De Guzman vs.

Court of Appeals Article 1732 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. The Court of Appeals referred to the fact that private respondent held no certificate of public convenience. A certificate of public convenience is not a requisite for the incurring of liability. 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. Planters Products, Inc. vs. CA 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 the charterer be charged, 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. 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, 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.

Fisher vs. Yangco In construing Act 98 for the alleged violation, the test is whether the refusal of YSC to carry the explosives without qualification or conditions may have the effect of subjecting any person or locality or the traffic is such explosives to an unduly unreasonable or unnecessary prejudice or discrimination. Common carriers in this jurisdiction cannot lawfully decline to accept a particular class of goods unless it appears that for some sufficient reason the discrimination for such is reasonable and necessary. YSC has not met those conditions. The nature of the business of a common carrier as a public employment is such that it is within the power of the State to impose such just regulations in the interest of the public as the legislator may deem proper. US vs. Quinahon There is no pretense that it actually cost more to handle the rice for the province than it did for the merchants with whom the special contracts were made. There was a clear discrimination against the province which is prohibited by the law. It is however not believed that the law prohibits common carriers from making special rates for the handling and transporting of merchandise, when the same are made for the purpose of increasing their business and to manage their important interests upon the same principles which are regarded as sound and adopted in other trades and pursuits. Absolute equality is not required in all cases. It is only unjust, undue and unreasonable discrimination which the law forbids. The law of equality is in force only where the services performed in the different cases are substantially the same and the circumstances and conditions are similar. Loadstar Shipping Co., Inc. vs. CA Loadstar submits that the vessel was a private carrier because it was not issued a CPC; it did not have a regular trip or schedule nor a fixed route; and there was only “one shipper, one consignee for a special cargo.” The SC held that Loadstar is a common carrier. It is not necessary that the carrier be issued a CPC, and this character is not altered by the fact that the carriage of the goods in question was periodic, occasional, episodic or unscheduled. First Philippine Industrial Corporation vs. CA Based on Article 1732 NCC, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or carrying

goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier. (De Guzman Ruling upheld) Respondent’s argument that the term “common carrier” as used in Section 133(j) of the Local Government Code refers only to common carriers transporting goods and passengers through moving vehicles or vessels either by land, sea or water is erroneous. The definition of “common carriers” in NCC makes no distinction as to the means of transporting as long as it is by land, water or air. It does not provide that the transporting of the passengers or goods should be by motor vehicle. Home Insurance Company vs. American Steamship Agencies, Inc. The NCC provisions on common carriers should not apply where the common carrier is not acting as such but as a private carrier. Under American Jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only becomes a private carrier. As a private carrier, a stipulation exempting the owner from liability for the negligence of its agent is valid. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if strict public policy governing common carrier is applied. Such policy has no force where the public at large is not involved, as in the case of a ship totally chartered for the use of a single party. The stipulation exempting the owner from liability for negligence of its agent is not against public policy and is deemed valid. Recovery can’t be had, for loss or damage to the cargo against shipowners, unless the same is due to personal acts or negligence of said owner or its managers, as distinguished from agents or employees. San Pablo vs. PANTRANCO Considering the environmental circumstances of the case, the conveyance of passengers, trucks and cargo from Matnog to Allen is certainly not a ferry boat service but a coastwise or interisland shipping service. Under no circumstance can the sea between Matnog and Allen be considered a continuation of the highway. While a ferry boat service has been considered as a continuation of the highway when crossing rivers or even lakes, which are small body of waters - separating the land, however, when as in this case the two terminals, Matnog and Allen are separated by an open sea it can not be considered as a continuation of the highway. Respondent PANTRANCO should secure a separate CPC for the operation of an interisland or coastwise shipping service in accordance with the provisions of law. Its CPC as a bus transportation cannot be merely amended to include this water service under the guise that it is a mere private ferry service.

and protect. the interests of both the public and the existing transport operators. are determined primarily by stipulations in their contracts of private carriage or charter party. It is a private carrier that renders tramping service and as such. The Court does not see any reason why inspite of its amended franchise to operate a private ferry boat service it cannot accept walk-in passengers just for the purpose of crossing the sea between Matnog and Allen. The presumption of public need for a service shall be deemed in favor of the applicant. As one of the basic requirements for the grant of a CPC. The object and purpose of such procedure. is to look out for. KMU vs. while the burden of proving that there is no need for the proposed service shall be the oppositor's. Unlike in a contract involving a common carrier. Indeed evidence to this effect has been submitted. It carried passengers or goods only for those it chose under a special contract of charter party. the rights and obligations of VSI and NSC. Consequently. public convenience and necessity exists when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. in a public hearing conducted for that purpose.” By its terms. private carriage does not involve the general public. Garcia “The issuance of a Certificate of Public Convenience is determined by public need. statistics and such other means necessary. The existence or non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence. not as a common carrier for its exclusive use in the ferrying of its passenger buses and cargo trucks is absurd. among other things. including their respective liability for damage to the cargo. Its services are available only to specific persons who enter into a special contract of charter party with its owner. the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. CA In the instant case. .The contention of private respondent PANTRANCO that its ferry service operation is as a private carrier. Hence. it is undisputed that VSI did not offer its services to the general public. PANTRANCO cannot pretend that in issuing tickets to its passengers it did so as a private carrier and not as a common carrier. public convenience or necessity generally means something fitting or suited to the public need. empirical data. does not transport cargo or shipment for the general public. National Steel Corporation vs. real and/or testimonial. PANTRANCO does not deny that it charges its passengers separately from the charges for the bus trips and issues separate tickets whenever they board the MV "Black Double" that crosses Matnog to Allen.

Article 1736 is applicable to the instant suit. One can own said facilities without operating them as a public utility. vs. The court a quo found that there was actual delivery to the consignee through its duly authorized agent. there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and equipment used to serve the public. The devotion of property to serve the public may be done by the owner or by the person in control thereof who may not necessarily be the owner thereof. The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof. a special law. In sales. the Carriage of Goods by Sea Act. there is actual delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly authorized agent and a reasonable time is given him to remove the goods. Inc. There is no doubt that Art. the carrier. Under said article. the liability of Petitioner Carrier is governed primarily by the Civil Code. the rights and obligations of common carrier shall be governed by the Code of Commerce and by special laws. Intermediate Appellate Court 1) The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss. or conversely. and were stored in the warehouse of a third party when last seen and/or heard of. Eastern Shipping Lines vs. 1738 finds no applicability to the instant case. and the actual apprehension of corporeal possession by the buyer or by some person authorized by him to receive the goods as his representative for the purpose of custody or disposal. The subject goods were still awaiting transshipment to their port of destination. destruction or deterioration. is suppletory to the provisions of the Civil Code. As the cargoes in question were transported from Japan to the Philippines. The said article contemplates a situation where the goods had already reached their place of destination and are stored in the warehouse of the carrier. in all matters not regulated by said Code. By the same token.Tatad vs. actual delivery has been defined as the ceding of corporeal possession by the seller. Garcia In law. Thus. or to the person who has a right to receive them. . Samar Mining Company. However. Nordeutscher Lloyd The validity of stipulations in bills of lading exempting the carrier from liability for loss or damage to the goods when the same are not in its actual custody has been upheld. one may operate a public utility without owning the facilities used to serve the public. the carrier may be relieved of the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee.

The agreement between NDC and MCP shows that MCP is appointed as agent.” This Petitioner Carrier has also failed to establish satisfactorily. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. Gelisan vs. under the provisions of the Code of Commerce. earthquake. during or after the occurrence of the disaster. It may even be caused by the actual fault or privity of the carrier. common carriers. according to all the circumstances of each case. Alday . In fact MCP was even conferred all the powers of the owner of the vessel. National Development Company vs. a term broad enough to include the concept of ship agent in maritime law." and that the carrier has "exercised due diligence to prevent or minimize the loss before. Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase "natural disaster or calamity. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage. Both owner and agent should be declared jointly and severally liable since the obligation which is the subject of the action had its origin in a fortuitous act and did not arise from contract. the Court said that fire may not be considered a natural disaster or calamity. supra. CA Significantly. from the nature of their business and for reasons of public policy. the shipowner or carrier. it is required under Article 1739 of the same Code that the "natural disaster" must have been the "proximate and only cause of the loss.” However. are bound to observe extraordinary diligence in the vigilance over goods. destruction. including the power to contract in the name of the NDC. storm. is not exempt from liability for damages arising from collision due to the fault or negligence of the captain. And even if fire were to be considered a "natural disaster" within the meaning of Article 1734 of the Civil Code. unless it proves that it has observed the extraordinary diligence required by law. Common carriers are responsible for the loss. lightning or other natural disaster or calamity. or deterioration of the goods unless the same is due to any of the following causes only: (1) Flood. particularly Articles 826 to 839. As the peril of the fire is not comprehended within the exception in Article 1734. Article 1735 of the Civil Code provides that all cases than those mention in Article 1734. This must be so as it arises almost invariably from some act of man or by human means.(2) Under the Civil Code. the common carrier shall be presumed to have been at fault or to have acted negligently.

The registered owner is not allowed to deny liability by proving the identity of the alleged transferee. Benedicto vs. although not effective against the public is valid and binding between the contracting parties. its only recourse if the judgment for damages is satisfied by it is to recover what it has paid from its employee who committed the fault or negligence which gave rise to the action based on quasi-delict. 2194. cannot be sustained because it appears that the lease contract had not been approved by the Public Service Commission. direct. for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. like petitioner Philtranco. PHILTRANCO Service Enterprise. the transfer is not binding upon the public and 3rd persons. direct and solidary. private respondents are not required to go beyond the vehicle’s certificate of registration to ascertain the owner of the carrier. Since the employer's liability is primary. Gelisan is not without recourse because he has a right to be indemnified by Espiritu for the amount he may be required to pay. Intermediate Appellate Court The prevailing doctrine in common carriers make the owner liable for consequences having from the operations of the carrier even though the specific vehicle involved may have been transferred to another person. It is a settled rule in our jurisprudence that if the property covered by a Franchise is transferred or lease to another without obtaining the requisite approval. Inc.The court has held in several decisions that the registered owner of a public service is responsible for damages that may arise from consequences incident to its operation or that may be caused to any of the passengers therein. Article 2181 of the Civil Code provides: . Thus. However. contrary to petitioner’s claim. The claim of the petitioners that he is not liable in view of the lease contract executed by and between him and Espiritu which exempts him from liability to 3rd persons. Article 2194 expressly provides: Art. This doctrine rests upon the principle in dealing with vehicles registered under Public Service Law. the public has the right to assume that the registered owner is the actual or lawful owner thereof. The responsibility of two or more persons who are liable for a quasi-delict is solidary. As to solidarity. for damages arising from the tortious acts of the driver is primary. and joint and several or solidary with the driver. It would be very difficult and often impossible as a practical matter. vs. This is due to the fact that the lease contract in question. Court of Appeals We have consistently held that the liability of the registered owner of a public service vehicle.

the latter. Intermediate Appellate Court The ruling in Lita Enterprises Inc. The defect of in existence of a contract is permanent and cannot be cured by ratification or by prescription. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim. Santos vs. whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government . vs. therefore. Lita Enterprises Inc. void and inexistent under Article 1409 of the Civil Code. Sibug Although SANTOS. This ruling is based on the principle that the operator of record is considered the operator of the vehicle in contemplation of law as regards the public and third persons even if the vehicle involved in the accident had been sold to another where such sale had not been approved by the then Public Service Commission. Intermediate Appellate Court Unquestionably. Although not outrightly penalized as a criminal offense. Magboo vs. as a consequence of the negligent or careless operation of the vehicle. but will leave them both where it finds them. The mere lapse of time cannot give efficacy to contracts that are null and void. IAC is upheld. The owner continued to be the operator of the vehicle in legal contemplation and as such. comonly known as the "kabit system". Abuse of this privilege by the grantees thereof cannot be countenanced. as the kabit was the true owner as against VIDAD. he is responsible for the consequences incident to its operation. the injured party. To exempt from liability the owner of a public vehicle who operates it under the “boundary system” on the ground that he is a mere . vs.Art. the "kabit system" is invariably recognized as being contrary to public policy and. It is a fundamental principle that the court will not aid either party to enforce an illegal contract. Teja Marketing vs. is directly and primarily responsible and liable for the damages caused to SIBUG. 2181. Bernardo The features which characterize the boundary system are not sufficient to withdraw the relationship between the parties from that of employer and employee. the parties herein operated under an arrangement. as the registered owner/operator and grantee of the franchise.

the contract of carriage was deemed perfected. destruction or deterioration of the goods commenced. Moreover. They are not unforeseen nor unforeseeable. The order of the acting Mayor did not constitute valid authority for petitioner to carry out. 1. particularly in the month of September which. there is absence of sufficient proof that the issuance of the same order was attended with such force or intimidation as to completely overpower the will of the petitioner’s employees. in our area. Ganzon vs. and the carrier must present evidence that it has observed the extraordinary diligence required by Article 1733 of the Civil Code in order to escape liability for damage or destruction to the goods that it had admittedly carried in this case. the intervention of the municipal officials was not of a character that would render impossible the fulfillment by the carrier of its obligation. Court of Appeals The heavy seas and rains referred to in the master’s report were not caso fortuito but normal occurrences that an ocean-going vessel. 1734. such extraordinary responsibility would cease only upon the delivery by the carrier to the consignee or persons with right to receive them. CA Petitioner Ganzon failed to show that the loss of the scrap iron due to any cause enumerated in Art. and upon their receipt by the carrier of transportation. Thus. Since the carrier has failed to establish any caso fortuito. No such evidence exists of record. The fact that part of the shipment had not been loaded on board did not impair the contract of transportation as the goods remained in the custody & control of the carrier. . the scraps were unconditionally placed in the possession and control of the common carrier. According to Art 1738. In any case. These are conditions that ocean-going vessels would encounter and provide for. That rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and foresight did not attend the closing of the ship's hatches so that rain water would not find its way into the cargo holds of the ship. Eastern Shipping Lines vs. the carrier cannot escape liability. the presumption by law of fault or negligence on the part of the carrier applies. is a month of rains and heavy seas would encounter as a matter of routine. Ganzon’s extraordinary responsibility for the loss. Consequently. The petitioner was not duly bound to obey the illegal order to dump into the sea the scrap of iron. 1956. By the delivery made during Dec.lessor would be not only to abet flagrant violations of the Public Service Law but also to place the riding public at the mercy of reckless and irresponsible drivers. in the ordinary course of a voyage.

resulting in the conclusion that it could not explode within five day’s use. receipted or paid for. the parties may validly stipulate that responsibility for the cargo rests solely on the charterer.Sarkies Tours Phils vs. unless the loss is due to any of the excepted causes under Article 1734 thereof. It is settled that an accident caused either by defects in the automobile or through the negligence of its driver is . private carriage does not involve the general public. such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law. the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law in contracts involving common carriers. Consequently. from the nature of their business and for reasons of public policy. We stress that in a contract of private carriage. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Court of Appeals In a contract of private carriage. without asking that they be weighed. exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. and this liability lasts from the time the goods are unconditionally placed in the possession of. actually or constructively. Court of Appeals Under the Civil Code. common carriers. the parties may freely stipulate their duties and obligations which perforce would be binding on them. are bound to observe extraordinary diligence in the vigilance over the goods transported by them. good customs. There are human factors involved in the situation. defendant appellant's employee even helped Fatima Minerva Fortades and her brother load the luggages/baggages in the bus' baggage compartment. It is responsible for the consequent loss of the baggage. Where the common carrier accepted its passenger's baggage for transportation and even had it placed in the vehicle by its own employee. and received by the carrier for transportation until the same are delivered. morals. Court of Appeals The explosion of the new tire is not a fortuitous event. public order. Valenzuela Hardwood & Industrial Supply vs. its failure to collect the freight charge is the common carrier's own lookout. Yobido vs. Pursuant to Article 1306 17 of the Civil Code. Hence. the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. or public policy. In the instant case. Neither may the fact that the tire bought and used is of a brand name noted for quality. Unlike in a contract involving a common carrier. declared. their contract of private carriage is not even a contract of adhesion. by the carrier to the person who has a right to receive them. Neither was this required of the other passengers. Indeed.

is a good delivery and binds the vessel receiving the freight. where there is a contract to carry goods from one port to another. or to the person who has a right to receive them. and they cannot be loaded directly on the vessel and lighters are sent by the vessel to bring the goods to it. or receipt by. Thus. Insurance Co. so that the bill of landing is applicable to the goods as soon as they are placed on the lighters. having failed to overthrow the presumption of negligence with clear and convincing evidence. similarly. and if actually no goods are received there can be no such contract. and not merely with the formal execution of a receipt or bill of lading. petitioners are hereby held liable for damages. The liability and responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery to. Whenever the control and possession of goods passes to the carrier and nothing remains to be done by the shipper. Even where it is provided by statute that liability commences with the issuance of the bill of lading. Compania Maritima vs. The bill of lading is juridically a documentary proof of the stipulations and conditions agreed upon by both parties. The liability of the carrier as common carrier begins with the actual delivery of the goods for transportation. then it can be said with certainty that the relation of shipper and carrier has been established. we believe however that the parties may agree to limit the liability of the carrier considering that the goods have still to through the inspection of the customs authorities before they are actually turned over to the consignee.not a caso fortuito. Moreover. actual delivery and acceptance are sufficient to bind the carrier. because in such case the goods are still in the hands of the Government and the owner cannot exercise dominion over them. the issuance of a bill of lading is not necessary to complete delivery and acceptance. the lighters are for the time its substitutes. where it is the custom to deliver in that way. of North America The receipt of goods by the carrier has been said to lie at the foundation of the contract to carry and deliver. A common carrier must still prove that it was not negligent in causing the death or injury resulting from the accident. This is a situation where we may say that the . Binamira While delivery of the cargo to the consignee. the liability commencing at the time of delivery to the lighter and. contemplated in Article 1736. A bill of lading is not indispensable for the creation of a contract of carriage. Lu Do vs. the carrier or an authorized agent and delivery to a lighter in charge of a vessel for shipment on the vessel. a common carrier may not be absolved from liability in case of force majeure.

Servando vs.. 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. . however. there is nothing therein that is contrary to law. that in the bills of lading issued for the cargoes in question. war. morals or public policy. the parties agreed to limit the responsibility of the carrier for the loss or damage that may be caused to the shipment therein the following stipulation: Clause 14. dangers or accidents of the sea or other waters. and since the burning of the warehouse occurred before actual or constructive delivery of the goods to the appellees. . Therefore. Under 1766 of NCC. 1763 of the New Civil Code provides that “the laws of the country to which the goods are transported shall govern the liability of the common carrier in case of loss.” Art. Phil. “in all matter not regulated by this Code. 1736-1738. It should be pointed out. This argument overlooks the pronouncement of this Court in Ong Yiu vs. and that they did not sign the same. fire . public enemies. where the same issue was resolved in this wise: . although Sec 4(5) of COGSA states that the carrier shall not be liable in an amount exceeding $500 per package unless the value of the goods had been declared by the shipper and asserted in the bill of lading. American President Lines. the same is of as moment. the loss is chargeable against the appellant. We sustain the validity of the above stipulation. 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. NCC governs said rights and obligations. Ltd.. vs. the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws. Steam 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. Court of Appeals.carrier losses control of the goods because of a custom regulation and it is unfair that it be made responsible for what may happen during the interregnum. Klepper With regard to the contention of the carrier that COGSA should control in this case. . Art. Nor shall carrier be responsible for loss or damage caused by force majeure. said section is merely supplementary to the provisions of the New Civil Code. destruction and deterioration.” This means that the law of the Philippines on the New Civil Code. .

he gives his consent. as the plane ticket in the case at bar. In order that any presumption of assent to a stipulation in a bill of lading limiting the liability of a carrier may arise. for that matter. and in the absence of fraud or mistake. . the execution of the bill of lading even prior to actual possession and control by the carrier of the cargo to be transported. that is. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents. where a shipper accepts a receipt which states that its conditions are to be found on the back. and acceptance under such circumstances makes it a binding contract. when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true facts ." There is a holding in most jurisdictions that the acceptance of a bill of lading without dissent raises a presumption that all terms therein were brought to the knowledge of the shipper and agreed to by him. The one who adheres to the contract is in reality free to reject it entirely." a further reading and a more faithful quotation of the authority cited would reveal that "(a) bill of lading may contain constituent elements of estoppel and thus become something more than a contract between the shipper and the carrier. Court of Appeals Except as may be prohibited by law. if it is shown that the consignor knew of its terms. he is nevertheless bound by the provisions thereof. 'Such provisions have been held to be a part of the contract of carriage. . are contracts not entirely prohibited. (However). as between the shipper and the carrier. vs. It is what is known as a contract of 'adhesion'. ." Saludo. and the shipper is held to have accepted and to be bound by the conditions there to be found. such receipt comes within the general rule. A stipulation printed on the back of a receipt or bill of lading or on papers attached to such receipt will be quite as effective as if printed on its face. it must appear that the clause containing this exemption from liability plainly formed a part of the contract contained in the bill of lading. in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other. . Jr. Between the consignor of goods and receiving carrier. that the former should precede the latter. he is estopped from thereafter denying that he assented to such terms. As between the consignor and a receiving carrier. While we agree with petitioners' statement that "an airway bill estops the carrier from denying receipt of goods of the quantity and quality described in the bill. the fact must outweigh the recital. There is no law which requires that the delivery of the goods for carriage and the issuance of the covering bill of lading must coincide in point of time or. and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation'.“While it may be true that petitioner had not signed the plane ticket. . there is nothing to prevent an inverse order of events. . recitals in a bill of lading as to the goods shipped raise only a rebuttable presumption that such goods were delivered for shipment. Thus. if he adheres.

1736 had. of the goods by the consignee or such other person entitled to receive them. conformably with Art. This premise draws us to conclude that the delivery of the cargoes to GPC as buyer/importer which. custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. we gather that he has been transacting with GPC as buyer/importer for around two (2) or three (3) years already. the right to receive them was proper. bank guarantee is normally required by the shipping lines prior to releasing the goods. attach and the presumption of fault of the carrier under Article 1735 be invoked. and terminates only after the lapse of a reasonable time for the acceptance. Petitioner also referred to GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. It has been the practice of petitioner to request the shipping lines to immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his "people. in the export invoices GPC was clearly named as buyer/importer. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit. However. CA The extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. there was not a single instance when the bill of lading was first presented before the release of the cargoes. Macam vs. other than the consignee. destruction or deterioration of goods in the custody of the carrier. Only when such fact of delivery has been unequivocally established can the liability for loss. But for buyers using telegraphic transfers. In his several years of business relationship with GPC and respondents. When mangoes and watermelons are in season. petitioner dispenses with the bank guarantee because the goods are already fully paid. Where such a delivery has thus been accepted by the carrier. . And. From the testimony of petitioner. unless the shipper or owner exercises the right of stoppage in transitu. there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession. his shipment to GPC using the facilities of respondents is twice or thrice a week.Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee. The goods are released to GPC. absent the excepting causes under Article 1734. the liability of the common carrier commences. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party." In transactions covered by a letter of credit.

he is nevertheless bound by the provisions thereof. The one who adheres to the contract is in reality free to reject it entirely. unless such common carriers previously assume the obligation to deliver at a given date or time. While there was no special contract entered into by the parties indicating the date of arrival of the subject shipment. Ong Yiu vs. In this regard. Philippine Airlines It can not be said that a contract has been entered into between a passenger and the common carrier. he gives his . in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other. "Such provisions have been held to be a part of the contract of carriage. It is what is known as a contract of "adhesion". Shewaram vs. as the plane ticket in the case at bar. Ysmael vs.Maersk Line vs. embodying the conditions as printed at the back of the ticket. if he adheres. there arises no need to execute another contract for the purpose as it would be a mere superfluity. petitioner nevertheless. and persons are not vested with the right to prompt delivery. was very well aware of the specific date when the goods were expected to arrive as indicated in the bill of lading itself. A common carrier cannot lawfully stipulate for exemption from liability. The fact that those conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the passenger was aware of those conditions such that he had "fairly and freely agreed" to those conditions. CA While it is true that common carriers are not obligated by law to carry and to deliver merchandise. Barretto Limiting the common carrier’s liability for loss or damage from any cause or for any reason for less than 1/8 the actual value of the goods is unconscionable and therefore against public policy. as manifested by the fact that he did not sign the ticket. In the case before us. are contracts not entirely prohibited. we find that a delay in the delivery of the goods spanning a period of two months and seven days falls was beyond the realm of reasonableness. delivery of shipment or cargo should at least be made within a reasonable time. The passenger is considered not having agreed to the stipulation on the ticket. unless such exemption is just and reasonable and the contract is freely and fairly made. Court of Appeals While it may be true that the passenger had not signed the plane ticket. and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation".

Its liability would only be up to One Hundred Thousand (Y100. Furthermore. IAC Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage so governed by the laws of the country of destination and the goods in question were shipped from the United States to the Philippines.00/kilo. the award based on the alleged market value of the goods is erroneous. It is provided in a clause in the BOL that its liability is limited to US$2. Inc. if it is reasonable and just under the circumstances. the stipulation on the carrier’s limited liability applies. had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier. vs. the shipper. .consent. Everett Seamship Corp. vs.000. the carrier made it clear that all claims for which it may be liable shall be adjusted and settled on the basis of the shipper's net invoice cost plus freight and insurance premiums. destruction or deterioration of the goods is valid. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. Considering that the shipper did not declare a higher valuation. it had itself to blame for not complying with the stipulations. unless the shipper or owner declares a greater value. and in no event shall the carrier be liable for any loss of possible profits or any consequential loss. However. a contract fixing the sum that may be recovered by the owner or shipper for the loss. Inc. vs. In this case. The consignee also admits in the memorandum that the value of the goods does not appear in the bill of lading. CA In the bill of lading. Sea Land Services. The commercial Invoice does not in itself sufficiently and convincingly show that the common carrier has knowledge of the value of the cargo as contended by the shipper. is binding. CA Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading. Applying the Civil Code provisions (Article 1749 and 1750) the stipulation in the bill of lading limiting the liability of the common carrier for loss or damages to the shipment covered by said rule unless the shipper declares the value of the shipment and pays additional charges is valid and binding on the consignee. Hence. the liability of common carrier to the consignee is governed primarily by the Civil Code.00) Yen. and has been fairly and freely agreed upon. if paid. Citadel Lines.

under circumstances obligation in the inter-island shipping industry. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. When an action is based on breach of contract of carriage. Macondray Three kinds of stipulations have often been made in a bill of lading. without any objection. the passenger can only sue BA and not PAL. understandingly and freely.British Airways vs. The latter merely endorsing the Manila to Hong Kong log of the former’s journey to PAL. he cannot thereafter recover more than the value which he thus places upon his property. A limitation of liability based upon an agreed value does not conflict with any sound principle of public policy. and it is not conformable to plain principles of justice that a shipper may understate value in order to reduce the rate and then recover a larger value in case of loss. We find and hold that Condition No. Wellsettled rule that an agent is also responsible for any negligence in the performance of its function and is liable for damages which the principal may suffer by reason of its negligent act. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. since the latter was not a party in the contract. According to an almost uniform weight of authority. vs. Conditions of contracts were one of continuous air transportation. on . it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets. CA The contract of transportation was exclusively between the passenger and common carrier BA. The second is one providing for an unqualified limitation of such liability to an agreed valuation. and names his valuation. TEVES Considered in the light of circumstances prevailing in the inter-island shipping industry in the country today. as its subcontractor or agent. H. The contention of BA with respect to limited liability was overruled although it is recognized in the Philippines. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons first. If a common carrier gives to a shipper the choice of two rates and if the shipper makes such a choice. stating that BA had waived the defense of limited liability when it allowed Mahtani(the passenger) to testify as to the actual damages he incurred due to the misplacement of his luggage. Heacock Co. Sweet Lines Inc. the first and second kinds of stipulations are invalid as being contrary to public policy. but the third is valid and enforceable. vs.E.

as was done in the instant case. and when plaintiff-appellees wanted to leave the port and gave up the trip. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu. moral damages are justly due in breaches of contract where the defendant acted fraudulently or in bad faith. . 14 is Printed in fine letters. much less prejudice. The condition will thus defeat.appellants did not offer to refund plaintiffs-appellees’ tickets nor provide them with transportation form Tacloban to Catbalogan. defendants. vs. 2220 of the Civil Code.appellants employees would come and say. Both the Trial Court and the Appellate Court found that there was bad faith on the part of petitioner in that: (1) Defendants.which Condition No. hand-grenades. petitioner.Appellants did not give notice to plaintiffs-appellates as to the change of scheduled of the vessel. petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. The hijackers do not board an airplane through a blatant display of firepower and violent fury. The use of the most sophisticated electronic detection devices may have minimized hijacking but still ineffective against truly determining hijackers. Hijackers do not board an airplane through a blatant display of firepower and violent fury. “we are leaving already”. 14. the ends of justice. Firearms and grenades are brought to the plane surreptitiously. instead of enhance. Firearms. (3) Defendants. particularly for failing to take positive measures to implement Civil Aeronautics Administration regulations prohibiting civilians from carrying firearms on board the plane. Upon the other hand. under Condition No. dynamite. Hence. Quisumbing Sr. defendants. the filing of the suit in the CFI of Misamis Oriental. Condition No. PAL was not negligent so as to overcome the force majeure nature of the hi-jacking. 14 subverts the public policy on transfer of venue of proceedings of this nature. PAL could not have been faulted for want of diligence. (2) Knowing fully well that it would take no less than fifteen hours to effect the repairs of the damaged engine. will not cause inconvenience to. although there is an occasional use of innocent hostages who will be coldly murdered unless a plane is given to the hijackers' complete disposal. will have to file suits against petitioner only in the City of Cebu.appellants instead made announce ment of assurance that the vessel would leave within a short period of time. Under Art. and explosives are introduced into the airplane surreptitiously and with the utmost cunning and stealth. since the same will prejudice rights and interests of innumerable passengers located in different places of the country who. he would most probably decide not to file the action at all. and second. Court of Appeals The highjacking-robbery was force majeure.

an air carrier would be exempt from any liability for damages in the event of its absolute refusal. and Dr. he cannot avoid the application of the liability limitations. the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage. The provisions in the plane ticket are sufficient to govern the limitations of liabilities of the airline for loss of luggage. which provides: (c) a notice to the effect that. The passenger ticket complies with Article 3. to comply with a contract of carriage. Rapadas The Warsaw Convention governs the availment of the liability limitations where the baggage check is combined with or incorporated in the passenger ticket. In the case at bar. or for some particular or exceptional type of damage. Inc. Prudence of a reasonably careful person also dictates that cash and jewelry should be removed from checked-in-luggage and placed in one's pockets or in a handcarried Manilapaper or plastic envelope. . which is absurd. vs. Alitalia vs. but without appreciable damage. belatedly. The facts show that the private respondent actually refused to register the attache case and chose to take it with him despite having been ordered by the PANAM agent to check it in. was expected to be vigilant insofar as his luggage is concerned. it is true. Intermediate Appellate Court The Warsaw Convention's provisions. in bad faith. Otherwise. if the passenger's journey involves an ultimate destination or stop in a country other than the country of departure. upon contracting with the airline and receiving the plane ticket. Pablo's luggage was eventually returned to her. do not regulate or exclude liability for other breaches of contract by the carrier' or misconduct of its officers and employees. The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding supplementary charges cannot justify his failure to comply with the requirement that will exclude the application of limited liability. no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline. If the passenger fails to adduce evidence to overcome the stipulations. In the case at bar. The passenger. In attempting to avoid registering the luggage by going back to the line. the baggage check is combined with the passenger ticket in one document of carriage. private respondent manifested a disregard of airline rules on allowable handcarried baggages.Pan American World Airways.

tardily. Certainly. allowance must be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. but beyond this. both realistically speaking and in contemplation of law. Santisteban was "off-duty" or "on-duty" at or around the time of actual collision is quite immaterial. as in the case at bar. in compelling the passenger to submit to more rigid inspection. Whether or not Capt. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers. The record shows that the "Don Juan" sank within ten (10) to fifteen (15) minutes after initial contact with the "Tacloban City. not to speak of his own. from the time she learned that her suitcases were missing up to the time when. She is not. which gradually turned to panic and finally despair. Pablo underwent profound distress and anxiety. inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible. her baggage was ultimately delivered to her in Manila. As already mentioned. no such thing as "off-duty" hours for the master of a vessel at sea that is a common carrier upon whom the law imposes the duty of extraordinary diligence. He cannot be subjected to any unusual search. of course. Nocum vs. While the failure of . the compensation for the injury suffered by Dr. having gone to Rome. could not have justified invasion of a constitutionally protected domain. there is. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage. Mecenas vs. Calling a policeman to his aid. constitutional boundaries are already in danger of being transgressed. entitled to be compensated for loss or damage to her luggage. Not to be lightly considered must be the right to privacy to which each passenger is entitled. CA The behaviour of the captain of the "Don Juan" in tills instance-playing mahjong "before and up to the time of collision constitutes behaviour that is simply unacceptable on the part of the master of a vessel to whose hands the lives and welfare of at least seven hundred fifty (750) passengers had been entrusted. after the passenger had already declared that the box contained mere clothes and other miscellaneous. when he protests the innocuousness of his baggage and nothing appears to indicate the contrary.There can be no doubt that Dr. Laguna Tayabas Bus Company Fairness demands that in measuring a common carrier's duty towards its passengers. but safely. she finally realized that she would no longer be able to take part in the conference. as suggested by the service manual invoked by the trial judge. In other words.

Capt. Santisteban to supervise his officers and crew in the process of abandoning the ship and his failure to avail of measures to prevent the too rapid sinking of his vessel after collision, did not cause the collision by themselves, such failures doubtless contributed materially to the consequent loss of life and, moreover, were indicative of the kind and level of diligence exercised by Capt. Santisteban in respect of his vessel and his officers and men prior to actual contact between the two (2) vessels. The officer-on-watch in the "Don Juan" admitted that he had failed to inform Capt. Santisteban not only of the "imminent danger of collision" but even of "the actual collision itself " There is also evidence that the "Don Juan" was carrying more passengers than she had been certified as allowed to carry. Under these circumstances, a presumption of gross negligence on the part of the vessel (her officers and crew) and of its ship-owner arises. Negros Navigation Co., Inc. vs. CA The Duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. (Same Ruling with Mecenas)

Korean Airlines Co., LTD. vs. CA The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage between them when it failed to bring Lapuz to his destination. This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation. The business of the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it offers. The contract of air carriage generates a relation attended with a public duty. Passengers have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. Fortune Express Inc. vs. CA

Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of the negligence of petitioner's employees, the seizure of the bus by Mananggolo and his men was made possible. Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board could have been employed without violating the passenger's constitutional rights. The acts of Maranaos could not be considered as caso fortuito because there was already a warning by the PC. No contributory negligence could be attributed to the deceased. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding. The armed men actually allowed deceased to retrieve something from the bus. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. Gatchalian vs. Delim The record yields affirmative evidence of fault or negligence on the part of respondent common carrier. The driver did not stop to check if anything had gone wrong with the bus when the snapping sound was heard and made known to him by the passengers, instead told them that it was normal. The driver's reply necessarily indicated that the same "snapping sound" had been heard in the bus on previous occasions. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the bus be checked and repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver.

