FIRST DIVISION Private respondent tried to stop the departure of Flight 560 as his personal belongings,
including a package containing a camera which a certain Miwa from Japan asked him to deliver
G.R. No. L-82619 September 15, 1993
PHILIPPINE AIRLINES, INC., petitioner,
vs.
COURT OF APPEALS and PEDRO ZAPATOS, respondents.
Leighton R. Liazon for petitioner.
Balmes L. Ocampo for private respondent.
BELLOSILLO, J.:
This petition for review in certiorari seeks to annul and set aside the decision of the then
Intermediate Appellant Court,1 now Court of Appeals, dated 28 February 1985, in AC-G.R. CV
No. 69327 ("Pedro Zapatos v. Philippine Airlines, Inc.") affirming the decision of the then Court
of first Instance, now Regional Trial Court, declaring Philippine Airlines, Inc., liable in damages
for breach of contract.
On 25 November 1976, private respondent filed a complaint for damages for breach of contract
of carriage2 against Philippine Airlines, Inc. (PAL), before the then Court of First Instance, now
Regional Trial Court, of Misamis Occidental, at Ozamiz City. According to him, on 2 August
1976, he was among the twenty-one (21) passengers of PAL Flight 477 that took off from Cebu
bound for Ozamiz City. The routing of this flight was Cebu-Ozamiz-Cotabato. While on flight
and just about fifteen (15) minutes before landing at Ozamiz City, the pilot received a radio
message that the airport was closed due to heavy rains and inclement weather and that he
should proceed to Cotabato City instead.
Upon arrival at Cotabato City, the PAL Station Agent informed the passengers of their options
to return to Cebu on flight 560 of the same day and thence to Ozamiz City on 4 August 1975, or
take the next flight to Cebu the following day, or remain at Cotabato and take the next available
flight to Ozamiz City on 5 August 1975.3 The Station Agent likewise informed them that Flight
560 bound for Manila would make a stop-over at Cebu to bring some of the diverted
passengers; that there were only six (6) seats available as there were already confirmed
passengers for Manila; and, that the basis for priority would be the check-in sequence at Cebu.
Private respondent chose to return to Cebu but was not accommodated because he checked-in
as passenger No. 9 on Flight 477. He insisted on being given priority over the confirmed
passengers in the accommodation, but the Station Agent refused private respondent's demand
explaining that the latter's predicament was not due to PAL's own doing but to be a force
majeure.4
to Mrs. Fe Obid of Gingoog City, were still on board. His plea fell on deaf ears. PAL then issued
to private respondent a free ticket to Iligan city, which the latter received under protest. 5 Private
respondent was left at the airport and could not even hitch a ride in the Ford Fiera loaded with
PAL personnel.6 PAL neither provided private respondent with transportation from the airport to
the city proper nor food and accommodation for his stay in Cotabato City.
The following day, private respondent purchased a PAL ticket to Iligan City. He informed PAL
personnel that he would not use the free ticket because he was filing a case against PAL. 7 In
Iligan City, private respondent hired a car from the airport to Kolambugan, Lanao del Norte,
reaching Ozamiz City by crossing the bay in a launch.8 His personal effects including the
camera, which were valued at P2,000.00 were no longer recovered.
On 13 January 1977, PAL filed its answer denying that it unjustifiably refused to accommodate
private respondent.9It alleged that there was simply no more seat for private respondent on
Flight 560 since there were only six (6) seats available and the priority of accommodation on
Flight 560 was based on the check-in sequence in Cebu; that the first six (6) priority
passengers on Flight 477 chose to take Flight 560; that its Station Agent explained in a
courteous and polite manner to all passengers the reason for PAL's inability to transport all of
them back to Cebu; that the stranded passengers agreed to avail of the options and had their
respective tickets exchanged for their onward trips; that it was
only the private respondent who insisted on being given priority in the accommodation; that
pieces of checked-in baggage and had carried items of the Ozamiz City passengers were
removed from the aircraft; that the reason for their pilot's inability to land at Ozamis City airport
was because the runway was wet due to rains thus posing a threat to the safety of both
passengers and aircraft; and, that such reason of force majeure was a valid justification for the
pilot to bypass Ozamiz City and proceed directly to Cotabato City.
10
On 4 June 1981, the trial court rendered its decision the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and
against the defendant Philippine AirLines, Inc. ordering the latter to pay:
(1) As actual damages, the sum of Two Hundred Pesos (P200.00)
representing plaintiff's expenses for transportation, food and accommodation
during his stranded stay at Cotabato City; the sum of Forty-Eight Pesos
(P48.00) representing his flight fare from Cotabato City to Iligan city; the sum
of Five Hundred Pesos (P500.00) representing plaintiff's transportation
expenses from Iligan City to Ozamiz City; and the sum of Five Thousand
Pesos (P5,000.00) as loss of business opportunities during his stranded stay
in Cotabato City;
(2) As moral damages, the sum of Fifty Thousand Pesos (P50,000.00) for
plaintiff's hurt feelings, serious anxiety, mental anguish and unkind and
discourteous treatment perpetrated by defendant's employees during his stay
as stranded passenger in Cotabato City;
 (3) As exemplary damages, the sum of Ten Thousand Pesos (P10,000.00) to
set a precedent to the defendant airline that it shall provide means to give
comfort and convenience to stranded passengers;
(4) The sum of Three Thousand Pesos (P3,000.00) as attorney's fees;
(5) To pay the costs of this suit.
PAL appealed to the Court of Appeals which on 28 February 1985, finding no reversible error,
affirmed the judgment of the court a quo. 11
PAL then sought recourse to this Court by way of a petition for review on certiorari 12 upon the
following issues: (1) Can the Court of Appeals render a decision finding petitioner (then
defendant-appellant in the court below) negligent and, consequently, liable for damages on a
question of substance which was neither raised on a question nor proved at the trial? (2) Can
the Court of Appeals award actual and moral damages contrary to the evidence and
established jurisprudence? 13
An assiduous examination of the records yields no valid reason for reversal of the judgment on
appeal; only a modification of its disposition.
In its petition, PAL vigorously maintains that private respondent's principal cause of action was
its alleged denial of private respondent's demand for priority over the confirmed passengers on
Flight 560. Likewise, PAL points out that the complaint did not impute to PAL neglect in failing
to attend to the needs of the diverted passengers; and, that the question of negligence was not
and never put in issue by the pleadings or proved at the trial.
Contrary to the above arguments, private respondent's amended complaint touched on PAL's
indifference and inattention to his predicament. The pertinent portion of the amended
complaint 14 reads:
10. That by virtue of the refusal of the defendant through its agent in
Cotabato to accommodate (sic) and allow the plaintiff to take and board the
plane back to Cebu, and by accomodating (sic) and allowing passengers
from Cotabato for Cebu in his stead and place, thus forcing the plaintiff
against his will, to be left and stranded in Cotabato, exposed to the peril and
danger of muslim rebels plundering at the time, the plaintiff, as a
consequence, (have) suffered mental anguish, mental torture, social
humiliation, bismirched reputation and wounded feeling, all amounting to a
conservative amount of thirty thousand (P30,000.00) Pesos.
15
To substantiate this aspect of apathy, private respondent testified
A I did not even notice that I was I think the last passenger
or the last person out of the PAL employees and army
personnel that were left there. I did not notice that when I
was already outside of the building after our conversation.
Q What did you do next?
A I banished (sic) because it seems that there was a war
not far from the airport. The sound of guns and the soldiers
were plenty.
Q After that what did you do?
A I tried to look for a transportation that could bring me
down to the City of Cotabato.
Q Were you able to go there?
A I was at about 7:00 o'clock in the evening more or less
and it was a private jeep that I boarded. I was even
questioned why I and who am (sic) I then. Then I explained
my side that I am (sic) stranded passenger. Then they
brought me downtown at Cotabato.
Q During your conversation with the Manager were you not
offered any vehicle or transportation to Cotabato airport
downtown?
A In fact I told him (Manager) now I am by-passed
passenger here which is not my destination what can you
offer me. Then they answered, "it is not my fault. Let us
forget that."
Q In other words when the Manager told you that offer was
there a vehicle ready?
A Not yet. Not long after that the Ford Fiera loaded with
PAL personnel was passing by going to the City of
Cotabato and I stopped it to take me a ride because there
was no more available transportation but I was not
accommodated.
Significantly, PAL did not seem to mind the introduction of evidence which focused on its
alleged negligence in caring for its stranded passengers. Well-settled is the rule in evidence
that the protest or objection against the admission of evidence should be presented at the time
the evidence is offered, and that the proper time to make protest or objection to the
admissibility of evidence is when the question is presented to the witness or at the time the
answer thereto is given. 16 There being no objection, such evidence becomes property of the
case and all the parties are amenable to any favorable or unfavorable effects resulting from the
evidence. 17
PAL instead attempted to rebut the aforequoted testimony. In the process, it failed to
substantiate its counter allegation for want of concrete proof 18 —
Atty. Rubin O. Rivera — PAL's counsel:
Q You said PAL refused to help you when you were in
Cotabato, is that right?
Private respondent:
A Yes.
Q Did you ask them to help you regarding any offer of
transportation or of any other matter asked of them?
A Yes, he (PAL PERSONNEL) said what is? It is not our
fault.
Q Are you not aware that one fellow passenger even
claimed that he was given Hotel accommodation because
they have no money?
xxx xxx xxx
A No, sir, that was never offered to me. I said, I tried to
stop them but they were already riding that PAL pick-up
jeep, and I was not accommodated.
Having joined in the issue over the alleged lack of care it exhibited towards its passengers, PAL
cannot now turn around and feign surprise at the outcome of the case. When issues not raised
by the pleadings are tried by express or implied consent of the parties, they shall be treated in
all respects as if they had been raised in the pleadings. 19
With regard to the award of damages affirmed by the appellate court, PAL argues that the
same is unfounded. It asserts that it should not be charged with the task of looking after the
passengers' comfort and convenience because the diversion of the flight was due to a
fortuitous event, and that if made liable, an added burden is given to PAL which is over and
beyond its duties under the contract of carriage. It submits that granting arguendo that
negligence exists, PAL cannot be liable in damages in the absence of fraud or bad faith; that
private respondent failed to apprise PAL of the nature of his trip and possible business losses;
and, that private respondent himself is to be blamed for unreasonably refusing to use the free
ticket which PAL issued.
The contract of air carriage is a peculiar one. Being imbued with public interest, the law
requires common carriers 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. 20 In Air France v. Carrascoso, 21 we held that —
A contract to transport passengers is quite different in kind and degree from
any other contractual relation. And this, 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 . . . . ( emphasis supplied).
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting
standard required by law. Undisputably, PAL's diversion of its flight due to inclement weather
was a fortuitous event. Nonetheless, such occurrence did not terminate PAL's 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. What we said in one case
once again must be stressed, i.e., the relation of carrier and passenger continues until the latter
has been landed at the port of destination and has left the carrier's premises. 22 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. On this score, 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. As the appellate court correctly ruled —
While the failure of plaintiff in the first instance to reach his destination at
Ozamis City in accordance with the contract of carriage was due to the
closure of the airport on account of rain and inclement weather which was
radioed to defendant 15 minutes before landing, it has not been disputed by
defendant airline that Ozamis City has no all-weather airport and has to
cancel its flight to Ozamis City or by-pass it in the event of inclement weather.
Knowing this fact, it becomes the duty of defendant to provide all means of
comfort and convenience to its passengers when they would have to be left
in a strange place in case of such by-passing. The steps taken by defendant
airline company towards this end has not been put in evidence, especially for
those 7 others who were not accommodated in the return trip to Cebu, only 6
of the 21 having been so accommodated. It appears that plaintiff had to leave
on the next flight 2 days later. If the cause of non-fulfillment of the contract is
due to a fortuitous event, it has to be the sole and only cause (Art. 1755 CC.,
Art. 1733 C.C.) Since part of the failure to comply with the obligation of
common carrier to deliver its passengers safely to their destination lay in the
defendant's 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, defendant becomes liable to
plaintiff. 23
While we find PAL remiss in its duty of extending utmost care to private respondent while being
stranded in Cotabato City, there is no sufficient basis to conclude that PAL failed to inform him
about his non-accommodation on Flight 560, or that it was inattentive to his queries relative
thereto.
On 3 August 1975, the Station Agent reported to his Branch Manager in Cotabato City that —
3. Of the fifteen stranded passengers two pax elected to take F478 on
August 05, three pax opted to take F442 August 03. The remaining ten (10)
including subject requested that they be instead accommodated (sic) on
F446 CBO-IGN the following day where they intended to take the surface
transportation to OZC. Mr. Pedro Zapatos had by then been very vocal and
boiceterous (sic) at the counter and we tactfully managed to steer him inside
the Station Agent's office. Mr. Pedro Zapatos then adamantly insisted that all
the diverted passengers should have been given priority over the originating
passengers of F560 whether confirmed or otherwise. We explained our
policies and after awhile he seemed pacified and thereafter took his ticket (in-
lieued (sic) to CBO-IGN, COCON basis), at the counter in the presence of
five other passengers who were waiting for their tickets too. The rest of the
diverted pax had left earlier after being assured their tickets will be ready the
following day. 24
Aforesaid Report being an entry in the course of business is prima facie evidence of the facts
therein stated. Private respondent, apart from his testimony, did not offer any controverting
evidence. If indeed PAL omitted to give information about the options available to its diverted
passengers, it would have been deluged with complaints. But, only private respondent
complained —
Atty. Rivera (for PAL)
Q I understand from you Mr. Zapatos that at the time you
were waiting at Cotabato Airport for the decision of PAL,
you were not informed of the decision until after the
airplane left is that correct?
A Yes.
COURT:
Q What do you mean by "yes"? You meant you were not
informed?
A Yes, I was not informed of their decision, that they will
only accommodate few passengers.
Q Aside from you there were many other stranded
passengers?
A I believed, yes.
Q And you want us to believe that PAL did not explain (to)
any of these passengers about the decision regarding
those who will board the aircraft back to Cebu?
A No, Sir.
Q Despite these facts Mr. Zapatos did any of the other
passengers complained (sic) regarding that incident?
xxx xxx xxx
A There were plenty of argument and I was one of those
talking about my case.
Q Did you hear anybody complained (sic) that he has not
been informed of the decision before the plane left for
Cebu?
A No. 25
Admittedly, private respondent's insistence on being given priority in accommodation was
unreasonable considering the fortuitous event and that there was a sequence to be observed in
the booking, i.e., in the order the passengers checked-in at their port of origin. His
intransigence in fact was the main cause for his having to stay at the airport longer than was
necessary.
Atty. Rivera:
Q And, you were saying that despite the fact that according
to your testimony there were at least 16 passengers who
were stranded there in Cotabato airport according to your
testimony, and later you said that there were no other
people left there at that time, is that correct?
A Yes, I did not see anyone there around. I think I was the
only civilian who was left there.
Q Why is it that it took you long time to leave that place?
26
A Because I was arguing with the PAL personnel.
Anent the plaint that PAL employees were disrespectful and inattentive toward private
respondent, the records are bereft of evidence to support the same. Thus, the ruling of
respondent Court of Appeals in this regard is without basis. 27 On the contrary, private
28
respondent was attended to not only by the personnel of PAL but also by its Manager."
In the light of these findings, we find the award of moral damages of Fifty Thousand Pesos
(P50,000.00) unreasonably excessive; hence, we reduce the same to Ten Thousand Pesos
(P10,000.00). Conformably herewith, the award of exemplary damages is also reduced to five
Thousand Pesos (5,000.00). 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 defendant's
culpable action. 29

With regard to the award of actual damages in the amount of P5,000.00 representing private
respondent's alleged business losses occasioned by his stay at Cotabato City, we find the
same unwarranted. Private respondent's testimony that he had a scheduled business
"transaction of shark liver oil supposedly to have been consummated on August 3, 1975 in the
morning" and that "since (private respondent) was out for nearly two weeks I missed to buy
about 10 barrels of shark liver oil,"30 are purely speculative. Actual or compensatory damages
cannot be presumed but must be duly proved with reasonable degree of certainty. A court
cannot rely on speculation, conjecture or guesswork as to the fact and amount of damages, but
must depend upon competent proof that they have suffered and on evidence of the actual
amount thereof. 31

WHEREFORE the decision appealed from is AFFIRMED with modification however that the
award of moral damages of Fifty Thousand Pesos (P50,000.00) is reduced to Ten Thousand
Pesos (P10,000.00) while the exemplary damages of Ten Thousand Pesos (P10,000.00) is
also reduced to Five Thousand Pesos (P5,000.00). The award of actual damages in the
amount Five Thousand Pesos (P5,000.00) representing business losses occasioned by private
respondent's being stranded in Cotabato City is deleted.

SO ORDERED.

Cruz, Griño-Aquino, Davide, Jr. and Quiason, JJ., concur.


SECOND DIVISION
G.R. No. L-36481-2 October 23, 1982
AMPARO C. SERVANDO, CLARA UY BICO, plaintiffs-appellees,
vs.
PHILIPPINE STEAM NAVIGATION CO., defendant-appellant.
Zoilo de la Cruz, Jr. & Associate for plaintiff-appellee Amparo Servando.
Benedicto, Sumbingco & Associate for appellee Clara Uy Bico.
Ross, Salcedo, del Rosario, Bito & Misa for defendant-appellant.
ESCOLIN, J.:
This appeal, originally brought to the Court of Appeals, seeks to set aside the decision of the
Court of First Instance of Negros Occidental in Civil Cases Nos. 7354 and 7428, declaring
appellant Philippine Steam Navigation liable for damages for the loss of the appellees' cargoes
as a result of a fire which gutted the Bureau of Customs' warehouse in Pulupandan, Negros
Occidental.
The Court of Appeals certified the case to Us because only pure questions of law are raised
therein.
The facts culled from the pleadings and the stipulations submitted by the parties are as follows:
On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded on board the
appellant's vessel, FS-176, for carriage from Manila to Pulupandan, Negros Occidental, the
following cargoes, to wit:
Clara Uy Bico —
1,528 cavans of rice valued
at P40,907.50;
Amparo Servando —
44 cartons of colored paper,
toys and general merchandise valued at P1,070.50;
1
as evidenced by the corresponding bills of lading issued by the appellant.
Upon arrival of the vessel at Pulupandan, in the morning of November 18, 1963, the cargoes
were discharged, complete and in good order, unto the warehouse of the Bureau of Customs.
At about 2:00 in the afternoon of the same day, said warehouse was razed by a fire of unknown
origin, destroying appellees' cargoes. Before the fire, however, appellee Uy Bico was able to
take delivery of 907 cavans of rice 2 Appellees' claims for the value of said goods were rejected
by the appellant.
On the bases of the foregoing facts, the lower court rendered a decision, the decretal portion of
which reads as follows:
WHEREFORE, judgment is rendered as follows:
1. In case No. 7354, the defendant is hereby ordered to pay the plaintiff
Amparo C. Servando the aggregate sum of P1,070.50 with legal interest
thereon from the date of the filing of the complaint until fully paid, and to pay
the costs.
2. In case No. 7428, the defendant is hereby ordered to pay to plaintiff Clara
Uy Bico the aggregate sum of P16,625.00 with legal interest thereon from the
date of the filing of the complaint until fully paid, and to pay the costs.
Article 1736 of the Civil Code imposes upon common carriers the duty to observe extraordinary
diligence from the moment the goods are unconditionally placed in their possession "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. "
The court a quo held that the delivery of the shipment in question to the warehouse of the
Bureau of Customs is not the delivery contemplated by Article 1736; and since the burning of
the warehouse occurred before actual or constructive delivery of the goods to the appellees,
the loss is chargeable against the appellant.
It should be pointed out, however, that in the bills of lading issued for the cargoes in question,
the parties agreed to limit the responsibility of the carrier for the loss or damage that may be
caused to the shipment by inserting therein the following stipulation:
Clause 14. Carrier shall not be responsible for loss or damage to shipments
billed 'owner's risk' unless such loss or damage is due to negligence of
carrier. Nor shall carrier be responsible for loss or damage caused by force
majeure, dangers or accidents of the sea or other waters; war; public
enemies; . . . fire . ...
We sustain the validity of the above stipulation; there is nothing therein that is contrary to law,
morals or public policy.
Appellees would contend that the above stipulation does not bind them because it was printed
in fine letters on the back-of the bills of lading; and that they did not sign the same. This
argument overlooks the pronouncement of this Court in Ong Yiu vs. Court of Appeals,
promulgated June 29, 1979, 3 where the same issue was resolved in this wise:
While it may be true that petitioner had not signed the plane ticket (Exh. '12'),
he is nevertheless bound by the provisions thereof. 'Such provisions have
been held to be a part of the contract of carriage, and valid and binding upon
the passenger regardless of the latter's lack of knowledge or assent to the
regulation'. It is what is known as a contract of 'adhesion', in regards which it
has been said that contracts of adhesion wherein one party imposes a ready
made form of contract on the other, as the plane ticket in the case at bar, are
contracts not entirely prohibited. The one who adheres to the contract is in
reality free to reject it entirely; if he adheres, he gives his consent."
(Tolentino, Civil Code, Vol. IV, 1962 Ed., p. 462, citing Mr. Justice J.B.L.
Reyes, Lawyer's Journal, Jan. 31, 1951, p. 49).
Besides, the agreement contained in the above quoted Clause 14 is a mere iteration of the
basic principle of law written in Article 1 1 7 4 of the Civil Code:
Article 1174. Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were
inevitable.
Nor can the appellant or its employees be charged with negligence. The storage of the goods in
the Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made
with their knowledge and consent. Since the warehouse belonged to and was maintained by
the government, it would be unfair to impute negligence to the appellant, the latter having no
control whatsoever over the same.
The lower court in its decision relied on the ruling laid down in Yu Biao Sontua vs. Ossorio 6,
where this Court held the defendant liable for damages arising from a fire caused by the
negligence of the defendant's employees while loading cases of gasoline and petroleon
products. But unlike in the said case, there is not a shred of proof in the present case that the
cause of the fire that broke out in the Custom's warehouse was in any way attributable to the
negligence of the appellant or its employees. Under the circumstances, the appellant is plainly
not responsible.
WHEREFORE, the judgment appealed from is hereby set aside. No costs.
SO ORDERED.
Makasiar (Chairman), Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ., concur.

