ay 'e necessary to prevent an i(proper enforce(ent of the ?ud)(ent. 9f a ?ud)(ent is sou)ht to 'e perverted and (ade a (ediu( of consu((atin) a *ron) the court on proper application can prevent it. #2 Fo)#02. 5etitioners in G. . "o. $2;,% ever that it *as error for the respondent Court of Appeals to allo* A'oitiK the 'enefit of the li(ited lia'ility rule despite its failure to present evidence to prove its entitle(ent thereto in the court 'elo*. 5etitioners Monarch and -a'acalera re(ind this Court that fro( the inception of G. . "o. $2;,% in the lo*er court and all the *ay to the 3upre(e Court, A'oitiK had not presented an iota of evidence to e=culpate itself fro( the char)e of ne)li)ence for the si(ple reason that it *as declared as in default. #, 9t is true that for havin) 'een declared in default, A'oitiK *as precluded fro( presentin) evidence to prove its defenses in the court " ;)o. 0e cannot, ho*ever, a)ree *ith petitioners that this circu(stance prevents the respondent Court of Appeals fro( ta1in) co)niKance of A'oitiK' defenses on appeal. 9t should 'e noted that A'oitiK *as declared as in default not for its failure to file an ans*er 'ut for its a'sence durin) pre-trial and the trial proper. 9n A'oitiK' ans*er *ith counterclai(, it clai(ed that the sin1in) of the M6! 5. A'oitiK *as due to an act of God or unforeseen event and that the said ship had 'een sea*orthy and fit for the voya)e. A'oitiK also alle)ed that it e=ercised the due dili)ence reJuired 'y la*, and that considerin) the real and hypothecary nature of (ariti(e trade, the sin1in) ?ustified the e=tin)uish(ent of its lia'ility for the lost ship(ent. ## A ?ud)(ent of default does not i(ply a *aiver of ri)hts e=cept that of 'ein) heard and presentin) evidence in defendant's favor. 9t does not i(ply ad(ission 'y the defendant of the facts and causes of action of the plaintiff, 'ecause the codal section #% reJuires the latter to adduce evidence in support of his alle)ations as an indispensa'le condition 'efore final ?ud)(ent could 'e )iven in his favor. "or could it 'e interpreted as an ad(ission 'y the defendant that the plaintiff's causes of action find support in the la* or that the latter is entitled to the relief prayed for. #+ -his is especially true *ith respect to a defendant *ho had filed his ans*er 'ut had 'een su'seJuently declared in default for failin) to appear at the trial since he has had an opportunity to traverse, vi"his ans*er, the (aterial aver(ents contained in the co(plaint. 3uch defendant has a 'etter standin) than a defendant *ho has neither ans*ered nor appeared at trial. #; -he for(er should 'e allo*ed to reiterate all affir(ative defenses pleaded in his ans*er 'efore the Court of Appeals. :i1e*ise, the Court of Appeals (ay revie* the correctness of the evaluation of the plaintiffs evidence 'y the lo*er court. 9t should also 'e pointed out that A'oitiK is not raisin) the issue of its entitle(ent to the li(ited lia'ility rule for the first ti(e on appeal thus, the respondent Court of Appeals (ay properly rule on the sa(e. Bo*ever, *hether or not the respondent Court of Appeals erred in findin), upon revie*, that A'oitiK is entitled to the 'enefit of the li(ited lia'ility rule is an alto)ether different (atter *hich shall 'e discussed 'elo*. ule on :i(ited :ia'ility. -he petitioners assert in co((on that the vessel M6! 