DELSAN TRANSPORT LINES INC. V. AMERICAN HOME
The fact of
ASSURANCE CORP., 498 SCRA 603
FACTS: Caltex engaged into a contract of affreightment
with the petitioner, Delsan Transport Lines, Inc.(Delsan), for
a period of one year whereby the said common carrier
agreed to transport Caltexs industrial fuel oil from the
Batangas-Bataan Refinery to different parts of the country.
Under the contract, petitioner took on board its vessel, MT
Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to
be delivered to the Caltex Oil Terminal in Zamboanga City.
The shipment was insured with private respondent,
American Home Assurance Corporation (American Home)
The vessel sank in the early morning of August 15, 1986
near Panay Gulf in the Visayas taking with it the entire cargo
of fuel oil.
Subsequently, American Home paid Caltex the sum of Php
5,096,635.57 representing the insured value of the cargo.
Exercising its right to subrogation under Article 2207 of the
New Civil Code, the American Home demanded the Delsan
the same amount it paid to Caltex.
Due to its failure to collect from Delsan despite prior
demand, American Home filed a complaint with the RTC of
Makati for collection of a sum of money.
The trial court dismissed the complaint against Delsan. It
ruled that the vessel, MT Maysun, was seaworthy and that
the incident was caused by unexpected inclement weather
condition or force majeure, thus exempting the common
carrier from liability for the loss of its cargo.
The CA reversed. It gave credence to the weather report
issued by PAGASA which stated that the waves were only .7
to 2 meters in height in the vicinity of the Panay Gulf at the
day the ship sank, in contrast to the claim of the crew of the
ship that the waves were 20 feet high.
Delsan contends the following
1. Delsan theorized that when the American
Home paid Caltex the value of its lost cargo,
the act of American Home is equivalent to a
tacit recognition that the ill-fated vessel was
seaworthy; otherwise, American Home was not
legally liable to Caltex due to the latters
breach of implied warranty under the marine
insurance policy that the vessel was
seaworthy.
2. Delsan avers that although chief officer had
merely a 2nd officers license, he was qualified
to act as the vessels chief officer. In fact, all
the crew and officers of MTT Maysun were
exonerated in the administrative investigation.
ISSUES
1. W/N the payment made by American Home to
Caltex for the insured value of the lost cargo
amounted to an admission that the vessel was
seaworthy, thus precluding any action for recovery
against the petitioner. NO
2. W/N the non-presentation of the marine insurance
policy bars the complaint for recovery of sum of
money for lack of cause of action. NO
RULING
First Issue: The payment made by American Home for the
insured value of the lost cargo operates as waiver of its right
to enforce the term of the implied warranty against Caltex
under the marine insurance policy. However, the same
cannot be validly interpreted as an automatic admission of
the vessels seaworthiness by American Home as to
foreclose recourse against Delsan for any liability under its
1 kat transpo pt2
contractual obligation as a common carrier.
payment grants American Home subrogatory right which
enables it to exercise legal remedies that would otherwise
be available to Caltex as owner of the lost cargo against
Delsan, the common carrier.
From the nature of their business and for reasons of public
policy, common carriers are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety
of passengers transported by them, according to all the
circumstances of each case. In the event of loss, destruction
or deterioration of the insured goods, common carriers shall
be responsible unless the same is brought about, among
others, by flood, storm, earthquake, lightning or other
natural disaster or calamity. In all other cases, if the goods
are lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted
negligently, unless they prove they observed extraordinary
diligence.
In order to escape liability for the loss of its cargo of
industrial fuel oil belonging to Caltex, Delsan attributes the
sinking of MT Maysun to fortuitous event or force majeure.
Although the testimony of the captain and chief mate that
there were strong winds and waves 20 feet high was
effectively rebutted and belied by the weather report of
PAGASA. Thus, as the CA correctly ruled, Delsans vessel, MT
Maysun, sank with its entire cargo for the reason that it was
not seaworthy. There was no squall or bad weather or
extremely poor sea condition in the vicinity where the said
vessel sank.
Additionally, the exoneration of MT Maysuns officers and
crew merely concern their respective administrative
liabilities. It does not in any way operate to absolve Delsan
the common carrier from its civil liability arising from its
failure to observe extraordinary diligence in the vigilance
over the goods it was transporting and for the negligent acts
or omissions of its employees, the determination of which
properly belongs to the courts. In the case at bar, Delsan is
liable for the insured value of the lost cargo of industrial fuel
oil belonging to Caltex for its failure to rebut the
presumption of fault or negligence as common carrier
occasioned by the unexplained sinking of its vessel, MT
Maysun, while in transit.
Second Issue: It is the view of the SC that the presentation
in evidence of the marine insurance policy is not
indispensable in this case before the insurer may recover
from the common carrier the insured value of the lost cargo
in the exercise of its subrogatory right. The subrogation
receipt, by itself, is sufficient to establish not only the
relationship of American Home as insurer and Caltex, as the
assured shipper of the lost cargo of industrial fuel oil, but
also the amount paid to settle the insurance claim. The right
of subrogation accrues simply upon payment by the
insurance company of the insurance claim.
1 Agreement Limiting Liability
a As to diligence required
Art. 1744. A stipulation between the common carrier and
the shipper or owner limiting the liability of the former for
the loss or destruction, or deterioration of the goods to a
degree less than extra-ordinary diligence shall be valid,
provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other
than the service rendered by the CC; and
(3) Reasonable, just and not contrary to public
policy.
Art. 1745. Any of the following or similar stipulations shall
be considered unreasonable, unjust and contrary to public
policy:
(1) That the goods are transported at the risk of the
owner or shipper;
(2) That the common carrier will not be liable for
any loss, destruction or deterioration of the goods;
(3) That the common carrier need not observe any
diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree
of diligence less than that of a good father of a
family, or of a man of ordinary prudence in the
vigilance over the movable transported;
(5) That the common carrier shall not be
responsible for the acts or omissions of his or its
employees;
(6) That the common carrier's liability for acts
committed by thieves, or of robbers who do not act
with grave or irresistible threat, violence or force, is
dispensed with or diminished;
(7) That the common carrier is not responsible for
the loss, destruction, or deterioration of goods on
account of the
defective condition of the car, vehicle, ship,
airplane or other equipment used in the contract of
carriage.
Art. 1751. The fact that the common carrier has no
competitor along the line or route, or a part thereof, to
which the contract refers shall be taken into consideration of
the question of whether or not a stipulation limiting the
common carrier's liability is reasonable, just and in
accordance with public policy.
b As to amount of liability
Art. 1749. A stipulation that the common carrier's liability
is limited to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater value,
is binding.
Art. 1750. A contract fixing the sum that may be recovered
by the owner or shipper for the loss, destruction, or
deterioration of the
goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.
H. E. HEACOCK COMPANY vs MACONDRAY &
COMPANY, INC
(1) On or about the 5th day of June, 1919, the plaintiff
caused to be delivered on board of steamship Bolton Castle,
then in the harbor of New York, four cases of merchandise
one of which contained twelve (12) 8-day Edmond clocks
properly boxed and marked for transportation to Manila, and
paid freight on said clocks from New York to Manila in
advance. The said steampship arrived in the port of Manila
on or about the 10th day of September, 1919, consigned to
the defendant herein as agent and representative of said
vessel in said port. Neither the master of said vessel nor the
defendant herein, as its agent, delivered to the plaintiff the
aforesaid twelve 8-day Edmond clocks, although demand
was made upon them for their delivery.
The invoice value of the said twelve 8-day Edmond clocks in
the city of New York was P22 and the market value of the
same in the City of Manila at the time when they should
have been delivered to the plaintiff was P420.
The bill of lading issued and delivered to the plaintiff by the
master of the said steamship Bolton Castle contained,
among others, the following clauses:
2 kat transpo pt2
1. It is mutually agreed that the value of the goods
receipted for above does not exceed $500 per freight
ton, or, in proportion for any part of a ton, unless the
value be expressly stated herein and ad valorem freight
paid thereon.
9. Also, that in the event of claims for short delivery of,
or damage to, cargo being made, the carrier shall not be
liable for more than the net invoice price plus freight and
insurance less all charges saved, and any loss or damage
for which the carrier may be liable shall be adjusted pro
rata on the said basis.
The case containing the aforesaid twelve 8-day Edmond
clocks measured 3 cubic feet, and the freight ton value
thereof was $1,480, U. S. currency. No greater value than
$500, U. S. currency, per freight ton was declared by the
plaintiff on the aforesaid clocks, and no ad valorem freight
was paid thereon.
(6) On or about October 9, 1919, the defendant tendered to
the plaintiff P76.36, the proportionate freight ton value of
the aforesaid twelve 8-day Edmond clocks, in payment of
plaintiff's claim, which tender plaintiff rejected.
The lower court, in accordance with clause 9 of the bill of
lading above quoted, rendered judgment in favor of the
plaintiff against the defendant for the sum of P226.02, this
being the invoice value of the clocks in question plus the
freight and insurance thereon, with legal interest thereon
from November 20, 1919, the date of the complaint,
together with costs. From that judgment both parties
appealed to this court.
The plaintiff-appellant insists that it is entitled to recover
from the defendant the market value of the clocks in
question, to wit: the sum of P420. The defendant-appellant,
on the other hand, contends that, in accordance with clause
1 of the bill of lading, the plaintiff is entitled to recover only
the sum of P76.36, the proportionate freight ton value of the
said clocks. The claim of the plaintiff is based upon the
argument that the two clause in the bill of lading above
quoted, limiting the liability of the carrier, are contrary to
public order and, therefore, null and void. The defendant, on
the other hand, contends that both of said clauses are valid,
and the clause 1 should have been applied by the lower
court instead of clause 9.
May a common carrier, by stipulations inserted in the
bill of lading, limit its liability for the loss of or
damage to the cargo to an agreed valuation of the
latter? 1awph!l.net
Three kinds of stipulations have often been made in a bill of
lading. The first is one exempting the carrier from any and
all liability for loss or damage occasioned by its own
negligence. The second is one providing for an unqualified
limitation of such liability to an agreed valuation. And
the third is one limiting the liability of the carrier to an
agreed valuation unless the shipper declares a higher value
and pays a higher rate of freight. According to an almost
uniform weight of authority, the first and second kinds of
stipulations are invalid as being contrary to public policy,
but the third is valid and enforceable.
It seems clear from the foregoing authorities that the
clauses (1 and 9) of the bill of lading here in question are
not contrary to public order. Article 1255 of the Civil Code
provides that "the contracting parties may establish any
agreements, terms and conditions they may deem
advisable, provided they are not contrary to law, morals or
public order." Said clauses of the bill of lading are, therefore,
valid and binding upon the parties thereto.
PARMANAND SHEWARAM vs. PHILIPPINE AIR LINES
Parmanand Shewaram, the plaintiff herein, was on
November 23, 1959, a paying passenger with ticket No. 4-
30976, on defendant's aircraft flight No. 976/910 from
Zamboanga City bound for Manila; that defendant is a
common carrier engaged in airline transportation in the
Philippines, offering its services to the public to carry and
transport passengers and cargoes from and to different
points in the Philippines; that on the above-mentioned date
of November 23, 1959, he checked in three (3) pieces of
baggages a suitcase and two (2) other pieces; that the
suitcase was mistagged by defendant's personnel in
Zamboanga City, as I.G.N. (for Iligan) with claim check No.
B-3883, instead of MNL (for Manila). When plaintiff
Parmanand Shewaram arrived in Manila on the date of
November 23, 1959, his suitcase did not arrive with his flight
because it was sent to Iligan. So, he made a claim with
defendant's personnel in Manila airport and another suitcase
similar to his own which was the only baggage left for that
flight, the rest having been claimed and released to the
other passengers of said flight, was given to the plaintiff for
him to take delivery but he did not and refused to take
delivery of the same on the ground that it was not his,
alleging that all his clothes were white and the National
transistor 7 and a Rollflex camera were not found inside the
suitcase, and moreover, it contained a pistol which he did
not have nor placed inside his suitcase; that after inquiries
made by defendant's personnel in Manila from different
airports where the suitcase in question must have been
sent, it was found to have reached Iligan and the station
agent of the PAL in Iligan caused the same to be sent to
Manila for delivery to Mr. Shewaram and which suitcase
belonging to the plaintiff herein arrived in Manila airport on
November 24, 1959; that it was also found out that the
suitcase shown to and given to the plaintiff for delivery
which he refused to take delivery belonged to a certain Del
Rosario who was bound for Iligan in the same flight with Mr.
Shewaram; that when the plaintiff's suitcase arrived in
Manila as stated above on November 24, 1959, he was
informed by Mr. Tomas Blanco, Jr., the acting station agent of
the Manila airport of the arrival of his suitcase but of course
minus his Transistor Radio 7 and the Rollflex Camera; that
Shewaram made demand for these two (2) items or for the
value thereof but the same was not complied with by
defendant.
It is admitted by defendant that there was mistake in
tagging the suitcase of plaintiff as IGN. The tampering of the
suitcase is more apparent when on November 24, 1959,
when the suitcase arrived in Manila, defendant's personnel
could open the same in spite of the fact that plaintiff had it
under key when he delivered the suitcase to defendant's
personnel in Zamboanga City.
It is clear from the above-quoted portions of the decision of
the trial court that said court had found that the suitcase of
the appellee was tampered, and the transistor radio and the
camera contained therein were lost, and that the loss of
those articles was due to the negligence of the employees of
the appellant. The evidence shows that the transistor radio
3 kat transpo pt2
cost P197.00 and the camera cost P176.00, so the total
value of the two articles was P373.00.
There is no question that the appellant is a common
carrier.1 As such common carrier the appellant, from the
nature of its business and for reasons of public policy, is
bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers
transported by it according to the circumstances of each
case. 2 It having been shown that the loss of the transistor
radio and the camera of the appellee, costing P373.00, was
due to the negligence of the employees of the appellant, it
is clear that the appellant should be held liable for the
payment of said loss.3
It is, however, contended by the appellant that its liability
should be limited to the amount stated in the conditions of
carriage printed at the back of the plane ticket stub which
was issued to the appellee, which conditions are embodied
in Domestic Tariff Regulations No. 2 which was filed with the
Civil Aeronautics Board. One of those conditions, which is
pertinent to the issue raised by the appellant in this case
provides as follows:
The liability, if any, for loss or damage to checked
baggage or for delay in the delivery thereof is limited to
its value and, unless the passenger declares in advance
a higher valuation and pay an additional charge
therefor, the value shall be conclusively deemed not to
exceed P100.00 for each ticket.
The appellant maintains that in view of the failure of the
appellee to declare a higher value for his luggage, and pay
the freight on the basis of said declared value when he
checked such luggage at the Zamboanga City airport,
pursuant to the above quoted condition, appellee can not
demand payment from the appellant of an amount in excess
of P100.00.
The law that may be invoked, in this connection is Article
1750 of the New Civil Code which provides as follows:
A contract fixing the sum that may be recovered by
the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and
has been fairly and freely agreed upon.
In accordance with the above-quoted provision of Article
1750 of the New Civil Code, the pecuniary liability of a
common carrier may, by contract, be limited to a fixed
amount. It is required, however, that the contract must be
"reasonable and just under the circumstances and has been
fairly and freely agreed upon."
The requirements provided in Article 1750 of the New Civil
Code must be complied with before a common carrier can
claim a limitation of its pecuniary liability in case of loss,
destruction or deterioration of the goods it has undertaken
to transport. In the case before us We believe that the
requirements of said article have not been met. It can not be
said that the appellee had actually entered into a contract
with the appellant, embodying the conditions as printed at
the back of the ticket stub that was issued by the appellant
to the appellee. The fact that those conditions are printed at
the back of the ticket stub in letters so small that they are
hard to read would not warrant the presumption that the
appellee was aware of those conditions such that he had
"fairly and freely agreed" to those conditions. The trial court
has categorically stated in its decision that the "Defendant
admits that passengers do not sign the ticket, much less did
plaintiff herein sign his ticket when he made the flight on
November 23, 1959." We hold, therefore, that the appellee
is not, and can not be, bound by the conditions of carriage
found at the back of the ticket stub issued to him when he
made the flight on appellant's plane on November 23, 1959.
The liability of the appellant in the present case should be
governed by the provisions of Articles 1734 and 1735 of the
New Civil Code
It having been clearly found by the trial court that the
transistor radio and the camera of the appellee were lost as
a result of the negligence of the appellant as a common
carrier, the liability of the appellant is clear it must pay
the appellee the value of those two articles.
AGUSTINO B. ONG YIU vs. CA and PHILIPPINE AIR
LINES, INC
On August 26, 1967, petitioner was a fare paying passenger
of respondent Philippine Air Lines, Inc. (PAL), on board Flight
No. 463-R, from Mactan Cebu, bound for Butuan City. He was
scheduled to attend the trial of Civil Case No. 1005 and
Spec. Procs. No. 1125 in the Court of First Instance, Branch
II, thereat, set for hearing on August 28-31, 1967. As a
passenger, he checked in one piece of luggage, a blue
"maleta" for which he was issued Claim Check No. 2106-R
(Exh. "A"). The plane left Mactan Airport, Cebu, at about
1:00 o'clock P.M., and arrived at Bancasi airport, Butuan
City, at past 2:00 o'clock P.M., of the same day. Upon arrival,
petitioner claimed his luggage but it could not be found.
According to petitioner, it was only after reacting indignantly
to the loss that the matter was attended to by the porter
clerk, Maximo Gomez, which, however, the latter denies, At
about 3:00 o'clock P.M., PAL Butuan, sent a message to PAL,
Cebu, inquiring about the missing luggage, which message
was, in turn relayed in full to the Mactan Airport teletype
operator at 3:45 P.M. (Exh. "2") that same afternoon. It must
have been transmitted to Manila immediately, for at 3:59
that same afternoon, PAL Manila wired PAL Cebu advising
that the luggage had been over carried to Manila aboard
Flight No. 156 and that it would be forwarded to Cebu on
Flight No. 345 of the same day. Instructions were also given
that the luggage be immediately forwarded to Butuan City
on the first available flight (Exh. "3"). At 5:00 P.M. of the
same afternoon, PAL Cebu sent a message to PAL Butuan
that the luggage would be forwarded on Fright No. 963 the
following day, August 27, 196'(. However, this message was
not received by PAL Butuan as all the personnel had already
left since there were no more incoming flights that
afternoon.
In the meantime, petitioner was worried about the missing
luggage because it contained vital documents needed for
trial the next day. At 10:00 o'clock that evening, petitioner
wired PAL Cebu demanding the delivery of his baggage
before noon the next day, otherwise, he would hold PAL
liable for damages, and stating that PAL's gross negligence
had caused him undue inconvenience, worry, anxiety and
extreme embarrassment (Exh. "B"). This telegram was
received by the Cebu PAL supervisor but the latter felt no
need to wire petitioner that his luggage had already been
forwarded on the assumption that by the time the message
reached Butuan City, the luggage would have arrived.
4 kat transpo pt2
Early in the morning of the next day, August 27, 1967,
petitioner went to the Bancasi Airport to inquire about his
luggage. He did not wait, however, for the morning flight
which arrived at 10:00 o'clock that morning. This flight
carried the missing luggage. The porter clerk, Maximo
Gomez, paged petitioner, but the latter had already left. A
certain Emilio Dagorro a driver of a "colorum" car, who also
used to drive for petitioner, volunteered to take the luggage
to petitioner. As Maximo Gomez knew Dagorro to be the
same driver used by petitioner whenever the latter was in
Butuan City, Gomez took the luggage and placed it on the
counter. Dagorro examined the lock, pressed it, and it
opened. After calling the attention of Maximo Gomez, the
"maleta" was opened, Gomez took a look at its contents, but
did not touch them. Dagorro then delivered the "maleta" to
petitioner, with the information that the lock was open.
Upon inspection, petitioner found that a folder containing
certain exhibits, transcripts and private documents in Civil
Case No. 1005 and Sp. Procs. No. 1126 were missing, aside
from two gift items for his parents-in-law. Petitioner refused
to accept the luggage. Dagorro returned it to the porter
clerk, Maximo Gomez, who sealed it and forwarded the
same to PAL Cebu.
I. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
RESPONDENT PAL GUILTY ONLY OF SIMPLE NEGLIGENCE AND
NOT BAD FAITH IN THE BREACH OF ITS CONTRACT OF
TRANSPORTATION WITH PETITIONER.
On July 16, 1975, this Court gave due course to the Petition.
There is no dispute that PAL incurred in delay in the delivery
of petitioner's luggage. The question is the correctness of
respondent Court's conclusion that there was no gross
negligence on the part of PAL and that it had not acted
fraudulently or in bad faith as to entitle petitioner to an
award of moral and exemplary damages.
From the facts of the case, we agree with respondent Court
that PAL had not acted in bad faith. Bad faith means a
breach of a known duty through some motive of interest or
ill will. 2 It was the duty of PAL to look for petitioner's
luggage which had been miscarried. PAL exerted due
diligence in complying with such duty.
Neither was the failure of PAL Cebu to reply to petitioner's
rush telegram indicative of bad faith, The telegram (Exh. B)
was dispatched by petitioner at around 10:00 P.M. of August
26, 1967. The PAL supervisor at Mactan Airport was notified
of it only in the morning of the following day. At that time
the luggage was already to be forwarded to Butuan City.
There was no bad faith, therefore, in the assumption made
by said supervisor that the plane carrying the bag would
arrive at Butuan earlier than a reply telegram. Had
petitioner waited or caused someone to wait at the Bancasi
airport for the arrival of the morning flight, he would have
been able to retrieve his luggage sooner.
In the absence of a wrongful act or omission or of fraud or
bad faith, petitioner is not entitled to moral damages.
 Art. 2217. Moral damages include physical suffering,
mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendant's wrongful act of omission.
Art. 2220. Willful injury to property may be a legal
ground for awarding moral damages if the court should
find that, under the circumstances, such damages are
justly due. The same rule applies to breaches of
contract where the defendant acted fraudulently or in
bad faith.
Petitioner is neither entitled to exemplary damages. In
contracts, as provided for in Article 2232 of the Civil Code,
exemplary damages can be granted if the defendant acted
in a wanton, fraudulent, reckless, oppressive, or malevolent
manner, which has not been proven in this case.
Petitioner further contends that respondent Court
committed grave error when it limited PAL's carriage liability
to the amount of P100.00 as stipulated at the back of the
ticket.
There is no dispute that petitioner did not declare any
higher value for his luggage, much less did he pay any
additional transportation charge.
But petitioner argues that there is nothing in the evidence to
show that he had actually entered into a contract with PAL
limiting the latter's liability for loss or delay of the baggage
of its passengers, and that Article 1750* of the Civil Code
has not been complied with.
There is another matter involved, raised as an error by PAL
the fact that on October 24, 1974 or two months after the
promulgation of the Decision of the appellate Court,
petitioner's widow filed a Motion for Substitution claiming
that petitioner died on January 6, 1974 and that she only
came to know of the adverse Decision on October 23, 1974
when petitioner's law partner informed her that he received
copy of the Decision on August 28, 1974. Attached to her
Motion was an Affidavit of petitioner's law partner reciting
facts constitutive of excusable negligence. The appellate
Court noting that all pleadings had been signed by
petitioner himself allowed the widow "to take such steps as
she or counsel may deem necessary." She then filed a
Motion for Reconsideration over the opposition of PAL which
alleged that the Court of Appeals Decision, promulgated on
August 22, 1974, had already become final and executory
since no appeal had been interposed therefrom within the
reglementary period.
Under the circumstances, considering the demise of
petitioner himself, who acted as his own counsel, it is best
that technicality yields to the interests of substantial justice.
Besides, in the 'last analysis, no serious prejudice has been
caused respondent PAL.
In fine, we hold that the conclusions drawn by respondent
Court from the evidence on record are not erroneous.
WHEREFORE, for lack of merit, the instant Petition is hereby
denied, and the judgment sought to be reviewed hereby
affirmed in toto. No costs. SO ORDERED.
5 kat transpo pt2
PAN AMERICAN WORLD AIRWAYS, INC. vs.
INTERMEDIATE APPELLATE COURT, RENE V. PANGAN,
SOTANG BASTOS PRODUCTIONS and ARCHER
PRODUCTIONS
On April 25, 1978, plaintiff Rene V. Pangan, president and
general manager of the plaintiffs Sotang Bastos and Archer
Production while in San Francisco, Califonia and Primo
Quesada of Prime Films, San Francisco, California, entered
into an agreement (Exh. A) whereby the former, for and in
consideration of the amount of US $2,500.00 per picture,
bound himself to supply the latter with three films. 'Ang
Mabait, Masungit at ang Pangit,' 'Big Happening with
Chikiting and Iking,' and 'Kambal Dragon' for exhibition in
the United States. It was also their agreement that plaintiffs
would provide the necessary promotional and advertising
materials for said films on or before May 30, 1978.
On his way home to the Philippines, plaintiff Pangan visited
Guam where he contacted Leo Slutchnick of the Hafa Adai
Organization. Plaintiff Pangan likewise entered into a verbal
agreement with Slutchnick for the exhibition of two of the
films above-mentioned at the Hafa Adai Theater in Guam on
May 30, 1978 for the consideration of P7,000.00 per picture.
Plaintiff Pangan undertook to provide the necessary
promotional and advertising materials for said films on or
before the exhibition date on May 30,1978.
On May 18, 1978, plaintiff Pangan obtained from defendant
Pan Am's Manila Office, through the Your Travel Guide, an
economy class airplane ticket with No. 0269207406324
(Exh. G) for passage from Manila to Guam on defendant's
Flight No. 842 of May 27,1978, upon payment by said
plaintiff of the regular fare. The Your Travel Guide is a tour
and travel office owned and managed by plaintiffs witness
Mila de la Rama.
On May 27, 1978, two hours before departure time plaintiff
Pangan was at the defendant's ticket counter at the Manila
International Airport and presented his ticket and checked in
his two luggages, for which he was given baggage claim
tickets Nos. 963633 and 963649. The two luggages
contained the promotional and advertising materials, the
clutch bags, barong tagalog and his personal belongings.
Subsequently, Pangan was informed that his name was not
in the manifest and so he could not take Flight No. 842 in
the economy class. Since there was no space in the
economy class, plaintiff Pangan took the first class because
he wanted to be on time in Guam to comply with his
commitment, paying an additional sum of $112.00.
When plaintiff Pangan arrived in Guam on the date of May
27, 1978, his two luggages did not arrive with his flight, as a
consequence of which his agreements with Slutchnick and
Quesada for the exhibition of the films in Guam and in the
United States were cancelled. Thereafter, he filed a written
claim for his missing luggages.
Upon arrival in the Philippines, Pangan contacted his lawyer,
who made the necessary representations to protest as to
the treatment which he received from the employees of the
defendant and the loss of his two luggages. Defendant Pan
Am assured plaintiff Pangan that his grievances would be
investigated and given its immediate consideration. Due to
the defendant's failure to communicate with Pangan about
the action taken on his protests, the present complaint was
filed by the plaintiff.
On the basis of the foregoing stipulations printed at the back
of the ticket, petitioner contends that its liability for the lost
baggage of private respondent Pangan is limited to $600.00
($20.00 x 30 kilos) as the latter did not declare a higher
value for his baggage and pay the corresponding additional
charges.
To support this contention, petitioner cites the case of Ong
Yiu v. Court of Appeals [G.R. No. L-40597, June 29, 1979, 91
SCRA 223], where the Court sustained the validity of a
printed stipulation at the back of an airline ticket limiting the
liability of the carrier for lost baggage to a specified amount
and ruled that the carrier's liability was limited to said
amount since the passenger did not declare a higher value,
much less pay additional charges.
We find the ruling in Ong Yiu squarely applicable to the
instant case.
In view thereof petitioner's liability for the lost baggage is
limited to $20.00 per kilo or $600.00, as stipulated at the
back of the ticket.
Thus, it is quite clear that the Court never intended to, and
in fact never did, rule against the validity of provisions of the
Warsaw Convention. Consequently, by no stretch of the
imagination may said quotation from Northwest be
considered as supportive of the appellate court's statement
that the provisions of the Warsaw Convention limited a
carrier's liability are against public policy.
2. The Court finds itself unable to agree with the decision of
the trial court, and affirmed by the Court of Appeals,
awarding private respondents damages as and for lost
profits when their contracts to show the films in Guam and
San Francisco, California were cancelled.
Thus, applying the foregoing ruling to the facts of the instant
case, in the absence of a showing that petitioner's attention
was called to the special circumstances requiring prompt
delivery of private respondent Pangan's luggages, petitioner
cannot be held liable for the cancellation of private
respondents' contracts as it could not have foreseen such an
eventuality when it accepted the luggages for transit.
The Court is unable to uphold the Intermediate Appellate
Court's disregard of the rule laid down in Mendoza and
affirmance of the trial court's conclusion that petitioner is
liable for damages based on the finding that "[tlhe
undisputed fact is that the contracts of the plaintiffs for the
exhibition of the films in Guam and California were cancelled
because of the loss of the two luggages in question." The
evidence reveals that the proximate cause of the
cancellation of the contracts was private respondent
Pangan's failure to deliver the promotional and advertising
materials on the dates agreed upon. For this petitioner
cannot be held liable. Private respondent Pangan had not
declared the value of the two luggages he had checked in
and paid additional charges. Neither was petitioner privy to
respondents' contracts nor was its attention called to the
condition therein requiring delivery of the promotional and
advertising materials on or before a certain date.
F: This is a petition filed by Pan Am to limit its liability for
lost baggage containing promotional and advertising
6 kat transpo pt2
materials for films to be exhibited in Guam and the US,
clutch bags, barong tagalogs and personal belongings of
Rene Pangan to the amount specified in the airline ticket
absent a declaration of a higher valuation and payment of
additional charges. Pan Am contends that its liability for lost
baggage is limited to $600 ($20 x 30 kilos) as the latter did
not declare a higher value for his baggage. Such stipulation
is printed at the back of the ticket.
H: Pan Am cited Ong Yiu vs CA. Such case is squarely
applicable in this case. The ruling in Shewaram vs PAL is
inapplicable since it was premised on the fact that the
conditions printed at the back of the ticket were so small
and hard to read. Liability is limited to $600 as stipulated at
the back of the ticket.
The SC reversed the CA ruling awarding respondent
damages for lost profits. The rule laid down in Mendoza vs
PAL provides that before damages can be awarded for loss
of profits on account of delay or failure of delivery, it must
have appeared that CC had notice at the time of delivery to
him of the particular circumstances attending the shipment,
and which probably would lead to such special loss if he
defaulted. In the absence of a showing that Pan Am's
attention was called to the special circumstances requiring
prompt delivery of the luggage, it cannot be held liable for
the cancellation of respondent's contracts as it could not
have foreseen such an eventuality when it accepted the
luggage for transit.
CATHAY PACIFIC AIRWAYS, LTD, vs. COURT OF
APPEALS and TOMAS L. ALCANTARA
1. CIVIL LAW; CONTRACT OF CARRIAGE; BREACH THEREOF;
PETITIONER BREACHED ITS CONTRACT OF CARRIAGE WITH
PRIVATE RESPONDENT WHEN IT FAILED TO DELIVER HIS
LUGGAGE AT THE DESIGNATED PLACE AND TIME.
Petitioner breached its contract of carriage with private
respondent when it failed to deliver his luggage at the
designated place and time, it being the obligation of a
common carrier to carry its passengers and their luggage
safely to their destination, which includes the duty not to
delay their transportation, and the evidence shows that
petitioner acted fraudulently or in bad faith.
4. WARSAW CONVENTION; DOES NOT OPERATE AS AN
EXCLUSIVE ENUMERATION OF THE INSTANCES FOR
DECLARING A CARRIER LIABLE FOR BREACH OF CONTRACT
OF CARRIAGE OR AS AN ABSOLUTE LIMIT OF THE EXTENT OF
THAT LIABILITY; DOES NOT PRECLUDE THE OPERATION OF
THE CIVIL CODE AND OTHER PERTINENT LAWS. As We
have repeatedly held, although the Warsaw Convention has
the force and effect of law in this country, being a treaty
commitment assumed by the Philippine government, said
convention does not operate as an exclusive enumeration of
the instances for declaring a carrier liable for breach of
contract of carriage or as an absolute limit of the extent of
that liability. The Warsaw Convention declares the carrier
liable for damages in the enumerated cases and under
certain limitations. However, it must not be construed to
preclude the operation of the Civil Code and other pertinent
laws. It does not regulate, much less exempt, the carrier
from liability for damages for violating the rights of its
passengers under the contract of carriage, especially if
wilfull misconduct on the part of the carrier's employees is
found or established, which is clearly the case before Us.
The facts are undisputed: On 19 October 1975, respondent
Tomas L. Alcantara was a first class passenger of petitioner
Cathay Pacific Airways, Ltd. (CATHAY for brevity) on its Flight
No. CX-900 from Manila to Hongkong and onward from
Hongkong to Jakarta on Flight No. CX-711. The purpose of
his trip was to attend the following day, 20 October 1975, a
conference with the Director General of Trade of Indonesia,
Alcantara being the Executive Vice-President and General
Manager of Iligan Cement Corporation, Chairman of the
Export Committee of the Philippine Cement Corporation, and
representative of the Cement Industry Authority and the
Philippine Cement Corporation. He checked in his luggage
which contained not only his clothing and articles for
personal use but also papers and documents he needed for
the conference. Upon his arrival in Jakarta, respondent
discovered that his luggage was missing. When he inquired
about his luggage from CATHAY's representative in Jakarta,
private respondent was told that his luggage was left behind
in Hongkong. For this, respondent Alcantara was offered
$20.00 as "inconvenience money" to buy his immediate
personal needs until the luggage could be delivered to him.
His luggage finally reached Jakarta more than twenty four
(24) hours after his arrival. However, it was not delivered to
him at his hotel but was required by petitioner to be picked
up by an official of the Philippine Embassy.
Both parties appealed to the Court of Appeals. CATHAY
assailed the conclusion of the trial court that it was
accountable for breach of contract and questioned the non-
application by the court of the Warsaw Convention as well
as the excessive damages awarded on the basis of its
finding that respondent Alcantara was rudely treated by
petitioner's employees during the time that his luggage
could not be found. For his part, respondent Alcantara
assigned as error the failure of the trial court to grant the
full amount of damages sought in his complaint.
On 11 November 1981, respondent Court of Appeals
rendered its decision affirming the findings of fact of the trial
court but modifying its award by increasing the moral
damages to P80,000.00, exemplary damages to P20,000.00
and temperate or moderate damages to P10,000.00. The
award of P25,000.00 for attorney's fees was maintained.
The same grounds raised by petitioner in the Court of
Appeals are reiterated before Us. CATHAY contends that: (1)
the Court of Appeals erred in holding petitioner liable to
respondent Alcantara for moral, exemplary and temperate
damages as well as attorney's fees; and, (2) the Court of
Appeals erred in failing to apply the Warsaw Convention on
the liability of a carrier to its passengers.
On its first assigned error, CATHAY argues that although it
failed to transport respondent Alcantara's luggage on time,
the one-day delay was not made in bad faith so as to justify
moral, exemplary and temperate damages. It submits that
the conclusion of respondent appellate court that private
respondent was treated rudely and arrogantly when he
sought assistance from CATHAY's employees has no factual
basis, hence, the award of moral damages has no leg to
stand on.
In the case at bar, both the trial court and the appellate
court found that CATHAY was grossly negligent and reckless
when it failed to deliver the luggage of petitioner at the
appointed place and time. We agree. CATHAY alleges that as
a result of mechanical trouble, all pieces of luggage on
board the first aircraft bound for Jakarta were unloaded and
transferred to the second aircraft which departed an hour
and a half later. Yet, as the Court of Appeals noted,
petitioner was not even aware that it left behind private
respondent's luggage until its attention was called by the
Hongkong Customs authorities. More, bad faith or otherwise
improper conduct may be attributed to the employees of
petitioner. While the mere failure of CATHAY to deliver
respondent's luggage at the agreed place and time did not
ipso facto amount to willful misconduct since the luggage
7 kat transpo pt2
was eventually delivered to private respondent, albeit
belatedly, 6 We are persuaded that the employees of
CATHAY acted in bad faith. We refer to the deposition of
Romulo Palma, Commercial Attache of the Philippine
Embassy at Jakarta, who was with respondent Alcantara
when the latter sought assistance from the employees of
CATHAY. This deposition was the basis of the findings of the
lower courts when both awarded moral damages to private
respondent
Indeed, the aforequoted testimony shows that the language
and conduct of petitioner's representative towards
respondent Alcantara was discourteous or arbitrary to justify
the grant of moral damages. The CATHAY representative
was not only indifferent and impatient; he was also rude and
insulting. He simply advised Alcantara to buy anything he
wanted. But even that was not sincere because the
representative knew that the passenger was limited only to
$20.00 which, certainly, was not enough to purchase
comfortable clothings appropriate for an executive
conference. Considering that Alcantara was not only a
revenue passenger but even paid for a first class airline
accommodation and accompanied at the time by the
Commercial Attache of the Philippine Embassy who was
assisting him in his problem, petitioner or its agents should
have been more courteous and accommodating to private
respondent, instead of giving him a curt reply, "What can we
do, the baggage is missing. I cannot do anything . . .
Anyhow, you can buy anything you need, charged to Cathay
Pacific." CATHAY's employees should have been more
solicitous to a passenger in distress and assuaged his
anxieties and apprehensions. To compound matters, CATHAY
refused to have the luggage of Alcantara delivered to him at
his hotel; instead, he was required to pick it up himself and
an official of the Philippine Embassy. Under the
circumstances, it is evident that petitioner was remiss in its
duty to provide proper and adequate assistance to a paying
passenger, more so one with first class accommodation.
Where in breaching the contract of carriage the defendant
airline is not shown to have acted fraudulently or in bad
faith, liability for damages is limited to the natural and
probable consequences of the breach of obligation which
the parties had foreseen or could have reasonably foreseen.
In that case, such liability does not include moral and
exemplary damages. 8 Conversely, if the defendant airline is
shown to have acted fraudulently or in bad faith, the award
of moral and exemplary damages is proper. However,
respondent Alcantara is not entitled to temperate damages,
contrary to the ruling of the court a quo, in the absence of
any showing that he sustained some pecuniary loss. 9 It
cannot be gainsaid that respondent's luggage was
ultimately delivered to him without serious or appreciable
damage.
As regards its second assigned error, petitioner airline
contends that the extent of its liability for breach of contract
should be limited absolutely to that set forth in the Warsaw
Convention. We do not agree. As We have repeatedly held,
although the Warsaw Convention has the force and effect of
law in this country, being a treaty commitment assumed by
the Philippine government, said convention does not
operate as an exclusive enumeration of the instances for
declaring a carrier liable for breach of contract of carriage or
as an absolute limit of the extent of that liability. 10 The
Warsaw Convention declares the carrier liable for damages
in the enumerated cases and under certain limitations. 11
However, it must not be construed to preclude the operation
of the Civil Code and other pertinent laws. It does not
regulate, much less exempt, the carrier from liability for
damages for violating the rights of its passengers under the
contract of carriage, 12 especially if wilfull misconduct on
the part of the carrier's employees is found or established,
which is clearly the case before Us. For, the Warsaw higher value and pays a higher rate of freight
Convention itself provides in Art. 25 that VALID and ENFORCEABLE

