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NICOLAS Aug 29, 2012 Defense of Due Diligence of a Good Father

This defense is not tenable in this case. The Pereñas are common
FACTS: carriers. They are not merely private carriers. (Prior to this case, the status of
In June 1996, Nicolas and Teresita Zarate contracted Teodoro and private transport for school services or school buses is not well settled as to
Nanette Pereña to transport their (Zarate’s) son, Aaron Zarate, to and from whether or not they are private or common carriers – but they were generally
school. The Pereñas were owners of a van being used for private school regarded as private carriers). Private transport for schools are common
transport. At about 6:45am of August 22, 1996, the driver of the said private carriers. The Pereñas, as the operators of a school bus service were: (a) engaged
van, Clemente Alfaro, while the children were on board including Aaron, in transporting passengers generally as a business, not just as a casual
decided to take a short cut in order to avoid traffic. The usual short cut was a occupation; (b) undertaking to carry passengers over established roads by the
railroad crossing of the Philippine National Railway (PNR). method by which the business was conducted; and (c) transporting students for
Alfaro saw that the barandilla (the pole used to block vehicles crossing a fee. Despite catering to a limited clientèle, the Pereñas operated as a common
the railway) was up which means it was okay to cross. He then tried to overtake carrier because they held themselves out as a ready transportation
a bus. However, there was in fact an oncoming train but Alfaro no longer saw indiscriminately to the students of a particular school living within or near
the train as his view was already blocked by the bus he was trying to overtake. where they operated the service and for a fee.
The bus was able to cross unscathed but the van’s rear end was hit. During the Being a common carrier, what is required of the Pereñas is not mere
collision, Aaron, was thrown off the van. His body hit the railroad tracks and his diligence of a good father. What is specifically required from them by law is
head was severed. He was only 15 years old. extraordinary diligence – a fact which they failed to prove in court. Verily, their
It turns out that Alfaro was not able to hear the train honking from 50 obligation as common carriers did not cease upon their exercise of diligently
meters away before the collision because the van’s stereo was playing loudly. choosing Alfaro as their employee.
The Zarates sued PNR and the Pereñas (Alfaro became at-large). Their (It is recommended that you read the full text, the Supreme Court
cause of action against PNR was based on quasi-delict. Their cause of action made an elaborate and extensive definition of common and private carriers as
against the Pereñas was based on breach of contract of common carriage. well as their distinctions.)
In their defense, the Pereñas invoked that as private carriers they were
not negligent in selecting Alfaro as their driver as they made sure that he had a Award of Damages for Aaron’s loss of earning capacity despite hebeing a high
driver’s license and that he was not involved in any accident prior to his being school student at the time of his death
hired. In short, they observed the diligence of a good father in selecting their The award is proper. Aaron was enrolled in a reputable school (Don
employee. Bosco). He was of normal health and was an able-bodied person. Further, the
PNR also disclaimed liability as they insist that the railroad crossing basis of the computation of his earning capacity was not on what he would have
they placed there was not meant for railroad crossing (really, that’s their become. It was based on the current minimum wage. The minimum wage was
defense!). validly used because with his circumstances at the time of his death, it is most
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the certain that had he lived, he would at least be a minimum wage earner by the
RTC. In the decision of the RTC and the CA, they awarded damages in favor of time he starts working. This is not being speculative at all.
the Zarates for the loss of earning capacity of their dead son. The Teehankee case was different because in that case, the reason why
The Pereñas appealed. They argued that the award was improper as no damages were awarded for loss of earning capacity was that the defendants
Aaron was merely a high school student, hence, the award of such damages was there were already assuming that the victim would indeed become a pilot –
merely speculative. They cited the case of People vs Teehankee where the hence, that made the assumption speculative. But in the case of Aaron, there
Supreme Court did not award damages for the loss of earning capacity despite was no speculation as to what he might be – but whatever he’ll become, it is
the fact that the victim there was enrolled in a pilot school. certain that he will at the least be earning minimum wage.