Because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy or good customs. A cursory examination of the purported waiver will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. All that said document proves is that they expressed a "desire" to make the waiver which obviously is not the same as making an actual waiver of their right. A waiver of the kind invoked by appellant must be clear and unequivocal. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her condition ante. Del Castillo vs. Jaymalin Common carriers are responsible for the death of their passengers (Articles 1764 and 2206 of the Civil Code). This liability includes the loss of the earning capacity of the deceased. It appears proven that the defendant corporations failed to exercise the diligence that was their duty to observe according to Articles 1733 and 1755. The conductor was apprised of the fact that Mario del Castillo was deaf and dumb. With this knowledge the conductor should have taken extra-ordinary care for the safety of the said passenger. In this he failed. Phil. Rabbit Bus Lines vs. IAC 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." It is the rule under the substantial factor test that if the actor's conduct is a substantial factor in bringing about harm to another, the fact that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable. The bus driver's conduct is not a substantial factor in bringing about harm to the

by exercising reasonable care and prudence. and an injury results. The owner of the vehicle in the case at bar is only required to observe ordinary care. and is not in duty bound to exercise extraordinary diligence as required by our law. Lara vs. Paras . since the case at bar is not a suit between the owners and drivers of the colliding vehicles but a suit brought by the heirs of the deceased passengers against both owners and drivers of the colliding vehicles.passengers of the jeepney. In other words. is that the negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the defendant. "The rule is established by weight of authority that the owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in its operation. As the doctrine is usually stated. Therefore. a person who has the last clear chance or opportunity of avoiding an accident. the Court is convinced that the respondent Court committed an error of law in applying the doctrine of last clear chance as between the defendants. might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff's negligence. Valencia The owner and driver of a vehicle owes to accommodation passengers or invited guests merely the duty to exercise reasonable care so that they may be transported safely to their destination. the respondent court erred in absolving the owner and driver of the cargo truck from liability. assuming such calculation to be correct. stated broadly. Thus. notwithstanding the negligent acts of his opponent or that of a third person imputed to the opponent is considered in law solely responsible for the consequences of the accident. It cannot be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour. is yet within the speed limit allowed in highways. A passenger must observe the diligence of a father of a family to avoid injury to himself which means that if the injury to the passenger has been proximately caused by his own negligence. the doctrine of last clear chance means that even though a person's own acts may have placed him in a position of peril. All premises considered. and not unreasonably to expose him to danger and injury by increasing the hazard of travel. CA The doctrine. the injured person is entitled to recovery. Necessito vs. the carrier cannot be held liable. Bustamante vs.

adverse weather conditions or extreme climatic changes are some of the perils involved in air travel. when JAL was prevented from resuming its flight to Manila due to the effects of Mt. It has been held that airline passengers must take such risks incident to the mode of travel. CA Accordingly. The doctrine of Res ipsa loquitur as a rule of evidence is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. In this regard. While JAL was no longer required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous event. Petitioner JAL reneged on its obligation to look after the comfort and convenience of its passengers when it declassified private respondents from "transit passengers" to "new passengers" as a result of which private respondents were obliged to make the necessary arrangements themselves for the next flight to Manila. IAC Res ipsa loquitur is a doctrine which states thus: "Where the thing which causes injury is shown to be under the management of the defendant. there is no question that when a party is unable to fulfill his obligation because of "force majeure. Yet it is undeniable that JAL assumed the hotel expenses of respondents for their unexpected overnight stay on June 15. The doctrine can be invoked when and only when. Japan Airlines vs. direct evidence is absent and not readily available. he has no remedy against him. while the carrier usually has. Corollarily. and the good repute of the manufacturer will not relieve the carrier from liability. under the circumstances involved. that the accident arose from want of care. and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care. In this connection. Pinatubo eruption. . hence." the general rule is that he cannot be held liable for damages for non-performance. the manufacturer of the defective appliance is considered in law the agent of the carrier. whatever losses or damages in the form of hotel and meal expenses the stranded passengers incurred. JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila. The rationale of the carrier's liability is the fact that the passenger has no privity with the manufacturer of the defective equipment. cannot be charged to JAL. the consequences of which the passenger must assume or expect. it should nevertheless be held to answer for the laws its equipment if such flaws were at all discoverable. 1991. in the absence of an explanation by the defendant.While the carrier is not an insurer of the safety of the passengers. Layugan vs. it affords reasonable evidence.

But despite this warning which we rule as sufficient. after reaching his destination. for example. It follows that the doctrine of Res ipsa loquitur is inapplicable. who was already led by father to a place about 5 meters away from the bus for her safety under contract of carriage. the the not the 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. which he had every right to do. Even if he had already disembarked an hour earlier. and includes a reasonable time to see after his baggage and prepare for his departure. CA The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. such person remains in the carrier's premises to claim his baggage. making the employer of the driver liable for the negligence of his employee. still bumped the rear of the parked cargo truck. As a direct consequence of such accident the petitioner sustained injuries on his left forearm and left foot. his presence in petitioner's . All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers. but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. CA The liability of the carrier for the child. vs. aids carrier's servant or employee in removing his baggage from the car. It is clear therefore that the absence or want of care of Daniel Serrano has been established by clear and convincing evidence. safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. the victim was in the act of unloading his cargoes.Whether the cargo truck was parked along the road or on half the shoulder of the right side of the road would be of no moment taking into account the warning device consisting of the lighted kerosene lamp placed three or four meters from the back of the truck. La Mallorca vs. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. The relation of carrier and passenger does necessarily cease where the latter. an employee of the private respondent. the relationship will not ordinarily terminate until the passenger has. When the accident occurred. the Isuzu truck driven by Daniel Serrano. persists. And. from petitioner's vessel. Aboitiz Shipping Co. after alighting from the car. The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if. Once created. what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances.

1755 of the Civil Code. Under Art. 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. 1756 of the Civil Code. unless there is proof to the contrary. in case of death or injuries to passengers. 1759 of the same Code. 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. acted without authority when they confirmed the flights of the petitioner. he cannot use what the PAL agents did to his advantage. Mallari Sr.premises was not without cause. Moreover. Bayasen vs. so that the petitioner had a valid excuse for his departure from his regular course. a common carrier is presumed to have been at fault or to have acted negligently. vs. the proximate cause of the collision resulting in the death of a passenger of the jeepney. Cervantes vs. Skidding means partial or complete loss of control of the car under circumstances not necessarily implying negligence.driver who skidded could not be regarded as negligent. under Art. Under the particular circumstances of the instant case. who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules. pursuant to Art. CA It is a well known physical tact that cars may skid on greasy or slippery roads. The said agents. was the sole negligence of the driver of the passenger jeepney. 2185 of the Civil Code. Under Art. without fault on account of the manner of handling the car. unless it proves that it observed extraordinary diligence. Under Article . as in the instant case. Further. It may occur without fault. CA Clearly. the skidding being an unforeseen event. it is liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees.. the petitioner. The victim had to claim his baggage which was possible only one 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. petitioner Alfredo Mallari Jr. 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. CA Since the PAL agents are not privy to the said Agreement and petitioner knew that a written request to the legal counsel of PAL was necessary.

If the said third person is aware of such limits of authority. it is the parties themselves who create the obligation. CA It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. the master or employer is presumed to be negligent either in the selection or in the . owners and managers are responsible for damages caused by their employees. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. where there is a pre-existing contractual relation between the parties. the jeepney was not properly parked. Furthermore. 1755. the acts of an agent beyond the scope of his authority do not bind the principal. its rear portion being exposed about two meters from the broad shoulders of the highway. some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. Sumayang In the case at bar. Pestaño. First. These are violations of the Land Transportation and Traffic Code. using the utmost diligence of very cautious persons. Art. unless the latter undertook to secure the principal's ratification. with due regard for all the circumstances" as required by Art.1989 of the New Civil Code. not in actions involving breach of contract. as a professional driver operating a public transport bus. and is not entitled to recover damages from the agent. The doctrine of proximate cause is applicable only in actions for quasi-delict. When an injury is caused by the negligence of a servant or an employee. The petitioner's driver took in more passengers than the allowed seating capacity of the jeepney. when the third person (herein petitioner) knows that the agent was acting beyond his power or authority. Under Articles 2180 and 2176 of the Civil Code. the obligation is created by law itself. he is to blame. In such a case. the principal cannot be held liable for the acts of the agent. Insofar as contracts of carriage are concerned. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof. Calalas vs. In case of death or injuries to passengers. unless the latter ratifies the same expressly or impliedly. and the function of the law is merely to regulate the relation thus created. Pestaño vs. Therefore. The driver of jeepney did not carry “safely as far as human care and foresight could provide. there is no assumption of risk by the passenger. should have anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised extreme caution. But. and facing the middle of the highway in a diagonal angle. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts.

In the present case. it is enough that the assault happens within the course of the employee's duty. which is the minority view. Gillaco vs. no less important. but also. the responsibility of the carrier extends only to those acts that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. Art. Under the first. and pursuant to established doctrine. The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees. Maranan vs. moral fibers. evidently follows the rule based on the second view. It is not sufficient that the act be within the course of employment only. nor could it reasonably forsee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. upheld by the majority and also by the later cases. the act of the train guard of the Manila Railroad Company in shooting the passenger (because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely unforseeable by the Manila Railroad Co. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee. and social attitude. it is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their technical competence and physical ability. Accordingly. Manila Railroad While a passenger is entitled to protection from personal violence by the carrier or its agents or employees. to their total personality. being both unforeseeable and inevitable under the given circumstances. Under the second view. the carrier is liable only when the act of the employee is within the scope of his authority and duty. the resulting breach of the company's contract of safe carriage with the deceased was excused thereby. including their patterns of behavior. since the contract of transportation obligates the carrier to transport a passenger safely to his destination. The latter had no means to ascertain or anticipate that the two would meet. Perez The basis of the common carrier's liability under NCC for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the passenger safely. 1759. 1105 of the old Civil Code (which is the law applicable). It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The shooting in question was therefore "caso fortuito" within the definition of Art.supervision of that employee. .

L. the conductor panicked . Likewise when the train did not even slow down when it approached the Iyam Bridge which was under repair at the time. Ammen Trans. It cannot however relieve the carrier but can only reduce its liability (ART. But while petitioner failed to exercise extraordinary diligence as required by law. despite the alarm raised by other passengers that a person had fallen off the train at lyam Bridge. Bachelor was negligent. However.PNR vs. the victims fell from the bus door when it was opened or gave way while the bus was still running. in order that a common carrier may be absolved from liability in case of force majeure. it is not enough that the accident was caused by force majeure. It is a prevailing rule that it is negligence per se for passengers on a railroad to protrude any part of his body and that no recovery can be had for an injury. CA The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. he is not held to the same degree of care he would otherwise. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. Co. Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion. The petitioner has the obligation to transport its passengers to their destinations and to observe extraordinary diligence in doing so. In this case. Bachelor Express Inc vs. be required in the absence of such emergency. 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. petitioner is guilty of contributory negligence. If the carrier’s employee is confronted with a sudden emergency. By placing his left arm on the window. 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. neither did the train stop. the bus was speeding from a full stop. A. CA When a train boarded by the deceased passenger 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. there was negligence. 1762). the common carrier is negligent. it appears that the deceased was chargeable with contributory negligence. Isaac vs. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. Since he opted to sit on the open platform between the coaches of the train.

LTB Co The income which deceased could earn if he should finish the medical course and pass the corresponding board examinations must be deemed to be within the same category provided for by Art. Villa Rey Transit. vs. The fact that plaintiff was ordered out under some pretext in order to accommodate a white man in an airline owned by an American firm with a reputation for bumping off non. and the bus was not properly equipped with doors in accordance with law. not only relevant. Cariaga vs. IAC By refusing to accommodate plaintiff in said flight. such as a four-year rule. in the case at bar. defendant had willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with plaintiff. LTB could not be held liable to pay moral damages under Article 2220 of the Civil Code on account of breach of its contract of carriage because it did not act fraudulently or in bad faith. CA Life expectancy is. When the liability of common carrier had been fixed at a minimal rate of only of P2. Self enrichment or fraternal interest and not personal ill will may have been the motive of defendant. as a young "training assistant" and when the deceased’s potentiality and capacity to increase his future income was not considered said liability may be enforced upon finality of the decision. 2201 of the Civil Code. no cogent reason has been given to warrant its disregard and the adoption. of a purely arbitrary standard.00 a year.and blew his whistle after people had already fallen off the bus. Pan American World Airways vs. an important element in fixing the amount recoverable by private respondents herein. Although it is not the sole element determinative of said amount. Inc. but. which is the annual salary of deceased at the time of his death. Defendant having breached its contract with plaintiff in bad faith. but it is malice nevertheless.184. also. Bad faith was also present.Caucasian to accommodate whites is very regrettable. The rationale behind . it is not error to have awarded exemplary damages. which are those that are the natural and probable consequences of the breach and which the parties had foreseen or could have reasonably foreseen at the time the obligation was constituted. LTB had exercised due diligence in the selection and supervision of its employees like the drivers of its buses in connection with the discharge of their duties and so it must be considered an obligor in good faith.

It will be observed that the defendant companies offered to settle the case by offering to the Soberanos the additional sum of P5. the court is called upon the exercise and use its discretion whether the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint. nor proof. unless there is express statutory provision to the contrary. among others.exemplary or corrective damages is. to compensatory damages. just and demandable claim. it need not also be alleged. In view of it nature. their determination depending upon the discretion of the court. moral damages are recoverable only by the party injured and not by his next of kin. An award of attorney's fees is also in order. The Soberanos. and the . as the name implies. that in the complaint. It is to be observed however. since the body of the complaint sought to recover damages against the defendant-carrier wherein plaintiffs prayed for indemnification for the damages they suffered as a result of the negligence of the driver who is appellant's employee and since exemplary damages is intimately connected with general damages." Now. in effect. therefore. If the amount of exemplary damages need not be proved. however. MRR In case of physical injuries. or when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid. Soberano vs. Mendoza It is argued that this Court is without jurisdiction to adjudicate the exemplary damages since there was no allegation nor prayer. who sustained the bodily injuries.000. it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant and other airlines.757. plaintiffs "prayed for such other and further relief as this Court may deem just and equitable. In this case it was Juana Soberano. not her husband Jose.76. to provide an example or correction for public good . having found bad faith on the part of defendant. nor counterclaim of error for the same by the respondents. Marchan vs. rejected the offer and proceeded to court to recover damages in the total sum of P76. Attorneys fees may only be awarded when the defendant's act or omission has compelled the plaintiff to litigate with third persons or incur expenses to protect his interest. Suffice it to state that when plaintiffs prayed in their complaint for such other relief and remedies that may be availed of under the premises. but that they cannot be recovered as a matter of right. plaintiffs may not be expected to single out by express term the kind of damages they are trying to recover against the defendant's carrier. Exemplary damages may be imposed by way of example or correction only in addition.

000.00 which is just equivalent to the pension the decedent would have received for one year if she did not die. whichever is shorter. However. even though there may have been mitigating circumstances. For the settlement of the issue at hand. Court of Appeals The deletion of the P10.00 paid to the herein petitioner by the insurer of the passenger bus which figured in the accident may be deemed to have come from the bus owner who procured the insurance.000. employers are made responsible for the damages caused by their employees acting within the scope of their assigned task. and the indemnity shall be paid to the heirs of the latter. Philippine Airlines vs. plaintiff. the insurance proceeds should be credited in favor of the errant driver. Even in the absence of local statute and case law. foreign jurisprudence is only persuasive.00 awarded for loss of pension is unjustified. the award of damages for death is computed on the basis of the life expectancy of the deceased. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased. the surviving heir of the former is entitled to the award of P 10. at bottom.000. there are enough applicable local laws and jurisprudence. Cachero vs.reason is obvious because it is merely incidental or dependent upon what the court may award as compensatory damages. . does not maintain his action against all the persons who might be liable for the damages caused but on an alleged breach of contract of carriage and against the defendant employer alone. not of his beneficiary. arises from the same culpa. the defendant taxicab company has not committed any criminal . De Caliston vs. resort to foreign jurisprudence would be proper only if no law or jurisprudence is available locally to settle a controversy. Under Article 1764 and Article 2206(1) of the Civil Code. Manila Yellow Taxi Cab While under the law. Under Article 2206 of the Civil Code: The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos. CA 185 SCRA 110 Petitioner relies on "the principle of law generally recognized and applied by the courts in the United States" that "the controlling element in determining loss of earnings arising from death is. However. the life expectancy of the deceased or of the beneficiary. in the present case. as established by authorities. the P5. The pension of the decedent being a sure income that was cut short by her death for which Dalmacio was responsible. Since the civil liability (ex-delicto) of the latter for the death caused by his driver is subsidiary and. On the other hand.

descendants and ascendants of the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased". Therefore. This is neither a case that comes under paragraph 11 of said Article because the Lower Court did not deem it just and equitable to award any amount for attorney's fees. without proof of bad faith or malice on the part of the defendant. therefore. Pan American As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs. International carriers like defendant . contrary to what is rightfully to be expected from the contractual undertaking. on which point this Court agrees. specially of paragraph 2 thereof. and in the case at bar there is no other evidence of such malice to support the award of moral damages by the Court of Appeals. would be to violate the clear provisions of the law. serious anxiety and mental anguish. Senator Lopez was then Senate President Pro Tempore. But the exceptional rule of Art. The present action was instituted because plaintiff demanded an exorbitant amount for moral damages and naturally the defendant did not and could not yield to such demand. Lopez vs. they were expected to be among the first-class passengers by those awaiting to welcome them. The present case does not come under any of the exceptions enumerated in Article 2208 of the Civil Code. It may not be humiliating to travel as tourist passengers. The one that committed the offense against plaintiff is the driver of defendant's taxicab but he was not made party defendant to the case. We think it is clear that the mere carelessness of the carrier's driver does not per se constitute or justify an inference of malice or bad faith on the part of the carrier. moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. only to be found among the tourist passengers. as required by Art. it is humiliating to be compelled to travel as such. 2206. wounded feelings. 2220. that entitles the spouse. Fores vs. For plaintiffs were travelling with first class tickets issued by defendant and yet they were given only the tourist class.offense resulting in physical injuries against the plaintiff. and constitute unwarranted judicial legislation. Miranda The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a passenger. 1764 makes it all the more evident that where the injured passenger does not die. At stop-overs. the latter suffered social humiliation. To award moral damages for breach of contract. in which case Article 1764 makes the common carrier expressly subject to the rule of Art. plaintiff is not entitled to compensation for moral damages as his case does not come within the exception of paragraph 1 of Article 2219 of the Civil Code. because defendant's failure to meet its responsibility was not the cause that compelled the plaintiff to litigate or to incur expenses to protect his interests.

even if . after it deprives him of his space in order to favor another passenger. What worsened the situation of was that Lufthansa succeeded in keeping Ortigas as its passenger by assuring him that he would be given first class accommodation at the next stations. and in fact he had a second engagement awaiting him in the United States: a banquet tendered by Filipino friends in his honor as Senate President Pro Tempore. A written contract for attorney's services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. Philippine Rabbit Bus Lines vs. after having contracted and paid for first class accommodations duly confirmed and validated. since the preference given to the Belgian passenger over plaintiff was done willfully and in wanton disregard of plaintiff's rights and his dignity as a human being and as a Filipino. when in truth such was not the case. inattention and lack of care on the part of the carrier resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which entitles the passenger to the award of moral damages in accordance with Article 2220 of the Civil Code. For the moral damages sustained by him. that economy class is anyway just as good as first class. Esguerra Moral damages are not recoverable in actions for damages predicated on a breach of the contract of transportation. and it is certainly not for the airplane to say later.000. But in the instant case. the breach appears to be of graver nature. vs. class. The exceptions are (1) where the mishap results in the death of a passenger. as in the instant case. and (2) where it is proved that the carrier was guilty of fraud or bad faith. Senator Lopez was going to the United States to attend a private business conference of the Binalbagan-Isabela Sugar Company. And he was former Vice-President of the Philippines. such as in this case. Lufthansa It is Our considered view that when it comes to contracts of common carriage. Ortigas Jr. the proper arrangements therefor having been made already. an award of P100. who may not be discriminated against with impunity. which he has to take in order to be able to arrive at his destination on his scheduled time. he is transferred over his objection to economy. therefore. We have uniformly upheld the right of a passenger to damages in all cases wherein. but his aforesaid rank and position were by no means left behind.00 is appropriate. A passenger contracts for first class accommodations for many reasons peculiar to himself and pays a higher price therefor.know the prestige of such an office. A consideration of the attorney’s prominence as well as comparison of the defense counsel’s fees could well establish the reasonableness of the attorney’s fees. in view of the provisions of Articles 2219 and 2220 of the New Civil Code.

private respondent warned him that they were not in the vicinity of Daet but above the town of Ligao. when the pilot was preparing to land in Daet. Such inattention and lack of care for the interest of its passengers who are entitled to its utmost consideration. particularly as to their convenience. he was angrily rebuffed by an employee of petitioner. even if he was sick. The dizziness. Philippine Airlines vs. Armovit vs. CA 106 SCRA 391 There was gross negligence by PAL for allowing Capt. having tumor on his nose. At the time of this unfortunate incident. He was a director of several companies and was active in civic and social organizations in the Philippines. no moral damages are recoverable. In other words. amount to bad faith which entitles the passenger to the award of moral damages. The deletion of the nominal damages by the appellate court is welltaken since there is an award of actual damages. Bustamante to fly on the that fateful day of the accident. No one will certify the fitness to fly a plane of one suffering from the disease. headaches . the private respondent was a practicing lawyer. Nominal damages cannot co-exist with actual or compensatory damages.death does not result. The Court of Appeals found that the two vehicles sideswiped each other at the middle of the road. a senior partner of a big law firm in Manila. Considering the circumstances of this case and the social standing of private respondent in the community. CA Petitioner sacrificed the comfort of its first class passengers including private respondent Vinluan for the sake of economy. This being the case. both vehicles were in their respective lanes and that they did not invade the lane of the other. CA The gross negligence committed by private respondent(Northwest Airlines) in the issuance of the tickets by the erroneous entry of the date of departure and without changing or correcting the error when the tickets were presented for re-confirmation and the manner by which petitioners were rudely informed that they were bumped off are clear indicia of such malice and bad faith and establish that private respondent committed a breach of contract which entitles petitioners to moral damages. It cannot be said therefore that there was fraud or bad faith on the part of the carrier's driver. More so in this case where instead of courteously informing private respondent of his being downgraded under the circumstances. One month prior to the crash-landing. he is entitled to the award of moral and exemplary damages. Trans World Airlines vs.

and general debility of private respondent were after-effects of the crashlanding. And therefore there is causal connection between the accident and said after-effects. The negligence of PAL is clearly a quasi-delict and therefore Art. 2219(2) is applicable, justifying the recovery of moral damages. Even from the standpoint of the petitioner that there is an employee-employer relationship between it and private respondent arising from the contract of employment, private respondent is still entitled to moral damages in view of the finding of bad faith or malice, applying the provisions of Article 2220. Prudenciado vs. Alliance Transport Dra. Prudenciado suffered a brain concussion which although mild can admittedly produce the effects complained of by her and that these symptoms can develop after several years and can lead to some, serious handicaps or predispose the patient to other sickness. Being a doctor by profession, her fears can be more real and intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of moral damages which are proportionate to her suffering. As to exemplary damages, Article 2231 of the Civil Code provides: “In quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence.” The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for the public good. Respondent driver was running at high speed after turning to the right along Taft Ave. coming from Ayala Boulevard, considering that the traffic was clear. Failing to notice petitioner's car, he failed to apply his brakes and did not even swerve to the right to avoid the collision. Much more, it was raining that time and the roads are slippery. The frequent incidence of accidents of this nature caused by taxi drivers indeed demands corrective measures.

I. CONCEPT OF COMMON CARRIER
DE GUZMAN vs. COURT OF APPEALS Facts: Respondent Ernesto Cendaña is a junk dealer who 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 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 different establishments in Pangasinan. For that service, respondent charged freight rates which were commonly lower than regular commercial rates. 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 its warehouse in Makati to petitioner's establishment in Urdaneta. 150 cartons were loaded on a truck driven by respondent, 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. Petitioner commenced action against private respondent demanding payment of P22,150.00, 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. 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. The RTC ruled that private respondent was a common carrier. CA reversed the decision and held that respondent had been engaged in transporting return loads of freight "as a casual occupation”, a sideline to his scrap iron business.

Issue: 1. Whether or not respondent is a common carrier. 2. Whether or not respondent is liable. Held: 1. Yes. Article 1732 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. The Court of Appeals referred to the fact that private respondent held no certificate of public convenience. A certificate of public convenience is not a requisite for the incurring of liability. 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. 2. No. 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. Article 1735 also 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. The hijacking of the carrier's truck does not fall within any of the five 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 argues

the steel hatches were closed with heavy iron lids. was hired by PPI to determine the "outturn" of the cargo shipped. then tied with steel bonds. Prior to its voyage. Before loading the fertilizer aboard the vessel. provided that they shall have complied with the rigorous standard of extraordinary diligence. Article 1745 provides in relevant part: Any of the following or similar stipulations shall be considered unreasonable. INC. violence or force. and are not held liable for acts or events which cannot be foreseen or are inevitable. A private marine and cargo surveyor. or of robbers who do not act with grave or irresistible threat. 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. that in the instant case. a time charter-party on the vessel was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner. covered with three layers of tarpaulin. and that they had nothing to do with the discharge of the shipment. in Tokyo. PLANTERS PRODUCTS. The hatches remained closed and tightly sealed throughout the entire voyage.that in the circumstances of this case. is dispensed with or diminished. The survey report submitted revealed a shortage in the cargo and that a portion of the Urea fertilizer approximating was contaminated with dirt. for the cost of the shortage in the and the diminution in value of that portion contaminated with dirt. armed men held up the second truck owned by private respondent which carried petitioner's cargo. In these circumstances. if not irresistible. In the instant case. SSA explained that they did not respond to the consignee's claim because it was not a formal claim. COURT OF APPEALS Facts: PPI purchased from Mitsubishi metric tons of Urea fertilizer which the latter shipped aboard the cargo vessel owned by KKKK from US to La Union. PPI sent a claim letter to Soriamont Steamship Agencies (SSA). Cargo Superintendents Company Inc. they were all presumably inspected by the charterer's representative and found fit to take a load of urea. the resident agent of the carrier. . (CSCI). After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper. We do not believe. however. threat. Japan. KKKK. Accused acted with grave. unjust and contrary to public policy: (6) that the common carrier's liability for acts committed by thieves. vs. violence or force. 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. private respondent should have hired a security guard presumably to ride with the truck carrying the 600 cartons of Liberty filled milk. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods.

that a common carrier becomes private. the manning of the decks. the Civil Code provisions on common carriers which set forth a presumption of negligence do not find application in the case at bar. This is evident in the present case considering that the steering of the ship. American Steamship Agencies. It is not disputed that respondent carrier. Respondent carrier's heavy reliance on the case of Home Insurance Co. common or private he may be. it 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. at least insofar as the particular voyage covering the charter-party is concerned. Even if the provisions of the charter-party are deemed valid. stowing. 2) Whether the shipowner was able to prove that he had exercised that degree of diligence required of him under the law. Hardly then can the charterer be charged. be the property of the charterer. 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. It is only when the charter includes both the vessel and its crew. with the duty of caring for his cargo when the charterer did not have any control of the means in doing so. the ship captain.PPI filed an action for damages. for the moment. in the ordinary course of business. although her holds may. a stranger to the crew and to the ship. 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. the burden of proving that the loss or damage was due to any of the causes which exempt him from liability is shifted to the carrier. After that. When petitioner chartered the vessel M/V "Sun Plum". a shipowner in a time or voyage charter retains possession and control of the ship. chosen and hired by the shipowner. Indubitably.) Not necessarily. v. Issue: 1) Whether a common carrier becomes a private carrier by reason of a charter-party. notwithstanding the charter of the whole or portion of a vessel by one or more persons. its officers and compliment were under the employ of the shipowner and therefore continued to be under its direct supervision and control. stating that “common carriers are presumed negligent. is misplaced for the reason that the meat of .” CA reversed the decision. transporting goods indiscriminately for all persons. Accordingly. and the defendants considered private carriers. RTC ruled in favor of plaintiff. Inc. trimming and discharge of the cargo. 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. It is therefore imperative that a public carrier shall remain as such. This they failed to do. operates as a common carrier. relying on the 1968 case of Home Insurance Co. Held: 1. provided the charter is limited to the ship only. 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. as in the case of a time-charter or voyage-charter. v.. American Steamship Agencies.

SC held that respondent carrier has sufficiently overcome. powder or other explosives. Also shown. the rule in the United States that a ship chartered by a single shipper to carry special cargo is not a common carrier. more particularly. Fisher. the prima facie presumption of negligence. 2. SC agreed that the bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. 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.) Yes. At any rate. adopted a resolution which was ratified by the stockholders declaring classes of merchandise which are not to be carried by the vessels of the company and prohibiting the employees to carry dynamite. 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. the test is whether the refusal of YSC to carry the explosives without qualification or conditions may have the effect of subjecting any person or locality or the traffic is such explosives to an unduly unreasonable or unnecessary prejudice or discrimination.YANGCO STEAMSHIP COMPANY Facts: The board of Yangco Steamship Co. Clearly. The Collector of Customs suspended the issuance of clearances for the vessels unless they carry the explosives.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. powder or other explosives" from any and all shippers who may offer such explosives for carriage can be held to be a lawful act. It was shown during the trial that after the loading of the cargo in bulk in the ship’s holds. and not the effects of a special charter on common carriers. F. as well as the inadequacy of its packaging which further contributed to the loss. then covered with 3 layers of serviceable tarpaulins which were tied with steel bonds. Issue: Whether or not the refusal of the board of YFC to accept for carriage "dynamite.C. foreclosing the possibility of spillage of the cargo into the sea or seepage of water inside the hull of the vessel. does not find application in our jurisdiction. This is a risk the shipper or the owner of the goods has to face. In an action for recovery of damages against a common carrier on the goods shipped. with a variable weather condition prevalent during its unloading. a stockholder of YSC. the rules governing common carriers. by clear and convincing proof. FISHER vs. Common carriers in this jurisdiction cannot lawfully decline to . was that the hull of the vessel was in good condition. the steel pontoon hatches were closed and sealed with iron lids. Moreso. respondent carrier has sufficiently proved the inherent character of the goods which makes it highly vulnerable to deterioration. In construing Act 98 for the alleged violation. filed a petition for prohibition. Held: No. as was the case at bar. the RTC’s statement on the requirements of the law was reiterated.

LOADSTAR received on board its M/V Cherokee goods(certain types of wood) for shipment. The goods were insured with Manila Insurance Co. It is however not believed that the law prohibits common carriers from making special rates for the handling and transporting of merchandise.. The law of equality is in force only where the services performed in the different cases are substantially the same and the circumstances and conditions are similar. LOADSTAR SHIPPING CO. hence they appealed to the higher court. the vessel sank off Limasawa Island. They were convicted. As a result of the total loss of its shipment. vs. Issue: Whether or not the defendants as common carriers caused prejudice to the Ilocos Norte Government.986 sacks of rice belonging to Ilocos Norte Provincial Government from Manila. There was a clear discrimination against the province which is prohibited by the law. the consignee made a claim with LOADSTAR which. US vs. QUINAHON Facts: Defendants were charged for violation of Act 98.(MIC) against various risks including “TOTAL LOSS BY TOTAL LOSS OF THE VESSEL”. undue and unreasonable discrimination which the law forbids. There is no pretense that it actually cost more to handle the rice for the province than it did for the merchants with whom the special contracts were made. in turn. The nature of the business of a common carrier as a public employment is such that it is within the power of the State to impose such just regulations in the interest of the public as the legislator may deem proper.(PGAI) for P4 Million. when the same are made for the purpose of increasing their business and to manage their important interests upon the same principles which are regarded as sound and adopted in other trades and pursuits. when they unloaded in the port of Currimao 5. Inc.COURT OF APPEALS Facts: On November 19. Agusan del Norte. MIC paid the insured in full settlement of its claim. INC. As the insurer. 1984. The vessel. . on its way to Manila from Nasipit. and charged the provincial treasurer 10 centavos for each sack instead of 6 centavos which they have been regularly charging for the unloading of the same kind of merchandise and under virtually the same circumstances and conditions. was insured by Prudential Guarantee & Assurance. Held: Yes. It is only unjust. Absolute equality is not required in all cases. 1984. On November 20. YSC has not met those conditions. however ignored the same.accept a particular class of goods unless it appears that for some sufficient reason the discrimination for such is reasonable and necessary.

and this character is not altered by the fact that the carriage of the goods in question was periodic. where the Court held that a common carrier transporting special cargo or chartering the vessel to a special person becomes a private carrier that is not subject to the provisions of the Civil Code. The first pipeline concession was granted in 1967 and was renewed by the ERB in 1992. The trial court rendered judgment for MIC. but only a general provision to the effect that the M/V Cherokee was a general cargo carrier. Petitioner argued that as a pipeline operator with a government concession engaged in transporting petroleum .” The SC held that Loadstar is a common carrier. prompting Loadstar to go to the CA which affirmed the decision. FIRST PHILIPPINE INDUSTRIAL CORPORATION vs. install and operate oil pipelines. Loadstar submits that the vessel was a private carrier because it was not issued a CPC. petitioner applied for a Mayor’s permit in Batangas City. episodic or unscheduled. CA was also mentioned. 1985. Loadstar claimed force majeur. one consignee for a special cargo. PGAI averred that MIC has no cause of action against it. Loadstar fits the definition of a common carrier under Article 1732 of the NCC. alleging that the sinking of the vessel was due to the fault and negligence of Loadstar and its employees. Issue: Whether or not Loadstar is a private carrier. In 1995. Loadstar being the party insured. The doctrine enunciated in the case of De Guzman v. on the date in question. To avoid hampering its operations. American Steamship Agencies. is not reason enough to convert the vessel from a common carrier to a private carrier. MIC filed a complaint against Loadstar and PGAI. The bills of lading failed to show any special arrangement. petitioner paid the amount of tax for the first quarter under protest. It is not necessary that the carrier be issued a CPC. Under the facts and circumstances obtaining in this case. In support of its position Loadstar relied on the 1968 case of Home Insurance Co. undertook to carry a special cargo or was chartered to a special person only. This case however is not applicable in the case at bar for the simple reason that the actual settings are different. and there was only “one shipper. it did not have a regular trip or schedule nor a fixed route. COURT OF APPEALS Facts: Petitioner is a grantee of a pipeline concession under RA 387 to contract. Respondent treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year in 1993 pursuant to the Local Government Code. especially where. Further. it was shown that the vessel was also carrying passengers. There was no charter party. CA decision is hereby affirmed. The records do not disclose that the M/V Cherokee. occasional. PGAI was later dropped as a party defendant after it paid the insurance proceeds to Loadstar. as in this case. the bare fact that the vessel was carrying a particular type of cargo for one shipper. Held: No.On February 4. which appears to be purely coincidental. v.