5. A'oitiK did not sin1 'y reason of .o#c$ "/$)#$ 'ut 'ecause of its unsea*orthiness and the concurrent fault and6or ne)li)ence of A'oitiK, the captain and its cre*, there'y 'arrin) A'oitiK fro( availin) of the 'enefit of the li(ited lia'ility rule. -he principle of li(ited lia'ility is enunciated in the follo*in) provisions of the Code of Co((erce> Art. %<;. -he shipa)ent shall also 'e civilly lia'le for the inde(nities in favor of third persons *hich (ay arise fro( the conduct of the captain in the care of )oods *hich he loaded on the vesselH 'ut he (ay e=e(pt hi(self therefro( 'y a'andonin) the vessel *ith all the eJuip(ents and the frei)ht it (ay have earned durin) the voya)e. Art. %$0. -he co-o*ners of a vessel shall 'e civilly lia'le in the proportion of their interests in the co((on fund for the results of the acts of the captain referred to in Art. %<;. 7ach co-o*ner (ay e=e(pt hi(self fro( his lia'ility 'y the a'andon(ent, 'efore a notary, of the part of the vessel 'elon)in) to hi(. Art. <,;. -he civil lia'ility incurred 'y shipo*ners in the case prescri'ed in this section, shall 'e understood as li(ited to the value of the vessel *ith all its appurtenances and the frei)hta)e served durin) the voya)e. Art. <,; appeals the principle of li(ited lia'ility in cases of collision hence, Arts. %<; and %$0 e('ody the universal principle of li(ited lia'ility in all cases. 9n Y"!&co v+ L"%$#!", #< this Court elucidated on the i(port of Art. %<; as follo*s> -he provision accords a shipo*ner or a)ent the ri)ht of a'andon(entH and 'y necessary i(plication, his lia'ility is confined to that *hich he is entitled as of ri)ht to a'andon-Fthe vessel *ith all her eJuip(ents and the frei)ht it (ay have earned durin) the voya)e.F 9t is true that the article appears to deal only *ith the li(ited lia'ility of the shipo*ners or a)ents for da(a)es arisin) fro( the (isconduct of the captain in the care of the )oods *hich the vessel carries, 'ut this is a (ere deficiency of lan)ua)e and in no *ay indicates the true e=tent of such lia'ility. -he consensus of authorities is to the effect that not*ithstandin) the lan)ua)e of the aforeJuoted provision, the 'enefit of li(ited lia'ility therein provided for, applies in all cases *herein the shipo*ner or a)ent (ay properly 'e held lia'le for the ne)li)ent or illicit acts of the captain. #$ F"o vessel, no lia'ility,F e=presses in a nutshell the li(ited lia'ility rule. -he shipo*ner's or a)ent's lia'ility is (erely co-e=tensive *ith his interest in the vessel such that a total loss thereof results in its e=tinction. -he total destruction of the vessel e=tin)uishes (ariti(e liens 'ecause there is no lon)er any #$% to *hich it can attach. %0-his doctrine is 'ased on the real and hypothecary nature of (ariti(e la* *hich has its ori)in in the prevailin) conditions of the (ariti(e trade and sea voya)es durin) the (edieval a)es, attended 'y innu(era'le haKards and perils. -o offset a)ainst these adverse conditions and to encoura)e ship'uildin) and (ariti(e co((erce, it *as dee(ed necessary to confine the lia'ility of the o*ner or a)ent arisin) fro( the operation of a ship to the vessel, eJuip(ent, and frei)ht, or insurance, if any. %1

Contrary to the petitioners' theory that the li(ited lia'ility rule has 'een rendered o'solete 'y the advances in (odern technolo)y *hich considera'ly lessen the ris1s involved in (ariti(e trade, this Court continues to apply the said rule in appropriate cases. -his is not to say, ho*ever, that the li(ited lia'ility rule is *ithout e=ceptions, na(ely> C1D *here the in?ury or death to a passen)er is due either to the fault of the shipo*ner, or to the concurrin) ne)li)ence of the shipo*ner and the captainH %2 C2D *here the vessel is insuredH and C,D in *or1(en's co(pensation clai(s. %, 0e have cate)orically stated that Article %<; spea1s only of situations *here the fault or ne)li)ence is co((itted solely 'y the captain. 9n cases *here the ship o*ner is li1e*ise to 'e 'la(ed, Article %<; does not apply. 