Thus, where fortuitous event or force majeure is the immediate and proximate cause of the
loss, the obligor is exempt from liability for non-performance. The Partidas, 4 the antecedent of
Article 1174 of the Civil Code, defines 'caso fortuito' as 'an event that takes place by accident
and could not have been foreseen. Examples of this are destruction of houses, unexpected fire,
shipwreck, violence of robbers.'

In its dissertation of the phrase 'caso fortuito' the Enciclopedia Juridicada Espanola 5 says: "In a
legal sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the
following essential characteristics: (1) the cause of the unforeseen and unexpected occurrence,
or of the failure of the debtor to comply with his obligation, must be independent of the human
will; (2) it must be impossible to foresee the event which constitutes the 'caso fortuito', or if it
can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be
free from any participation in the aggravation of the injury resulting to the creditor." In the case
at bar, the burning of the customs warehouse was an extraordinary event which happened
independently of the will of the appellant. The latter could not have foreseen the event.

There is nothing in the record to show that appellant carrier ,incurred in delay in the
performance of its obligation. It appears that appellant had not only notified appellees of the
arrival of their shipment, but had demanded that the same be withdrawn. In fact, pursuant to
such demand, appellee Uy Bico had taken delivery of 907 cavans of rice before the burning of
the warehouse.
 FIRST DIVISION
G.R. No. 60501. March 5, 1993.
CATHAY PACIFIC AIRWAYS, LTD, petitioner, vs. COURT OF APPEALS and TOMAS L.
ALCANTARA, respondents.
Siguion-Reyna, Montecillo & Ongsiako and Tomacruz, Manguiat & Associates for petitioner.
Tanjuatco, Oreta, Tanjuatco, Berenger & Corpus for private respondent.
SYLLABUS
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.
2. DAMAGES; MORAL AND EXEMPLARY DAMAGES PREDICATED UPON A BREACH OF
CONTRACT OF CARRIAGE; RECOVERABLE ONLY IN INSTANCES WHERE THE MISHAP
RESULTS IN DEATH OF A PASSENGER, OR WHERE THE CARRIER IS GUILTY OF FRAUD
OR BAD FAITH; THE CONDUCT OF PETITIONER'S REPRESENTATIVE TOWARDS
RESPONDENT JUSTIFIES THE GRANT OF MORAL AND EXEMPLARY DAMAGES IN CASE
AT BAR. — Moral damages predicated upon a breach of contract of carriage may only be
recoverable in instances where the mishap results in death of a passenger, or where the carrier
is guilty of fraud or bad faith. 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." 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. Conversely, if the defendant airline is shown to have
acted fraudulently or in bad faith, the award of moral and exemplary damages is proper.
3. TEMPERATE DAMAGES; RECOVERABLE ONLY UPON PROOF THAT THE CLAIMANT
SUSTAINED SOME PECUNIARY LOSS. — 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. It cannot be gainsaid that respondent's luggage was
ultimately delivered to him without serious or appreciable damage.
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.
DECISION
BELLOSILLO, J p:
This is a petition for review on certiorari of the decision of the Court of Appeals which affirmed
with modification that of the trial court by increasing the award of damages in favor of private
respondent Tomas L. Alcantara.
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.
On 1 March 1976, respondent filed his complaint against petitioner with the Court of First
Instance (now Regional Trial Court) of Lanao del Norte praying for temperate, moral and
exemplary damages, plus attorney's fees.
On 18 April 1976, the trial court rendered its decision ordering CATHAY to pay Plaintiff
P20,000.00 for moral damages, P5,000.00 for temperate damages, P10,000.00 for exemplary
damages, and P25,000.00 for attorney's fees, and the costs. 1
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.
Petitioner's first assigned error involves findings of fact which are not reviewable by this Court.
2 At any rate, it is not impressed with merit. 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, 3 and the evidence
shows that petitioner acted fraudulently or in bad faith.
Moral damages predicated upon a breach of contract of carriage may only be recoverable in
instances where the mishap results in death of a passenger, 4 or where the carrier is guilty of
fraud or bad faith. 5
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 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. Hereunder is part of Palma's testimony —
"Q: What did Mr. Alcantara say, if any?
A. Mr. Alcantara was of course . . . . I could understand his position. He was furious for the
experience because probably he was thinking he was going to meet the Director-General the
following day and, well, he was with no change of proper clothes and so, I would say, he was
not happy about the situation.
Q: What did Mr. Alcantara say?
A: He was trying to press the fellow to make the report and if possible make the delivery of his
baggage as soon as possible.
Q: And what did the agent or duty officer say, if any?
A: The duty officer, of course, answered back saying 'What can we do, the baggage is missing.
I cannot do anything.' something like it. 'Anyhow you can buy anything you need, charged to
Cathay Pacific.'
Q: What was the demeanor or comportment of the duty officer of Cathay Pacific when he said
to Mr. Alcantara 'You can buy anything chargeable to Cathay Pacific'?
A: If I had to look at it objectively, the duty officer would like to dismiss the affair as soon as
possible by saying indifferently 'Don't worry. It can be found.'" 7
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.
When petitioner airline misplaced respondent's luggage and failed to deliver it to its passenger
at the appointed place and time, some special species of injury must have been caused to him.
For sure, the latter underwent profound distress and anxiety, and the fear of losing the
opportunity to fulfill the purpose of his trip. In fact, for want of appropriate clothings for the
occasion brought about by the delay of the arrival of his luggage, to his embarrassment and
consternation respondent Alcantara had to seek postponement of his pre-arranged conference
with the Director General of Trade of the host country.
In one case, 13 this Court observed that a traveller would naturally suffer mental anguish,
anxiety and shock when he finds that his luggage did not travel with him and he finds himself in
a foreign land without any article of clothing other than what he has on.

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.
Thus, respondent is entitled to moral and exemplary damages. We however find the award by
the Court of Appeals of P80,000.00 for moral damages excessive, hence, We reduce the
amount to P30,000.00. The exemplary damages of P20,000.00 being reasonable is
maintained, as well as the attorney's fees of P25,000.00 considering that petitioner's act or
omission has compelled Alcantara to litigate with third persons or to incur expenses to protect
his interest. 14

However, respondent Alcantara is not entitled to temperate damages, contrary to the ruling of WHEREFORE, the assailed decision of respondent Court of Appeals is AFFIRMED with the
the court a quo, in the absence of any showing that he sustained some pecuniary loss. 9 It exception of the award of temperate damages of P10,000.00 which is deleted, while the award
cannot be gainsaid that respondent's luggage was ultimately delivered to him without serious or of moral damages of P80,000.00 is reduced to P30,000.00. The award of P20,000.00 for
appreciable damage. exemplary damages is maintained as reasonable together with the attorney's fees of
P25,000.00. The moral and exemplary damages shall earn interest at the legal rate from 1
As regards its second assigned error, petitioner airline contends that the extent of its liability for March 1976 when the complaint was filed until full payment.
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 SO ORDERED.
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 Convention itself provides in
Art. 25 that —

"(1) The carrier shall not be entitled to avail himself of the provisions of this convention which
exclude or limit his liability, if the damage is caused by his wilfull misconduct or by such default
on his part as, in accordance with the law of the court to which the case is submitted, is
considered to be equivalent to wilfull misconduct."

(2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage
is caused under the same circumstances by any agent of the carrier acting within the scope of
his employment."
 HIRD DIVISION
G.R. No. L-47822 December 22, 1988
PEDRO DE GUZMAN, petitioner,
vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents.
Vicente D. Millora for petitioner.
Jacinto Callanta for private respondent.
FELICIANO, J.:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap
metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent
would bring such material to Manila for resale. He utilized two (2) six-wheeler trucks which he
owned for hauling the material to Manila. On the return trip to Pangasinan, respondent would
load his vehicles with cargo which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, respondent charged freight rates which were
commonly lower than regular commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer
of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with
respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General
Milk in Makati, Rizal, to petitioner's establishment in Urdaneta on or before 4 December 1970.
Accordingly, on 1 December 1970, respondent loaded in Makati the merchandise on to his
trucks: 150 cartons were loaded on a truck driven by respondent himself, while 600 cartons
were placed on board the other truck which was driven by Manuel Estrada, respondent's driver
and employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never
reached petitioner, since the truck which carried these boxes was hijacked somewhere along
the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its
driver, his helper and the cargo.
On 6 January 1971, petitioner commenced action against private respondent in the Court of
First Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of the lost
merchandise, plus damages and attorney's fees. Petitioner argued that private respondent,
being a common carrier, and having failed to exercise the extraordinary diligence required of
him by the law, should be held liable for the value of the undelivered goods.
In his Answer, private respondent denied that he was a common carrier and argued that he
could not be held responsible for the value of the lost goods, such loss having been due
to force majeure.
On 10 December 1975, the trial court rendered a Decision 1 finding private respondent to be a
common carrier and holding him liable for the value of the undelivered goods (P 22,150.00) as
well as for P 4,000.00 as damages and P 2,000.00 as attorney's fees.
On appeal before the Court of Appeals, respondent urged that the trial court had erred in
considering him a common carrier; in finding that he had habitually offered trucking services to
the public; in not exempting him from liability on the ground of force majeure; and in ordering
him to pay damages and attorney's fees.
The Court of Appeals reversed the judgment of the trial court and held that respondent had
been engaged in transporting return loads of freight "as a casual
occupation — a sideline to his scrap iron business" and not as a common carrier. Petitioner
came to this Court by way of a Petition for Review assigning as errors the following conclusions
of the Court of Appeals:
1. that private respondent was not a common carrier;
2. that the hijacking of respondent's truck was force majeure; and
3. that respondent was not liable for the value of the undelivered cargo.
(Rollo, p. 111)
We consider first the issue of whether or not private respondent Ernesto Cendana may, under
the facts earlier set forth, be properly characterized as a common carrier.
The Civil Code defines "common carriers" in the following terms:
Article 1732. 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.
The above article makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier offering its services to the
"general public," i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population. We think that Article
1733 deliberaom making such distinctions.
So understood, the concept of "common carrier" under Article 1732 may be seen to coincide
neatly with the notion of "public service," under the Public Service Act (Commonwealth Act No.
1416, as amended) which at least partially supplements the law on common carriers set forth in
the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, "public service"
includes:
... every person that now or hereafter may own, operate, manage, or control
in the Philippines, for hire or compensation, with general or limited clientele,
whether permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction railway,
subway motor vehicle, either for freight or passenger, or both, with or without
fixed route and whatever may be its classification, freight or carrier service of
any class, express service, steamboat, or steamship line, pontines, ferries
and water craft, engaged in the transportation of passengers or freight or
both, shipyard, marine repair shop, wharf or dock, ice plant,
ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and
power, water supply and power petroleum, sewerage system, wire or
wireless communications systems, wire or wireless broadcasting stations and
other similar public services. ... (Emphasis supplied)
It appears to the Court that private respondent is properly characterized as a common carrier
even though he merely "back-hauled" goods for other merchants from Manila to Pangasinan,
although such back-hauling was done on a periodic or occasional rather than regular or
scheduled manner, and even though private respondent's principal occupation was not the
carriage of goods for others. There is no dispute that private respondent charged his customers
a fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here.
The Court of Appeals referred to the fact that private respondent held no certificate of public
convenience, and concluded he was not a common carrier. This is palpable error. A certificate
of public convenience is not a requisite for the incurring of liability under the Civil Code
provisions governing common carriers. That liability arises the moment a person or firm acts as
a common carrier, without regard to whether or not such carrier has also complied with the
requirements of the applicable regulatory statute and implementing regulations and has been
granted a certificate of public convenience or other franchise. To exempt private respondent
from the liabilities of a common carrier because he has not secured the necessary certificate of
public convenience, would be offensive to sound public policy; that would be to reward private
respondent precisely for failing to comply with applicable statutory requirements. The business
of a common carrier impinges directly and intimately upon the safety and well being and
property of those members of the general community who happen to deal with such carrier.
The law imposes duties and liabilities upon common carriers for the safety and protection of
those who utilize their services and the law cannot allow a common carrier to render such
duties and liabilities merely facultative by simply failing to obtain the necessary permits and
authorizations.
We turn then to the liability of private respondent as a common carrier.
Common carriers, "by the nature of their business and for reasons of public policy" 2 are held to
a very high degree of care and diligence ("extraordinary diligence") in the carriage of goods as
well as of passengers. The specific import of extraordinary diligence in the care of goods
transported by a common carrier is, according to Article 1733, "further expressed in Articles
1734,1735 and 1745, numbers 5, 6 and 7" of the Civil Code.
Article 1734 establishes the general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry, "unless the same is due to any of the
following causes only:
(1) Flood, storm, earthquake, lightning or other natural
disaster or calamity;
(2) Act of the public enemy in war, whether international or
civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character-of the goods or defects in the packing or-
in the containers; and
(5) Order or act of competent public authority.
It is important to point out that the above list of causes of loss, destruction or deterioration
which exempt the common carrier for responsibility therefor, is a closed list. Causes falling
outside the foregoing list, even if they appear to constitute a species of force majeure fall within
the scope of Article 1735, which provides as follows:
In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the
preceding article, 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 that they observed extraordinary diligence as required in
Article 1733. (Emphasis supplied)
Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause
alleged in the instant case — the hijacking of the carrier's truck — does not fall within any of the
five (5) categories of exempting causes listed in Article 1734. It would follow, therefore, that the
hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other
words, that the private respondent as common carrier is presumed to have been at fault or to
have acted negligently. This presumption, however, may be overthrown by proof of
extraordinary diligence on the part of private respondent.
Petitioner insists that private respondent had not observed extraordinary diligence in the care of
petitioner's goods. Petitioner argues that in the circumstances of this case, private respondent
should have hired a security guard presumably to ride with the truck carrying the 600 cartons of
Liberty filled milk. We do not believe, however, that in the instant case, the standard of
extraordinary diligence required private respondent to retain a security guard to ride with the
truck and to engage brigands in a firelight at the risk of his own life and the lives of the driver
and his helper.
The precise issue that we address here relates to the specific requirements of the duty of
extraordinary diligence in the vigilance over the goods carried in the specific context of
hijacking or armed robbery.
As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under Article
1733, given additional specification not only by Articles 1734 and 1735 but also by Article 1745,
numbers 4, 5 and 6, Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be considered unreasonable,
unjust and contrary to public policy:
In these circumstances, we hold that the occurrence of the loss must reasonably be regarded
as quite beyond the control of the common carrier and properly regarded as a fortuitous event.
It is necessary to recall that even common carriers are not made absolute insurers against all
risks of travel and of transport of goods, and are not held liable for acts or events which cannot
be foreseen or are inevitable, provided that they shall have complied with the rigorous standard
of extraordinary diligence.
We, therefore, agree with the result reached by the Court of Appeals that private respondent
Cendana is not liable for the value of the undelivered merchandise which was lost because of
an event entirely beyond private respondent's control.

xxx xxx xxx ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and the Decision of
the Court of Appeals dated 3 August 1977 is AFFIRMED. No pronouncement as to costs.
(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 donot act with grave or
irresistible threat, violence or force, is dispensed with or
diminished; and

(7) that the common carrier shall 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.
(Emphasis supplied)

Under Article 1745 (6) above, a common carrier is held responsible — and will not be allowed
to divest or to diminish such responsibility — even for acts of strangers like thieves or
robbers, except where such thieves or robbers in fact acted "with grave or irresistible threat,
violence or force." We believe and so hold that the limits of the duty of extraordinary diligence in
the vigilance over the goods carried are reached where the goods are lost as a result of a
robbery which is attended by "grave or irresistible threat, violence or force."