When stipulation limiting liability valid.Under 1744,

"(1) The carrier shall not be entitled to avail himself of the
the shipper or owner and the CC may stipulate to limit the
provisions of this convention which exclude or limit his
liability of the CC for the loss, destruction or deterioration of
liability, if the damage is caused by his wilfull misconduct or
goods to a degree less than extraordinary diligence :
by such default on his part as, in accordance with the law of
1. the stipulation must be in writing and signed by
the court to which the case is submitted, is considered to be
both parties;
equivalent to wilfull misconduct."
2. the stipulation must be supported by valuable
consideration other than the service rendered by
(2) Similarly the carrier shall not be entitled to avail himself the CC;
of the said provisions, if the damage is caused under the 3. the stipulation must be reasonable, just and not
same circumstances by any agent of the carrier acting contrary to public policy. This applies only when the
within the scope of his employment." CC is acting as such but not when it acts as a
private carrier [in Home Insurance vs American
Steamship Co., the SC held that the Civil Code
When petitioner airline misplaced respondent's luggage and
provisions on CC should not be applied where the
failed to deliver it to its passenger at the appointed place
CC is not acting as such but as a private carrier;
and time, some special species of injury must have been
such policy has no force where the public at large is
caused to him. For sure, the latter underwent profound
not involved]
distress and anxiety, and the fear of losing the opportunity
to fulfill the purpose of his trip. In fact, for want of
The parties may stipulate that the diligence to be exercised
appropriate clothings for the occasion brought about by the
by the CC be less than extra-ordinary diligence, provided
delay of the arrival of his luggage, to his embarrassment
that the requirements under Article 1744 are complied with.
and consternation respondent Alcantara had to seek
However, the parties cannot
postponement of his pre-arranged conference with the
reduce the diligence to less than that of a good father of a
Director General of Trade of the host country.
family. Art. 1745 provides for 7 stipulations which shall be
considered unreasonable, unjust and contrary to public
policy.

Construction of stipulations limiting common carrier's

c Factors affecting agreement
liability.-- An exemption in general words not expressly
relating to negligence, even though the words are wide
Art. 1746. An agreement limiting the common
enough to include loss by negligence
carrier's liability may be annulled by the shipper or
or default of CC's servants, must be construed as limiting
owner if the CC refused to carry the goods unless the
the liability of the CC as assurer, and not as relieving him
former agree to such stipulation.
from the duty of exercising reasonable skill and care
Art. 1747. If the common carrier, without just cause,
Effect of lack of competitor to common carrier.-- Under
delays the transportation of the goods or changes
1751, the lack of competition of the CC shall be considered
the stipulated or usual route, the contract limiting
in determining WON a stipulation limiting CC's liability is
the common carrier's liability cannot be availed of in
reasonable, just and in consonance with public policy.
case of the loss, destruction, or deterioration of the
goods.
Examples of valid stipulations:
1. 1748 - an agreement limiting the CC's liability for
Art. 1748. An agreement limiting the common
delay on account of strikes or riots
carrier's liability for delay on account of strikes or
2. 1749, Heacock vs Macondray - a stipulation that
riots is valid.
the CC's liability is limited to the value of the goods
appearing in bill of lading unless the shipper or
Art. 1751. The fact that the common carrier has no
owner declares a greater value
competitor along the line or route or a part thereof,
3. 1750 - a contract fixing the sum that may be
to which the contract refers shall be taken into
recovered by the owner or shipper for the loss,
consideration on the question of whether or not a
destruction or deterioration of the goods, if it is
stipulation limiting the common carrier's liability is
reasonable and just under the circumstances, and
reasonable, just, and in consonance with public
has been fairly and freely agreed upon
policy.
Under 1746, an agreement limiting the CC's liability may be
Art. 1752. Even when there is an agreement limiting
annulled by the shipper or owner if the CC refused to carry
the liability of the common carrier in the vigilance
the goods unless the former agreed to such stipulation. The
over the goods, the
effect of the shipper's consent
common carrier is disputably presumed to have been
obtained by means of refusal on the part of the carrier to
negligent in case of their loss, destruction or
carry the goods is to make the agreement limiting the CC's
deterioration.
liability voidable at the instance of the shipper
Kinds of stipulation limiting liability.The following
2 Applicable Law in Foreign Trade
stipulations are often made in a bill of lading bill of lading:
1. stipulation exempting the CC from any and all
Art. 1753. The law of the country to which the goods
liability for loss or damage occasioned by its own
are to be transported shall govern the liability of the
negligence VOID
common carrier for their loss, destruction or
2. stipulation providing for an unqualified limitation of
deterioration.
such liability to an agreed stipulation VOID
3. 3. stipulation limiting the liability of the CC to an
The Civil Code governs the liability of the CC in case of loss,
agreed valuation unless the shipper declares a
damage or deterioration. Under 1766, in all matters not
regulated by the Civil Code, the rights and obligations of CC

8 kat transpo pt2

shall be governed by the Code of Commerce and by special
laws which are suppletory to the provisions of the Civil Code.
3 Rules on Passenger Baggage
Art. 1754. The provisions of Arts.1733 to 1753 shall
apply to the passenger's baggage which is not in his
personal custody or in that of his employees. As to
other baggage, the rules in Articles 1998 and 2000 to
2003 concerning the responsibility of hotel keepers
shall be applicable.
Art. 1998. The deposit of effects made by travelers in
hotels and inns shall also be regarded as necessary.
The keepers of hotels
and inns shall be responsible for them as
depositaries, provided that notice was given to them,
or to their employees, of the effects
brought by the guests and that, on the part of the
latter, they take the precautions which said hotel-
keepers or their substitutes advised relative to the
care and vigilance of their effects.
Art. 2000. The responsibility referred to in the
preceding article shall include the loss of, or injury to
the personal property of the guests caused by the
servants or employees of the keepers of hotels or
inns as well as by strangers; but not that which may
proceed from any force majeure. The fact that
travelers are
constrained to rely on the vigilance of the keeper of
the hotel or inn shall be considered in determining
the degree of care required of him.
Art. 2001. The act of a thief or robber, who has
entered the hotel is not deemed force majeure,
unless it is done with the use of arms or through
irresistible force.
Under 2001, the act of a thief or robber, who has entered
the CC's vehicle is not deemed force majeure, unless it is
done with the use of arms or through irresistible force.
Under 2002, the CC is not liable if the loss of the baggage in
the personal custody of the passenger is due to the acts of
the passengers, his family, servants or visitors, OR if the
loss arises from the character of the baggage.
Stipulations limiting liability.Under 2003, a CC cannot
free himself from responsibility by posting notices to the
effect that he is not liable for the baggage brought by the
passengers. Any stipulation diminishing the responsibility
required under 1998 to 2001 shall be void.
Liability for baggage not in custody of passenger.--
This refers to baggage delivered to the custody of the CC
and received by him, to be carried in the same manner as
other goods being transported
by him. As the CC has custody of such baggage and are
carried like any other goods, the provisions on carriage of
goods shall apply (extra-ordinary diligence in the vigilance
over the goods).
The moment the effects of a passenger are unconditionally
placed in the possession of and received by a carrier for
conveyance, the law
immediately imposes on the CC extra-ordinary responsibility
for the loss thereof which lasts until the actual or
constructive delivery of the effects to the passenger as the
person who has the right to receive them (presumption of
negligence exists but may be rebutted by proof of exercise
of extraordinary diligence or causes under 1734).
A CC is liable for the loss of baggage although not declared
and the charges not paid, if it accepted them for
transportation

Art. 2002. The hotelkeeper is not liable for

compensation if the loss is due to the acts of the
guest, his family, servants or visitors, or if the loss
arises from the character of the things brought into
the hotel.

Art. 2003. The hotelkeeper cannot free himself from

responsibility by posting notices to the effect that he
is not liable for the articles brought by the guest. Any
stipulation between the hotelkeeper and the guest
where the responsibility of the former as set forth in
Arts. 1998 to 2001 is suppressed or diminished shall
be void.

Classes of baggage of passengers.-- The law makes a

distinction between (1) baggage in the custody of the
passengers or their EEs; and (2) baggage not in such
custody but in that of the CC.
Liability for baggage in custody of passenger.-- Art.
1754 refers to Arts. 1998, 2000- 2003 concerning the
responsibility of hotel keepers. Under 1998, the baggage of
passengers in their personal custody or in
that of their EEs while being transported shall be regarded
as necessary deposits. The CC shall be responsible for such
baggage as depositaries, provided that
(1) notice was given to them or to their EEs, of the
baggage brought by their passengers, and that
(2) the passengers take the precautions which said
CCs advised relative to the care and vigilance of
their baggage.

Responsibility for acts of EEs, thieves.--

Under 2000, a CC is responsible as a depositary for the loss
of or injury to the baggage in the personal custody of
passengers, caused by the CC's servants or EEs but not
those caused by force majeure.

9 kat transpo pt2


B Common Carriage of Passengers
1 Nature and extent of responsibility
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound
10 kat transpo pt2
to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers
transported by them, according to the
circumstances of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735,
and 1745, Nos. 5, 6, and 7, while the extraordinary
diligence for the safety of the passengers is further
set forth in Articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight
can provide, using the utmost diligence of very
cautious persons, with a due regard for all
circumstances.
Common carriers must exercise extraordinary
diligence in carrying passengers.-- Art. 1755 shows
clearly the high degree of care and extra-o diligence
required of a CC with respect to its passengers.
Carrier's duty of extraordinary diligence extends also
to crew members.-- The duty to exercise the utmost
diligence on the part of CCs is for the safety of passengers
as well as for the members of
the crew or the complement operating the carrier. This must
be so for any omission, lapse or neglect thereof will certainly
result to the damage, prejudice, injuries or even death to all
aboard the plane.
ISAAC V. A.L. AMMEN TRANS. CO., SUPRA
FACTS:
May 31, 1951: Cesar Isaac boarded Bus No. 31 from
Ligao, Albay bound for Pili, Camarines Sur and seated
himself on the left side resting his left arm on the
window sill but with his left elbow outside the window
Before reaching his destination, a pick-up
car at full speed and was running outside of its proper
lane came from the opposite direction
The driver of the bus swerved the
bus to the very extreme right of the road until its front
and rear wheels have gone over the pile of stones or
gravel situated on the rampart of the road.
The bus could not bus farther
right and run over a greater portion of the pile of
gravel, the peak of which was about 3 feet high,
without endangering the safety of his passengers.
Despite efforts, the rear left side
of the bus was hit by the pick-up car
He was rushed to a hospital in Iriga,
Camarines Sur where he was given blood transfusion to
save his life
After 4 days, he was transferred to another hospital
in Tabaco, Albay, where he under went treatment for 3
months
Later, he was moved to the Orthopedic Hospital
where he was operated on and stayed for another 2
months.
He incurred expenses of P623.40, excluding
medical fees which were paid by A.L. Ammen Trans. Co.
Trial Court: Dismissed the complaint - collision
occurred due to the negligence of the driver of the pick-
up car
I: W/N if there is no negligence on the part of the common
carrier but that the accident resulting in injuries is due to
causes which are inevitable and which could not have been
avoided or anticipated notwithstanding the exercise of that
high degree of care and skill which the carrier is bound to
exercise for the safety of his passengers neither the
common carrier nor the driver is liable therefor
H: YES. Appealed decision is AFFIRMED.