3uch a situation *ill 'e covered 'y the provisions of the Civil Code on co((on carriers. %# A findin) that a fortuitous event *as the sole cause of the loss of the M6! 5. A'oitiK *ould a'solve A'oitiK fro( any and all lia'ility pursuant to Article 1;,#C1D of the Civil Code *hich provides in part that co((on carriers are responsi'le for the loss, destruction, or deterioration of the )oods they carry, unless the sa(e is due to flood, stor(, earthJua1e, li)htnin), or other natural disaster or cala(ity. On the other hand, a findin) that the M6! 5. A'oitiK san1 'y reason of fault and6or ne)li)ence of A'oitiK, the ship captain and cre* of the M6! 5. A'oitiK *ould render inapplica'le the rule on li(ited lia'ility. -hese issues are therefore ulti(ately Juestions of fact *hich have 'een su'?ect of conflictin) deter(inations 'y the trial courts, the Court of Appeals and even this Court. 9n Civil Cases "os. <2-2;+;-<2-2;;0 Cno* G. . "o. $2;,%D, after receivin) Monarch's and -a'acalera's evidence, the trial court found that the co(plete loss of the ship(ent on 'oard the M6! 5. A'oitiK *hen it san1 *as neither due to a fortuitous event nor a stor( or natural cause. &or A'oitiK' failure to present controvertin) evidence, the trial court also upheld petitioners' alle)ation that the M6! 5. A'oitiK *as unsea*orthy. %% Bo*ever, on appeal, respondent Court of Appeals e=culpated A'oitiK fro( fault or ne)li)ence and ruled that> . . ., even if she CM6! 5. A'oitiKD *as found to 'e unsea*orthy, this .")'0 Cdistin)uished fro( civi' 'i"*i'i04D cannot 'e laid on the shipo*ner's door. 3uch fault *as directly attri'uta'le to the captain. -his is so, 'ecause under Art. +12 of the Code of Co((erce, a(on) the inherent duties of a captain, are to e=a(ine the vessel 'efore sailin) and to co(ply *ith the la*s on navi)ation. %+ and that> . . . althou)h the shipo*ner (ay 'e held civilly lia'le for the captain's fault . . . havin) a'andoned the vessel in Juestion, even if the vessel *as unsea*orthy due to the captain's fault, A'oitiK is still entitled to the 'enefit under the rule of li(ited lia'ility accorded to shipo*ners 'y the Code of Co((erce. %; Civil Case "o. 1,<,$+ Cno* G. . "o. $%%;<D *as si(ilarly resolved 'y the trial court, *hich found that the sin1in) of the M6! 5. A'oitiK *as not due to an act of God or .o#c$ "/$)#$. 9t added that the evidence presented 'y the petitioner 7Juita'le de(onstrated the ne)li)ence of A'oitiK 3hippin) Corporation in the (ana)e(ent and operation of its, vessel M6! 5. A'oitiK. %< Bo*ever, A'oitiK' appeal *as favora'ly acted upon 'y the respondent Court of Appeals *hich reiterated its rulin) in G. . "o. $2;,% that the unsea*orthiness of the M6! 5. A'oitiK *as not a fault directly attri'uta'le to A'oitiK 'ut to the captain, and that A'oitiK is entitled to the 'enefit of the li(ited lia'ility rule for havin) a'andoned its ship. %$ &inally, in Civil Case "o. 1,<+#, Cno* G. . "o. $#<+;D, the trial court held that the M6! 5. A'oitiK *as not lost due to a fortuitous event or .o#c$ "/$)#$, and that A'oitiK had failed to satisfactorily esta'lish that it had o'served e=traordinary dili)ence in the vi)ilance over the )oods transported 'y it. +0 9n CA-G. . C! "o. 0#121, the Court of Appeals initially ruled a)ainst A'oitiK and found that the sin1in) of the vessel *as due to its unsea*orthiness and the failure of its cre* and (aster to e=ercise e=traordinary dili)ence. +13u'seJuently, ho*ever, A'oitiK' petition 'efore the Court of Appeals, doc1eted as CA-G. . 