In the instant case, armed men held up the second truck owned by private respondent which
carried petitioner's cargo. The record shows that an information for robbery in band was filed in
the Court of First Instance of Tarlac, Branch 2, in Criminal Case No. 198 entitled "People of the
Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina, Oscar Oria and one John
Doe." There, the accused were charged with willfully and unlawfully taking and carrying away
with them the second truck, driven by Manuel Estrada and loaded with the 600 cartons of
Liberty filled milk destined for delivery at petitioner's store in Urdaneta, Pangasinan. The
decision of the trial court shows that the accused acted with grave, if not irresistible, threat,
violence or force.3 Three (3) of the five (5) hold-uppers were armed with firearms. The robbers
not only took away the truck and its cargo but also kidnapped the driver and his helper,
detaining them for several days and later releasing them in another province (in Zambales).
The hijacked truck was subsequently found by the police in Quezon City. The Court of First
Instance convicted all the accused of robbery, though not of robbery in band. 4
 [G.R. No. 113003. October 17, 1997] all driver applicants in Yobido Liner underwent actual driving tests before they were employed.
Defendant Cresencio Yobido underwent such test and submitted his professional drivers license
and clearances from the barangay, the fiscal and the police.
On August 29, 1991, the lower court rendered a decision[2] dismissing the action for lack of
ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs. COURT OF APPEALS, LENY merit. On the issue of whether or not the tire blowout was a caso fortuito, it found that the falling
TUMBOY, ARDEE TUMBOY and JASMIN TUMBOY, respondents. of the bus to the cliff was a result of no other outside factor than the tire blow-out. It held that the
ruling in the La Mallorca and Pampanga Bus Co. v. De Jesus[3] that a tire blowout is a mechanical
DECISION defect of the conveyance or a fault in its equipment which was easily discoverable if the bus had
been subjected to a more thorough or rigid check-up before it took to the road that morning is
ROMERO, J.: inapplicable to this case. It reasoned out that in said case, it was found that the blowout was
caused by the established fact that the inner tube of the left front tire was pressed between the
In this petition for review on certiorari of the decision of the Court of Appeals, the issue is inner circle of the left wheel and the rim which had slipped out of the wheel. In this case, however,
whether or not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event the cause of the explosion remains a mystery until at present. As such, the court added, the tire
that exempts the carrier from liability for the death of a passenger. blowout was a caso fortuito which is completely an extraordinary circumstance independent of
the will of the defendants who should be relieved of whatever liability the plaintiffs may have
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee suffered by reason of the explosion pursuant to Article 1174 [4] of the Civil Code.
and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City.
Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the lower court
exploded. The bus fell into a ravine around three (3) feet from the road and struck a tree. The the following errors: (a) finding that the tire blowout was a caso fortuito; (b) failing to hold that the
incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other defendants did not exercise utmost and/or extraordinary diligence required of carriers under
passengers. Article 1755 of the Civil Code, and (c) deciding the case contrary to the ruling in Juntilla v.
Fontanar,[5] and Necesito v. Paras.[6]
On November 21, 1988, a complaint for breach of contract of carriage, damages and
attorneys fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, On August 23, 1993, the Court of Appeals rendered the Decision [7] reversing that of the
and Cresencio Yobido, its driver, before the Regional Trial Court of Davao City. When the lower court. It held that:
defendants therein filed their answer to the complaint, they raised the affirmative defense of caso
fortuito. They also filed a third-party complaint against Philippine Phoenix Surety and Insurance, To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the blow-
Inc. This third-party defendant filed an answer with compulsory counterclaim. At the pre-trial out, if due to a factory defect, improper mounting, excessive tire pressure, is not an
conference, the parties agreed to a stipulation of facts.[1] unavoidable event. On the other hand, there may have been adverse conditions on the road
that were unforeseeable and/or inevitable, which could make the blow-out a caso fortuito. The
Upon a finding that the third party defendant was not liable under the insurance contract, fact that the cause of the blow-out was not known does not relieve the carrier of liability. Owing
the lower court dismissed the third party complaint. No amicable settlement having been arrived to the statutory presumption of negligence against the carrier and its obligation to exercise the
at by the parties, trial on the merits ensued. utmost diligence of very cautious persons to carry the passenger safely as far as human care
The plaintiffs asserted that violation of the contract of carriage between them and the and foresight can provide, it is the burden of the defendants to prove that the cause of the blow-
defendants was brought about by the drivers failure to exercise the diligence required of the out was a fortuitous event. It is not incumbent upon the plaintiff to prove that the cause of the
carrier in transporting passengers safely to their place of destination. According to Leny Tumboy, blow-out is not caso-fortuito.
the bus left Mangagoy at 3:00 oclock in the afternoon. The winding road it traversed was not
cemented and was wet due to the rain; it was rough with crushed rocks. The bus which was full Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge
of passengers had cargoes on top. Since it was running fast, she cautioned the driver to slow defendants burden. As enunciated in Necesito vs. Paras, the passenger has neither choice nor
down but he merely stared at her through the mirror. At around 3:30 p.m., in Trento, she heard control over the carrier in the selection and use of its equipment, and the good repute of the
something explode and immediately, the bus fell into a ravine. manufacturer will not necessarily relieve the carrier from liability.
For their part, the defendants tried to establish that the accident was due to a fortuitous
event. Abundio Salce, who was the bus conductor when the incident happened, testified that the Moreover, there is evidence that the bus was moving fast, and the road was wet and
42-seater bus was not full as there were only 32 passengers, such that he himself managed to rough. The driver could have explained that the blow-out that precipitated the accident that
get a seat. He added that the bus was running at a speed of 60 to 50 and that it was going slow caused the death of Toto Tumboy could not have been prevented even if he had exercised due
because of the zigzag road. He affirmed that the left front tire that exploded was a brand new tire care to avoid the same, but he was not presented as witness.
that he mounted on the bus on April 21, 1988 or only five (5) days before the incident. The Yobido
Liner secretary, Minerva Fernando, bought the new Goodyear tire from Davao Toyo Parts on The Court of Appeals thus disposed of the appeal as follows:
April 20, 1988 and she was present when it was mounted on the bus by Salce. She stated that
WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. In other
defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in words, there must be an entire exclusion of human agency from the cause of injury or loss. [14]
moral damages, and P7,000.00 for funeral and burial expenses.
Under the circumstances of this case, the explosion of the new tire may not be considered
a fortuitous event. There are human factors involved in the situation. The fact that the tire was
SO ORDERED. new did not imply that it was entirely free from manufacturing defects or that it was properly
mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is of a
The defendants filed a motion for reconsideration of said decision which was denied on brand name noted for quality, resulting in the conclusion that it could not explode within five days
November 4, 1993 by the Court of Appeals. Hence, the instant petition asserting the position that use. Be that as it may, it is settled that an accident caused either by defects in the automobile or
the tire blowout that caused the death of Tito Tumboy was a caso fortuito.Petitioners claim further through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability
that the Court of Appeals, in ruling contrary to that of the lower court, misapprehended facts and, for damages.[15]
therefore, its findings of fact cannot be considered final which shall bind this Court. Hence, they
pray that this Court review the facts of the case. Moreover, a common carrier may not be absolved from liability in case of force majeure or
fortuitous event alone. The common carrier must still prove that it was not negligent in causing
The Court did re-examine the facts and evidence in this case because of the inapplicability the death or injury resulting from an accident.[16] This Court has had occasion to state:
of the established principle that the factual findings of the Court of Appeals are final and may not
be reviewed on appeal by this Court. This general principle is subject to exceptions such as the While it may be true that the tire that blew-up was still good because the grooves of the tire
one present in this case, namely, that the lower court and the Court of Appeals arrived at diverse were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No
factual findings.[8] However, upon such re-examination, we found no reason to overturn the evidence was presented to show that the accident was due to adverse road conditions or that
findings and conclusions of the Court of Appeals. precautions were taken by the jeepney driver to compensate for any conditions liable to cause
As a rule, when a passenger boards a common carrier, he takes the risks incidental to the accidents. The sudden blowing-up, therefore, could have been caused by too much air
mode of travel he has taken. After all, a carrier is not an insurer of the safety of its passengers pressure injected into the tire coupled by the fact that the jeepney was overloaded and
[17]
[9]
and is not bound absolutely and at all events to carry them safely and without injury. However, speeding at the time of the accident.
when a passenger is injured or dies while travelling, the law presumes that the common carrier
is negligent. Thus, the Civil Code provides: It is interesting to note that petitioners proved through the bus conductor, Salce, that the
bus was running at 60-50 kilometers per hour only or within the prescribed lawful speed
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have limit. However, they failed to rebut the testimony of Leny Tumboy that the bus was running so
been at fault or to have acted negligently, unless they prove that they observed extraordinary fast that she cautioned the driver to slow down. These contradictory facts must, therefore, be
diligence as prescribed in articles 1733 and 1755. resolved in favor of liability in view of the presumption of negligence of the carrier in the law.
Coupled with this is the established condition of the road rough, winding and wet due to the rain. It
was incumbent upon the defense to establish that it took precautionary measures considering
Article 1755 provides that (a) common carrier is bound to carry the passengers safely as partially dangerous condition of the road. As stated above, proof that the tire was new and of
far as human care and foresight can provide, using the utmost diligence of very cautious persons, good quality is not sufficient proof that it was not negligent. Petitioners should have shown that it
with a due regard for all the circumstances. Accordingly, in culpa contractual, once a passenger undertook extraordinary diligence in the care of its carrier, such as conducting daily routinary
dies or is injured, the carrier is presumed to have been at fault or to have acted negligently. This check-ups of the vehicles parts. As the late Justice J.B.L. Reyes said:
disputable presumption may only be overcome by evidence that the carrier had observed
extraordinary diligence as prescribed by Articles 1733,[10] 1755 and 1756 of the Civil Code or that
the death or injury of the passenger was due to a fortuitous event. [11] Consequently, the court It may be impracticable, as appellee argues, to require of carriers to test the strength of each
need not make an express finding of fault or negligence on the part of the carrier to hold it and every part of its vehicles before each trip; but we are of the opinion that a due regard for
responsible for damages sought by the passenger.[12] 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
In view of the foregoing, petitioners contention that they should be exempt from liability endanger the safety of the passengers.[18]
because the tire blowout was no more than a fortuitous event that could not have been foreseen,
must fail. A fortuitous event is possessed of the following characteristics: (a) the cause of the Having failed to discharge its duty to overthrow the presumption of negligence with clear
unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, and convincing evidence, petitioners are hereby held liable for damages. Article 1764[19] in
must be independent of human will; (b) it must be impossible to foresee the event which relation to Article 2206[20] of the Civil Code prescribes the amount of at least three thousand
constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the pesos as damages for the death of a passenger. Under prevailing jurisprudence, the award of
occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a damages under Article 2206 has been increased to fifty thousand pesos (P50,000.00).[21]
normal manner; and (d) the obligor must be free from any participation in the aggravation of the
injury resulting to the creditor.[13] As Article 1174 provides, no person shall be responsible for a Moral damages are generally not recoverable in culpa contractual except when bad faith
had been proven. However, the same damages may be recovered when breach of contract of
carriage results in the death of a passenger, [22] as in this case. Exemplary damages, awarded by
way of example or correction for the public good when moral damages are awarded, [23] may
likewise be recovered in contractual obligations if the defendant acted in wanton, fraudulent,
reckless, oppressive, or malevolent manner. [24] Because petitioners failed to exercise the
extraordinary diligence required of a common carrier, which resulted in the death of Tito Tumboy,
it is deemed to have acted recklessly.[25] As such, private respondents shall be entitled to
exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the
modification that petitioners shall, in addition to the monetary awards therein, be liable for the
award of exemplary damages in the amount of P20,000.00. Costs against petitioners.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.
 EN BANC
G.R. No. L-16629 January 31, 1962
SOUTHERN LINES, INC., petitioner,
vs.
COURT OF APPEALS and CITY OF ILOILO, respondents.
Jose Ma. Lopez Vito, Jr. for petitioner.
The City Fiscal for respondents.
DE LEON, J.:
This is a petition to review on certiorari the decision of the Court of Appeals in CA-G.R. No.
15579-R affirming that of the Court of First Instance of Iloilo which sentenced petitioner
Southern Lines, Inc. to pay respondent City of Iloilo the amount of P4,931.41.
Sometime in 1948, the City of Iloilo requisitioned for rice from the National Rice and Corn
Corporation (hereafter referred to as NARIC) in Manila. On August 24 of the same year,
NARIC, pursuant to the order, shipped 1,726 sacks of rice consigned to the City of Iloilo on
board the SS "General Wright" belonging to the Southern Lines, Inc. Each sack of rice weighed
75 kilos and the entire shipment as indicated in the bill of lading had a total weight of 129,450
kilos. According to the bill of lading, the cost of the shipment was P63,115.50 itemized and
computed as follows: .
Unit Price per bag P36.25 P62,567.50
Handling at P0.13 per bag 224.38
Trucking at P2.50 per bag 323.62
T o t a l . . . . . .. . . . . 63,115.50
On September 3, 1948, the City of Iloilo received the shipment and paid the amount of
P63,115.50. However, it was noted that the foot of the bill of lading that the City of Iloilo
'Received the above mentioned merchandise apparently in same condition as when shipped,
save as noted below: actually received 1685 sacks with a gross weight of 116,131 kilos upon
actual weighing. Total shortage ascertained 13,319 kilos." The shortage was equivalent to 41
sacks of rice with a net weight of 13,319 kilos, the proportionate value of which was P6,486.35.
On February 14, 1951 the City of Iloilo filed a complaint in the Court of First Instance of Iloilo
against NARIC and the Southern Lines, Inc. for the recovery of the amount of P6,486.35
representing the value of the shortage of the shipment of rice. After trial, the lower court
absolved NARIC from the complaint, but sentenced the Southern Lines, Inc. to pay the amount
of P4,931.41 which is the difference between the sum of P6,486.35 and P1,554.94
representing the latter's counterclaim for handling and freight.
The Southern Lines, Inc. appealed to the Court of Appeals which affirmed the judgment of the
trial court. Hence, this petition for review.
The only question to be determined in this petition is whether or not the defendant-carrier, the
herein petitioner, is liable for the loss or shortage of the rice shipped.
Article 361 of the Code of Commerce provides: .
ART. 361. — The merchandise shall be transported at the risk and venture of the
shipper, if the contrary has not been expressly stipulated.
As a consequence, all the losses and deteriorations which the goods may suffer
during the transportation by reason of fortuitous event, force majeure, or the inherent
nature and defect of the goods, shall be for the account and risk of the
shipper.1äwphï1.ñët
Proof of these accidents is incumbent upon the carrier.
Article 362 of the same Code provides: .
ART. 362. — Nevertheless, the carrier shall be liable for the losses and damages
resulting from the causes mentioned in the preceding article if it is proved, as against
him, that they arose through his negligence or by reason of his having failed to take
the precautions which usage his establisbed among careful persons, unless the
shipper has committed fraud in the bill of lading, representing the goods to be of a kind
or quality different from what they really were.
If, notwithstanding the precautions referred to in this article, the goods transported run
the risk of being lost, on account of their nature or by reason of unavoidable accident,
there being no time for their owners to dispose of them, the carrier may proceed to sell
them, placing them for this purpose at the disposal of the judicial authority or of the
officials designated by special provisions.
Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was
only obliged to prove that the damages suffered by the goods were "by virtue of the nature or
defect of the articles." Under the provisions of Article 362, the plaintiff, in order to hold the
defendant liable, was obliged to prove that the damages to the goods by virtue of their nature,
occurred on account of its negligence or because the defendant did not take the precaution
adopted by careful persons. (Government v. Ynchausti & Co., 40 Phil. 219, 223).
Petitioner claims exemption from liability by contending that the shortage in the shipment of rice
was due to such factors as the shrinkage, leakage or spillage of the rice on account of the bad
condition of the sacks at the time it received the same and the negligence of the agents of
respondent City of Iloilo in receiving the shipment. The contention is untenable, for, if the fact of WHEREFORE, the decision of the Court of Appeals is hereby affirmed in all respects and the
improper packing is known to the carrier or his servants, or apparent upon ordinary petition for certioraridenied.
observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability
for loss or injury resulting thereform. (9 Am Jur. 869.) Furthermore, according to the Court of
Appeals, "appellant (petitioner) itself frankly admitted that the strings that tied the bags of rice
were broken; some bags were with holes and plenty of rice were spilled inside the hull of the
boat, and that the personnel of the boat collected no less than 26 sacks of rice which they had
distributed among themselves." This finding, which is binding upon this Court, shows that the
shortage resulted from the negligence of petitioner.

Invoking the provisions of Article 366 of the Code of Commerce and those of the bill of lading,
petitioner further contends that respondent is precluded from filing an action for damages on
account of its failure to present a claim within 24 hours from receipt of the shipment. It also
cites the cases of Government v. Ynchausti & Co., 24 Phil. 315 and Triton Insurance Co. v.
Jose, 33 Phil. 194, ruling to the effect that the requirement that the claim for damages must be
made within 24 hours from delivery is a condition precedent to the accrual of the right of action
to recover damages. These two cases above-cited are not applicable to the case at bar. In the
first cited case, the plaintiff never presented any claim at all before filing the action. In the
second case, there was payment of the transportation charges which precludes the
presentation of any claim against the carrier. (See Article 366, Code of Commerce.) It is
significant to note that in the American case of Hoye v. Pennsylvania Railroad Co., 13 Ann.
Case. 414, it has been said: .

... "It has been held that a stipulation in the contract of shipment requiring the owner of
the goods to present a notice of his claim to the carrier within a specified time after the
goods have arrived at their destination is in the nature of a condition precedent to the
owner's right to enforce a recovery, that he must show in the first instance that be has
complied with the condition, or that the circumstances were such that to have
complied with it would have required him to do an unreasonable thing. The weight of
authority, however, sustains the view that such a stipulation is more in the nature of a
limitation upon the owner's right to recovery, and that the burden of proof is
accordingly on the carrier to show that the limitation was reasonable and in proper
form or within the time stated." (Hutchinson on Carrier, 3d ed., par. 44) Emphasis
supplied.

In the case at bar, the record shows that petitioner failed to plead this defense in its answer to
respondent's complaint and, therefore, the same is deemed waived (Section 10, Rule 9, Rules
of Court), and cannot be raised for the first time at the trial or on appeal. (Maxilom v. Tabotabo,
9 Phil. 390.) Moreover, as the Court of Appeals has said: .