ART. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extra ordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by
them according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods
is further expressed in articles 1734, 1735, and 1745, Nos.
5, 6, and 7, while the extraordinary diligence for the safety
of the passengers is further set forth in articles 1755 and
1756
ART. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles
1733 and 1755.
Principles governing the liability of a common
carrier:
1. the liability of a carrier is contractual and arises
upon breach of its obligation. There is breach if it fails
to exert extraordinary diligence according to all
circumstances of each case
2. a carrier is obliged to carry its passenger with the
utmost diligence of a very cautious person, having
due regard for all the circumstances
3. a carrier is presumed to be at fault or to have acted
negligently in case of death of, or injury to,
passengers, it being its duty to prove that it exercised
extraordinary diligence
4. the carrier is not an insurer against all risks of
travel
where a carrier's employee is confronted with a sudden
emergency, the fact that he is obliged to act quickly
and without a chance for deliberation must be taken
into account, and he is held to the some degree of care
that he would otherwise be required to exercise in the
absence of such emergency but must exercise only
such care as any ordinary prudent person would
exercise under like circumstances and conditions, and
the failure on his part to exercise the best judgment the
case renders possible does not establish lack of care
and skill on his part
Considering all the circumstances, we are
persuaded to conclude that the driver of the bus has
done what a prudent man could have done to avoid the
collision
It is true that Isaac's contributory negligence
cannot relieve A.L. Ammen of its liability but will only
entitle it to a reduction of the amount of damage
caused (Article 1762, new Civil Code), but this is a
circumstance which further militates against the
position taken by Isaac
SPOUSES MARCELO LANDINGIN and RACQUEL
BOCASAS vs
PANGASINAN TRANSPORTATION CO. and MARCELO
OLIGAN
The complaints in said Civil Cases Nos. D-1468 and D-1470
were filed by the spouses Marcelo Landingin and Racquel
Bocasas, and the spouses Pedro Garcia and Eufracia
Landingin, respectively, for damages allegedly suffered by
them in connection with the death of their respective
daughter, Leonila Landingin and Estrella Garcia, due to the
alleged negligence of the defendants and/or breach of
11 kat transpo pt2
contract of carriage. In their complaints, plaintiffs averred,
among others, that in the morning of April 20, 1963, their
above-mentioned daughters were among the passengers in
the bus driven by defendant Marcelo Oligan and owned and
operated by defendant PANTRANCO on an excursion trip
from Dagupan City to Baguio City and back, that the bus
was open on one side and enclosed on the other, in gross
violation of the rules of the Public Service Commission; that
defendant PANTRANCO acted with negligence, fraud and
bad faith in pretending to have previously secured a special
permit for the trip when in truth it had not done so; that
upon reaching an uphill point at Camp 8, Kennon Road,
Baguio City, on the onward trip, defendant driver, through
utter lack of foresight, experience and driving knowledge,
caused the bus to stall and stop for a few moments; that
through the said defendant's fault and mishandling, the
motor ceased to function, causing the bus to slide back
unchecked; that when the said defendant suddenly swerved
and steered the bus toward the mountainside, Leonila and
Estrella, together with several other passengers, were
thrown out of the bus through its open side unto the road,
suffering serious injuries as a result of which Leonila and
Estrella died at the hospital and the same day; and that in
connection with the incident, defendant driver had been
charged with and convicted of multiple homicide and
multiple slight physical injuries on account of the death of
Leonila and Estrella and of the injuries suffered by four
others, although it may be said, by way of parenthesis, that
this case is now pending appeal in a higher court. The
plaintiffs prayed for awards of moral, actual and exemplary
damages in the total sum of P40,000.00 in Civil Case No. D-
1468, and in the total sum of P25,000.00 in Civil Case No. D-
1470 as well as attorney's fees in the amounts of P5,000.00
and P4,000.00, respectively.
Defendants filed a joint answer to each of the two
complaints alleging, among others, that at the time of the
accident, defendant driver was driving the bus at, the slow
speed of about 10 kilometers per hour; that while the said
defendant was steering his bus toward the mountainside
after hearing a sound coming from under the rear end of the
bus, Leonila and Estrella recklessly, and in disobedience to
his shouted warnings and advice, jumped out of the bus
causing their heads to hit the road or pavement; that the
bus was then being driven with extraordinary care,
prudence and diligence; that defendant PANTRANCO
observed the care and diligence of a good father of a family
to prevent the accident as well as in the selection and
supervision of its employees, particularly of defendant
driver; and that the decision convicting the said defendant
was not yet final, the same having been appealed to the
Court of Appeals where it was still pending.
By agreement of the parties, the two cases were tried
jointly. On October 17, 1966, the court a quo rendered its
decision therein in which it made the following findings; that
upon reaching the fatal spot at Camp 8, a sudden snapping
or breaking of metal below the floor of the bus was heard,
and the bus abruptly stopped, rolling back a few moments
later; that as a result, some of the passengers jumped out of
the bus, while others stepped down; that defendant driver
maneuvered the bus safely to and against the side of the
mountain where its rear end was made to rest, ensuring the
safety of the many passengers still inside the bus; that while
defendant driver as steering the bus towards the
mountainside, he advised the passengers not to jump, but
to remain seated; that Leonila and Estrella were not thrown
out of the bus, but that they panicked and jumped out; that
the malfunctioning of the motor resulted from the breakage
of the cross-joint; that there was no negligence on the part
of either of the defendants; that only the day before, the
said cross-joint was duly inspected and found to be in order;
and that defendant PANTRANCO had exercised the requisite
care in the selection and supervision of its employees,
including the defendant driver. The court concluded that
"the accident was caused by a fortuitous event or an act of
God brought about by some extra-ordinary circumstances
independent of the will of the Pantranco or its employees."
Defendants-appellants complain that having found them to
be absolutely free from fault or negligence, and having in
fact dismissed the complaints against them, the court
should not have ordered them to assume any pecuniary
liability. There would be merit in his argument but for the
fact that defendant-appellant PANTRANCO was guilty of
breach of contract of carriage. It will be noted that in each of
the two complaints it is averred that two buses including the
one in which the two deceased girls were riding, were hired
to transport the excursionist passengers from Dagupan City
to Baguio City, and return, and that the said two passengers
did not reach destination safely.
As a common carrier, defendant-appellant PANTRANCO was
duty bound to carry its passengers "safely as far as human
care and foresight can provide, using the utmost diligence of
very cautious persons, with a due regard for all the
circumstances." (Article 1755, Civil Code.) Did defendant-
appellant PANTRANCO measure up to the degree of care and
foresight required it under the circumstances? We think not.
The court below found that the cross-joint of the bus in
which the deceased were riding broke, which caused the
malfunctioning of the motor, which in turn resulted in panic
among some of the passengers. This is a finding of fact
which this Court may not disturb. We are of the opinion,
however, that the lower court's conclusion drawn from that
fact, i.e., that "the accident was caused by a fortuitous
event or an act of God brought about by some extraordinary
circumstances independent of the will of the Pantranco or its
employees," is in large measure conjectural and speculative,
and was arrived at without due regard to all the
circumstances, as required by Article 1755. In Lasam vs.
Smith (45 Phil. 660), this Court held that an accident caused
by defects in the automobile is not a caso fortuito. The
rationale of the carrier's liability is the fact that "the
passenger has neither the choice nor control over the carrier
in the selection and use of the equipment and appliances in
use by the carrier." (Necesito, et al. vs. Paras, et al., 104
Phil. 75.)
When a passenger dies or is injured, the presumption is that
the common carrier is at fault or that it acted negligently
(Article 1756). This presumption is only rebutted by proof on
the carrier's part that it observed the "extraordinary
diligence" required in Article 1733 and the "utmost diligence
of very cautious persons" required in Article 1755 (Article
1756). In the instant case it appears that the court below
considered the presumption rebutted on the strength of
defendants-appellants' evidence that only the day before
the incident, the crossjoint in question was duly inspected
and found to be in order. It does not appear, however, that
the carrier gave due regard for all the circumstances in
connection with the said inspection. The bus in which the
deceased were riding was heavily laden with passengers,
and it would be traversing mountainous, circuitous and
ascending roads. Thus the entire bus, including its
mechanical parts, would naturally be taxed more heavily
than it would be under ordinary circumstances. The mere
fact that the bus was inspected only recently and found to
12 kat transpo pt2
be in order would not exempt the carrier from liability unless
it is shown that the particular circumstances under which
the bus would travel were also considered.
In the premises, it was error for the trial court to dismiss the
complaints. The awards made by the court should be
considered in the concept of damages for breach of
contracts of carriage.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the
judgment appealed from is modified as indicated above, and
defendant-appellant PANTRANCO is ordered to pay to
plaintiffs-appellees the amounts stated in the judgment
appealed from, as damages for breach of contracts, with
interest thereon at the legal rate from the date of the filing
of the complaints. Costs against defendant-appellant
PANTRANCO.
LANDICHO VS BTC, 52 OG 764
F: Landicho boarded a BTC bus. Before he did so, the
conductor helped him in placing his two baskets of chicken
inside the running board. After a distance, he claimed that
he noticed one cage falling and he called the conductor's
attention who did not respond. He tried to fix it himself
resulting in his fall in which he suffered injuries.
Held : The facts show that the cage was not about to fall.
Plaintiff was probably dizzy or sleepy that he fell from the
truck. It is true that defendant being a CC is bound to
transport its passengers from the point of origin to the place
of destination, but the duty does not encompass all the risks
attendant to a passenger in transit, for then the co. would
be a good source of stipend for a family who would like to
end it all by simply boarding, paying the fare and
intentionally falling off. It is enough for the CC's EEs to see
to it that the passenger places himself safely inside the
vehicle, that it is operated carefully and that its mechanism
is perfectly alright to prevent mishaps. It would be
unreasonable to exact upon operators to determine
beforehand whether a passenger is likely to fall dizzy or
sleepy on the way, for that is the lookout of the passenger
himself. A passenger must see to it that he seats himself in
a safe portion of the vehicle.
NECESITO V. PARAS 104 PHIL 75
1. CARRIERS; LIABILITY FOR DAMAGES CAUSED BY
MECHANICAL DEFECTS. While the carrier is not an insurer
of the safety of the passengers, it should nevertheless be
held to answer for the laws its equipment if such flaws were
at all discoverable. In this connection, the manufacturer of
the defective appliance is considered in law the agent of the
carrier, and the good repute of the manufacturer will not
relieve the carrier from liability. The rationale of the carriers
liability is the fact that the passenger has no privity with the
manufacturer of the defective equipment; hence, he has no
remedy against him, while the carrier usually has.
2. DAMAGES; MORAL DAMAGES FOR BREACH OF CONTRACT,
WHEN RECOVERABLE. Under Article 2220 of the new Civil
Code, in case to suits for breach of contract, moral damages
are recoverable only where the defendant acted fraudulently
or in bad faith, and there is none in the case at bar. (But see
Resolution on the Motion to Reconsider.)
3. CARRIERS; MECHANICAL DEFECTS. A carrier is liable to
its passengers for damages caused by mechanical defects
of the conveyance.
4. ID.; ID.; WHERE INJURY IS PATENT, INDEMNITY CANNOT BE
DENIED. Where the injury is patent and not denied, the
court is empowered to calculate moderate damages,
although there is no definite proof of the pecuniary loss
suffered by the injured party.
These cases involve actions ex contractu against the owners
and operators of the common carrier known as Philippine
Rabbit Bus Lines, filed by one passenger, and the heirs of
another, who were injured as a result of the fall into a river
of the vehicle in which they were riding.
In the morning of January 28, 1954, Severina Garces and her
one- year old son, Precillano Necesito, carrying vegetables,
boarded passenger auto truck or bus No. 199 of the
Philippine Rabbit Bus Lines at Agno, Pangasinan. The
passenger truck, driven by Francisco Bandonell, then
proceeded on its regular run from Agno to Manila. After
passing Mangatarem, Pangasinan, truck No. 199 entered a
wooden bridge, but the front wheels swerved to the right;
the driver lost control, and after wrecking the bridges
wooden rails, the truck fell on its right side into a creek
where water was breast deep. The mother, Severina Garces,
was drowned; the son, Precillano Necesito, was injured,
suffering abrasions and fracture of the left femur. He was
brought to the Provincial Hospital at Dagupan, where the
fracture was set but with fragments one centimeter out of
line. The money, wrist watch and cargo of vegetables were
lost.
Two actions for damages and attorneys fees totalling over
P85,000 having been filed in the Court of First Instance of
Tarlac (Cases Nos. 908 and 909) against the carrier, the
latter pleaded that the accident was due to "engine or
mechanical trouble" independent or beyond the control of
the defendants or of the driver Bandonell.
After joint trial, the Court of First Instance found that the bus
was proceeding slowly due to the bad condition of the road;
that the accident was caused by the fracture of the right
steering knuckle, which was defective in that its center or
core was not compact but "bubbled and cellulous", a
condition that could not be known or ascertained by the
carrier despite the fact that regular thirty-day inspections
were made of the steering knuckle, since the steel exterior
was smooth and shiny to the depth of 3/16 of an inch all
around; that the knuckles are designed and manufactured
for heavy duty and may last up to ten years; that the
knuckle of bus No. 199 that broke on January 28, 1954, was
last inspected on January 5, 1954, and was due to be
inspected again on February 5th. Hence, the trial court,
holding that the accident was exclusively due to fortuitous
event, dismissed both actions. Plaintiffs appealed directly to
this Court in view of the amount in controversy.
We are inclined to agree with the trial court that it is not
likely that bus No. 199 of the Philippine Rabbit Lines was
driven over the deeply rutted road leading to the bridge at a
speed of 50 miles per hour, as testified for the plaintiffs.
Such conduct on the part of the driver would have provoked
instant and vehement protest on the part of the passengers
because of the attendant discomfort, and there is no trace
of any such complaint in the records. We are thus forced to
assume that the proximate cause of the accident was the
reduced strength of the steering knuckle of the vehicle
caused by defects in casting it. While appellants hint that
the broken knuckle exhibited in court was not the real fitting
attached to the truck at the time of the accident, the records
show that they registered no objection on that ground at the
trial below.
The issue is thus reduced to the question whether or not the
carrier is liable for the manufacturing defect of the steering
knuckle, and whether the evidence discloses that in regard
thereto the carrier exercised the diligence required by law
13 kat transpo pt2
(Art. 1755, new Civil Code). library
It is clear that the carrier is not an insurer of the passengers
safety. His liability rests upon negligence, his failure to
exercise the "utmost" degree of diligence that the law
requires, and by Art. 1756, in case of a passengers death or
injury the carrier bears the burden of satisfying the court
that he has duly discharged the duty of prudence required.
In the American law, where the carrier is held to the same
degree of diligence as under the new Civil Code, the rule on
the liability of carriers for defects of equipment is thus
expressed: "The preponderance of authority is in favor of
the doctrine that a passenger is entitled to recover damages
from a carrier for an injury resulting from a defect in an
appliance purchased from a manufacturer, whenever it
appears that the defect would have been discovered by the
carrier if it had exercised the degree of care which under the
circumstances was incumbent upon it, with regard to
inspection and application of the necessary tests. For the
purposes of this doctrine, the manufacturer is considered as
being in law the agent or servant of the carrier, as far as
regards the work of constructing the appliance. According to
this theory, the good repute of the manufacturer will not
relieve the carrier from liability The rationale of the
carriers liability is the fact that the passenger has neither
choice nor control over the carrier in the selection and use
of the equipment and appliances in use by the carrier.
Having, no privity whatever with the manufacturer or vendor
of the defective equipment, the passenger has no remedy
against him, while the carrier usually has. It is but logical,
therefore, that the carrier, while not an insurer of the safety
of his passengers, should nevertheless be held to answer for
the flaws of his equipment if such flaws were at all
discoverable
In the case now before us, the record is to the effect that the
only test applied to the steering knuckle in question was a
purely visual inspection every thirty days, to see if any
cracks developed. It nowhere appears that either the
manufacturer or the carrier at any time tested the steering
knuckle to ascertain whether its strength was up to
standard, or that it had no hidden flaws that would impair
that strength. And yet the carrier must have been aware of
the critical importance of the knuckles resistance; that its
failure or breakage would result in loss of balance and
steering control of the bus, with disastrous effects upon the
passengers. No argument is required to establish that a
visual inspection could not directly determine whether the
resistance of this critically important part was not impaired.
Nor has it been shown that the weakening of the knuckle
was impossible to detect by any known test; on the
contrary, there is testimony that it could be detected. We
are satisfied that the periodical visual inspection of the
steering knuckle as practiced by the carriers agents did not
measure up to the required legal standard of "utmost
diligence of very cautious persons" "as far as human care
and foresight can provide", and therefore that the knuckles
failure can not be considered a fortuitous event that
exempts the carrier from responsibility
It may be impracticable, as appellee argues, to require of
carriers to test the strength of each and every part of its
vehicles before each trip; but we are of the opinion that a
due regard for the carriers obligations toward the traveling
public demands adequate periodical tests to determine the
condition and strength of those vehicle portions the failure
of which may endanger the safety of the passengers.
As to the damages suffered by the plaintiffs, we agree with
appellee that no allowance may be made for moral
damages, since under Article 2220 of the new Civil Code, in
case of suits for breach of contract, moral damages are
recoverable only where the defendant acted fraudulently or
in bad faith, and there is none in the case before us. As to
exemp]ary damages, the carrier has not acted in a "wanton,
fraudulent, reckless, oppressive or malevolent manner" to
warrant their award. Hence, we believe that for the minor
Precillano Necesito (G. R No. L-10605), an indemnity of
P5,000 would be adequate for the abrasions and fracture of
the femur, including medical and hospitalization expenses,
there being no evidence that there would be any permanent
impairment of his faculties or bodily functions, beyond the
lack of anatomical symmetry. As for the death of Severina
Garces (G. R. No. L-10606) who was 33 years old, with seven
minor children when she died, her heirs are obviously
entitled to indemnity not only for the incidental loses of
property (cash, wrist watch and merchandise) worth P394
that she carried at the time of the accident and for the
burial expenses of P490, but also for the loss of her earnings
(shown to average P120 a month) and for the deprivation of
her protection, guidance and company. In our judgment, an
award of P15,000 would be adequate
F: A mother and son boarded a passenger autotruck of the
Phil. Rabbit Bus Lines. While entering a wooden bridge, its
front wheels swerved to the right, the driver lost control and
the truck fell into a creek. The mother drowned; the son was
injured.
Held : While the carrier is not an insurer of the safety of the
passengers, it should nevertheless be held answerable for
the flaws of its equipment if such flaws were discoverable.
The liability of the CC rests upon negligence or his failure to
exercise the utmost degree
of diligence that the law requires. The rationale of CC's
liability for manufacturing defects is the fact that the
passenger has neither choice nor control over the carrier in
the selection and use of the eqpt. and
appliances in use by the carrier. Having no privity whatever
with the manufacturer or vendor of the defective eqpt, the
passenger has no remedy against him. In this case, the
defect could have been detected
with the exercise of utmost diligence by the CC.
PAL V. CA, 106 SCRA 391
There was gross negligence by PAL for allowing Capt.
Bustamante to fly on the that fateful day of the accident,
even if he was sick, having tumor on his nose. No one will
certify the fitness to fly a plane of one suffering from the
disease. One month prior to the crash-landing, when the
pilot was preparing to land in Daet, private respondent
warned him that they were not in the vicinity of Daet but
above the town of Ligao. The dizziness, headaches and
general debility of private respondent were after-effects of
the crash-landing. And therefore there is causal connection
between the accident and said after-effects. The negligence
of PAL is clearly a quasi-delict and therefore Art.2219(2) is
applicable, justifying the recovery of moral damages. Even
from the standpoint of the petitioner that there is an
employee-employer relationship between it and private
respondent arising from the contract of employment, private
respondent is still entitled to moral damages in view of the
finding of bad faith or malice, applying the provisions of
Article 2220
SULPICIO V. CA, 246 SCRA 299
On October 23, 1988, plaintiff Tito Duran Tabuquilde
(hereinafter, "Tito") and his three-year old daughter Jennifer
Anne boarded the M/V Dona Marilyn at North Harbor, Manila,
bringing with them several pieces of luggage. In the
morning of October 24, 1988, the M/V Dona Marilyn, while in
transit, encountered inclement weather which caused huge
waves due to Typhoon Unsang.
14 kat transpo pt2
Notwithstanding the fact that Storm Signal No. 2 had been
raised by the PAG-ASA authorities over Leyte as early as
5:30 P.M. of October 23, 1988 and which signal was raised to
Signal No. 3 by 10 P.M. of the same day, the ship captain
ordered the vessel to proceed to Tacloban when prudence
dictated that he should have taken it to the nearest port for
shelter, thus violating his duty to exercise extraordinary
diligence in the carrying of passengers safely to their
destination.
At about the same time, plaintiff-appellee Angelina
Tabuquilde (hereinafter, "Angelina") mother of Jennifer Anne,
contacted the Sulpicio Office to verify radio reports that the
vessel M/V Dona Marilyn was missing. Employees of said
Sulpicio Lines assured her that the ship was merely "hiding"
thereby assuaging her anxiety.
At around 2:00 P.M. of October 24, 1988, said vessel
capsized, throwing plaintiff-appellee Tito and Jennifer Anne,
along with hundreds of passengers, into the tumultuous sea.
Tito tried to keep himself and his daughter afloat but to no
avail as the waves got stronger and he was subsequently
separated from his daughter despite his efforts.
He found himself on Almagro Island in Samar the next day
at round (sic) 11:00 A.M. and immediately searched for his
daughter among the survivors in the island, but the search
proved fruitless.
In the meantime, Angelina tried to seek the assistance of
the Sulpicio Lines in Manila to no avail, the latter refusing to
entertain her and hundreds of relatives of the other
passengers who waited long hours outside the Manila Office.
Angelina spent sleepless nights worrying about her husband
Tito and daughter Jennifer Anne in view of the refusal of
Sulpicio Lines to release a verification of the sinking of the
ship.
On October 26, 1988, Tito and other survivors in the
Almagro Island were fetched and were brought to Tacloban
Medical Center for treatment.
On October 31, 1988, Tito reported the loss of his daughter,
was informed that the corpse of a child with his daughter's
description had been found. Subsequently, Tito wrote a
letter to his wife, reporting the sad fact that Jennifer Anne
was dead. Angelina suffered from shock and severe grief
upon receipt of the news. On November 3, 1988, the coffin
bearing the corpse of Jennifer Anne was buried in Tanauan,
Leyte. On November 24, 1988, a claim for damages was
filed by Tito with the defendant Sulpicio Lines in connection
with the death of the plaintiff-appellee's daughter and the
loss of Tito's belongings worth P27,580.00.
On January 3, 1991, the trial court rendered a decision in
Civil Case No. Q-89-3048 in favor of the plaintiffs Tito Duran
Tabuquilde and Angelina de Paz Tabuquilde (private
respondents herein) and against defendant Sulpicio Lines,
Inc. (petitioner herein) ordering defendant to pay
P27,580.00 as actual damages, P30,000.00 for the death of
Jennifer Tabuquilde, P100,000.00 as moral damages,
P50,000.00 as exemplary damages, and P50,000.00 as
attorney's fees, and costs.
Petitioner appealed to the Court of Appeals which affirmed
the decision of the trial court. Petitioner then filed a motion
for reconsideration which was denied. Hence, this petition.
II
Generally, the findings of fact of the trial court are entitled
to great weight and not disturbed except for cogent reasons
(Gatmaitan v. Court of Appeals, 200 SCRA 37 [1991]). One of
the accepted reasons is when the findings of fact are not
supported by the evidence (Sandoval Shipyard, Inc. v. Clave,
94 SCRA 472 [1979]). Corollary to this is the rule that actual
or compensatory damages, to be recovered, must be
proved; otherwise, if the proof is flimsy, no damages will be
awarded (Dichoso v. Court of Appeals, 192 SCRA 169
[1990]).
In the case at bench, the trial court merely mentioned the
fact of the loss and the value of the contents of the pieces of
baggage without stating the evidence on which it based its
findings. There is no showing that the value of the contents
of the lost pieces of baggage was based on the bill of lading
or was previously declared by respondent Tito D. Tabuquilde
before he boarded the ship. Hence, there can be no basis to
award actual damages in the amount of P27,850.00.
The Court of Appeals was correct in confirming the award of
damages for the death of the daughter of private
respondents, a passenger on board the stricken vessel of
petitioner. It is true that under Article 2206 of the Civil Code
of the Philippines, only deaths caused by a crime as quasi
delict are entitled to actual and compensatory damages
without the need of proof of the said damages.
Deducing alone from said provision, one can conclude that
damages arising from culpa contractual are not
compensable without proof of special damages sustained by
the heirs of the victim.
However, the Civil Code, in Article 1764 thereof, expressly
makes Article 2206 applicable "to the death of a passenger
caused by the breach of contract by a common carrier."
Accordingly, a common carrier is liable for actual or
compensatory damages under Article 2206 in relation to
Article 1764 of the Civil Code for deaths of its passengers
caused by the breach of the contract of transportation.
The trial court awarded an indemnity of P30,000.00 for the
death of the daughter of private respondents. The award of
damages under Article 2206 has been increased to
P50,000.00 (People v. Flores, 237 SCRA 653 [1994]).
With respect to the award of moral damages, the general
rule is that said damages are not recoverable in culpa
contractual except when the presence of bad faith was
proven (Trans World Air Lines v. Court of Appeals, 165 SCRA
143 [1988]). However, in breach of contract of carriage,
moral damages may be recovered when it results in the
death of a passenger. With respect to the award of
exemplary damages, Article 2232 of the Civil Code of the
Philippines gives the Court the discretion to grant said
damages in breach of contract when the defendant acted in
a wanton, fraudulent and reckless manner.
A common carrier is obliged to transport its passengers to
their destinations with the utmost diligence of a very
cautious person (Laguna Tayabas Bus Co. v. Tiongson, 16
15 kat transpo pt2
SCRA 940 [1966]). The trial court found that petitioner failed
to exercise the extraordinary diligence required of a
common carrier, which resulted in the sinking of the M/V
Dona Marilyn.
The trial court correctly concluded that the sinking of M/V
Dona Marilyn was due to gross negligence, thus:
. . . [i]t is undisputed that Typhoon Unsang entered the
Philippine Area of Responsibility on October 21, 1988.
The rain in Metro Manila started after lunch of October
23, 1988, and at about 5:00 p.m. Public Storm Signal
No. 1 was hoisted over Metro Manila, Signal No. 2 in
Leyte and Signal No. 3 in Samar. But at 10:00 o'clock
(sic) in the morning of October 23, 1988, Public Storm
Signal No. 1 was already hoisted over the province of
Leyte, which is the destination of M/V Dona Marilyn.
This was raised to Signal No. 2 at 4:00 p.m. and Signal
No. 3 at 10:00 p.m. on the same date. The following
day, October 24, 1988, at 4:00 a.m. and 10:00 a.m.,
Storm Signal No. 3 remained hoisted in Leyte. At 4 p.m.
on October 24, 1988, Storm Signal No. 3 remained
hoisted in Leyte but was reduced to Storm Signal No. 2
(Exh. G). Signal No. 1 has maximum winds at 60 kph
within 36 hours; Signal No. 2 has maximum winds of
from 60 kph to 100 kph within a period of 24 hours; and
Signal No. 3 has maximum winds of 100 kph and above
within a period of 12 hours.
Warnings of the storm signal are issued by PAG-ASA
thru DZZA, Office of Civil Defense, Philippine Navy,
Coast Guard, Radio Stations, and other offices, every six
(6) hours as soon as a cyclone enters the Philippine
Area of Responsibility.
At 10:30 a.m. on October 24, 1988, the vessel was
estimated to be between Mindoro and Masbate, and the
center of the typhoon then was around 130 degrees
longitude with maximum winds of 65 kph (Exh. G-3),
with a "radius of rough to phenomenal sea at that time
of 450 kms. North and 350 kms. elsewhere; 350 kms.
North center and all throughout the rest" (p. 12, TSN,
Lumalda, Feb. 19, 1990).
xxx xxx xxx
In the same manner, (referring to the negligence of the
crew of the ship that sank in Vasquez v. Court of
Appeals, 138 SCRA 553 [1985]) the crew of the vessel
M/V Dona Marilyn took a calculated risk when it
proceeded despite the typhoon brewing somewhere in
the general direction to which the vessel was going. The
crew assumed a greater risk when, instead of dropping
anchor in or at the periphery of the Port of Calapan, or
returning to the port of Manila which is nearer,
proceeded on its voyage on the assumption that it will
be able to beat and race with the typhoon and reach its
destination before it (Unsang) passes ( Rollo, pp. 45-
47).
In this case, the petitioner filed before the Municipal Court
an action for forcible entry against the private respondent.
The said court dismissed the complaint. On appeal, the
Court of First Instance of Camarines Sur sustained the
decision of the lower court, dismissed the appeal and
awarded attorney's fees in the sum of not less than P500.00
in favor of private respondent. Upon appeal to us, we
deleted the award of attorney's fees because the text of the
appealed decision was bereft of any findings of fact and law
to justify such an award. Moreover, there was no proof,
other than the bare allegation of harassment that the
adverse party had acted in bad faith. The aforementioned
decision is inapposite to the instant case where the decision
clearly mentions the facts and the law upon which the
award of attorney's fees were based.
JAPAN AIRLINES V. COURT OF APPEALS, 449 SCRA 544
FACTS: This petition for review seeks to reverse and set
aside the October 9, 2002 decision of the Court of Appeals
and its January 12, 2004 resolution, which affirmed in toto
the June 10, 1997 decision of the Regional Trial Court of
Makati City, Branch 61 in Civil Case No. 92-3635.
On March 27, 1992, respondents Michael and Jeanette
Asuncion left Manila on board Japan Airlines (JAL) Flight 742
bound for Los Angeles. Their itinerary included a stop-over
in Narita and an overnight stay at Hotel Nikko Narita. Upon
arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL endorsed
their applications for shore pass and directed them to the
Japanese immigration official. A shore pass is required of a
foreigner aboard a vessel or aircraft who desires to stay in
the neighborhood of the port of call for not more than 72
hours.
During their interview, the Japanese immigration official
noted that Michael appeared shorter than his height as
indicated in his passport. Because of this inconsistency,
respondents were denied shore pass entries and were
brought instead to the Narita Airport Rest House where they
were billeted overnight.
Mr. Atsushi Takemoto of the International Service Center
(ISC), the agency tasked by Japans Immigration Department
to handle passengers who were denied shore pass entries,
brought respondents to the Narita Airport Rest House where
they stayed overnight until their departure the following day
for Los Angeles. Respondents were charged US$400.00 each
for their accommodation, security service and meals.
On December 12, 1992, respondents filed a complaint for
damages claiming that JAL did not fully apprise them of their
travel requirements and that they were rudely and forcibly
detained at Narita Airport.
Issue: Whether or not JAL is liable of breach of
contract of carriage.
Side Issues:
Whether or not JAL is liable for moral, exemplary damages,
Whether or not the plaintiff is liable for attorneys fee and
cost of suit incurred (JAL counterclaim)
Ruling:
The court finds that JAL did not breach its contract of
carriage with respondents. It may be true that JAL has the
duty to inspect whether its passengers have the necessary
travel documents, however, such duty does not extend to
checking the veracity of every entry in these documents. JAL
could not vouch for the authenticity of a passport and the
correctness of the entries therein. The power to admit or not
an alien into the country is a sovereign act which cannot be
interfered with even by JAL. This is not within the ambit of
the contract of carriage entered into by JAL and herein
16 kat transpo pt2
respondents. As such, JAL should not be faulted for the
denial of respondents shore pass applications.
In the Respondents claim that petitioner breached its
contract of carriage when it failed to explain to the
immigration authorities that they had overnight vouchers at
the Hotel Nikko Narita. They imputed that JAL did not
exhaust all means to prevent the denial of their shore pass
entry applications. JAL or any of its representatives have no
authority to interfere with or influence the immigration
authorities. The most that could be expected of JAL is to
endorse respondents applications, which Mrs. Higuchi did
immediately upon their arrival in Narita.
Moral damages may be recovered in cases where one
willfully causes injury to property, or in cases of breach of
contract where the other party acts fraudulently or in bad
faith. Exemplary damages are imposed by way of example
or correction for the public good, when the party to a
contract acts in wanton, fraudulent, oppressive or
malevolent manner. Attorneys fees are allowed when
exemplary damages are awarded and when the party to a
suit is compelled to incur expenses to protect his interest.
[17] There being no breach of contract nor proof that JAL
acted in wanton, fraudulent or malevolent manner, there is
no basis for the award of any form of damages.
Neither should JAL be held liable to reimburse respondents
the amount of US$800.00. It has been sufficiently proven
that the amount pertained to ISC, an agency separate and
distinct from JAL, in payment for the accommodations
provided to respondents. The payments did not in any
manner accrue to the benefit of JAL.
However, we find that the Court of Appeals correctly
dismissed JALs counterclaim for litigation expenses,
exemplary damages and attorneys fees. The action was
filed by respondents in utmost good faith and not manifestly
frivolous. Respondents honestly believed that JAL breached
its contract. A persons right to litigate should not be
penalized by holding him liable for damages. This is
especially true when the filing of the case is to enforce what
he believes to be his rightful claim against another although
found to be erroneous.[
WHEREFORE, in view of the foregoing, the instant petition is
PARTLY GRANTED. The October 9, 2002 decision of the Court
of Appeals and its January 12, 2004 resolution in CA-G.R. CV
No. 57440, are REVERSED and SET ASIDE insofar as the
finding of breach on the part of petitioner and the award of
damages, attorneys fees and costs of the suit in favor of
respondents is concerned. Accordingly, there being no
breach of contract on the part of petitioner, the award of
actual, moral and exemplary damages, as well as attorneys
fees and costs of the suit in favor of respondents Michael
and Jeanette Asuncion, is DELETED for lack of basis.
However, the dismissal for lack of merit of petitioners
counterclaim for litigation expenses, exemplary damages
and attorneys fees, is SUSTAINED. No pronouncement as to
costs.
 2 DURATION OF RESPONSIBILITY

ARTICLE 1736. The extraordinary responsibility of the

common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by
the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or
to the person who has a right to receive them, without
prejudice to the provisions of article 1738.