35 "o. 20<## Cno* G. . "o. $#<+;D to annul and set aside the order of e=ecution issued 'y the lo*er court *as resolved in favor of A'oitiK. -he Court of Appeals 'rushed aside the issue of A'oitiK' ne)li)ence and6or fault and proceeded to allo* the application of the li(ited lia'ility rule Fto acco(plish the ai(s of ?ustice.F +2 9t ela'orated thus> F-o e=ecute the ?ud)(ent in this case *ould pre?udice the su'stantial ri)ht of other clai(ants *ho have filed suits to clai( their car)oes that *as lost in the vessel that san1 and also a)ainst the petitioner to 'e ordered to pay (ore than *hat the la* reJuires.F +, 9t should 'e pointed out that the issue of *hether or not the M6! 5. A'oitiK san1 'y reason of .o#c$ "/$)#$ is not a novel one for that Juestion has already 'een the su'?ect of conflictin) pronounce(ents 'y the 3upre(e Court. 9n A*oi0iz S2i((i!& Co#(o#"0io! v+ Co)#0 o. A(($"'%, +# this Court approved the findin)s of the trial court and the appellate court that the sin1in) of the M6! 5. A'oitiK *as not due to the *aves caused 'y tropical stor( F8onin)F 'ut due to the fault and ne)li)ence of A'oitiK, its (aster and cre*. +% On the other hand, in the later case of Co)!0#4 B"!8$#% I!%)#"!c$ Co#(o#"0io! v+ Co)#0 o. A(($"'% , ++ this Court issued a esolution on Au)ust 2<, 1$$1 denyin) the petition for revie* on the )round that the Court of Appeals co((itted no reversi'le error, there'y affir(in) and adoptin) as its o*n, the findin)s of the Court of Appeals that .o#c$ "/$)#$ had caused the M6! 5. A'oitiK to founder. 9n vie* of these conflictin) pronounce(ents, *e find that no* is the opportune ti(e to settle once and for all the issue or *hether or not .o#c$ $/$)#$ had indeed caused the M6! 5. A'oitiK to sin1. After revie*in) the records of the instant cases, *e cate)orically state that 'y the facts on record, the M6! 5. A'oitiK did not )o under *ater 'ecause of the stor( F8onin).F 9t is true that as testified 'y .usto 9)lesias, (eteorolo)ist of 5a)-Asa, durin) the inclusive dates of Octo'er 2<-,1, 1$<0, a stor(y *eather condition prevailed *ithin the 5hilippine area of responsi'ility, particularly alon) the sea route fro( Bon) Son) to Manila, 'ecause of tropical depression F8onin)F. +; /ut even A'oitiK' o*n evidence in the for( of the (arine protest filed 'y Captain acines affir(ed that the *ind force *hen the M6! 5. A'oitiK foundered on Octo'er ,1, 1$<0 *as only ten C10D to fifteen C1%D 1nots *hich, under the /eaufort 3cale or 0ind, falls *ithin scale "o. # that descri'es the *ind velocity as F(oderate 'reeKe,F and characteriKes the *aves as Fs(all . . . 'eco(in) lon)er, fairly freJuent *hite horses.F +< Captain acines also testified in open court that the ill-fated M6! 5. A'oitiK *as t*o hundred C200D (iles a*ay fro( stor( F8onin)F *hen it san1. +$ -he issue of ne)li)ence on the part of A'oitiK, and the captain and cre* of the M6! 5. A'oitiK has also 'een su'?ect of conflictin) rulin)s 'y this Court. 9n G. . "o. 100,;,, Co)!0#4 B"!8$#% I!%)#"!c$ Co#(o#"0io! v+ Co)#0 o. A(($"'% , this Court found no error in

the findin)s of the Court of Appeals that the M6! 5. A'oitiK san1 'y reason of .o#c$ "/$)#$, and that there *as no ne)li)ence on the part of its officers and cre*. 9n direct contradiction is this Court's cate)orical declaration in A*oi0iz S2i((i!& Co#(o#"0io! v+ Co)#0 o. A(($"'%,F ;0 to *it> -he trial court and the appellate court found that the sin1in) of the M6! 5. A'oitiK *as not due to the *aves caused 'y tropical stor( F8onin)F *)0 1)$ 0o 02$ .")'0 "!1 !$&'i&$!c$ o. ($0i0io!$#, i0% "%0$# "!1 c#$3+ T2$ co)#0 #$(#o1)c$% 3i02 "((#ov"' %"i1 .i!1i!&% . . . . ;1 Bo*ever, in the su'seJuent case of A*oi0iz S2i((i!& Co#(o#"0io! v+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io!, L01., ;2 this Court e=culpated A'oitiK fro( fault and6or ne)li)ence *hile holdin) that the unsea*orthiness of the M6! 