NCC. for hire as a public employment. Held: No. 587 of the Code of Commerce makes the ship agent civilly liable for damages in favor of third persons due to the conduct of carrier’s captain and that the stipulation in the charter party exempting owner from liability is against public policy under Art. i. The cargo arrived in Manila and was discharged into the lighters of Luzon Stevedoring Co.products via pipeline it is exempted from payment of tax based on gross receipts. that is. 1744.000 after its demand. It undertakes to carry for all persons indifferently. Facts: A Peruvian firm shipped fishmeal through the SS Chowborough consigned to the San Miguel Brewery and insured by the Home Insurance Co. to all persons who choose to employ its services. INC. HOME INSURANCE COMPANY vs. (De Guzman Ruling upheld) Respondent’s argument that the term “common carrier” as used in Section 133(j) of the Local Government Code refers only to common carriers transporting goods and passengers through moving vehicles or vessels either by land. The lower court absolved Luzon after finding that it observed the required diligence but ordered ASA to reimburse Home Insurance. To tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code. AMERICAN STEAMSHIP AGENCIES. Home Insurance filed for reimbursement from Luzon Stevedoring and American Steamship Agencies. and transports the goods by land and for compensation.e. water or air. The definition of “common carriers” in NCC makes no distinction as to the means of transporting as long as it is by land." Petitioner is already paying 3% common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. Home Insurance Co. Respondent refused to make reimbursement on the ground that petitioner is not a common carrier engaged in transportation business by land. Based on Article 1732 NCC. It is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the so-called "common carrier's tax. declaring that Art. It is engaged in the business of transporting or carrying goods. there is no doubt that petitioner is a common carrier. water or air. When the cargo was delivered to SMB there were shortages. alleging that under the provisions of the . petroleum products. sea or water is erroneous. The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier. ASA appealed. owner and operator of the vessel. Issue: Whether or not petitioner is liable to pay a local tax based on gross receipts since it is not a common carrier. paid SMB P14. It does not provide that the transporting of the passengers or goods should be by motor vehicle.

PANTRANCO claims that it can operate a ferry service in connection with its franchise for bus operation in the highway from Pasay City to Tacloban City for the purpose of continuing the highway.Charter Party referred to in the bills of lading. PANTRANCO nevertheless acquired the vessel. for loss or damage to the cargo against shipowners. a stipulation exempting the owner from liability for the negligence of its agent is valid. not the shipowner is responsible for any loss or damage of the cargo. The stipulation exempting the owner from liability for negligence of its agent is not against public policy and is deemed valid.Sorsogon and Allen. unless the same is due to personal acts or negligence of said owner or its managers. the charterer. SAN PABLO vs. As a private carrier.This was not given due course because the Matnog-Allen run is adequately serviced by Cardinal Shipping Corp. The NCC provisions on common carriers should not apply where the common carrier is not acting as such but as a private carrier. Issue: Are the provisions of the NCC applicable? Held: No. as distinguished from agents or employees. a common carrier undertaking to carry a special cargo or chartered to a special person only becomes a private carrier. It operates passenger buses from Metro Manila to Bicol Region and Eastern Samar. Such being the case there is no need to obtain a separate certificate for public convenience to operate a ferry service. Under American Jurisprudence.1980 it requested MARINA for authority to lease/purchase a vessel for its project to operate a ferryboat service from Matnog. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if strict public policy governing common carrier is applied. that it proposes to operate a ferry service to carry its passenger buses and freight trucks between Allen and Matnog in connection with its trips to Tacloban City. the said proposed ferry operation is merely a necessary and incidental service to its main service and obligation of transporting its passengers from Pasay City to Tacloban City. as in the case of a ship totally chartered for the use of a single party. PANTRANCO Facts: PANTRANCO offers PUB service for passengers and freight. which is interrupted by a small body of water.Samar that will provide service to company buses and freight trucks that have to cross San Bernardo Strait. It wrote the Chairman of the Board of Transportation (BOT). Recovery can’t be had. and Epitacio San Pablo and market conditions in the proposed route cannot support the entry of additional tonnage. Such policy has no force where the public at large is not involved. to which the petitioners opposed. Issue: W/N a land transportation company can be authorized to operate a ferry service or coastwise or interisland shipping service along its authorized . On March 27. The BOT granted authority to PANTRANCO to operate a private ferry boat service.

Issue: W/N VSI contracted with NSC as a common carrier or as a private carrier. RTC ruled against the plaintiff. Indeed evidence to this effect has been submitted. The cargo was discharged and unloaded by stevedores hired by the plaintiff. which are small body of waters . PANTRANCO cannot pretend that in issuing tickets to its passengers it did so as a private carrier and not as a common carrier.separating the land. NATIONAL STEEL CORPORATION vs.route as an incident to its franchise without the need of filing a separate application for the same.145. 1974. the MV ‘VLASONS I’ to make one voyage to load steel products at Iligan City and discharge them at North Harbor Manila. The Court does not see any reason why inspite of its amended franchise to operate a private ferry boat service it cannot accept walk-in passengers just for the purpose of crossing the sea between Matnog and Allen. stating that the vessel was seaworthy and that there is no proof of willful negligence of the vessel's officers. hence the appeal. nearly all the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. Held: No. COURT OF APPEALS Facts: On July 17. Under no circumstance can the sea between Matnog and Allen be considered a continuation of the highway. The contention of private respondent PANTRANCO that its ferry service operation is as a private carrier. the conveyance of passengers. When the vessel’s 3 hatches containing the shipment were opened by plaintiff’s agents. Considering the environmental circumstances of the case. plaintiff NSC as charterer and defendant VSI as owner. Respondent PANTRANCO should secure a separate CPC for the operation of an interisland or coastwise shipping service in accordance with the provisions of law. Plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the damaged tinplates in the amount of P941. entered into a Contract of Voyage Charter Hire whereby NSC hired VSI’s vessel. While a ferry boat service has been considered as a continuation of the highway when crossing rivers or even lakes. Matnog and Allen are separated by an open sea it can not be considered as a continuation of the highway. not as a common carrier for its exclusive use in the ferrying of its passenger buses and cargo trucks is absurd. trucks and cargo from Matnog to Allen is certainly not a ferry boat service but a coastwise or interisland shipping service.18 but defendant refused and failed to pay. . when as in this case the two terminals. PANTRANCO does not deny that it charges its passengers separately from the charges for the bus trips and issues separate tickets whenever they board the MV "Black Double" that crosses Matnog to Allen. however. This was affirmed by CA but modified the award of damages. Its CPC as a bus transportation cannot be merely amended to include this water service under the guise that it is a mere private ferry service.

the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. Its services are available only to specific persons who enter into a special contract of charter party with its owner. a public hearing should be held for the fixing of the rates . which was incorporated in the parties’ contract of transportation. It is a private carrier that renders tramping service and as such. unless the same was caused by its lack of due diligence to make the vessel seaworthy or to ensure that the same was “properly manned. The CA decision. the rights and obligations of VSI and NSC. allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one year. does not transport cargo or shipment for the general public. It carried passengers or goods only for those it chose under a special contract of charter party. circulars and/or orders are sought to be nullified by the instant petition.Held: It is a private carrier. Fernando. affirming the RTC decision in favor of defendant and dismissing the complaint is Affirmed. KMU vs.” The NANYOZAI Charter Party(an internationally recognized Charter Party Agreement). Consequently.” In view of the above. NSC must prove that the damage to its shipment was caused by VSI’s wilful negligence or failure to exercise due diligence in making MV Vlasons I seaworthy and fit for holding. the rates to be approved should be proposed by public service operators ii. are determined primarily by stipulations in their contracts of private carriage or charter party. including their respective liability for damage to the cargo. private carriage does not involve the general public. the burden of proof was placed on NSC by the parties’ agreement. Hence. LTFRB Chairman. finding the MO not legally feasible submitted a memorandum to DOTC Secretary Orbos as it contravenes the Public Service Act for the following reasons: i. equipped and supplied. Unlike in a contract involving a common carrier. carrying and safekeeping the cargo. GARCIA Facts: The following memoranda. It is clear from the parties’ Contract of Voyage Charter Hire. there should be a publication and notice to concerned or affected parties in the territory affected iii. that VSI “shall not be responsible for losses except on proven wilful negligence of the officers of the vessel. In the instant case. dated June 26. it is undisputed that VSI did not offer its services to the general public. viz: (a) DOTC Memorandum Order 90-395. Ineluctably. 1990 relative to the implementation of a fare range scheme for provincial bus services in the country. further provided that the shipowner shall not be liable for loss of or damage to the cargo arising or resulting from unseaworthiness.

085 per kilometer. (b) DOTC Department Order No. the said administrative issuances being amendatory and violative of the Public Service Act and the Rules of Court. and Perla C. Petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. announced a fare increase of 20% percent of the existing fares. 92-587. Sometime in March. providing implementing guidelines on the DOTC Department Order No. Inc. 1994. Held: While the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transport sector is recognized. the Court found that they committed grave abuse of discretion in issuing DOTC Department Order No. dated March 30. Provincial Bus Operators Association of the Philippines. LTFRB dismissed the petition hence the present one. The burden of proving that there is no need for a proposed service shall be with the oppositor(s).” (c) DOTC Memorandum dated October 8. (PBOAP) filed an application for an across-the-board fare increase of P0.The chairman added that to allow bus operators to charge fares 15% above the present LTFRB fares in the wake of the devastation. Presumed Public Need: A CPC is an authorization granted by the LTFRB for the operation of land transportation services for public use as required by . 1992. the presumption of need for a service shall be deemed in favor of the applicant. and (e) LTFRB Order dated March 24. private respondent PBOAP. The said increase was granted by LTFRB. 92-009 promulgating the implementing guidelines on DOTC Department Order No. Inc. Issue: Whether or not the assailed orders/circulars are valid. death and suffering caused by the July 16 earthquake will not be socially warranted and will be politically unsound. 1994 in Case No. 1992. Fare Range Scheme: The 20% fare increase imposed by PBOAP without the benefit of a petition and a public hearing is null and void and of no force and effect. Bautista alleging that the proposed rates were exorbitant and unreasonable. 92-587. (d) LTFRB Memorandum Circular No. It was opposed by Philippine Consumers Foundation. 92-587 and LTFRB Memorandum Circular No. 94-3112. Among the salient provisions of which include: “In determining public need.92-587. availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing. laying down rules and procedures to implement Department Order No. 92-009. defining the policy framework on the regulation of transport services. 92-587.

As one of the basic requirements for the grant of a CPC. it was found that out of all the applicants. Part IV. GARCIA Facts: DOTC planned to construct a light railway transit line along EDSA referred to as EDSA Light Rail Transit III (EDSA LRT III). empirical data. After prequalifying the bidders for the construction of the said transit. association or joint-stock company constituted and organized under the laws of the Philippines. The presumption of public need for a service shall be deemed in favor of the applicant. 1992. only the EDSA LRT Consortium met the requirements. signed into law the Build-Operate-Transfer (BOT) Law. among other things. the following requirements must be met before a CPC may be granted. (ii) the applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its operation. and (iii) the applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. public convenience or necessity generally means something fitting or suited to the public need. Ltd. is to look out for. in a public hearing conducted for that purpose. The existence or non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence. public convenience and necessity exists when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. the same being merely internal communications between administrative officers. 90-395 and DOTC Memorandum dated October 8. statistics and such other means necessary. as amended. provides for yet incongruous and contradictory policy guideline on the issuance of a CPC. TATAD vs. LTFRB Memorandum Circular No. No grave abuse of discretion however was committed in the issuance of DOTC Memorandum Order No. It is understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC. to wit: (i) the applicant must be a citizen of the Philippines. at least 60 % of its stock or paid-up capital must belong entirely to citizens of the Philippines. the interests of both the public and the existing transport operators. The guidelines states: “The issuance of a Certificate of Public Convenience is determined by public need. Then President Aquino. or a corporation or copartnership.law. and protect. DOTC and respondent EDSA LRT Corporation. (a private corporation organized under the laws of HongKong) in substitution of the . while the burden of proving that there is no need for the proposed service shall be the oppositor's. Pursuant to Section 16(a) of the Public Service Act. 92-009. The object and purpose of such procedure. While adopting the foregoing requisites for the issuance of a CPC.” By its terms. real and/or testimonial.

.. and private respondent entered into a supplemental agreement—“Revised and Restated Agreement to Build. in their capacity as Senators and taxpayers. Lease and Transfer a Light Rail Transit System for EDSA" under the terms of the BOT Law. Secretary Garcia and private respondent on the other hand. While a franchise is needed to operate these facilities to serve the public. rolling stocks like the coaches. what constitutes a public utility is not their ownership but their use to serve the public. DOTC. What private respondent owns are the rail tracks. vs. In law.EDSA LRT Consortium. Ltd. private respondent will immediately deliver possession of the LRT system by way of lease for 25 years. own the facilities and equipment of the LRT III mean it also own the LRT III as a public utility? Held: No. does not own EDSA LRT III as a public utility. It is DOTC which shall operate the EDSA LRT III. Issue: Does the fact that EDSA LRT Corporation. question the constitutionality of the two agreements between DOTC and private respondent. one may operate a public utility without owning the facilities used to serve the public. or conversely. there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and equipment used to serve the public. entered into an "Agreement to Build. v. not a public utility. represented by Secretary Garcia. Public Service Board. Therefore. As ruled in Iloilo Ice & Cold Storage Co. a foreign corporation. private respondent. private respondent will not run the light rail vehicles and collect fees from the riding public. NORDEUTSCHER LLOYD . Ltd. Petitioners. during which period DOTC shall operate the same as a common carrier and private respondent shall provide technical maintenance and repair services to DOTC. contend that the nationality requirement for public utilities mandated by the Constitution does not apply to private respondent. the ownership of EDSA LRT III which is a public utility. Clearly. a foreign corporation. They contend that it grants EDSA LRT Corp. rail stations. Lease and Transfer a Light Rail Transit System for EDSA" so as to clarify their respective rights and responsibilities and to submit Supplemental Agreement to the President. DOTC sought the approval of the President but the same was denied. SAMAR MINING COMPANY. Thus. INC. they do not by themselves constitute a public utility. Ltd. It will have no dealings with the public and the public will have no right to demand any services from it. In the case at bar. One can own said facilities without operating them as a public utility. The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof.. terminals and the power plant. The devotion of property to serve the public may be done by the owner or by the person in control thereof who may not necessarily be the owner thereof. EDSA LRT Corp.. private respondent and DOTC agreed that on completion date.

F. transhipped or forwarded.. in making arrangements with any person for or in connection with all transshipping or forwarding of the goods or the use of any means of transportation or forwarding of goods not used or operated by the carrier.) “The carrier or master. vs. SAMAR of one crate Optima welded wedge wire sieves through the M/S SCHWABENSTEIN a vessel owned by defendant NORDEUTSCHER LLOYD. xxx” The trial court rendered judgment in favor of plaintiff.. while the freight had been prepaid up to the port of destination or the “port of discharge of goods”—Davao. LTD. Section 1. 18. the goods were to be transhipped by the carrier to the port of destination or “port of discharge of goods”.). INC. 18 duly issued to consignee SAMAR MINING COMPANY. The goods were however never delivered to. only up to the “port of discharge from ship”—Manila. morals. UNITED STATES LINES. Bill of lading. Thereafter. states: “The carrier shall not be liable in any capacity whatsoever for any delay. hence the appeal. paragraph 3 of Bill of Lading No. The validity of stipulations in bills of lading exempting the carrier from liability for loss or damage to the goods when the same are not in its actual custody has been upheld in PHOENIX ASSURANCE CO. SHARP & CO. M/S SHWABENSTEIN. the consignee at the port of destination—Davao. Issue: Whether or not the various clauses and stipulations in the Bill of lading is valid. public order or public policy their validity was sustained. 2. loss or damage occurring before the goods enter ship’s tackle to be loaded or after the goods leave ship’s tackle to be discharged. No. last subpar. shall be considered solely the agent of the shipper and consignee and without any other responsibility whatsoever or for the cost thereof.” (Par. C. (represented in the Philippines by its agent. The carrier undertook to transport the goods in its vessel. good customs. INC. Upon arrival of the aforesaid vessel at the port of Manila. nor received by. Held: Yes.” (Par. the importation was unloaded and delivered in good order and condition to the bonded warehouse of AMCYL. 16) Finding the above stipulations not contrary to law. 22 SCRA 674 (1968).Facts: The case arose from an importation made by plaintiff. Germany. which shipment is covered by Bill of Lading No. . The stipulations in the bill of lading in the PHOENIX case which are substantially the same as the subject stipulations provides: “The carrier shall not be liable in any capacity whatsoever for any loss or damage to the goods while the goods are not in its actual custody. 18 sets forth in the page 2 thereof that the goods were received by NORDEUTSCHER LLOYD at the “port of loading at Bremen.

Article 1736 and 1738. agency and contracts. with appellant acting as agent of the consignee. 18 and in conformity with the provisions of the New Civil Code on common carriers. No. there is actual delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly authorized agent and a reasonable time is given him to remove the goods.000 pieces of calorized lance pipes consigned to . as applied to the case. the character of appellant's possession also changes. a vessel operated by petitioner loaded at Kobe. sometime in or prior to June. they incur no liability for the loss of the goods in question. INC. the carrier may be relieved of the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee. its personality changes from that of carrier to that of agent of the consignee. Germany to Manila. and were stored in the warehouse of a third party when last seen and/or heard of. 1977. and the actual apprehension of corporeal possession by the buyer or by some person authorized by him to receive the goods as his representative for the purpose of custody or disposal. There is no doubt that Art. The subject goods were still awaiting transshipment to their port of destination. The actions of appellant carrier and of its representative in the Philippines being in full faith with the lawful stipulations of Bill of Lading No. Under said article. Such being the case. from possession in its own name as carrier. At the hiatus between these two undertakings of appellant which is the moment when the subject goods are discharged in Manila. The court a quo found that there was actual delivery to the consignee through its duly authorized agent. or to the person who has a right to receive them. The second. Thus. Two undertakings appeared embodied and/or provided for in the Bill of Lading in question. 5. 69044. Upon such delivery. Plaintiff-appellee's complaint is DISMISSED.A careful perusal of the provisions of the New Civil Code on common carriers was looked into by the Court particularly. ceases to be responsible for any loss or damage that may befall the goods from that point onwards. in effect. By the same token. This is the full import of Article 1736. the carrier. vs. In sales. the M/S ASIATICA. THE TRANSSHIPMENT OF THE SAME GOODS from Manila to Davao. The said article contemplates a situation where the goods had already reached their place of destination and are stored in the warehouse of the carrier. the appellant. Appealed decision is REVERSED. as erstwhile carrier. The first is FOR THE TRANSPORT OF GOODS from Bremen. 1738 finds no applicability to the instant case. into possession in the name of consignee as the latter's agent. there was. INTERMEDIATE APPELLATE COURT Facts: In G. actual delivery of the goods from appellant as carrier to the same appellant as agent of the consignee. Japan for transportation to Manila.R. EASTERN SHIPPING LINES. actual delivery has been defined as the ceding of corporeal possession by the seller. Article 1736 is applicable to the instant suit.

As the peril of the fire is not comprehended within the exception in Article 1734. is suppletory to the provisions of the Civil Code.. the common carrier shall be presumed to have . As the cargoes in question were transported from Japan to the Philippines. Enroute for Kobe. Article 1735 of the Civil Code provides that all cases than those mention in Article 1734. However. or deterioration of the goods unless the same is due to any of the following causes only: (1) Flood. (2) Under the Civil Code. common carriers. the Carriage of Goods by Sea Act. Inc. and two cases of surveying instruments consigned to Aman Enterprises and General Merchandise. and 7 cases of spare parts valued consigned to Central Textile Mills. earthquake. the liability of Petitioner Carrier is governed primarily by the Civil Code. lightning or other natural disaster or calamity. Both sets of goods were insured against marine risk for with respondent. The 128 cartons were insured for their stated value by respondent Nisshin and the 2 cases by respondent Dowa. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. a special law. Common carriers are responsible for the loss. the Court said that fire may not be considered a natural disaster or calamity. Japan. Respondents filed a claim for reimbursement from petitioner. during the same period. It may even be caused by the actual fault or privity of the carrier. to Manila. 71478. This must be so as it arises almost invariably from some act of man or by human means. the same vessel took on board 128 cartons of garment fabrics and accessories consigned to Mariveles Apparel Corporation.Philippine Blooming Mills Co..” However. The RTC ruled in their favor to which the petitioner appealed. are bound to observe extraordinary diligence in the vigilance over goods. the rights and obligations of common carrier shall be governed by the Code of Commerce and by special laws. The respective respondent Insurers paid the corresponding marine insurance values to the consignees concerned and were thus subrogated unto the rights of the latter as the insured. storm. Inc. from the nature of their business and for reasons of public policy. Issue: (1) Which law should govern the Civil Code provisions on Common carriers or the Carriage of Goods by Sea Act? and (2) who has the burden of proof to show negligence of the carrier? Held: (1) The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss. No. in all matters not regulated by said Code. In G. the vessel caught fire and sank. destruction. supra.R. destruction or deterioration. according to all the circumstances of each case. Thus. Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase "natural disaster or calamity. resulting in the total loss of ship and cargo.

The foregoing suffices to show that the circumstances under which the fire originated and spread are such as to show that Petitioner Carrier or its servants were negligent in connection therewith. paid the respective claims of holders of the negotiable bills of lading duly endorsed to them. unless caused by the actual fault or privity of the carrier. a total of 1. that there was "actual fault" of the carrier shown by "lack of diligence" in that when the smoke was noticed. Consequently. and that after the cargoes were stored in the hatches. . Petitioner Carrier has also proved that the loss was caused by fire. as a fact. Inc. Nor may Petitioner Carrier seek refuge from liability under the Carriage of Goods by Sea Act. Plaintiff (DISC) as insurer." and that the carrier has "exercised due diligence to prevent or minimize the loss before. acting for and in behalf of Pan Asiatic Commercial Company. Plaintiff filed complaint for reimbursement from the defendants-NDC and MCP as owner and ship agent respectively. In this case. the respective Insurers. 4(2).been at fault or to have acted negligently. Manila and the People’s Bank and Trust Company. no regular inspection was made as to their condition during the voyage. it is required under Article 1739 of the same Code that the "natural disaster" must have been the "proximate and only cause of the loss. the complete defense afforded by the COGSA when loss results from fire is unavailing to Petitioner Carrier. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from (b) Fire. The burden then is upon Petitioner Carrier to proved that it has exercised the extraordinary diligence required by law. during or after the occurrence of the disaster. in effect.200 bales of American raw cotton consigned to Manila Banking Corporation. who represents Riverside Mills Corporation. that the fire must have started 24 hours before the same was noticed. found. which it failed to do. California. as subrogees of the cargo shippers. have proven that the transported goods have been lost. the fire was already big. The E. And even if fire were to be considered a "natural disaster" within the meaning of Article 1734 of the Civil Code. Japan with a Japanese vessel as a result of which 50 bales of aforesaid cargo were lost and/or destroyed. unless it proves that it has observed the extraordinary diligence required by law. NDC as the first preferred mortgagee of three ocean-giving vessels including one with the name “Dona Nati” appointed MCP as its agents to manage and operate said vessel in its behalf. Both the Trial Court and the Appellate Court. COURT OF APPEALS Facts: An agreement was entered onto between defendants National Development Company (NDC) and Maritime Company of the Philippines (MCP) in accordance of which. NATIONAL DEVELOPMENT COMPANY vs. Philipp Corporation of the New York loaded on board the vessel “Dona Nati” at San Francisco. The vessel figured in a collision at Ise Bay.” This Petitioner Carrier has also failed to establish satisfactorily. It is provided therein that: Sec.

the shipowner or carrier. and the extent of liability? Held: This issue has already been laid to rest by this Court of Eastern Shipping Lines Inc. under the provisions of the Code of Commerce. Both owner and agent should be declared jointly and severally liable since the obligation which is the subject of the action had its origin in a fortuitous act and did not arise from contract. a term broad enough to include the concept of ship agent in maritime law. that collision falls among matters not specifically regulated by the Civil Code. Under the above ruling. however. But more in point to the instant case is Article 827 of the same Code. The agreement between NDC and MCP shows that MCP is appointed as agent. CA affirmed the RTC’s decision. each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages suffered by their cargoes. California and Tokyo. CA decision is affirmed. Japan. so that no reversible error can be found in respondent courses application to the case at bar of Articles 826 to 839. it is evident that the laws of the Philippines will apply. and it is immaterial that the collision actually occurred in foreign waters. including the power to contract in the name of the NDC. such as Ise Bay. MCP and NDC interposed their appeals. v. the owner of the vessel at fault. Significantly. Article 826 of the Code of Commerce provides that where collision is imputable to the personnel of a vessel. Book Three of the Code of Commerce. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage. Japan to the Philippines and that they were lost or due to a collision which was found to have been caused by the negligence or fault of both captains of the colliding vessels. In fact MCP was even conferred all the powers of the owner of the vessel. is not exempt from liability for damages arising from collision due to the fault or negligence of the captain. CONTRACTUAL EFFECTS . shall indemnify the losses and damages incurred after an expert appraisal.The RTC rendered a decision ordering the defendants MCP and NDC to pay jointly and solidarity to DISC. II. IAC (150 SCRA 469-470 [1987]) In the case at bar. It appears. which provides that if the collision is imputable to both vessels. More specifically. particularly Articles 826 to 839. Issue: Which law shall govern loss or destruction of goods due to collision of vessels outside Philippine waters. it has been established that the goods in question are transported from San Francisco. which deal exclusively with collision of vessels.

The claim of the petitioner that he is not liable in view of the lease contract executed by and between him and Roberto Espiritu which exempts him from liability to third persons. adverted to.A. The fertilizer was delivered to the driver and helper of Espiritu with the necessary waybill receipts. Vigilance over Goods GELISAN vs. sugar. although not effective against the public for . The Court has invariably held in several decisions that the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation or that may be caused to any of the passengers therein. Gelisan is not without recourse because he has a right to be indemnified by Roberto Espiritu for the amount that he may be required to pay as damages for the injury caused to Benito Alday. did not deliver the fertilizer to the Atlas Fertilizer bodega at Mandaluyong. On appeal. to its Warehouse in Mandaluyong. Alday had a contact to haul the fertilizer of the Atlas Fertilizer Corporation from Pier 4. Held: Yes. Thus. flour and fertilizer. It is settled in our jurisprudence that if the property covered by a franchise is transferred or leased to another without obtaining the requisite approval. Defendant Bienveido Gelisan and Roberto Roberto entered into a contact underwhich Espiritu hired the same freight truck of Gelisan for the purpose of hauling rice. the transfer is not binding upon the public or third persons. ALDAY Facts: Bienvenido Gelisan is the owner of a freight truck. However. CA ruled that Bienvenido Gelisan is likewise liable for being the registered owner of the truck. had not been approved by the Public service Commission. North Harbor. being the registered owner of the truck. Benito Alday was compelled to pay the value of the 400 bags of fertilizers to Atlas Fertilizer Corporation and filed a compliant against Roberto Espiritu and Bienvenido Gelisan with the CFI of Manila. The offer was accepted by Alday and he instructed his checker to let Roberto Espiritu haul the fertilizer. Benito Alday. It also agreed that Espiritu shall bear and pay all losses and damages attending the carriage of the goods to be hauled by him. The CFI of Manila ruled that Roberto Espiritu was the only one liable. Alday met Espiritu at the gate of Pier 4 and the latter offered the use of his truck with the driver and helper. being the registered owner of the truck. Espiritu. a trucking operator had known Roberto Espiritu. Gelisan should be held solidarily liable with Espiritu. Issue: Whether or not Gelisan should be held solidarily liable with Espiritu. Espiritu made two hauls of zoobags of fertilizer per trip. however. cannot be sustained because it appears that the lease contract. since the lease contract in question.

The latter then informed Greenhills’ resident manager. Benedicto is liable for the undelivered or lost sawn lumber as registered owner. a business enterprise engaged in hauling freight. This doctrine rests upon the principle that in dealing with vehicles registered under the Public Service Law. being the registered owner of the carrier. should be held liable for the value of the undelivered or lost sawn lumber. for members of the general public to enforce the rights of action that they may . the driver of a cargo truck to transport its sawn lumber to the consignee Blue Star in Valenzuela. cruz in the presence and with the consent of driver Licuden. To effect its first delivery. The cargo truck was registered in the name of petitioner Ma. BENEDICTO vs. On May 15. private respondent bound itself to sell and deliver to Blue Star Mahogany. the public has the right to assume that the registered owner is the actual or lawful owner thereof. a lumber manufacturing firm. With costs against the petitioner. even though the specific vehicle involved may already have been transferred to another person. 1980. a common carrier. is valid and binding between the contracting parties. Still. The Court ruled that the petitioner is DENIED. Petitioner Benedicto is. Issue: Whether or not petitioner Benedicto. supervised the loading of sawn lumber with invoice aboard the cargo truck. IAC Facts: Private respondent Greenhills Wood Industries Company. On appeal. the Manager of Blue Star called up Greenhills’ president. The trial court ruled against Benedicto and Luciden. private respondent’s resident manager Dominador Cruz. Inc. Sometime in May 1980.000 board feet of sawn lumber with the understanding that an initial delivery would be made on May 15. 1980.. operates a sawmill in Quirino. Thereafter. private respondent Greenhills filed criminal case against driver Luciden for estafa and also against petitioner Benedicto for recovery of the value of the lost sawn lumber plus damages before the RTC of Dagupan City. informing him that the sawn lumber on board the subject cargo truck had not yet arrived in Bulacan. the proprietor of Macoren Trucking. in brief.not having been approved by the Public Service Commission. Blue Star had not received the sawn lumber and were constrained to look for other suppliers. Held: Yes. It would be very difficult and often impossible as a practical matter. the IAC affirmed the decision of the trial court in toto. Bulacan. Luisa Benedicto. Inc. contracted Virgilio Licuden. There is no dispute that petitioner Benedicto has been holding herself out to the public as engaged in the business of hauling or transporting goods for hire or compensation. a company in Bulacan 100. The prevailing doctrine on common carrier makes the registered owner liable for consequences flowing from the operations of the carrier. Thus. (“Blue Star”).

but the latter did not listen. On appeal. To permit the ostensible or registered owner to prove who the actual owner is. fell and was ran over by the bus. would be to set at naught the purpose or public policy which infuses that doctrine. Yabao who was then jogging approached the bus driver defendant Manilhig and signaled him to stop. “Whoever by act or omission causes damage to another. The said defendant drivers stopped the Philtranco bus. the bus did not stop although it had already bumped and ran over the victim. PHILTRANCO SERVICE ENTERPRISES. the police officer introduced himself and ordered the latter to stop. is called a quasi. As the bus was pushed. INC. its engine started thereby the bus continued its running motion and it occurred at the time when Ramon A. is obliged to pay for the damage done. there being fault or negligence. Also in Calbayog City. Acuesta who was still riding on his bicycle was directly in front of the said bus. As a result. Further. the letter presented by petitioner allegedly written by Benjamin Tee admitting that Licuden was his driver. petitioner Philtranco as the registered owner is still liable. the CA affirmed the decision of the trial court. Such fault or negligence. Held: Yes. In this regard. instead. Article 2180 of the Civil Code states that. The Court ruled that the Petition fro Review is Denied. private respondent is not required to go beyond the vehicle’s certificate of registration to ascertain the owner of the carrier. As the engine of Philtranco started abruptly and suddenly. So. The registered owner is not allowed to deny liability by proving the identity of the alleged transferee. Still. In the case at bar. Article 2176 of the Civil Code provides that. Thereafter. its running motion was also enhanced by the said functioning engine. if there is no pre-existing contractual relation between the parties. The trial court rendered a decision ordering the petitioners to jointly and severally pay the private respondent. 2176 is demandable not only for one’s own acts or omissions. “the obligation imposed by Art. thereby bumped on the victim Ramon. but for those of persons for whom one is responsible.have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. had no evidentiary value not only because Benjamin Tee was not presented in court to testify on this matter but because of the afore mentioned doctrine. it proceeded running. defendant Philtranco driven by defendant Rogasiones Dolina Manilhig was being pushed by some persons in order to start its engine. vs. CA Facts: The victim Ramon Acuesta was riding in his easy rider bicycle along Calbayog City. . P/sgt.delict and is governed by the provision of this Chapter. Issue: Whether or not petitioner Philtranco as the registered owner of a public service is liable for damages arising from the tortuous acts of the driver.

as a result. for damages arising from the tortuous acts of the driver is primary. the jeepney under the “kabit system” which bumped sold at public auction to satisfy the court’s award. Judgment was rendered in favor of Sibug. prior to said date. Santos presented a third-party claim with the Sheriff. petitioner Santos was the owner of a passenger jeep. On April 26. an authorized public utility operator but is actually owned by Santos (the kabit operator). Santos. which bumped Sibug be sold at a public auction to satisfy the court’s award. . which was to be a private document presumably to be registered if and when it was decided that the passenger jeep of Santos was to be withdrawn from the kabit agreement. or rights. approval or authorization of the Commission previously hadalienate. Issue: Whether or not a jeepney registered in the name of Vidad. franchise privileges. lessee or operator thereof. private respondent Sibug was bumped by a passenger jeepney operated by vidad and driven by Severo Gragas. Vidad executed a re-transfer document to the former. Sibu can be unlawful for without the (g) to sell. 1965. For the protection of Santos. Thus. certificates. 20 (g) of the Public Service Act provides: “it shall be any public service or for the owner. Sec. like petitioner Philtranco. Santos became what is known as a kabit operator. Since the employer’s liability is primary. its only recourse if the judgment for damages is satisfied by it is to recover what it has paid from its employee who committed the fault or negligence which gave rise to the action based on quasi. branch X affirmed Santos’ ownership of the jeepney in question. or any part thereof. Sibug sought relief from respondent Appellate Court. SANTOS vs. The next day. the liability of the registered owner of a public service vehicle.In the case at bar. The court ruled that the petition is partly granted. the Sheriff of Manila levied on a motor vehicle. Held: Yes. SIBUG Facts: Prior to April 26. Santos then transferred his jeep to the name of Vidad so that it could be operated under the latter’s certificate of public convenience. registered in the name of Vidad. 1963. Also. 1963. instituted an Action for Damages and Injunction with a prayer for Preliminary Mandatory Injunction.delict. but he had no certificate of public convenience for the operation of the vehicle as a public passenger jeep. and scheduled the public auction sale. direct and solidary. On October 14. filed a complaint for damages. 1964. direct. mortgage. encumber or lease its property. Vidad was duly authorized passenger jeepney operator. On April 10. Thus. Respondent Court held that Santos may not be permitted to prove his ownership over a particular vehicle being levied upon but registered in another’s name in a separate action. and joint and severally or solidary with the driver.