Article 17, Warsaw Convention (51 O.G. 5084)

The carrier is liable for damage sustained in the event of the
death or wounding of a passenger or any other bodily injury
suffered by a passenger, if the accident which caused the
damage so sustained took place on board the aircraft or in
the course of any of the operations of embarking or
disembarking.

Article 698, Code of Commerce

In case a voyage already begun should be interrupted, the
passengers shall be obliged to pay the fare in proportion to
the distance covered, without right to recover for losses and
damages if the interruption is due to fortuitous event or
force majeure, but with a right to indemnity if the
interruption should have been caused by the captain
exclusively. If the interruption should be caused by the
disability of the vessel and a passenger should agree to
await the repairs, he may not be required to pay any
increased price of passage, but his living expenses during
the stay shall be for his own account.

CANGCO V. MRR, SUPRA

IGNACIO DEL PRADO vs. MANILA ELECTRIC CO.

The appellant, the Manila Electric Company, is engaged in

operating street cars in the City for the conveyance of
passengers; and on the morning of November 18, 1925, one
Teodorico Florenciano, as appellant's motorman, was in
charge of car No. 74 running from east to west on R. Hidalgo
Street, the scene of the accident being at a point near the
intersection of said street and Mendoza Street. After the car
had stopped at its appointed place for taking on and letting
off passengers, just east of the intersection, it resumed its
course at a moderate speed under the guidance of the
motorman. The car had proceeded only a short distance,
however, when the plaintiff, Ignacio del Prado, ran across
the street to catch the car, his approach being made from
the left. The car was of the kind having entrance and exist
at either end, and the movement of the plaintiff was so
timed that he arrived at the front entrance of the car at the
moment when the car was passing.

The testimony of the plaintiff and of Ciriaco Guevara, one of

his witnesses, tends to shows that the plaintiff, upon
approaching the car, raised his hand as an indication to the
motorman of his desire to board the car, in response to
which the motorman eased up a little, without stopping.
Upon this the plaintiff seized, with his hand, the front
perpendicular handspot, at the same time placing his left
foot upon the platform. However, before the plaintiff's
position had become secure, and even before his raised
right foot had reached the flatform, the motorman applied
the power, with the result that the car gave a slight lurch
forward. This sudden impulse to the car caused the
plaintiff's foot to slip, and his hand was jerked loose from the
handpost, He therefore fell to the ground, and his right foot
was caught and crushed by the moving car. The next day