5. A'oitiK *as only attri'uta'le to the ne)li)ence of its captain and cre*. -hus, On this point, it should 'e stressed that unsea*orthiness is not a fault that can 'e laid sJuarely on petitioner's lap, a'sent a factual 'asis for such conclusion. -he unsea*orthiness found in so(e cases *here the sa(e has 'een ruled to e=ist is directly attri'uta'le to the vessel's cre* and captain, (ore so on the part of the latter since Article +12 of the Code of Co((erce provides that a(on) the inherent duties of a captain is to e=a(ine a vessel 'efore sailin) and to co(ply *ith the la*s of navi)ation. 3uch a construction *ould also put (atters to rest relative to the decision of the /oard of Marine 9nJuiry. 0hile the conclusion therein e=oneratin) the captain and cre* of the vessel *as not sustained for lac1 of 'asis, the findin) therein contained to the effect that the vessel *as sea*orthy deserves (erit. Despite appearances, it is not totally inco(pati'le *ith the findin)s of the trial court and the Court of Appeals, *hose findin) of Funsea*orthinessF clearly did not pertain to the structural condition of the vessel *hich is the 'asis of the /M9's findin)s, 'ut to the condition it *as in at the ti(e of the sin1in), *hich condition *as a result of the acts of the captain and the cre*. ;, 9t therefore 'eco(es incu('ent upon this Court to ans*er *ith finality the na))in) Juestion of *hether or not it *as the concurrent fault and6or ne)li)ence of A'oitiK and the captain and cre* of the ill-fated vessel that had caused it to )o under *ater. Guided 'y our previous pronounce(ents and illu(inated 'y the evidence no* on record, *e reiterate our findin)s in A*oi0iz S2i((i!& Co#(o#"0io! v+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io!, L01 . ;#, that the unsea*orthiness of the M6! 5. A'oitiK had caused it to founder. 0e, ho*ever, ta1e e=ception to the pronounce(ent therein that said unsea*orthiness could not 'e attri'uted to the ship o*ner 'ut only to the ne)li)ent acts of the captain and cre* of the M6! 5. A'oitiK. On the (atter of A'oitiK' ne)li)ence, *e adhere to our rulin) in A*oi0iz S2i((i!& Co#(o#"0io! v+ Co)#0 o. A(($"'% , ;% that found A'oitiK, and the captain and cre* of the M6! 5. A'oitiK to have 'een concurrently ne)li)ent. Durin) the trial of Civil Case "os. <2-2;+;-<2-2;;0 Cno* G. . "o. $2;,%D, petitioners Monarch and -a'acalera presented a survey fro( 5erfect :a('ert, a surveyor 'ased in Bon) Son) that conducted an investi)ation on the possi'le cause of the sin1in) of the vessel. -he said survey esta'lished that the cause of the sin1in) of the vessel *as the lea1a)e of *ater into the M6! 5. A'oitiK *hich pro'a'ly started in the for*ard part of the "o. 1 hull, althou)h no e=planation *as proffered as to *hy the "o. 2 hull *as li1e*ise flooded. 5erfect :a('ert sur(ised that the floodin) *as due to a lea1a)e in the shell platin) or a defect in the *ater ti)ht 'ul1 head 'et*een the "os. 1 and 2 holds *hich allo*ed the *ater enterin) hull "o. 1 to pass throu)h hull "o. 2. -he surveyor concluded that *hatever the cause of the lea1a)e of *ater into these hulls, the sea*orthiness of the vessel *as definitely in Juestion 'ecause the 'reaches of the hulls and serious floodin) of the t*o car)o holds occurred si(ultaneously in seasonal *eather. ;+ 0e a)ree *ith the unifor( findin) of the lo*er courts that A'oitiK had failed to prove that it o'served the e=traordinary dili)ence reJuired of it as a co((on carrier. 0e therefore reiterate our pronounce(ent in A*oi0iz Co#(o#"0io! v+ Co)#0 o. A(($"'% ;; on the issue of A'oitiK' lia'ility in the sin1in) of its vessel, to *it> 9n accordance *ith Article 1;,2 of the Civil Code, the defendant co((on carrier fro( the nature of its 'usiness and for reasons of pu'lic policy, is 'ound to o'serve e=traordinary dili)ence in the vi)ilance over the )oods and for the safety of the passen)ers transported 'y it accordin) to all circu(stances of the case. 0hile the )oods are in the possession of the carrier, it is 'ut fair that it e=ercise e=traordinary dili)ence in protectin) the( fro( loss or da(a)e, and if loss occurs, the la* presu(es that it *as due to the carrier's fault or ne)li)enceH that is necessary to protect the interest of the shipper *hich is at the (ercy of the carrier . . . 