Although Santos. Florante Galvez. the parties entered into a “kabit system”. Thus. The parties herein operated under an arrangement. CA Facts: Sometime in 1966. Thus. INC. A criminal case was filed against the driver while a civil case was filed against Lita enterprises seeking for damages. A certificate of public convenience is a special privilege conferred by the government. Santos had fictitiously sold the jeepney to Vidad. whereby a person who has been granted a certificate of convenience allows another person who owns motor vehicles to operate under such franchise for a fee. commonly known as the “kabit system”. the court cannot allow either of the . as the kabit. is directly and primarily responsible and liable for damages caused to Sibug. LITA ENTERPRISES. Emeterio Martin. Thereafter. as a consequence of the negligent or careless operation of the vehicle.In the case at bar. Issue: Whether or not the parties entered into a “kabit system” Held: Yes. was the true owner as against Vidad. the latter. The kabit system has been identified as one of the root causes of the prevalence of graft and corruption in the government transportation services. the spouses Nicasio Ocampo and Francisca Garcia. the IAC modified the decision. This ruling is based on the principle that the operator of record is considered the operator of the vehicle in contemplation of law as regards the public and third persons even if the vehicle involved in the accident had been sold to another where such sale had not been approved by the then Public Service commission. a writ of execution was issued and one of the vehicles of respondent spouses was levied upon and sold at public auction. On Appeal. Abuse of this privilege by the grantees thereof cannot be countenanced. vs. About a year later. herein private respondent purchased in installment from the Delta Motor Sales Corp. but the document was not registered. for the use of the latter’s certificate of public convenience in consideration of an initial payment of P1. one of said taxicabs driven by their employee. as the registered owner/ operator and grantee of the franchise. collided with a motorcycle whose driver.000 and a monthly rental of P200 per taxi cab unit. Hence. It is true that Vidad had executed a re-sale to Santos. who had become the registered owner and operator of record at the time of the accident. they contracted with petitioner. but Lita Enterprises allegedly refused. petitioner Lita Enterprises was adjudged liable for damages as the registered owner of the taxicab. The court ruled that the petition for review filed by Santos is dismissed. the concept of Kabit system being contrary to public policy and void and existent. respondent Nicasio Ocampo decided to register his taxicab in his name. died from the head injuries sustained. The CFI of Manila ordered Lita Enterprises to transfer the registration certificate. the injured party. In the CFI of Manila. five Toyota Corona Standard cars to be used as taxicabs. Since they had no franchise to operate taxicabs. the spouses filed a complaint.

so much so that in the registration certificate. Petitioner Teja Marketing and/or Angel Jaucian filed an action for the “sum of money with damages”.000. void and inexistent under Article 1404 of the Civil Code. It also appears and the court so finds that the defendant purchased the motorcycle in question and the Court so finds that defendant purchased the motorcycle in question. The Court ruled that the decisions rendered by the CFI of Manila and IAC are hereby annulled and set aside.00. Thus. Although not outrightly penalized as a criminal offense. that plaintiff would undertake the yearly registration of the unit in question with the LTC. Out of the total purchase price the defendant gave a down payment of P1. This is a system whereby a person who has been granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise for a fee.00 of rits registration. the kabit system is invariably recognized as being contrary to public policy and therefore. A certificate of public convenience is a special privilege conferred by the government. but will leave both where it finds them. as well as the insurance coverage of the unit. Issue: Whether or not kabit system applies in the instant case. particularly for the purpose of engaging and using the same in transportation business and for this purpose said trimobile unit was attached to the plaintiff’s transportation line who had the franchise.parties to enforce an illegal contract bu leaves them both where it finds them. IAC Facts: On May 9.00 with a promise that he would pay plaintiff the balance within sixty days. The defendant. it appears to have been agreed further between. TEJA MARKETING vs. per agreement. The assailed decision of the IAC now the CA is AFFIRMED. the parties operated under an agreement called “kabit system”.700. the plaintiff and the defendant. The city court rendered judgment in favor of petitioner. the period of paying the balance was extended to one year in monthly installments until January 1976 when he stopped paying anymore. Thus. for the registration of the unit for the year 1976. the decision was affirmed in toto. The court ruled that the petition is hereby dismissed for lack of merit. The plaintiff made demands but just the same the defendant failed to comply thus forcing plaintiff to consult a lawyer and file this action for his damage. failed to comply with his promise and so upon his own request. however. . 1975. Furthermore. the defendant gave to the plaintiff the amount of P82. the defendant bought from the plaintiff a motorcycle with complete accessories and a sidecar in the total consideration of P8. court will not aid either party to enforce an illegal contract. the plaintiff appears to be the owner of the unit. Held: Yes. On appeal.

Issue: Whether or not an employer-employee relationship exists between a jeepney. for privilege of driving the jeepney.employee.are not sufficient to withdraw the relationship between them from that of employer. At the time of the accident.owner. it being their agreement that whatever earnings Roque could make out of the use of the jeepney in transporting passengers from one point to another would belong entirely to Conrado Roque. BERNARDO Facts: The spouses Magboo are the parents of the 8-year old child killed in a motor vehicle accident. the loading of the scrap iron was resumed. said passenger jeepney was driven by Corado Roque. 000. the jeepney. private respondent delivered the scrap iron to the captain for loading.owner and a driver under a “boundary system” agreement. ordered the captain and his crew to dump the scrap iron. Conrado Roque served his sentence but he was not able to pay the indemnity because he was insolvent. CA Facts: In 1965. to indemnify the heirs of the deceased in the sum of P3. The Acting Mayor. The contract between Conrado Roque and defendant Delfin Bernardo was that Roque was to pay to defendant the sum of P8. the fact that the driver does not receive a fixed wage but gets only the excess of the amount of fares collected by him over the amount he pays to the jeep.MAGBOO vs. and that upon arraignment. Held: Yes.00 from private respondents. which the latter refused to give. prompting the Mayor to draw his gun and shoot at him. A receipt was issued stating that the Municipality of Mariveles had taken custody of the scrap iron. which he paid to said defendant.owner is subsidiarily liable as employer in accordance with article 103 of the Revised Penal Code. private respondent Tumambing contracted the services of petitioner Ganzon to haul 305 tons of scrap iron from Mariveles. Conrado Roque pleaded guilty to the information and was sentenced to a jail term. Conrado Roque was prosecuted for homicide thru reckless imprudence before the CFI of Manila. GANZON vs. The gunshot was not fatal but he had to be taken to a hospital. the vehicle owned by the defendant Bernardo. Bataan on board the latter’s lighter.00 with subsidiary imprisonment in case of insolvency. Pursuant to their agreement. When half of the scrap iron was loaded. with the rest brought to Nassco Compound. Mayor Advincula demanded P5. there exist an employer-employee relationship under a boundary system arrangement. The features which characterize the boundary systemnamely. and that the gasoline consumed by the jeepney is for the account of the driver. Consequently. Thereafter. The Court ruled that the judgment appealed from is hereby affirmed. As a result of the accident. accompanied by three policemen.00.000. .

or to the person who has a right to receive them. 1737 of the Civil Code provides that. EASTERN SHIPPING LINES. Issue: Whether or not rains and rough is considered as caso fortuito which would exempt petitioner from liability for the deterioration of the cargo. actual or constructive. On appeal. Only Eastern Shipping Lines. Consequently. vs.” Further Article 1735 of the Civil Code provides that. Razon in RTC. albeit still unloaded. such extraordinary responsibility would cease only upon the delivery. the vessel encountered very rough seas and stormy weather. such is not considered caso fortuito which would exempt from liability for the deterioration of the cargo. “if the goods are lost. for delivery to stresstek PostTensioning Philippines in Manila. Inc. 1978.carrier’s extraordinary responsibility for the loss. Held: Yes. thirteen coils of uncoated 7. filed this petition. The said cargo was insured by respondent operator E. destruction or deterioration of the goods commenced. “common carrier are bound to observe extraordinary vigilance over goods according to all circumstances of each case.stressed concrete were shipped on board the vessel “Jupri Venture” owned and operated by petitioner. Pursuant to Article 1736. Manila was dismissed. by the carrier to the consignee. By the said act of delivery. for the days.Issue: Whether or not petitioner is guilty of breach of contract of transportation and in imposing a liability against him commencing from the time the scrap iron was placed in his custody and control have no basis in fact and in law. petitioner is guilty of breach of the contract of transportation. which caused it to pound and roll heavily. Razon. the contract of carriage was deemed perfected. the scraps were unconditionally placed in the possession and control of the common carrier. The fact that part of the shipment had not been headed the lighter did not impair the said contract of transportation as the goods remained in the custody and control of the carrier. The complaint that was filed by the first Nationwide Assurance Corporation (insurer) against Eastern Shipping Lines and F. Art. The Court ruled that the petition is DENIED. The coils which were wrapped in burlap cloth and cardboard paper were stored in the lower hold of the hatch of the vessel which were rusty on one side each and it was found that the “wetting” was caused by fresh water that entered the hatch. the judgment appealed from is hereby SET ASIDE. and upon their receipt by the carrier for transportation. destroyed. or .wire stress relieved for pre. from whom the consignee’s broker received for delivery to consignee’s warehouse. Held: No. the petitioner. INC. It appears that while en route. CA Facts: On September 4.

unless they prove that they observed extraordinary diligence as required in Article 1733. but normal occurrences that an ocean. but the driver ignored them and proceeded to Legaspi City. in the ordinary course of voyage. Whether or not petitioner is liable for the lost baggage’s of Held: The petitioner is liable for the lost baggage’s. common carriers are presumed to have been at fault or to have acted negligently. Petitioner apologized through a letter.going vessel. Her belongings were kept in the baggage compartment and during the stopover at Daet. passport and visa.deteriorated. Respondents. actually or constructively. The Court ruled that the petition is DISMISSED. The trial court ruled in favor of respondents. which she turned down.” and this liability “last from the time the goods are unconditionally placed in the possession of. and received by the carrier for transportation until the same are delivered. Her brother helped her load three pieces of luggage containing all of her optometry review books. it was discovered that only one bag had remained in the baggage compartment. Issue: Fatima. one of Fatima’s bags was recovered. who went to petitioner’s office. “common carriers from the nature of their business and for reasons of public policy are bound to observe extraordinary diligence and vigilance over goods transported by the. is a month of rains and heavy seas would encounter as a matter of routine. Petitioner merely offered her one thousand pesos for each piece of luggage lost. Fatima boarded petitioner’s De luxe bus in Manila on her way to Legaspi City. through counsel. the presumption by law of fault or negligence on the part of the carrier applies. These are conditions that ocean.going vessels would encounter and provide for.” In the case at bar. COURT OF APPEALS Facts: On August 31. . “unless the loss is due to any of the excepted causes under Article 1734 thereof. materials and equipment. Fatima asked the help of radio stations and even from Philtranco bus drivers who plied the same route. heavy rains and rough seas were not caso fortuito. the appellate court affirmed the trial court’s judgment. the carrier has failed to establish any caso fortuito. 1984. They are not unforeseen nor unforeseeable. Since. Under the Civil Code. by the carrier to the person who has a right to receive them. particularly in the month of September. demanded satisfaction of their complaint from petitioner. respondents decided to file the case. Fatima reported the loss to her mother. trial contact lenses. That rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and foresight did not attend the closing of ships hatches so that rain water would not find its way into the cargo holds of the ship. Some of the passengers suggested retracing the route to try to recover the items. SARKIES TOURS PHILIPPINES vs. On appeal. Thus. After more than nine months of fruitless waiting.

exempting the ship-owner from liability for the loss of or damage to the cargo caused even by the negligence of the ship captain. The Court affirmed the decision of the Court of Appeals with modification. Petitioner insured the logs against loss and/or damage with South Sea Surety and Insurance Company. the charter party between the petitioner and private respondent stipulated that the “owners shall not be responsible for loss. petitioner is held liable. breakages and any kind of damages to the cargo”. but modified it by holding that Seven Brothers was not liable for the lost of the cargo. The petition is denied by the Court. Thus. Issue: Whether or not the stipulation in the charter party exempting the ship-owner from liability for the loss of the cargo arising from the negligence of its captain valid. This stipulation is deemed valid as it is undisputed that private respondent acted as a private carrier in transporting petitioner’s lauan logs. After trial. Thus. CA Facts: Valenzuela hardwood entered into an agreement with Seven Brother Shipping Corporation whereby the latter undertook to load on board its vessel M/V Seven Ambassador the formers lauan round logs numbering 940 at the port of Isabela for shipment to Manila. short landing. vs. good customs. In the case at bar. As a result of this lack of care. The Court of Appeals affirmed in part the RTC judgment by sustaining the liability of South Surety and Insurance Company. VALENZUELA HARDWOOD AND INDUSTRIAL SUPPLY INC. the court held that the proximate cause of the los is the negligence of the captain and the stipulation in the charter party limiting respondent’s liability is void being against public policy citing Article 1745 of the Civil Code. split.In the case at bar. the parties may validly stipulate that responsibility for the cargo rests solely on the charterer. The said vessel sank resulting on the loss of plaintiff’s insured bags. Held : The stipulation in the instant case is valid. Pursuant to Article 1306 of the Civil Code. the cause of the loss was petitioner’s negligence in not ensuring that the doors of the baggage compartment of its bus were securely fastened. . such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law. public order or public policy. Both respondent and insurer denied liability. Article 1745 and other Civil Code provisions on common carriers which were cited by the petitioner may not be applied unless expressly stipulated by the parties in their charter party. morals. In a contract of private carriage. almost all the baggage was lost to the prejudice of the paying passengers.

common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. Thus. Be that as it may. Leny filed a case of breach of contract of carriage against petitioners. The owners of Yobido Liner Bus. They claimed that the bus was not full as there were only 32 passengers out of the 42 seating capacity. petitioners are hereby held liable for damages. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality. along Picop Road. Article 1755 provides that “a common carrier is bound to carry the passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons with due regard for all circumstances. resulting in the conclusion that it could not explode within five days use.” Further. They also claimed that the bus was running as speed pr “60 to 50” and that the tire was brand-new. Agusan del Sur.. the explosion of the new tire may not be considered a fortuitous event. Alberto and Cresencio Yobido raised the affirmative defense of caso fortuito.YOBIDO vs. asserted the violation of the contract of carriage was brought about by the driver’s failure to exercise the diligence required of the carrier.” In the case at bar. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. The incident resulted in the death if Tito Tumboy and physical injuries to other passengers. a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence. There are human factors involved in the situation. Leny claimed that the was running fast in a winding road which was not cemented and was wet because of the rain. it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a case fortuity that would exempt the carrier from liability for damages. Moreover. the left front tire of the bus exploded. COURT OF APPEALS Facts: Spouses Tito and Leny Tumboy and their minor children boarded a Yobido Liner bus at Surigaodel Sur. Issue: Whether or not the tire blow out is considered a fortuitous event which would exempt petitioners from liability. . Held: The tire blow out is not considered as a fortuitous event which would exempt petitioners from liability. The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. The Court ruled that the Decision of the Court of Appeals is hereby affirmed. Article 1756 of the Civil Code provides that. “in case of death or injuries to passengers. The bus fell into a ravine around the three feet from the road and struck a tree. Respondents on the other hand.

although Art. One of the lighters sunk which Macleod suffered damage P54. The responsibility of the carrier commenced on the actual delivery to. INSURANCE CO. As to the issuance of a bill of lading. however. it is not indispensable. The ship arrived in Cebu and discharged her cargo. placing it in the custody of the arrastre operator appointed by the Bureau of Customs. The Code of Commerce does not demand as a necessary requisite in the contract of transportation. Held: There was a complete contract of carriage the consummation of which has already begun when the shipper delivered the cargo to the carrier and the latter took possession of the same by placing it on a lighter manned by its authorized employees. As regards to the form of the contract of carriage. On the contract of carriage. BINAMIRA Facts: Delta Company of New York shipped six cases of films and photographic supplies to Binamira. Petitioner denied the liability on the grounds that there was no bill of lading issued thereby resulting to the non-existence of carriage contract. A bill of lading is not essential to the contract. Two lighters of the petitioner loaded said cargo from Macleod’s wharf at Davao awaiting the arrival of another vessel of the petitioner for loading. there should be no limitations as to form. Issue: Whether or not there is a perfected contract of carriage. first by telephone and later confirmed by a formal written booking issued by Macleod and Co. the delivery of a bill of lading to the shipper. 018.55. of the goods. the carrier or its authorized agent. it was stipulated that the carrier in no longer liable for the . it can be said that provided there is a meeting of the minds and from such meeting arise rights and obligations. The barges or lighters were merely employed as the first step of the voyage. or receipt by. 350 of the Code of Commerce provides that the shipper as well as the carrier may mutually demand that a bill of lading be issued. the services of the petitioner Campania Maritime for the shipment of bales of hemp from Davao to Manila. Judgment against petitioner is affirmed. that the sinking was due to a fortuitous event and that the respondent has no personality. but gives the right to both the shipper and carrier to mutually demand of each other the delivery of the said bill. under which Macleod became entitled to the privilege secured to him by law. OF NORTH AMERICA Facts: Macleod and Co. The cargo was checked both by the stevedoring company and the arrastre operator and was found in good order.COMPANIA MARITIMA vs. although it may become obligatory by reason of the regulations or as a condition imposed in the contract by the agreement of the parties themselves. LU DO vs. contracted.

Inc. the parties may agree to limit the liability of the carrier considering that the goods have still to go through the inspection of the customs authorities before they are actully turned over to the consignee. aforementioned. 842. 248. Lower Court held that the carrier liable. showing signs of having been previously tampered. on September 6. and LCM Brokerage Co. Judgment reversed. This is a situation where the carrier loses control of the goods because of a custom regulation and it is unfair that it be made responsible for any loss or damage that may be caused to the goods during the interregnum. where the said shipment was examined and inventoried. contained in (3) boxes. Inc. The cargo remained with the ARRASTRE for ten days until it was withdrawn on April 16. which arrived at the Port of Manila. Inc. The cargo was later delivered to Binamira and a marine surveyor found that some were missing valued at P324. The shipment was insured by FGU Ins. Corp. The trial court found in favor of private respondent and ordered APL to pay private respondent the amount of P28. 602956.24 The defendant CARRIER transshipped the shipment in Hongkong on board the vessel MS ‘Partas’. The CARRIER. Inc.. and the one box discharged from the CARRIER’s vessel in bad order condition. filed a complaint for recovery of a sum of money against APL. was found short of one piece waster cone and one piece Main Relief valued. Private respondent FGU Ins. complete and in good order condition. the shipment was discharged and turned over to Marina Port Services. 1987.58.58. with one box in bad order condition. issued its clean Bill of Lading No. covered by a Turn over Survey Cargoes No. at P28. for P481. California.(Arrastre0.. CHI-MNL-120. thru Forwarders Direct Container Lines. A-08851. LTD. hence. Marina Port Services. It was for transport to Manila in favor or Lindale Development Corporation. . CA Facts: American President Lines (APL) vessel President Washington(Carrier for short) receive and loaded on board at Los Angeles. per invoice. Corp.. Issue: is valid. at its warehouse. the subject of the shipment of one (1) unit of Submersible Jocky Pump. and Packing List. vs. On the same date. Whether or not the stipulations limiting the liability of the carrier Held: While delivery of the cargo to the customs authorities is not delivery to the consignee of the person who has the right to receive them as contemplated in Article 1736 of the Civil Code because in such case the goods are still in the hands of the government and the owner cannot be exercise dominion over them. the consignee.63. 248. covered by Commercial Invoice No. In actual damages. AMERICAN PRESIDENT LINES. however.cargo upon its delivery to the hands of the customs authorities. 1987 by the defendant broker which delivered the same to the consignee. These stipulations limiting liability is not contrary to morals or public policy.

and since the burning of the warehouse occurred before actual or constructive delivery of the goods to the appellees. said warehouse was razed by a fire of unknown origin. the loss is chargeable against the appellant. Upon arrival of the vessel at Pulupandan in the morning of November 18. With regard to the contention of the carrier that COGSA should control in this case. dangers or accidents of the sea or other waters. destruction and deterioration. However. Issue: Whether or not the stipulations in the bill of lading limiting the liability of carrier is valid. PHILIPPINE STEAM NAVIGATION CO.” . the same is of no moment. Negros Occidental. that in the bills of lading issued for the cargoes in question. 1736-1738. 1963. of the same day. Carrier shall not be responsible for loss or damage to shipments billed “owner’s risk” unless such damage is due to negligence of carrier. Nor shall carrier be responsible for loss or damage cause by force majeure. unto the warehouse of the Bureau of Customs. Held: The court a quo held that the delivery of the shipment on question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736. Therefore. public enemies. for carriage from Manila to Pulupundan. “in all matter not regulated by this Code. the cargoes were discharged. war.” This means that the law of the Philippines on the New Civil Code. destroying Servando’s cargoes. 1763 of the New Civil Code provides that “the laws of the country to which the goods are transported shall govern the liability of the common carrier in case of loss.” Art. SERVANDO vs. About 2:00 p. “Clause 14. complete and in good order. 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. FS-176.Issue: What law is applicable the Civil Code provisions or COGSA? Held: The Civil Code. Art.m. Facts: Clara UY Bico and Amparo Servando loaded on board the Philippine Steam Navigation vessel. cargoes of rice and colored paper as evidenced by the corresponding bills of lading issued by the carrier. although Sec 4(5) of COGSA states that the carrier shall not be liable in an amount exceeding $500 per package unless the value of the goods had been declared by the shipper and asserted in the bill of lading. the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws. said section is merely supplementary to the provisions of the New Civil Code. xxx fire xxx. Under 1766 of NCC. NCC governs said rights and obligations.

However. accompanied by the three policemen. After some time. Bataan. But on December 4.We sustain the validity of the above stipulation. Issue: Whether or not the scrap iron were already delivered. Ganzon to haul 305 tons of scrap iron from Mariveles. morals or public policy. Held: Petitioner Ganzon insists that the scrap iron had not been unconditionally placed under his custody and control to make him liable. Mayor Advincula drew his gun and fired at Tumambing. Acting Mayor Rub issued a receipt stating that the Municipality of Mariveles had taken custody of the scrap iron. On December 1. and that they did not sign the same. 1956. for loading which was actually began on the same date by the crew of the lighter. COURT OF APPEALS Facts: Gelacio Tumambing contracted the services of Mauro B. the private respondent delivered the scraps to Captain . This argument overlooks the pronouncement of this Court in Ong Yiu vs. 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. Acting Mayor Basillo Rub. The rest was brougth to the compound of NASSCO. Such provisions have been held to be 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.” There is nothing in the record to show that appellant carrier in delay in the performance of its obligation nor that was the cause of the fire that broke out in the Custom’s warehouse in anyway attributable to the negligence of the appellant or its employees. Bataan. 1956. Court of Appeals. Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza. there is nothing therein that is contrary to law. Bataan. for treatment. The latter resisted the shakedown and after a heated argument. 1956. arrived and demanded P5. When about of the scrap of the scrap iron was already loaded. ordered Captain Filomeno Niza and his crew to dump the scrap iron where the lighter was docked.” Ganzon then sent his lighter “Batman” to Mariveles where it docked. GANZON vs. captain of the lighter. “While it may be true that petitioner had not signed the plane ticket. 000. the loading of the scrap iron was resumed. he completely agrees with the respondent Court’s finding that on December 1. he is nevertheless bound by the provisions thereof.00 from Tumambing. to the port of Manila on board the lighter LCT “Batman. The gunshot was not fatal but Tumambing had to be taken to a hospital in Balanga. Mayor Advincula of Mariveles.

Crispina Saludo. SALUDO.” That the petitioner. JR. over the possibility of losing their mother’s mortal remains. and not the cold insensitivity to their predicament. 1976. The remains were taken to the Chicago Airport. the casket bearing the remains of plaintiff’s mother was mistakenly sent to Mexico and was opened there. COURT OF APPEALS Facts: After the death of plaintiff’s mother. by the carrier to the consignee. The court absolve the two airline companies of any liability. or to the person who has a right to receive them. the scraps were unconditionally placed in the possession and control of the common carrier and upon their receipt by the carrier for transportation. Issue: Whether or not the carrier is liable for damages. particularly Maria and Saturnino Saludo. Plaintiff filed a damage suit with CFI of Leyte. The CA affirmed such decision.Niza for loading in the lighter “Batman. Held: The records reveal that petitioners. Common sense could and should have dictated that they exert a little effort in making a more extensive inquiry by themselves or through their superiors. or deterioration of the goods commenced. By the said act of delivery. The fact that part of the shipment had not been loaded on board the lighter did not impair the said contract of transportation as the goods remained in the custody and control of the carrier. The shipment was immediately loaded on PAL flight and arrived on Manila a day after it expected arrival on October 29. Pursuant to Art. vs. Pomierski and Son Funeral Home of Chicago brought the remains to Continental Mortuary Air Services which booked the shipment of the remains from Chicago to San Francisco by TWA and from San Francisco to Manila with PAL. unattended to and without any assurance from the employees of TWA that they were doing anything about the situation. Consequently. the petitioner-carrier’s extraordinay responsibility for the loss. the contract of carriage was deemed perfected. destruction. Somehow the two bodies were switched. actually received the scraps is freely admitted. agonised for nearly five hours. contending that Trans World Airlines and PAL were liable for misshipment. With all the modern communications equipment readily . the eventual delay on the delivery of the cargo containing the remains. thru his employees. albeit unloaded. 1738. They were entitled to the understanding and humane consideration called of by and commensurate with the extraordinary diligence required for common carriers. and of the discourtesy of its employees to them. such extraordinary responsibility would cease only upon the delivery. rather than just shrug off the problem with a callous and uncaring remark that they had no knowledge about it. actual or constructive. but it turned out that there were two bodies in the said airport.

through local agent respondent Wallem Philippines Shipping.46. . The shipment was bound for Hongkong with Pakistan Bank as consignee and Great Prospect Company of Kowloon. intensified by anguish due to the uncertainty of the whereabouts of their mother’s remains. It was from PAL that they received confirmation that their mother’s remains would be on the same flight with them.273.223.00 and fresh mangoes valued at US$14. No attribution of discourtesy or indifference has been made against PAL by petitioners and. Petitioner’s right to be treated with due courtesy in accordance with the degree of diligence required by law to be exercised by every common carrier was violated by the TWA and this entitles them. atleast to nominal damages from TWA alone. do not appear to be applicable to respondent PAL. Petitioner returned the amount involved to SOLIDBANK. and then demanded payment from respondent WALLEM in writing but to no avail. They are recoverable where some injury has been done but the amount of which the evidence fails to show. Hongkong as notify party. GPC failed to pay Pakistan Bank such that the latter. albeit. is a painful experience. still in possession of the original bills of lading. Our culture accords utmost tenderness human feelings toward and in reverence to the dead. it could have easily facilitated said inquiry. petitioner Maria Saludo testified that it was to PAL they repaired after failing to receive proper attention from TWA.46. MACAM vs. The foregoing observations. COURT OF APPEALS Facts: Petitioner Benito Macam shipped on board the vessel Nen Jiang. Subsequently. the assessment of damages being left to the discretion of the court according to the circumstances of the case. and without the required bill of lading having been surrendered. refused to pay petitioner through SOLIDBANK. TWA’s personnel were remiss in the observance of that genuine human concern and professional attentiveness required and expected of them. Losing a loved one. belatedly and eventually laid in her final resting place is of little consolation. however. Inc. TWA’s apathetic stance while not legally reprehensible is morally deplorable. it demanded payment from respondent WALLEM but was refused. was especially condemnable particularly in the hours of bereavement of the family of Crispina Saludo. watermelons valued at US$5. Upon arrival in Hongkong. That the remains of the deceased were subsequently delivered. not to Pakistan Bank. in fact. the shipment was delivered by respondent WALLEM directly to GPC. Since SOLIDBANK already prepaid petitioner the value of the shipment. Consolidated Banking Corporation(SOLIDBANK) paid petitioner in advance the total value of the shipment of US$20. even for just that fraction of time.available to them. The imperviousness displayed by TWA’s personnel. Petitioner’s depository bank. especially one’s parent.950. Articles 2221 and 2222 of the Civil Code make it clear that nominal damages are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded.

1977 or after two months from the date specified. The Memorandum of Shipment provides that the shipper advised the consignee that the goods were already shipped on board the vessel of petitioner for shipment to the Philippines via Oakland.” In transactions covered by a letter of credit. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was notifying party. 1977. in the export invoices GPC was clearly named as buyer/importer.46 from respondents before the RTC of Manila. However. . there was not a single instance when the bill of lading was first presented before the release of the cargoes.(shipper) 600.223. California. his shipment to GPC using the facilities of respondents is twice or thrice a week. the extraordinary responsibility of the common carrier lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. In his several years of business relationship with GPC and respondents. Private respondent alleging gross negligence and undue delay in the delivery of the goods. bases on delivery of the shipment to GPC without presentation of the bills of lading and bank guarantee. filed an action for rescission of contract with damages against petitioner and shipper. For reasons unknown. Petitioner also referred to GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. From the testimony of petitioner.000 empty gelatin capsules for the manufacture of his pharmaceutical products. It has been the practice of petitioner to request the shipping lines to immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his “people. USA and then transported back to Oakland. MAERSK LINE vs. bank guarantee is normally required by the shipping lines prior to releasing the goods. Virginia. This premise draws us to conclude that the delivery of the cargoes to GPC as buyer/importer which. the right to receive them was proper. When mangoes and watermelons are in season. 1736 had. conformably with Art. Issue: Whether or not respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee? Held: Under Art. said cargo of capsules were mishipped and diverted to Richmond. But for buyers using telegraphic transfers. COURT OF APPEALS Facts: Private respondent(consignee) ordered from Eli Lilly. The consignee refused to take delivery of the goods. California. we gather that he has been transacting with GPC as buyer/importer for around 2 to 3 years already. other than the consignee. The goods are released to GPC. The goods finally arrived in the Philippines on June 10.Hence petitioner sought collection of the value of the shipment if US$20. 1736 of the Civil Code. The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee. petitioner dispenses with the bank guarantee because the goods are already fully paid. Inc. The specified date of arrival was April 3.

BARRETTO Facts:Ysmael.”the Carrier does not undertake that the goods shall arrive at the port of discharge or the place of delivery at any particular time. hence the present petition. CA affirmed said decision. In this regard. he is not liable for the excess of P300. The RTC dismissed the complaint against the shipper and ruled in favor of the consignee. there arises no need to execute another contract for the purpose as it would be a mere superfluity. which is the alleged value of four cases of merchandise which it delivered to the steamship Andres.. SC said that it was necessarily so and that it is a settled rule that bills of lading are contracts not entirely prohibited. Issue: Whether or not respondent is entitled to damages resulting from delay in the delivery of the shipment in the absence in the bill of lading of a stipulation on the period of delivery. While it is true that common carriers are not obligated by law to carry and to deliver merchandise. RTC ruled that the stipulation in the BOL is in the nature of contract of adhesion and therefore void. Barretto also alleged that in provision 12 of the bill of lading. we find that a delay in the delivery of the goods spanning a period of two months and seven days falls was beyond the realm of reasonableness. The lower court rendered its judgment in favor of Ysmael & co. . delivery of shipment or cargo should at least be made within a reasonable time. The shipper alleged that the mis-shipment was due solely to the gross negligence of petitioner. a domestic corporation seeks to recover from Barretto P9. While there was no special contract entered into by the parties indicating the date of arrival of the subject shipment. plaintiff’s right of action is barred for the reason that it was not brought within 60 days from the time the cause of action accrued. Held: Yes. An examination of the subject bill of lading shows that the subject shipment was estimated to arrive in Manila on April 3. destruction or deterioration of the goods as provided for in Article 1734 NCC. The said merchandise was never delivered to the consignee Solomon Sharuff. and persons are not vested with the right to prompt delivery.00 for any package of silk unless the value and contents of such package are correctly declared in the bill of lading at the time of shipment. In the case before us.Petitioner alleged that the goods were transported in accordance with the bill of lading(. Barretto denied all the allegations against him stating that the said merchandise was never delivered to him. unless such common carriers previously assume the obligation to deliver at a given date or time.940. With respect to the ruling that contracts of adhesion are void. at Manila to be shipped to Surigao. 1977.”) and that its liability under the law attaches only in case of loss. petitioner nevertheless. He also stated that under the provision of paragraph 7 of the printed condition at the back of the bill of lading. YSMAEL vs. was very well aware of the specific date when the goods were expected to arrive as indicated in the bill of lading itself..