... the records reveal that the appellee (respondent) filed the present action, within a
reasonable time after the short delivery in the shipment of the rice was made. It should
be recalled that the present action is one for the refund of the amount paid in excess,
and not for damages or the recovery of the shortage; for admittedly the appellee
(respondent) had paid the entire value of the 1726 sacks of rice, subject to
subsequent adjustment, as to shortages or losses. The bill of lading does not at all
limit the time for filing an action for the refund of money paid in excess.
 FIRST DIVISION
G.R. No. 101503 September 15, 1993
PLANTERS PRODUCTS, INC., petitioner,
vs.
COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN
KABUSHIKI KAISHA, respondents.
Gonzales, Sinense, Jimenez & Associates for petitioner.
Siguion Reyna, Montecillo & Ongsiako Law Office for private respondents.
BELLOSILLO, J.:
Does a charter-party1 between a shipowner and a charterer transform a common carrier into a
private one as to negate the civil law presumption of negligence in case of loss or damage to its
cargo?
Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation
(MITSUBISHI) of New York, U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% fertilizer which
the latter shipped in bulk on 16 June 1974 aboard the cargo vessel M/V "Sun Plum" owned by
private respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro
Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading No. KP-1 signed by
the master of the vessel and issued on the date of departure.
On 17 May 1974, or prior to its voyage, a time charter-party on the vessel M/V "Sun Plum"
pursuant to the Uniform General Charter2 was entered into between Mitsubishi as
shipper/charterer and KKKK as shipowner, in Tokyo, Japan. 3 Riders to the aforesaid charter-
party starting from par. 16 to 40 were attached to the pre-printed agreement. Addenda Nos. 1,
2, 3 and 4 to the charter-party were also subsequently entered into on the 18th, 20th, 21st and
27th of May 1974, respectively.
Before loading the fertilizer aboard the vessel, four (4) of her holds 4 were all presumably
inspected by the charterer's representative and found fit to take a load of urea in bulk pursuant
to par. 16 of the charter-party which reads:
16. . . . At loading port, notice of readiness to be accomplished by certificate
from National Cargo Bureau inspector or substitute appointed by charterers
for his account certifying the vessel's readiness to receive cargo spaces. The
vessel's hold to be properly swept, cleaned and dried at the vessel's expense
and the vessel to be presented clean for use in bulk to the satisfaction of the
inspector before daytime commences. (emphasis supplied)
After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of
the shipper, the steel hatches were closed with heavy iron lids, covered with three (3) layers of
tarpaulin, then tied with steel bonds. The hatches remained closed and tightly sealed
throughout the entire voyage.5
Upon arrival of the vessel at her port of call on 3 July 1974, the steel pontoon hatches were
opened with the use of the vessel's boom. Petitioner unloaded the cargo from the holds into its
steelbodied dump trucks which were parked alongside the berth, using metal scoops attached
to the ship, pursuant to the terms and conditions of the charter-partly (which provided for an
F.I.O.S. clause).6 The hatches remained open throughout the duration of the discharge.7
Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was
transported to the consignee's warehouse located some fifty (50) meters from the wharf.
Midway to the warehouse, the trucks were made to pass through a weighing scale where they
were individually weighed for the purpose of ascertaining the net weight of the cargo. The port
area was windy, certain portions of the route to the warehouse were sandy and the weather
was variable, raining occasionally while the discharge was in progress. 8 The petitioner's
warehouse was made of corrugated galvanized iron (GI) sheets, with an opening at the front
where the dump trucks entered and unloaded the fertilizer on the warehouse floor. Tarpaulins
and GI sheets were placed in-between and alongside the trucks to contain spillages of the
ferilizer.9
It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July 1974 (except July
12th, 14th and 18th).10A private marine and cargo surveyor, Cargo Superintendents Company
Inc. (CSCI), was hired by PPI to determine the "outturn" of the cargo shipped, by taking draft
readings of the vessel prior to and after discharge. 11 The survey report submitted by CSCI to
the consignee (PPI) dated 19 July 1974 revealed a shortage in the cargo of 106.726 M/T and
that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt. The same
results were contained in a Certificate of Shortage/Damaged Cargo dated 18 July 1974
prepared by PPI which showed that the cargo delivered was indeed short of 94.839 M/T and
about 23 M/T were rendered unfit for commerce, having been polluted with sand, rust and
dirt. 12
Consequently, PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship
Agencies (SSA), the resident agent of the carrier, KKKK, for P245,969.31 representing the cost
of the alleged shortage in the goods shipped and the diminution in value of that portion said to
have been contaminated with dirt. 13
Respondent SSA explained that they were not able to respond to the consignee's claim for
payment because, according to them, what they received was just a request for shortlanded
certificate and not a formal claim, and that this "request" was denied by them because they
"had nothing to do with the discharge of the shipment." 14 Hence, on 18 July 1975, PPI filed an
action for damages with the Court of First Instance of Manila. The defendant carrier argued that
the strict public policy governing common carriers does not apply to them because they have
become private carriers by reason of the provisions of the charter-party. The court a
quo however sustained the claim of the plaintiff against the defendant carrier for the value of
the goods lost or damaged when it ruled thus: 15
. . . Prescinding from the provision of the law that a common carrier is
presumed negligent in case of loss or damage of the goods it contracts to
transport, all that a shipper has to do in a suit to recover for loss or damage is
to show receipt by the carrier of the goods and to delivery by it of less than
what it received. After that, the burden of proving that the loss or damage
was due to any of the causes which exempt him from liability is shipted to the
carrier, common or private he may be. Even if the provisions of the charter-
party aforequoted are deemed valid, and the defendants considered private
carriers, it was still incumbent upon them to prove that the shortage or
contamination sustained by the cargo is attributable to the fault or negligence
on the part of the shipper or consignee in the loading, stowing, trimming and
discharge of the cargo. This they failed to do. By this omission, coupled with
their failure to destroy the presumption of negligence against them, the
defendants are liable (emphasis supplied).
On appeal, respondent Court of Appeals reversed the lower court and absolved the carrier from
liability for the value of the cargo that was lost or damaged. 16 Relying on the 1968 case
of Home Insurance Co. v. American Steamship Agencies, Inc.,17 the appellate court ruled that
the cargo vessel M/V "Sun Plum" owned by private respondent KKKK was a private carrier and
not a common carrier by reason of the time charterer-party. Accordingly, the Civil Code
provisions on common carriers which set forth a presumption of negligence do not find
application in the case at bar. Thus —
. . . In the absence of such presumption, it was incumbent upon the plaintiff-
appellee to adduce sufficient evidence to prove the negligence of the
defendant carrier as alleged in its complaint. It is an old and well settled rule
that if the plaintiff, upon whom rests the burden of proving his cause of
action, fails to show in a satisfactory manner the facts upon which he bases
his claim, the defendant is under no obligation to prove his exception or
defense (Moran, Commentaries on the Rules of Court, Volume 6, p. 2, citing
Belen v. Belen, 13 Phil. 202).
But, the record shows that the plaintiff-appellee dismally failed to prove the
basis of its cause of action, i.e. the alleged negligence of defendant carrier. It
appears that the plaintiff was under the impression that it did not have to
establish defendant's negligence. Be that as it may, contrary to the trial
court's finding, the record of the instant case discloses ample evidence
showing that defendant carrier was not negligent in performing its obligation .
. . 18 (emphasis supplied).
Petitioner PPI appeals to us by way of a petition for review assailing the decision of the Court of
Appeals. Petitioner theorizes that the Home Insurance case has no bearing on the present
controversy because the issue raised therein is the validity of a stipulation in the charter-party
delimiting the liability of the shipowner for loss or damage to goods cause by want of due
deligence on its part or that of its manager to make the vessel seaworthy in all respects, and
not whether the presumption of negligence provided under the Civil Code applies only to
common carriers and not to private carriers. 19 Petitioner further argues that since the
possession and control of the vessel remain with the shipowner, absent any stipulation to the
contrary, such shipowner should made liable for the negligence of the captain and crew. In fine,
PPI faults the appellate court in not applying the presumption of negligence against respondent
carrier, and instead shifting the onus probandi on the shipper to show want of due deligence on
the part of the carrier, when he was not even at hand to witness what transpired during the
entire voyage.
As earlier stated, the primordial issue here is whether a common carrier becomes a private
carrier by reason of a charter-party; in the negative, whether the shipowner in the instant case
was able to prove that he had exercised that degree of diligence required of him under the law.
It is said that etymology is the basis of reliable judicial decisions in commercial cases. This
being so, we find it fitting to first define important terms which are relevant to our discussion.
A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof,
is let by the owner to another person for a specified time or use; 20 a contract of affreightment
by which the owner of a ship or other vessel lets the whole or a part of her to a merchant or
other person for the conveyance of goods, on a particular voyage, in consideration of the
payment of freight; 21 Charter parties are of two types: (a) contract of affreightment which
involves the use of shipping space on vessels leased by the owner in part or as a whole, to
carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which
the whole vessel is let to the charterer with a transfer to him of its entire command and
possession and consequent control over its navigation, including the master and the crew, who
are his servants. Contract of affreightment may either be time charter, wherein the vessel is
leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased
for a single voyage. 22 In both cases, the charter-party provides for the hire of vessel only,
either for a determinate period of time or for a single or consecutive voyage, the shipowner to
supply the ship's stores, pay for the wages of the master and the crew, and defray the
expenses for the maintenance of the ship.
Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the Civil
Code. 23 The definition extends to carriers either by land, air or water which hold themselves
out as ready to engage in carrying goods or transporting passengers or both for compensation
as a public employment and not as a casual occupation. The distinction between a "common or
public carrier" and a "private or special carrier" lies in the character of the business, such that if
the undertaking is a single transaction, not a part of the general business or occupation,
although involving the carriage of goods for a fee, the person or corporation offering such
service is a private carrier. 24
Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of
their business, should observe extraordinary diligence in the vigilance over the goods they
carry.25 In the case of private carriers, however, the exercise of ordinary diligence in the
carriage of goods will suffice. Moreover, in the case of loss, destruction or deterioration of the
goods, common carriers are presumed to have been at fault or to have acted negligently, and
the burden of proving otherwise rests on them.26 On the contrary, no such presumption applies
to private carriers, for whosoever alleges damage to or deterioration of the goods carried has
the onus of proving that the cause was the negligence of the carrier.
It is not disputed that respondent carrier, in the ordinary course of business, operates as a
common carrier, transporting goods indiscriminately for all persons. When petitioner chartered
the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ
of the shipowner and therefore continued to be under its direct supervision and control. Hardly
then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring
for his cargo when the charterer did not have any control of the means in doing so. This is
evident in the present case considering that the steering of the ship, the manning of the decks,
the determination of the course of the voyage and other technical incidents of maritime
navigation were all consigned to the officers and crew who were screened, chosen and hired by
the shipowner. 27
It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter
of the whole or portion of a vessel by one or more persons, provided the charter is limited to the
ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes
both the vessel and its crew, as in a bareboat or demise that a common carrier becomes
private, at least insofar as the particular voyage covering the charter-party is concerned.
Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship,
although her holds may, for the moment, be the property of the charterer. 28
Respondent carrier's heavy reliance on the case of Home Insurance Co. v. American
Steamship Agencies, supra, is misplaced for the reason that the meat of the controversy
therein was the validity of a stipulation in the charter-party exempting the shipowners from
liability for loss due to the negligence of its agent, and not the effects of a special charter on
common carriers. At any rate, the rule in the United States that a ship chartered by a single
shipper to carry special cargo is not a common carrier, 29 does not find application in our
jurisdiction, for we have observed that the growing concern for safety in the transportation of
passengers and /or carriage of goods by sea requires a more exacting interpretation of
admiralty laws, more particularly, the rules governing common carriers.
We quote with approval the observations of Raoul Colinvaux, the learned barrister-at-law 30 —
As a matter of principle, it is difficult to find a valid distinction between cases
in which a ship is used to convey the goods of one and of several persons.
Where the ship herself is let to a charterer, so that he takes over the charge
and control of her, the case is different; the shipowner is not then a carrier.
But where her services only are let, the same grounds for imposing a strict
responsibility exist, whether he is employed by one or many. The master and
the crew are in each case his servants, the freighter in each case is usually
without any representative on board the ship; the same opportunities for
fraud or collusion occur; and the same difficulty in discovering the truth as to
what has taken place arises . . .
In an action for recovery of damages against a common carrier on the goods shipped, the
shipper or consignee should first prove the fact of shipment and its consequent loss or damage
while the same was in the possession, actual or constructive, of the carrier. Thereafter, the
burden of proof shifts to respondent to prove that he has exercised extraordinary diligence
required by law or that the loss, damage or deterioration of the cargo was due to fortuitous
event, or some other circumstances inconsistent with its liability. 31
To our mind, respondent carrier has sufficiently overcome, by clear and convincing proof,
the prima faciepresumption of negligence.
The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken on 19 April 1977
before the Philippine Consul and Legal Attache in the Philippine Embassy in Tokyo, Japan,
testified that before the fertilizer was loaded, the four (4) hatches of the vessel were cleaned,
dried and fumigated. After completing the loading of the cargo in bulk in the ship's holds, the
steel pontoon hatches were closed and sealed with iron lids, then covered with three (3) layers
of serviceable tarpaulins which were tied with steel bonds. The hatches remained close and
tightly sealed while the ship was in transit as the weight of the steel covers made it impossible
for a person to open without the use of the ship's boom. 32
It was also shown during the trial that the hull of the vessel was in good condition, foreclosing
the possibility of spillage of the cargo into the sea or seepage of water inside the hull of the
vessel. 33 When M/V "Sun Plum" docked at its berthing place, representatives of the consignee
boarded, and in the presence of a representative of the shipowner, the foreman, the
stevedores, and a cargo surveyor representing CSCI, opened the hatches and inspected the
condition of the hull of the vessel. The stevedores unloaded the cargo under the watchful eyes
of the shipmates who were overseeing the whole operation on rotation basis. 34
Verily, the presumption of negligence on the part of the respondent carrier has been
efficaciously overcome by the showing of extraordinary zeal and assiduity exercised by the
carrier in the care of the cargo. This was confirmed by respondent appellate court thus —
. . . Be that as it may, contrary to the trial court's finding, the record of the
instant case discloses ample evidence showing that defendant carrier was
not negligent in performing its obligations. Particularly, the following
testimonies of plaintiff-appellee's own witnesses clearly show absence of
negligence by the defendant carrier; that the hull of the vessel at the time of
the discharge of the cargo was sealed and nobody could open the same
except in the presence of the owner of the cargo and the representatives of
the vessel (TSN, 20 July 1977, p. 14); that the cover of the hatches was
made of steel and it was overlaid with tarpaulins, three layers of tarpaulins
and therefore their contents were protected from the weather (TSN, 5 April
1978, p. 24); and, that to open these hatches, the seals would have to be
broken, all the seals were found to be intact (TSN, 20 July 1977, pp. 15-16)
(emphasis supplied).
The period during which private respondent was to observe the degree of diligence required of
it as a public carrier began from the time the cargo was unconditionally placed in its charge
after the vessel's holds were duly inspected and passed scrutiny by the shipper, up to and until
the vessel reached its destination and its hull was reexamined by the consignee, but prior to
unloading. This is clear from the limitation clause agreed upon by the parties in the Addendum
to the standard "GENCON" time charter-party which provided for an F.I.O.S., meaning, that the
loading, stowing, trimming and discharge of the cargo was to be done by the charterer, free
from all risk and expense to the carrier. 35 Moreover, a shipowner is liable for damage to the
cargo resulting from improper stowage only when the stowing is done by stevedores employed
by him, and therefore under his control and supervision, not when the same is done by the
consignee or stevedores under the employ of the latter. 36
Article 1734 of the New Civil Code provides that common carriers are not responsible for the
loss, destruction or deterioration of the goods if caused by the charterer of the goods or defects
in the packaging or in the containers. The Code of Commerce also provides that all losses and
deterioration which the goods may suffer during the transportation by reason of fortuitous
event, force majeure, or the inherent defect of the goods, shall be for the account and risk of
the shipper, and that proof of these accidents is incumbent upon the carrier. 37 The carrier,
nonetheless, shall be liable for the loss and damage resulting from the preceding causes if it is
proved, as against him, that they arose through his negligence or by reason of his having failed
to take the precautions which usage has established among careful persons. 38
Respondent carrier presented a witness who testified on the characteristics of the fertilizer
shipped and the expected risks of bulk shipping. Mr. Estanislao Chupungco, a chemical
engineer working with Atlas Fertilizer, described Urea as a chemical compound consisting
mostly of ammonia and carbon monoxide compounds which are used as fertilizer. Urea also
contains 46% nitrogen and is highly soluble in water. However, during storage, nitrogen and
ammonia do not normally evaporate even on a long voyage, provided that the temperature
inside the hull does not exceed eighty (80) degrees centigrade. Mr. Chupungco further added
that in unloading fertilizer in bulk with the use of a clamped shell, losses due to spillage during
such operation amounting to one percent (1%) against the bill of lading is deemed "normal" or
"tolerable." The primary cause of these spillages is the clamped shell which does not seal very
tightly. Also, the wind tends to blow away some of the materials during the unloading process.
report to PPI was just an approximation or estimate made by them after the fertilizer was
discharged from the vessel and segregated from the rest of the cargo.
The Court notes that it was in the month of July when the vessel arrived port and unloaded her
cargo. It rained from time to time at the harbor area while the cargo was being discharged
according to the supply officer of PPI, who also testified that it was windy at the waterfront and
along the shoreline where the dump trucks passed enroute to the consignee's warehouse.
Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like
fertilizer carries with it the risk of loss or damage. More so, with a variable weather condition
prevalent during its unloading, as was the case at bar. This is a risk the shipper or the owner of
the goods has to face. Clearly, respondent carrier has sufficiently proved the inherent character
of the goods which makes it highly vulnerable to deterioration; as well as the inadequacy of its
packaging which further contributed to the loss. On the other hand, no proof was adduced by
the petitioner showing that the carrier was remise in the exercise of due diligence in order to
minimize the loss or damage to the goods it carried.
WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of Appeals,
which reversed the trial court, is AFFIRMED. Consequently, Civil Case No. 98623 of the then
Court of the First Instance, now Regional Trial Court, of Manila should be, as it is
hereby DISMISSED.
Costs against petitioner.
SO ORDERED.

The dissipation of quantities of fertilizer, or its daterioration in value, is caused either by an

extremely high temperature in its place of storage, or when it comes in contact with water.
When Urea is drenched in water, either fresh or saline, some of its particles dissolve. But the
salvaged portion which is in liquid form still remains potent and usable although no longer
saleable in its original market value.

The probability of the cargo being damaged or getting mixed or contaminated with foreign
particles was made greater by the fact that the fertilizer was transported in "bulk," thereby
exposing it to the inimical effects of the elements and the grimy condition of the various pieces
of equipment used in transporting and hauling it.

The evidence of respondent carrier also showed that it was highly improbable for sea water to
seep into the vessel's holds during the voyage since the hull of the vessel was in good
condition and her hatches were tightly closed and firmly sealed, making the M/V "Sun Plum" in
all respects seaworthy to carry the cargo she was chartered for. If there was loss or
contamination of the cargo, it was more likely to have occurred while the same was being
transported from the ship to the dump trucks and finally to the consignee's warehouse. This
may be gleaned from the testimony of the marine and cargo surveyor of CSCI who supervised
the unloading. He explained that the 18 M/T of alleged "bar order cargo" as contained in their
G.R. Nos. L-21353 and L-21354 May 20, 1966
GREGORIO ANURAN, MARIA MALIGAYA, LAPAZ LARO, ET AL., petitioners,
vs.
PEPITO BUÑO, PEDRO GAHOL, LUISA ALCANTARA, GUILLERMO RAZON, ANSELMO
MALIGAYA and CEFERINA ARO, respondents.
Victoriano A. Endaya for petitioners.
Trinidad and Borromeo for respondents Buño, et al.
Contreras and Adapon for respondents Razon, et al.
BENGZON, C.J.:
At noon of January 12, 1958, a passenger jeepney was parked on the road to Taal, Batangas.
A motor truck speeding along, negligently bumped it from behind, with such violence that three
of its passengers died, even as two others (passengers too) suffered injuries that required their
confinement at the Provincial Hospital for many days.
So, in February 1958 these suits were instituted by the representatives of the dead and of the
injured, to recover consequently damages against the driver and the owners of the truck and
also against the driver and the owners of the jeepney.
The Batangas Court of First Instance, after trial, rendered judgment absolving the driver of the
jeepney and its owners, but it required the truck driver and the owners thereof to make
compensation.
The plaintiffs appealed to the Court of Appeals insisting that the driver and the owners of the
jeepney should also be made liable for damages.
The last mentioned court, upon reviewing the record, declared that:
It is admitted that at about noontime on January 13, 1958, the passenger jeepney
owned by defendants spouses Pedro Gahol and Luisa Alcantara, bearing plate No.
TPU-13548, then being driven by their regular driver, defendant Pepito Buño was on
its regular route travelling from Mahabang Ludlud, Taal, Batangas, towards the
poblacion of the said municipality. When said passenger jeepney crossed the bridge
separating Barrios Mahabang Ludlud and Balisong, Taal, Batangas, it had fourteen
passengers, excluding the driver, according to the testimony of defendant Buño (pp.
12 and 18, t.s.n. July 17, 1958), or sixteen passengers according to the testimony of
plaintiff Edita de Sagun, (pp. 9, 12 and 13, t.s.n. June 26, 1958). However, the fact
remains that the vehicle was overloaded with passengers at the time, because
according to the partial stipulation of facts "the maximum capacity of the jeepney
bearing plate No. TPU-13548 of said defendants was eleven (11) passengers
including the driver. (Printed Record on Appeal, pp. 35, 37.)
After crossing the bridge, defendant Buño stopped his vehicle in order to allow one of
his passengers to alight. But he so parked his jeepney in such a way that one-half of
its width (the left wheels) was on the asphalted pavement of the road and the other
half, on the right shoulder of said road (pp. 21-22, t.s.n. May 26, 1958; p. 12 t.s.n. July
17, 1958). Approximately five minutes later and before Buño could start his vehicle, a
speeding water truck, which bore plate No. T-17526 and owned by defendants-
spouses Anselmo Maligaya and Ceferina Aro, then being driven by Guillermo Razon
from the direction of Mahabang Ludlud, Taal, Batangas, towards the poblacion of that
municipality, violently smashed against the parked jeepney from behind, causing it to
turn turtle into a nearby ditch.
Then said Appellate Court went on to affirm the exoneration of the jeepney driver and of its
owners. It explained that although "the driver of the ill-starred vehicle was not free from fault, for
he was guilty of an antecedent negligence in parking his vehicle with a portion thereof
occupying the asphalted road", it considered the truck driver guilty of greater negligence which
was the efficient cause of the collision; and applying the doctrine of the "last clear chance"1 said
Court ordered the owners of the truck to pay, solidarily with its driver, damages as follows:
x x x the sum of P6,000.00 for the death of their daughter Emelita, another sum of
P5,000.00 as moral damages and the sum of P500.00 as actual damages, and to
plaintiffs Simplicio, Alberto, Avelina and Alfredo, all surnamed Arriola, and represented
by their guardian ad litem Agustin Arriola, the sum of P6,000.00 for the death of their
natural mother, Leonor Masongsong, another sum of P5,000.00 as moral damages
the sum of P3,600.00 for loss of earning capacity of said deceased and the sum of
P850.00 as actual damages.
The plaintiffs brought the matter to this Supreme Court insisting that the driver and the owners
of the jeepney should also be made liable.
We gave due course to the petition for review, because we thought the decision meant
exoneration of the carrier from liability to its passengers, notwithstanding the negligence of its
driver. exonerate
Upon further and more extended consideration of the matter, we have become convinced that
error of law was committed in releasing the jeepney from liability. It must be remembered that
the obligation of the carrier to transport its passengers safely is such that the New Civil Code
requires "utmost diligence" from the carriers (Art. 1755) who are "presumed to have been at
fault or to have acted negligently, unless they prove that they have observed extraordinary
diligence" (Art. 1756). In this instance, this legal presumption of negligence is confirmed by the
Court of Appeals' finding that the driver of the jeepney in question was at fault in parking the
vehicle improperly. It must follow that the driver — and the owners — of the jeepney must
answer for injuries to its passengers.
The principle about the "last clear chance" would call for application in a suit between the
owners and drivers of the two colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual obligations. For it would be inequitable
to exempt the negligent driver of the jeepney and its owners on the ground that the other driver
was likewise guilty of negligence.
Now as to damages. The driver and the owners of the truck have not appealed from the Court
of Appeals' assessment. The plaintiffs (petitioners) have not asked here for a greater amount of
indemnity. They merely pray for a declaration that Pepito Buño, Pedro Gahol and Luisa
Alcantara (the driver and the owners of the jeepney, respectively) be declared jointly and
severally liable with the other defendants.1äwphï1.ñët

Wherefore, affirming the decision under review, we hereby modify it in the sense prayed for by
plaintiffs-petitioners. The three defendants last mentioned are required to pay solidarily with the
other defendants-respondents the amounts fixed by the appealed decision. Costs of both
appeals against said three defendants. So ordered.