9n the case at 'ar, the defendant failed to prove hat the loss of the su'?ect car)o *as not due to its fault or ne)li)ence. ;< -he failure of A'oitiK to present sufficient evidence to e=culpate itself fro( fault and6or ne)li)ence in the sin1in) of its vessel in the face of the fore)oin) e=pert testi(ony constrains us to hold that A'oitiK *as concurrently at fault and6or ne)li)ent *ith the ship captain and cre* of the M6! 5. A'oitiK. -his is in accordance *ith the rule that in cases involvin) the li(ited lia'ility of shipo*ners, the initial 'urden of proof of ne)li)ence or unsea*orthiness rests on the clai(ants. Bo*ever, once the vessel o*ner or any party asserts the ri)ht to li(it its lia'ility, the 'urden of proof as to lac1 of privity or 1no*led)e on its part *ith respect to the (atter of ne)li)ence or unsea*orthiness is shifted to it. ;$ -his 'urden, A'oitiK had unfortunately failed to dischar)e. -hat A'oitiK failed to dischar)e the 'urden of provin) that the unsea*orthiness of its vessel *as not due to its fault and6or ne)li)ence should not ho*ever (ean that the li(ited lia'ility rule *ill not 'e applied to the present cases. -he peculiar circu(stances here de(and that there should 'e no strict adherence to procedural rules on evidence lest the ?ust clai(s of shippers6insurers 'e frustrated. -he rule on li(ited lia'ility should 'e applied in accordance *ith the latest rulin) in A*oi0iz S2i((i!& Co#(o#"0io! v+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io!, L01., <0 pro(ul)ated on .anuary 21, 1$$,, that clai(ants 'e treated as Fcreditors in an insolvent corporation *hose assets are not enou)h to satisfy the totality of clai(s a)ainst it.F <1 -o do so, the Court set out in that case the procedural )uidelines> 9n the instant case, there is, therefore, a need to collate all clai(s preparatory to their satisfaction fro( the insurance proceeds on the vessel M6! 5. A'oitiK and its pendin) frei)hta)e at the ti(e of its loss. "o clai(ant can 'e )iven precedence over the others 'y the si(ple e=pedience of havin) co(pleted its action earlier than the rest. -hus, e=ecution of ?ud)(ent in earlier co(pleted cases, even these already final and e=ecutory (ust 'e stayed pendin) co(pletion of all cases occasioned 'y the su'?ect sin1in). -hen and only then can all such clai(s 'e si(ultaneously settled, either co(pletely or pro-rata should the insurance proceeds and frei)hta)e 'e not enou)h to satisfy all clai(s. === === === I! ."i#!$%% 0o 02$ c'"i "!0% "!1 "% " "00$# o. $;)i04 , the total proceeds of the insurance and pendin) frei)hta)e should no* 'e deposited in trust. Moreover, petitioner should institute the necessary li(itation and distri'ution action 'efore the proper

ad(iralty court *ithin 1% days fro( finality of this decision, and thereafter deposit *ith it the proceeds fro( the insurance co(pany and pendin) frei)hta)e in order to safe)uard the sa(e pendin) final resolution of all incidents, for final pro-ratin) and settle(ent thereof. <2C7(phasis supplied.D -here is no record that A'oitiK. has instituted such action or that it has deposited in trust the insurance proceeds and frei)hta)e earned. -he pendency of the instant cases 'efore the Court is not a reason for A'oitiK to disre)ard the afore(entioned order of the Court. 9n fact, had A'oitiK co(plied there*ith, even these cases could have 'een ter(inated earlier. 