Such a limitation of value is unconscionable and void as against public policy. INC. a suitcase and two other pieces. In this situation. the stipulation is not valid. A common carrier cannot lawfully stipulate for the exemption from liability. to be delivered to Salomon Sharuff in Surigao." The evidence shows that 164 "cases" were shipped." The clause in question provides that the carrier shall not be liable for loss or damage from any cause or for any reason to an amount in excess of P300 "for any single package of silk or other valuable cargo. He checked in three pieces of baggages. unless such exemption is just andreasonable and the contract is freely and fairly made. or less than one-eight of its actual value. 1923. If that rule of law should be sustained. as this was its limited liability as . Also. no silk would ever be shipped from one island to another in the Philippines. or a little less than six months after the shipment was made. unless such exemption is just and reasonable. 1922. It was found out that it was mistagged by defendant’s personnel. Defendant admitted that the two items (Transistor Radio and the Rollflex Camera) could not be found inside the suitcase. Plaintiff's original complaint was filed on April 17. the plaintiff delivered to the defendants 164 cases of silk consigned and to be delivered by the defendants to Salomon Sharuff in Surigao. and the evidence shows that their value is the alleged in the complaint. PHILIPPINE AIR LINES.Issue: Whether or not the stipulation in the bill of lading limiting the liability of defendant of not more than P300 is valid. When plaintiff Parmanand Shewaram arrived in Manila. his suitcase did not arrive with his flight because it was sent to Iligan. the limit of defendants' liability for each case of silk "for loss or damage from any cause or for any reason" would put it in the power of the defendants to have taken the whole cargo of 164 cases of silk at a valuation of P300 for each case. Facts: Shewaram. The station agent of the PAL in Iligan caused the baggage to be sent to Manila for delivery to plaintiff. and that the value of each case was very near P2. RTC ruled that the loss of the articles was due to the negligence of the employees of PAL. PAL however was ordered to pay damages of P100. An action for damages was instituted against PAL." and that by reason thereof they "are not binding upon the plaintiff. Based upon the findings of fact of the trial court which are sustained by the evidence. a paying passenger on defendant's aircraft flight from Zamboanga City bound for Manila.00 only. The lower court also points out that the conditions in question "are not printed on the triplicate copies which were delivered to the plaintiff. SHEWARAM vs. There is no merit in the appeal. The judgment of the lower court is affirmed.500. Held: No. Four of such cases were never delivered to the consignee. A common carrier cannot lawfully stipulate for exemption from liability. The carrier cannot limit its liability for injury to or loss of goods shipped if such was caused by its own negligence. the goods in question were shipped from Manila on October 25.

if any. The plane left Mactan Airport. Upon arrival. embodying the conditions as printed at the back of the ticket. According to petitioner. Shewaram did not agree to the stipulation on the ticket. As a passenger. The limited liability rule shall not apply. 946-R from Mactan Cebu bound for Butuan City. the later denied.”). In the case before us We believe that the requirements of said article have not been met. it was only after reacting indignantly to the loss that the matter was attended by the porter clerk which however. destruction or deterioration of the goods it has undertaken to transport. unless the passenger declares in advance a higher valuation and pay an additional charge therefor. He was scheduled to attend the trial in the Court of First instance . ONG YIU vs. (“The liability. COURT OF APPEALS Facts: Petitioner was paying passenger of respondent Philippine Airlines on board flight No. for loss or damage to checked baggage or for delay in the delivery thereof is limited to its value and. he checked in one piece of luggage. The requirements provided in Article 1750 of the New Civil Code must be complied with before a common carrier can claim a limitation of its pecuniary liability in case of loss. Held: No. II thereat. the value shall be conclusively deemed not to exceed P100. a bull maleta. . CA held that PAL was guilty only of simple negligence. It can not be said that the appellee had actually entered into a contract with the appellant. The fact that those conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the appellee was aware of those conditions such that he had "fairly and freely agreed" to those conditions. but ordered PAL to pay plaintiff the sum of P100.00. Cebu City at about 1pm and arrived at Bacasi Airport. Petitioner refused to accept the luggage. the baggage liability assumed by it under the condition of carriage printed at the back of the ticket. as manifested by the fact that Shewaram did not sign the ticket. Issue: Whether or not the limited liability rule applies. aside from the two gift items for his parents-in-law.stated in the ticket. reversed the judgment of the trial Court granting petitioner moral and exemplary damages. Hence the present petition. he found out that the folder containing documents and transcripts were missing. When the luggage was delivered to the petitioner with the information that the lock was open. Petitioner filed a Complaint against PAL for damages for breach of contract of transportation. Br.00 for each ticket. petitioner claimed his luggage but it could not be found. Butuan City at past 2pm of the same day. The lower Court found PAL to have acted in bad faith and with malice and declared petitioner entitled to moral damages. An appeal was then brought up by plaintiff.

or damage to. PAL exerted diligent efforts to locate the plaintiff’s baggage. The shipper not having declared the value of the shipment. as the plane ticket in the case at bar. vs. The one who adheres to the contract is in reality free to reject it entirely. and while awaiting transshipment to Cebu the cargo was stolen and never recovered. It is what is known as a contract of "adhesion". PAL did not act in bad faith. Petitioner is neither entitled to exemplary damages. . IAC Facts: Sea-land. Exemplary damages can only be granted if the defendant asked in a wanton. Held: No.Issue: Whether or not PAL acted with gross negligence. no value was indicated in the BOL. Held: Yes. The CA affirmed the decision. reckless. INC. are contracts not entirely prohibited. hence the petition. the unrealized profit and attorneys fees. received from Seaborne Trading Company in California a shipment consigned to Sen Hiap Hing. goods being transported under said bill. he is nevertheless bound by the provisions thereof. although that document may have been drawn up only by the consignor and the carrier without the intervention of the consignee. SEA-LAND SERVICE. "Such provisions have been held to be a part of the contract of carriage. oppressive or malevolent manner. The shipment was discharged in Manila. in accordance with the stipulation written at the back of the ticket is limited to P100 per luggage plaintiff not having declared a greater value and not having called the attention of the defendant on its value ad paid the tariff thereon. he gives his consent. in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other. fraudulent. The lower court sentences Sea-land to pay Cue the value of the lost cargo. a foreign shipping and forwarding company licensed to do business in the Philippines. Issue: Whether or not the consignee of seaborne freight is bound by stipulations in the covering bill of lading limiting to a fixed amount the liability of the carrier for loss or damage to the cargo where its value is not declared in the bill. It was the duty of PAL to look for petitioner’s luggage which had been miscarried. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. There is no question of the right of a consignee in a bill of lading to recover from the carrier or shipper for loss of. which loss. if he adheres. and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation". While it may be true that petitioner had not signed the plane ticket.

65. Even if Section 4(5) of COGSA did not list the validity and binding effect of the liability limitation clause in the bill of lading here are fully substantial on the basis alone of Article 1749 and 1750 of the Civil Code. as the consignee is the importer of the subject shipment of Dunhill cigarettes from England. Thereafter. The lower court decided to absolve the arrastre form any liability. INC. 1979. The consignee filed a complaint against the carrier demanding P315. It was found out that 90 cases of the cigarettes were missing. Clause 6 of the bills of lading issued by the carrier states to limit the latter’s liability to US$2. The carrier admitted the loss in its reply letter but alleged that the said matter is under the control of the arrastre therefore. One of these supplementary special laws is the Carriage of goods by Sea Act (COGSA). The justices of such stipulation is implicit in its giving the owner or shipper the option of avoiding accrual of liability limitation by the simple expedient of declaring the value of the shipment in the bill of lading. CITADEL LINES. Based on the investigation conducted by the arrastre. containing the cigarettes were placed in two containers due to the lack of space. the vessel “Cardigan” loaded on board at England for carriage to Manila. Razon an arrastre.The shipment arrived at the port of Manila Pier 13 and the container van was received by E. in all matters not cluttered thereby. On or about March 17. while private respondent Manila Wine Merchants. One shipment was delivered and the other. by the Code of Commerce and special laws.Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage so governed by the laws of the country of destination and the goods in question were shipped from the United States to the Philippines. made applicable to all contracts for the carriage by sea to and from the Philippines Ports in Foreign Trade by Comm.000 which is the market value of the goods. the cargo was not formally turned over by the carrier. and as ordained by the said Code. supplementary. . 180 Filbrate cartons of mixed British manufactured cigarettes called “Dunhill International Filter” & “Dunhill International Menthol”. as evidenced by a Bill of Lading. The stipulation in the bill of lading limiting the liability of Sea-Land for loss or damages to the shipment covered by said rule to US$500 per package unless the shipper declares the value of the shipment and pays additional charges is valid and binding on Cue. the carrier’s headchecker discovered that one of the container van had a different padlock and the sealed was tampered with.1979. the container van containing two shipments was stripped.00 per kilo. On May 1. Act. COURT OF APPEALS Facts: Petitioner is the general agent of the vessel “Cardigan Bay/ Straight Enterprises”. CA affirmed the decision of the lower court. vs. the liability of Sea-Land has Cue is governed primarily by the Civil Code. both of them duly padlocked and sealed by the representative of the carrier. Inc. the consignee filed a complaint against the arrastre.

The crates were shipped from Japan to Manila on board a vessel owned by petitioner’s principal. EVERETT STEAMSHIP CORPORATION vs. Upon arrival at the port of Manila. imported three crates of bus spare parts from Japan from its supplier Maruman Trading based there. Hence.467. .552. the carrier’s liability amounts only to US$4. the maximum amount stipulated in clause 18 of the BOL.00. The judgment of CA is hereby modified. An appeal was brought by petitioner only 100.500.233. Furthermore. The consignee also admits in the memorandum that the value of the goods does not appear in the bill of lading. and (3) in allowing private respondent to fully recover the full alleged value of its lost cargo. if it is reasonable and just under the circumstances. Respondent made a formal claim for the recovery of the actual value of the lost spare parts contained in the missing crates.80. Since 90 cartons were lost and the weight of said cartons is 2. and has been fairly and freely agreed upon. Petitioner now comes to SC arguing that the Court of Appeals erred (1) in ruling that the consent of the consignee to the terms and conditions of the bill of lading is necessary to make such stipulations binding upon it.60. It is provided in Clause 6 that its liability is limited to US$2. The trial court rendered judgment in favor of private respondent. Issue: Whether or not the petitioner is liable for the actual value and not the maximum value recoverable under the bill of lading.000 based on the alleged market value of the goods is erroneous. Held: Yes. destruction or deterioration of the goods is valid. (2) in holding that the carrier's limited package liability as stipulated in the bill of lading does not apply in the instant case. The bill of lading shows that 120 cartons weight 2. ordering petitioner to pay Y1. In this case. it was discovered that one of the crater was missing. COURT OF APPEALS Facts: Private respondent Hernandez Trading Co. a contract fixing the sum that may be recovered by the owner or shipper for the loss. the award of P315. the stipulation is valid. Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading. unless the shipper or owner declares a greater value. is binding.000 yen was offered by petitioner. the stipulation on the carrier’s limited liability applies.00/kilo.978 kilos or 24. Everett Orient Lines.82kilos/carton.Issue: Whether or not the stipulation limiting the liability of the carrier contained in the bill of lading is binding on the consignee. The Court of Appeals deleted the award of attorney's fees but affirmed the trial court's findings with the additional observation that private respondent can not be bound by the terms and conditions of the bill of lading because it was not privy to the contract of carriage.

Gemar to prepare his travel plan to Bombay. Prior to his departure. A stipulation in the bill of lading limiting the liability of the common carrier for the loss. goods in an amount exceeding One Hundred thousand Yen in Japanese Currency (Y100. Mahtani had to take a connecting flight to Bombay. Gemar purchased a ticket from British Airways. In the bill of lading. India.000. BRITISH AIRWAYS vs. To defeat the carrier's limited liability. had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier. the liability of the carrier under the limited liability clause stands. with extra freight paid. he discovered that . confident that upon reaching Hong Kong." The bill of lading subject of the present controversy specifically provides. the aforecited Clause 18 of the bill of lading requires that the shipper should have declared in writing a higher valuation of its goods before receipt thereof by the carrier and insert the said declaration in the bill of lading. it is required that the stipulation limiting the common carrier's liability for loss must be "reasonable and just under the circumstances. if paid. particularly Articles 1749 and 1750 of the Civil Code. unless the shipper declares or a higher value is sanctioned by law. reasonable and just.00) or its equivalent in any other currency per package or customary freight unit (whichever is least) unless the value of the goods higher than this amount is declared in writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of Lading and extra freight is paid as required.000. the same would be transferred to the BA flight bound for Bombay. Unfortunately. However. among others: 18.00) Yen. and has been freely and fairly agreed upon. These requirements in the bill of lading were never complied with by the shipper. Maruman Trading. The carrier shall not be liable for any loss of or any damage to or in any connection with. damages of cargo to a certain sum. Considering that the shipper did not declare a higher valuation. All claims for which the carrier may be liable shall be adjusted and settled on the basis of the shipper's net invoice cost plus freight and insurance premiums. to our mind. it had itself to blame for not complying with the stipulations. hence. The above stipulations are. COURT OF APPEALS Facts: Mahtani obtained the services of a certain Mr. Pursuant to the afore-quoted provisions of law. Mahtani checked in the PAL counter in Manila his two pieces of luggage containing his clothing and personal effects. however since it had no ticket flights from Manila to Bombay.Held: No. the shipper. when Mahtani arrived in Bombay. the carrier made it clear that its liability would only be up to One Hundred Thousand (Y100. Mr. The commercial Invoice does not in itself sufficiently and convincingly show that petitioner has knowledge of the value of the cargo as contended by private respondent. and in no event shall the carrier be liable for any loss of possible profits or any consequential loss.

his luggage was missing and that upon inquiry from the BA representatives, he was told that the same might have been diverted to London. After plaintiff waited for his luggage for one week, BA finally advised him to file a claim. Mahtani filed his complaint for damages. BA filed a third-party complaint against PAL alleging that the reason for the non-transfer of the luggage was due to the latter's late arrival in Hongkong, thus leaving hardly any time for the proper transfer of Mahtani's luggage to the BA aircraft bound for Bombay. RTC rendered its decision in favor of Mahtani, which CA affirmed, hence the instant petition. BA alleged that there should have been no separate award for the luggage and the contents thereof since Mahtani failed to declare a separate higher valuation for the luggage and therefore, its liability is limited, at most, only to the amount stated in the ticket. Issue: Whether or not BA is liable for the compensatory damages. Held: Yes. The contract of transportation was exclusively between Mahtani and BA. The latter merely endorsing the Manila to Hong Kong log of the former’s journey to PAL, as its subcontractor or agent. Conditions of contacts was one of continuous air transportation from Manila to Bombay. The Court of Appeals should have been cognizant of the well-settled rule that an agent is also responsible for any negligence in the performance of its function and is liable for damages which the principal may suffer by reason of its negligent act. The third-party complaint was therefore reinstated. Since the instant petition was based on breach of contract of carriage, Mahtani can only sue BA and not PAL, since the latter was not a party in the contract. The contention of BA with respect to limited liability was overruled although it is recognized in the Philippines, stating that BA had waived the defense of limited liability when it allowed Mahtani to testify as to the actual damages he incurred due to the misplacement of his luggage, without any objection. H. E. HEACOCK COMPANY vs. MACONDRAY & COMPANY, INC. Facts: The plaintiff shipped Edmonton clocks from New York to Manila on board a vessel of the defendant. The BOL has the following stipulations: 1. It is mutually agreed that the value of the goods receipted for above does not exceed $500 per freight ton, or, in proportion for any part of a ton, unless the value be expressly stated herein and ad valorem freight paid thereon. 9. Also, that in the event of claims for short delivery of, or damage to, cargo being made, the carrier shall not be liable for more than the net invoice price plus freight and insurance less all charges saved, and any loss or damage for which the carrier may be liable shall be adjusted pro rata on the said basis. The clocks were not delivered despite demands. Plaintiff claimed P420.00, the market value of the clocks, while defendant tendered only P76.36, the proportionate freight ton value. The trial court decided for the plaintiff for P226.02, the invoice value plus freight and insurance. Both appealed. The

claim of the plaintiff is based upon the argument that the clause in the bill of lading, limiting the liability of the carrier, are contrary to public order and, therefore, null and void. The defendant, on the other hand, contends that clause 1 is valid, and clause 9 should have not been applied by the lower court. Issue: May a common carrier, by stipulations inserted in the bill of lading, limit its liability for the loss of or damage to the cargo to an agreed valuation of the latter? Held: Yes. Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable. A reading of clauses 1 and 9 of the bill of lading here in question, however, clearly shows that the present case falls within the third stipulation, to wit: That a clause in a bill of lading limiting the liability of the carrier to a certain amount unless the shipper declares a higher value and pays a higher rate of freight, is valid and enforceable. Thus, if a common carrier gives to a shipper the choice of two rates, the lower of the conditioned upon his agreeing to a stipulated valuation of his property in case of loss, even by the carrier's negligence, if the shipper makes such a choice, understandingly and freely, and names his valuation, he cannot thereafter recover more than the value which he thus places upon his property. A limitation of liability based upon an agreed value to obtain a lower rate does not conflict with any sound principle of public policy; and it is not conformable to plain principles of justice that a shipper may understate value in order to reduce the rate and then recover a larger value in case of loss. SWEET LINES, INC. vs. TEVES Facts: Private respondents Atty. Tandog and Tiro, a contractors bought tickets for Voyage at the branch office of petitioner, a shipping company transporting inter-island passengers and cargoes, at Cagayan de Oro City. Respondents were to board petitioner's vessel bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel was not proceeding to Bohol, since many passengers were bound for Surigao, private respondents per advice, went to the branch office for proper relocation to another vessel. Because the said vessel was already filled to capacity, they were forced to agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." Private respondents alleged that they were, during the trip," "exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits," and that the tickets they bought at Cagayan

de Oro City for Tagbilaran were not honored and they were constrained to pay for other tickets. In view thereof, private respondents sued petitioner for damages and for breach of contract of carriage before Court of First Instance of Misamis Oriental. Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised on the condition printed at the back of the tickets, Condition No. 14, which reads: “It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu.” The motion was denied hence the instant petition. Issue: Is Condition No. 14 printed at the back of the petitioner's passage tickets purchased by private respondents, which limits the venue of actions arising from the contract of carriage to theCourt of First Instance of Cebu, valid and enforceable? Held: No. Considered in the light of circumstances prevailing in the interisland shipping industry in the country today, We find and hold that Condition No. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons first, under circumstances obligation in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets, on which Condition No. 14 is Printed in fine letters, and second, Condition No. 14 subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable passengers located in different places of the country who, under Condition No. 14, will have to file suits against petitioner only in the City of Cebu. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause inconvenience to, much less prejudice, petitioner. QUISUMBING, SR. vs. COURT OF APPEALS Facts: Norberto Quisumbing Sr. and Gunther Leoffler were among the passengers of PAL’s plane from Mactan City Cebu to Manila. There was an exchange of gunshot between a Senior NBI agent Villarin and the four armed hijackers one of which was “Zaldy” who is a suspect in the killing of Judge Valdez. Zaldy then announced to the passengers and the pilots that it was a hijacked and ordered the pilot not to send any SOS. The robbers divested the passengers of their belongings including Quisumbing who was divested with his jewelries and cash amounting to P18,650.00 and Leoffler with his watch, wallet and cash amounting to P1,700. Quisumbing suffered a shock for a gun

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. The petition is denied and appealed decision of CA is affirmed. with respect to said Civil Code article 1998. and constitutes a serious dereliction of PAL's legal duty to exercise extraordinary diligence in the vigilance over the same. INC. Firearms and grenades are brought to the plane surreptitiously. Firearms. PAN AMERICAN WORLD AIRWAYS. The four hijackers succeeded in their escape upon arrival at Manila. 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. The use of the most sophisticated electronic detection devices may have minimized hijacking but still ineffective against truly determining hijackers. He stepped out of the line only to . And. PAL was not negligent so as to overcome the force majeure nature of the hi-jacking. The Court ruled that under the facts. Issue: 1) Whether or not hijacking-robbery was force majeure. pursuant to Civil Code articles 1754. 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. 2) Whether or not PAL was negligent to overcome the hi-jacking-robbery. Hence the instant petition. Hijackers do not board an airplane through a blatant display of firepower and violent fury.. although there is an occasional use of innocent hostages who will be coldly murdered unless a plane is given to the hijackers' complete disposal..had been pointed at him by one of the hold uppers.The CFI dismissed the complaint and the CA affirmed the CFI’s decision. 998. vs." observing that: hijackers do not board an airplane through a blatant display of firepower and violent fury. and explosives are introduced into the airplane surreptitiously and with the utmost cunning and stealth. Held: 1) Yes. 2) No. "the highjacking-robbery was force majeure. particularly for failing to take positive measures to implement Civil Aeronautics Administration regulations prohibiting civilians from carrying firearms on board the plane. Rapadas protested pointing to the fact that other co-passengers were permitted to handcarry bulkier baggages. 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. Rapadas was ordered by petitioner's handcarry control agent to check-in his Samsonite attache case. dynamite. Quisumbing and Loeffler brought suit against PAL to recover the value of the property lost by them to the robbers as well as moral and exemplary damages. handgrenades. PAL could not have been faulted for want of diligence. The plaintiffs declared that their suit was instituted ". While standing in line to board the flight at the Guam airport. RAPADAS Facts: Private respondent held Passenger Ticket and Baggage Claim Check for petitioner's Flight with the route from Guam to Manila.

For fear that he would miss the plane if he insisted and argued on personally taking the valise with him. In the case at bar. The petitioner exerted efforts to locate the luggage through the Pan American World Airways-Manila International Airport (PAN AM-MIA) Baggage Service. according to the agreement between the parties. Carriage between two points within the territory of a single High Contracting Party without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention. Issue: Whether or not a passenger is bound by the terms of a passenger ticket declaring the limitations of carrier’s liability Held: Yes.go back again at the end of it to try if he can get through without having to register his attache case. The Convention governs the availment of the liability limitations where the baggage check is combined with or incorporated in the passenger ticket. safe and practical custom among air carriers to indicate beforehand the precise sums equivalent to those fixed by the Convention. 2 as follows: (2) For the purposes of this Convention. but without declaring its contents or the value of its contents. On appeal. as amended. whether or not there be a breach in the carriage or a transhipment. Refusing to accept this kind of settlement. the baggage check is combined with the passenger ticket in . The Warsaw Convention. He sent his son. Nowhere in the Warsaw Convention. The lower court ruled in favor of Rapadas after finding no stipulation giving notice to the baggage liability limitation. ("High Contracting Party" refers to a state which has ratified or adhered to the Convention.00 representing the petitioner's alleged limit of liability for loss or damage to a passenger's personal property under the contract of carriage between Rapadas and PAN AM. are situated either within the territories of two High Contracting Parties or within the territory of a single High Contracting Party if there is an agreed stopping place within the territory of another State. He then gave his attache case to his brother who happened to be around and who checked it in for him. even if that State is not a High Contracting Party. the place of departure and the place of destination. as amended. Rapadas filed the instant action for damages. par. or which has not effectively denounced the Convention [Article 40A(l)]). Nevertheless. this petition. Jorge Rapadas to request for the search of the missing luggage. is such a detailed notice of baggage liability limitations required. the expression "international carriage" means any carriage in which. Rapadas received a letter from the petitioner's counsel offering to settle the claim for the sum of $160. the same man in charge of handcarry control did not fail to notice him and ordered him again to register his baggage. Hence. Upon arriving in Manila Rapadas claimed and was given all his checked-in baggages except the attache case. specifically provides that it is applicable to international carriage which it defines in Article 1. it should become a common. However. he acceded to checking it in. the Court of Appeals affirmed the trial court decision.

Italy. Her luggage consisted of two suitcases. Pablo booked passage on petitioner airline. ALITALIA. he cannot avoid the application of the liability limitations. In attempting to avoid registering the luggage by going back to the line. was expected to be vigilant insofar as his luggage is concerned. if the passenger's journey involves an ultimate destination or stop in a country other than the country of departure. The passenger ticket complies with Article 3. She was however told by the petitioner’s personnel there at Milan that her luggage was delayed inasmuch as the same was in one of the succeeding flights from Rome to Milan. Pablo by petitioner until eleven months and four months after the institution of her action. the Court finds the provisions in the plane ticket sufficient to govern the limitations of liabilities of the airline for loss of luggage. The suitcases were not actually restored to Prof. the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage. What the petitioner is concerned about is whether or not the notice. To fulfill this engagement. The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding supplementary charges cannot justify his failure to comply with the requirement that will exclude the application of limited liability. The passenger. As earlier stated. Felipa Pablo. was invited to a meeting of the Department of Research and Isotopes of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of UN in Ispra. which it did not fail to state in the plane ticket and which it deemed to have been read and accepted by the private respondent will be considered by this Court as adequate under the circumstances of this case. IAC Facts: Dr.one document of carriage. Issue: Did petitioner acted in bad faith so as to entitle private respondent to damages? . If the passenger fails to adduce evidence to overcome the stipulations. But the other flights arriving from Rome did not have her baggage on board. Dr. ALITALIA vs. an associate professor in UP. She arrived in Milan on the day before the meeting in accordance with the itinerary and time table set for her by ALITALIA. upon contracting with the airline and receiving the plane ticket. which provides: (c) a notice to the effect that. Prudence of a reasonably careful person also dictates that cash and jewelry should be removed from checked-in-luggage and placed in one's pockets or in a handcarried Manilapaper or plastic envelope. private respondent manifested a disregard of airline rules on allowable handcarried baggages. The facts show that the private respondent actually refused to register the attache case and chose to take it with him despite having been ordered by the PANAM agent to check it in.

Pablo underwent profound distress and anxiety. The fact is. or ignored. The Warsaw Convention does not exclude liability for other breaches of contract by the carrier. it is true. and there is otherwise no special or extraordinary form of resulting injury. In the case at bar. at the prestigious international conference. which gradually turned to panic and finally despair. The Convention's provisions. the compensation for the injury suffered by Dr. tables and tabulations) that she had painstakingly labored over. recklessness. that some species of injury was caused to Dr. or as an absolute limit of the extent of that liability. Certainly. or otherwise improper conduct on the part of any official or employee for which the carrier is responsible. having gone to Rome.' Nor may it for a moment be supposed that if a member of the aircraft complement should inflict some physical injury on a passenger. Moreover. do not regulate or exclude liability for other breaches of contract by the carrier' or misconduct of its officers and employees. in bad faith.Held: No. she finally realized that she would no longer be able to take part in the conference. no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline. to be sure-with the result that she was unable to read the paper and make the scientific presentation (consisting of slides. or destruction. or for some particular or exceptional type of damage. slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death or injury to person. Pablo because petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time appointed-a breach of its contract of carriage. 'an air carrier would be exempt from any liability for damages in the event of its absolute refusal. in short. Thus: "The Convention does not thus operate as an exclusive enumeration of the instances of an airline's liability. There can be no doubt that Dr. She is not. her baggage was ultimately delivered to . and Dr. from the time she learned that her suitcases were missing up to the time when. Otherwise. which is absurd. depending on the peculiar facts presented by each case. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage. nevertheless. bad faith. of course. but without appreciable damage. As already mentioned. Neither may the Convention be invoked to justify the disregard of some extraordinary sort of damage resulting to a passenger and preclude recovery therefor beyond the limits set by said Convention. to attend which she had traveled hundreds of miles. or maliciously destroy or damage the latter's property. to her embarrassment and the disappointment and annoyance of the organizers. loss or damage to property or delay in its transport is not attributable to or attended by any wilful misconduct. the Convention might successfully be pleaded as the sole gauge to determine the carrier's liability to the passenger. belatedly. Pablo's luggage was eventually returned to her. It is in this sense that the Convention has been applied. entitled to be compensated for loss or damage to her luggage. autoradiograms or films. to comply with a contract of carriage.

inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible. may be vindicated and recognized. exercise the extraordinary diligence required? Held: Yes. not to speak of his own. which has been violated or invaded by the defendant. tardily. Not to be lightly considered must be the right to privacy to which each passenger is entitled. was injured as a consequence of the explosion of firecrackers." a barge-type oil tanker owned by the Philippine National Oil Company (PNOC) and operated by the PNOC Shipping and Transport Corporation (PNOC Shipping). as the law says. who was a passenger in appellant's Bus No. Municipality of Bay. constitutional boundaries are already in danger of being transgressed. In other words. contained in the box brought by the co-passenger. ." B. Issue: Did LTB Co. fairness demands that in measuring a common carrier's duty towards its passengers. She is however entitled to nominal damageswhich. when he protests the innocuousness of his baggage and nothing appears to indicate the contrary.00. but safely. Calling a policeman to his aid. MECENAS vs. in compelling the passenger to submit to more rigid inspection.000. having unloaded its cargo. and not for the purpose of indemnifying the plaintiff for any loss suffered-and this Court agrees that the respondent Court of Appeals correctly set the amount thereof at P40. Facts: A passenger boarded the respondents bus carrying a box which such person attested to the conductor as containing clothes and miscellaneous items. CA Facts: M/T "Tacloban City.her in Manila. after the passenger had already declared that the box contained mere clothes and other miscellaneous. He cannot be subjected to any unusual search. Laguna. 120 then making a trip within the barrio of Dita. left for Negros Occidental when it collided with a carrier ship named Don Juan. as suggested by the service manual invoked by the trial judge. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers. LAGUNA TAYABAS BUS CO. could not have justified invasion of a constitutionally protected domain. Appellee. is adjudicated in order that a right of the plaintiff. allowance must be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. as in the case at bar. but beyond this. Safety of Passengers NOCUM vs.

son and niece who were going to Bacolod City to attend a family reunion boarding the Don Juan. Santisteban to supervise his officers and crew in the process of abandoning the ship and his failure to avail of measures to prevent the too rapid sinking of his vessel after collision. The record shows that the "Don Juan" sank within ten (10) to fifteen (15) minutes after initial contact with the "Tacloban City. but the four members of private respondents' families were never found. CA Facts: Private respondent Ramon Miranda purchased from the Negros Navigation Co. The officer-on-watch in the "Don Juan" admitted that he had failed to inform Capt. Under these circumstances. no such thing as "offduty" hours for the master of a vessel at sea that is a common carrier upon whom the law imposes the duty of extraordinary diligence. an oil tanker owned by the Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport Corporation (PNOC/STC). NEGROS NAVIGATION CO. a presumption of gross negligence on the part of the vessel (her officers and crew) and of its ship-owner arises. were indicative of the kind and level of diligence exercised by Capt. Inc. the behaviour of the captain of the "Don Juan" in tills instanceplaying mahjong "before and up to the time of collision constitutes behaviour that is simply unacceptable on the part of the master of a vessel to whose hands the lives and welfare of at least seven hundred fifty (750) passengers had been entrusted.. whose bodies were never found despite intensive search by petitioners. the sea was calm. Whether or not Capt. the spouses Perfecto Mecenas and Sofia Mecenas. such failures doubtless contributed materially to the consequent loss of life and. Don Juan collided off the Tablas Strait in Mindoro.When the collision occurred. four special cabin tickets for his wife. with the M/T Tacloban City. both realistically speaking and in contemplation of law. As a result. . Santisteban in respect of his vessel and his officers and men prior to actual contact between the two (2) vessels. moreover. As a result of this collision. the M/V Don Juan sank. there is. did not cause the collision by themselves. the M/V "Don Juan" sank and hundreds of its passengers perished. The bodies of some of the victims were found and brought to shore. While the failure of Capt. Santisteban not only of the "imminent danger of collision" but even of "the actual collision itself " There is also evidence that the "Don Juan" was carrying more passengers than she had been certified as allowed to carry. Among the ill-fated passengers were the parents of petitioners. the weather fair and visibility good. Several of her passengers perished in the sea tragedy. Santisteban was "off-duty" or "onduty" at or around the time of actual collision is quite immaterial. Issue: Whether or not the respondents were negligent? Held: Yes. vs. daughter.

FORTUNE EXPRESS vs. Saudi Arabia. was contracted for employment in Jeddah. Initially. CA . the duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel.Issue: Whether or not the petitioners exercised the extraordinary diligence required? Held: No. vs. KOREAN AIRLINES CO. Lapuz was supposed to leave via Korean Airlines. They are entitled to be protected against personal misconduct. When he later asked for another booking. It invites people to avail themselves of the comforts and advantages it offers. Passengers have the right to be treated by the carrier's employees with kindness. The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger manifest of KAL for its Flight No. As with the Mecenas case. he was "wait-listed. This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation. CA Facts: Juanito C. Also. Issue: Carriage? Whether or not KAL committed a breach of the Contract of Held: Yes. KE 903. his ticket was canceled by KAL. KAL thus committed a breach of the contract of carriage between them when it failed to bring Lapuz to his destination. courtesy and due consideration." which meant that he could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. Consequently. So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. he was unable to report for his work in Saudi Arabia within the stipulated 2-week period and so lost his employment. When two of such passengers did not appear. respect. injurious language. The contract of air carriage generates a relation attended with a public duty. an automotive electrician. His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that flight. The business of the carrier is mainly with the traveling public. indignities and abuses from such employees. As he was about to board the said airline a KAL officer pointed to him and shouted "Down! Down!" He was thus barred from taking the flight. Lapuz. Lapuz and another person by the name of Perico were given the two unclaimed seats. this Court found petitioner guilty of negligence in (1) allowing or tolerating the ship captain and crew members in playing mahjong during the voyage. (2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry more passengers than it was allowed to carry.

it is clear that because of the negligence of petitioner's employees. Lanao del Norte while on its way to Iligan City. The Constabulary officer found out that certain Maranaos were planning to take revenge on the petitioner by burning some of its buses. . Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers. 1989. GATCHALIAN vs. No contributory negligence could be attributed to the deceased. A bus of petitioner figured in an accident with a jeepney in Kauswagan. such as frisking passengers and inspecting their baggages. Under the circumstances. preferably with non-intrusive gadgets such as metal detectors. the seizure of the bus by Mananggolo and his men was made possible. Lanao del Norte. that the necessary precautions would be taken. While the bus was running along the highway in Barrio Payocpoc. In the present case. Caorong pleaded with the Maranaos to spare the bus driver but the Maranaos shot him. They started pouring gasoline inside the bus. The acts of Maranaos could not be considered as caso fortuito because there was already a warning by the PC.Facts: Petitioner is a bus company in northern Mindanao. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. simple precautionary measures to protect the safety of passengers. resulting in the death of several passengers of the jeepney. Art. petitioner did nothing to protect the safety of its passengers. including two Maranaos. before allowing them on board could have been employed without violating the passenger's constitutional rights. A passenger Atty. Bauang. The armed men actually allowed deceased to retrieve something from the bus. On November 22. as the other held the passenger at bay with a handgun then ordered the passenger to get off the bus. if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. DELIM Facts: Petitioner Reynalda Gatchalian boarded respondent's mini bus. three armed Maranaos who pretended to be passengers. seized a bus of petitioner at Linamon. Issue: Whether or not the petitioners were guilty of a breach of the contract of carriage? Held: Yes. Diosdado Bravo.

For a waiver to be valid and effective. A waiver of the kind invoked by appellant must be clear and unequivocal. if that integrity is violated or diminished. turned turtle and fell into a ditch as a result petitioner sustained injuries. it must not be contrary to law. resulting from the infliction of injury upon her. the vehicle bumped a cement flower pot on the side of the road. coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers. we must construe any such purported waiver most strictly against the common carrier. As she and several others were confined in a hospital. Held: The record yields affirmative evidence of fault or negligence on the part of respondent common carrier. The driver's reply necessarily indicated that the same "snapping sound" had been heard in the bus on previous occasions. shortly thereafter. is a violation of bodily integrity. constituted wanton disregard of the physical safety of the passengers. A cursory examination of the purported waiver will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus. Because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence. petitioner Gathalian filed a complaint. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. especially one on the face of the woman. . The driver did not stop to check if anything had gone wrong with the bus when the snapping sound was heard and made known to him by the passengers. morals. and hence gross negligence on the part of respondent and his driver. Issue: Whether or not the private respondent were negligent. A person is entitled to the physical integrity of his or her body. Notwithstanding this document. instead told them that it was normal. public policy or good customs. respondent Delim paid for the hospitalization expenses and had the passengers sign a waiver stating that they were no longer interested to file a complaint. All that said document proves is that they expressed a "desire" to make the waiver which obviously is not the same as making an actual waiver of their right. actual injury is suffered for which actual or compensatory damages are due and assessable. went off the road. giving raise to a legitimate claim for restoration to her condition ante. Such a sound is obviously alien to a motor vehicle in good operating condition. "a snapping sound" was suddenly heard at one part of the bus and. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before mishap. A scar.Union. and even a modicum of concern for life and limb of passengers dictated that the bus be checked and repaired.