ISSUES: (1)Whether or not the defense of due diligence of a good father by the
Pereñas is untenable.
(2) Whether or not the award of damages for loss of income is proper.

Yes, in both issues.
TRANSPO – 5. A.F Sanchez Brokerage, Inc.vs. CA G.R. No. 147079, December In this light, Sanchez Brokerage as a common carrier is mandated to observe,
21, 2004 under Article 1733 of the Civil Code, extraordinary diligence in the vigilance
over the goods it transports according to all the circumstances of each case. In
FACTS: AF Sanchez is engaged in a broker business wherein its main job is to the event that the goods are lost, destroyed or deteriorated, it is presumed to
calculate customs duty, fees and charges as well as storage fees for the cargoes. have been at fault or to have acted negligently, unless it proves that it observed
Part also of the services being given by AF Sanchez is the delivery of the extraordinary diligence. In the event that the goods are lost, destroyed or
shipment to the consignee upon the instruction of the shipper. deteriorated, it is presumed to have been at fault or to have acted negligently,
Wyett engaged the services of AF Sanchez where the latter delivered the unless it proves that it observed extraordinary diligence.
shipment to HizonLaboratories upon instruction of Wyett. Upon inspection, it
was found out that at least 44 cartons containing contraceptives were in bad AF Sanchez Brokerage vs. CA
condition. G.R. No. 147079
Wyett claimed insurance from FGU which paid Wyeth-Suaco the amount of December 21, 2004
P181,431.49. Wyett thus issued a issued Subrogation Receipt in favor of FGU
Insurance. FGU Insurance Corporation (FGU) then brought an action for FACTS:
reimbursement against petitioner A.F. Sanchez Brokerage Inc. (Sanchez
Brokerage) to collect the amount paid by the former to Wyeth-Suaco On July 8, 1992, Wyeth-Pharma GMBH shipped on board an aircraft of KLM
Laboratories Inc. Royal Dutch Airlines at Dusseldorf, Germany oral contraceptives for delivery to
A.F. Brokerage refused to admit liability for the damaged goods as it maintained Manila in favor of the consignee, Wyeth-Suaco Laboratories, Inc. Wyeth-Suaco
that the damage was due to improper and insufficient export packaging, insured the shipment against all risks with FGU Insurance
discovered when the sealed containers were opened outside the PSI warehouse.
Upon arrival of the shipment on July 11, 1992 at the Ninoy Aquino International
The trial court dismissed the complaint, holding that the Survey Report Airport (NAIA), it was discharged without exception and delivered to the
prepared by the Elite Surveyors is bereft of any evidentiary support and a mere warehouse of the Philippine Skylanders, Inc. (PSI) located also at the NAIA for
product of pure guesswork. safekeeping.

On appeal, the appellate court reversed the decision of the trial court, holding In order to secure the release of the cargoes from the PSI and the Bureau of
that the Sanchez Brokerage engaged not only in the business of customs Customs, Wyeth-Suaco engaged the services of Sanchez Brokerage. On the
brokerage but also in the transportation and delivery of the cargo of its clients, receipt, another representative of Sanchez Brokerage, M. Sison, acknowledged
hence, a common carrier within the context of Article 1732 of the NCC. that he received the cargoes consisting of three pieces in good condition. Upon
inspection, however, he, together with Ruben Alonzo of Elite Surveyors,
discovered that 44 cartons containing Femenal and Nordiol tablets were in bad
ISSUE:Whether or not AF Sanchez a common carrier? order He thus placed a note above his signature on the delivery receipt stating
that 44 cartons of oral contraceptives were in bad order. The remaining 160
RULING: YES. As defined under Article 1732 of the Civil Code, common carriers cartons of oral contraceptives were accepted as complete and in good order.