17 kat transpo pt2

the member had to be amputated in the hospital. The
witness, Ciriaco Guevara, also stated that, as the plaintiff
started to board the car, he grasped the handpost on either
side with both right and left hand. The latter statement may
possibly be incorrect as regards the use of his right hand by
the plaintiff, but we are of the opinion that the finding of the
trial court to the effect that the motorman slowed up slightly
as the plaintiff was boarding the car that the plaintiff's fall
was due in part at lease to a sudden forward movement at
the moment when the plaintiff put his foot on the platform is
supported by the evidence and ought not to be disturbed by
us.
The motorman stated at the trial that he did not see the
plaintiff attempting to board the car; that he did not
accelerate the speed of the car as claimed by the plaintiff's
witnesses; and that he in fact knew nothing of the incident
until after the plaintiff had been hurt and some one called to
him to stop. We are not convinced of the complete candor of
this statement, for we are unable to see how a motorman
operating this car could have failed to see a person boarding
the car under the circumstances revealed in this case. It
must be remembered that the front handpost which, as all
witness agree, was grasped by the plaintiff in attempting to
board the car, was immediately on the left side of the
motorman.
With respect to the legal aspects of the case we may
observe at the outset that there is no obligation on the part
of a street railway company to stop its cars to let on
intending passengers at other points than those appointed
for stoppage. In fact it would be impossible to operate a
system of street cars if a company engage in this business
were required to stop any and everywhere to take on people
who were too indolent, or who imagine themselves to be in
too great a hurry, to go to the proper places for boarding the
cars. Nevertheless, although the motorman of this car was
not bound to stop to let the plaintiff on, it was his duty to do
act that would have the effect of increasing the plaintiff's
peril while he was attempting to board the car. The
premature acceleration of the car was, in our opinion, a
breach of this duty.
The relation between a carrier of passengers for hire and its
patrons is of a contractual nature; and in failure on the part
of the carrier to use due care in carrying its passengers
safely is a breach of duty (culpa contructual) under articles
1101, 1103 and 1104 of the Civil Code. Furthermore, the
duty that the carrier of passengers owes to its patrons
extends to persons boarding the cars as well as to those
alighting therefrom. The case of Cangco vs. Manila Railroad
Co. (38 Phil., 768), supplies an instance of the violation of
this duty with respect to a passenger who was getting off of
a train. In that case the plaintiff stepped off of a moving
train, while it was slowing down in a station, and at the time
when it was too dark for him to see clearly where he was
putting his feet. The employees of the company had
carelessly left watermelons on the platform at the place
where the plaintiff alighted, with the result that his feet
slipped and he fell under the car, where his right arm badly
injured. This court held that the railroad company was liable
for breach positive duty (culpa contractual), and the plaintiff
was awarded damages in the amount of P2,500 for the loss
of his arm. In the opinion in that case the distinction is
clearly drawn between a liability for negligence arising from
breach of contructual duty and that arising articles 1902 and
1903 of the Civil Code (culpa aquiliana).
18 kat transpo pt2
The distiction between these two sorts of negligence is
important in this jurisdiction, for the reason that where
liability arises from a mere tort (culpa aquiliana), not
involving a breach of positive obligation, an employer, or
master, may exculpate himself, under the last paragraph of
article 1903 of the Civil Code, by providing that he had
exercised due degligence to prevent the damage; whereas
this defense is not available if the liability of the master
arises from a breach of contrauctual duty (culpa
contractual). In the case bfore us the company pleaded as a
special defense that it had used all the deligence of a good
father of a family to prevent the damage suffered by the
plaintiff; and to establish this contention the company
introduced testimony showing that due care had been used
in training and instructing the motorman in charge of this
car in his art. But this proof is irrelevant in view of the fact
that the liability involved was derived from a breach of
obligation under article 1101 of the Civil Code and related
provisions. (Manila Railroad Co. vs. Compana Transatlantica
and Atlantic, Gulf & Pacific Co., 38 Phil., 875, 887; De Guia
vs. Manila Electric Railroad & Light Co., 40 Phil., 706, 710.)
As to the contributory negligence of the plaintiff, we are of
the opinion that it should be treated, as in Rakes vs.
Atlantic, Gulf and Pacific Co. (7 Phil., 359), as a mitigating
circumstance under article 1103 of the Civil Code. It is
obvious that the plaintiff's negligence in attempting to board
the moving car was not the proximate cause of the injury.
The direct and proximate cause of the injury was the act of
appellant's motorman in putting on the power prematurely.
A person boarding a moving car must be taken to assume
the risk of injury from boarding the car under the conditions
open to his view, but he cannot fairly be held to assume the
risk that the motorman, having the situation in view, will
increase his peril by accelerating the speed of the car before
he is planted safely on the platform. Again, the situation
before us is one where the negligent act of the company's
servant succeeded the negligent act of the plaintiff, and the
negligence of the company must be considered the
proximate cause of the injury. The rule here applicable
seems to be analogous to, if not identical with that which is
sometimes referred to as the doctrine of "the last clear
chance." In accordance with this doctrine, the contributory
negligence of the party injured will not defeat the action if it
be shown that the defendant might, by the exercise of
reasonable care and prudence, have avoided the
consequences of the negligence of the injured party. The
negligence of the plaintiff was, however, contributory to the
accident and must be considered as a mitigating
circumstance.
With respect to the effect of this injury upon the plaintiff's
earning power, we note that, although he lost his foot, he is
able to use an artificial member without great
inconvenience and his earning capacity has probably not
been reduced by more than 30 per centum. In view of the
precedents found in our decisions with respect to the
damages that ought to be awarded for the loss of limb, and
more particularly Rakes vs. Atlantic, Gulf and Pacific Co. (7
Phil., 359); Cangco vs. Manila Railroad Co. (38 Phil., 768);
and Borromeo vs. Manila Electric Railroad and Light Co. (44
Phil., 165), and in view of all the circumstances connected
with the case, we are of the opinion that the plaintiff will be
adequately compensated by an award of P2,500.
LA MALLORCA V. COURT OF APPEALS
Facts: Plaintiffs, husband and wife, together with their three
minor daughters (Milagros, 13 years old, Raquel, about 4
years old and Fe, 2 years old) boarded the Pambusco at San
Fernando Pampanga, bound for Anao, Mexico, Pampanga.
Such bus is owned and operated by the defendant.
They were carrying with them four pieces of baggage
containing their personal belonging. The conductor of the b
us issued three tickets covering the full fares of the plaintiff
and their eldest child Milagros. No fare was charged on
Raquel and Fe, since both were below the height which fare
is charged in accordance with plaintiffs rules and
regulations.
After about an hours trip, the bus reached Anao where it
stopped to allow the passengers bound therefore, among
whom were the plaintiffs and their children to get off.
Mariano Beltran, carrying some of their baggage was the
first to get down the bus, followed by his wife and children.
Mariano led his companion to a shaded spot on the left
pedestrian side of the road about four or five meters away
from the vehicle. Afterwards, he returned to the bus in
controversy to get his paying, which he had left behind, but
in so doing, his daughter followed him unnoticed by his
father. While said Mariano Beltran was on he running board
of the bus waiting for the conductor to hand him his bayong
which he left under one its seats near the door, the bus,
whose motor was not shut off while unloading suddenly
started moving forward, evidently to resume its trip,
notwithstanding the fact that the conductor was still
attending to the baggage left behind by Mariano Beltran.
Incidentally, when the bus was again placed in a complete
stop, it had traveled about 10 meters from point where
plaintiffs had gotten off.
Sensing the bus was again in motion; Mariano immediately
jumped form the running board without getting his bayong
from conductor. He landed on the side of the road almost
board in front of the shaded place where he left his wife and
his children. At that time, he saw people beginning to gather
around the body of a child lying prostrate on the ground, her
skull crushed, and without life. The child was none other
than his daughter Raquel, who was run over by the bus in
which she rode earlier together her parent.
For the death of the said child, plaintiffs comment the suit
against the defendant to recover from the latter damages.
Issue: Whether or not the child was no longer the
passenger of the bus involved in the incident, and therefore,
the contract of carriage was already terminated?
Held: There can be no controversy that as far as the father
is concerned, when he returned to the bus for his bayong
which was not unloaded, the relation of passenger and
carrier between him and the petitioner remained subsisting.
The relation of carrier and passenger does not necessarily
cease where the latter, after alighting from the car aids the
carriers servant or employee in removing his baggage from
the car.
It is a rule that the relation of carrier and passenger does
not cease the moment the passenger alights from the
carriers vehicle at a place selected by the carrier at the
point of destination but continues until the passenger has
had a reasonable time or a reasonable opportunity to leave
the carriers premises.
The father returned to the bus to get one of his baggages
which was not unloaded when they alighted from the bus.
Raquel must have followed her father. However, although
the father was still on the running board of the bus awaiting
for the conductor to hand him the bag or bayong, the bus
started to run, so that even he had jumped down from the
moving vehicle. It was that this instance that the child, who
must be near the bus, was run over and killed. In the
circumstances, it cannot be claimed that the carriers agent
had exercised the utmost diligence of a very cautious
person required by Article 1755 of the Civil Code to be
19 kat transpo pt2
observed by a common carrier in the discharge of its
obligation to transport safely its passengers. The driver,
although stopping the bus, nevertheless did not put off the
engine. He started to run the bus even before the conductor
gave him the signal to go and while the latter was still
unloading part of the baggage of the passengers Beltran
and family. The presence of the said passengers near the
bus was not unreasonable and they are, therefore, to be
considered still as passengers of the carrier, entitled to the
protection under their contract of carriage.
BATACLAN V. MEDINA
FACTS: Medina is the owner and operator of a bus. This bus,
on Sept. 13, 1952 around 2:00AM somewhere in Imus,
Cavite, crashed and fell into a ditch. Apparently, its front tire
burst, zig-zagged and turned turtle into the ditch. Bataclan
was one of the 18 passengers. Most of the passengers were
able to get out, but Bataclan and 3 others were trapped. It
appears that the bus drivers and the passengers who
already got out did not try to help Bataclan et al get out,
instead, about 10 of the locals in the area came to their aid,
they were carrying a burning torch for illumination, but then
a fierce fire started and engulfed the bus and killed Bataclan
et al. It appears that there was a gas leak from the bus and
it caught fire from the torch the would-be rescuers were
using.
The heirs of Bataclan sued Medina.
The trial court found that there was a breach of a contract of
carriage where Medina undertook to take Bataclan to his
destination safely. The trial court also found that there was
negligence on the part of Medina since at the time of the
blow-out, the bus was speeding. There is no question that
under the circumstances, the defendant carrier is liable. The
only question is to what degree. The trial court argued that
Medina is only liable for the injuries suffered by Bataclan
and not by his death, the proximate cause of which was the
fire, which was not caused by Medina.
ISSUE: Whether or not it was the negligence of Medina,
owner of the bus company, which was the proximate cause
of the death of Bataclan.
HELD: Yes. In this case, the proximate cause of the death
was the overturning of the bus, because of the overturning,
it leaked gas which is not unnatural or unexpected. The
locals coming to the aid of the trapped passengers was most
likely because the driver and the conductor went out looking
for help. It is only natural that the would-be rescuers bring
with them a torch because it was 2:30AM and the place was
unlit. The fire could also be attributed to the bus driver and
conductor because he should have known, from the
circumstances, and because he should have been able to
smell gasoline and therefore he should have warned the
rescuers not to bring the torch. Said negligence on the part
of the agents of the carrier come under the codal provisions
above-reproduced, particularly, Articles 1733, 1759 and
1763.
Proximate Cause that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result
would not have occurred. And more comprehensively, the
proximate legal cause is that acting first and producing the
injury, either immediately or by setting other events in
motion, all constituting a natural and continuous chain of
events, each having a close causal connection with its
immediate predecessor, the final event in the chain
immediately effecting the injury as a natural and probable
result of the cause which first acted, under such
circumstances that the person responsible for the first event
should, as an ordinarily prudent and intelligent person, have
reasonable ground to expect at the moment of his act or
default that an injury to some person might probably result
therefrom.
ABOITIZ V. CA. 179 SCRA 95
Facts: On May 11, 1975, Anacleto Viana boarded M/|V
Antonio from Occidental Mindoro bound for Manila. Upon
arrival on May 12, 1975, the passengers therein
disembarked through a gangplank connecting the vessel to
the pier. Viana, instead of disembarking through the
gangplank, disembarked through the third deck, which was
at the same level with the pier. An hour after the passengers
disembarked, Pioneer stevedoring started to operate in
unloading the cargo from the ship. Viana then went back,
remembering some of his cargoes left at the vessel. At that
time, while he was pointing at the crew of the vessel to
where his cargoes were loaded, the crane hit him, pinning
him between the crane and the side of the vessel. He was
brought to the hospital where he died 3 days after (May 15).
The parents of Anacleto filed a complaint against Aboitiz for
breach of contract of carriage.
The trial court ruled in favor of the plaintiffs. Then both
Aboitiz and Pioneer filed a motion for reconsideration, upon
which the trial court issued an order absolving Pioneer from
liability but not Aboitiz. On appeal, CA affirmed the trial
court ruling. Hence, this petition.
Issue: Whether or not Viana is still considered a passenger
at the time of the incident?
Held: Yes. The La Mallorca case is applicable in the case at
bar.
The rule is that the relation of carrier and passenger
continues until the passenger has been landed at the port of
destination and has left the vessel owners dock or
premises. Once created, the relationship will not ordinarily
terminate until the passenger has, after reaching his
destination, safely alighted from the carriers conveyance or
had a reasonable opportunity to leave the carriers
premises. All persons who remain on the premises a
reasonable time after leaving the conveyance are to be
deemed passengers, and what is a reasonable time or a
reasonable delay within this rule is to be determined from all
the circumstances, and includes a reasonable time to see
after his baggage and prepare for his departure. The carrier-
passenger relationship is not terminated merely by the fact
that the person transported has been carried to his
destination if, for example, such person remains in the
carriers premises to claim his baggage.
The reasonableness of the time should be made to depend
on the attending circumstances of the case, such as the kind
of common carrier, the nature of its business, the customs
of the place, and so forth, and therefore precludes a
consideration of the time element per se without taking into
account such other factors.
Where a passenger dies or is injured, the common carrier is
presumed to have been at fault or to have acted negligently.
This gives rise to an action for breach of contract where all
that is required of plaintiff is to prove the existence of the
contract of carriage and its non-performance by the carrier,
that is, the failure of the carrier to carry the passenger
safely to his destination, which, in the instant case,
necessarily includes its failure to safeguard its passenger
with extraordinary diligence while such relation subsists.
PAL VS. CA AND ZAPATOS
Facts: Private respondent was among the 21 passengers of
Flight 477 that took off from Cebu bound for Ozamiz City.
The routing of this flight was Cebu-Ozamiz-Cotabato. The
pilot received a radio message that Ozamiz airport was
closed due to heavy rains and inclement weather and that
he should proceed to Cotabato City instead.
20 kat transpo pt2
Upon arrival at Cotabato City, the PAL Station Agent
informed the passengers of their options to return to Cebu
on the same day and then to Ozamiz, or take the next flight
to Cebu the following day, or remain at Cotabato and take
the next available flight to Ozamiz City. Flight 560 bound for
Manila would make a stop-over at Cebu to bring some of the
diverted passengers; that there were only 6 seats available.
Private respondent chose to return to Cebu but was not
accommodated because he checked-in as passenger No. 9
on Flight 477.
He was forced to stay at Cotabato City despite the local war
between the military and the muslim rebels. He tried to ferry
the Ford Fiera loaded with PAL personnel but said pick-up
vehicle did not accommodate him. The personnel of PAL did
not secure his accommodation in Cotabato City.
He received a free ticket on a flight to Iligan, but chose to
buy his own. He lost his personal belongings, including a
camera.
Issue:
1. WON PAL can properly invoke the defense of fortuitous
event of bad weather in Ozamiz to exempt itself from
paying damages to the PR? NO
PAL remissed in its duty of extending utmost care to private
respondent while being stranded in Cotabato City.
PALs diversion of its flight due to inclement weather was a
fortuitous event. Nonetheless, such occurrence did not
terminate PALs contract with its passengers. Being in the
business of air carriage and the sole one to operate in the
country, PAL is deemed equipped to deal with situations as
in the case at bar. The relation of carrier and passenger
continues until the latter has been landed at the port of
destination and has left the carriers premises. Hence, PAL
necessarily would still have to exercise extraordinary
diligence in safeguarding the comfort, convenience and
safety of its stranded passengers until they have reached
their final destination. PAL grossly failed considering the
then ongoing battle between government forces and Muslim
rebels in Cotabato City and the fact that the private
respondent was a stranger to the place.
A contract to transport passengers is quite different in kind
and degree from any other contractual relation. Because of
the relation which an air carrier sustains with the public. Its
business is mainly with the travelling public. It invites people
to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation
attended with a public duty.
Since part of the failure to comply with the obligation of
common carrier to deliver its passengers safely to their
destination lay in the defendants failure to provide comfort
and convenience to its stranded passengers using extra-
ordinary diligence, the cause of non-fulfillment is not solely
and exclusively due to fortuitous event, but due to
something which defendant airline could have prevented,
PAL becomes liable to plaintiff.
2. WON the exemplary damages was properly
awarded by the appellate court? NO
The award of moral damages was excessive and was
reduced by the Court. There was no clear basis that PAL
failed to entertain the plaintiff and answer its queries. In
fact, the manager accommodated him in his office. Moral
damages are not intended to enrich the private respondent.
They are awarded only to enable the injured party to obtain
means, diversion or amusements that will serve to alleviate
the moral suffering he has undergone by reason of the
defendants culpable action. The plaintiffs claim on loss of
business opportunities was based only on pure speculation.
It must depend on competent proof.
PRESUMPTION OF NEGLIGENCE, ART. 1756
ARTICLE 1756. In case of death of or injuries to
passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that
they observed extraordinary diligence as prescribed in
articles 1733 and 1755.
FORCE MAJEURE
BACHELOR EXPRESS V. CA, 188 SCRA 217
Fact: On 1 August 1980, Bus 800, owned by Bachelor
Express, Inc. and driven by Cresencio Rivera, came from
Davao City on its way to Cagayan de Oro City passing
Butuan City. While at Tabon-Tabon, Butuan City,the bus
picked up a passenger. About 15 minutes later, a passenger
at the rear portion suddenly stabbed a PC soldier which
caused commotion and panic among the passengers. When
the bus stopped, passengers Ornominio Beter and Narcisa
Rautraut were found lying down the road, the former already
dead as a result of head injuries and the latter also suffering
from severe injuries which caused her death later. The
passenger-assailant alighted from the bus and ran toward
the bushes but was killed by the police.
Thereafter, the heirs of Ornomino Beter and Narcisa
Rautraut (Ricardo Beter and Sergia Beter are the parents of
Ornominio while Teofilo Rautraut and Zotera Rautraut are
the parents of Narcisa) filed a complaint for sum of money
against Bachelor Express, its alleged owner Samson Yasay,
and the driver Rivera. After due trial, the trial court issued
an order dated 8 August 1985 dismissing the complaint.
Upon appeal however, the trial courts decision was
reversed and set aside. The appellate entered a new
judgment finding Bachelor Express, Yasay, and Rivera jointly
and solidarily liable to pay the Beters and theRautraut the
amount of P75,000.00 in loss of earnings and support, moral
damages, straight death indemnity and attorneys fees to
the heirs of Ornominio Beter; and the amount of P45,000.00
for straight death indemnity, moral damages and attorneys
fees to the heirs of Narcisa Rautraut; with costs against
Bachelor Express, et. al. Hence, the petition for review.
The Supreme Court dismissed the petition, and affirmed the
decision dated 19 May 1988 and the resolution dated 1
August 1988 of the Court of Appeals.
1. Liability of Bachelor Express, et. al. anchored on culpa
contractual. The liability, if any, of Bachelor Express, Yasay,
and Rivera, is anchored on culpa contractual or breach of
contract of carriage.
2. Article 1732 NCC. Article 1732 of the Civil Code provides
that Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or
transporting passengers or goods or both by land, water, or
air, for compensation, offering their services to the public.
3. Article 1733 NCC. Article 1733 of the Civil Code provides
that Common carriers, from the nature of their business
andfor reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods
andfor the safety of the passengers transported by them,
according to all the circumstances of each case.
4. Article 1755 NCC. Article 1755. of the Civil Code provides
that A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
5. Article 1756 NCC. Article 1756 of the Civil Code provides
that In case of death of or injuries to passengers, common
21 kat transpo pt2
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed
extraordinary diligence as prescribed in Articles 1733 and
1755.
6. Bachelor Express a common carrier, bound to carry
passenger using utmost diligence of very cautious persons
Bachelor Express, Inc. is a common carrier. Hence, from the
nature of its business and for reasons of public policy
Bachelor Express, Inc. is bound to carry its passengers
safely as far as human care and foresight can provide using
the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
7. Bachelor Express presumed to act negligently for death of
passengers. Herein, Ornominio Beter and Narcisa Rautraut
were passengers of a bus belonging to Bachelor Express
and, while passengers of the bus, suffered injuries which
caused their death. Consequently, pursuant to Article 1756
of the Civil Code, Bachelor Express is presumed to have
acted negligently unless it can prove that it had observed
extraordinary diligence in accordance with Articles 1733 and
1755 of the New Civil Code.
Proximate cause of incident; Sudden act of passenger who
stabbed another passenger within context of force majeure.
The running amuck of the passenger was the proximate
cause of the incident as it triggered off acommotion and
panic among the passengers such that the passengers
started running to the sole exit shovingeach other resulting
in the falling off the bus by passengers Beter and Rautraut
causing them fatal injuries. The sudden act of the passenger
who stabbed another passenger in the bus is within the
context of force majeure.
18. Bachelor Express negligent. The negligence of the
common carrier, through its employees, consisted of the
lack of extraordinarydiligence required of common carriers,
in exercising vigilance and utmost care of the safety of its
passengers, exemplified by the drivers belated stop and the
reckless opening of the doors of the bus while the same was
travelling at an appreciably fast speed. At the same time,
the common carrier itself acknowledged, through its
administrative officer, Benjamin Granada, that the bus was
commissioned to travel and take on passengers and the
public at large, while equipped with only a solitary door for a
bus its size and loading capacity, in contravention of rules
and regulations provided for under the Land Transportation
and Traffic Code (RA 4136as amended.). Bachelor Express,
et. al. have failed to overcome the presumption of fault and
negligence foundin the law governing common carriers.
19. Defense of carrier not insurers of passengers not given
merit due to failure to observe required diligence.
Bachelor Express argument that they are not insurers of
their passengers deserves no merit in view of their failure
to prove that the deaths of the two passengers were
exclusively due to force majeure and not to their failure to
observe extraordinary diligence in transporting safely the
passengers to their destinations as warranted by law.
QUISUMBING, SR., and GUNTHER LOEFFLER vs. CA &
PAL
Having met with no success in the Court of First Instance of
Rizal and in the Court of Appeals, the petitioners are now in
this Court in a third and final attempt to recover from the
Philippine Airlines, Inc. (hereafter, simply PAL) the value of
jewelry, other valuables and money taken from them
by four (4) armed robbers on board one of the latter's
airplanes while on a flight from Mactan City to
Manila, as well as moral and exemplary damages,
attorney's fees and expenses of litigation.
The petitioners accept the correctness of the basic facts
adopted by the Court of Appeals from the judgment of the
Court of First Instance, to wit: 1
1. . . . Norberto Quisumbing, Sr. and Gunther Leoffler
were among the of ... (PAL's) Fokker 'Friendship' PIC-536
plane in its flight of November 6,1968 which left Mactan
City at about 7:30 in the evening with Manila for its
destination.
2. After the plane had taken off, Florencio O. Villarin, a
Senior NBI Agent who was also a passenger of the said
plane, noticed a certain 'Zaldy,' a suspect in the killing
of Judge Valdez, seated at the front seat near the door
leading to the cockpit of the plane. A check by Villarin
with the passenger's ticket in the possession of flight
Stewardess Annie Bontigao, who was seated at the last
seat right row, revealed that 'Zaldy' had used the name
'Cardente,' one of his aliases known to Villarin. Villarin
also came to know from the stewardess that 'Zaldy' had
three companions on board the plane."
3. Villarin then scribbled a note addressed to the pilot of
the plane requesting the latter to contact NBI duty
agents in Manila for the said agents to ask the Director
of the NBI to send about six NBI agents to meet the
plane because the suspect in the killing of Judge Valdez
was on board (Exh. 'G'). The said note was handed by
Villarin to the stewardess who in tum gave the same to
the pilot.
4. After receiving the note, which was about 15 minutes
after take off, the pilot of the plane, Capt. Luis
Bonnevie, Jr., came out of the cockpit and sat beside
Villarin at the rear portion of the plane and explained
that he could not send the message because it would
be heard by all ground aircraft stations. Villarin,
however, told the pilot of the danger of commission of
violent acts on board the plane by the notorious 'Zaldy'
and his three companions.
5. While the pilot and Villarin were talking, 'Zaldy' and
one of his companions walked to the rear and stood
behind them. Capt. Bonnevie then stood up and went
back to the cockpit. 'Zaldy' and his companions
returned to their seats, but after a few minutes they
moved back to the rear throwing ugly looks at Villarin
who, sensing danger, stood up and went back to his
original seat across the aisle on the second to the last
seat near the window. 'Zaldy and his companion
likewise went back to their respective seats in front.
6. Soon thereafter an exchange of gunshots ensued
between Villarin and 'Zaldy' and the latter's
companions. 'Zaldy' announced to the passengers and
the pilots in the cockpit that it was a hold-up and
ordered the pilot not to send any SOS. The hold-uppers
divested passengers of their belongings.
7. Specifically, ... Norberto Quisumbing, Sr. was
divested of jewelries and cash in the total amount of
P18,650.00 out of which recoveries were made
amounting to P4,550.00. . . Gunther Leoffler was
divested of a wrist watch, cash and a wallet in the total
of P1,700.00. As a result of the incident ... Quisumbing,
Sr.suffered shock, because a gun had been pointed at
him by one of the holduppers.
22 kat transpo pt2
8. Upon landing at the Manila International Airport.
'Zaldy' and his three companions succeeded in
escaping.
Demands were thereafter made on PAL by Quisumbing and
Loeffler "to indemnify ... (them) on their aforesaid loss,
but ... (PAL) refused ... (averring that) it is not liable to
(them) in law or in fact." 2
Contending that the "aforesaid loss is a result of breach of ...
(PAL's) contractual obligation to carry ... (them) and their
belongings and effects to their Manila destination without
loss or damage, and constitutes a serious dereliction of ...
(PAL's) legal duty to exercise extraordinary diligence in the
vigilance over the same." , Quisumbing and Loeffler brought
suit against PAL in the Court of First Instance of Rizal, as
stated in this opinion's opening paragraph, to recover the
value of the property lost by them to the robbers as well as
moral and exemplary damages, attorney's fees and
expenses of litigation. 3 The plaintiffs declared that their suit
was instituted "... pursuant to Civil Code articles 1754, 998,
2000 and 2001 and on the ground that in relation to said
Civil Code article 2001 the complained-of act of the armed
robbers is not a force majeure, as the 'use of arms' or
'irresistible force' was not taken advantage of by said armed
robbers in gaining entrance to defendant's ill-fated plane in
questions. And, with respect to said Civil Code article 1998,
it is not essential that the lost effects and belongings of
plaintiffs were actually delivered to defendant's plane
personnel or that the latter were notified thereof (De los
Santos v. Tamn Khey, [CA] 58 O.G. 7693)." 4
PAL filed answer denying liability, alleging inter alia that the
robbery during the flight and after the aircraft was forcibly
landed at the Manila Airport did indeed constitute force
majeure, and neither of the plaintiffs had notified PAL "or its
crew or employees that they were in possession of cash,
German marks and valuable jewelries and watches" or
surrendered said items to "the crew or personnel on board
the aircraft." 5
After trial, the Court of First Instance rendered judgment
'dismissing plaintiffs' complaint with costs against ...
(them)." 6 The Court opined that since the plaintiffs "did not
notify defendant or its employees that they were in
possession of the cash, jewelries, and the wallet they are
now claiming," the very provision of law invoked by them,
Article 1998 of the Civil Code, denies them any recourse
against PAL. The Court also pointed out that-
... while it is true that the use of gems was not taken
advantage of by the robbers in gaining entrance to
defendant's ill-fated plane, the armed robbery that
took place constitutes force majeure for which
defendant is not liable because the robbers were able
to gain entrance to the plane with the guns they used
already in their possession, which fact could not have
been prevented nor avoided by the defendant since it
was not authorized to search its passengers for
firearms and deadly weapons as shown in Exhibits '6',
'7', '8,' and '8-A.' As its robbery constitutes force
majeure, defendant is not liable.
The plaintiffs appealed to the Court of Appeals. 7 The Court
affirmed the trial court's judgment. 8 It rejected the
argument that "the use of arms or ... irresistible force"
referred to in Article 2001 constitutes force majeure only if
resorted to gain entry into the airplane, and not if it attends
"the robbery itself." The Court ruled that under the facts,
"the highjacking-robbery was force majeure," observing that
 ... hijackers do not board an airplane through a blatant
display of firepower and violent fury. Firearms, hand-
grenades, dynamite, and explosives are introduced into
the airplane surreptitiously and with the utmost cunning
and stealth, although there is an occasional use of
innocent hostages who will be coldly murdered unless a
plane is given to the hijackers' complete disposal. The
objective of modern-day hijackers is to display the
irresistible force amounting to force majeure only when
it is most effective and that is when the jetliner is
winging its way at Himalayan altitudes and ill-advised
heroics by either crew or passengers would send the
multi-million peso airplane and the priceless lives of all
its occupants into certain death and destruction. ...
The Appellate Court also ruled that in light of the evidence
PAL could not be faulted for want of diligence, particularly
for failing "to take positive measures to implement Civil
Aeronautics Administration regulations prohibiting civilians
from carrying firearms on board aircrafts;" and that "the
absence of coded transmissions, the amateurish behaviour
of the pilot in dealing with the NBI agent, the allegedly open
cockpit door, and the failure to return to Mactan, in the light
of the circumstances of the case ..., were not negligent acts
sufficient to overcome the force majeure nature of the
armed robbery." In fact, the Court went on to says, 9
... it is illusive to assume that had these precautions
been taken, the hijacking or the robbery would not
have succeeded. The mandatory use of the most
sophisticated electronic detection devices and
magnetometers, the imposition of severe penalties,
the development of screening procedures, the
compilation of hijacker behavioural profiles, the
assignment of sky marshals, and the weight of
outraged world opinion may have minimized
hijackings but all these have proved ineffective
against truly determined hijackers. World experience
shows that if a group of armed hijackers want to take
over a plane in flight, they can elude the latest
combined government and airline industry measures.
And as our own experience in Zamboanga City
illustrates, the use of force to overcome hijackers,
results in the death and injury of innocent passengers
and crew members. We are not in the least bit
suggesting that the Philippine Airlines should not do
everything humanly possible to protect passengers
from hijackers' acts. We merely state that where the
defendant has faithfully complied with the
requirements of government agencies and adhered to
the established procedures and precautions of the
airline industry at any particular time, its failure to
take certain steps that a passenger in hindsight
believes should have been taken is not the
negligence or misconduct which mingles with force
majeure as an active and cooperative cause.
Under the circumstance of the instant case, the acts
of the airline and its crew cannot be faulted as
negligence. The hijackers had already shown their
willingness to kill. One passenger was in fact killed
and another survived gunshot wounds. The lives of
the rest of the passengers and crew were more
important than their properties. Cooperation with the
hijackers until they released their hostages at the
runway end near the South Superhighway was
dictated by the circumstances.
Insisting that the evidence demonstrates negligence on the
part of the PAL crew "occurring before and exposing them to
hijacking," Quisumbing and Loeffler have come up to this
Court praying that the judgments of the trial Court and the
23 kat transpo pt2
Court of Appeals be reversed and another rendered in their
favor. Once again, the issue will be resolved against them.
A careful analysis of the record in relation to the memoranda
and other pleadings of the parties, convinces this Court of
the correctness of the essential conclusion of both the trial
and appellate courts that the evidence does indeed fail to
prove any want of diligence on the part of PAL, or that, more
specifically, it had failed to comply with applicable
regulations or universally accepted and observed
procedures to preclude hijacking; and that the particular
acts singled out by the petitioners as supposedly
demonstrative of negligence were, in the light of the
circumstances of the case, not in truth negligent acts
"sufficient to overcome the force majeure nature of the
armed robbery." The Court quite agrees, too, with the
Appellate Tribunal's wry observation that PAL's "failure to
take certain steps that a passenger in hindsight believes
should have been taken is not the negligence or misconduct
which mingles with force majeure as an active and
cooperative cause."
No success can therefore attend petitioners' appeal, not
only because they wish to have a review and modification of
factual conclusions of the Court of Appeals, which
established and uniformly observed axiom proscribes, 10 but
also because those factual conclusions have in this Court's
view been correctly drawn from the proofs on record.
WHEREFORE, the petition is DENIED and the appealed
Decision of the Court of Appeals is AFFIRMED, with costs
against petitioners. SO ORDERED.
LIMITATION OF LIABILITY; VALIDITY OF STIPULATIONS
ARTICLE 1757. The responsibility of a common carrier for
the safety of passengers as required in articles 1733 and
1755 cannot be dispensed with or lessened by stipulation,
by the posting of notices, by statements on tickets, or
otherwise.
ARTICLE 1758. When a passenger is carried gratuitously, a
stipulation limiting the common carriers liability for
negligence is valid, but not for wilful acts or gross
negligence. The reduction of fare does not justify any
limitation of the common carriers liability.
RESPONSIBILITY FOR ACTS OF EMPLOYEES
ARTICLE 1759. Common carriers are liable for the death of
or injuries to passengers through the negligence or wilful
acts of the formers employees, although such employees
may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of the common carriers does not cease upon
proof that they exercised all the diligence of a good father of
a family in the selection and supervision of their employees.
ARTICLE 1760. The common carriers responsibility
prescribed in the preceding article cannot be eliminated or
limited by stipulation, by the posting of notices, by
statements on the tickets or otherwise.
BATACLAN V. MEDINA, SUPRA
FACTS: Medina is the owner and operator of a bus. This bus,
on Sept. 13, 1952 around 2:00AM somewhere in Imus,
Cavite, crashed and fell into a ditch. Apparently, its front tire
burst, zig-zagged and turned turtle into the ditch. Bataclan
was one of the 18 passengers. Most of the passengers were
able to get out, but Bataclan and 3 others were trapped. It
appears that the bus drivers and the passengers who
already got out did not try to help Bataclan et al get out,
instead, about 10 of the locals in the area came to their aid,
they were carrying a burning torch for illumination, but then
a fierce fire started and engulfed the bus and killed Bataclan
et al. It appears that there was a gas leak from the bus and
it caught fire from the torch the would-be rescuers were
using. The heirs of Bataclan sued Medina.
The trial court found that there was a breach of a contract of
carriage where Medina undertook to take Bataclan to his
destination safely. The trial court also found that there was
negligence on the part of Medina since at the time of the
blow-out, the bus was speeding. There is no question that
under the circumstances, the defendant carrier is liable. The
only question is to what degree. The trial court argued that
Medina is only liable for the injuries suffered by Bataclan
and not by his death, the proximate cause of which was the
fire, which was not caused by Medina.
ISSUE: Whether or not it was the negligence of Medina,
owner of the bus company, which was the proximate cause
of the death of Bataclan.
HELD: Yes. In this case, the proximate cause of the death
was the overturning of the bus, because of the overturning,
it leaked gas which is not unnatural or unexpected. The
locals coming to the aid of the trapped passengers was most
likely because the driver and the conductor went out looking
for help. It is only natural that the would-be rescuers bring
with them a torch because it was 2:30AM and the place was
unlit. The fire could also be attributed to the bus driver and
conductor because he should have known, from the
circumstances, and because he should have been able to
smell gasoline and therefore he should have warned the
rescuers not to bring the torch. Said negligence on the part
of the agents of the carrier come under the codal provisions
above-reproduced, particularly, Articles 1733, 1759 and
1763.
Proximate Cause that cause, which, in natural and caso fortuito for which the carrier was not liable. The court a
continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result
would not have occurred. And more comprehensively, the
proximate legal cause is that acting first and producing the
injury, either immediately or by setting other events in
motion, all constituting a natural and continuous chain of
events, each having a close causal connection with its
immediate predecessor, the final event in the chain
immediately effecting the injury as a natural and probable
result of the cause which first acted, under such
circumstances that the person responsible for the first event
should, as an ordinarily prudent and intelligent person, have
reasonable ground to expect at the moment of his act or
default that an injury to some person might probably result
therefrom.
DE GILLACO V. MRR, 97 PHIL. 884
Facts: Lieut. Tomas Gillaco, husband of the plaintiff, was a
passenger in the early morning train of the Manila Railroad
Company from Calamba, Laguna to Manila. When the train
reached the Paco Railroad station, Emilio Devesa, a train
guard of the MRR happened to be in said station waiting for
the same train which would take him to Tutuban Station,
where he was going to report for duty. Emilio had along
standing personal grudge against Tomas. Because of this,
Emilio shot Tomas with the carbine furnished to him by the
MRR for his use as such train guard upon seeing him inside
the train coach. Tomas died. Emilio was convicted of
homicide. A complaint for damages was filed by the victims
widow. Damages were awarded to the plaintiff, hence the
instant petition. Appellant's contention is that, no liability
attaches to it as employer of Emilio because the crime was
not committed while the slayer was in the actual
performance of his ordinary duties and service and that no
negligence on appellant's part was shown.
24 kat transpo pt2
Issue: Whether or not MRR could be held liable for the acts
of its employee.
Held: No. While a passenger is entitled to protection from
personal violence by the carrier or its agents or employees,
since the contract of transportation obligates the carrier to
transport a passenger safely to his destination, the
responsibility of the carrier extends only to those acts that
the carrier could foresee or avoid through the exercise of the
degree of care and diligence required of it. In the present
case, the act of the train guard of the Manila Railroad
Company in shooting the passenger (because of a personal
grudge nurtured against the latter since the Japanese
occupation) was entirely unforseeable by the Manila
Railroad Co. The latter had no means to ascertain or
anticipate that the two would meet, nor could it reasonably
forsee every personal rancour that might exist between
each one of its many employees and any one of the
thousands of eventual passengers riding in its trains. The
shooting in question was therefore "caso fortuito" within the
definition of Art. 1105 of the old CivilCode (which is the law
applicable), being both unforeseeable and inevitable under
the given circumstances; and pursuant to established
doctrine, the resulting breach of the company's contract of
safe carriage with the deceased was excused thereby.
MARANAN V. PEREZ
Facts: Rogelio Corachea, a passenger in a taxicab owned
and operated by Pascual Perez, was stabbed and killed by
the driver, Simeon Valenzuela. Valenzuela was found guilty
for homicide by the Court of First Instance and was
sentenced to suffer Imprisonment and to indemnify the heirs
of the deceased in the sum of P6000. While pending appeal,
mother of deceased filed an action in the Court of First
Instance of Batangas to recover damages from Perez and
Valenzuela. Defendant Perez claimed that the death was a
quo, after trial, found for the plaintiff and awarded her