Pangasinan. The bus driver's conduct is not a substantial factor in bringing about harm to the . Respondents contend that the proximate cause of Mario's death was his recklessness and gross negligence in jumping out of the bus while in motion. Rosales. he fell and died as a result.DEL CASTILLO vs. a deaf-mute. invading and eventually stopping on the western lane and was hit by the petitioner company’s bus causing the death of Catalina Pascua and two other passengers. Issue: Wether or not the Doctrine of Last Clear Chance applies in the case at bar? Held: No. IAC Facts: Catalina Pascua with several others boarded the jeep owned by spouses Isidro Mangune and Guillerma Carreon and driven by Tranquilino Manalo bound for Carmen. The conductor was apprised of the fact that Mario del Castillo was deaf and dumb. so it was running in an unbalanced position. It appears proven that the defendant corporations failed to exercise the diligence that was their duty to observe according to Articles 1733 and 1755. common carriers are responsible for the death of their passengers (Articles 1764 and 2206 of the Civil Code). as a result of which. Held: No. JAYMALIN Facts: Mario del Castillo. The principle about "the last clear" chance. the jeepney which was then running on the eastern lane (its right of way) made a U-turn. PHILIPPINE RABBIT BUS LINES vs. son of plaintiff Severo del Castillo boarded a bus of private respondent bus line. In this he failed. Issue: Whether or not respondents exercised extraordinary diligence." It is the rule under the substantial factor test that if the actor's conduct is a substantial factor in bringing about harm to another. 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. With this knowledge the conductor should have taken extra-ordinary care for the safety of the said passenger. Upon reaching Tarlac the right rear wheel of the jeepney was detached. This liability includes the loss of the earning capacity of the deceased. Manalo stepped on the brake. 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. Upon alighting from the bus. the fact that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable.

even if such breach be due to the negligence of his driver. the carrier is exclusively responsible therefore to the passenger. which set aside the trial court’s decision. Cavite. Metro Manila. and a Mazda passenger bus along the national road at Calibuyo. only defendants Federico del Pilar and Edilberto Montesiano. to Baclaran. respectively. is yet within the speed limit allowed in highways. which Novelo sold to Magtibay on November 8. and in the event of contractual liability. under a franchise. Tanza. BUSTAMANTE vs. the cargo truck was driven by defendant Montesiano and owned by defendant Del Pilar. and which the latter transferred to Serrado (Cerrado) on January 18. several passengers of the bus were thrown out and died as a result of the injuries they sustained. if We make the driver jointly and severally liable with the carrier. In other words. owner and driver. After a careful perusal of the circumstances of the case. Hence the present petition. while the passenger bus was driven by defendant Susulin. with a line from Naic. Secondly. It could not be determined from the evidence that it was only the negligent act of one of them which was the proximate cause of the collision. In view of this. Due to the impact. 1983. the trial court reached the conclusion "that the negligent acts of both drivers contributed to or combined with each other in directly causing the accident which led to the death of the aforementioned persons. of the sand and gravel truck have interposed an appeal before the respondent Court of Appeals. ripping off the said wall from the driver's seat to the last rear seat. the carrier can neither shift his liability on the contract to his driver nor share it with him. CA Facts: A collision occurred between a gravel and sand truck. The vehicle was registered in the name of defendant Novelo but was owned and/or operated as a passenger bus jointly by defendants Magtibay and Serrado. that would make the carrier's liability personal instead of merely vicarious and consequently. Cavite. entitled to recover only the share which corresponds to the driver. the liability of the two drivers for their negligence must be solidary. Firstly. for his driver's negligence is his. the contract of carriage is between the carrier and the passenger. During the incident. assuming such calculation to be correct. and several others. and vice versa. From said decision. It cannot be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour. Among those killed were Rogelio Bustamante and his spouse and children. 1981. The front left side portion (barandilla) of the body of the truck sideswiped the left side wall of the passenger bus. . The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage.passengers of the jeepney. The rationale behind this is readily discernible. Paranaque. contradictory to the explicit provision of Article 2181 of the New Civil Code.

As the doctrine is usually stated. or according to some authorities. In other words. pp.Issue: Whether the respondent court has properly and legally applied the doctrine of "last clear chance" in the present case despite its own finding that appellant cargo truck driver Edilberto Montesiano was admittedly negligent in driving his cargo truck very fast on a descending road and in the presence of the bus driver coming from the opposite direction. 2d. All premises considered. (Sangco. the doctrine of last clear chance means that even though a person's own acts may have placed him in a position of peril. since the case at bar is not a suit between the owners and drivers of the colliding vehicles but a suit brought by the heirs of the deceased passengers against both owners and drivers of the colliding vehicles. the Court is convinced that the respondent Court committed an error of law in applying the doctrine of last clear chance as between the defendants. aware of the plaintiffs peril.. Held: The respondent court adopted the doctrine of "last clear chance. stated broadly. Lara boarded with several others a pick-up bound for Davao and were seated at the back on an improvised bench. and an injury results. The defendant is engaged in the business of exporting logs from his lumber concession in Cotabato. is that the negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the defendant. Jur. Lara went to said concession upon instructions of his chief to classify the logs of defendant which were about to be loaded on a ship anchored in the port of Parang. Lara accidentally fell from the pick-up and as a result he suffered serious injuries which lead to his death. if he. a person who has the last clear chance or opportunity of avoiding an accident. p. the injured person is entitled to recovery. by exercising reasonable care and prudence." The doctrine. notwithstanding the negligent acts of his opponent or that of a third person imputed to the opponent is considered in law solely responsible for the consequences of the accident. the respondent court erred in absolving the owner and driver of the cargo truck from liability. The practical import of the doctrine is that a negligent defendant is held liable to a negligent plaintiff. 4th Ed. Issue: Whether or not the respondent failed to exercise the ordinary diligence required? . should have been aware of it in the reasonable exercise of due case. LARA vs. Therefore. Torts and Damages. had in fact an opportunity later than that of the plaintiff to avoid an accident (57 Am.. 165). VALENCIA Facts: The deceased was an inspector of the Bureau of Forestry stationed in Davao. might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff's negligence. 1986. 798-799). or even to a plaintiff who has been grossly negligent in placing himself in peril.

Held: Yes. the son. The mother. Thus. and after wrecking the bridge's wooden rails. In this connection. Issue: Whether or not the carrier is liable Held: While the carrier is not an insurer of the safety of the passengers. "The rule is established by weight of authority that the owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in its operation. due to the Mt. The owner of the vehicle in the case at bar is only required to observe ordinary care. Pinatubo eruption rendered NAIA inaccessible to . was drowned. However. The truck entered a wooden bridge. NECESSITO vs. hence. the son sustained injuries. the carrier cannot be held liable. PARAS Facts: Severina Garces and her one-year old son boarded passenger auto truck of the Philippine Rabbit Bus Lines. JAPAN AIRLINES vs. Severina Garces.the truck fell on its right side into a creek where water was breast deep. the driver lost control. The mother. Severina Garces. it should nevertheless be held to answer for the laws its equipment if such flaws were at all discoverable. private respondents went to the airport to take their flight to Manila. A passenger must observe the diligence of a father of a family to avoid injury to himself which means that if the injury to the passenger has been proximately caused by his own negligence. Upon arrival at Narita private respondents were billeted at Hotel Nikko Narita for the night. the truck fell on its right side into a creek where water was breast deep. he has no remedy against him. and not unreasonably to expose him to danger and injury by increasing the hazard of travel. was drowned. The rationale of the carrier's liability is the fact that the passenger has no privity with the manufacturer of the defective equipment. CA Facts: Private respondents boarded the JAL flights to Manila with a stop over at Narita Japan at the airlines' expense. The next day. while the carrier usually has. the manufacturer of the defective appliance is considered in law the agent of the carrier. and the good repute of the manufacturer will not relieve the carrier from liability. and is not in duty bound to exercise extraordinary diligence as required by our law. The owner and driver of a vehicle owes to accommodation passengers or invited guests merely the duty to exercise reasonable care so that they may be transported safely to their destination. but the front wheels swerved to the right.

not a truck helper being a brother-in-law of the driver of said truck and hence must suffer the damages. the consequences of which the passenger must assume or expect. The trial court decided in favor of the plaintiff. . cannot be charged to JAL. 1991. LAYUGAN vs. Issue: W/N defendant is absolved by virtue of the doctrine of res ipsa loquitur. Bagabag. Nueva Vizcaya. the Plaintiff and a companion were repairing the tire of their cargo truck which was parked along the right side of the National Highway. alleging that while at Baretbet. Issue: Whether or not JAL was obligated accommodation expenses due to the force majeure. Corollarily. whatever losses or damages in the form of hotel and meal expenses the stranded passengers incurred. private respondents' trip to Manila was cancelled indefinitely. when JAL was prevented from resuming its flight to Manila due to the effects of Mt. While JAL was no longer required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous event. Layugan filed an action for damages against Godofredo Isidro. Defendant countered that the plaintiff was merely a bystander. Petitioner JAL reneged on its obligation to look after the comfort and convenience of its passengers when it declassified private respondents from "transit passengers" to "new passengers" as a result of which private respondents were obliged to make the necessary arrangements themselves for the next flight to Manila. Pinatubo eruption. IAC Facts: Pedro T. plaintiff was injured and hospitalized. JAL then booked another flight fort the passengers and again answered for the hotel accommodations but still the succeeding flights were cancelled. driven recklessly by Daniel Serrano bumped the plaintiff. to answer for the Held: No. adverse weather conditions or extreme climatic changes are some of the perils involved in air travel. It has been held that airline passengers must take such risks incident to the mode of travel. that as a result.airline traffic. Hence. Yet it is undeniable that JAL assumed the hotel expenses of respondents for their unexpected overnight stay on June 15. JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila. which was reversed by the CA. that defendant's truck." the general rule is that he cannot be held liable for damages for non-performance. hence the present petition. In this regard. there is no question that when a party is unable to fulfill his obligation because of "force majeure.

Respondent Isidro posits that any immobile object along the highway. Moreover. as found by the respondent court. and other peculiar circumstances of the occasion. like that required by law. to exercise extreme care so that the motorist negotiating the road would be properly forewarned of the peril of a parked vehicle. who claims to be a helper of the truck driver. like a parked truck. it affords reasonable evidence. plaintiffs and their children alighted from the bus and the father led them to a shaded spot . Isidro submits that the burden of proving that care and diligence were observed is shifted to the petitioner. that the driver was licensed. and could have repaired it and thus the accident could have been avoided. are not sufficient to destroy the finding of negligence of the Regional Trial Court given the facts established at the trial The private respondent or his mechanic. the petitioner herein. If he did he could have discovered earlier that the brake fluid pipe on the right was cut. in the absence of an explanation by the defendant. Isidro proffers that the petitioner must show to the satisfaction of a reasonable mind that the driver and he (petitioner) himself. that the accident arose from want of care. LA MALLORCA vs. as in the case at bar. his (Isidro's) Isuzu truck had a right to be on the road. who must be competent. and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care. He argues that since the parked cargo truck in this case was a threat to life and limb and property. or.Held: No. as previously claimed. boarded a La Mallorca bus. It is clear that the driver did not know his responsibilities because he apparently did not check his vehicle before he took it on the road. together with their minor children. under the doctrine of Res ipsa loquitur. the fact that the private respondent used to instruct his driver to be careful in his driving. DE JESUS Facts: Plaintiffs husband and wife. it was incumbent upon the driver as well as the petitioner. In the light of the circumstances obtaining in the case. and the fact that he had no record of any accident. Isidro concludes. poses serious danger to a moving vehicle which has the right to be on the highway. so to speak. place. Upon arrival at their destination. by some other adequate means that would properly forewarn vehicles of the impending danger that the parked vehicle posed considering the time. Res ipsa loquitur is a doctrine which states thus: "Where the thing which causes injury is shown to be under the management of the defendant. who was fixing the flat tire of the said truck. provided an early warning device. while the immobile cargo truck had no business. should have conducted a thorough inspection of his vehicle before allowing his driver to drive it. would. evoke the presumption of negligence on the part of the driver of the parked cargo truck as well as his helper. to our mind. to be there. for. we hold that Isidro failed to prove that the diligence of a good father of a family in the supervision of his employees which would exculpate him from solidary liability with his driver to the petitioner. Respondent Isidro's contention is untenable. Likewise. Absent such proof of care.

Said vessel arrived at Pier 4. did not put off the engine. Held: Yes. bound for Manila. holding La Mallorca liable for quasi-delict. and the passengers therein disembarked. Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel. After said vessel had landed. Raquel. La Mallorca contended that when the child was killed. It is also averred that since the crane operator was not an . Firstly. pinning him between the side of the vessel and the crane. While the father was still on the running board awaiting for the conductor to give his baggage. at the port at San Jose. 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. He was followed by her daughter Raquel. CA Facts: Anacleto Viana boarded the vessel owned by defendant ABOITIZ. Private respondents Vianas filed a complaint for damages against Aboitiz for breach of contract of carriage. the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement between the third party defendant Pioneer Stevedoring Corporation and defendant Aboitiz. although stopping the bus. In this case.about 5 meters away from the vehicle. he started to run the bus even before the bus conductor gave him the signal and while the latter was unloading cargo. to be determined from the circumstances. He was thereafter brought to the hospital where he later died. she was no longer a passenger and therefore the contract of carriage had terminated. Issue: Whether or not the deceased is considered to be still a passenger of the bus to which the petitioner could be held liable. The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one hour after the passengers of said vessel had disembarked. who was near the bus. the driver. Secondly. was run over and killed. a gangplank having been provided connecting the side of the vessel to the pier. The father returned to the bus to get a piece of baggage which was not unloaded. Instead of using said gangplank Anacleto Viana disembarked on the third deck which was on the level with the pier. it started operation by unloading the cargoes from said vessel. Manila. Here the presence of said passengers near the bus was not unreasonable and the duration of responsibility still exists. The Lower Court rendered judgment for the plaintiff which was affirmed by CA. North Harbor. While the crane was being operated. ABOITIZ SHIPPING CORPORATION vs. Occidental Mindoro. the bus started to run so that the father had to jump. went back to the vessel. the vessel was completely under the control of Pioneer as the which handled the unloading of cargoes from the vessel of Aboitiz. there was no utmost diligence. Aboitiz denied responsibility contending that at the time of the accident. It is a recognized rule that the relation between carrier and passengers does not cease at the moment the passenger alights from the carrier’s premises.

Hence. The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if. common carriers like Aboitiz. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. his presence in petitioner's premises was not without cause. Hence the instant petition. Parenthetically. the victim Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death. and the corresponding presumption of negligence foisted on. Pioneer had taken the necessary safeguards insofar as its unloading operations were concerned. Consequently. Thus.employee of Aboitiz. a fact which appears to have been accepted by the plaintiff therein by not impleading Pioneer as a defendant. The victim had to claim his baggage which was possible only one 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. When the accident occurred. the relationship will not ordinarily terminate until the passenger has. Even if he had already disembarked an hour earlier. Held: No. the evidence does not show that there was a cordon of drums around the perimeter of the crane. such person remains in the carrier's premises to claim his baggage. Issue: Whether or not the responsibility of Aboitiz to the victim ceased when it disembarked from the vessel. which he had every right to do. Pioneer is not within the ambit of the rule on extraordinary diligence required of. Aboitiz is negligent. 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. Judgment is rendered in favor of the plantiffs. under the foregoing circumstances. the victim was in the act of unloading his cargoes. The trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz to preponderantly established a case of negligence against the crane operator which the court ruled is never presumed. after reaching his destination. the latter cannot be held liable under the fellow-servant rule. It also adverted to the fact that the alleged presence of visible warning signs in the vicinity was disputable and not indubitably established. for example. 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. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. As found by the Court of Appeals. safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. Once created. from petitioner's vessel. and includes a reasonable time to see after his baggage and prepare for his departure. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers. as claimed by petitioner. and likewise inceptively by Aboitiz by filing its third-party complaint only after ten months from the institution of the suit against it. .

who admitted that immediately before the collision and after he rounded a curve on the highway. Sec. its driver Felix Angeles. driver of the Bulletin delivery van. having two or more lanes for movement of traffic in one direction. 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. Bataan. 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. within a business or residential district. Hence this petition. Held: Yes. the trial court held that BULLETIN and Felix Angeles are jointly and severally liable. otherwise known as The Land Transportation and Traffic Code. 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. and the N. nor upon a curve in the highway.V.MALLARI SR. 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 widow of the victim. Netherlands Insurance Company. The trial court found that the proximate cause of the collision was the negligence of Felix Angeles. Hence. Dinalupihan. and Alfredo Mallari Jr. Issue: Whether or not petitioners are negligent. 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. where the driver's 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. that the collision occurred immediately after petitioner Mallari Jr. (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. and owned by his co-petitioner Alfredo Mallari Sr. CA Facts: The passenger jeepney driven by petitioner Alfredo Mallari Jr. the driver of a vehicle may overtake or pass another vehicle on the right. (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. filed a complaint for damages against petitioners and also against BULLETIN. Restrictions on overtaking and passing. 41. vs. respondent BULLETIN. (a) and (b). the appellate court ruled that the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr. overtook a vehicle in front of it while traversing a curve on the highway. of RA 4136 as amended. It also dismissed the complaint against the other defendants Alfredo Mallari Sr. This act of overtaking was in clear violation of Sec. The Court of Appeals correctly found. 41. pars. Instead. collided with the delivery van of respondent Bulletin along the National Highway in Barangay San Pablo. 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 .

1756 of the Civil Code. In the instant case. pursuant to Art. 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. Sagada. petitioner Alfredo Mallari Jr. After trial. Said jeep fell over a precipice in the abovementioned place causing thereby the death of Elena Awichen. When a motor vehicle is approaching or rounding a curve. under Art. 1755 of the Civil Code. the carrier jeepney owned by Mallari Sr. 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. BAYASEN vs. by his own admission. CA Facts: Petitioner was charged of Homicide Thru Reckless Imprudence. it is liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees. Issue: Whether or not petitioner is entitled to acquittal on the ground that the finding of the Court of Appeals that the proximate cause of the death of . Clearly. hence the instant petition. a passenger of the jeepney.see to it that the road is clear and not to proceed if he cannot do so in safety. 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. The decision was affirmed in CA. Clearly. assumed the express obligation to transport the passengers to their destination safely and to observe extraordinary diligence with due regard for all the circumstances. 1759 of the same Code. careless and imprudent manner. was the sole negligence of the driver of the passenger jeepney. Mountain Province in a negligent. who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules. drove along Suyo Municipal Road. the proximate cause of the collision resulting in the death of Israel Reyes. 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 vehicles in front of it at a curve in the highway. Under Art.. As found by the appellate court. 2185 of the Civil Code. and any injury or death that might be suffered by its passengers is right away attributable to the fault or negligence of the carrier. Further. petitioners failed to present satisfactory evidence to overcome this legal presumption. petitioner Mallari Jr. by the contract of carriage. Moreover. unless it proves that it observed extraordinary diligence. being then the driver and person in-charge of Rural health Unit Jeep. unless there is proof to the contrary. the petitioner was found guilty of the charge. a common carrier is presumed to have been at fault or to have acted negligently. Under Art. 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. in case of death or injuries to passengers.

without fault on account of the manner of handling the car.e.Awichen was the petitioner's "negligence in driving at an unreasonable speed" is openly contrary to the evidence of the prosecution. 1990. He is. he immediately booked his Los Angeles-Manila return ticket with the PAL office. Since the PAL agents are not privy to the said Agreement and petitioner knew that a written request to the legal counsel of PAL was . therefore. 1990. for breach of contract of carriage. 1990. CERVANTES vs. 1990 flight. Issue: Whether or not the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner's ticket. and considering that he would be there on April 2. On March 23." Petitioner Cervantes filed a Complaint for Damages. because as he said. the lower court’s decision was upheld. he was not allowed to board. It is a well known physical tact that cars may skid on greasy or slippery roads. i. and it was confirmed for the April 2. But the said complaint was dismissed for lack of merit. his guilt of the crime charged has not been proven beyond reasonable doubt. CA Facts: PAL issued to the petitioner a round trip plane ticket for ManilaHonolulu-Los Angeles-Honolulu-Manila. the petitionerdriver who skidded could not be regarded as negligent. Skidding means partial or complete loss of control of the car under circumstances not necessarily implying negligence. In fact. until March 27. The negligence of the petitioner not having been sufficiently established. he wanted to play safe and avoid the embankment. be charged to the petitioner. he promptly drove it to the left hand side of the road. four days before the expiry date of subject ticket. It is obvious that the proximate cause of the tragedy was the skidding of the rear wheels of the jeep and not the "unreasonable speed" of the petitioner because there is no evidence on record to prove or support the finding that the petitioner was driving at "an unreasonable speed". parallel to the slope of the mountain. The PAL personnel concerned marked the following notation on his ticket: "TICKET NOT ACCEPTED DUE EXPIRATION OF VALIDITY. On April 2. which ticket expressly provided an expiry of date of one year from issuance. hence the instant petition. when the petitioner checked in at the PAL counter in San Francisco. entitled to acquittal.. Held: Yes. the skidding being an unforeseen event. so that the petitioner had a valid excuse for his departure from his regular course. as in the instant case. Held: No. petitioner made arrangements with PAL for him to board the flight In San Francisco instead of boarding in Los Angeles. On appeal. Upon his arrival in Los Angeles on the same day. 1990. No negligence as a matter of law can. Upon learning that the same PAL plane would make a stop-over in San Francisco. Under the particular circumstances of the instant case. the petitioner used it. the moment he felt that the rear wheels of the jeep skidded. It may occur without fault. therefore.

Just as she was doing so.necessary. Neither can the claim for exemplary damages be upheld. for quasi-delict. Negros Occidental. and the existence of bad faith is established. As a result. the acts an agent beyond the scope of his authority do not bind the principal. Furthermore. Such kind of damages is imposed by way of example or correction for the public good. he is to blame. the ruling of the lower court was reversed on the ground that Sunga's cause of action was based on a contract of carriage. alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a common carrier. in which the same court held Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney. What the employees of PAL did was one of simple negligence. filed by Calalas against Salva and Verena. As she was seated at the rear of the vehicle. Sunga filed a complaint for damages against Calalas. 3490). according to the Court of Appeals. filed a third-party complaint against Francisco Salva. acted without authority when they confirmed the flights of the petitioner. and that the common carrier failed to exercise the diligence required under . No injury resulted on the part of petitioner because he had a back-up ticket should PAL refuse to accommodate him with the use of subject ticket. and is not entitled to recover damages from the agent. Under Article 1989 of the New Civil Code. holding that it was the driver of the Isuzu truck who was responsible for the accident. the jeepney stopped to let a passenger off. the owner of the Isuzu truck. Petitioner knew there was a strong possibility that he could not use the subject ticket. Should there be a finding of bad faith. As the jeepney was filled to capacity of about 24 passengers. then a college freshman majoring in Physical Education at the Siliman University. when the third person (herein petitioner) knows that the agent was acting beyond his power or authority. Sunga gave way to the outgoing passenger. On the way to Poblacion Sibulan. unless the latter undertook to secure the principal's ratification. we are of the opinion that it should be on the petitioner. It took cognizance of another case (Civil Case No. On appeal to the Court of Appeals. Calalas. on the other hand. unless the latter ratifies the same expressly or impliedly. took a passenger jeepney owned and operated by petitioner Vicente Calalas. If the said third person is aware of such limits of authority. CA Facts: Private respondent Eliza Sunga." a wooden stool at the back of the door at the rear end of the vehicle. In awarding moral damages for breach of contract of carriage. CALALAS vs. he cannot use what the PAL agents did to his advantage. the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability. The said agents. the principal cannot be held liable for the acts of the agent. an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. Sunga was injured. Sunga was given by the conductor an "extension seat. not quasi-delict. so much so that he bought a back-up ticket to ensure his departure.

using the utmost diligence of very cautious persons. In quasi-delict. 3490 that the negligence of Verena was the proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers. did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide. where there is a pre-existing contractual relation between the parties. failed to transport his passenger safely to his destination. the negligence or fault should be clearly established because it is the basis of the action. Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway. But. Art. He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito. this petition. These are violations of the Land Transportation and Traffic Code. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. There is no basis for the contention that the ruling in Civil Case No. The appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for damages to Sunga. In case of death or injuries to passengers. whereas in breach of contract. As a general rule. moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not one of the items . Petitioner further assails the award of moral damages to Sunga on the ground that it is not supported by evidence. not in actions involving breach of contract. in this case the common carrier. and the function of the law is merely to regulate the relation thus created. the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor. 3490. 1733 and 1755 of the Code. with due regard for all the circumstances" as required by Art. In such a case. Petitioner contends that the ruling in Civil Case No. the obligation is created by law itself. 1755? We do not think so. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. its rear portion being exposed about two meters from the broad shoulders of the highway. finding Salva and his driver Verena liable for the damage to petitioner's jeepney. Hence. It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. Issue: Should be petitioner be absolved if his contentions are considered? Held: No. some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. Insofar as contracts of carriage are concerned. The doctrine of proximate cause is applicable only in actions for quasi-delict.the Civil Code. First. it is the parties themselves who create the obligation. the jeepney was not properly parked. The petitioner's driver took in more passengers than the allowed seating capacity of the jeepney. should be binding on Sunga. This provision necessarily shifts to the common carrier the burden of proof. Now. and facing the middle of the highway in a diagonal angle.

2219 of the Civil Code. such damages are recoverable: (1) in cases in which the mishap results in the death of a passenger. it was found out that as the two vehicles approached the junction. filed this civil action for damages against petitioners. owners and managers are responsible for damages caused by their employees. This contention has no factual basis. As a professional driver operating a public transport bus. the motorcycle driver should have slowed down until he had been overtaken. Apart from the institution of criminal charges against Pestaño. The lower court found petitioners liable. Petitioners contend that Pestaño was not under any obligation to slow down when he overtook the motorcycle. they were hit by a passenger bus driven by Pestaño and owned by Metro Cebu which had tried to overtake them. Seeing that the left side of the road was clearly visible and free of oncoming traffic. as provided in Art. as provided in Art.enumerated under Art. As an exception. based on the testimony of the witnesses. They further contend that the motorcycle was not in the middle of the road nearest to the junction but was on the inner lane. wherein. This explains why the damages on the bus were all on the right side . Cebu. 1764. 2220. Said decision was affirmed by CA.the right end of the bumper and the right portion of the radiator grill were bent and dented. hence this petition. the victim raised his left arm to signal that he was turning left to Tabagon. Tabagon. there is no legal basis for awarding moral damages since there was no factual finding by the appellate court that petitioner acted in bad faith in the performance of the contract of carriage. SC disagreed with this contention and considered the findings of CA. Riding with him was his friend Manuel Romagos. Having given way to the bus.In this case. because the deceased had given way to him upon hearing the bus horn. The cases were consolidated. Issue: Whether or not petitioner Pestaño was negligent Held: Yes. When an injury is caused by the negligence of a servant or an employee. Pestaño accelerated his speed to pass the motorcycle. sending the motorcycle and its passengers hurtling upon the pavement. Respondent-heirs. Pestaño should have anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised extreme caution. PESTAÑO vs. Petitioners also aver that the CA was wrong in attributing the accident to a faulty speedometer and in implying that the accident could have been avoided had this instrument been properly functioning. As they came upon a junction where the highway connected with the road leading to Tabagon. and (2) in the cases in which the carrier is guilty of fraud or bad faith. Under Articles 2180 and 2176 of the Civil Code. SUMAYANG Facts: Ananias Sumayang was riding a motorcycle along the national highway in Ilihan. 2206(3) of the Civil Code. but that the latter and his companion were thrown off the motorcycle after it was bumped by the overspeeding bus. in relation to Art. the master or .

hence the instant petition. being both unforeseeable and inevitable under the given circumstances. because of this. the responsibility of the carrier extends only to those acts that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. GILLACO vs. MARANAN vs.employer is presumed to be negligent either in the selection or in the supervision of that employee. was a passenger in the early morning train of the Manila Railroad Company from Calamba. The latter had no means to ascertain or anticipate that the two would meet. nor could it reasonably forsee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. When the train reached the Paco Railroad station. upon seeing him inside the train coach. husband of the plaintiff. since the contract of transportation obligates the carrier to transport a passenger safely to his destination. where he was going to report for duty. Tomas Gillaco. a train guard of the Manila Railroad Company happened to be in said station waiting for the same train which would take him to Tutuban Station. the act of the train guard of the Manila Railroad Company in shooting the passenger (because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely unforseeable by the Manila Railroad Co. In the present case. Issue: Whether or not appellant could be held liable for the acts of its employee. A complaint for damages was filed by the victim’s widow. Tomas died. 1105 of the old Civil Code (which is the law applicable). Devesa was convicted of homicide. Devesa shot Gillaco with the carbine furnished to him by the Manila Railroad Company for his use as such train guard. no liability attaches to it as employer of the Emilio Devesa because the crime was not committed while the slayer was in the actual performance of his ordinary duties and service and that no negligence on appellant's part was shown. Emilio Devesa. While a passenger is entitled to protection from personal violence by the carrier or its agents or employees. and pursuant to established doctrine. Emilio Devesa had a long standing personal grudge against Tomas Gillaco. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee. Held: No. Damages were awarded to the plaintiff. the resulting breach of the company's contract of safe carriage with the deceased was excused thereby. MANILA RAILROAD COMPANY Facts: Lieut. The shooting in question was therefore "caso fortuito" within the definition of Art. Laguna to Manila. Appellant's contention is that. PEREZ .

The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from liability. it is enough that the assault happens within the course of the employee's duty. the basis of the carrier's liability for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the passenger safely. upheld by the majority and also by the later cases. 1759. Manila Railroad Co. In the Gillaco case. The Civil Code provisions on the subject of Common Carriers are new and were taken from Anglo-American Law. the passenger was killed outside the scope and the course of duty of the guilty employee. 1960. 97 Phil. the killing of the passenger here took place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties. There. inter alia from violence and insults at the hands of strangers and other passengers. While appeal was pending in the Court of Appeals. 884. (2) said liability of the carrier for the servant's violation of duty to passengers. was a passenger in a taxicab owned and operated by Pascual Perez when he was stabbed and killed by the driver. Hence the instant petition. Issue: Whether or not defendant. filed an action to recover damages. unlike the present Civil Code. that the carrier is under no absolute liability for assaults of its employees upon the passengers. from the acts of the carrier's own servants charged with the passenger's safety. At least three very cogent reasons underlie this rule. Simeon Valenzuela. on October 18. the carrier is liable only when the act of the employee is within the scope of his authority and duty. in whose hands the carrier had entrusted the duty of executing the contract of carriage. but above all. As can be gleaned from Art. Moreover.operators could be held liable for damages Held: Yes. Rogelio's mother.. the killing was perpetrated by the driver of the very cab transporting the passenger. Under the first. The court decided in plaintiff’s favor. In other words. (1) the special undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the exercise of the high degree of care prescribed by the law. The attendant facts and controlling law of that case and the one at bar are very different however. Defendant-appellant relies solely on the ruling enunciated in Gillaco v. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. did not impose upon common carriers absolute liability for the safety of passengers against wilful assaults or negligent acts committed by their employees. which is the minority view. unlike the Gillaco case. is the result of the formers . The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees. Now here. the Gillaco case was decided under the provisions of the Civil Code of 1889 which. Antonia Maranan. Under the second view.Facts: Rogelio Corachea. Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas and was found guilty. It is not sufficient that the act be within the course of employment only. the Civil Code of the Philippines evidently follows the rule based on the second view.

since it. including their patterns of behavior. Upon complaint filed by Rosario the lower court after trial. The PNR was created under Rep. Quezon. incidental or conducive to the attainment of the purpose of the corporation. Generally. Camarines Sur. Issue: Whether or not PNR can raise the defense of doctrine of state immunity from suit. 1759 of the Civil Code. it is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their technical competence and physical ability. but also. and (3) as between the carrier and the passenger. To do all such other things and to transact all such business directly or indirectly necessary.confiding in the servant's hands the performance of his contract to safely transport the passenger. therefore. wherein PNR raised for the first time. to exercise all powers of a corporation under the Corporation Law. as a paying passenger bound for Manila. The dismissal of the claim against the defendant driver was also correct. Section 4 of the said Act provides: The Philippine national Railways shall have the following powers: a.The train did not stop despite the alarm raised by the other passengers that somebody fell from the train. moral fibers. Camarines Sur. no less important. and b. delegating therewith the duty of protecting the passenger with the utmost care prescribed by law. the train stopped at Sipocot. and that its funds are governmental in character and. Applying this stringent norm to the facts in this case. and not the passengers. It alleged that it is a mere agency of the Philippine government without distinct or separate personality of its own. Unfortunately. the former must bear the risk of wrongful acts or negligence of the carrier's employees against passengers. for repairs. Held: No. as a defense. the doctrine of state immunity from suit. to their total personality. Act 4156. therefore. the characteristics and attributes of a corporation under the Corporation Law. upon passing Iyam Bridge at Lucena. the lower court rightly adjudged the defendant carrier liable pursuant to Art. The decision was sustained by the appellate court hence the present petition. Due to some mechanical defect. Plaintiff's action was predicated on breach of contract of carriage7 and the cab driver was not a party thereto. boarded a train of appellant at Libmanan. Under the foregoing section. held PNR liable for damages for breach of contract of carriage. Accordingly. PHILIPPINE NATIONAL RAILWAYS vs. . CA Facts: Winifredo Tupang. and social attitude. not subject to garnishment or execution. has power to select and remove them. as amended. husband of plaintiff. His civil liability is covered in the criminal case wherein he was convicted by final judgment. the PNR has all the powers. Winifredo Tupang fell off the train resulting in his death.

while not exempting the PNR from liability. A. he is not held to the same degree of care he would otherwise. The bus collided with a pick-up truck which was coming from opposite direction trying to swerve from a pile of gravel. Thus. Issue: Whether or not the common carrier is liable. Plaintiff brought an action for damages which the lower court dismissed holding the driver of the pick-up car negligent and not that of the bus.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. he required in the absence of such emergency. of the carrier’s employee is confronted with a sudden emergency. oppressive or malevolent manner. nevertheless justified the deletion of the amount adjudicated as moral damages and exemplary damages. Since he opted to sit on the open platform between the coaches of the train. his left arm was completely severed. 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. Plaintiff chose to hold defendant liable on its contractual obligation. The petitioner has the obligation to transport its passengers to their destinations and to observe extraordinary diligence in doing so. The appellate court found. Held: The bus was running at a moderate speed. 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. as correctly ruled by the respondent court. ISAAC vs. Facts: Plaintiff boarded defendant’s bus as paying passenger from Albay. 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. the rear left side was hit. By placing his left arm on the window. Also.L. the petitioner does not deny. Now. fraudulent. the petitioner failed to overthrow such presumption of negligence with clear and convincing evidence. As a result. Neither did the train stop. The driver of the bus upon the speeding pick-up truck swerved the bus to the very extreme right of the road. AMMEN TRANS. But while petitioner failed to exercise extraordinary diligence as required by law. . Such contributory negligence. he is guilty of contributory negligence cannot relieve the carrier but can only reduce its liability (ART. Said driver would not move the bus further without endangering the safety of his passengers. despite the alarm raised by other passengers that a person had fallen off the train at lyam Bridge. 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. Exemplary damages may be allowed only in cases where the defendant acted in a wanton. Notwithstanding all these efforts. it appears that the deceased was chargeable with contributory negligence. This finding of the lower court was sustained. CO. reckless. is PNR negligent? Yes.