are persons, corporations, firms or associations engaged in the business of Wyeth-Suaco later demanded, by letter of August 25, 1992, from Sanchez
carrying or transporting passengers or goods or both by land, water or air for Brokerage the payment of P191,384.25 representing the value of its loss arising
compensation, offering their services to the public. It does not distinguish from the damaged tablets.
between one whose principal business activity is the carrying of goods and one
who does such carrying only as an ancillary activity. As the Sanchez Brokerage refused to heed the demand, Wyeth-Suaco filed an
insurance claim against FGU Insurance which paid Wyeth-Suaco the amount
The contention therefore of Sanchez Brokerage that it is not a common carrier of P181,431.49. On demand by FGU Insurance for payment of the amount
but a customs broker whose principal function is to prepare the correct customs of P181,431.49 it paid Wyeth-Suaco, Sanchez Brokerage, by letter of January 7,
declaration and proper shipping documents as required by law is bereft of 1993, disclaimed liability for the damaged goods, positing that the damage was
merit. It suffices that petitioner undertakes to deliver the goods for due to improper and insufficient export packaging; that when the sealed
pecuniary consideration. containers were opened outside the PSI warehouse, it was discovered that some
of the loose cartons were wet,] prompting its (Sanchez Brokerages)
representative Morales to inform the Import-Export Assistant of Wyeth-Suaco, SPOUSES CRUZ v. SUN HOLIDAYS; GR 186312; June 29, 2010
Ramir Calicdan, about the condition of the cargoes but that the latter advised to FACTS: Spouses Cruz files a complaint for damages against Sun Holidays arising
still deliver them to Hizon Laboratories where an adjuster would assess the from the death of their son who perished with his wife on board the boat M/B
damage. Coco Beach III that capsized en route Batangas from PuertoGalera where the
couple had stayed at Coco Beach Island Resort owned and operated by
ISSUE: respondent. Their stay was by virtue of a tour package-contract with
Whether or not Sanchez Brokerage is a common carrier which is required to respondent that included transportation to andfrom the resort and the point of
exercise extraordinary diligence. departure in Batangas.Eight of the passengersincluding petitioner’ssonand his
wife died during the accident. Sun denied any responsibility for the incident
RULING: which it consideredto be a fortuitous event.
Petitioners allege that as a common carrier, Sun was negligent in allowing
Yes. The appellate court did not err in finding petitioner, a customs broker, to be the boat to sail despite the storm warning bulletins issued by
also a common carrier, as defined under Article 1732 of the Civil Code. Article PAGASA.Respondent denied being a commoncarrieralleging that its boats are
1732 does not distinguish between one whose principal business activity is the not available to the public but are only used as ferry resort carrier. It
carrying of goods and one who does such carrying only as an ancillary alsoclaimed to have exercised the utmost diligence in ensuring the safety of its
activity. The contention, therefore, of petitioner that it is not a common carrier passengersand that contraryto petitioner’sallegation, there was no storm as the
but a customs broker whose principal function is to prepare the correct customs Coast Guard in fact cleared the voyage. M/B CocoBeach III was not filled to
declaration and proper shipping documents as required by law is bereft of capacity and had sufficient life jackets for its passengers.
merit. It suffices that petitioner undertakes to deliver the goods for pecuniary ISSUE: W/N respondent is a common carrier and breached its obligation
consideration. HELD: YES. Respondent is a common carrier. Its ferry services are so
intertwined with its business as to be properly considered ancillary thereto. The
In this light, petitioner as a common carrier is mandated to observe, under constancy of respondent’s ferry services in its resort operations is underscored
Article 1733of the Civil Code, extraordinary diligence in the vigilance over the by its having its own Coco Beach boats. And the tour packages it offers, which
goods it transports according to all the circumstances of each case. In the event include the ferry services may be availed of by anyone who can afford to pay the
that the goods are lost, destroyed or deteriorated, it is presumed to have been at same. These services are thus available to the public.