P3,000 as damages against defendant Perez. The claim
against defendant Valenzuela was dismissed. From this
ruling, both plaintiff and defendant Perez appealed to this
Court, the former asking for more damages and the latter
insisting on non-liability. Defendant-appellant relied solely
on the ruling enunciated in Gillaco vs. Manila Railroad Co.
that the carrier is under no absolute liability for assaults of
its employees upon the passengers.
Issue: Whether or not Perez should be held liable for the
death of the passenger?
Held: Yes. The basis of the carrier's liability for assaults on
passengers committed by its drivers rests on the principle
that it is the carrier's implied duty to transport the
passenger safely. As between the carrier and the passenger,
the former must bear the risk of wrongful acts or negligence
of the carrier's employees against passengers, since it, and
not the passengers, has power to select and remove them.
Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the
formers employees, although such employees may have
acted beyond the scope of their authority or in violation of
the orders of the common carriers. The liability of the
common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the
selection and supervision of their employees. (Art. 1759)
The attendant facts and controlling law of that case and the
one at bar were very different. In the Gillaco case, the
passenger was killed outside the scope and the course of
duty of the guilty employee. The Gillaco case was decided
under the provisions of the Civil Code of 1889 which, unlike
the present Civil Code, did not impose upon common
carriers absolute liability for the safety of passengers
against willfull assaults or negligent acts committed by their
employees. The death of the passenger in the Gillaco case
was truly a fortuitous event which exempted the carrier from
liability. It is true that Art. 1105 of the old Civil Code on
fortuitous events has been substantially reproduced in Art.
1174 of the Civil Code of the Philippines but both articles
clearly remove from their exempting effect the case where
the law expressly provides for liability in spite of the
occurrence of force majeure. The Civil Code provisions on
the subject of Common Carriers are new and were taken
from Anglo-American Law. The basis of the carrier's liability
for assaults on passengers committed by its drivers rested
either on the doctrine of respondent superior or the principle
that it was the carrier's implied duty to transport the
passenger safely. Under the second view, upheld by the
majority and also by the later cases, it was enough that the
assault happens within the course of the employee's duty. It
was no defense for the carrier that the act was done in
excess of authority or in disobedience of the carrier's orders.
The carrier's liability here was absolute in the sense that it
practically secured the passengers from assaults committed
by its own employees.
LRTA V. NAVIDAD, SUPRA
F: Navidad was drunk when he entered the boarding
platform of the LRT. He got into an altercation with the SG
Escartin. They had a fistfight and Navidad fell onto the
tracks and was killed when a train came and ran over him.
The Heirs of Navidad filed a complaint for damages against
Escartin, the train driver, (Roman) the LRTA, the Metro
Transit Organization and Prudent Security Agency (Prudent).
The trial court found Prudent and Escartin jointly and
severally liable for damages to the heirs. The CA exonerated
Prudent and instead held the LRTA and the train driver
Romero jointly and severally liable as well as removing the
award for compensatory damages and replacing it with
nominal damages.
The reasoning of the CA was that a contract of carriage
already existed between Navidad and LRTA (by virtue of his
havA ing purchased train tickets and the liability was caused
by the mere fact of Navidad's death after being hit by the
train being managed by the LRTA and operated by Roman.
The CA also blamed LRTA for not having presented expert
evidence showing that the emergency brakes could not
have stopped the train on time.
I: (1) Whether or not LRTA and/or Roman is liable for the
death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with
compensatory damages.
H: (1) Yes. The foundation of LRTA's liability is the contract
of carriage and its obligation to indemnify the victim arising
from the breach of that contract by reason of its failure to
exercise the high diligence required of a common carrier.
(2) Fault was not established. Liability will be based on Tort
under Art. 2176 of the New Civil Code.
(3) No. It is an established rule that nominal damages
cannot co-exist with compensatory damages.
RATIO: Liability of LRTA Read Arts. 1755,1756, 1759 and
1763 of the New Civil Code
A common carrier is required by these above statutory
provisions to use utmost diligence in carrying passengers
with due regard for all circumstances. This obligation exists
not only during the course of the trip but for so long as the
passengers are within its premises where they ought to be
in pursuance to then contract of carriage.
Art. 1763 renders a common carrier liable for death of or
injury to passengers (a) through the negligence or willful
acts of its employees or (b) on account of willful acts or
25 kat transpo pt2
negligence of other passengers or of strangers if the
common carriers employees through the exercise of due
diligence could have prevented or stopped the act or
omission. In case of such death or injury, a carrier is
presumed to have been at fault or been negligent, and by
simple proof of injury, the passenger is relieved of the duty
to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove
that the injury is due to an unforeseen event or to force
majeure.
Liability of Security Agency If Prudent is to be held
liable, it would be for a tort under Art. 2176 in conjunction
with Art. 2180. Once the fault of the employee Escartin is
established, the employer, Prudent, would be held liable on
the presumption that it did not exercise the diligence of a
good father of the family in the selection and supervision of
its employees.
Relationship between contractual and non-
contractual breach How then must the liability of the
common carrier, on the one hand, and an independent
contractor, on the other hand, be described? It would be
solidary. A contractual obligation can be breached by tort
and when the same act or omission causes the injury, one
resulting in culpa contractual and the other in culpa
aquiliana, Article 2194 of the Civil Code can well apply. In
fine, a liability for tort may arise even under a contract,
where tort is that which breaches the contract. Stated
differently, when an act which constitutes a breach of
contract would have itself constituted the source of a quasi-
delictual liability had no contract existed between the
parties, the contract can be said to have been breached by
tort, thereby allowing the rules on tort to apply.
Nominal Damages - The award of nominal damages in
addition to actual damages is untenable. Nominal damages
are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It is
an established rule that nominal damages cannot co-exist
with compensatory damages. The award was deleted.
RESPONSIBILITY FOR ACTS OF STRANGERS AND CO-
PASSENGERS
ARTICLE 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the
common carriers employees through the exercise of the
diligence of a good father of a family could have prevented
or stopped the act or omission.
PILAPIL V. CA, 180 SCRA 546
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded
respondent-defendant's bus bearing No. 409 at San Nicolas,
Iriga City on 16 September 1971 at about 6:00 P.M. While
said bus No. 409 was in due course negotiating the distance
between Iriga City and Naga City, upon reaching the vicinity
of the cemetery of the Municipality of Baao, Camarines Sur,
on the way to Naga City, an unidentified man, a bystander
along said national highway, hurled a stone at the left side
of the bus, which hit petitioner above his left eye. Private
respondent's personnel lost no time in bringing the
petitioner to the provincial hospital in Naga City where he
was confined and treated.
Considering that the sight of his left eye was impaired,
petitioner was taken to Dr. Malabanan of Iriga City where he
was treated for another week. Since there was no
improvement in his left eye's vision, petitioner went to V.
Luna Hospital, Quezon City where he was treated by Dr.
Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and
sustained a permanent scar above the left eye.
Thereupon, petitioner instituted before the Court of First
Instance of Camarines Sur, Branch I an action for recovery
of damages sustained as a result of the stone-throwing
incident. After trial, the court a quo rendered judgment with
the following dispositive part:
Wherefore, judgment is hereby entered:
1. Ordering defendant transportation company to
pay plaintiff Jose Pilapil the sum of P 10,000.00,
Philippine Currency, representing actual and
material damages for causing a permanent scar
on the face and injuring the eye-sight of the
plaintiff;
2. Ordering further defendant transportation
company to pay the sum of P 5,000.00, Philippine
Currency, to the plaintiff as moral and exemplary
damages;
3. Ordering furthermore, defendant transportation
company to reimburse plaintiff the sum of P
300.00 for his medical expenses and attorney's
fees in the sum of P 1,000.00, Philippine
Currency; and
1
4. To pay the costs. SO ORDERED
From the judgment, private respondent appealed to the
Court of Appeals where the appeal was docketed as CA-G.R.
No. 57354R. On 19 October 1979, the Court of Appeals, in a
Special Division of Five, rendered judgment reversing and
setting aside the judgment of the court a quo. Hence the
present petition.
In seeking a reversal of the decision of the Court of Appeals,
petitioner contends that said court has decided the issue not
in accord with law. Specifically, petitioner argues that the
nature of the business of a transportation company requires
the assumption of certain risks, and the stoning of the bus
by a stranger resulting in injury to petitioner-passenger is
one such risk from which the common carrier may not
exempt itself from liability.
We do not agree. In consideration of the right granted to it
by the public to engage in the business of transporting
passengers and goods, a common carrier does not give its
consent to become an insurer of any and all risks to
passengers and goods. It merely undertakes to perform
certain duties to the public as the law imposes, and holds
itself liable for any breach thereof.
Under Article 1733 of the Civil Code, common carriers are
required to observe extraordinary diligence for the safety of
the passenger transported by them, according to all the
circumstances of each case. The requirement of
extraordinary diligence imposed upon common carriers is
restated in Article 1755: "A common carrier is bound to
carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances."
26 kat transpo pt2
Further, in case of death of or injuries to passengers, the law
presumes said common carriers to be at fault or to have
acted negligently. 2
While the law requires the highest degree of diligence from
common carriers in the safe transport of their passengers
and creates a presumption of negligence against them, it
does not, however, make the carrier an insurer of the
absolute safety of its passengers. 3
Article 1755 of the Civil Code qualifies the duty of
extraordinary care, vigilance and precaution in the carriage
of passengers by common carriers to only such as human
care and foresight can provide. what constitutes compliance
with said duty is adjudged with due regard to all the
circumstances.
Article 1756 of the Civil Code, in creating a presumption of
fault or negligence on the part of the common carrier when
its passenger is injured, merely relieves the latter, for the
time being, from introducing evidence to fasten the
negligence on the former, because the presumption stands
in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common
carrier had exercised extraordinary diligence as required by
law in the performance of its contractual obligation, or that
the injury suffered by the passenger was solely due to a
fortuitous event. 4
In fine, we can only infer from the law the intention of the
Code Commission and Congress to curb the recklessness of
drivers and operators of common carriers in the conduct of
their business. Thus, it is clear that neither the law nor the
nature of the business of a transportation company makes it
an insurer of the passenger's safety, but that its liability for
personal injuries sustained by its passenger rests upon its
negligence, its failure to exercise the degree of diligence
that the law requires. 5
Petitioner contends that respondent common carrier failed
to rebut the presumption of negligence against it by proof
on its part that it exercised extraordinary diligence for the
safety of its passengers.
We do not agree. First, as stated earlier, the presumption of
fault or negligence against the carrier is only a disputable
presumption. It gives in where contrary facts are established
proving either that the carrier had exercised the degree of
diligence required by law or the injury suffered by the
passenger was due to a fortuitous event. Where, as in the
instant case, the injury sustained by the petitioner was in no
way due to any defect in the means of transport or in the
method of transporting or to the negligent or willful acts of
private respondent's employees, and therefore involving no
issue of negligence in its duty to provide safe and suitable
cars as well as competent employees, with the injury arising
wholly from causes created by strangers over which the
carrier had no control or even knowledge or could not have
prevented, the presumption is rebutted and the carrier is not
and ought not to be held liable. To rule otherwise would
make the common carrier the insurer of the absolute safety
of its passengers which is not the intention of the
lawmakers.
Second, while as a general rule, common carriers are bound
to exercise extraordinary diligence in the safe transport of
their passengers, it would seem that this is not the standard
by which its liability is to be determined when intervening
acts of strangers is to be determined directly cause the
injury, while the contract of carriage Article 1763 governs:
Article 1763. A common carrier is responsible for
injuries suffered by a passenger on account of the
wilful acts or negligence of other passengers or of
strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a
family could have prevented or stopped the act or
omission.
Clearly under the above provision, a tort committed by a
stranger which causes injury to a passenger does not accord
the latter a cause of action against the carrier. The
negligence for which a common carrier is held responsible is
the negligent omission by the carrier's employees to prevent
the tort from being committed when the same could have
been foreseen and prevented by them. Further, under the
same provision, it is to be noted that when the violation of
the contract is due to the willful acts of strangers, as in the
instant case, the degree of care essential to be exercised by
the common carrier for the protection of its passenger is
only that of a good father of a family.
Petitioner has charged respondent carrier of negligence on
the ground that the injury complained of could have been
prevented by the common carrier if something like mesh-
work grills had covered the windows of its bus.
We do not agree. Although the suggested precaution could
have prevented the injury complained of, the rule of
ordinary care and prudence is not so exacting as to require
one charged with its exercise to take doubtful or
unreasonable precautions to guard against unlawful acts of
strangers. The carrier is not charged with the duty of
providing or maintaining vehicles as to absolutely prevent
any and all injuries to passengers. Where the carrier uses
cars of the most approved type, in general use by others
engaged in the same occupation, and exercises a high
degree of care in maintaining them in suitable condition, the
carrier cannot be charged with negligence in this respect. 6
Finally, petitioner contends that it is to the greater interest
of the State if a carrier were made liable for such stone-
throwing incidents rather than have the bus riding public
lose confidence in the transportation system.
Sad to say, we are not in a position to so hold; such a policy
would be better left to the consideration of Congress which
is empowered to enact laws to protect the public from the
increasing risks and dangers of lawlessness in society.
WHEREFORE, the judgment appealed from is hereby
AFFIRMED. SO ORDERED.
BACHELOR EXPRESS, INC. V. CA, SUPRA
DUTY OF PASSENGER; EFFECT OF CONTRIBUTORY
NEGLIGENCE
ARTICLE 1761. The passenger must observe the diligence
of a good father of a family to avoid injury to himself.
ARTICLE 1762. The contributory negligence of the
passenger does not bar recovery of damages for his death
or injuries, if the proximate cause thereof is the negligence
of the common carrier, but the amount of damages shall be
equitably reduced.
27 kat transpo pt2
Cangco v. MRR, supra
Isaac v. A.L. Ammen, supra
C DAMAGES RECOVERABLE FROM COMMON CARRIERS
IN GENERAL
Art. 1764. Damages in cases comprised in this Section shall
be awarded with the title XVIII of this book concerning
damages. Article 2206 shall also apply to the death of a
passenger caused by the breach of contract by a common
carrier.
Art. 2197. Damages may be:
(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated;
(6) Exemplary or corrective.
ACTUAL OR COMPENSATORY
Art. 2199. Except as provided by law or by stipulation, one
is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory
damages.
Art. 2201. In contracts and quasi-contracts, the damages
for which the obligor who acted in good faith is liable shall
be those that are the natural and probable consequences of
the breach of the obligation, and which the parties have
foreseen or could have reasonably foreseen at the time the
obligation was constituted.
Art. 2203. The party suffering loss or injury must exercise
the diligence of a good father of a family to minimize the
damages resulting from the act or omission in question.
Art. 2206. The amount of damages for death caused by a
crime or quasi-delict shall be at least three thousand pesos,
even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter; such indemnity shall in every case be
assessed and awarded by the court, unless the deceased on
account of permanent physical disability not caused by the
defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to
the provisions of Article 291, the recipient who is not an heir
called to the decedent's inheritance by the law of testate or
intestate succession, may demand support from the person
causing the death, for a period not exceeding five years, the
exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages
for mental anguish by reason of the death of the deceased.
CARIAGA V. LTBCO. AND MRR, 110 PHIL 346
F: Edgardo Cariaga, a fourth year medical student of UST,
was a passenger of an LTBC bus which bumped against a
train of MRR on the national highway crossing a railroad
tract at Laguna de Bay. Cariaga suffered severe injuries on
the head making him unconscious during the first 35 days
after the accident, reducing his intelligence by 50% and
rendering him in a helpless condition, virtually invalid, both
physically and mentally. LTBC paid all medical expenses plus
allowance during convalescence. Later, Cariaga's parents
brought an action to recover damages from LTBC and MRR in
the amount of P 312,000 as actual, compensatory, moral
and exemplary damages. LTBC disclaimed liability and filed
a cross-complaint against MRR for recovery of
expenses paid by it to the plaintiff placing MRR negligent for
not providing a crossing bar at the national highway railroad
track. Laguna CFI dismissed the cross-complaint against
MRR and held LTBC liable
for P 10,000 as compensatory damages with interest.
Plaintiff and LTBC appealed.
Held: The train driver was not negligent. He sounded the
train's whistle four times before the intersection, which were
heard even by the bus passengers. The bus did not slow
down but instead the bus driver tried to pass the
intersection before the train. In addition, another LTBC bus
which arrived ahead of the bus in this case, at the crossing
heeded the train whistle by stopping and allowing the train
to pass. Clearly, the bus driver was negligent in totally
disregarding the
warning. On the other hand, MRR cannot be held to be
contributorily negligent because LTBC was not able to
discharge its burden of proof when it alleged that MRR
violated its charter by failing to ring the locomotive bell.
The evidence shows that Ed C. had been rendered physically
and mentally invalid by the accident. He suffered head
injuries specifically a
fractured right forehead necessitating the removal of all the
right frontal lobe of his brain, which reduced his intelligence
by 50% so that he can no longer finish his medical course. In
addition, he has to lead a quiet and retired life because if
the tantalum plate which replaced a portion of his skull is
pressed in or dented, it would cause his death.
LTBC admitted that under Art. 2201, it is liable for damages
that are the natural and probable consequences of the
breach and which the parties had foreseen or could have
reasonably foreseen at the time the obligation was
constituted. It however claims that the said provision
contemplates only the medical, hospital, and other
expenses in the total sum of P 17,719.75. The SC ruled that
the income which Ed could earn if he should finish the
medical course, and pass the corresponding board exams
must be deemed included because they could have
reasonably been foreseen by the parties at the time he
boarded the bus.
While his scholastic record may not be first rate, it is
sufficient to justify the assumption that he could have
finished his course and would have passed the board exams
in due time. As regards the income that he could possibly
earn as a doctor, P 300 (accdg. to LTBC witness, Dr. Doria)
could easily be expected as minimum monthly income of Ed
C. had he finished his studies. Compensatory damages
should be increased to P 25,000. The claim for moral
damages could not be
granted because Art. 2219 enumerates the instances when
moral damages may be recovered and the present case
does not fall under any of them, even par.
(2) thereof because this case is not one of quasidelict and
could not be considered as such because of a pre-existing
contractual relation between Ed C. and LTBC. Neither could
LTBC be liable under Art. 2220
because it did not act fraudulently or in bad faith. Attorney's
fees could also not be granted because this case does not
fall under Art. 2208.
The claim by the parents for actual and compensatory
damages is also without merit because the present action is
based upon a breach of contract of carriage and the parents
were not a party thereto, and were not themselves injured
as a result of the collision.
PAN AM V. IAC, SUPRA
28 kat transpo pt2
VILLA-REY V. CA, 31 SCRA 511
Facts: Policarpio Quintos, Jr. boarded a Villa Rey Transit bus
at Pangasinan which was bound for Manila. He was seated
at the first seat on the right side of the bus. The bus met an
accident at a bridge in Pampanga. It hit the back of a
bullcart full of hay while it was crossing the said bridge.
Unfortunately, there was a bamboo pole tied to the cart and
the end of this bamboo pole penetrated through the wind
shield of the bus and hit the face of Quintos. A La Mallorca
bus was passing by the same bridge and helped bring
Quintos, Jr. and those who were on board the bullcart to the
hospital. The bamboo pole caused a severe injury to his eye
and head which later on resulted into his death.
A complaint was filed by the sisters of Quintos to
recover damages from Villa Rey Transit. The Court of First
Instance held that Villa Rey Transit is liable to pay actual or
compensatory damages in the amount of 63,750 pesos as
well as attorneys fees. Villa Rey Transit appealed the case
and the Court of Appeals affirmed the decision of the lower
court. Hence this petition.
Issue: Whether or not the amount awarded as damages to
the heirs of Quintos is proper.
Held: The Court modified the award of damages to the heirs
of Quintos. It explained that the award of damages is
computed with regard to the life expectancy of the
deceased and the rate of losses sustained by the deceased
sisters. The court emphasized that the life expectancy of the
victim is very important in the computation of actual
damages however it is not the sole basis for computation of
the said amount. Expenses shall be deducted from the
amount determined to be the monthly income of the
deceased. It is proper to deduct living expenses that the
victim would have also incurred if he were alive.
Therefore the award of actual damages shall be
33,333 pesos with regard to Quintos possible earnings, the
amount of medical and burial expenses, and 12,000 pesos
pursuant to Articles 104 and 107 of the RPC in relation to
Article 2206 of the NCC. In addition to this, attorneys fees
shall be awarded as well.
PAL v. CA, 185 SCRA 110
F: In 1960, Nicanor Padilla boarded the PAL flight from Iloilo
to Manila. The plane crashed on Mt. Baco, Mindoro. The
plane, a PI-C133, was manufactured in 1942 and was
acquired by PAL in 1948. It had been
certified airworthy by the Civil Aeronautics Administration.
As a result of her son's death, Mrs. Padilla demanded P
600,000 as actual and
compensatory damages plus exemplary damages and P
60,000 attorney's fees. Prior to his death, Nicanor Padilla
was 29 years
old, President and General Manager of Padilla Shipping Co.
at Iloilo City, and a legal assistant of the Padilla Law Office.
Upon learning of the death of her son, she suffered shock
and mental anguish, because her son who was still single
was living with her. Nicanor had life insurance of P 20,000,
the proceeds of which were paid to his sister. Eduardo Mate
of the Allied Overseas Trading Co. testified that the
deceased was one of the incorporators of the co. and also its
VP with a monthly
salary of P 455. Isaac Reyes, auditor of Padilla Shipping Co.,
declared that the deceased was President and General
Manager and received a salary of P 1,500 per month.
The RTC and the CA awarded damages of P 477,000 as
award for the expected income of the deceased, P 10,000 as
moral damages; P 10,000 as attorney's fees and to pay the
costs. PAL appealed the decision since accdg. to it, the court
erred in computing the awarded indemnity based on the life
expectancy of the deceased rather than on the life
expectancy of the mother. Accdg. to it, the life expectancy
of the deceased or of the beneficiary, whichever is shorter,
is used in computing for amount of damages.
Held: Under Arts. 1764 and Article 2206 (1), the award of
damages for death is computed on the basis of the life
expectancy of the deceased and not of the beneficiary. In
this case, the lower courts determined
the deceased gross annual income to be P 23,100 less P
9,200 as living expenses, resulting in a net income of P
13,900. The lower court allowed the deceased a life
expectancy of 30 years. Multiplying
his annual net income by his life expectancy of 30 years, the
product is P 417,000, which is the death indemnity due to
his mother and only forced heir. Because of the long delay in
this case, the mother already died without being able to
receive the indemnity she deserved. PAL is ordered to pay
her heirs the death indemnity with legal rate of interest of
6% per annum.
MORAL
Art. 2217. Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate
result of the defendant's wrongful act for omission.
Art. 2216. No proof of pecuniary loss is necessary in order
that moral, nominal, temperate, liquidated or exemplary
damages, may be adjudicated. The assessment of such
damages, except liquidated ones, is left to the discretion of
the court, according to the circumstances of each case.
Art. 2219. Moral damages may be recovered in the following
and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28,
29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or
abused, referred to in No. 3 of this article, may also recover
moral damages.
The spouse, descendants, ascendants, and brothers and
sisters may bring the action mentioned in No. 9 of this
article, in the order named.
Art. 2220. Willful injury to property may be a legal ground
for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.
Fores v. Miranda, supra
AIR FRANCE V. CARRASCOSO, 18 SCRA 155
In March 1958, Rafael Carrascoso and several other Filipinos
were tourists en route to Rome from Manila. Carrascoso was
issued a first class round trip ticket by Air France. But during
a stop-over in Bangkok, he was asked by the plane manager
of Air France to vacate his seat because a white man
allegedly has a better right than him. Carrascoso
protested but when things got heated and upon advise of
other Filipinos on board, Carrascoso gave up his seat and
was transferred to the planes tourist class.
After their tourist trip when Carrascoso was already in the
Philippines, he sued Air France for damages for the
29 kat transpo pt2
embarrassment he suffered during his trip. In court,
Carrascoso testified, among others, that he when he was
forced to take the tourist class, he went to the planes
pantry where he was approached by a plane purser who told
him that he noted in the planes journal the following:
First-class passenger was forced to go to the tourist class
against his will, and that the captain refused to intervene
The said testimony was admitted in favor of Carrascoso. The
trial court eventually awarded damages in favor of
Carrascoso. This was affirmed by the Court of Appeals.
Air France is assailing the decision of the trial court and the
CA. It avers that the issuance of a first class ticket to
Carrascoso was not an assurance that he will be seated in
first class because allegedly in truth and in fact, that was
not the true intent between the parties.
Air France also questioned the admissibility of Carrascosos
testimony regarding the note made by the purser because
the said note was never presented in court.
ISSUE 1: Whether or not Air France is liable for damages
and on what basis.
ISSUE 2: Whether or not the testimony of Carrasoso
regarding the note which was not presented in court is
admissible in evidence.
HELD 1: Yes. It appears that Air Frances liability is based on
culpa-contractual and on culpa aquiliana.
Culpa Contractual
There exists a contract of carriage between Air France and
Carrascoso. There was a contract to furnish Carrasocoso a
first class passage; Second, That said contract was breached
when Air France failed to furnish first class transportation at
Bangkok; and Third, that there was bad faith when Air
Frances employee compelled Carrascoso to leave his first
class accommodation berth after he was already,
seated and to take a seat in the tourist class, by reason of
which he suffered inconvenience, embarrassments and
humiliations, thereby causing him mental anguish, serious
anxiety, wounded feelings and social humiliation, resulting
in moral damages.
The Supreme Court did not give credence to Air Frances
claim that the issuance of a first class ticket to a passenger
is not an assurance that he will be given a first class seat.
Such claim is simply incredible.
Culpa Aquiliana
Here, the SC ruled, even though there is a contract of
carriage between Air France and Carrascoso, there is also a
tortuous act based on culpa aquiliana. Passengers do not
contract merely for transportation. They have a right to be
treated by the carriers employees with kindness, respect,
courtesy and due consideration. They are entitled to be
protected against personal misconduct, injurious language,
indignities and abuses from such employees. So it is, that
any rule or discourteous conduct on the part of employees
towards a passenger gives the latter an action for damages
against the carrier. Air Frances contract with Carrascoso is
one attended with public duty. The stress of Carrascosos
action is placed upon his wrongful expulsion. This is a
violation of public duty by the Air France a case of quasi-
delict. Damages are proper.
HELD: 2: Yes. The testimony of Carrascoso must be
admitted based on res gestae. The subject of inquiry is not
the entry, but the ouster incident. Testimony on the entry
does not come within the proscription of the best evidence
rule. Such testimony is admissible. Besides, when the
dialogue between Carrascoso and the purser happened, the
impact of the startling occurrence was still fresh and
continued to be felt. The excitement had not as yet died
down. Statements then, in this environment, are admissible
as part of the res gestae. The utterance of the purser
regarding his entry in the notebook was spontaneous, and
related to the circumstances of the ouster incident. Its
trustworthiness has been guaranteed. It thus escapes the
operation of the hearsay rule. It forms part of the res gestae.
LOPEZ V. PAN AM, 16 SCRA 431
F: Plaintiffs made first class reservations with defendant air
carrier, in its Tokyo-SF flight, which reservation was
confirmed and first class tickets issued; but defendant's
agent by mistake canceled plaintiff's reservations and
thereafter deliberately withheld from plaintiffs the
information, letting them go on believing that their first
class reservations stood valid and confirmed, expecting
some cancellations of bookings would be made before the
flight time, which failed to occur.
Upon arrival in Tokyo, only then were the plaintiffs informed
that there were no accommodations for them in the first
class, and they were constrained, due to pressing
engagements in the US, to take the flight as tourist
passengers, which they did under protest. Plaintiffs sued the
defendant for moral and exemplary damages. The Rizal CFI
awarded
the plaintiffs moral and exemplary damages and attorney's
fees. Upon plaintiff's MFR, said damages were increased in
amount.
Held: In so misleading the plaintiffs into purchasing first
class tickets in conviction that they had confirmed
reservations when in fact they had none, defendant willfully
and knowingly placed itself into position of
having breached its contract with plaintiffs. Such actions of
the defendant may indeed have been prompted by nothing
more than the promotion of its self-interest in holding on to
plaintiffs as passengers and foreclosing on their chances to
seek the service of other airlines that may have been able
to afford to them first class accommodations. All the same,
in legal contemplation, such conduct already amounts to
action in BF. For bad faith means a breach of a known duty
through some motive of interest of ill will. It may not be
humiliating to travel as tourist passengers, but it is
humiliating to be compelled to travel as such, contrary to
what is rightfully to be expected from the contractual
undertaking.
Plaintiffs are entitled to moral damages. Considering their
official, political, social and financial standing, they are
awarded P 200,000 as moral damages, P 75,000 as
exemplary damages all with interest, and P 50,000 as
attorney's fees considering the standing of plaintiff's
counsel.
ORTIGAS V. LUFTHANSA, 64 SCRA 610
J. Barredo
Facts: Francisco Ortigas, and defendant Lufthansa German
Airlines, appealed from the decision of the Court of First
Instance of Manila, condemning the defendant to pay
plaintiff an indemnity for the former's failure to "comply with
its obligation to give first class accommodation to a Filipino
passenger holding a first class ticket," This was due to
giving of the space instead to a Belgian and the improper
conduct of its agents in dealing with him which was filled
with discrimination.
During the trial, there were several postponements of the
trial from both sides. Three hearings were postponed on the
request of the plaintiffs, 4 on the request of both parties,
and 10 on the request of respondents.
Due to so many postponements made by the respondent,
including the no-show of their European employees as
witnesses, the case tilted out of their favor. One of their
witnesses was stricken from the list due to his non-
appearance in the day that the cross-exam on him was to be
finished and the judge moved for a finality regarding the
postponements (ie. no postponements were to be made
again)
30 kat transpo pt2
Ortigas claimed that while in Rome, the discrimination
against him took place. Moreover, when he asked for a seat
change to first class during the stop overs, he wasnt given
any. He was only given the option when he was already in
Hong Kong, about 3 hours only from Manila.
Issues:
1. WON the lower court acted in grave abuse of discretion
when it denied the defendants motion for postponement on
Sept 24, 1966.
2. WON the lower court erred in striking out the testimony of
one of the defendants witnesses even if his testimony was
not finished
3. WON the lower court erred in making the defendant pay
indemnities.
Held: No to all. Judgment modified raising damages
from 100k to 150k.
Ratio:
1. The case had been pending for about three years and had
actually suffered during that period even more than the
usually permissible number of continuances, quite often to
suit the convenience of defendant's counsel. Notice of the
September 28, 1966 schedule had been served on counsel
the month previous. It must be assumed that due
preparations and arrangements were to be made since the
receipt of that notice to insure the presence in Manila for the
expected witnesses on the date set. Under the
circumstances, the excuse given by defendant that the
witnesses could not leave their respective stations and
places of work to attend the trial is plainly unacceptable.
There was enough time and opportunity for defendant to
have made the corresponding adjustments in
the assignments of its personnel so as to enable its
witnesses to be in court.
As it is, there was actually no basis at all for the exercise of
discretion on the part of the trial judge in a manner
favorable to it. Trials may be postponed because of the
absence of evidence only when such absence is justified.
Mere absence is not a justification in itself. Section 4 of Rule
22 is sufficiently clear on this point. It provides that "A
motion to postpone a trial on the ground of absence of
evidence can be granted only upon affidavit showing the
materiality of evidence expected to be obtained, and that
due diligence has been used to procure it." This means that
it must be shown to the court that due diligence had been
exercised in either securing the presence of the evidence
(witnesses) or preventing the absence thereof.
Indeed, even if such reason were given earlier on September
24, 1966 the court would have been as well justified in
denying the requested postponement. We cannot see any
reason why, despite its having knowledge of the date of the
hearing about a month before, defendant did not see to it
that its expected witnesses were not assigned to do duty on
the day they were supposed to appear in court. We cannot
believe Lufthansa could be so undermanned that such a
simple adjustment of its personnel had to be "impossible."
2. The right of a party to cross-examine the witnesses of his
adversary is invaluable as it is inviolable in civil cases, no
less than the right of the accused in criminal cases. The
express recognition of such right of the accused in the
Constitution does not render the right of parties in civil
cases less constitutionally based, for it is an indispensable
part of the due process guaranteed by the fundamental law.
Subject to appropriate supervision by the judge in order to
avoid unnecessary delays on account of its being unduly
protracted and to needed injunctions protective of the right
of the witness against self-incrimination and oppressive and
unwarranted harassment and embarrassment, a party is
absolutely entitled to a full cross-examination as prescribed
in Section 8 of Rule 132 thus: "Upon the termination of the
direct examination, the witness may be cross-examined by
the adverse party as to any matters stated in the direct
examination, or connected therewith, with sufficient fullness
and freedom to test his accuracy and truthfulness and
freedom from interest or bias, or the reverse, and to elicit
all important facts bearing upon the issue." Until such cross-
examination has been finished, the testimony of the witness
cannot be considered as complete and may not, therefore,
be allowed to form part of the evidence to be considered by
the court in deciding the case.
Oral testimony may be taken into account only when it
is complete, that is, if the witness has been wholly cross-
examined by the adverse party or the right to cross-examine
is lost wholly or in part thru the fault of such adverse party.
But when cross-examination is not and cannot be done or
completed due to causes attributable to the party offering
the witness, the uncompleted testimony is thereby rendered
incompetent.
In the case at bar, however, the Supreme Court has not
opted not to rely exclusively on the foregoing
considerations. In order to satisfy as to whether or not
defendant stands to be irreparably prejudiced by the
impugned action of the trial court relative to the testimony
of Lazzari, the justices have just the same gone over the
transcript thereof. After considering the same, they claimed
that even his direct testimony, without taking into account
anymore his answers to the cross-examination questions of
counsel for plaintiff, cannot be of much weight in
establishing the defenses in defendant's answer.
However, the trial court's action cannot be categorized as
arbitrary or oppressive or as amounting to a grave abuse of
discretion. To be sure, this second order was but a logical
consequence of the previous order denying defendant's
motion for postponement. With such denial, the next thing
in order was to declare the presentation of evidence of the
defendant terminated. Accordingly, it was necessary to
determine what evidence could be considered to be for the
defendant. And so when counsel for plaintiff asked the court
to strike out the testimony so far given by Lazarri, there was
practically no alternative for the court but to grant the
same. Indeed, defendant's counsel could not and did not
offer any objection thereto.
3. In the light of all the foregoing, there can be no doubt as
to the right of Ortigas to damages, both moral and
exemplary. Precedents We have consistently adhered to so
dictate.
Lopez- According to the Court, such omission placed
plaintiffs in a predicament that enabled the company to
keep the plaintiffs as their passengers in the tourist class,
thereby retaining the business and promoting the
company's self-interest at the expense of, embarrassment,
discomfort and humiliation on the part of the plaintiffs.
These precedents, as may be seen, apply four-square to
herein plaintiffs case. Defendant's liability for willful and
wanton breach of its contract of carriage with plaintiff is,
therefore, indubitable.
PAL V. MIANO, 242 SCRA 235
CATHAY PACIFIC V. VASQUEZ, 399 SCRA 207
FACTS: In respondents return flight to Manila from
Hongkong, they were deprived of their original seats in
Business Class with their companions because of
overbooking. Since respondents were privileged members,
their seats were upgraded to First Class. Respondents
refused but eventually persuaded to accept it. Upon return
to Manila, they demanded that they be indemnified in the
amount of P1million for the humiliation and
embarrassment caused by its employees. Petitioners
Country Manager failed to respond. Respondents instituted
action for damages. The RTC ruled in favor of respondents.
The Court of Appeals affirmed the RTC decision with
modification in the award of damages.
31 kat transpo pt2
ISSUE: Whether or not the petitioners (1) breached the
contract of carriage, (2) acted with fraud and (3) were liable
for damages.
RULING: (1) YES. Although respondents have the priority of
upgrading their seats, such priority may be waived, as what
respondents did. It should have not been imposed on them
over their vehement objection.
(2) NO. There was no evident bad faith or fraud in upgrade
of seat neither on overbooking of flight as it is within 10%
tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in
the amount of P5,000.00. Moral damages (Art.2220, NCC)
and attorneys fees were set aside and deleted from the
Court of Appeals ruling.
NORTHWEST AIRLINES INC. V. SPS. HESHAN,
G.R. NO. 179117, 3 FEBRUARY 2010
CARPIO MORALES, J.:
In July 1998, Edward Heshan (Edward) purchased three (3)
roundtrip tickets from Northwest Airlines, Inc. (petitioner) for
him, his wife Nelia Heshan (Nelia) and daughter Dara
Ganessa Heshan (Dara) for their trip from Manila to St.
Louis, Missouri, USA and back to attend an ice skating
competition where then seven yearold Dara was to
participate.[1]
When Daras participation in the ice skating event ended on
August 7, 1998, the Heshans proceeded to the airport to
take the connecting flight from St. Louis to Memphis on their
way to Los Angeles. At the airport, the Heshans first
checked-in their luggage at the airports curbside check-in
near the entrance.[2] Since they arrived three hours early for
their 6:05 p.m. flight (Flight No. 972M), the Heshans whiled
away the time at a nearby coffee shop. At 5:15 p.m. when
the check-in counter opened, Edward took to the line where
he was second in the queue. When his turn came and
presented the tickets to petitioners customer service agent
Ken Carns (Carns) to get the boarding passes, he was asked
to step aside and wait to be called again.[3]
After all the other departing passengers were given their
boarding passes, the Heshans were told to board the plane
without any boarding pass given to them and to just occupy
open seats therein. Inside the plane, the Heshans noticed
that only one vacant passenger seat was available, which
was offered to Dara, while Edward and Nelia were directed
to occupy two folding seats located at the rear portion of the
plane. To respondents, the two folding seats were crew seats
intended for the stewardesses.[4]
Upset that there were not enough passenger seats for them,
the Heshans complained to the cabin crew about the matter
but were told that if they did not like to occupy the seats,
they were free to disembark from the plane. And disembark
they did, complaining thereafter to Carns about their
situation. Petitioners plane then departed
for Memphis without respondents onboard.[5]
The Heshans were later endorsed to and carried by Trans
World Airways to Los Angeles. Respondents arrived in Los
Angeles at 10:30 p.m. of the same day but had to wait for
three hours at the airport to retrieve their luggage from
petitioners Flight No. 972M.[6] Respondents stayed for five
days more in the U.S. before going back home to Manila.[7]
On September 24, 1998, respondents sent a letter to
petitioner to demand indemnification for the breach of
contract of carriage.[8] Via letter of December 4, 1998,
petitioner replied that respondents were prohibited to board
Flight No. 972M for verbally abus[ing] [the] flight crew. [9] As
their demand remained unheeded, respondents filed a
complaint for breach of contract with damages at the
Regional Trial Court (RTC) of Quezon City.[10]