Bautista Angelo, Concepcion, J.B.L. Reyes, Dizon, Regala, Makalintal and

 EN BANC
G.R. No. L-16086 May 29, 1964
M. RUIZ HIGHWAY TRANSIT, INC. and MARTIN BUENA, petitioners,
vs.
COURT OF APPEALS, GUILLERMO MONSERRAT and MARTA
CONSIGNADO, respondents.
T. F. Cachero for petitioners.
Godofredo C. Montesines for respondents.
BENGZON, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
In the Laguna court of first instance, the spouses Guillermo Monserrat and Marta Consignado
sued M. Ruiz Highway Transit, Inc., and Martin Buena to recover damages for the death of their
four-year old daughter Victoria.
In the morning of May 22, 1954, said child and her parents were paying passengers in a bus of
defendant transportation company driven by co-defendant Buena, bound for Antipolo, Rizal. In
Sta. Rosa, Laguna, while the bus was running, a rear tire exploded, blasting a hole in the very
place where Victoria was standing in front of her mother. As a result, the child fell through the
hole, and died that same morning from injuries sustained in the fall.1äwphï1.ñët
The court of first instance dismissed the complaint on the ground that (1) the accident was not
due to negligence of the carrier, but was an act of God; and (2) even if negligence was
attributable to defendants, their liability had been discharged, as evidenced by Exhibits 2 and 3
quoted in the footnote. 1
On appeal by plaintiffs, the Court of Appeals reversed the judgment, upon the finding that (1)
defendants failed to prove the extraordinary diligence required of carriers; and (2) Exhibits 2
and 3 did not effect a waiver of plaintiffs' right to damages. Said appellate court, therefore,
required defendants to pay plaintiffs P6,000.00 as indemnity for the child's death; P2,000.00 as
moral damages and P500.00 as attorney's fees, with interest from the date of its decision,
(minus the P150.00 that had been given to plaintiff Guillermo Monserrat, thru Exhibit 3).
In their petition for review by certiorari, the carrier and the driver raise the following issues: (1)
whether in a contract of carriage breached by the passenger's death, his parents may be
granted moral damages; and (2) whether the sum of P6,000.00 may be awarded as death
indemnity for a child passenger. In their brief, they pose the following questions in addition to
the above issues; (3) was there a contract of carriage between the deceased child and
petitioner transportation company; (4) have petitioners rebutted the presumption that they have
been negligent; (5) was the bus crowded; (6) was the bus running fast when the tire exploded;
(7) what caused the bursting of the tire; (8) was the bus floor weak; (9) was the blow-out of the
tire caso fortuito; and (10) was petitioners' liability cancelled by Exhibits 2 and 3?
The alleged lack of a contract of carriage between the deceased child and petitioner
transportation company, if true, is a complete defense against claimants' cause of action.
However, the issue is now inarguable, it being partly factual, on which the appellate court made
its finding.
Respondents and the child were paying passengers in the bus; petitioners were duty bound to
transport them, using the utmost diligence of very cautious persons (Art. 1755, New Civil
Code). Therein they failed. The child died because the floor of the bus gave way; this reinforces
the presumption that petitioners had neglected to provide a safe conveyance (Art. 1756, New
Civil Code). Evidence of the required extraordinary diligence was not introduced to rebut the
presumption.
On the contrary, the appellate court found that the bus was overcrowded and overspeeding,
and the floor thereof was weak — persuasive indications of negligence; and reasoned out that
the tire exploded due to one or a combination of the following: "The tire was not strong and
safe; the air pressure was not properly checked; the load was heavy; the excessive speed of
the bus must have overstrained the tire; and the high velocity generated heat in the tire which
could have expanded the already compressed air therein." 2
Petitioners venture to guess that it was due either to accidental puncture by a sharp instrument,
as a nail, or to latent defect in the tire. Evidence should have been — but was not — presented
to establish such defense.
Even conceding that the tire blow-out was accidental, we could still hold the carrier liable for
failure to provide a safe floor in the bus.
Exhibits 2 and 3 are not proof that petitioners have discharged their legal liability to claimants.
What is expressed there is the latter's belief — clearly erroneous — that petitioners are not
liable to them and acknowledgment of the voluntary help extended by petitioner transportation
company. The belief is baseless. That respondents entertained such an ill-founded impression
is not to be wondered at. They are ignorant, illiterate, indigent, and, at the time they signed
Exhibits 2 and 3, thoroughly confused and distracted by the death of their child.
The minimum death indemnity is P3,0003, although this Court has in various instances granted
P6,000.00. As for moral damages, the carrier is liable therefor to the parents of a child who
meets death while a passenger in any of the carrier's vehicles (Arts. 2206 and 1764, New Civil
Code). Since respondents are indigents, and have litigated as paupers, they should be allowed
attorney's fees of P500.00.
FOR THESE REASONS, the appealed decision is affirmed, with costs.
Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Regala and Makalintal, JJ.,
concur.
Padilla, Labrador and Dizon, JJ., took no part.
 FIRST DIVISION
G.R. No. L-34597 November 5, 1982
ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO MONTEFALCON, petitioners,
vs.
GERUNDIO B. CASTAÑO, and the COURT OF APPEALS, respondents.
RELOVA, J.: traverse
Appeal taken by petitioners from a decision of the Court of Appeals, affirming that of the Court
of First Instance of Misamis Occidental, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered, ordering the defendants to
jointly and severally pay to the plaintiff the sum of (1) P973.10 for medical
treatment and hospitalization; (2) P840.20 for loss of salary during treatment;
and (3) P2,000.00 for partial permanent deformity, with costs against the
defendants.
The facts are set forth in the decision of the Court of Appeals, from which We quote:
... In the afternoon of April 1, 1960, he (PR) boarded the said jeep as a
paying passenger at Oroquieta bound for Jimenez, Misamis Occidental. It
was then fined to capacity, with twelve (12) passengers in all. 'The jeep was
running quite fast and the jeep while approaching the (Sumasap) bridge there
was a cargo truck which blew its horn for a right of way. The jeep gave way
but did not change speed. ... When the jeep gave way it turned to the right
and continued running with the same speed. In so doing ...the driver was not
able to return the jeep to the proper place ... instead, it ran obliquely towards
the canal; that is why, we fell to the ditch. ... When the jeep was running in
the side of the road for few meters, naturally, the jeep was already inclined
and two passengers beside me were the ones who pushed me. I was pushed
by the two passengers beside me; that is why, when I was clinging, my leg
and half of my body were outside the jeep when it reached the canal. ... My
right leg was sandwiched by the body of the jeep and the right side of the
ditch. ... My right leg was broken.' He was rushed to the Saint Mary's Hospital
where he stayed for about two (2) months. 'My right leg is now shorter by one
and one-half inches causing me to use specially made shoes. ... I could not
squat for a long time; I could not kneel for a long time; and I could not even
sit for a long time because I will suffer cramp. ... With my three fingers I am
still uneasy with my three fingers in my right hand. There is a feeling of
numbness with my three fingers even right now.
xxx xxx xxx
From appellee's version just set out, it appears that after he boarded the jeep
in question at Oroquieta, it was driven by defendant Montefalcon at around
forty (40) kilometers per hour bound for Jimenez; that while approaching
Sumasap Bridge at the said speed, a cargo truck coming from behind blew
its horn to signal its intention to overtake the jeep; that the latter, without
changing its speed, gave way by swerving to the right, such that both
vehicles ran side by side for a distance of around twenty (20) meters, and
that thereafter as the jeep was left behind, its driver was unable to return it to
its former lane and instead it obliquely or diagonally ran down an inclined
terrain towards the right until it fell into a ditch pinning down and crushing
appellee's right leg in the process.
Throwing the blame for this accident on the driver of the cargo truck,
appellants, in turn, state the facts to be as follows:
In the afternoon of April 1, 1960, plaintiff Gerundio Castaño boarded the said
jeepney at Oroquieta bound for Jimenez, Misamis occidental. While said
jeepney was negotiating the upgrade approach of the Sumasap Bridge at
Jimenez, Misamis Occidental and at a distance of about 44 meters therefrom,
a cargo truck, owned and operated by a certain Te Tiong alias Chinggim,
then driven by Nicostrato Digal, a person not duly licensed to drive motor
vehicles, overtook the jeepney so closely that in the process of overtaking
sideswiped the jeepney, hitting the reserve tire placed at the left side of the
jeepney with the hinge or bolt of the siding of the cargo truck, causing the
jeepney to swerve from its course and after running 14 meters from the road
it finally fell into the canal. The right side of the jeep fell on the right leg of the
plaintiff-appellee, crushing said leg against the ditch resulting in the injury to
plaintiff-appellee consisting of a broken right thigh.
and take the following stand: 'The main defense of defendants appellants is
anchored on the fact that the jeepney was sideswiped by the overtaking
cargo truck' (Appellants' Brief, pp. 3-4, 7).
It must be admitted, out of candor, that there is evidence of the sideswiping
relied upon by appellants. ....
This appeal by certiorari to review the decision of respondent Court of Appeals asserts that the
latter decided questions of substance which are contrary to law and the approved decisions of
this Court. Petitioners alleged that respondent Court of Appeals erred (1) in finding contributory
negligence on the part of jeepney driver appellant Montefalcon for having raced with the
overtaking cargo truck to the bridge instead of slackening its speed, when the person solely
responsible for the sideswiping is the unlicensed driver of the overtaking cargo truck; (2) in
finding the jeepney driver not to have exercised extraordinary diligence, human care, foresight
and utmost. diligence of very cautious persons, when the diligence required pursuant to Article
1763 of the New Civil Code is only that of a good father of a family since the injuries were
caused by the negligence of a stranger; and (3) in not considering that appellants were freed
from any liability since the accident was due to fortuitous event - the sideswiping of the jeepney
by the overtaking cargo truck.
We are not persuaded. The fact is, petitioner-driver Montefalcon did not slacken his speed but
instead continued to run the jeep at about forty (40) kilometers per hour even at the time the
overtaking cargo truck was running side by side for about twenty (20) meters and at which time
he even shouted to the driver of the truck. Hereunder is the testimony of private respondent
Gerundio B. Castaño on this point:
Q At that time when you rode that jeep on your way to Jimenez, you said that the jeep
was running quite fast for a jeep, is that correct?
A Yes, sir.
xxx xxx xxx
Q When you said that it is quite fast for a jeep, do you mean to tell this Court that the
speed of that jeep could not be made by that particular jeepney?
A It can be made but it will not be very safe for that kind of transportation to run that kind
of speed.
Q What was the speed of that jeep in terms of miles or kilometers per hour?
A About 40 kilometers or about that time during that trip per hour.
Q And you said also that there was a cargo truck that was behind the jeep, is that correct,
while you were already approaching the Sumasap bridge?
A Yes.
xxx xxx xxx
Q How about the speed of that truck as the jeep you were riding was approaching the
Sumasap bridge? What was the speed of that truck, fast or not fast?
A Naturally, the truck when it asks for a clearance that he will overtake it will run fast.
xxx xxx xxx
Q Now comparing the speed that you mentioned that the jeep was negotiating in that
place and the cargo truck, which ran faster-the jeep or the cargo truck?
xxx xxx xxx
A Naturally, the truck was a little bit faster because he was able to overtake.
xxx xxx xxx
Q Now, how far more or less was the jeep from the bridge when the truck was about to or
in the process of overtaking the jeep you were riding?
A When the truck was asking for a clearance it was yet about less than 100 meters from
the bridge when he was asking for a clearance to overtake.
xxx xxx xxx
Q Do you remember the distance when the truck and the jeep were already side by side
as they approach the bridge in relation to the bridge?
xxx xxx xxx
A They were about fifty meters ... from fifty to thirty meters when they were side by side
from the bridge.
xxx xxx xxx
Q .... You said before that the jeep and the truck were running side by side for a few
meters, is that correct?
A Yes, sir.
Q I am asking you now, how long were they running side by side-the jeep and the cargo
truck?
A About 20 meters, they were running side by side.
Q And after running side by side for 20 meters, the jeep and its passengers went to the
canal?
A Yes.
Q You said on direct examinaton that when the jeep (should be truck) was blowing its
horn and asking for a way, you said that the jeep gave way and turned to the right and did
not recover its position and the jeep fell into the ditch, is that what you said before?
A The jeep did not recover. It was not able to return to the center of the road. It was
running outside until it reached the canal, running diagonally.
Q When the jeep gave way to the cargo truck, the jeep was at the right side of the road?
A Already on the right side of the road.
 Q And this jeep was running steadily at the right side of the road.
A Yes, sir.
xxx xxx xxx
Q When the jeep gave way to the cargo truck and it kept its path to the right, it was still
able to maintain that path to the right for about twenty meters and while the jeep and the
cargo truck were running side by side?
A Yes.
Q When the truck and the jeep were already running side by side and after having run
twenty meters side by side, do you know why the jeep careened to the ditch or to the
canal?
A I do not know why but I know it slowly got to the canal but I do not know why it goes
there.
xxx xxx xxx
Q You said when the jeep was about to be lodged in the canal, you stated that the jeep
was running upright, is that a fact?
A Yes.
Q So that the terrain was more or less level because the jeep was already running upright,
is that not correct?
A The jeep was running on its wheels but it is running on the side, the side was inclining
until it reached the ditch.
Q You mean to tell the Court that from the entire of the fifteen meters distance from the
side of the road up to the place where the jeep was finally lodged that place is inclining
towards the right?
A When the jeep left the road it was already inclining because it was running part side of
the road which is inclining. (Transcript of March 25 and 26, 1963).
Thus, had Montefalcon slackened the speed of the jeep at the time the truck was overtaking it,
instead of running side by side with the cargo truck, there would have been no contact and
accident. He should have foreseen that at the speed he was running, the vehicles were getting
nearer the bridge and as the road was getting narrower the truck would be to close to the jeep
and would eventually sideswiped it. Otherwise stated, he should have slackened his jeep when
he swerved it to the right to give way to the truck because the two vehicles could not cross the
bridge at the same time.
The second assigned error is centered on the alleged failure on the part of the jeepney driver to
exercise extraordinary diligence, human care, foresight and utmost diligence of a very cautious
person, when the diligence required pursuant to Article 1763 of the Civil Code is only that of a
good father of a family. Petitioners contend that the proximate cause of the accident was the
negligence of the driver of the truck. However, the fact is, there was a contract of carriage
between the private respondent and the herein petitioners in which case the Court of Appeals
correctly applied Articles 1733, 1755 and 1766 of the Civil Code which require the exercise of
extraordinary diligence on the part of petitioner Montefalcon.
Art. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary 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.
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. 1766. In all matters not regulated by this Code, the rights and obligations
of common carriers shall be governed by the Code of Commerce and by
special laws.
Indeed, the hazards of modern transportation demand extraordinary diligence. A common
carrier is vested with public interest. Under the new Civil Code, instead of being required to
exercise mere ordinary diligence a common carrier is exhorted to carry the passengers safely
as far as human care and foresight can provide "using the utmost diligence of very cautious
persons." (Article 1755). Once a passenger in the course of travel is injured, or does not reach
his destination safely, the carrier and driver are presumed to be at fault.
The third assigned error of the petitioners would find fault upon respondent court in not freeing
petitioners from any liability, since the accident was due to a fortuitous event. But, We repeat
that the alleged fortuitous event in this case - the sideswiping of the jeepney by the cargo truck,
was something which could have been avoided considering the narrowness of the Sumasap
Bridge which was not wide enough to admit two vehicles. As found by the Court of Appeals,
Montefalcon contributed to the occurrence of the mishap.
WHEREFORE, the decision of the respondent Court of Appeals, dated September 30,1971, is
hereby AFFIRMED. With costs.
G.R. No. L-45637 May 31, 1985
ROBERTO JUNTILLA, petitioner,
vs.
CLEMENTE FONTANAR, FERNANDO BANZON and BERFOL CAMORO, respondents.
GUTIERREZ, JR., J.:
This is a petition for review, on questions of law, of the decision of the Court of First Instance of
Cebu which reversed the decision of the City Court of Cebu and exonerated the respondents
from any liability arising from a vehicular accident.
The background facts which led to the filing of a complaint for breach of contract and damages
against the respondents are summarized by the Court of First Instance of Cebu as follows:
The facts established after trial show that the petitioner was a passenger of
the public utility jeepney bearing plate No. PUJ-71-7 on the course of the trip
from Danao City to Cebu City. The jeepney was driven by defendant Berfol
Camoro. It was registered under the franchise of defendant Clemente
Fontanar but was actually owned by defendant Fernando Banzon. When the
jeepney reached Mandaue City, the right rear tire exploded causing the
vehicle to turn turtle. In the process, the plaintiff who was sitting at the front
seat was thrown out of the vehicle. Upon landing on the ground, the plaintiff
momentarily lost consciousness. When he came to his senses, he found that
he had a lacerated wound on his right palm. Aside from this, he suffered
injuries on his left arm, right thigh and on his back. (Exh. "D"). Because of his
shock and injuries, he went back to Danao City but on the way, he
discovered that his "Omega" wrist watch was lost. Upon his arrival in Danao
City, he immediately entered the Danao City Hospital to attend to his injuries,
and also requested his father-in-law to proceed immediately to the place of
the accident and look for the watch. In spite of the efforts of his father-in-law,
the wrist watch, which he bought for P 852.70 (Exh. "B") could no longer be
found.
xxx xxx xxx
Petitioner Roberto Juntilla filed Civil Case No. R-17378 for breach of contract with damages
before the City Court of Cebu City, Branch I against Clemente Fontanar, Fernando Banzon and
Berfol Camoro.
The respondents filed their answer, alleging inter alia that the accident that caused losses to
the petitioner was beyond the control of the respondents taking into account that the tire that
exploded was newly bought and was only slightly used at the time it blew up.
After trial, Judge Romulo R. Senining of the Civil Court of Cebu rendered judgment in favor of
the petitioner and against the respondents. The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and
against the defendants and the latter are hereby ordered, jointly and
severally, to pay the plaintiff the sum of P750.00 as reimbursement for the
lost Omega wrist watch, the sum of P246.64 as unrealized salary of the
plaintiff from his employer, the further sum of P100.00 for the doctor's fees
and medicine, an additional sum of P300.00 for attorney's fees and the costs.
The respondents appealed to the Court of First Instance of Cebu, Branch XIV.
Judge Leonardo B. Canares reversed the judgment of the City Court of Cebu upon a finding
that the accident in question was due to a fortuitous event. The dispositive portion of the
decision reads:
WHEREFORE, judgment is hereby rendered exonerating the defendants
from any liability to the plaintiff without pronouncement as to costs.
A motion for reconsideration was denied by the Court of First Instance.
The petitioner raises the following alleged errors committed by the Court of First Instance of
Cebu on appeal—
a. The Honorable Court below committed grave abuse of discretion in failing
to take cognizance of the fact that defendants and/or their employee failed to
exercise "utmost and/or extraordinary diligence" required of common carriers
contemplated under Art. 1755 of the Civil Code of the Philippines.
b. The Honorable Court below committed grave abuse of discretion by
deciding the case contrary to the doctrine laid down by the Honorable
Supreme Court in the case of Necesito et al. v. Paras, et al.
We find the petition impressed with merit.
The City Court and the Court of First Instance of Cebu found that the right rear tire of the
passenger jeepney in which the petitioner was riding blew up causing the vehicle to fall on its
side. The petitioner questions the conclusion of the respondent court drawn from this finding of
fact.
The Court of First Instance of Cebu erred when it absolved the carrier from any liability
upon a finding that the tire blow out is a fortuitous event. The Court of First Instance of
Cebu ruled that:
After reviewing the records of the case, this Court finds that the accident in
question was due to a fortuitous event. A tire blow-out, such as what
happened in the case at bar, is an inevitable accident that exempts the
carrier from liability, there being absence of a showing that there was
misconduct or negligence on the part of the operator in the operation and
 maintenance of the vehicle involved. The fact that the right rear tire exploded,
despite being brand new, constitutes a clear case of caso fortuito which can
be a proper basis for exonerating the defendants from liability. ...
The Court of First Instance relied on the ruling of the Court of Appeals in Rodriguez v. Red Line
Transportation Co., CA G.R. No. 8136, December 29, 1954, where the Court of Appeals ruled
that:
A tire blow-out does not constitute negligence unless the tire was already old
and should not have been used at all. Indeed, this would be a clear case of
fortuitous event.
The foregoing conclusions of the Court of First Instance of Cebu are based on a
misapprehension of overall facts from which a conclusion should be drawn. The reliance of the
Court of First Instance on the Rodriguez case is not in order. In La Mallorca and Pampanga
Bus Co. v. De Jesus, et al. (17 SCRA 23), we held that:
Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to
no liability for negligence, citing the rulings of the Court of Appeals in
Rodriguez v. Red Line Transportation Co., CA G.R. No. 8136, December 29,
1954, and People v. Palapad, CA-G.R. No. 18480, June 27, 1958. These
rulings, however, not only are not binding on this Court but were based on
considerations quite different from those that obtain in the case at bar. The
appellate court there made no findings of any specific acts of negligence on
the part of the defendants and confined itself to the question of whether or
not a tire blow-out, by itself alone and without a showing as to the causative
factors, would generate liability. ...
In the case at bar, there are specific acts of negligence on the part of the respondents. The
records show that the passenger jeepney turned turtle and jumped into a ditch immediately
after its right rear tire exploded. The evidence shows that the passenger jeepney was running
at a very fast speed before the accident. We agree with the observation of the petitioner that a
public utility jeep running at a regular and safe speed will not jump into a ditch when its right
rear tire blows up. There is also evidence to show that the passenger jeepney was overloaded
at the time of the accident. The petitioner stated that there were three (3) passengers in the
front seat and fourteen (14) passengers in the rear.
While it may be true that the tire that blew-up was still good because the grooves of the tire
were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No
evidence was presented to show that the accident was due to adverse road conditions or that
precautions were taken by the jeepney driver to compensate for any conditions liable to cause
accidents. The sudden blowing-up, therefore, could have been caused by too much air
pressure injected into the tire coupled by the fact that the jeepney was overloaded and
speeding at the time of the accident.
In Lasam v. Smith (45 Phil. 657), we laid down the following essential characteristics of caso
fortuito:
xxx xxx xxx
... In a legal sense and, consequently, also in relation to contracts, a caso
fortuito presents the following essential characteristics: (1) The cause of the
unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will. (2) It must
be impossible to foresee the event which constitutes the caso fortuito, or if it
can be foreseen, it must be impossible to avoid. (3) The occurrence must be
such as to render it impossible for the debtor to fulfill his obligation in a
normal manner. And (4) the obligor (debtor) must be free from any
participation in the aggravation of the injury resulting to the creditor.
(5 Encyclopedia Juridica Espanola, 309.)
In the case at bar, the cause of the unforeseen and unexpected occurrence was not
independent of the human will. The accident was caused either through the negligence of the
driver or because of mechanical defects in the tire. Common carriers should teach their drivers
not to overload their vehicles, not to exceed safe and legal speed limits, and to know the
correct measures to take when a tire blows up thus insuring the safety of passengers at all
times. Relative to the contingency of mechanical defects, we held in Necesito, et al. v. Paras, et
al. (104 Phil. 75), that:
... 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' (10 Am. Jur. 205, s, 1324; see also
Pennsylvania R. Co. v. Roy, 102 U.S. 451; 20 L. Ed. 141; Southern R. Co. v.
Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed Note, 29 ALR 788.: Ann. Cas.
1916E 929).
The rationale of the carrier's 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. ...
It is sufficient to reiterate that the source of a common carrier's legal liability is the contract of
carriage, and by entering into the said contract, it binds itself to carry the passengers safely as
far as human care and foresight can provide, using the utmost diligence of a very cautious
person, with a due regard for all the circumstances. The records show that this obligation was
not met by the respondents.