fault or to have acted negligently, unless it proves that it observed In the De Guzman case, Article 1732 of the Civil Code defining common carriers
extraordinary diligence. has deliberately refrained from making distinctions on whether the carrying of
persons or goods is the carrier’s principal business whether it is offered on a
In the case at bar, it was established that petitioner received the cargoes from regular basis' or whether it is offered to the general public.
the PSI warehouse in NAIA in good order and condition; and that upon delivery Under the Civil Code, common carriers, from the nature of their business and for
by petitioner to Hizon Laboratories Inc., some of the cargoes were found to be in reasons of public policyare bound to observe extraordinary diligence for the
bad order, as noted in the Delivery Receiptissued by petitioner, and as indicated safety of the passengers transported by themaccording to all the circumstances
in the Survey Report of Elite Surveyors and the Destruction Report of Hizon of each case. They are bound to carry the passengers safely as far as human care
Laboratories, Inc. and foresight can provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances.
If the claim of petitioner that some of the cartons were already damaged upon When a passenger dies or is injured in the discharge of a contract of carriage, it
delivery to it were true, then it should naturally have received the cargo under is presumed that the common carrier is at fault or negligent. In fact, there is
protest or with reservations duly noted on the receipt issued by PSI. But it made even no need for the court to make an express finding of fault or negligence on
no such protest or reservation. the part of the common carrier.This statutory presumption may only be
overcome by evidence that the carrier exercised extraordinary diligence.
Since petitioner received all the cargoes in good order and condition at the time Nostradamus Villanueva vs. Domingo
they were turned over by the PSI warehouseman, and upon their delivery to
Hizon Laboratories, Inc. a portion thereof was found to be in bad order, it was Facts:
incumbent on petitioner to prove that it exercised extraordinary diligence in the Priscilla Domingo, respondent is the registered owner of the car driven by one
carriage of the goods. It did not, however. Hence, its presumed negligence under of the respondent Leando Domingo. While petitioner was the registered owner
Article 1735 of the Civil Code remains unrebutted. of the green Mitsubishi Lancer driven by Ocfamia hit the car owned as Domingo
Villanueva. Ocfemia was driving with expired license and positive for alcoholic UCPB vs Aboitiz Shipping
breath. Hence, Manila Assistant City Prosecutor Oscar A. Pascua recommended G.R. No. 168433
the filing of information for reckless imprudence resulting to damage to
property and physical injuries. Nostradamus Villanueva claimed that he was no Facts:
longer the owner of the car at the time of the mishap because it was swapped On June 18, 1991, three (3) units of waste water treatment plant with
with a Pajero owned by Albert Jaucian/Auto Palace Car Exchange accessories were purchased by San Miguel Corporation (SMC for brevity) from
Super Max Engineering Enterprises, Co., Ltd. of Taipei, Taiwan. The goods came
Held:May the registered owner of a motor vehicle be held liable for damages from Charleston, U.S.A. and arrived at the port of Manila on board MV
arising from a vehicular accident involving his motor vehicle while being "SCANDUTCH STAR", a vessel owned and operated by DAMCO. The same were
operated by the employee of its buyer without the latter’s consent and then transported to Cebu on board MV "ABOITIZ SUPERCON II". After its arrival
knowledge? at the port of Cebu and clearance from the Bureau of Customs, the goods were
delivered to and received by SMC at its plant site on August 2, 1991. It was then
Held: discovered that one electrical motor of DBS Drive Unit Model DE-30-7 was
damaged.Interestingly enough, UCPB itself has revealed that when the shipment
YES. SC ruled that the registered owner of any vehicle is directly and primarily was discharged and opened at the ICTSI in Manila in the presence of an Eagle
responsible to the public and third persons while it is being operated. The Express representative, the cargo had already been found damaged. In fact, a
principle upon which this doctrine is based is that in dealing with vehicles request for bad order survey was then made and a turnover survey of bad order
registered under the Public Service Law, the public has the right to assume or cargoes was issued, pursuant to the procedure in the discharge of bad order
presume that the registered owner is the actual owner thereof, for it would be cargo. The shipment was then repacked and transshipped from Manila to Cebu