0e are inclined to 'elieve that instead of filin) the suit as directed 'y this Court, A'oitiK tolerated the situation of several clai(ants *aitin) to )el hold of its insurance proceeds, *hich, if correctly handled (ust have (ultiplied in a(ount 'y no*. /y its failure to a'ide 'y the order of this Court, it had caused (ore da(a)e to the clai(ants over and a'ove that *hich they have endured as a direct conseJuence of the sin1in) of the M6! 5. A'oitiK. 9t *as o'vious that fro( a(on) the (any cases filed a)ainst it over the years, A'oitiK *as *aitin) for a ?ud)(ent that (i)ht prove favora'le to it, in 'latant violation of the 'asic provisions of the Civil Code on a'use of ri)hts. 0ell a*are of the 110 clai(ants a)ainst it, A'oitiK preferred to liti)ate the clai(s sin)ly rather than e=ert effort to*ards the consolidation of all clai(s. ConseJuently, courts have arrived at conflictin) decisions *hile clai(ants *aited over the years for a resolution of any of the cases that *ould lead to the eventual resolution of the rest. A'oitiK failed to )ive the clai(ants their due and to o'serve honesty and )ood faith in the e=ercise of its ri)hts. <, A'oitiK' 'latant disre)ard of the order of this Court in A'oitiK 3hippin) Co#(o#"0io! v+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io!, L01. <# cannot 'e anythin) 'ut, *illful on its part. An act is considered *illful if it is done *ith 1no*led)e of its in?urious effectH it is not reJuired that the act 'e done purposely to produce the in?ury. <% A'oitiK is *ell a*are that 'y not institutin) the said suit, it caused the delay in the resolution of all clai(s a)ainst it. Bavin) *illfully caused loss or in?ury to the petitioners in a (anner that is contrary to (orals, )ood custo(s or pu'lic policy, A'oitiK is lia'le for da(a)es to the latter. <+ -hus, for its contu(acious act of defyin) the order of this Court to file the appropriate action to consolidate all clai(s for settle(ent, A'oitiK (ust 'e held lia'le for (oral da(a)es *hich (ay 'e a*arded in appropriate cases under the Chapter on hu(an relations of the Civil Code CArticles 1$ to ,+D. <; On account of A'oitiK' refusal to satisfy petitioners' clai(s in accordance *ith the directive of the Court in A*oi0iz S2i((i!& Co#(o#"0io! v+ G$!$#"' Acci1$!0 Fi#$ "!1 Li.$ A%%)#"!c$ Co#(o#"0io!, L01., it acted in )ross and evident 'ad faith. Accordin)ly, pursuant to Article 220< of the Civil Code, << petitioners should 'e )ranted attorney's fees. 0B7 7&O 7, the petitions in G. . "os. $2;,%, $#<+;, and $%%;< are D7"97D. -he decisions of the Court of Appeals in CA-G. . "o. 35-1;#2; dated March 2$, 1$$0, CA-G. . 35 "o. 20<## dated Au)ust 1%, 1$$0, and CA-G. . C! "o. 1%0;1 dated Au)ust 2#, 1$$0 are A&&9 M7D *ith the MOD9&9CA-9O" that respondent A'oitiK 3hippin) Corporation is ordered to pay each of the respective petitioners the a(ounts of 5100,000.00 as (oral da(a)es and 5%0,000.00 as attorney's fees, and tre'le the cost of suit. espondent A'oitiK 3hippin) Corporation is further directed to co(ply *ith the Order pro(ul)ated 'y this Court on .anuary 21, 1$$, in A'oitiK 3hippin) Corporation v. General Accident &ire and :ife Assurance Corporation, :td., G. . "o. 100##+, .anuary 21, 1$$,, to CaD institute the necessary li(itation and distri'ution action 'efore the proper e)ional -rial Court, actin) as ad(iralty court, *ithin fifteen C1%D days fro( the finality of this decision, and C'D thereafter to deposit *ith the said court the insurance proceeds fro( the loss of the vessel, M6! 5. A'oitiK, and the frei)hta)e earned in order to safe)uard the sa(e pendin) final resolution of all incidents relative to the final pro-ratin) thereof and to the settle(ent of all clai(s. 3O O D7 7D.