The respondents likewise argue that the petitioner cannot recover any amount for failure to
prove such damages during the trial. The respondents submit that if the petitioner was really
injured, why was he treated in Danao City and not in Mandaue City where the accident took
place. The respondents argue that the doctor who issued the medical certificate was not
presented during the trial, and hence not cross-examined. The respondents also claim that the
petitioner was not wearing any wrist watch during the accident.

It should be noted that the City Court of Cebu found that the petitioner had a lacerated wound
on his right palm aside from injuries on his left arm, right thigh and on his back, and that on his
way back to Danao City, he discovered that his "Omega" wrist watch was lost. These are
findings of facts of the City Court of Cebu which we find no reason to disturb. More so when we
consider the fact that the Court of First Instance of Cebu impliedly concurred in these matters
when it confined itself to the question of whether or not the tire blow out was a fortuitous event.

WHEREFORE, the decision of the Court of First Instance of Cebu, Branch IV appealed from is
hereby REVERSED and SET ASIDE, and the decision of the City Court of Cebu, Branch I is
REINSTATED, with the modification that the damages shall earn interest at 12% per annum
and the attorney's fees are increased to SIX HUNDRED PESOS (P600.00). Damages shall
earn interests from January 27, 1975.

SO ORDERED.
 [G.R. No. 128607. January 31, 2000]
ALFREDO MALLARI SR. and ALFREDO MALLARI JR., petitioners, vs. COURT OF
APPEALS and BULLETIN PUBLISHING CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
ALFREDO MALLARI SR. and ALFREDO MALLARI JR. in this petition for review
on certiorari seek to set aside the Decision of the Court of Appeals [1] which reversed the court
a quo and adjudged petitioners to be liable for damages due to negligence as a common carrier
resulting in the death of a passenger.
On 14 October 1987, at about 5:00 o'clock in the morning, the passenger jeepney driven by
petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the
delivery van of respondent Bulletin Publishing Corp. (BULLETIN, for brevity) along the National
Highway in Barangay San Pablo, Dinalupihan, Bataan. Petitioner Mallari Jr. testified that he
went to the left lane of the highway and overtook a Fiera which had stopped on the right lane.
Before he passed by the Fiera, he saw the van of respondent BULLETIN coming from the
opposite direction. It was driven by one Felix Angeles. The sketch of the accident showed that
the collision occurred after Mallari Jr. overtook the Fiera while negotiating a curve in the
highway. The points of collision were the left rear portion of the passenger jeepney and the left
front side of the delivery van of BULLETIN. The two (2) right wheels of the delivery van were on
the right shoulder of the road and pieces of debris from the accident were found scattered
along the shoulder of the road up to a certain portion of the lane travelled by the passenger
jeepney. The impact caused the jeepney to turn around and fall on its left side resulting in
injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity
of his injuries. Manikan
On 16 December 1987 Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for
damages with the Regional Trial Court of Olongapo City against Alfredo Mallari Sr. and Alfredo
Mallari Jr., and also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands
Insurance Company. The complaint alleged that the collision which resulted in the death of
Israel Reyes was caused by the fault and negligence of both drivers of the passenger jeepney
and the Bulletin Isuzu delivery van. The complaint also prayed that the defendants be ordered
jointly and severally to pay plaintiff P1,006,777.40 in compensatory damages, P40,000.00 for
hospital and medical expenses, P18,270.00 for burial expenses plus such amounts as may be
fixed by the trial court for exemplary damages and attorneys fees.
The trial court found that the proximate cause of the collision was the negligence of Felix
Angeles, driver of the Bulletin delivery van, considering the fact that the left front portion of the
delivery truck driven by Felix Angeles hit and bumped the left rear portion of the passenger
jeepney driven by Alfredo Mallari Jr. Hence, the trial court ordered BULLETIN and Felix
Angeles to pay jointly and severally Claudia G. Reyes, widow of the deceased victim, the sums
of P42,106.93 for medical expenses; P8,600.00 for funeral and burial expenses; P1,006,777.40
for loss of earning capacity;P5,000.00 for moral damages and P10,000.00 for attorneys fees.
The trial court also ordered N.V. Netherlands Insurance Company to indemnify Claudia G.
Reyes P12,000.00 as death indemnity and P2,500.00 for funeral expenses which when paid
should be deducted from the liabilities of respondent BULLETIN and its driver Felix Angeles to
the plaintiff. It also dismissed the complaint against the other defendants Alfredo Mallari Sr. and
Alfredo Mallari Jr.
On appeal the Court of Appeals modified the decision of the trial court and found no negligence
on the part of Angeles and consequently of his employer, respondent BULLETIN. Instead, the
appellate court ruled that the collision was caused by the sole negligence of petitioner Alfredo
Mallari Jr. who admitted that immediately before the collision and after he rounded a curve on
the highway, he overtook a Fiera which had stopped on his lane and that he had seen the van
driven by Angeles before overtaking the Fiera. The Court of Appeals ordered petitioners Mallari
Jr. and Mallari Sr. to compensate Claudia G. Reyes P1,006,777.50 for loss of earning
capacity, P50,000.00 as indemnity for death and P10,000.00 for attorneys fees. It absolved
from any liability respondent BULLETIN, Felix Angeles and N.V. Netherlands Insurance
Company. Hence this petition. Oldmis o
Petitioners contend that there is no evidence to show that petitioner Mallari Jr. overtook a
vehicle at a curve on the road at the time of the accident and that the testimony of Angeles on
the overtaking made by Mallari Jr. was not credible and unreliable. Petitioner also submits that
the trial court was in a better position than the Court of Appeals to assess the evidence and
observe the witnesses as well as determine their credibility; hence, its finding that the
proximate cause of the collision was the negligence of respondent Angeles, driver of the
delivery van owned by respondent BULLETIN, should be given more weight and consideration.
We cannot sustain petitioners. Contrary to their allegation that there was no evidence
whatsoever that petitioner Mallari Jr. overtook a vehicle at a curve on the road at the time of or
before the accident, the same petitioner himself testified that such fact indeed did occur -
Q:.......And what was that accident all about?
A:.......Well, what happened, sir, is that at about that time 5:00 oclock in that
morning of October 14 while I was negotiating on the highway at San Pablo,
Dinalupihan, Bataan, I was then following a blue Ford Fierra and my distance
behind was about twenty (20) feet and then I passed that blue Ford Fierra. I
overtook and when I was almost on the right lane of the highway towards
Olongapo City there was an oncoming delivery van of the Bulletin Publishing
Corporation which bumped the left rear portion of the jeepney which I was
driving and as a result of which the jeepney x x x turned around and fell on its
left side and as a result of which some of my passengers including me were
injured, sir x x x x
Q:.......Before you overtook the Ford Fierra jeepney did you look x x x
whether there was any vehicle coming towards you?
A:.......Yes, sir.
Q:.......Did you see the Bulletin van or the Press van coming towards you?
 A:.......Yes, sir.
Q:.......At the moment the Ford Fierra xxx stop(ped) and in overtaking the
Fierra, did you not have an option to stop and not to overtake the Ford
Fierra?
A:.......Well, at the time when the Ford Fierra stopped in front of me I slowed
down with the intention of applying the brake, however, when I saw the
oncoming vehicle which is the Press van is very far x x x which is 100 feet
distance, x x x it is sufficient to overtake the Ford Fierra so I overt(ook) it x x x
x negligence of the driver of the passenger jeepney, petitioner Alfredo Mallari Jr., who recklessly
Q:.......You said that you took into consideration the speed of the oncoming
Press van but you also could not estimate the speed of the press van
because it was dark at that time, which of these statements are true? Ncm
A:.......What I wanted to say, I took into consideration the speed of the
oncoming vehicle, the Press van, although at the moment I could not
estimate the speed of the oncoming vehicle x x x x[2]
Provocative
The Court of Appeals correctly found, based on the sketch and spot report of the police
authorities which were not disputed by petitioners, that the collision occurred immediately after
petitioner Mallari Jr. overtook a vehicle in front of it while traversing a curve on the
highway.[3] This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136
as amended, otherwise known as The Land Transportation and Traffic Code which provides:
Sec. 41. Restrictions on overtaking and passing. - (a) The driver of a vehicle
shall not drive to the left side of the center line of a highway in overtaking or
passing another vehicle proceeding in the same direction, unless such left
side is clearly visible and is free of oncoming traffic for a sufficient distance
ahead to permit such overtaking or passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass another vehicle
proceeding in the same direction when approaching the crest of a grade, nor
upon a curve in the highway, where the drivers view along the highway is
obstructed within a distance of five hundred feet ahead except on a highway
having two or more lanes for movement of traffic in one direction where the
driver of a vehicle may overtake or pass another vehicle:
Provided That on a highway, within a business or residential district, having
two or more lanes for movement of traffic in one direction, the driver of a
vehicle may overtake or pass another vehicle on the right.
The rule is settled that a driver abandoning his proper lane for the purpose of overtaking
another vehicle in an ordinary situation has the duty to see to it that the road is clear and not to
proceed if he cannot do so in safety.[4] When a motor vehicle is approaching or rounding a
curve, there is special necessity for keeping to the right side of the road and the driver does not
have the right to drive on the left hand side relying upon having time to turn to the right if a car
approaching from the opposite direction comes into view. [5] Ncmmis
In the instant case, by his own admission, petitioner Mallari Jr. already saw that the BULLETIN
delivery van was coming from the opposite direction and failing to consider the speed thereof
since it was still dark at 5:00 o'clock in the morning mindlessly occupied the left lane and
overtook two (2) vehicles in front of it at a curve in the highway. Clearly, the proximate cause of
the collision resulting in the death of Israel Reyes, a passenger of the jeepney, was the sole
operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules.
Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of the mishap he was violating
a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory
evidence to overcome this legal presumption.
The negligence and recklessness of the driver of the passenger jeepney is binding against
petitioner Mallari Sr., who admittedly was the owner of the passenger jeepney engaged as a
common carrier, considering the fact that in an action based on contract of carriage, the court
need not make an express finding of fault or negligence on the part of the carrier in order to
hold it responsible for the payment of damages sought by the passenger. Under Art. 1755 of
the Civil Code, 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. Moreover, under Art. 1756 of the Civil Code, in case of death or
injuries to passengers, a common carrier is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence. Further, pursuant to Art.
1759 of the same Code, it is liable for the death of or injuries to passengers through the
negligence or willful acts of the formers employees. This liability of the common carrier does not
cease upon proof that it exercised all the diligence of a good father of a family in the selection
of its employees. Clearly, by the contract of carriage, the carrier jeepney owned by Mallari Sr.
assumed the express obligation to transport the passengers to their destination safely and to
observe extraordinary diligence with due regard for all the circumstances, and any injury or
death that might be suffered by its passengers is right away attributable to the fault or
negligence of the carrier. Scnc m
The monetary award ordered by the appellate court to be paid by petitioners to the widow of the
deceased passenger Israel M. Reyes of P1,006,777.50 for loss of earning capacity, P50,000.00
as civil indemnity for death, and P10,000.00 for attorneys fees, all of which were not disputed
by petitioners, is a factual matter binding and conclusive upon this Court.
WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals dated 20
September 1995 reversing the decision of the trial court being in accord with law and evidence
is AFFIRMED. Consequently, petitioners are ordered jointly and severally to pay Claudia G.
Reyes P1,006,777.50 for loss of earning capacity, P50,000.00 as civil indemnity for death,
and P10,000.00 for attorneys fees. Costs against petitioners.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., concur.2/22/00 9:44 AM
G.R. No. L-50076 September 14, 1990
NORBERTO QUISUMBING, SR., and GUNTHER LOEFFLER petitioners,
vs.
COURT OF APPEALS and PHILIPPINE AIR LINES, INC., respondents.
NARVASA, J.:
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.
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 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.
G.R. No. L-55347 October 4, 1985
PHILIPPINE NATIONAL RAILWAYS, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ROSARIO TUPANG, respondents.
Arturo Samaniego for private respondent.
ESCOLIN, J.:
Invoking the principle of state immunity from suit, the Philippine National Railways, PNR for
short, instituted this petition for review on certiorari to set aside the decision of the respondent
Appellate Court which held petitioner PNR liable for damages for the death of Winifredo
Tupang, a paying passenger who fell off a train operated by the petitioner.
The pertinent facts are summarized by the respondent court as follows:
The facts show that on September 10, 1972, at about 9:00 o'clock in the
evening, Winifredo Tupang, husband of plaintiff Rosario Tupang, boarded
'Train No. 516 of appellant at Libmanan, Camarines Sur, as a paying
passenger bound for Manila. Due to some mechanical defect, the train
stopped at Sipocot, Camarines Sur, for repairs, taking some two hours before
the train could resume its trip to Manila. Unfortunately, upon passing Iyam
Bridge at Lucena, Quezon, Winifredo Tupang fell off the train resulting in his
death.The train did not stop despite the alarm raised by the other passengers
that somebody fell from the train. Instead, the train conductor Perfecto
Abrazado, called the station agent at Candelaria, Quezon, and requested for
verification of the information. Police authorities of Lucena City were
dispatched to the Iyam Bridge where they found the lifeless body of Winifredo
Tupang.
As shown by the autopsy report, Winifredo Tupang died of cardio-respiratory
failure due to massive cerebral hemorrhage due to traumatic injury [Exhibits
B and C, Folder of Exhibits],Tupang was later buried in the public cemetery
of Lucena City by the local police authorities. [Rollo, pp. 91-92]
Upon complaint filed by the deceased's widow, Rosario Tupang, the then Court of First
Instance of Rizal, after trial, held the petitioner PNR liable for damages for breach of contract of
carriage and ordered "to pay the plaintiff the sum of P12,000,00 for the death of Winifredo
Tupang, plus P20,000.00 for loss of his earning capacity and the further sum of P10,000.00 as
moral damages, and P2,000.00 as attorney's fees, and costs. 1
On appeal, the Appellate Court sustained the holding of the trial court that the PNR did not
exercise the utmost diligence required by law of a common carrier. It further increased the
amount adjudicated by the trial court by ordering PNR to pay the plaintiff an additional sum of
P5,000.00 as exemplary damages.
Moving for reconsideration of the above decision, the PNR raised for the first time, as a
defense, the doctrine of state immunity from suit. It alleged that it is a mere agency of the
Philippine government without distinct or separate personality of its own, and that its funds are
governmental in character and, therefore, not subject to garnishment or execution. The motion
was denied; the respondent court ruled that the ground advanced could not be raised for the
first time on appeal.
Hence, this petition for review.
The petition is devoid of merit. The PNR was created under Rep. Act 4156, as amended.
Section 4 of the said Act provides:
The Philippine national Railways shall have the following powers:
a. To do all such other things and to transact all such business directly or
indirectly necessary, incidental or conducive to the attainment of the purpose
of the corporation; and
b. Generally, to exercise all powers of a corporation under the Corporation
Law.
Under the foregoing section, the PNR has all the powers, the characteristics and attributes of a
corporation under the Corporation Law. There can be no question then that the PNR may
sue and be sued and may be subjected to court processes just like any other
corporation. 2
The petitioner's contention that the funds of the PNR are not subject to garnishment or
execution hardly raises a question of first impression. In Philippine National Railways v. Union
de Maquinistas, et al., 3 then Justice Fernando, later Chief Justice, said. "The main issue posed
in this certiorari proceeding, whether or not the funds of the Philippine National Railways, could
be garnished or levied upon on execution was resolved in two recent decisions, the Philippine
National Bank v. Court of Industrial Relations [81 SCRA 314] and Philippine National Bank v.
Hon. Judge Pabalan [83 SCRA 595]. This Court in both cases answered the question in the
affirmative. There was no legal bar to garnishment or execution. The argument based on non-
suability of a state allegedly because the funds are governmental in character was
unavailing.So it must be again."
In support of the above conclusion, Justice Fernando cited the Court's holding in Philippine
National Bank v. Court of Industrial Relations, to wit: "The premise that the funds could be
spoken of as public in character may be accepted in the sense that the People's Homesite and
Housing Corporation was a government-owned entity. It does not follow though that they were
exempt from garnishment. National Shipyard and Steel Corporation v. Court of Industrial
Relations is squarely in point. As was explicitly stated in the opinion of then Justice, later Chief
Justice, Concepcion: "The allegation to the effect that the funds of the NASSCO are public
funds of the government, and that, as such, the same may not be garnished, attached or levied SO ORDERED.
upon, is untenable for, as a government- owned and controlled corporation, the NASSCO has a
personality of its own, distinct and separate from that of the Government. It has-pursuant to Concepcion, Jr., Cuevas, and Alampay, JJ., concur.
Section 2 of Executive Order No. 356, dated October 23, 1950 * * *, pursuant to which the
NASSCO has been established- 'all the powers of a corporation under the Corporation Law * *
*. 4