difficult for the public to enforce the actions that they may have for injuries on board MV Aboitiz Supercon II. When the cargo was finally received by SMC at
caused to them by the vehicles being negligently operated if the public should its Mandaue City warehouse, it was found in bad order, thereby confirming the
be required to prove who the actual owner is. damage already uncovered in Manila.Pursuant to an insurance agreement,
plaintiff-appellee paid SMC the amount of P1,703,381.40 representing the value
SC, however, did not imply by his doctrine, however, that the registered owner of the damaged unit. In turn, SMC executed a Subrogation Form dated March 31,
may not recover whatever amount he had paid by virtue of his liability to third 1992 in favor of plaintiff-appellee. The trial court rendered a decision adjudging
persons from the person to whom he had actually sold, assigned or conveyed Aboitiz Shipping and DAMCO as solidarily liable for the damages caused to
the vehicle. UCPB. The appellate court, as previously mentioned, reversed the decision of
the trial court and ruled that UCPB's right of action against respondents did not
Under the same principle the registered owner of any vehicle, even if not used accrue because UCPB failed to file a formal notice of claim within 24 hours from
for a public service, should primarily be responsible to the public or to third (SMC's) receipt of the damaged merchandise as required under Art. 366 of the
persons for injuries caused the latter while the vehicle is being driven on the Code of Commerce. According to the Court of Appeals, the filing of a claim
highways or streets. within the time limitation in Art. 366 is a condition precedent to the accrual of a
right of action against the carrier for the damages caused to the merchandise.
A registered owner who has already sold or transferred a vehicle has the
recourse to a third-party complaint, in the same action brought against him to Issue:
recover for the damage or injury done, against the vendee or transferee of the WON Aboitiz Shipping is liable for the damages in light of Art. 366 of the
vehicle. COde of Commerce

Whether the driver is authorized or not by the actual owner is irrelevant Held:
to determining the liability of the registered owner who the law holds No. In charging Aboitiz with liability for the damaged cargo, the trial court
primarily and directly responsible for any accident, injury or death caused by condoned UCPB's wrongful suit against Aboitiz to whom the damage could not
the operation of the vehicle in the streets and highways. have been attributable since there was no evidence presented that the cargo
was further damaged during its transshipment to Cebu. Even by the exercise of
extraordinary diligence, Aboitiz could not have undone the damage to the cargo
that had already been there when the same was shipped on board its
vessel.That said, it is nonetheless necessary to ascertain whether any of the
remaining parties may still be held liable by UCPB. The provisions of the Code of respondent sent a demand letter to PAL and Singapore Airlines. However, both
Commerce, which apply to overland, river and maritime transportation, come airlines disowned liability and blamed each other for the fiasco. Then, a
into play.The requirement to give notice of loss or damage to the goods is not an Complaint for Damages before the RTC was filed seeking compensation for
empty formalism. The fundamental reason or purpose of such a stipulation is moral damages. PAL filed a Motion to Dismisson the ground that the said
not to relieve the carrier from just liability, but reasonably to inform it that the complaint was barred on the ground of prescription, i.e. two years. RTC denied
shipment has been damaged and that it is charged with liability therefor, and to the Motion to Dismiss and this was affirmed by the Court of Appeals.Hence, this
give it an opportunity to examine the nature and extent of the injury. This petition.
protects the carrier by affording it an opportunity to make an investigation of a
claim while the matter is still fresh and easily investigated so as to safeguard Issue:What is the applicable law, the Civil Code or the Warsaw Convention? Has
itself from false and fraudulent claims.We have construed the 24-hour claim the action prescribed?
requirement as a condition precedent to the accrual of a right of action against a
carrier for loss of, or damage to, the goods. The shipper or consignee must Held:The Civil Code is applicable. Therefore the action has not yet prescribed
allege and prove the fulfillment of the condition. Otherwise, no right of action for the prescription period is 4 years.
against the carrier can accrue in favor of the former.