However. hence the instant petition. 1755 and 1756 are applicable. passengers Ornominio Beter and Narcisa Rautraut were found lying down the road. The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers. In effect. vs. Bachelor is presumed to have acted negligently unless it can prove that it had observed extraordinary diligence in accordance with Articles 1733 and 1755 of the New Civil Code. The liability. Issue: Whether or not petitioner is negligent. this is a circumstance which further militates against plaintiff’s position. private respondents herein filed a complaint for "sum of money" against Bachelor Express. while passengers of the bus. Bachelor denies liability for the death of Beter and Rautraut in that their death was caused by a third person who was beyond its control and supervision. Bachelor is bound to carry its passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons. Thereafter. Art. if any. Butuan City. In the case at bar. CA reversed the decision. in order that a . 1733. Consequently. The lower court dismissed the complaint. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. 1732. the heirs of Ornominio Beter and Narcisa Rautraut. the former already dead as a result of head injuries and the latter also suffering from severe injuries which caused her death later. that about fifteen minutes later. in order to overcome the presumption of fault or negligence under the law. The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. pursuant to Article 1756 of the Civil Code. suffered injuries which caused their death. with a due regard for all the circumstances. the petitioner. While at Tabon-Tabon. the bus picked up a passenger.” BACHELOR EXPRESS. Inc. There is no question that Bachelor is a common carrier. Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to Bachelor and. of the petitioners is anchored on culpa contractual or breach of contract of carriage.. It is a prevailing rule that it is negligence per se for passengers on a railroad to protrude any part of his body and that no recovery can be had for an injury.1762). Held: Yes. When the bus stopped. Hence. states that the vehicular incident resulting in the death of passengers Beter and Rautraut was caused by force majeure or caso fortuito over which the common carrier did not have any control.CA Facts: The bus owned by Petitioners came from Davao City on its way to Cagayan de Oro City passing Butuan City. its alleged owner and the driver Rivera.

the conductor panicked and blew his whistle after people had already fallen off the bus. it is clear that because of the negligence of petitioner's employees. whose heirs are private respondents herein was a passenger of the bus and was shot and killed during the incident. A constabulary agent investigated and found out that the owner of the jeepney was a Maranao and that certain Maranaos were planning to take revenge on the petitioner by burning some of its buses. the victims fell from the bus door when it was opened or gave way while the bus was still running. petitioner . Art. Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager. the bus was speeding from a full stop. three armed Maranaos who pretended to be passengers seized a bus petitioner bound for Iligan City and set it on fire. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. including two Maranaos. INC.. vs. In the present case. Issue: Was there breach of contract of carriage? Held: Yes. the seizure of the bus by Mananggolo and his men was made possible. In this case. Diosdado Bravo. Bachelor was negligent. hence the instant petition. Talib Caorong. FORTUNE EXPRESS. Lanao del Norter. The petitioners' argument that the petitioners "are not insurers of their passengers" deserves no merit in view of the failure of the petitioners to prove that the deaths of the two passengers were exclusively due to force majeure and not to the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. The operations manager of petitioner was advised to take precautionary measures. Atty. Four days after the accident. it is not enough that the accident was caused by force majeure. The private respondents brought this suit for breach of contract of carriage. that the necessary precautions would be taken. Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion. resulting in the death of several passengers of the jeepney. and the bus was not properly equipped with doors in accordance with law-it is clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing common carriers.common carrier may be absolved from liability in case of force majeure. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers.CA Facts: A bus of petitioner figured in an accident with a jeepney in Kauswagan. if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. with petitioners contention that the acts of the Maranaos is caso fortuito. Complaint was dismissed in the lower court but its decision was reversed in CA.

Certainly. Court of Appeals. preferably with non-intrusive gadgets such as metal detectors. with due regard for all the circumstances. Caorong to retrieve something from the bus. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. Court of Appeals. violence. Art. it was ruled that a common carriers is not responsible for goods lost as a result of a robbery which is attended by grave or irresistable threat. before allowing them on board could have been employed without violating the passenger's constitutional rights." Thus. But Atty. It is clear that the cases of Pilapil and De Guzman do not apply to the prensent case. in De Guzman v. let alone recklessness. such as tortious or criminal acts of third persons. such as frisking passengers and inspecting their baggages. this act cannot be considered an act of negligence. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. . Caorong did not act recklessly. this factor of unforeseeability (the second requisite for an event to be considered force majeure) is lacking. ordered the passengers to get off the bus as they intended to burn it and its driver. despite the report of PC agent Generalao that the Maranaos were planning to burn some of petitioner's buses and the assurance of petitioner's operation manager (Diosdado Bravo) that the necessary precautions would be taken. or force. He was playing the role of the good Samaritan. Under the circumstances. not its passengers. Mananggolo. Caorong was guilty of contributory negligence in returning to the bus to retrieve something. we held in Pilapil and De Guzman that the respondents therein were not negligent in failing to take special precautions against threats to the safety of passengers which could not be foreseen. the leader of the group which had hijacked the bus. and De Guzman v. As already stated. Court of Appeals. using the utmost diligence of very cautious persons. In the present case. Court of Appeals. nothing was really done by petitioner to protect the safety of passengers. in support of its contention that the seizure of its bus by the assailants constitutes force majeure. The petitioner contends that Atty. In Pilapil v. it was held that a common carrier is not liable for failing to install window grills on its buses to protect the passengers from injuries cause by rocks hurled at the bus by lawless elements. simple precautionary measures to protect the safety of passengers. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding. Petitioner invokes the ruling in Pilapil v. It should be pointed out that the intended targets of the violence were petitioners and its employees. On the other hand. 1755 of the Civil Code provides that "a common carrier is bound to carry the passengers as far as human care and foresight can provide. The armed men actually allowed Atty.did nothing to protect the safety of its passengers.

The Manila Railroad Company. The lower court held that it was the negligence of the bus driver that caused the accident and. medical and miscellaneous expenses incurred from June 18. and for actual and moral damages. The LTB paid the sum of P16. and in not sentencing appellant LTB to pay attorney's fees. the LTB having agreed to give him a subsistence allowance of P10..194. paid heed to the warning and stopped before the "crossing". secondly. when it bumped against the engine of a train passing by. a fourth-year medical student of the University of Santos Tomas was a passenger in one of the buses of LTB. Upon the whole evidence on the matter. in not awarding them actual and moral damages.964. the sum of P18. Issue: WON petitioners are entitled to an increase in compensatory damages. DAMAGES A.The Cariagas claim that the trial court erred: in awarding only P10. where the national highway crossed a railroad track.00 as actual.00 in the same concepts. 1952 to April 1953.490. LAGUNA TAYABAS BUS COMPANY Facts: Edgardo Cariaga. Held: The findings of the trial court was sustained. and dismissing the cross-claim against the Manila Railroad Company. the train whistle had been sounded several times before it reached the crossing. The front part of the body of the bus was wrecked. moral and exemplary damages. Firstly. the Manila Railroad Company.III. for not providing a crossing bar at the point where the national highway crossed the railway track. compensatory.45 for all the hospital. From January 15. the driver of the bus died. alleging that it was the reckless negligence of the bus driver that caused the accident. the lower court found that the removal of the right frontal lobe of the brain of Edgardo reduced his intelligence by about 50%. and for this reason filed the corresponding cross-claim against the latter company to recover the total sum of P18. that due to the replacement of the right frontal . when it reached that part of the Poblacion of Bay.490. Actual/Compensatory Damages CARIAGA vs. with interest at the legal rate from the filing of the coinplaint. as a result.000. The present action was filed to recover from the LTB and the MRR Co. denied liability upon the complaint and cross-claim.00 as compensatory damages. 1953 up to April of the same year Edgardo stayed in a private house in Quezon City. rendered judgment sentencing the LTB to pay Edgardo the sum of P10.00 as compensatory damages to Edgardo.75 representing the expenses paid to Edgardo. From this decision the Cariagas and the LTB appealed. Laguna. in turn. and for Edgardo’s parents.00 daily during his convalescence. as well as attorneys fees. that another LTB bus which arrived at the crossing ahead of the one where Edgardo was a passenger. and many passengers including Edgardo were injured.000. the total sum of P312. The LTB disclaimed liability claiming that the accident was due to the negligence of its co-defendant.

bone of his head with a tantalum plate Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or dented it would cause his death. CA Facts: An Izuzu First Class passenger bus owned and operated by the petitioner left Lingayen. he is now in a helpless condition. as a result of the physical injuries suffered by Edgardo Cariaga. Appellant LTB admits that under Art.75 are within this category. Pangasinan. As a result the end of a bamboo pole placed on top of the hayload and tied to the cart to hold it in place. it frontally hit the rear side of a bullcart filled with hay. brought this action . Jr. Among its paying passengers was the deceased. The protruding end of the bamboo pole. When the vehicle was nearing the Sadsaran Bridge on the national highway in barrio Sto. guilty of a breach of contract but who acted in good faith. INC. Policronio Quintos. Notwithstanding the medical assistance. municipality of Minalin. provided such damages. virtually an invalid. according to Art. that the income which Edgardo could earn if he should finish the medical course and pass the corresponding board examinations must be deemed to be within the same category because they could have reasonably been foreseen by the parties at the time he boarded the bus. and so holds. hit the right side of the windshield of the bus. VILLA REY TRANSIT. vs. Article 2219 of the Civil Code enumerates the instances when moral damages may be covered and the case under consideration does not fall under any one of them. Upon consideration of all the facts this Court is of the opinion. Neither could LTB be held liable to pay moral damages under Article 2220 of the Civil Code on account of breach of its contract of carriage because it did not act fraudulently or in bad faith. Petitioner is not entitled to recover attorney's fees. about 8 feet long from the rear of the bullcart. which caused several wounds. have been duly proved. hospital and other expenses in the total sum of P17. for Manila. LTB had exercised due diligence in the selection and supervision of its employees like the drivers of its buses in connection with the discharge of their duties and so it must be considered an obligor in good faith. 2201 of the Civil Code the damages for which the obligor." The impression one gathers from this evidence is that.00. both physically and mentally. Upon this premise it claims that only the actual damages suffered by Edgardo consisting of medical. is liable shall be those that are the natural and probable consequences of the breach and which the parties had foreseen or could have reasonably foreseen at the time the obligation was constituted. 2199 of the same Code. because this case does not fall under any of the instances enumerated in Article 2208 of the Civil Code. the Quintos died. Pampanga.000. that the compensatory damages awarded to petitioner should be increased to P25. penetrated through the glass windshield and landed on the face of deceased.719. We are of the opinion however. Domingo. The present action cannot come under Paragraph 2 of said article because it is not one of quasi-delict and cannot be considered as such because of the pre-existing contractual relation between the Laguna LTB and Edgardo.The claim for moral damages and attorney's fees is denied. The private respondents.

however. controlling in the one at bar. despite the fact that the victim therein was 39 years old. This argument is basically true.184. and had a life expectancy of 28. whichever is shorter. It even declared “that the determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. the liability of petitioner herein had been fixed at the rate only of P2. an important element in fixing the amount recoverable by private respondents herein. on which petitioner relies. also. including attorney's fees. in the . one of the reasons why the Alcantara case points out the absence of a "fixed basis" for the ascertainment of the damages recoverable in litigations like the one at bar.90 years. at the time of his death. whereas most of those sought to be indemnified will be suffered years later. is an important factor. In addition.00 as damages. the lower courts did not consider. The life expectancy of the deceased or of the beneficiary. petitioner impugns the decision appealed from upon the ground that the damages awarded therein will have to be paid now. such as a four-year rule. Just the same. the case had not thereby laid down any rule on the length of time to be used in the computation of damages. as a young "training assistant" in the Bacnotan Cement Industries. which is the annual salary of Policronio Quintos. the force of the said argument of petitioner herein is offset by the fact that. In the Alcantara case. but. Jr. unlike the Alcantara case. in the case at bar. both of which found that the accident and the death of Policronio had been due to the negligence of the bus driver. none of the parties had questioned the propriety of the four-year basis adopted by the trial court in making its award of damages.00 a year. but the amount recoverable depends on the particular facts and circumstances of each case. not only relevant. Petitioner maintains that the lower courts had erred in placing the life expectancy of Quintos at 33-1/3. no cogent reason has been given to warrant its disregard and the adoption. With respect to the rate at which the damages shall be computed. Jr. In other words. In short. but this pretense was rejected by the trial court and the Court of Appeals. life expectancy is. Both parties appealed. Although it is not the sole element determinative of said amount. but only as regards the amount thereof. of a purely arbitrary standard. Much is left to the discretion of the court considering the moral and material damages involved.750. he being over 29 years of age at the time of his demise and in not acting in accordance with Alcantara v. Said petitioner contended that the mishap was due to a fortuitous event. Issue: Did CA erred in its award of the damages to the heirs of Quintos? Held: No. and this is. at the time of his death. Inc. although payment of the award in the case at bar will have to take place upon the finality of the decision therein. The case cited is not. Hence the instant petition.against petitioner for breach of the contract of carriage to recover the aggregate sum of P63. the Court of Appeals has not erred in basing the computation of petitioner's liability upon the life expectancy of Policronio Quintos. perhaps. and so it has been said that there can be no exact or uniform rule for measuring the value of a human life and the measure of damages cannot be arrived at by precise mathematical calculation.” Thus. Surro in which the damages were computed on a four year basis.

000. Treasurer of the Molave Development Corp. to earn more. Lilibeth Warner. wounded feelings and social humiliation She prayed that she be awarded moral damages of P500. New York City USA.00 and actual damages sustained by her in the amount of US$1.000. Tinitigan.00. INC.. attorney's fees of P100. IAC Facts: Private respondent Teofista P.15. a businesswoman and a multimillionaire in her own right as evidenced (proprietor of Sampaguita Restaurant. Domingo. Republica Dominica to San Juan. if not considering the growing importance of trade. a Pan Am employee ordered her in a loud voice to step out of line because her ticket was not confirmed to her consternation and embarrassment in the presence of several people who heard and order. and.000. filed a complaint against petitioner for damages arising from defendant's alleged refusal to accommodate her on Pan Am Flight No. Rene Nolasco. Indeed.000 in said contract but since she wasn’t able to board the flight. commerce and industry and the concomitant rise in the income level of officers and employees therein much more. serious anxiety. Other instances which caused moral damage to the plaintiff are the following: 1. While plaintiff was standing in line preparatory to boarding the aircraft. 431 from Sto. The lower court rendered judgment in favor of plaintiff and awarded the amount of damages as prayed for. she saw that her seat was given to a white man. Plaintiff expected to make a profit of $1.00. hence. to sign her contract or lose it. but subject to modifications. Phil. Domingo and thus causing her to suffer mental anguish. said profit was lost. proprietor of Cavite Household Appliances and Rowena's Handicraft. And as if to add insult to injury. besmirched reputation. Despite her Pleas she was not allowed to board the aircraft. Domingo. When the plane took off without her but with her luggage on board. 2. the former said that she (plaintiff) must be in San Juan that same day. Issue: Whether or not the award of damages was proper. he was supposed to have a better job and be promoted from time to time. Puerto Rico notwithstanding the fact that she possessed a confirmed plane ticket purchased from Pan Am’s Office at Sto. vs. exemplary damages of P200. after talking thru the telephone with a certain Mrs. was on a business trip with a Pan-Am ticket. Defendant denied that plaintiff was a confirmed passenger since the ticket issued to her was on an open space basis which meant that she could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. She was forced to return to her hotel without any luggage much less an extra .546. Said decision was affirmed hence the instant petition. Policronio's potentiality and capacity to increase his future income. Phil. While in Sto..). Findings of fact show that plaintiff. Held: Yes. PAN AMERICAN WORLD AIRWAYS.present case. upon the conclusion of his training period.

hotel accommodation was paid before departure. without any luggage to stay in the hotel. The award of actual damages in the amount of One Thousand Five Hundred Forty Six American dollars and fifteen cents (US$1. The rational behind exemplary or corrective damages is. plaintiff's passport was stamped accordingly. a contract or carriage perfected between plaintiff and defendant for the latter to take plaintiff to her place of destination. DELIM Facts: Reynalda Gatchalian boarded respondent’s minibus at a point in Aringay.00) Pesos.15) computed at the exchange rate prevailing at the time of payment is hereby retained and granted. While the bus was running along the highway. turned turtle and fell into the ditch. GATCHALIAN vs. Self enrichment or fraternal interest and not personal ill will may have been the motive of defendant. We believe. Bad faith was also present. therefore.Caucasian to accommodate whites is very regrettable. Plaintiff was made to pay the fare and terminal fee. By refusing to accommodate plaintiff in said flight. but it is malice nevertheless. as the name implies.000. . An award of attorney's fees is also in order. defendant had willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with plaintiff. it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant and other airlines. Upon medical examination. however the amount of some damages awarded to be exorbitant: We therefore reduce the moral and exemplary damages to the combined total sum of Two Hundred Thousand (P200. plaintiff was made to pay the room accommodation petition in advance. It is clear from the evidence that defendant issued a Passenger Ticket and Baggage Check with assigned seat and the corresponding pass and baggage claim symbol. Defendant having breached its contract with plaintiff in bad faith. And these show that plaintiff was indeed a confirmed passenger of defendant's Flight 431 for San Juan. While normally. having found bad faith on the part of defendant. Plaintiff's name was included in the passenger manifest.dress. the vehicle bumped a cement flower pot on the side of the road. to provide an example or correction for public good . At the immigration section. La Union bound for Bauang.546.00) Pesos and the attorney's fees to Twenty Thousand (P20. The fact that plaintiff was ordered out under some pretext in order to accommodate a white man in an airline owned by an American firm with a reputation for bumping off non. It was a good thing that the Hotel people remembered her because they do not usually accommodate female guests. In view of it nature. There was. a “snapping sound” was suddenly heard at one part of the bus and shortly thereafter. it is not error to have awarded exemplary damages.000.

subsistence. 104 Phil. demanded from the defendant companies the value thereof amounting to P370. driven by Santiago Caccam. After due trial. hence the present recourse. and the Soberanos filed the present action against the defendant companies and Caccam. (MRR). arm and forehead. the bus hit a stone embankment. is a violation of bodily integrity. a subsidiary of the Manila Railroad Co. her husband. About three kilometers away from Baguio City. causing it to fall into a 65-foot deep precipice. 529. for among other things.219. actual injury is suffered for which actual or compensatory damages are due and assessable. dismissing at the same time the complaint against Caccam. giving raise to a legitimate claim for restoration to her condition ante. the surgical removal of the scar on the face of a young boy who had been injured in a vehicular collision. this Court awarded actual or compensatory damages. especially one on the face of the woman. .757.000. allowances.00 to recover the cost of such plastic surgery is not unreasonable. Juana Soberano did not intervene in the criminal case because she filed a formal reservation to institute a separate civil action for damages and indemnity against the MRR and the BAL. SOBERANO vs. The MRR has paid a total sum of P4. The motion for reconsideration was denied. as well as the service fees of her caretaker. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before mishap. The offer was rejected. of which sum the MRR paid P300. A scar. if that integrity is violated or diminished. resulting in death to two of its passengers and serious physical injuries to Juana and loss and destruction of all her belongings. tendering to the Soberanos the additional sum of P5. Because of the loss of the eggs and the destruction of the personal effects that Juana brought with her in that trip. Areglado. Juana brought with her 3. along the Naguilian road. to recover from them damages in the total sum of P76. Later the MRR offered to settle the case extrajudicially. In that trip. Jose Soberano.petitioner was found to have sustained physical injuries on the leg. hospitalization. bound for Baguio City. resulting from the infliction of injury upon her. the lower court rendered the decision appealed from. A person is entitled to the physical integrity of his or her body.000. MANILA RAILROAD COMPANY Facts: Juana Soberano boarded a bus of the Benguet Auto Line (BAL). Issue: Is petitioner entitled to actual and compensatory damages? Held: Yes. and some personal belongings which she needed in that trip. medical fees and medicines of Juana Soberano. The Soberanos moved to have the decision reconsidered. The MRR also paid the daily expenses.66.76. We consider that the amount of P15. In Araneta v.024 chicken eggs to be sold in Baguio City.

757. In case of physical injuries. which provide that attorney's fees and expenses of litigation may be recovered when the defendant's act or omission has compelled the plaintiff to litigate with third persons or incur expenses to protect his interest. The lower court denied this claim on the strength of the oftreiterated ruling of this Court that moral damages cannot be recovered against the employer in actions based on a breach of contract of carriage in the absence of malice.76. It may be argued that the Soberanos could not have recovered this sum in the criminal case because Juana Soberano expressly filed a formal reservation to institute a separate civil action for damages. It will be observed that the defendant companies offered to settle the case by offering to the Soberanos the additional sum of P5. Considering all the facts this Court is of the opinion that the sum of P5. or bad faith. In this case it was Juana Soberano. The reservation is ineffective as to Caccam as it did not include him among those against whom their rights had been reserved. It was not. the defendant companies that compelled the Soberanos to litigate. because these expenses were properly taxable in the criminal case. who sustained the bodily injuries. This claim is predicated upon paragraphs (2) and (5) of article 2208 of the New Civil Code. moral damages are recoverable only by the party injured and not by his next of kin. or to incur expenses in connection with the litigation instituted by them. not her husband Jose. the nature and extent of the physical injuries suffered by Juana Soberano has the effect of making her live an abnormal life.000. mental anguish. This claim was correctly denied by the lower court. Held: The Soberanos initially contend that the lower court erred in disallowing their claim of P200. The Soberanos next contend that the lower court erred in denying their claim for moral damages in the sum of P15. Lastly. rejected the offer and proceeded to court to recover damages in the total sum of P76. therefore. The Soberanos aver that they were obliged to file a separate civil action for damages against the defendant companies. representing the expenses of Juana Soberano in attending as a witness in the criminal case and attorney's fees incurred in connection therewith.000 in compensatory damages awarded to her for loss of earning capacity is inadequate. but such reservation did not preserve whatever rights they had against Caccam on the basis of the latter's imprudence. The claim for attorney's fees was also properly denied by the lower court. And the Soberanos not having intervened in the criminal case. The lower court rightly denied the claim for moral damages as far as Jose Soberano is concerned. for the physical suffering. however. this claim must be considered as having been impliedly adjudicated in the criminal case. just and demandable claim. the amount should be increased to P15.Issue: Whether or not the amount of damages awarded is adequate. serious anxiety and fright they suffered as a consequence of the mishap. and cannot therefore be ventilated in the present action.000.000. The Soberanos. She should also be awarded the sum . unless there is express statutory provision to the contrary. fraud. or when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid.

Polo. Arsenio Mendoza suffered the most serious injuries which damaged his vertebrae causing the paralysis of his lower extremities. As a result of which Arsenio Mendoza.00 a month from the business of his father-in-law as Assistant Supervisor of the small fairs and his income of P100.00 for the death of the victim. An action was brought to recover damages against petitioners predicated not only on a breach of contract of carriage for failure to safely convey the plaintiffs to their destination. de Darrocha (a USVA pensioner) who died instantly. Gloria Darrocha de Caliston.000.000. Prosecuted for homicide thru reckless imprudence.000.000. MARCHAN vs.00 as exemplary damages and sustained the award of attorney's fees in the amount of P5.024 chicken eggs which she brought with her in the trip and which were destroyed. P5. but also on account of a criminal negligence on the part of defendant driver. private respondent Geronimo Dalmacio ran over Juana Sonza Vda. CA Facts: While driving a passenger bus in Bacolod City. his wife and child. MENDOZA Facts: A passenger bus of the Philippine Rabbit Bus Lines which was then driven by Silverio Marchan fell into a ditch somewhere in Barrio Malanday.00 as moral damages. Held: Yes. The lower court ruled in favor of plaintiffs. survived by her only child.00 as compensatory damages was affirmed by CA.00 for loss of pension which the deceased had failed to receive. Issue: Whether or not the award of moral damages was proper. especially so if we take into account that plaintiff was only 26 years old when he met an accident and taking the average span of life of a Filipino. The amount of P40. he may be expected to live for 30 years more and bearing in mind the earning capacity of Arsenio Mendoza who before the happening of this accident derived an income of almost P100.000.000. It however added the amount of P30.00. considering that plaintiff Arsenio Mendoza had suffered paralysis on the lower extremities. the herein petitioner. The award of P40. representing unrealized profits from the 3.of P45.00 for burial expenses and P10. who were then inside the bus as passengers were thrown out to the ground resulting in their multiple injuries. Bulacan.00 a month which he derived as a professional boxer.00 awarded by the court as compensatory damages is quite reasonable and fair. Dalmacio was convicted by the Court of First Instance of Negros Occidental. sentenced to imprisonment and ordered to pay the herein petitioner P15.000. P5.000. which will incapacitate him to engage in his customary occupation throughout the remaining years of his life. while travelling on its way to Manila. .35. DE CALISTON vs.

was his only legal heir. the former Court of Appeals modified the CFI decision by absolving Dalmacio from the payment of the P10.000. The pension of the decedent being a sure income that was cut short by her death for which Dalmacio was responsible. de Padilla. PHILIPPINE AIRLINES.000. It had been certified as airworthy by the Civil Aeronautics Administration. the P5. The plane did not reach its destination but crashed on Mt.000. and the indemnity shall be paid to the heirs of the latter. INC. at bottom. It had flown almost 18. As a result of her son's death. arises from the same culpa. even though there may have been mitigating circumstances. on its way to Manila. Mrs.000 as attorney's fees. a DC-3 type aircraft manufactured in 1942 and acquired by PAL in 1948.00 awarded for loss of pension is unjustified. Under Article 2206 of the Civil Code: The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos.00 which is just equivalent to the pension the decedent would have received for one year if she did not die.00 for loss of pension and credited him for the amount of P5.000. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased. Since the civil liability (ex-delicto) of the latter for the death caused by his driver is subsidiary and.000 as actual and compensatory damages. with 33 persons on board. the insurance proceeds should be credited in favor of the errant driver. Issue: Whether or not the deletion of the P10.00 awarded for loss of pension is justified? Held: The deletion of the P10. the surviving heir of the former is entitled to the award of P 10.000 hours at the time of its illfated flight. Starlight Flight No. Baco. vs.00 previously paid to the herein petitioner under a vehicular insurance policy obtained by the bus owner. including the plane's complement.00 paid to the herein petitioner by the insurer of the passenger bus which figured in the accident may be deemed to have come from the bus owner who procured the insurance. .The plane was Identified as PI-C133.000. Padilla filed a complaint (which was amended twice) against PAL. 26 of the Philippine Air Lines took off from Iloilo. Natividad A. He was 29 years old. single.000. plus exemplary damages and P60. Vda. Mindoro. demanding payment of P600. CA 185 SCRA 110 Facts: On November 23. 1960. On the other hand.On appeal. His mother. one hour and fifteen minutes after takeoff . Among the fatalities was Nicanor Padilla.

00 as attorney's fees. 2206. In the case of Davila vs.00 as moral damages. this Court determined not only PALs liability for negligence or . However.In its answer. For the settlement of the issue at hand.000 as indemnity for loss of earnings. foreign jurisprudence is only persuasive. unless the deceased on account of permanent physical disability not caused by the defendant. and to pay the costs. de Padilla the sum of P477. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. The amount of damages for death caused by a crime or quasidelict shall be at least three thousand pesos. the damages sought were excessive and speculative. The articles provide: Art. resort to foreign jurisprudence would be proper only if no law or jurisprudence is available locally to settle a controversy. 49 SCRA 497 which involved the same tragic plane crash. moreover. and the indemnity shall be paid to the heirs of the latter. P10. such indemnity shall in every case be assessed and awarded by the court. Padilla rather than on the life expectancy of private respondent.00 as award for the expected income of the deceased Nicanor. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased. On Appeal to the Court of Appeals the decision of the trial court was affirmed in toto. PAL.000. had no earning capacity at the time of his death. On August 31. whichever is shorter. and thus erred in awarding what appears to the petitioner as the excessive sum of P477. as established by authorities. not of his beneficiary. Issue: Whether or not the respondent court erred in computing the awarded indemnity on the basis of the life expectancy of the late Nicanor A. there are enough applicable local laws and jurisprudence. the trial court promulgated a decision. PAL denied that the accident was caused by its negligence or that of any of the plane's flight crew.000. ordering the defendant Philippine Air Lines. 1764. 1973. to pay the plaintiff Natividad A. the life expectancy of the deceased or of the beneficiary. Held: Petitioner relies on "the principle of law generally recognized and applied by the courts in the United States" that "the controlling element in determining loss of earnings arising from death is. concerning Damages. the award of damages for death is computed on the basis of the life expectancy of the deceased. Inc. even though there may have been mitigating circumstances. Even in the absence of local statute and case law. Art. Under Article 1764 and Article 2206(1) of the Civil Code. P10. Vda. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book.000. and that.

suffering thereby physical injuries. Pedro Davila. INC. Jr. with the result that the cab was badly smashed and the plaintiff fell out of the vehicle to the ground. until it is fully paid.The present action was instituted because plaintiff demanded an exorbitant amount for moral damages (P60. This is neither a case that comes under paragraph 11 of Article 2208 because the Lower Court did not deem it just and equitable to award any amount for attorney's fees. with legal rate of interest of 6% per annum from the date of the judgment on August 31. upon his plea of guilty the Municipal Court of Manila sentenced him to suffer 1 month and 1 day of arresto mayor. The decision of the trial court is affirmed with modification. the petition is dismissed. On December 17.. which he asks for damages.. and to pay the costs. On passing Oroquieta between Doroteo José and Lope de Vega streets. of course. Inc. Inc. the attorney's fees and expenses of litigation must be reasonable. . which was followed by another of January 6. Cachero addressed a letter to the Manila Yellow Taxicab Co..breach of contract. The petitioner is ordered to pay the private respondent or her heirs death indemnity in the sum of P417. So plaintiff instituted an action in the Court of First Instance of Manila. but also the manner of computing the damages due the plaintiff therein which it based on the life expectancy of the deceased. 1973. Facts: Atty. slight in nature.000) and naturally the defendant did not and could not yield to such demand. 1953.20 as his only basis for settlement which. Issue: Whether or not the defendant demanded an exorbitant moral damages? Held: In all cases.000). Cachero boarded a Yellow Taxicab driven by Gregorio Mira Abinion and owned by the Manila Yellow Taxicab Co. Tranquilino F. to avoid expenses and time of litigation offered to settle the case amicably with plaintiff but the latter only agreed to reduce his demand to the sum of P72. MANILA YELLOW TAXICAB CO.000 (not P477... Costs against the petitioner. Gregorio Mira Abinion bumped said taxicab against a Meralco post. 1952. WHEREFORE. We cannot declare that he erred for not awarding to plaintiff any such fees in this case. As We agree with the trial Judge on this point. was not accepted by said company.050. MORAL DAMAGES CACHERO vs. B. The chauffeur was subsequently prosecuted by the City Fiscal and on February 26. 1953. The Taxicab Co.

and when said right consists in injuries sustained due to a breach of a contract of carriage with us. the defendant.000 and by eliminating. for. to avoid the expense and time of litigation.900. not a misfortune. Wherefore. and after going over the record of this case. to compensate the plaintiff of the suffering and losses he had undergone and incurred because of the accident oftentimes mentioned in this brief in which plaintiff was injured". Said decision is in all other respects affirmed. in our humble opinion. the moral damages of P2. but instead he is submitting his case to the sound discretion of the Honorable Court for the award of a reasonable and equitable damages allowable by law. then respect and sympathy give way to something else. should be the first in helping Us in the administration of justice. thus adding a clearly petty case to the already overflowing desk of the Honorable Members of this Court. The plaintiff himself must have felt embarrassed by his own attitude when after receiving defendant's brief as appellant. sympathy and understanding are added thereto.000 to P2.20 for a subluxation of the right humerus bone and an insignificant contusion in 'he chest. FORES vs."Realizing its obligation under its contract of carriage with the plaintiff. It is so ordered. even at its generous although erroneous best. Mesa bridge at an excessive rate of speed. and because the facts of the case. it would be a blessing.20 as the only basis for settlement. We admire and respect at all times a man for standing up and fighting for his rights. for plaintiff has already deprived the Court of Appeals of the occasion to exercise its appellate jurisdiction over this case which he recklessly dumped to this Court. has not even the semblance of reasonableness. as have been shown. The accident occurred on the morning of March 22. the decision appealed from is hereby modified by reducing the amount awarded as unearned professioral fees from P3. . but the latter refused and insisted on his demand for P72." This case was instituted by a lawyer who. the driver lost control thereof. offered to settle the case amicably with plaintiff. It is time to fight. If plaintiff's claim is granted.050. mark it as more proper for the Municipal Court only.20 for a solitary bruise and sprain. But when a person starts demanding P2. causing it to swerve and to hit the bridge wall. could only grant P5.050. we do not hesitate to say that the demand of P72. to be injured. there is nothing more loathsome nor truly worthy of condemnation than one who uses his injuries for other purposes than just rectification. This acknowledgment comes too late.000 awarded by the Lower Court to the plaintiff. he makes in his brief as appellee the categorical statement that he "DOES NOT NOW INSIST NOR PRETEND IN THE LEAST to collect from the defendant all the damages he had claimed in his complaint. we do not hesitate to say that the demand of this case. We certainly cannot look with favor at this attitude of plaintiff. injuries for which the trial court. as an officer of the courts. While the vehicle was descending the Sta.050. without pronouncement as to costs. MIRANDA Facts: Respondent was one of the passengers on a jeepney driven by Eugenio Luga.

The driver was charged with serious physical injuries through reckless imprudence. Petitioner fails to note that attorney's fees are included in the concept of actual damages under the Civil Code and may be awarded whenever the court deems it just and equitable. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries. 2219. TPU-1163.1953. 1953. Moral damages are not recoverable in damage actions predicated on a breach of the contract of transportation. series of 1952. A point to be further remarked is petitioner's contention that on March 21.." By contrasting the provisions of these two articles it immediately becomes apparent that: (a) In case of breach of contract (including one of transportation) proof of bad faith or fraud (dolus). is essential to Justify an award of moral damages. that it carried plate No. The CA awarded moral damages to respondent hence this petition. who relied on an attack upon the credibility of the two policemen who went to the scene of the incident. The contention that the evidence did not sufficiently establish the identity of the vehicle as that belonging to the petitioner was rejected by the appellate court which found. (appellant herein) and that the vehicle even had the name of "Doña Paz" painted below its windshield. He was taken to the National Orthopedic Hospital for treatment. a second. the first on May 23. and (b) . (2) Quasi-delicts causing physical injuries. she allegedly sold the passenger jeep that was involved therein to a certain Carmen Sackerman. including the respondent who suffered a fracture of the upper right humerus. Quezon City. Five of the passengers were injured. since the only evidence presented on this point consisted of respondent's bare statement of his expenses and the said loss of income. 2220. under the circumstances. Issue: Whether or not the award of moral damages given by the CA was valid? Held: No. 1953. it appears that respondent had not yet recovered the use of his right arm. such damages are justly due. or one day before the accident happened. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. i.e. when wire loops were wound around the broken bones and screwed into place. and upon interposing a plea of guilty was sentenced accordingly. effected to insert a metal splint. wanton or deliberately injurious conduct. Willful injury to property may be a legal ground for awarding moral damages if the court should find that. registered in the name of Paz Fores. and a third one to remove such splint. among other things. No evidence to the contrary was introduced by the petitioner. Petitioner’s contention of loss of income and payment of attorneys fees cannot be the basis for the award of the damages on the ground that a review of the records failed to disclose a sufficient basis for the trial court's appraisal. and later was subjected to a series of operations. which provide as follows: "ART. in view of Articles 2219 and 2220 of the new Civil Code. ART. At the time of the trial.