As far back as 1941, this Court in the case of Manila Hotel Employees Association v. Manila
Hotel Co., 5 laid down the rule that "when the government enters into commercial business,
it abandons its sovereign capacity and is to be treated like any other corporation. [Bank
of the U.S. v. Planters' Bank, 9 Waitch 904, 6 L. ed. 244]. By engaging in a particular business
through the instrumentality of a corporation the government divests itself pro hac vice of its
sovereign character, so as to render the corporation subject to the rules of law governing
private corporations. 6 Of Similar import is the pronouncement in Prisco v. CIR,' that "when the
government engages in business, it abdicates part of its sovereign prerogatives and descends
to the level of a citizen, ... . " In fine, the petitioner PNR cannot legally set up the doctrine of
non-suability as a bar to the plaintiff's suit for damages.

The appellate court found, the petitioner does not deny, that the train boarded by the deceased
Winifredo Tupang was so over-crowded that he and many other passengers had no choice but
to sit on the open platforms between the coaches of the train. It is likewise undisputed that the
train did not even slow down when it approached the Iyam Bridge which was under repair at the
time, Neither did the train stop, despite the alarm raised by other passengers that a person had
fallen off the train at lyam Bridge. 7

The petitioner has the obligation to transport its passengers to their destinations and to
observe extraordinary diligence in doing so. Death or any injury suffered by any of its
passengers gives rise to the presumption that it was negligent in the performance of its
obligation under the contract of carriage. Thus, as correctly ruled by the respondent
court, the petitioner failed to overthrow such presumption of negligence with clear and
convincing evidence.

But while petitioner failed to exercise extraordinary diligence as required by law, 8 it appears
that the deceased was chargeable with contributory negligence. Since he opted to sit on
the open platform between the coaches of the train, he should have held tightly and
tenaciously on the upright metal bar found at the side of said platform to avoid falling off
from the speeding train. Such contributory negligence, while not exempting the PNR from
liability, nevertheless justified the deletion of the amount adjudicated as moral damages.
By the same token, the award of exemplary damages must be set aside. Exemplary
damages may be allowed only in cases where the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner. 9 There being no evidence of
fraud, malice or bad faith on the part of petitioner, the grant of exemplary damages
should be discarded.

WHEREFORE, the decision of the respondent appellate court is hereby modified by eliminating
therefrom the amounts of P10,000.00 and P5,000.00 adjudicated as moral and exemplary
damages, respectively. No costs.
G.R. No. 95582 October 7, 1991
DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y
MALECDAN, petitioners,
vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY,
FERNANDO CUDLAMAT, MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE
CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late Pedrito
Cudiamat represented by Inocencia Cudiamat, respondents.
Francisco S. Reyes Law Office for petitioners.
Antonio C. de Guzman for private respondents. Rebut
REGALADO, J.:
On May 13, 1985, private respondents filed a complaint 1 for damages against petitioners for
the death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25,
1985 at Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged that on said date,
while petitioner Theodore M. Lardizabal was driving a passenger bus belonging to petitioner
corporation in a reckless and imprudent manner and without due regard to traffic rules and
regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat.
However, instead of bringing Pedrito immediately to the nearest hospital, the said driver, in
utter bad faith and without regard to the welfare of the victim, first brought his other passengers
and cargo to their respective destinations before banging said victim to the Lepanto Hospital
where he expired.
On the other hand, petitioners alleged that they had observed and continued to observe the
extraordinary diligence required in the operation of the transportation company and the
supervision of the employees, even as they add that they are not absolute insurers of the safety
of the public at large. Further, it was alleged that it was the victim's own carelessness and
negligence which gave rise to the subject incident, hence they prayed for the dismissal of the
complaint plus an award of damages in their favor by way of a counterclaim.
On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with this
decretal portion:
IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito
Cudiamat was negligent, which negligence was the proximate cause of his death.
Nonetheless, defendants in equity, are hereby ordered to pay the heirs of Pedrito
Cudiamat the sum of P10,000.00 which approximates the amount defendants initially
offered said heirs for the amicable settlement of the case. No costs.
SO ORDERED. 2
Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3
in CA-G.R. CV No. 19504
promulgated on August 14, 1990, set aside the decision of the lower court, and ordered
petitioners to pay private respondents:
1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of
the victim Pedrito Cudiamat;
2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;
3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual
and compensatory damages;
4. The costs of this suit. 4
Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated October 4, 1990, 5
hence this
petition with the central issue herein being whether respondent court erred in reversing the
decision of the trial court and in finding petitioners negligent and liable for the damages
claimed.
It is an established principle that the factual findings of the Court of Appeals as a rule are final
and may not be reviewed by this Court on appeal. However, this is subject to settled
exceptions, one of which is when the findings of the appellate court are contrary to those of the
trial court, in which case a reexamination of the facts and evidence may be undertaken. 6
In the case at bar, the trial court and the Court of Appeal have discordant positions as to who
between the petitioners an the victim is guilty of negligence. Perforce, we have had to conduct
an evaluation of the evidence in this case for the prope calibration of their conflicting factual
findings and legal conclusions.
The lower court, in declaring that the victim was negligent, made the following findings:
This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving
vehicle, especially with one of his hands holding an umbrella. And, without having
given the driver or the conductor any indication that he wishes to board the bus. But
defendants can also be found wanting of the necessary diligence. In this connection, it
is safe to assume that when the deceased Cudiamat attempted to board defendants'
bus, the vehicle's door was open instead of being closed. This should be so, for it is
hard to believe that one would even attempt to board a vehicle (i)n motion if the door
of said vehicle is closed. Here lies the defendant's lack of diligence. Under such
circumstances, equity demands that there must be something given to the heirs of the
victim to assuage their feelings. This, also considering that initially, defendant common
carrier had made overtures to amicably settle the case. It did offer a certain monetary
consideration to the victim's heirs. 7
However, respondent court, in arriving at a different opinion, declares that:

From the testimony of appellees'own witness in the person of Vitaliano Safarita, it is
evident that the subject bus was at full stop when the victim Pedrito Cudiamat boarded
the same as it was precisely on this instance where a certain Miss Abenoja alighted
from the bus. Moreover, contrary to the assertion of the appellees, the victim did
indicate his intention to board the bus as can be seen from the testimony of the said
witness when he declared that Pedrito Cudiamat was no longer walking and made a
sign to board the bus when the latter was still at a distance from him. It was at the
instance when Pedrito Cudiamat was closing his umbrella at the platform of the bus
when the latter made a sudden jerk movement (as) the driver commenced to
accelerate the bus.
Evidently, the incident took place due to the gross negligence of the appellee-
driver in prematurely stepping on the accelerator and in not waiting for the
passenger to first secure his seat especially so when we take into account that the
platform of the bus was at the time slippery and wet because of a drizzle. The
defendants-appellees utterly failed to observe their duty and obligation as common
carrier to the end that they should observe extra-ordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them according to
the circumstances of each case (Article 1733, New Civil Code). 8
After a careful review of the evidence on record, we find no reason to disturb the above holding
of the Court of Appeals. Its aforesaid findings are supported by the testimony of petitioners' own
witnesses. One of them, Virginia Abalos, testified on cross-examination as follows:
Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the
incident, there is a crossing?
A The way going to the mines but it is not being pass(ed) by the bus.
Q And the incident happened before bunkhouse 56, is that not correct?
A It happened between 54 and 53 bunkhouses. 9
The bus conductor, Martin Anglog, also declared:
Q When you arrived at Lepanto on March 25, 1985, will you please inform this
Honorable Court if there was anv unusual incident that occurred?
A When we delivered a baggage at Marivic because a person alighted there between
Bunkhouse 53 and 54.
Q What happened when you delivered this passenger at this particular place in
Lepanto?
A When we reached the place, a passenger alighted and I signalled my driver. When
we stopped we went out because I saw an umbrella about a split second and I
signalled again the driver, so the driver stopped and we went down and we saw
Pedrito Cudiamat asking for help because he was lying down.
Q How far away was this certain person, Pedrito Cudiamat, when you saw him lying
down — from the bus how far was he?
A It is about two to three meters.
Q On what direction of the bus was he found about three meters from the bus, was it
at the front or at the back?
A At the back, sir. 10 (Emphasis supplied.)
The foregoing testimonies show that the place of the accident and the place where one of
the passengers alighted were both between Bunkhouses 53 and 54, hence the finding of
the Court of Appeals that the bus was at full stop when the victim boarded the same is
correct. They further confirm the conclu sion that the victim fell from the platform of the
bus when it suddenly accelerated forward and was run over by the rear right tires of the
vehicle, as shown by the physical evidence on where he was thereafter found in relation to the
bus when it stopped. Under such circumstances, it cannot be said that the deceased was guilty
of negligence.
The contention of petitioners that the driver and the conductor had no knowledge that the victim
would ride on the bus, since the latter had supposedly not manifested his intention to board the
same, does not merit consideration. When the bus is not in motion there is no necessity for a
person who wants to ride the same to signal his intention to board. A public utility bus, once it
stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty of the
driver and the conductor, every time the bus stops, to do no act that would have the effect of
increasing the peril to a passenger while he was attempting to board the same. The premature
acceleration of the bus in this case was a breach of such duty. 11
It is the duty of common carriers of passengers, including common carriers by railroad train,
streetcar, or motorbus, to stop their conveyances a reasonable length of time in order to afford
passengers an opportunity to board and enter, and they are liable for injuries suffered by
boarding passengers resulting from the sudden starting up or jerking of their conveyances while
they are doing so. 12
Further, even assuming that the bus was moving, the act of the victim in boarding the same
cannot be considered negligent under the circumstances. As clearly explained in the testimony
of the aforestated witness for petitioners, Virginia Abalos, th bus had "just started" and "was still
in slow motion" at the point where the victim had boarded and was on its platform. 13
It is not negligence per se, or as a matter of law, for one attempt to board a train or
streetcar which is moving slowly. 14 An ordinarily prudent person would have made the
attempt board the moving conveyance under the same or similar circumstances. The fact that
passengers board and alight from slowly moving vehicle is a matter of common experience
both the driver and conductor in this case could not have been unaware of such an ordinary
practice.
The victim herein, by stepping and standing on the platform of the bus, is already considered a
passenger and is entitled all the rights and protection pertaining to such a contractual relation.
Hence, it has been held that the duty which the carrier passengers owes to its patrons extends
to persons boarding cars as well as to those alighting therefrom. 15
Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordina diligence for the safety of
the passengers transported by the according to all the circumstances of each case. 16
A common carrier is bound to
carry the passengers safely as far as human care and foresight can provide, using the
utmost diligence very cautious persons, with a due regard for all the circumstances. 17
It has also been repeatedly held that in an action based on a contract of carriage, the court
need not make an express finding of fault or negligence on the part of the carrier in order to
hold it responsible to pay the damages sought by the passenger. By contract of carriage, the
carrier assumes the express obligation to transport the passenger to his destination
safely and observe extraordinary diligence with a due regard for all the circumstances,
and any injury that might be suffered by the passenger is right away attributable to the
fault or negligence of the carrier. This is an exception to the general rule that negligence
must be proved, and it is therefore incumbent upon the carrier to prove that it has exercised
extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. 18
Moreover, the circumstances under which the driver and the conductor failed to bring the
gravely injured victim immediately to the hospital for medical treatment is a patent and
incontrovertible proof of their negligence. It defies understanding and can even be stigmatized
as callous indifference. The evidence shows that after the accident the bus could have forthwith
turned at Bunk 56 and thence to the hospital, but its driver instead opted to first proceed to
Bunk 70 to allow a passenger to alight and to deliver a refrigerator, despite the serious
condition of the victim. The vacuous reason given by petitioners that it was the wife of the
deceased who caused the delay was tersely and correctly confuted by respondent court:
... The pretension of the appellees that the delay was due to the fact that they had to
wait for about twenty minutes for Inocencia Cudiamat to get dressed deserves scant
consideration. It is rather scandalous and deplorable for a wife whose husband is at
the verge of dying to have the luxury of dressing herself up for about twenty minutes
before attending to help her distressed and helpless husband. 19
Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70
was to inform the victim's family of the mishap, since it was not said bus driver nor the
conductor but the companion of the victim who informed his family thereof. 20 In fact, it was
only after the refrigerator was unloaded that one of the passengers thought of sending
somebody to the house of the victim, as shown by the testimony of Virginia Abalos again, to
wit:
Q Why, what happened to your refrigerator at that particular time?
A I asked them to bring it down because that is the nearest place to our house and
when I went down and asked somebody to bring down the refrigerator, I also asked
somebody to call the family of Mr. Cudiamat.
COURT:
Q Why did you ask somebody to call the family of Mr. Cudiamat?
A Because Mr. Cudiamat met an accident, so I ask somebody to call for the family of
Mr. Cudiamat.
Q But nobody ask(ed) you to call for the family of Mr. Cudiamat?
A No sir. 21
With respect to the award of damages, an oversight was, however, committed by respondent Court of Appeals in computing the actual
damages based on the gross income of the victim. The rule is that the amount recoverable by the heirs of a victim of a tort is not the loss of the
entire earnings, but rather the loss of that portion of the earnings which the beneficiary would have received. In other words, only net earnings,
not gross earnings, are to be considered, that is, the total of the earnings less expenses necessary in the creation of such earnings or income
and minus living and other incidental expenses. 22
We are of the opinion that the deductible living and other expense of the deceased may fairly and reasonably be fixed at P500.00 a month or
P6,000.00 a year. In adjudicating the actual or compensatory damages, respondent court found that the deceased was 48 years old, in good
health with a remaining productive life expectancy of 12 years, and then earning P24,000.00 a year. Using the gross annual income as the
basis, and multiplying the same by 12 years, it accordingly awarded P288,000. Applying the aforestated rule on computation based on the net
earnings, said award must be, as it hereby is, rectified and reduced to P216,000.00. However, in accordance with prevailing jurisprudence, the
death indemnity is hereby increased to P50,000.00. 23

WHEREFORE, subject to the above modifications, the challenged judgment and resolution of respondent Court of Appeals are hereby
AFFIRMED in all other respects.

SO ORDERED.

Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur. stocks


SECOND DIVISION
G.R. No. 84458 November 6, 1989
ABOITIZ SHIPPING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO
VIANA and GORGONIA VIANA, and PIONEER STEVEDORING
CORPORATION, respondents.
Herenio E. Martinez for petitioner.
M.R. Villaluz Law Office for private respondent.
REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the
decision 1 of respondent Court of Appeals, dated July 29, 1988, the decretal portion of which
reads:
WHEREFORE, the judgment appealed from as modified by the order of
October 27, 1982, is hereby affirmed with the modification that appellant
Aboitiz Shipping is hereby ordered to pay plaintiff-appellees the amount of
P30,000.00 for the death of Anacleto Viana; actual damages of P9,800.00;
P150,000.00 for unearned income; P7,200.00 as support for deceased's
parents; P20,000.00 as moral damages; P10,000.00 as attorney's fees; and
to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted by respondent
court, are as follows: .
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the
vessel M/V Antonia, owned by defendant, at the port at San Jose, Occidental
Mindoro, bound for Manila, having purchased a ticket (No. 117392) in the
sum of P23.10 (Exh. 'B'). On May 12, 1975, said vessel arrived at Pier 4,
North Harbor, Manila, and the passengers therein disembarked, a gangplank
having been provided connecting the side of the vessel to the pier. Instead of
using said gangplank Anacleto Viana disembarked on the third deck which
was on the level with the pier. After said vessel had landed, the Pioneer
Stevedoring Corporation took over the exclusive control of the cargoes
loaded on said vessel pursuant to the Memorandum of Agreement dated July
26, 1975 (Exh. '2') between the third party defendant Pioneer Stevedoring
Corporation and defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its crane
operator Alejo Figueroa was placed alongside the vessel and one (1) hour
after the passengers of said vessel had disembarked, it started operation by
unloading the cargoes from said vessel. While the crane was being operated,
Anacleto Viana who had already disembarked from said vessel obviously
remembering that some of his cargoes were still loaded in the vessel, went
back to the vessel, and it was while he was pointing to the crew of the said
vessel to the place where his cargoes were loaded that the crane hit him,
pinning him between the side of the vessel and the crane. He was thereafter
brought to the hospital where he later expired three (3) days thereafter, on
May 15, 1975, the cause of his death according to the Death Certificate (Exh.
"C") being "hypostatic pneumonia secondary to traumatic fracture of the
pubic bone lacerating the urinary bladder" (See also Exh. "B"). For his
hospitalization, medical, burial and other miscellaneous expenses, Anacleto's
wife, herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to "E-5").
Anacleto Viana who was only forty (40) years old when he met said fateful
accident (Exh. 'E') was in good health. His average annual income as a
farmer or a farm supervisor was 400 cavans of palay annually. His parents,
herein plaintiffs Antonio and Gorgonia Viana, prior to his death had been
recipient of twenty (20) cavans of palay as support or P120.00 monthly.
Because of Anacleto's death, plaintiffs suffered mental anguish and extreme
worry or moral damages. For the filing of the instant case, they had to hire a
lawyer for an agreed fee of ten thousand (P10,000.00) pesos. 2
Private respondents Vianas filed a complaint 3 for damages against petitioner corporation
(Aboitiz, for brevity) for breach of contract of carriage.
In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident, the
vessel was completely under the control of respondent Pioneer Stevedoring Corporation
(Pioneer, for short) as the exclusive stevedoring contractor of Aboitiz, which handled the
unloading of cargoes from the vessel of Aboitiz. It is also averred that since the crane operator
was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against Pioneer
imputing liability thereto for Anacleto Viana's death as having been allegedly caused by the
negligence of the crane operator who was an employee of Pioneer under its exclusive control
and supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz had no
cause of action against Pioneer considering that Aboitiz is being sued by the Vianas for breach
of contract of carriage to which Pioneer is not a party; that Pioneer had observed the diligence
of a good father of a family both in the selection and supervision of its employees as well as in
the prevention of damage or injury to anyone including the victim Anacleto Viana; that Anacleto
Viana's gross negligence was the direct and proximate cause of his death; and that the filing of
the third-party complaint was premature by reason of the pendency of the criminal case for
homicide through reckless imprudence filed against the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to pay the
Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever
amount the latter paid the Vianas. The dispositive portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor of the plantiffs:
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the
sum of P12,000.00 for the death of Anacleto Viana P9,800.00 as actual
damages; P533,200.00 value of the 10,664 cavans of palay computed at
P50.00 per cavan; P10,000.00 as attorney's fees; F 5,000.00, value of the
100 cavans of palay as support for five (5) years for deceased (sic) parents,
herein plaintiffs Antonio and Gorgonia Viana computed at P50.00 per cavan;
P7,200.00 as support for deceased's parents computed at P120.00 a month
for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as
moral damages, and costs; and
(2) ordering the third party defendant Pioneer Stevedoring Corporation to
reimburse defendant and third party plaintiff Aboitiz Shipping Corporation the
said amounts that it is ordered to pay to herein plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they similarly
raised the trial court's failure to declare that Anacleto Viana acted with gross negligence despite
the overwhelming evidence presented in support thereof. In addition, Aboitiz alleged, in
opposition to Pioneer's motion, that under the memorandum of agreement the liability of
Pioneer as contractor is automatic for any damages or losses whatsoever occasioned by and
arising from the operation of its arrastre and stevedoring service.
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability for failure of
the Vianas and Aboitiz to preponderantly establish a case of negligence against the crane
operator which the court a quo ruled is never presumed, aside from the fact that the
memorandum of agreement supposedly refers only to Pioneer's liability in case of loss or
damage to goods handled by it but not in the case of personal injuries, and, finally that Aboitiz
cannot properly invoke the fellow-servant rule simply because its liability stems from a breach
of contract of carriage. The dispositive portion of said order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant
Pioneer Stevedoring Corporation is concerned rendered in favor of the
plaintiffs-,:
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the
sum of P12,000.00 for the death of Anacleto Viana; P9,000.00 (sic) as actual
damages; P533,200.00 value of the 10,664 cavans of palay computed at
P50.00 per cavan; P10,000.00 as attorney's fees; P5,000.00 value of the 100
cavans of palay as support for five (5) years for deceased's parents, herein
plaintiffs Antonio and Gorgonia Viana,computed at P50.00 per cavan;
P7,200.00 as support for deceased's parents computed at P120.00 a month
for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as
moral damages, and costs; and
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic)
any liability for the death of Anacleto Viana the passenger of M/V Antonia
owned by defendant third party plaintiff Aboitiz Shipping Corporation it
appearing that the negligence of its crane operator has not been established
therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to
respondent Court of Appeals which affirmed the findings of of the trial court except as to the
amount of damages awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
(A) In holding that the doctrine laid down by this honorable Court in La
Mallorca vs. Court of Appeals, et al. (17 SCRA 739, July 27, 1966) is
applicable to the case in the face of the undisputable fact that the factual
situation under the La Mallorca case is radically different from the facts
obtaining in this case;
(B) In holding petitioner liable for damages in the face of the finding of the
court a quo and confirmed by the Honorable respondent court of Appeals that
the deceased, Anacleto Viana was guilty of contributory negligence, which,
We respectfully submit contributory negligence was the proximate cause of
his death; specifically the honorable respondent Court of Appeals failed to
apply Art. 1762 of the New Civil Code;
(C) In the alternative assuming the holding of the Honorable respondent
Court of Appears that petitioner may be legally condemned to pay damages
to the private respondents we respectfully submit that it committed a
reversible error when it dismissed petitioner's third party complaint against
private respondent Pioneer Stevedoring Corporation instead of compelling
the latter to reimburse the petitioner for whatever damages it may be
compelled to pay to the private respondents Vianas. 9
At threshold, it is to be observed that both the trial court and respondent Court of
Appeals found the victim Anacleto Viana guilty of contributory negligence, but holding
that it was the negligence of Aboitiz in prematurely turning over the vessel to the
arrastre operator for the unloading of cargoes which was the direct, immediate and
proximate cause of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the time Anacleto
Viana disembarked from the vessel and that he was given more than ample opportunity
to unload his cargoes prior to the operation of the crane, his presence on the vessel was
no longer reasonable e and he consequently ceased to be a passenger. Corollarily, it
insists that the doctrine in La Mallorca vs. Court of Appeals, et al. 10 is not applicable to the
case at bar.
Th e rule is that the relation of carrier and passenger continues until the passenger has
been landed at the port of destination and has left the vessel owner's dock or
premises. 11 Once created, the relationship will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from the carrier's
conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this rule is to be
determined from all the circumstances, 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,
and includes a reasonable time to see after his baggage and prepare for his departure. 12 The
carrier-passenger relationship is not terminated merely by the fact that the person transported
has been carried to his destination if, for example, such person remains in the carrier's
premises to claim his baggage.13
It was in accordance with this rationale that the doctrine in the aforesaid case of La Mallorca
was enunciated, to wit:
It has been recognized as a rule that the relation of carrier and
passenger does not cease at the moment the passenger alights from the
carrier's 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 carrier's premises. And, what is a
reasonable time or a reasonable delay within this rule is to be determined from
all the circumstances. Thus, a person who, after alighting from a train, walks
along the station platform is considered still a passenger. So also, where a
passenger has alighted at his destination and is proceeding by the usual way to
leave the company's premises, but before actually doing so is halted by the
report that his brother, a fellow passenger, has been shot, and he in good faith
and without intent of engaging in the difficulty, returns to relieve his brother, he
is deemed reasonably and necessarily delayed and thus continues to be a
passenger entitled as such to the protection of the railroad company and its
agents.
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus. Racquel,
the child that she was, must have followed the father. However, although the
father was still on the running board of the bus waiting for the conductor to hand
him the bag or bayong, the bus started to run, so that even he (the father) had
to jump down from the moving vehicle. It was at 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 carrier's agent had exercised the 'utmost diligence' of a 'very
cautious person' required by Article 1755 of the Civil Code to be observed by a
common carrier in the discharge of its obligation to transport safely its
passengers. ... The presence of 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. 14
It is apparent from the foregoing that what prompted the Court to rule as it did in said case is
the fact of the passenger's reasonable presence within the carrier's premises. That
reasonableness of 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. It is thus of no moment whether in the cited case
of La Mallorca there was no appreciable interregnum for the passenger therein to leave the
carrier's premises whereas in the case at bar, an interval of one (1) hour had elapsed before
the victim met the accident. The primary factor to be considered is the existence of a
reasonable cause as will justify the presence of the victim on or near the petitioner's vessel. We
believe there exists such a justifiable cause.
It is of common knowledge that, by the very nature of petitioner's business as a shipper, the
passengers of vessels are allotted a longer period of time to disembark from the ship than other
common carriers such as a passenger bus. With respect to the bulk of cargoes and the number
of passengers it can load, such vessels are capable of accommodating a bigger volume of both
as compared to the capacity of a regular commuter bus. Consequently, a ship passenger will
need at least an hour as is the usual practice, to disembark from the vessel and claim his
baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very
short period of time. Verily, petitioner cannot categorically claim, through the bare expedient of
comparing the period of time entailed in getting the passenger's cargoes, that the ruling in La
Mallorca is inapplicable to the case at bar. On the contrary, if we are to apply the doctrine
enunciated therein to the instant petition, we cannot in reason doubt that the victim Anacleto
Viana was still a passenger at the time of the incident. When the accident occurred, the victim
was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel.
As earlier stated, a carrier is duty bound not only to bring its passengers safely to their
destination but also to afford them a reasonable time to claim their baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim had already
disembarked from the vessel. Petitioner failed to prove this. What is clear to us is that at the
time the victim was taking his cargoes, the vessel had already docked an hour earlier. In
consonance with common shipping procedure as to the minimum time of one (1) hour allowed
for the passengers to disembark, it may be presumed that the victim had just gotten off the
vessel when he went to retrieve his baggage. Yet, even if he had already disembarked an hour
earlier, his presence in petitioner's premises was not without cause. The victim had to claim his
baggage which was possible only one (1) hour after the vessel arrived since it was admittedly
standard procedure in the case of petitioner's vessels that the unloading operations shall start
only after that time. Consequently, under the foregoing circumstances, the victim Anacleto
Viana is still deemed a passenger of said carrier at the time of his tragic death.
II. Under the law, common carriers are, from the nature of their business and for reasons of
public policy, bound to observe extraordinary 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. 15 More particularly, 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. 16 Thus, where a passenger dies or is injured, the
common carrier is presumed to have been at fault or to have acted negligently. 17 This gives
rise to an action for breach of contract of carriage 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, 18which, in the instant
case, necessarily includes its failure to safeguard its passenger with extraordinary diligence
while such relation subsists.
The presumption is, therefore, established by law that in case of a passenger's death or injury
the operator of the vessel was at fault or negligent, having failed to exercise extraordinary
diligence, and it is incumbent upon it to rebut the same. This is in consonance with the avowed
policy of the State to afford full protection to the passengers of common carriers which can be
carried out only by imposing a stringent statutory obligation upon the latter. Concomitantly, this
Court has likewise adopted a rigid posture in the application of the law by exacting the highest
degree of care and diligence from common carriers, bearing utmost in mind the welfare of the
passengers who often become hapless victims of indifferent and profit-oriented carriers. We
cannot in reason deny that petitioner failed to rebut the presumption against it. Under the facts
obtaining in the present case, it cannot be gainsaid that petitioner had inadequately complied
with the required degree of diligence to prevent the accident from happening.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross
negligence of the victim, hence its present contention that the death of the passenger was due
to the negligence of the crane operator cannot be sustained both on grounds, of estoppel and
for lack of evidence on its present theory. Even in its answer filed in the court below it readily
alleged that Pioneer had taken the necessary safeguards insofar as its unloading operations
were concerned, a fact which appears to have been accepted by the plaintiff therein by not
impleading Pioneer as a defendant, and likewise inceptively by Aboitiz by filing its third-party
complaint only after ten (10) months from the institution of the suit against it. Parenthetically,
Pioneer is not within the ambit of the rule on extraordinary diligence required of, and the
corresponding presumption of negligence foisted on, common carriers like Aboitiz. This, of
course, does not detract from what we have said that no negligence can be imputed to Pioneer
but, that on the contrary, the failure of Aboitiz to exercise extraordinary diligence for the safety
of its passenger is the rationale for our finding on its liability.
WHEREFORE, the petition is DENIED and the judgment appealed from is hereby
AFFIRMED in toto.
SO ORDERED.

As found by the Court of Appeals, the evidence does not show that there was a cordon of Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.
drums around the perimeter of the crane, as claimed by petitioner. It also adverted to the fact
that the alleged presence of visible warning signs in the vicinity was disputable and not
indubitably established. Thus, we are not inclined to accept petitioner's explanation that the
victim and other passengers were sufficiently warned that merely venturing into the area in
question was fraught with serious peril. Definitely, even assuming the existence of the
supposed cordon of drums loosely placed around the unloading area and the guard's
admonitions against entry therein, these were at most insufficient precautions which pale into
insignificance if considered vis-a-vis the gravity of the danger to which the deceased was
exposed. There is no showing that petitioner was extraordinarily diligent in requiring or seeing
to it that said precautionary measures were strictly and actually enforced to subserve their
purpose of preventing entry into the forbidden area. By no stretch of liberal evaluation can such
perfunctory acts approximate the "utmost diligence of very cautious persons" to be exercised
"as far as human care and foresight can provide" which is required by law of common carriers
with respect to their passengers.

While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to
exercise extraordinary diligence was the proximate and direct cause of, because it could
definitely have prevented, the former's death. Moreover, in paragraph 5.6 of its petition, at
bar, 19 petitioner has expressly conceded the factual finding of respondent Court of Appeals
that petitioner did not present sufficient evidence in support of its submission that the deceased
Anacleto Viana was guilty of gross negligence. Petitioner cannot now be heard to claim
otherwise.

No excepting circumstance being present, we are likewise bound by respondent court's

declaration that there was no negligence on the part of Pioneer Stevedoring Corporation, a
confirmation of the trial court's finding to that effect, hence our conformity to Pioneer's being
absolved of any liability.
 EN BANC
G.R. No. L-20761 July 27, 1966
LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents.
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No. 23267-R,
holding it liable for quasi-delict and ordering it to pay to respondents Mariano Beltran, et al.,
P6,000.00 for the death of his minor daughter Raquel Beltran, plus P400.00 as actual
damages.
The facts of the case as found by the Court of Appeals, briefly are:
On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with
their minor daughters, namely, Milagros, 13 years old, Raquel, about 4½ years old,
and Fe, over 2 years old, boarded the Pambusco Bus No. 352, bearing plate TPU No.
757 (1953 Pampanga), owned and operated by the defendant, at San Fernando,
Pampanga, bound for Anao, Mexico, Pampanga. At the time, they were carrying with
them four pieces of baggages containing their personal belonging. The conductor of
the bus, who happened to be a half-brother of plaintiff Mariano Beltran, issued three
tickets (Exhs. A, B, & C) 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 at
which fare is charged in accordance with the appellant's rules and regulations.
After about an hour's trip, the bus reached Anao whereat it stopped to allow the
passengers bound therefor, among whom were the plaintiffs and their children to get
off. With respect to the group of the plaintiffs, Mariano Beltran, then carrying some of
their baggages, was the first to get down the bus, followed by his wife and his children.
Mariano led his companions to a shaded spot on the left pedestrians side of the road
about four or five meters away from the vehicle. Afterwards, he returned to the bus in
controversy to get his other bayong, which he had left behind, but in so doing, his
daughter Raquel followed him, unnoticed by her father. While said Mariano Beltran
was on the running board of the bus waiting for the conductor to hand him
his bayong which he left under one of 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 has not given the driver the
customary signal to start, since said conductor was still attending to the baggage left
behind by Mariano Beltran. Incidentally, when the bus was again placed into a
complete stop, it had travelled about ten meters from the point where the plaintiffs had
gotten off.
Sensing that the bus was again in motion, Mariano Beltran immediately jumped from
the running board without getting his bayong from the conductor. He landed on the
side of the road almost in front of the shaded place where he left his wife and children.
At that precise 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 with her parents.
For the death of their said child, the plaintiffs commenced the present suit against the
defendant seeking to recover from the latter an aggregate amount of P16,000 to cover
moral damages and actual damages sustained as a result thereof and attorney's fees.
After trial on the merits, the court below rendered the judgment in question.
On the basis of these facts, the trial court found defendant liable for breach of contract of
carriage and sentenced it to pay P3,000.00 for the death of the child and P400.00 as
compensatory damages representing burial expenses and costs.
On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of
contract in the case, for the reason that when the child met her death, she was no longer a
passenger of the bus involved in the incident and, therefore, the contract of carriage had
already terminated. Although the Court of Appeals sustained this theory, it nevertheless found
the defendant-appellant guilty of quasi-delict and held the latter liable for damages, for the
negligence of its driver, in accordance with Article 2180 of the Civil Code. And, the Court of
Appeals did not only find the petitioner liable, but increased the damages awarded the plaintiffs-
appellees to P6,000.00, instead of P3,000.00 granted by the trial court.
In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding it liable
for quasi-delict, considering that respondents complaint was one for breach of contract, and (2)
in raising the award of damages from P3,000.00 to P6,000.00 although respondents did not
appeal from the decision of the lower court.
Under the facts as found by the Court of Appeals, we have to sustain the judgement holding
petitioner liable for damages for the death of the child, Raquel Beltran. It may be pointed out
that although it is true that respondent Mariano Beltran, his wife, and their children (including
the deceased child) had alighted from the bus at a place designated for disembarking or
unloading of passengers, it was also established that the father had to return to the vehicle
(which was still at a stop) to get one of his bags or bayong that was left under one of the seats
of the bus. There can be no controversy that as far as the father is concerned, when he
returned to the bus for his bayongwhich was not unloaded, the relation of passenger and carrier
between him and the petitioner remained subsisting. For, the relation of carrier and passenger
does not necessarily cease where the latter, after alighting from the car, aids the carrier's
servant or employee in removing his baggage from the car. 1 The issue to be determined here is
whether as to the child, who was already led by the father to a place about 5 meters away from
the bus, the liability of the carrier for her safety under the contract of carriage also persisted.
It has been recognized as a rule that the relation of carrier and passenger does not cease at
the moment the passenger alights from the carrier's 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 carrier's premises. And, what is a reasonable time or a
reasonable delay within this rule is to be determined from all the circumstances. Thus, a person
who, after alighting from a train, walks along the station platform is considered still a
passenger.2 So also, where a passenger has alighted at his destination and is proceeding by
the usual way to leave the company's premises, but before actually doing so is halted by the
report that his brother, a fellow passenger, has been shot, and he in good faith and without
intent of engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and
necessarily delayed and thus continues to be a passenger entitled as such to the protection of
the railroad and company and its agents.3
In the present case, the father returned to the bus to get one of his baggages which was not
unloaded when they alighted from the bus. Raquel, the child that she was, must have followed
the 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 (the
father) had to jump down from the moving vehicle. It was at 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 carrier's agent had exercised the "utmost diligence" of a "very cautions person" required by
Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its
obligation to transport safely its passengers. In the first place, the driver, although stopping the
bus, nevertheless did not put off the engine. Secondly, he started to run the bus even before
the bus conductor gave him the signal to go and while the latter was still unloading part of the
baggages of the passengers Mariano Beltran and family. The presence of 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.
But even assuming arguendo that the contract of carriage has already terminated, herein
petitioner can be held liable for the negligence of its driver, as ruled by the Court of Appeals,
pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint, which reads —
rise to the presumption that the defendant employer did not exercise the diligence of a good
father of the family in the selection and supervision of its employees. And this presumption, as
the Court of Appeals found, petitioner had failed to overcome. Consequently, petitioner must be
adjudged peculiarily liable for the death of the child Raquel Beltran.
The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals,
however, cannot be sustained. Generally, the appellate court can only pass upon and consider
questions or issues raised and argued in appellant's brief. Plaintiffs did not appeal from that
portion of the judgment of the trial court awarding them on P3,000.00 damages for the death of
their daughter. Neither does it appear that, as appellees in the Court of Appeals, plaintiffs have
pointed out in their brief the inadequacy of the award, or that the inclusion of the figure
P3,000.00 was merely a clerical error, in order that the matter may be treated as an exception
to the general rule.5Herein petitioner's contention, therefore, that the Court of Appeals
committed error in raising the amount of the award for damages is, evidently,
meritorious.1äwphï1.ñët
Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner
to pay to the respondents Mariano Beltran, et al., the sum of P3,000.00 for the death of the
child, Raquel Beltran, and the amount of P400.00 as actual damages. No costs in this instance.
So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and Castro,
JJ., concur.
Makalintal, J., concurs in the result.

That aside from the aforesaid breach of contract, the death of Raquel Beltran,
plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost
diligence of a very cautious person on the part of the defendants and their agent,
necessary to transport plaintiffs and their daughter safely as far as human care and
foresight can provide in the operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict, while
incompatible with the other claim under the contract of carriage, is permissible under Section 2
of Rule 8 of the New Rules of Court, which allows a plaintiff to allege causes of action in the
alternative, be they compatible with each other or not, to the end that the real matter in
controversy may be resolved and determined.4

The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated
when it was alleged in the complaint that "the death of Raquel Beltran, plaintiffs' daughter, was
caused by the negligence and want of exercise of the utmost diligence of a very cautious
person on the part of the defendants and their agent." This allegation was also proved when it
was established during the trial that the driver, even before receiving the proper signal from the
conductor, and while there were still persons on the running board of the bus and near it,
started to run off the vehicle. The presentation of proof of the negligence of its employee gave