From the depositions of petitioners employees Carns, Mylan
Brown (Brown) and Melissa Seipel (Seipel), the following
version is gathered:
The Heshans did not have reservations for particular seats
on the flight. When they requested that they be seated
together, Carns denied the request and explained that other
passengers had pre-selected seats and that the
computerized seating system did not reflect that the request
could be accommodated at the time. Carns nonetheless
assured the Heshans that they would be able to board the
plane and be seated accordingly, as he in fact instructed
them ten minutes before the planes departure, to board the
plane even without boarding passes and to occupy open
seats therein.[11]
By Seipels claim, as the Heshans were upset upon learning
that they were not seated together on the plane, she told
them that she would request other passengers to switch
places to accommodate their demand; that she never had a
chance to try to carry out their demand, however, as she
first had to find space for their bags in the overhead
compartment; and that the Heshans cursed her which
compelled her to seek assistance from Brown in dealing with
them.
Brown averred that she went to the back portion of the
plane to help out but she was brushed aside by Nelia who
was cursing them as she stormed out of the plane followed
by Edward and Dara.[13]
Petitioner denied that the Heshans (hereafter respondents)
were told to occupy folding seats or crew seats since
[Federal Aviation Authority] regulations say no passengers
are to sit there. As for respondents not having been given
boarding passes, petitioner asserted that that does not in
itself mean that the flight was overbooked, for [t]his is done
on last minute boarding when flights are full and in order to
get passengers on their way and to get the plane out on
time. This is acceptable procedure.[15]
Branch 96 of the RTC, by Decision of August 20,
2002, rendered judgment in favor of respondents, disposing
as follows:
WHEREFORE, judgment is rendered ordering [petitioner]
Northwest Airlines, Inc. to pay [respondents] Edward J.
Heshan, Nelia L. Heshan and Dara Ganessa L. Heshan the
following:
1. P3,000,000.00, as moral damages;
2. P500,000.00, as exemplary damages;
3. A sum equivalent of 20% of the foregoing amounts, as
attorneys fees; and,
4. Costs of suit. SO ORDERED.[17]
In finding for respondents, the trial court noted:
[T]hat the [respondents] held confirmed reservations for
the St Louis-Memphis leg of their return trip to the
Philippines is not disputed. As such, they were entitled as of
right under their contract to be accommodated in the flight,
regardless of whether they had selected their seats in
advance or not. They had arrived at the airport early to
make sure of their seating together, and, in fact, Edward
was second in the queue for boarding passes. Yet, Edward
was unceremoniously sidelined and curtly told to wait
without any explanations why. His concerned seeking for
explanations was repeatedly rebuffed by the airline
employees. When, at last, they were told to board the
aircraft although they had not yet been issued
boarding passes, which they thought to be highly
unusual, they soon discovered, to their dismay, that
the plane was fully booked, with only one seat left for
the 3 of them. Edward and Nelia rejected the offer [to
32 kat transpo pt2
take] the crew seats. [Respondents] were thus forced
to disembark.
On appeal, the Court of Appeals, by Decision of June 22,
2007, sustained the trial courts findings but reduced the
award of moral and exemplary damages to P2 million
and P300,000, respectively. In affirming the findings of the
trial court, the appellate court held:
[I]t is clear that the only instances [sic] when the [petitioner]
and its agents allow its passengers to board the plane
without any boarding pass is when the flights are full and
the plane is running late. Taking into account the fact that
the [respondents] arrived at the airport early, checked-in
their baggage before hand and were in fact at the gates of
the boarding area on time, thus, it could not be said that
they can fall under the exceptional circumstance [sic]. It
bears stressing at this juncture that it becomes a highly
irregular situation that despite the fact that the
[respondents] showed up on time at the boarding
area[,] they were made to go in last and sans any
boarding passes. Thus, We hold that it can be logically
inferred that the reason why no boarding passes
were immediately issued to the [respondents] is
because Flight 972 from St. Louis to Memphis is full
and the [respondents] were bumped off from their
flight.
Reconsideration having been denied by the appellate court,
petitioner filed the present petition for review upon the
issues of whether the appellate court
I . . . ERRED IN RULING THAT RESPONDENTS WERE ENTITLED
TO MORAL DAMAGES
II . . . ERRED IN RULING THAT RESPONDENTS WERE
ENTITLED TO EXEMPLARY DAMAGES
III. . . ERRED IN RULING THAT RESPONDENTS WERE
ENTITLED TO ATTORNEYS FEES
IV. . .ASSUMING ARGUENDO THAT RESPONDENTS WERE
ENTITLED TO AN AWARD OF DAMAGES, [ERRED IN
AWARDING EXCESSIVE DAMAGES TO RESPONDENTS] .
V . . . ERRED IN NOT FINDING FOR [IT] ON ITS
COUNTERCLAIM.
To petitioner, the present petition offers compelling reasons
to again review the congruent factual findings of the lower
courts which, to it, are contrary to the evidence on
record; that the lower courts disregarded vital testimonies of
its witnesses; that the appellate court premised its decision
on a misapprehension of facts and failed to consider certain
relevant facts which, if properly taken into account, will
justify a different conclusion; that the appellate court made
several inferences which were manifestly mistaken and
absurd; and that the appellate court exercised grave abuse
of discretion in the appreciation of facts.
Petitioner maintains that it did not violate the contract of
carriage since respondents were eventually transported
from Memphis to Los Angeles, albeit via another airline, and
that respondents made no claim of having sustained injury
during the carriage.
Petitioner goes on to posit that if indeed crew seats were
offered to respondents, its crew would have had nowhere to
sit and the plane would not have been able to depart, and
that in reality, respondents voluntarily disembarked from the
aircraft because they were not willing to wait to be seated
together. At all events, petitioner finds the amount of
damages imposed by the appellate court excessive and
unprecedented and needing substantial reduction.
In their Comment, respondents counter that since the
petition is predicated on questions of facts and the appellate
court affirmed the trial courts factual findings, these are
entitled to great weight and respect.[27]
Respondents thus maintain that petitioner was guilty of
breach of contract. They cite Singapore Airlines v.
Fernandez,[28] which ruled:
[W]hen an airline issues a ticket to a
passenger, confirmed for a particular flight on a certain
date, a contract of carriage arises. The passenger then has
every right to expect that he be transported on that
flight and on that date. If he does not, then the carrier
opens itself to a suit for a breach of contract of carriage.
The petition fails. As has repeatedly been underscored,
in petitions for review on certiorari, the general rule is that
only questions of law may be raised by the parties and
passed upon by the Court. Factual findings of the appellate
court are generally binding on the Court, especially when in
complete accord with the findings of the trial court, as in the
present case, save for some recognized exceptions. The
issues raised by petitioner are predicated on the
appreciation of factual issues. In weighing the evidence of
the parties, the trial court found respondents more credible.
An examination of the evidence presented by petitioner
shows that it consisted only of depositions of its
witnesses. It had in its possession and disposition pertinent
documents such as the flight manifest and the planes actual
seating capacity and layout which could have clearly refuted
respondents claims that there were not enough passenger
seats available for them. It inexplicably failed to offer even a
single piece of documentary evidence. The Court thus
believes that if at least the cited documentary evidence had
been produced, it would have been adverse to petitioners
case.
More. Petitioner failed to satisfactorily explain why it did not
issue boarding passes to respondents who were confirmed
passengers, even after they had checked-in their luggage
three hours earlier. That respondents did not reserve seats
prior to checking-in did not excuse the non-issuance of
boarding passes.
From Carns following testimony, viz:
Q. Now you mentioned open seats, Mr. Carns, can you tell
us what the phrase or term open seats mean?
A. Well, about 10 minutes before boarding time when we
cancel those who do not take reserve seats, we know how
many passengers are on the plane and we just tell the other
passengers to take whatever seat is available at that time,
[32]
it is gathered that respondents were made to wait for
last-minute cancellations before they were accommodated
onto the plane. This, coupled with petitioners failure to issue
respondents their boarding passes and the eleventh-hour
directive for them to embark, reinforces the impression that
the flight was overbooked.
Petitioners assertion that respondents disembarked from the
plane when their request to be seated together was ignored
does not impress. The observation of the appellate
court, viz:
x x x x [T]he fact that the Appellees still boarded the plane
ten (10) minutes prior to the departure time, despite
knowing that they would be seated apart, is a clear
manifestation of the Appellees willingness to abandon their
request and just board the plane in order to catch their
flight. But as it turns out, there were not enough seats for
the three of them as aptly found by the Court a quo, to
which We subscribed [sic]. x x x x, merits the Courts
concurrence.
Nonetheless, the petition is in part meritorious. There is a
need to substantially reduce the moral damages awarded by
the appellate court. While courts are given discretion to
determine the amount of damages to be awarded, it is
limited by the principle that the amount awarded should not
be palpably and scandalously excessive.
33 kat transpo pt2
Moral damages are neither intended to impose a penalty to
the wrongdoer, nor to enrich the claimant. Taking into
consideration the facts and circumstances attendant to the
case, an award to respondents of P500,000, instead
of P2,000,000, as moral damages is to the Court reasonable.
WHEREFORE, the assailed Decision and Resolution of the
Court of Appeals are AFFIRMED with MODIFICATION. The
award of moral damages is reduced to P500,000. In all other
respects, the Decision is AFFIRMED.
EXEMPLARY
Art. 2229. Exemplary or corrective damages are
imposed, by way of example or correction for the
public good, in addition to the moral, temperate,
liquidated or compensatory damages.
Art. 2232. In contracts and quasi-contracts, the court
may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner.
Art. 2233. Exemplary damages cannot be recovered
as a matter of right; the court will decide whether or
not they should be adjudicated.
MECENAS V. COURT OF APPEALS, 180 SCRA 83
Facts: On the morning of 22 April 1980, the M/T Tacloban
City, a barge-type oil tanker owned and operated by
Philippine National Oil Company (PNOC), having unloaded its
cargo of petroleum products, left Negros Occidental and
headed towards Bataan. On the same day, the M/V Don
Juan, an interisland vessel owned and operated by Negros
Navigation, left Manila bound for Bacolod with 750
passengers listed in its manifest, and a complete set of
officers and crew members. On the evening of the same
day, the two vessels became aware of each others
presence in the area by visual contact at a distance of 6
miles. They were fully aware that if they continued on their
course, they will meet head on. Don Juan steered to the
right; Tacloban City continued its course to the left. The two
vessels thus collided and as a result, the Don Juan sank
and hundreds of its passengers perished. Petitioners who
were the children of the spouses Perfecto and Sofia
Mecenas, their parents among the passengers whose bodies
were never found, filed a complaint against Negros
Navigation and its Captain Roger Santisteban. The trial court
ruled that both vessels were at fault in the collision and
awarded petitioners actual or compensatory damages,
which was reduced on appeal. Petitioners likewise claim for
exemplary damages.
Issue: Whether or not petitioners herein are also entitled to
exemplary damages.
Ruling: YES.
In respect of the petitioners claim for exemplary damages,
it is only necessary to refer to Article 2232 of the Civil Code:
Article 2332. In contracts and quasi-contracts, the court may
exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.
There is, therefore, no question that the Don Juan was at
least as negligent as the M/T Tacloban City in the events
leading up to the collision and the sinking of the Don Juan.
The remaining question is whether the negligence on the
part of the Don Juan reached that level of recklessness or
gross negligence that our Civil Code requires for the
imposition of exemplary damages. Our own review of the
record in the case at bar requires us to answer this in the
affirmative.
M/S Don Juans Master, Capt. Rogelio Santisteban, was
playing mahjong before and up to the time of collision.
Moreover, after the collision, he failed to institute
appropriate measures to delay the sinking M/S Don Juan and
to supervise properly the execution of his order of
abandonship. As regards the officer on watch, Senior 3rd
Mate Rogelio Devera, he admitted that he failed or did not
call or inform Capt. Santisteban of the imminent danger of
collision and of the actual collision itself. Also, he failed to
assist his master to prevent the fast sinking of the ship. The
record also indicates that Auxiliary Chief Mate Antonio
Labordo displayed laxity in maintaining order among the
passengers after the collision. There is also evidence that
the Don Juan was carrying more passengers than she had
been certified as allowed to carry.
Exemplary damages are designed by our civil law to permit
the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or
deterrents against such behaviour. In requiring compliance
with the standard which is in fact that of the highest
possible degree of diligence, from common carriers and in
creating a presumption of negligence against them, the law
seeks to compel them to control their employees, to tame
their reckless instincts and to force them to take adequate
care of human beings and their property. The Court will take
judicial notice of the dreadful regularity with which grievous
maritime disasters occur in our waters with massive loss of
life. The bulk of our population is too poor to afford domestic
air transportation. So it is that notwithstanding the frequent
sinking of passenger vessels in our waters, crowds of people
continue to travel by sea. This Court is prepared to use the
instruments given to it by the law for securing the ends of
law and public policy. One of those instruments is the
institution of exemplary damages; one of those ends, of
special importance in an archipelagic state like the
Philippines, is the safe and reliable carriage of people and
goods by sea. Considering the foregoing, we believe that an
additional award in the amount of P200,000.00 as
exemplary damages is quite modest.
NOMINAL, TEMPERATE AND LIQUIDATED
Art. 2221. Nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered by him.
Art. 2224. Temperate or moderate damages, which are
more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary
loss has been suffered but its amount can not, from the
nature of the case, be provided with certainty.
Art. 2226. Liquidated damages are those agreed upon by
the parties to a contract, to be paid in case of breach
thereof.
ALITALIA V. IAC, 192 SCRA 9
F: Dr. Felipa Pablo, an associate professor of UP and a
research grantee of the Phil. Atomic Energy Association was
invited to take part at a meeting sponsored by the United
Nations in Ispra, Italy. She
accepted the invitation and was then scheduled by the
organizers to read her paper. She was to be the 2nd speaker
on the first day of the meeting. She then booked passage
with Alitalia. She arrived in Milan on
the day before the meeting in accordance with the itinerary
set for her by Alitalia but her luggage was delayed as it was
in one of the succeeding flights from Rome to Milan.
However, the other flights from Rome did not have her
baggage on board. Her luggage consisted of 2 suitcases--
one for her clothing and personal items and the other for her
scientific papers, slides and other research material.
Feeling desperate, she went to Rome to try to locate her
bags. She inquired about her suitcases in the international
34 kat transpo pt2
and domestic airports and filled out the forms required by
Alitalia for people in her
predicament. However, her baggage could not be found.
Discouraged, she returned to Manila without attending the
meeting in Ispra, Italy.
In Manila, she demanded that Alitalia make reparation for
damages suffered by her. Alitalia offered her free airline
tickets which she rejected while instituting this action. Her
bags were located and
forwarded to Ispra but only on the day after her scheduled
appearance. As she was no longer there to accept delivery,
her bags were not actually returned to her until after 11
months. The CFI awarded nominal damages of P 20,000 and
attorney's fees of P 5,000 plus costs of the suit. The IAC
increased the award of nominal damages to P 40,000. The
increase was justified as follows-- considering the
negligence committed by defendant, the amount of P20,000
under
present inflationary conditions as awarded to plaintiff as
nominal damages is too little to make up for the plaintiff's
frustration and disappointment in not being able to appear
at said conference, and for the embarrassment and
humiliation she suffered from the academic community for
failure to carry out an official mission for which she was
singled out by the faculty to represent her institution and
the country.
Alitalia appealed on the following grounds:
(1) That the Warsaw Convention should have been applied
to limit Alitalia's liability; and (2) That there is no warrant in
fact or in law for the award of nominal damages and
attorney's fees.
Held: Under the Warsaw Convention, an air carrier is made
liable for damages for: (1) The death, wounding or other
bodily injury of a passenger if the accident causing it took
place on board the aircraft or in the course of its operations
of embarking or disembarking;
(2) The destruction, or loss of damage to, any registered
luggage or goods, if the occurrence causing it took place
during the carriage by air; and (3) Delay in the
transportation by air of passengers, luggage or goods.
The Convention also limits the liability of the carriers for
each passenger to 250,000 francs and for registered
baggage and cargo to 250 francs per kg unless the
passenger has declared a higher rate and
has paid additional charges. The Warsaw Convention,
however, denies to the carrier availment of the provisions
which exclude or limit his liability, if the damage is caused
by his wilful misconduct or by such default on his part as is
considered to be equivalent to wilful misconduct or if the
damage is similarly caused by any agent of the carrier
acting within the scope of his employment. The Convention
does not thus operate as an exclusive enumeration of the
instances of an airline's liability, or as an absolute limit of
the extent of that liability. Such proposition is not borne out
by the language of the Convention. The Convention should
be deemed a liability only in those cases where the cause of
the death or injury to person, or destruction, loss or damage
to property or delay in its transport is not attributable to or
attended by any wilful misconduct, bad faith, recklessness,
or otherwise improper conduct. The Convention does not
regulate or exclude liability for other breaches of contract by
the carrier. Otherwise, an air carrier would be exempt from
any liability for damages in the event
of its absolute refusal, in bad faith, to comply with a contract
of carriage. The Warsaw Convention has invariably been
held inapplicable, or as not restrictive of the carrier's
liability, where there was satisfactory
evidence of malice or bad faith attributable to its officers
and employees.
In the case at bar, no bad faith or otherwise improper
conduct may be ascribed to the EEs of Alitalia. Dr. Pablo's
luggage was eventually returned belatedly, but without
appreciable damage. The fact is, nevertheless, that some
special species of injury was caused to her because Alitalia
misplaced her baggage and failed to deliver it to her at the
time appointed -- a breach of its contract of carriage with
the result that she was unable to read her paper that she
had painstakingly labored over. The opportunity to claim
honor or distinction for herself, for UP and for the country,
was irretrievably lost to her. She also underwent profound
distress and anxiety, which gradually turned into panic and
despair, when she learned that her suitcases were missing.
The compensation for the injury suffered by Dr. Pablo cannot
under the circumstances be restricted to that prescribed by
the Warsaw Convention for delay in the transport of
baggage. She is not entitled to be compensated for loss or
damage to her luggage since they were ultimately delivered
to her. She is however entitled to nominal damages, which is
adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be
vindicated and recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered. As to the
argument that she failed to include a specific claim for
nominal damages in her complaint,
it suffices that her general prayer includes "such other and
further just and equitable relief in the premises." Also
absent any claim for actual or compensatory damages (she
asked for moral and exemplary damages and attorney's
fees), and with proof of Dr. Pablo's right being violated, the
issue of nominal damages is raised.
The award of P 5,000 for attorney's fees is reasonable. The
law authorizes recovery of attorney's fees where the
defendant's act or omission has compelled the plaintiff to
litigate with third person or
to incur expenses to protect his interest, or where the court
deems it just and equitable.
SALUDO V. COURT OF APPEALS, 207 SCRA 498
F: After the death of plaintiff's mother Crispina Galdo,
Saludo in Chicago, Pomierski and Son Funeral Home, made
the necessary preparations and arrangements for the
shipment of the body from
Chicago to the Philippines. They had the body embalmed
and secured a permit from the Philippine Vice Consul in
Chicago. The Phil. Vice Consul sealed the shipping case on
Oct. 26,1976. On the same date, Pomierski brought the
remains to the Continental Mortuary Air Service (CMAS)
which made the necessary arrangements such as flights,
transfers,etc.
CMAS is a national service used by undertakers which
furnishes the air pouch in which the casket is enclosed in
and they see to it that the remains are taken to the proper
air freigh terminal. CMAS booked the shipment with PAL,
through its agent Air Care International, with
Pomierski as shipper and Maria Saludo as consignee. PAL
Airway Bill was issued for the route from Chicago to SF on
board TWA Flight 131 of Oct. 27, 1976, and from SF to
Manila, on board PAL Flight 107 of Oct. 27, 1976, and from
Manila to Cebu on board PAL Flight 149 of Oct. 29, 1976.
Maria Saludo and Saturnino Saludo, children of the deceased
were booked with United Airlines from Chicago to California
and with PAL from California to Manila. When she learned of
her mother's arrangements, she changed reservations from
UA to TWA. She watched from the look-out area but she saw
no body being brought on the flight. She reluctantly took the
TWA flight with her cousin's assurance to look
into the matter. Upon arrival in SF, she went to the TWA
counter to inquire about her mother's remains but she was
told that they did not know anything about it. She then
called Pomierski who then called
CMAS which in a matter of 10 minutes told him that the
remains had been switched with another body and had been
sent to Mexico. Based on the facts, there was a mix-up in
Chicago Airport between the two bodies. Arrangements
were made to send the body to California through Texas. On
October 28, 1976, the remains arrived in SF and was
35 kat transpo pt2
received by PAL at 7:45 p.m. The shipment was immediately
loaded on PAL flight for Manila that same evening and
arrived in Manila on October 30, 1976, a day after its
expected arrival on October 29, 1976.
Plaintiffs then filed a case against PAL and TWA before the
CFI of Leyte, praying for the award of actual damages of P
50,000, moral damages of P 1,000,000, exemplary damages
and attorney's fees and costs of suit. The CFI and CA
absolved the two airline companies. Plaintiffs then appealed
the decision on the ff. grounds: (1) That the delay in the
delivery of the remains was due to the fault of the airlines,
(2) The one day delay in the delivery constitutes breach of
contract as would entitle them to damages, (3) That
damages are recoverable by petitioners for the humiliating,
arrogant, and indifferent acts of the EEs of TWA and PAL.
The airlines objected on the ground that this petition only
raises
factual questions. Since it is precisely the soundness of the
inferences or conclusions that may be drawn from the
factual issues which are here being assailed, the issues
raised in the petition indeed warrant a
second look.
Held: (1) Petitioners allege that private respondents
received the casketed remains of petitioner's mother on Oct.
26, 1976 as evidenced by the issuance of the PAL Airway
Bill. From said date, private respondents were charged with
the responsibility to exercise extraordinary diligence so
much so that for the alleged switching of the caskets on Oct.
27, 1976, or one day after private respondents received the
cargo, the latter must necessarily be liable. Petitioners relied
on the
doctrine that the issuance of the bill of lading carries the
presumption that the goods were delivered to the carrier
issuing the bill, for immediate shipment, and it is nowhere
questioned that a bill of lading is prima facie evidence of the
receipt of the goods by the carrier. A bill of lading is a
written acknowledgment of the receipt of the goods and an
agreement to transport and deliver them at a specified
place to a
person named or on his order. A bill of lading is a receipt as
to the quantity and description of the goods shipped and a
contract to transport the goods to the consignee or other
person therein designated, on the terms specified in such
instrument.
SC: An airway bill estops the carrier from denying receipt of
goods. However, as between the shipper and the carrier,
when no goods have been delivered for shipment no recitals
in the bill can estop
the carrier from showing the true facts. We must therefore
allow the airline companies to explain, why, despite the
issuance of the airway bill and the date thereof, they deny
having received the remains of
Saludo on Oct. 26, 1976. As found by the CA, the airway bill
was issued,
not as evidence of receipt of delivery but merely as
confirmation for the booking made for the SF-Manila flight
scheduled on October 27, 1976. It was not until Oct. 28 that
PAL received physical delivery of the body
at SF. The extraordinary responsibility of CC begins from the
time the goods are delivered to the carrier. This
responsibility remains in force even when they are
temporarily unloaded or stored in transit, unless the shipper
exercises the right of stoppage in transitu, and terminates
only after the lapse of a reasonable time for the acceptance
of the goods by the consignee or other person entitled to
receive them. For such duty to commence, there must in
fact have been delivery of the cargo subject of the contract
of carriage. Only when such fact of delivery has been
unequivocally established can the reqt. of extraordinary
responsibility arise. As found by the CA, the body was really
received by PAL on Oct. 28, 1976 and it was from such date
that it became responsible for the agreed cargo under the
airway bill. Consequently, for the switching of caskets prior
thereto which was not caused by them and subsequent
events caused thereby, PAL cannot be held liable.
(2) Petitioners allege that even assuming CMAS was at fault,
PAL would still be liable because whoever brought the cargo
to the airport or loaded it on the plane did so as agent of
PAL.
SC: This contention is without merit. When the cargo was
received from CMAS, Air Care Intl, PAL's agent and TWA had
no way of determining its actual contents, since the casket
was hermetically sealed by
the Philippine Vice-Consul. They had to rely on the
information given by CMAS. No amount of inspection by the
airlines could have guarded against the switching that had
taken place. They had no authority
to unseal and open the casket. It is the right of the carrier to
require good faith on the part of those persons who deliver
goods to be carried by it. In the absence of more definite
information, the carrier has
the right to accept shipper's marks as to the contents of the
package offered for transportation and is not bound to
inquire particularly about them. It can safely be said that a
CC is entitled to fair representation of the nature and value
of the goods to be carried, with
the concomitant right to rely thereon, and that a carrier has
no obligation to inquire into the correctness or sufficiency of
such information. The consequent duty to conduct an
inspection arises in the event that there should be reason to
doubt the veracity of such
representations.
In this case, private respondents had no reason to doubt the
truth of the shipper's representations. The airway bill was
issued on the basis of such representations. Neither can
they be held accountable on the
basis of petitioner's theory that whoever brought the cargo
to the airport or loaded it on the plane did so as an agent of
private respondents, so that even if CMAS was indeed at
fault, the liability would be attributed to the airlines. CMAS
was not an agent of private
respondents. It was hired to handle all the necessary
shipping arrangements for the transportation of the
remains. CMAS may be classified as a forwarder, which is
regarded as the agent of the shipper
(Pomierski) and not of the carrier. It merely contracts for the
transportation of goods by carriers and has no interest in the
freight but receives compensation from the shipper as his
agent.
The facts of the case would point to CMAS as the culprit. In
fact, even the petitioners wrote CMAS entertaining serious
doubts as to whether they were responsible for the mix-up.
But the court cannot rule on the possible liability of CMAS as
such is not at issue in this case and there has not been
convincing evidence on the matter.
(3) Petitioners contended that TWA by agreeing to transport
the remains, it made itself a party to the contract of carriage
and was therefore bound by the airway bill. When TWA
shipped the remains ten hours earlier than scheduled, it
allegedly violated the terms of the airway bill which
compounded, if not directly caused, the switching of the
caskets. The EEs of TWA presumably caused the mix-up by
loading the wrong casket on the plane. TWA must be
presumed negligent unless such is rebutted. TWA contends