The contributory negligence of the passenger does not bar recovery of damages for his death or injuries." "ART. 1756) "ART. not only because Art. justifying recovery of moral damages under Art. Whoever by act or omission causes damage to another. 2220 specifically provides for the damages that are caused by contractual breach. Such fault or negligence. common carriers are presumed to have been at fault or to have acted negligently. moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. The suggestion that a carrier's violation of its engagement to safely transport the passenger involves a breach of the passenger's confidence. that entitles the spouse. But the exceptional rule of Art. without proof of bad faith or malice on the part of the defendant. We think it is clear that the mere carelessness of the carrier's driver does not per se constitute or justify an inference of malice or bad faith on the part of the carrier. as required by Art. if the proximate cause thereof is the negligence of the common carrier. 2201. would be to violate the clear provisions of the law. and . 2219. 2220 is untenable. unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755. but the amount of damages shall be equitably reduced.That a breach of contract can not be considered included in the descriptive term "analogous cases" used in Art. there being fault or negligence. and in the case at bar there is no other evidence of such malice to support the award of moral damages by the Court of Appeals. "ART. if there is no pre-existing contractual relation between the parties. while under the law (Art. is obliged to pay for the damage done. 2176 of the Code expressly excludes the cases where there is a "preexisting contractual relation between the parties. therefore. their consequences being clearly differentiated by the Code. 2206. bad faith or malice in the sense of deliberate or wanton wrong doing and negligence (as mere carelessness) is too fundamental in our law to be ignored. In case of death of or injuries to passengers. but because the definition of quasi-delict in Art. is called a quasi-delict and is governed by the provisions of this Chapter. 1756. 1762. To award moral damages for breach of contract. and it would be never accountable for simple negligence. natural and probable consequences of the breach of the obligation." "ART. 2176. 1764 makes it all the more evident that where the injured passenger does not die. the damages forwhich the obligor who acted in good faith is liable shall be those that arc the." The distinction between fraud. in which case Article 1764 makes the common carrier expressly subject to the rule of Art. and constitute unwarranted judicial legislation. for under it the carrier would always be deemed in bad faith. in every case its obligation to the passenger is infringed. In contracts and quasi-contracts." The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a passenger. 2220. descendants and ascendants of the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased". and therefore should be regarded as a breach of contract in bad faith.

and Art. malice or wanton attitude. 2220 they limited recovery of moral damages to breaches of contract in bad faith. P25. for then Senator Fernando Lopez. Mrs. They were constrained to take PAN-AM's flight from Tokyo to San Francisco as tourist passengers. For the given reason that the first class seats therein were all booked up. plaintiffs asked for P500. 2 of Pan American World Airways from Tokyo to San Francisco were made. in the absence of statutory provision to the contrary. asserting that its failure to provide first class accommodations to plaintiffs was due to honest error of its employees.000 exemplary damages. LOPEZ vs.which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. Lopez. Alfredo Montelibano. Jr. Issue: Whether or not plaintiff is entitled to damages.PAN AMERICAN WORLD AIRWAYS Facts: Reservations for first class accommodations in Flight No.000 attorney's fees plus costs. and his daughter. stating that they could not go in that flight unless they took the tourist class therein. and a carrier's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the carrier's employees. P100. In case of fraud. the decision of the Court of Appeals is modified by eliminating the award of P5. but that fact must be shown in evidence. PAN-AM's San Francisco head office confirmed the reservations." It is to be presumed. his wife Maria J. In view of the foregoing considerations. As soon as they arrived Senator Lopez requested Minister Busuego of the Philippine Embassy to contact PAN-AM's Tokyo office regarding their first class accommodations for that evening's flight. but the latter firmly reiterated that there was no accommodation for them in the first class.000 actual and moral damages. As scheduled Senator Lopez and party left Manila by Northwest Airlines. Senator Lopez thereupon gave their first class tickets to Minister Busuego for him to show the same to PAN-AM's Tokyo office. Suit for damages was thereafter filed by Senator Lopez and party against PAN-AM. by "Your Travel Guide" agency. . PAN-AM filed its answer. his son-in-law Alfredo Montelibano. bad faith. the obligor shall be responsible for all damages which may be reasonably attributed to the nonperformance of the obligation. that this difference was in the mind of the lawmakers when in Art. however.00 by way of moral damages the presumption is that common carriers acted negligently (and not maliciously). PAN-AM's Tokyo office informed Minister Busuego that PAN-AM could not accommodate Senator Lopez and party in that trip as first class passengers. First class tickets for the abovementioned flight were subsequently issued. Alleging breach of contracts in bad faith by defendant.000. It is true that negligence may be occasionally so gross as to amount to malice. Court of First Instance rendered its decision in favor of plaintiffs. Both however appealed the decision. Plaintiff prayed for an increase in the award. 1762 speaks of negligence of the common carrier. Jr..

including those of Senator Lopez and party. that is.Held: Yes. Herranz forgot the matter and told no one about it except his co-employee. wounded feelings.00 as exemplary or corrective damages. All the time. It said that the first class reservations of Senator Lopez and party were made together with those of four members of the Rufino family. Considering also the physical discomfort of the wife of Senator Lopez as well as the members of his family. Senator Lopez was then Senate President Pro Tempore. For the moral damages sustained by him. out of racial prejudice against Orientals. we find it just to award P75. According to plaintiffs. At stop-overs. International carriers like defendant know the prestige of such an office.000. therefore. serious anxiety and mental anguish. it is humiliating to be compelled to travel as such. an award of P100. And he was former Vice-President of the Philippines. Against the foregoing. then. however. when in fact they had none. it is in effect admitted that defendant through its agents first cancelled plaintiffs. but his aforesaid rank and position were by no means left behind. the latter suffered social humiliation. it should be imposed in such an amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or other airlines. As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs. they were expected to be among the first-class passengers by those awaiting to welcome them. In so misleading plaintiffs into purchasing first class tickets in the conviction that they had confirmed reservations for the same. defendant's evidence would seek to establish its theory of honest mistake. First. letting them go on believing that their first class reservations stood valid and confirmed. Now on the issue of amount of damages. For plaintiffs were travelling with first class tickets issued by defendant and yet they were given only the tourist class. defendant willfully and knowingly placed itself into the position of having to breach its contracts with plaintiffs. In this light. reservations by mistake and thereafter deliberately and intentionally withheld from plaintiffs or their travel agent the fact of said cancellation. Senator Lopez was going to the United States to attend a private business conference of the Binalbagan-Isabela Sugar Company. only to be found among the tourist passengers.00 is appropriate. For bad faith means a breach of a known duty through some motive of interest or ill-will.000. It may not be humiliating to travel as tourist passengers. defendant acted in bad faith because it deliberately refused to comply with its contract to provide first class accommodations to plaintiffs. From the foregoing evidence of defendant. The reservations employee mistakenly cancelled all the seats that had been reserved. A written contract for attorney's services shall control the amount to be paid therefor unless found by the court to be unconscionable or . contrary to what is rightfully to be expected from the contractual undertaking. and in fact he had a second engagement awaiting him in the United States: a banquet tendered by Filipino friends in his honor as Senate President Pro Tempore. Since the flight involved was still more than a month away and confident that reinstatement would be made. as to moral damages. in legal contemplation such conduct already amounts to action in bad faith.

and the business and financial position of the offender on the other. The man at the counter of the Alitalia office told him it had no flight on Monday but the Lufthansa had. social. The man thereafter asked for Ortigas' passport and other travel papers and attached a validating sticker on flight coupon No. An employee in the airport asked for his passport and other papers and. the travel department of C. where his Filipino nationality appears. The amount of P25. Inc. after examining his passport. F. 000 is reasonable. said he could not board the plane that day because his seat would be given to a Belgian. He unloaded his baggage and proceeded to the counter in charge of the Lufthansa passengers. included in his original itinerary. let it be stressed that the amount of damages awarded in this appeal has been determined by adequately considering the official. after talking to an employee thereof. various cities in the United States.unreasonable. General Agents of the defendant. Ortigas arrived in due course in Rome. the Far East. political. told Ortigas that the Lufthansa had no first class. On her request... The man thereupon called up the office of the Lufthansa and. he decided to leave out some cities. The employee afterwards informed Ortigas that the Lufthansa had a first class seat available. In concluding. JR. The following Monday. To be sure he could fly first class to Hongkong. Ortigas requested her to check with her main office. considering the attorney’s prominence in the legal profession. LUFTHANSA GERMAN AIRLINES Facts: The Sharp Travel Service. but only economy seats available. the place of departure. He was furthermore asked to pay 800 liras for bus fare and 700 liras as embarkation tax. for several appointments he had there. Sharp. In New York. Inc. 4 which corresponded to the Rome-Hongkong leg of his TWA Ticket. He left Manila as scheduled. Ortigas immediately asked him to get the seat and to see to it that his ticket be confirmed and validated for the flight and a first class seat. for his appointments there the next day. to be in Hongkong. and that the defense counsel’s fees is more than half the said amount. After calling. which she did by calling it up. Ortigas' ticket for all these different legs of his journey was first class. ORTIGAS.. The lady at the counter told him that Lufthansa had no space for him that day. Ortigas was not willing to take an economy seat and requested the employee to call up other airlines. and financial standing of the offended parties on one hand. Ortigas had his luggage weighed and was given the free luggage allowance of a first class passenger. Ortigas went to the office of the Alitalia to book passage. . the majority interest-in-which is held by Rocha y Cia. Ortigas checked out of his hotel and took a taxi to the terminal. Europe. and then back to Manila. to Hongkong. vs. she apologized and said the plaintiff's ticket was in order and would be confirmed and validated. the place of destination. Lufthansa German Airlines issued to the plaintiff First Class Pan American Ticket which would take him from Manila. Asia.

Held: Yes. he said he would not as a sign of protest. a valid and binding contract between Lufthansa and the plaintiff to transport him as a first class passenger from Rome to Hongkong. since the preference given to the Belgian passenger over plaintiff was done willfully and in wanton disregard of plaintiff's rights and his dignity as a human being and as a Filipino. said plaintiff can easily be taken for a European or white more than his own witness Amado Castro and besides. It is Our considered view that when it comes to contracts of common carriage. Ortigas made another request. that there could not have been any possible discrimination by reason of race against Ortigas because from his appearance. in which an award of moral and exemplary damages was ordered and now subject of an appeal. There is evidence that the defendant acted with bad faith and in willful disregard of the plaintiffs rights. general manager of Filital. . "Manual of Traffic Conference Resolutions" and that telephone calls for reservation by one airline to another is in fact accepted procedure in accordance with the official airline guide of the Air Traffic Conference and International Air Transport Association. that the employee call other airlines to inquire if they had flights to Hongkong that day but he once more turned down the plea and insisted that Ortigas travel economy. He was constrained to agree with the arrangement. Inc. who may not be discriminated against with impunity. There was. It cannot be said the breach was the result of an honest mistake or excusable negligence. inattention and lack of care on the part of the carrier resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which entitles the passenger to the award of moral damages in accordance with Article 2220 of the Civil Code.After an argument with the employee. Ortigas once again requested a transfer or that he be assisted in booking passage on other planes but was also refused. At Dharham. since it would certainly be damaging to its own business. Lufthansa contends. the breach appears to be of graver nature. It was only in Bangkok when the chief steward asked him if he wanted to move over to first class but having been already embarrassed and humiliated and the trip to Hongkong being only three hours. therefore. the plaintiff once more requested a transfer to first class but was also told by the Lufthansa agent that he had not received any communication about the change and the request could not be granted. Upon arrival in Cairo. which is the general agent of the Alitalia in the Philippines. The foregoing facts resulted in the filing of the case by the plaintiff against defendant. In Calcutta. But in the instant case. Manuel Otayza. It is argued that any such policy would be self-defeating. the plaintiff requested the Lufthansa agent to transfer him to first class but the agent said he could not and that he did not receive any communication from Rome to that effect. with the promise that he will be transferred to first class in Cairo and onward to Hongkong. there were other Orientals in the same flight on that occasion. Issue: Whether or not plaintiff is entitled to damages. and this agreement the defendant violated by compelling the plaintiff to travel as an economy passenger. however.. testified that space reservation through telephone calls between airlines is permitted by IATA's.

Moreover. Thus. and it is certainly not for the airplane to say later. for what appears from the evidence is not really a case of a general policy of discriminating against Orientals or non-whites. since his luggage was already in the plane. . when the plane reached Cairo. This Ortigas rejected. Worse. this ratiocination is untenable. We have uniformly upheld the right of a passenger to damages in all cases wherein. he is transferred over his objection to economy. In the light of all the foregoing.00. if only to make patent his displeasure and indignation at being so inconsiderately treated in the earlier part of his journey. To his disappointment. the next station. class. which he has to take in order to be able to arrive at his destination on his scheduled time. In all other respects. the economy class accommodations are not much different from first class and Ortigas was not delayed in his trip. including as to the payment of interests on the said amounts. A passenger contracts for first class accommodations for many reasons peculiar to himself and pays a higher price therefor.Again. the judgment appealed from is modified by raising the award of moral and exemplary damages to plaintiff Ortigas to P150. It was only at Bangkok where for the first time. he was told by the Lufthansa office there that no word at all had been received from Rome and they had no space for him in first class. the proper arrangements therefor having been made already. Ortigas was at last informed that he could have a first class seat in that leg of the flight. We cannot see the point. Ortigas hardly had any choice.00 and P100. the same is affirmed. similar false representations were made to him at Dharham and Calcutta. when in truth such was not the case. DISPOSITIVE: WHEREFORE. after it deprives him of his space in order to favor another passenger. Although molested and embarrassed to the point that he had to take nitroglycerine pills to ward off a possible heart attack. both moral and exemplary. that economy class is anyway just as good as first class. As found by the lower court what worsened the situation of Ortigas was that Lufthansa succeeded in keeping him as its passenger by assuring him that he would be given first class accommodation at Cairo. after having contracted and paid for first class accommodations duly confirmed and validated.000. the Lufthansa employee who had indifferently told him about his downgrading paid very little attention if ever to said request. respectively. from Bangkok to Hongkong. it is argued. but a specific act of Lufthansa employee at the airport of giving preference to a Belgian after examining Ortigas passport wherein his Filipino nationality is noted. instead of complying with the request of Ortigas that other airlines be contacted to find out it they had first class space for him.000. there can be no doubt as to the right of Ortigas to damages.

The window glass near the driver's seat of the Rabbit Bus was detached and the left side of its body was damaged. The Court of Appeals found that the two vehicles sideswiped each other at the middle of the road. Bulacan. This Court has repeatedly held that moral damages are not recoverable in actions for damages predicated on a breach of the contract of transportation. as in the instant case. vs.ESGUERRA Facts: Patrocinio Esguerra was a paying passenger of Bus No. In other words both vehicles were in their respective lanes and that they did not invade the lane of the other. was coming from the opposite direction. The exceptions are (1) where the mishap results in the death of a passenger.PHILIPPINE RABBIT BUS LINES. As the bus approached barrio San Marcos. moral and exemplary. The vehicles sideswiped each other. The left arm was amputated. 1972. SWEET LINES vs. Inc. He sat at the left-end of the fourth row behind the driver. and (2) where it is proved that the carrier was guilty of fraud or bad faith. in view of the provisions of Articles 2219 and 2220 of the New Civil Code. Inc. He boarded the said bus at the Manila terminal about four o'clock in the afternoon of November 6. 223 of Philippine Rabbit Bus Lines. It cannot be said therefore that there was fraud or bad faith on the part of the carrier's driver. Pampanga. Plaintiff filed a case against the Philippine Rabbit Bus Lines. The left forearm of Patrocinio Esguerra was hit by a hard blunt object. only to be towed back to cebu due to engine trouble. He was immediately brought to the Bulacan Provincial Hospital in Malolos.. together with their respective drivers. bound for San Fernando. breaking the bones into small fragments while the soft tissues of the muscles and the skin were mascerated. Instead of departing at the scheduled hour of about midnight on July 8. arrving at about 4:00pm n the same day. M/V Sweet Grace. CA Facts: Private respondents purchased first-class tickets from petitioner at the latter’s office in Cebu City. and the Transport Contractors. close to the window. litigation expenses and costs. the vessel set sail at 3:00am of July 9. Calumpit. Western Samar. actual and compensatory. The contention of petitioners with respect to the award of moral damages is meritorious. no moral damages are recoverable. Issue: Whether or not the award of moral damages is proper Held: No. Bulacan for treatment. even if death does not result. bound for Catbalogan. Repairs having been accomplished. a freight truck owned and operated by the Transport Contractors. They were to board petitioner’s vessel. praying that judgment be rendered in favor of the plaintiff and against the defendants requiring them to pay. The Court of Appeals affirmed CFI’s decision. 1961. the vessel lifted anchor again on July 10. Inc. . 1972 at around 8:00am. This being the case. 1972. INC. jointly and severally damages. Inc.

and when plaintiff-appellees wanted to leave the port and gave up the trip.000.” Under the circumstances. . which was the first port of call. Paris. may have been the motive.Instead of docking to Catbalogan. this suit for damages for breach of contract of carriage which the Trial court. affirmed by the CA. (2) Knowing fully well that it would take no less than fifteen hours to effect the repairs of the damaged engine.appellants did not offer to refund plaintiffs-appellees’ tickets nor provide them with transportation form Tacloban to Catbalogan.appellants instead made announce ment of assurance that the vessel would leave within a short period of time. Private respondents had no recourse but to disembark and board a ferryboat to Catbalogan. we find the award of moral damages excessive and accordingly reduce them from P75. Honolulu and back to Manila thru the same airline and other airlines it represents for which he was issued the corresponding first class tickets for the entire trip. Issue: Whether or not moral damages may be rightfully demanded. Both the Trial Court and the Appellate Court found that there was bad faith on the part of petitioner in that: (1) Defendants. “we are leaving already”. Hamburg. and not personal ill will. since it is not the function of the court to analyze and review evidence on this point all over again. CA Facts: Rogelio A. Held: Yes. TRANS WORLD AIRLINES vs. New York. (3) Defendants.000. however. Self enrichment or fraternal interest.00 to P3. Hence. Moscow. Vinluan is a practicing lawyer who entered into a contract for air carriage for valuable consideration with Japan Airlines first class from Manila to Tokyo. That the finding of bad faith is binding on us. Los Angeles. Under Art. defendantsappellants employees would come and say. the vessel proceeded direct to Tacloban at around 9:00pm of July 10. aside from the fact that we find it faithful to the meaning of bad faith enunciated thus: “Bad faith means a breach of a known duty through some motive or interest or ill will. but it is malice nevertheless. moral damages are justly due in breaches of contract where the defendant acted fraudulently or in bad faith. 2220 of the Civil Code.00 respectively for each of the private respondents. Zurich.Appellants did not give notice to plaintiffs-appellates as to the change of scheduled of the vessel. Judgment MODIFIED . decided in favor of plaintiffs. defendants. 1972.

1979. the award of moral and exemplary damages by the respondent court is in order. he saw that several Caucasians who arrived much later were accommodated in first class seats when the other passengers did not show up.M. He asked for an explanation but TWA employees on duty declined to give any reason. As he protested.. Vinluan filed an action for damages against the TWA in the Court of First Instance of Rizal alleging breach of contract and bad faith. 5 More so in this case . Petitioner sacrificed the comfort of its first class passengers including private respondent Vinluan for the sake of economy. He was informed that there was no first class seat available for him on the flight.On April 18. 1979. It was twice confirmed and yet respondent unceremoniously told him that there was no first class seat available for him and that he had to be downgraded to the economy class.. Held: Respondent had a first class ticket for Flight No. While waiting for the departure of Flight No. 41 from New York to San Francisco. Braam. 41 with its New York office." To be able to keep his schedule. he was arrogantly threatened by one Mr. rudely threatened him with the words "Don't argue with me. Braam. Vinluan reconfirmed his reservation for first class accommodation on board TWA Flight No. I have a very bad temper. at about 8:00 o'clock A. Vinluan noticed that other passengers who were white Caucasians and who had checked-in later than him were given preference in some first class seats which became available due to "no show" passengers. Issue: Whether or not Trans World should be liable for damages. a certain Mr. while he was waiting for the flight. Such inattention and lack of care for the interest of its passengers who are entitled to its utmost consideration. The discrimination is obvious and the humiliation to which private respondent was subjected is undeniable. A validated stub was attached to the New York-Los Angeles portion of his ticket evidencing his confirmed reservation for said flight with the mark "OK " On April 20. he went to the office of Trans World Airlines (TWA) and secured therefrom confirmed reservation for first class accommodation on board its Flight No. On February 15. 1979. Worst still. 41. amount to bad faith which entitles the passenger to the award of moral damages. Vinluan presented his ticket for check-in at the counter of TWA at JFK International Airport at about 9:45 o'clock A. When he began to protest. 41 of petitioner from New York to San Francisco on April 20. 1980. the scheduled time of the departure being 11:00 o'clock A.M. Indeed. private respondent had shown that the alleged switch of planes from a Lockheed 1011 to a smaller Boeing 707 was because there were only 138 confirmed economy class passengers who could very well be accommodated in the smaller plane and not because of maintenance problems. Consequently. one of the TWA employees. while in Paris. particularly as to their convenience. The CFI ruled in favor of Vinluan which was affirmed by the Court of appeals with some modifications. He was advised that his reservation was confirmed. Vinluan was compelled to take the economy seat offered to him and he was issued a refund application" as he was downgraded from first class to economy class.M.

and serious anxiety day and night of January 17th until the morning of January . This award should be reasonably sufficient to indemnify private respondent for the humiliation and embarrassment that he suffered and to serve as an example to discourage the repetition of similar oppressive and discriminatory acts. Flight 002. ARMOVIT vs.COURT OF APPEALS Facts: In October 1981. NW flight 002. and the exemplary damages should be reduced to P200.00. time 10:30 A. Armovit protested in extreme agitation that because of the bump-off he will not be able to keep his appointments with his patients in the U. petitioner arrived at the check-in counter of private respondent at the Manila International Airport at 9:15 in the morning. date 17 January.000. OK. wounded feelings. 306. the petitioners decided to spend their Christmas holidays with relatives and friends in the Philippines.S. 307. The departure time in the three (3) tickets of petitioners was not changed when re-confirmed. Petitioners suffered anguish. to Manila and back. He was a director of several companies and was active in civic and social organizations in the Philippines. (Northwest Airlines. was already taking off and the 10:30 A. Considering the circumstances of this case and the social standing of private respondent in the community. the private respondent was a practicing lawyer.M. flight time entered in their plane tickets was erroneous. The names of petitioners appeared in the passenger manifest and confirmed as Passenger Nos. Petitioners were rudely informed that they cannot be accommodated inasmuch as Flight 002 scheduled at 9:15 a. scheduled on January 17. and 308. he is entitled to the award of moral and exemplary damages.M. However. a senior partner of a big law firm in Manila. Inc. so they purchased from private respondent. the moral damages should be reduced to P300.M.S.S.) three (3) round trip airline tickets from the U. At the time of this unfortunate incident. Previous to the said date of departure petitioners re-confirmed their reservations through their representative Ernesto Madriaga who personally presented the three (3) tickets at the private respondent's Roxas Boulevard office.m. scheduled flight time recited in their tickets. 1982. Each ticket of the petitioners which was in the handwriting of private respondent's tickets sales agent contains the following entry on the Manila to Tokyo portion of the return flight: from Manila to Tokyo. Status. On their return trip from Manila to the U. Herein petitioner Dr.000. though not involved in the suit. plus three (3) tickets for the rest of the children. he was angrily rebuffed by an employee of petitioner.where instead of courteously informing private respondent of his being downgraded under the circumstances.00. which is a good one (1) hour and fifteen (15) minutes ahead of the 10:30 A.

considering the circumstances of this case whereby the private respondent attended to the plight of the petitioners. exemplary damages and nominal damages to the plaintiffs but the CA eliminated the award for moral and nominal damages. dinner. media so petitioners were advised to refrain from returning to the Philippines at the time when they were scheduled to testify. petitioners were compelled to file an action for damages in the Regional Trial Court of Manila. 1982. Atty. but were assured of this flight only on the very morning of that day. However. Held: Yes. brother of Dr. Armovit told the said check-in-officer that he had to be accommodated that morning so that he could attend to all his appointments in the U. took the witness stand for he was there from the time they checked in until the time they were rudely informed that their flight had already taken off. Issue: Whether or not the elimination of the CA of the award for moral damages. No doubt Atty.. that the petitioners were finally able to fly out of Manila on January 18. The CA overlooked the fact that a year after the incident there was a turmoil in the country because of the assassination of Benigno Aquino and that violent demonstrations in the country were sensationalized in the U.00 while waiting to be flown out of Manila. that Dr. moral damages. Because of the refusal of the private respondent to heed the repeated demands of the petitioners for compensatory damages arising from the aforesaid breach of their air-transport contracts.300. Armovit. taking care of their accommodations . that petitioner Jacqueline Armovit also complained about not being able to report for work at the expiration of her leave of absence. wounded feelings and social humiliation that petitioners suffered upon having been bumped off. and breakfast in the sum of P1. so that they experienced anxiety until they were assured seats for that flight.S. petitioners did not use their meal coupons supplied because of the limitations thereon so they had to spend for lunch. Angered and frustrated Dr.S.18th when they were finally informed that seats will be available for them on the flight that day. The contention of the CA that the appellees did not take the witness stand to testify on their "social humiliation. Armovit had to forego the professional fees for the medical appointments he missed due to his inability to take the January 17 flight. The RTC awarded actual damages. Nevertheless. Raymund Armovit's testimony adequately and sufficiently established the serious anxiety. wounded feelings and anxiety" and the breach of contract was not malicious or fraudulent was without merit. Armovit. that while petitioner had to accept private respondent's offer for hotel accommodations at the Philippine Village Hotel so that they could follow up and wait for their flight out of Manila the following day.

the failure to correct such erroneous entries and the manner by which petitioners were rudely informed that they were bumped off are clear indicia of such malice and bad faith and establish that private respondent committed a breach of contract which entitles petitioners to moral damages. which further warrants the award of damages? Held: Yes. And instead of PAL giving Samson expert and proper medical treatment it referred him to a general medical practitioner. The jolt caused injuries to Samson. The airplane crash-landed beyond the runway due to the slow reaction and poor judgment of said captain. headaches and general debility of private respondent were after-effects of the crash-landing.000. and that the physical headaches and dizziness experience by Samson were due to emotional disturbance over his inability to pass the required upgrading course given by PAL. headache and general debility allegedly caused by the accident and private respondent’s discharge from employment. . the Court finds that the petitioners are entitled to moral damages in the amount of P100. COURT OF APPEALS 106 SCRA 391 Facts: Private respondent Jesus Samson flew as co-pilot on a regular flight from Manila to Legaspi with Captain Delfin Bustamante in a plane belonging to petitioner PAL. which caused him to file a complaint for damages. PHILIPPINE AIRLINES vs. The dizziness.while waiting and boarding them in the flight back to the U.S. Judgement was rendered in favor of Samson in the lower court which was affirmed by CA with some modification. when it did not maintain the required pressure on the brakes and notwithstanding the diligent efforts of Samson. PAL denied liability on the ground of fortuitous event. Doctors presented by PAL even admit the vital facts about Samson’s brain injury. Hence the instant petition. Also. by imposing legal rate of interest on the unearned income of Samson. Issue: Is there a causal connection between the injuries suffered by private respondent during the accident and the subsequent periodic dizziness. The deletion of the nominal damages by the appellate court is welltaken since there is an award of actual damages. Wherefore the decision of the CA is modified providing the award for moral damages.00 each. the gross negligence committed by private respondent in the issuance of the tickets with entries as to the time of the flight. Now. on grounds of physical disability Samson was discharged from PAL’s employ. Nominal damages cannot co-exist with actual or compensatory damages. the following day.

having considered the bad faith of PAL. 2219(2) is applicable.00 a month for extra pay for extra flying time including bonus every year is justified. she stopped her car and looked to the right and to the left and not noticing any on-coming vehicle on either side she slowly proceeded on first gear to cross the same. Both defendants were held jointly and severally liable for the physical injuries suffered by the . The damage to the taxicab amounted to P190. INC. the award of damages was likewise affirmed. Even from the standpoint of the petitioner that there is an employee-employer relationship between it and private respondent arising from the contract of employment.000] by computing the basic salary per annum at P750.27. suddenly bumped and struck petitioner’s car. Facts: Petitioner was driving her own Chevrolet Bel Air car along Arroceros Street with the intention of crossing Taft Avenue in order to turn left. Exemplary Damages PRUDENCIADO vs. Alliance Transport System. The lower court found Jose Leyson guilty of negligence. The plane hit outside the airstrip.00.00 a month and P300. The grant of moral damages[P50. near the island thereof. Inc. private respondent warned him that they were not in the vicinity of Daet but above the town of Ligao. to go to the Philippine Normal College Compound where she would hold classes. the pilot would hit the Mayon Volcano had not the plaintiff warned him. applying the provisions of Article 2220. ALLIANCE TRANSPORT SYSTEM. but when she was almost at the center. In another instance. One month prior to the crash-landing.451. that before crossing Taft Ave. She claimed that she was driving her car at the rate of 10 kmph. justifying the recovery of moral damages. The grant of compensatory damages[P204. even if he was sick. These more than prove what private respondent had complained of. when the pilot was preparing to land in Daet. failed to prove to the satisfaction of the court that it had exercised the required diligence of a good father of the family in the selection.000] was also justified. C. Petitioner filed a complaint for damages against respondents. Jose Leyson who was driving People's Taxicab owned and operated by Alliance Transport System. private respondent is still entitled to moral damages in view of the finding of bad faith or malice. No one will certify the fitness to fly a plane of one suffering from the disease. suffering more particularly brain concussion while her car was damaged to the extent of P2. thereby causing physical injuries in different parts of her body.. Bustamante to fly on the that fateful day of the accident. Having affirmed the gross negligence and casual connection of the after-effects of the accident. supervision and control of its employees.There was also gross negligence by PAL for allowing Capt. The negligence of PAL is clearly a quasi-delict and therefore Art. having tumor on his nose. Inc. Disregard thereof by PAL is condemnable.

000 to P2. P5. Otherwise stated. CA modified the award.27 for actual damages representing the cost for the repair of the car of plaintiff.000 and eliminating the award of exemplary damages and attorney's fees. A careful review of the records makes it readily apparent that the injuries sustained by petitioner are not as serious or extensive as they were claimed to be. which became the basis of the award of exemplary damages that respondent driver was running at high speed after turning to the right along Taft Ave. it was raining that time and the roads are slippery. which appears to be the underlying basis to justify such reduction. Issue: Whether or not the Court of Appeals is justified in modifying or changing the grant of damages by the trial court. to pass the test of reasonableness.plaintiff as well as for the damage to her car. Much more. actually took place. Unquestionably. exemplary damages may be granted if the defendant acted with grave negligence. to warrant the damages awarded by the trial court. Prudenciado suffered a brain concussion which although mild can admittedly produce the effects complained of by her and that these symptoms can develop after several years and can lead to some. The findings of the trial court is apparent. While the damages sought to be recovered were not satisfactorily established to the extent desired by the petitioner. This however was overruled by CA and did not subscribed to the fact that the driver was grossly negligent. she is undeniably a proper recipient of moral damages which are proportionate to her suffering.000. Hence the instant petition. in which this Court finds that it has erred. On the other hand.00 as attorney's fees. Being a doctor by profession.00 as exemplary damages. not to mention the fact that such were not supported by the medical findings presented. to provide an example or correction for the public good. therefore. The frequent incidence of accidents of this nature caused by taxi drivers indeed demands corrective measures. . the damages imposed by the lower court should be reduced to more reasonable levels.451. her fears can be more real and intense than an ordinary person. The award was P2.000.” The rationale behind exemplary or corrective damages is. As to exemplary damages. serious handicaps or predispose the patient to other sickness. as the name implies. Article 2231 of the Civil Code provides: “In quasi-delicts. Held: No. reducing the amount of moral damages from P25. P25. with costs against the defendants. in addition to the other consequential damages prayed for.00 as moral damages. Failing to notice petitioner's car. it was nonetheless not disputed that an accident occurred due to the fault and negligence of the respondents that Dra. he failed to apply his brakes and did not even swerve to the right to avoid the collision. a closer scrutiny of the exhibits showing a moderate damage to the car can by no stretch of the imagination produce a logical conclusion that such disastrous effects of the accident sought to be established. In fact. it will be observed that the reduction of the damages made by the Court of Appeals is both too drastic and unrealistic. considering that the traffic was clear. and the further sum of P3. coming from Ayala Boulevard.000.

It is argued that this Court is without jurisdiction to adjudicate the exemplary damages since there was no allegation nor prayer. Suffice it to state that when plaintiffs prayed in their complaint for such other relief and remedies that may be availed of under the premises.000. An action was brought to recover damages against petitioners predicated not only on a breach of contract of carriage for failure to safely convey the plaintiffs to their destination.000. Exemplary damages may be imposed by way of example or correction only in addition. Issue: Whether or not there should be an award of exemplary damages. while travelling on its way to Manila. If the amount of exemplary damages need not be proved. Arsenio Mendoza suffered the most serious injuries which damaged his vertebrae causing the paralysis of his lower extremities. No pronouncement as to costs. and respondents are ordered to jointly and severally pay the petitioner.000." Now. it need not also be alleged. Polo. therefore.DISPOSITIVE: PREMISES CONSIDERED. Bulacan. Held: Yes. nor counterclaim of error for the same by the respondents. but that they cannot be recovered as a matter of right. The award of P40. but also on account of a criminal negligence on the part of defendant driver. It however added the amount of P30. that in the complaint. (1) the sum of P2. plaintiffs "prayed for such other and further relief as this Court may deem just and equitable. (3) the sum of P5. their determination depending upon the discretion of the court. (2) the sum of P15.00.00 as exemplary damages and sustained the award of attorney's fees in the amount of P5. MARCHAN vs. and (4) the sum of P3.000. to compensatory damages.451.00 as moral damages. and the . nor proof. among others. The lower court ruled in favor of plaintiffs. in effect.00 as compensatory damages was affirmed by CA. It is to be observed however.000. who were then inside the bus as passengers were thrown out to the ground resulting in their multiple injuries.000. plaintiffs may not be expected to single out by express term the kind of damages they are trying to recover against the defendant's carrier. As a result of which Arsenio Mendoza. since the body of the complaint sought to recover damages against the defendant-carrier wherein plaintiffs prayed for indemnification for the damages they suffered as a result of the negligence of the driver who is appellant's employee and since exemplary damages is intimately connected with general damages.00 as exemplary damages. the assailed decision of the Court of Appeals is hereby MODIFIED insofar as the award of damages is concerned.27 for actual damages representing the cost of the repair of her car.00 as attorney's fees. the court is called upon the exercise and use its discretion whether the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint. his wife and child. MENDOZA Facts: A passenger bus of the Philippine Rabbit Bus Lines which was then driven by Silverio Marchan fell into a ditch somewhere in Barrio Malanday.

Respondents are entitled to interest for the amount of compensatory damages from the date of the decision of the lower court and legal interest on the exemplary damages from the date of the decision of the Court of Appeals.000 attorneys fees. . A modification of the decision however is proper.reason is obvious because it is merely incidental or dependent upon what the court may award as compensatory damages. There is no reason to consider that the lower court erred in awarding the P5.

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