that it faithfully complied with the obligations under the
airway bill. Said faithful compliance was not affected by the
fact that the remains were shipped on an earlier
flight as there was no fixed time for completion of carriage
stipulated on. TWA did not undertake to carry the cargo
aboard any specified aircraft, in view of the condition on the
back of the airway bill, which provides that " xxx no time is
fixed for the completion of the
carriage, xxx and that Carrier may without notice substitute
alternate carriers or aircrafts xxx."
36 kat transpo pt2
SC : TWA's contention is tenable. TWA can use substitute
aircraft, even without notice and without the assumption of
any obligation whatsoever to carry the goods on any
specified aircraft. This is clearly
sanctioned by the contract of carriage. When a CC
undertakes to convey goods, the law implies a contract that
they shall be delivered at destination within a reasonable
time, in the absence of any agreement as to the time of
delivery. In case at bar, no special contract for prompt
delivery was entered into by the parties.
Condition No. 5 is binding on the plaintiff even if it is printed
at the back of the airway bill. This is in the nature of a
contract of adhesion. However, such condition only serves
to insulate the carrier from
liability in those instances when the changes in routes,
flights and schedules are clearly justified by the peculiar
circumstances of a particular case, or by general
transportation practices, customs and usages, or by
contingencies, emergencies in aviation, such as
weather turbulence, mechanical failure, reqts. Of national
security and the like. In this case, the delay in the delivery
of the remains cannot be attributed to the fault, negligence
or malice of private respondents.
When TWA shipped the remains on an earlier flight, it did so
in the exercise of sound discretion and with reasonable
prudence -- they wanted to assure that the shipment would
be received in SF in sufficient time for transfer to PAL. TWA
knew of the urgency of the
shipment due to the notation on the airway bill : "xxx Please
return bag first available flight to SFO."
(4) Petitioners alleged that private respondents are liable for
tort on account of humiliating, arrogant and indifferent acts
of their officers and personnel. They contended that there
was no reason for the personnel to disclaim knowledge of
the arrival or whereabouts of
the body other than their sheer arrogance, indifference and
extreme insensitivity to their feelings.
SC: It affirmed the CA's findings that TWA EEs did not deal
with petitioners in a grossly humiliating, arrogant or
indifferent manner as to amount to BF or malice. It must be
pointed out that the lamentable
actuations of TWA's EEs leave much to be desired,
particularly so given the grief of petitioners, their tension
and anxiety wrought by the confusion and the fear about
where their mother's remains were. Airline companies are
sternly admonished to strictly require
their personnel to be more accommodating to passengers
and the general public. Petitioners agonized for 5 hours
unattended to
and without any assurance from the EEs of TWA. Common
sense should have dictated that they exert a little extra
effort in making more extensive inquiry, by themselves or
through their superiors, rather than just shrug off the
problem with a callous and uncaring
remark that they had no knowledge about it.
The foregoing observations do not appear to be applicable
to PAL and its EEs. (5) In the absence of strong and positive
evidence of fraud, malice or bad faith, moral damages
cannot be awarded. Neither can exemplary damages nor
attorney's fees, in the absence of proof that
defendants acted with malice, fraud or BF. The censurable
conduct of TWA's EEs cannot be said to have approximated
the dimensions of fraud, malice or BF. Nonetheless, the facts
show that petitioners' right
to be treated with due courtesy in accordance with the
degree of diligence required by law to be exercised by every
common carrier was violated by TWA and this entitles them,
at least, to nominal damages from TWA alone. Arts. 2221
and 2222 of the Civil Code makes it
clear that nominal damages are not intended for
indemnification of loss suffered but for the vindication or
recognition of a right violated or invaded. They are
recoverable where some injury has been done but the
amount of which the evidence fails to show, the assessment
of damages being left to the discretion of the court accdg. to
the circumstances of the case. Nominal damages of P
40,000 to be paid by TWA was
awarded in favor of petitioners as a reasonable amount in
the circumstances.
JAPAN AIRLINES V. COURT OF APPEALS, 294 SCRA 19
Facts: Private respondents boarded a JAL flight in San
Francisco, California bound for Manila. It included an
overnight stopover at Narita, Japan at JALs expense. Due to
the Mt. Pinatubo eruption, private respondents trip to
Manila was cancelled. JAL rebooked all the Manila-bound
passengers and paid for the hotel expenses of their
unexpected overnight stay. The flight of private respondents
was again cancelled due to NAIAs indefinite closure. JAL
informed the respondents that it would no longer defray
their hotel and accommodation expense during their stay in
Narita. The respondents were forced to pay for their
accommodations and meal expenses for 5 days.
Issues:
1. Whether or not JAL has the obligation to shoulder
the hotel and meal expenses even if the delay was
caused by force majeure
2. Whether or not the award of damages was proper
Held:
1. When a party is unable to fulfill his obligation
because of force majeure, the general rule is that
he cannot be held liable for damages for non-
performance. When JAL was prevented from
resuming its flight to Manila due to the effects of
the eruption, whatever losses or damages in the
form of hotel and meal expenses the stranded
passengers incurred cannot be charged to JAL. The
predicament of the private respondents was not
due to the fault or negligence of JAL. JAL had the
duty to arrange the respondents flight back to
Manila. However, it failed to look after the comfort
and convenience of its passengers when it made
the passengers arrange their flight back to Manila
on their own and after waiting in the airport for a
whole day.
2. Yes, the award of nominal damages is proper.
Nominal damages are adjudicated in order that a
right of a plaintiff, which has been violated or
invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying
any loss suffered by him.
SAVELLANO V. NWA, 405 SCRA 416
The facts of the case are summarized by the CA as follows:
[Petitioner] Victorino Savellano (Savellano) was a Cabugao,
Ilocos Sur mayor for many terms, former Chairman of the
Commission on Elections and Regional Trial Court (RTC)
judge. His wife, [Petitioner] Virginia is a businesswoman and
operates several rural banks in Ilocos Sur. The couples x x x
son [Petitioner] Deogracias was, at the time [of] the incident
subject of the case, the Vice-Governor of Ilocos Sur.
On October 27, 1991, at around 1:45 p.m., [petitioners]
departed from San Francisco, USA on board Northwest
Airlines (NW) Flight 27, Business Class, bound for Manila,
Philippines using the NW round-trip tickets which were
issued at [respondents] Manila ticketing office.
[Petitioners] were expected to arrive at the Ninoy Aquino
International Airport (NAIA), Manila on October 29, 1991
(Manila time) or after twelve (12) hours of travel.
After being airborne for approximately two and one-half (2)
hours or at about 4:15 p.m. of the same day, October 27,
1991 (Seattle, USA time), NW Flight 27s pilot made an
37 kat transpo pt2
emergency landing in Seattle after announcing that a fire
had started in one of the planes engines.
[Petitioners] and the other passengers proceeded to Gate 8
of the Seattle Airport where they were instructed to go
home to Manila the next day, using the same boarding
passes with the same seating arrangements
[Respondents] shuttle bus thereafter brought all passengers
to the Seattle Red Lion Hotel where they were billeted by,
and at the expense of [respondent].
[Petitioners] who were traveling as a family were assigned
one room at the hotel. At around 12:00 midnight, they were
awakened by a phone call from [respondents] personnel
who advised them to be at the Seattle Airport by 7:00 a.m.
(Seattle time) the following day, October 28, 1991, for
departure. To reach the airport on time, the NW shuttle bus
fetched them early, making them skip the 6:30 a.m. hotel
breakfast.
Prior to leaving the hotel, however, [petitioners] met at the
lobby Col. Roberto Delfin, a Filipino co-passenger who was
also traveling Business Class, who informed them that he
and some passengers were leaving the next day, October
29, 1991, on board the same plane with the same itinerary.
On account of the engine failure of the plane, [petitioner]
Virginia developed nervousness. On getting wind of
information that they were bumped off, she took valium to
calm her nerves and cough syrup for the fever and colds she
had developed during the trip.
When [petitioners] reached the Seattle Airport,
[respondents] ground stewardess belatedly advised them
that instead of flying to Manila they would have to board NW
Flight 94, a DC-10 plane, bound for a 3-hour flight to Los
Angeles for a connecting flight to Manila. When [Petitioner]
Savellano insisted theirs was a direct flight to Manila, the
female ground stewardess just told them to hurry up as they
were the last passengers to board.
In Los Angeles, [petitioners] and the other passengers
became confused for while there was a sort of a board which
announced a Seoul-Bangkok flight, none was posted for a
Manila flight. It was only after they complained to the NW
personnel that the latter finally changed the board to
include Manila.
Before boarding NW Flight 23 for Manila via Seoul,
[petitioners] encountered another problem. Their three
small handcarried items which were not padlocked as they
were merely closed by zippers were not allowed to be
placed inside the passengers baggage compartments of the
plane by an arrogant NW ground stewardess.
On [petitioners] arrival at the NAIA, Manila where they saw
Col. Delfin and his wife as well as the other passengers of
the distressed flight who unlike them [petitioners] who left
Seattle on October 28, 1991, left Seattle on October 29,
1991, they were teased for taking the longer and tiresome
route to the Philippines.
When [petitioners] claimed their luggage at the baggage
carousel, they discovered that the would-have-been
handcarried items which were not allowed to be placed
inside the passengers baggage compartment had been
ransacked and the contents thereof stolen. Virginia was later
to claim having lost her diamond earrings costing
P300,000.00, two (2) Perry Gan shoes worth US$ 250.00,
four (4) watches costing US$ 40.00 each, two (2) pieces of
Tag Heuer watch and three (3) boxes of Elizabeth Arden
[perfumes]. Deogracias, on the other hand, claimed to have
lost two (2) pairs of Cole Haan shoes which he bought for his
wife, and the clothes, camera, personal computer, and jeans
he bought for his children.
By letter of November 22, 1991, [petitioners] through
counsel demanded from [respondent] the amount of
P3,000,000.00 as damages for what they claimed to be the
humiliation and inconvenience they suffered in the hands of
its personnel. [Respondent] did not accede to the demand,
however, impelling [petitioners] to file a case for damages
at the RTC of Cabugao, Ilocos Sur subject of the present
appeal.
[Petitioners] concede that they were not downgraded in any
of the flights on their way home to Manila. Their only
complaint is that they suffered inconvenience,
embarrassment, and humiliation for taking a longer route.
During the trial, the [RTC], on motion of [petitioners], issued
on October 29, 1993 a subpoena duces tecum directing
[respondent] to submit the passengers manifest of the
distressed flight from San Francisco to Tokyo on October 27,
1991, the passengers manifest of the same distressed plane
from Seattle to Tokyo which took off on October 29, 1991,
and the passenger manifest of the substitute plane from
Seattle to Los Angeles and Los Angeles to Seoul enroute to
Manila which took off on October 28, 1991.
The subpoena duces tecum was served on December 1,
1993 but was not complied with, however, by [respondent],
it proffering that its Minneapolis head office retains
documents only for one year after which they are destroyed.
x x x Branch 24 of the RTC of Cabugao, Ilocos Sur rendered
judgment in favor of [petitioners] x x x.
In granting moral and actual damages to [petitioners], the
[RTC] credited [petitioners] claim that they were excluded
form the Seattle-Tokyo-Manila flight to accommodate several
Japanese passengers bound for Japan. And as basis of its
award of actual damages arising from the allegedly lost
articles contained in the would-have-been handcarried
[luggage], the [RTC], passing on the lack of receipts
covering the same, took judicial notice of the Filipinos
practice of often bringing home pasalubong for friends and
relatives.[6]
Ruling of the Court of Appeals
The CA ruled that petitioners had failed to show respondents
bad faith, negligence or malice in transporting them via the
Seattle-Los Angeles-Seoul-Manila route. Hence, it held that
there was no basis for the RTCs award of moral and
exemplary damages. Neither did it find any reason to grant
attorneys fees.
It further ruled:
[Petitioners] testimonial claim of losses is unsupported by
any other evidence at all. It is odd and even contrary to
human experience for [petitioner] Virginia not to have taken
out a P300,000.00 pair of diamond earrings from an
unlocked small luggage after such luggage was not allowed
to be placed inside the passengers baggage compartment,
given the ease with which it could have been done as the
small luggage was merely closed by zipper. Just as it is odd
why no receipts for alleged purchases for valuable
pasalubongs including Tag Huer watches, camera and
personal computer were presented. x x x. [7]
Thus, even the trial courts award of actual damages was
reversed by the appellate court.
Hence this Petition.[8]
Issues
In their appeal, petitioners ask this Court to rule on these
issues:
x x x [W]hether or not petitioners discriminatory bump-off
from NW Flight No. 0027 on 28 October 1991 (not the
diversion of the distressed plane to Seattle the day before,
i.e. NW Flight 27 on 27 October 1991) constitutes breach by
respondent airline of its air-carriage contract?
And if so, whether or not petitioners are entitled to actual,
moral and exemplary damages -- including attorneys fees --
as a consequence?[9]
The Courts Ruling: The Petition is partly meritorious.
First Issue:
Breach of Contract: Petitioners contract of carriage with
Northwest was for the San Francisco-Tokyo(Narita)-Manila
flights scheduled for October 27, 1991. This itinerary was
not followed when the aircraft used for the first segment of
the journey developed engine trouble. Petitioners stress that
they are questioning, not the cancellation of the original
itinerary, but its substitution, which they allegedly had not
contracted for or agreed to. They insist that, like the other
38 kat transpo pt2
passengers of the distressed flight, they had the right to be
placed on Flight 27, which had a connecting flight from
Japan to Manila.They add that in being treated differently
and shabbily, they were being discriminated against.
A contract is the law between the parties. [10] Thus, in
determining whether petitioners rights were violated, we
must look into its provisions, which are printed on the airline
ticket. Condition 9 in the agreement states that a x x x
[c]arrier may without notice substitute alternate carriers or
aircraft, and may alter or omit stopping places shown on the
ticket in case of necessity. x x x.[11]
The basis of the Complaint was the way respondent
allegedly treated petitioners like puppets that could be
shuttled to Manila via Los Angeles and Seoul without their
consent.[12] Undeniably, it did not take the time to explain
how it would be meeting its contractual obligation to
transport them to their final destination. Its employees
merely hustled the confused petitioners into boarding one
plane after another without giving the latter a choice from
other courses of action that were available. It unilaterally
decided on the most expedient way for them to reach their
final destination.
Passengers Consent
After an examination of the conditions printed on the airline
ticket, we find nothing there authorizing Northwest to decide
unilaterally, after the distressed flight landed in Seattle,
what other stopping places petitioners should take and
when they should fly. True, Condition 9 on the ticket allowed
respondent to substitute alternate carriers or aircraft
without notice. However, nothing there permits shuttling
passengers -- without so much as a by your-leave -- to
stopping places that they have not been previously notified
of, much less agreed to or been prepared for. Substituting
aircrafts or carriers without notice is entirely different from
changing stopping places or connecting cities without
notice.
The ambiguities in the contract, being one of adhesion,
should be construed against the party that caused its
preparation -- in this case, respondent.[13] Since the
conditions enumerated on the ticket do not specifically allow
it to change stopping places or to fly the passengers to
alternate connecting cities without consulting them, then it
must be construed to mean that such unilateral change was
not permitted.
Proof of Necessity of Alteration
Furthermore, the change in petitioners flight itinerary does
not fall under the situation covered by the phrase may alter
or omit stopping places shown on the ticket in case of
necessity.[14] A case of necessity must first be proven. The
burden of proving it necessarily fell on respondent. This
responsibility it failed to discharge.
Petitioners do not question the stop in Seattle, so we will not
delve into this matter. The airplane engine trouble that
developed during the flight bound for Tokyo from San
Francisco definitely merited the necessity of landing the
plane at some place for repair -- in this case, Seattle -- but
not that of shuttling petitioners to other connecting points
thereafter without their consent.
Northwest failed to show a case of necessity for changing
the stopping place from Tokyo to Los Angeles and Seoul. It is
a fact that some of the passengers on the distressed flight
continued on to the Tokyo (Narita) connecting place. No
explanation whatsoever was given to petitioners as to why
they were not similarly allowed to do so. It may be that the
Northwest connecting flight from Seattle to Tokyo to Manila
could no longer accommodate them. Yet it may also be that
there were other carriers that could have accommodated
them for these sectors of their journey, and whose route
they might have preferred to the more circuitous one
unilaterally chosen for them by respondent.
In the absence of evidence as to the actual situation, the
Court is hard pressed to determine if there was a case of
necessity sanctioning the alteration of the Tokyo stopping
place in the case of petitioners. Thus, we hold that in the
absence of a demonstrated necessity thereof and their
rerouting to Los Angeles and Seoul as stopping places
without their consent, respondent committed a breach of
the contract of carriage.
Second Issue: Damages
Being guilty of a breach of their contract, respondent may
be held liable for damages suffered by petitioners in
accordance with Articles 1170 and 2201 of the Civil Code,
which state:
Art. 1170. Those who in the performance of their obligations
are guilty of fraud, negligence, or delay and those who in
any manner contravene the tenor thereofare liable for
damages. (Emphasis supplied)
Art. 2201. In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is liable shall be
those that are the natural and probable consequences of the
breach of the obligation, and which the parties have
foreseen or could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the
obligation.
As a general rule, the factual findings of the CA when
supported by substantial evidence on record are final and
conclusive and may not be reviewed on appeal.[15] An
exception to this rule is when the lower court and the CA
arrive at different factual findings.[16] In this case, the trial
court found the presence of bad faith and hence awarded
moral and exemplary damages; while the CA found none
and hence deleted the award of damages. Thus, the Court is
now behooved to review the basis for sustaining the award
or deletion of damages.
Petitioners impute oppression, discrimination, recklessness
and malevolence to respondent. We are not
convinced. There is no persuasive evidence that they were
maliciously singled out to fly the Seattle-Los Angeles-Seoul-
Manila route. It appears that the passengers of the
distressed flight were randomly divided into two groups. One
group was made to take the Tokyo-Manila flight; and the
other, the Los Angeles-Seoul-Manila flight.The selection of
who was to take which flight was handled via the computer
reservation system, which took into account only the
passengers final destination.[17]
The records show that respondent was impelled by sincere
motives to get petitioners to their final destination by
whatever was the most expeditious course -- in its
judgment, if not in theirs. Though they claim that they were
not accommodated on Flight 27 from Seattle to Tokyo
because respondent had taken on Japanese passengers,
petitioners failed to present convincing evidence to back
this allegation. In the absence of convincing evidence, we
cannot find respondent guilty of bad faith.
In the light of these facts, the Court held there was a breach
of the contract of carriage. The failure of the defendant to
inform the plaintiffs on time that their reservations for the
first class had long been cancelled was considered as the
element of bad faith entitling them to moral damages for
the contractual breach. According to the Court, such
omission had placed them in a predicament that enabled
the company to keep them as their passengers in the tourist
class. Thus, the defendant was able to retain the business
and to promote its self-interest at the expense of
embarrassment, discomfort and humiliation on their part.
In Zulueta, the passenger was coming home to Manila from
Honolulu via a Pan-American flight. The plane had a
stopover at Wake Island, where Rafael Zulueta went down to
relieve himself. At flight time, he could not be located
immediately. Upon being found, an altercation ensued
between him and the Pan-Am employees. One of them
remonstrated: What in the hell do you think you are? Get on
that plane. An exchange of angry words followed, and the
39 kat transpo pt2
pilot went to the extent of referring to the Zuluetas as those
monkeys. Subsequently, for his belligerent attitude, Rafael
Zulueta was intentionally off-loaded and left at Wake Island
with the prospect of being stranded there for a week, with
malice aforethought. The Court awarded to the Zuluetas
P500,000.00 as moral damages, P200,000.00 as exemplary
damages and P75,000.00 as attorneys fees, apart from the
actual damages of P5,502.85.
In Ortigas, Francisco Ortigas Jr. had a confirmed and
validated first-class ticket for Lufthansas Flight No. 646. His
reserved first-class seat was, however, given to a
Belgian. As a result, he was forced to take economy class on
the same flight. Lufthansa succeeded in keeping him as a
passenger by assuring him that he would be given first-class
accommodation at the next stop. The proper arrangements
therefor had supposedly been made already, when in truth
such was not the case. In justifying the award of moral and
exemplary damages, the Court explained:
x x x [W]hen it comes to contracts of common carriage,
inattention and lack of care on the part of the carrier
resulting in the failure of the passenger to be
accommodated in the class contracted for amounts to bad
faith or fraud which entitles the passenger to the award of
moral damages in accordance with Article 2220 of the Civil
Code. But in the instant case, the breach appears to be of
graver nature, since the preference given to the Belgian
passenger over plaintiff was done willfully and in wanton
disregard of plaintiffs rights and his dignity as a human
being and as a Filipino, who may not be discriminated
against with impunity.
To summarize, in Lopez, despite sufficient time -- one month
-- to inform the passengers of what had happened to their
booking, the airline agent intentionally withheld that
information from them. In Zulueta, the passenger was
deliberately off-loaded after being gravely insulted during an
altercation. And in Ortigas, the passenger was intentionally
downgraded in favor of a European.
These cases are different from and inapplicable to the
present case. Here, there is no showing that the breach of
contract was done with the same entrepreneurial motive or
self-interest as in Lopez or with ill will as in Zulueta and
Ortigas. Petitioners have failed to show convincingly that
they were rerouted by respondent to Los Angeles and Seoul
because of malice, profit motive or self-interest. Good faith
is presumed, while bad faith is a matter of fact that needs to
be proved[21] by the party alleging it.
In the absence of bad faith, ill will, malice or wanton
conduct, respondent cannot be held liable for moral
damages. Article 2219 of the Civil Code[22] enumerates the
instances in which moral damages may be awarded. In a
breach of contract, such damages are not awarded if the
defendant is not shown to have acted fraudulently or with
malice or bad faith.[23] Insufficient to warrant the award of
moral damages is the fact that complainants suffered
economic hardship, or that they worried and experienced
mental anxiety.[24]
Neither are exemplary damages proper in the present
case. The Civil Code provides that [i]n contracts and quasi-
contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.[25] Respondent has not
been proven to have acted in that manner. At most, it can
only be found guilty of having acted without first considering
and weighing all other possible courses of actions it could
have taken, and without consulting petitioners and securing
their consent to the new stopping places.
The unexpected and sudden requirement of having to
arrange the connecting flights of every single person in the
distressed plane in just a few hours, in addition to the
Northwest employees normal workload, was difficult to
satisfy perfectly. We cannot find respondent liable for
exemplary damages for its imperfection of neglecting to
consult with the passengers beforehand.
Nevertheless, herein petitioners will not be totally deprived
of compensation. Nominal damages may be awarded as
provided by the Civil Code, from which we quote:
Art. 2221. Nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered by him.
Art. 2222. The court may award nominal damages in every
obligation arising from any source enumerated in article
1157, or in every case where any property right has been
invaded.
Nominal damages are recoverable if no actual, substantial
or specific damages were shown to have resulted from the
breach.[26] The amount of such damages is addressed to the
sound discretion of the court, taking into account the
relevant circumstances.[27]
In the present case, we must consider that petitioners
suffered the inconveniences of having to wake up early after
a bad night and having to miss breakfast; as well as the fact
that they were business class passengers. They paid more
for better service; thus, rushing them and making them miss
their small comforts was not a trivial thing. We also consider
their social and official status. Victorino Savellano was a
former mayor, regional trial court judge and chairman of the
Commission on Elections. Virginia B. Savellano was the
president of five rural banks, and Deogracias Savellano was
then the incumbent vice governor of Ilocos Sur. Hence, it will
be proper to grant one hundred fifty thousand pesos
(P150,000) as nominal damages[28] to each of them, in order
to vindicate and recognize their right[29] to be notified and
consulted before their contracted stopping place was
changed.
A claim for the alleged lost items from the baggage of
petitioners cannot prosper, because they failed to give
timely notice of the loss to respondent. The Conditions
printed on the airline ticket plainly read:
2. Carriage hereunder is subject to the rules and limitations
relating to liability established by the Warsaw Convention
unless such carriage is not International carriage as defined
by that Convention.
xxxxxxxxx
7. Checked baggage will be delivered to bearer of the
baggage check. In case of damage to baggage moving in
international transportation complaint must be made in
writing to carrier forthwith after discovery of damage, and at
the latest, within 7 days from receipt; in case of delay,
complaint must be made within 21 days from date the
baggage was delivered. x x x.[30]
The pertinent provisions of the Rules Relating to
International Carriage by Air (Warsaw Convention) state:
Article 26
1. Receipt by the person entitled to delivery of luggage or
goods without complaint is prima facie evidence that the
same have been delivered in good condition and in
accordance with the document of carriage.
2. In case of damage, the person entitled to delivery must
complain to the carrier forthwith after the discovery of the
damage, and, at the latest, within three days from the date
of receipt in the case of luggage and seven days from date
of receipt in the case of goods. In the case of delay the
40 kat transpo pt2
complaint must be made at the latest within fourteen days
from the date on which the luggage or goods have been
placed at his disposal.
3. Every complaint must be made in writing upon the
document of carriage or by separate notice in writing
dispatched within the times aforesaid.
4. Failing complaint within the times aforesaid, no action
shall lie against the carrier, save in the case of fraud on his
part.
After allegedly finding that their luggage had been
ransacked, petitioners never lodged a complaint with any
Northwest airport personnel. Neither did they mention the
alleged loss of their valuables in their November 22, 1991
demand letter.[31] Hence, in accordance with the parties
contract of carriage, no claim can be heard or admitted
against respondent with respect to alleged damage to or
loss of petitioners baggage.
WHEREFORE, the Petition is hereby PARTIALLY GRANTED,
and the assailed Decision MODIFIED. Respondent is
ORDERED to pay one hundred fifty thousand pesos
(P150,000) to each of the three petitioners as nominal
damages. No pronouncement as to costs. SO ORDERED.
ATTORNEYS FEES AND INTEREST
Art. 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious prosecution against the
plaintiff;
(4) In case of a clearly unfounded civil action or proceeding
against the plaintiff;
(5) Where the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiff's plainly valid, just
and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household
helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation
and employer's liability laws;
(9) In a separate civil action to recover civil liability arising
from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation
should be recovered.
In all cases, the attorney's fees and expenses of litigation
must be reasonable.
Art. 2210. Interest may, in the discretion of the court, be
allowed upon damages awarded for breach of contract.
Very truly y
PHILIPPINE