Article 19 of the Warsaw Convention provides for liability on the part of a
The shipment in this case was received by SMC on August 2, 1991. However, as carrier for “damages occasioned by delay in the transportation by air of
found by the Court of Appeals, the claims were dated October 30, 1991, more passengers, baggage or goods. Article 24 excludes other remedies by further
than three (3) months from receipt of the shipment and, at that, even after the providing that “(1) in the cases covered by articles 18 and 19, any action for
extent of the loss had already been determined by SMC's surveyor. The claim damages, however founded, can only be brought subject to the conditions and
was, therefore, clearly filed beyond the 24-hour time frame prescribed by Art. limits set out in this convention.” Therefore, a claim covered by the Warsaw
366 of the Code of Commerce. Convention can no longer be recovered under local law, if the statue of
limitations of two years has elapsed.Nevertheless, this Court notes that
jurisprudence in the Philippines and the United States also recognizes that the
PHILIPPINE AIRLINES, INC. VS. HON. ADRIANO SAVILLO Warsaw Convention does not “exclusively regulate” the relationship between
G.R. No. 149547; July 4, 2008 passenger and carrier on an international flight.
In the Petition at bar, Savillo’s Complaint alleged that both PAL and Singapore
Facts: Private respondent SimplicioGriño was invited to participate in the 1993 Airlines were guilty of gross negligence, which resulted in his being subjected to
ASEAN Seniors Annual Golf Tournament held in Jakarta, Indonesia. He and “humiliation, embarrassment, mental anguish, serious anxiety, fear and
several companions decided to purchase their respective passenger tickets from distress” therefore this case is not covered by the Warsaw Convention.
PAL and were made to understand by PAL that its plane would take them from
Manila to Singapore, while Singapore Airlines would take them from Singapore When the negligence happened before the performance of the contract of
to Jakarta. However, upon arrival, Singapore Airlines rejected the tickets of carriage, it is not covered by the Warsaw Convention. Also, this case is
private respondent and his group because they were not endorsed by PAL. It comparable to Lathigra v. British Airways. In that case, it was held that the
was explained to them that if Singapore Airlines honored the tickets without airlines’ negligent act of reconfirming the passenger’s reservation days before
PAL’s endorsement, PAL would not pay Singapore Airlines for their passage. departure and failing to inform the latter that the flight had already been
Private respondent tried to contact PAL’s office at the airport, only to find out discontinued is not among the acts covered by the Warsaw Convention, since
that it was closed. Stranded at the airport in Singapore and left with no the alleged negligence did not occur during the performance of the contract of
recourse, private respondent was in panic and at a loss where to go; and was carriage but, rather, days before the scheduled flight.
subjected to humiliation, embarrassment, mental anguish, serious anxiety, fear
and distress. Eventually, they were forced to purchase tickets from Garuda In the case at hand, Singapore Airlines barred Savillo from boarding the
Airlines. When they arrived in Jakarta at midnight, the party who was supposed Singapore Airlines flight because PAL allegedly failed to endorse the tickets of
to fetch them from the airport had already left and they had to arrange for their private respondent and his companions, despite PAL’s assurances to Savillo that
transportation to the hotel at a very late hour. After the series of nerve- Singapore Airlines had already confirmed their passage. While this fact still
wracking experiences, private respondent became ill and was unable to needs to heard and established by adequate proof before the RTC, an action
participate in the tournament.Upon his return to the Philippines, private
based on these allegations will not fall under the Warsaw Convention, since the respondents fault since it did not clearly indicate the departure date on the
purported negligence on the party of PAL did not occur during the performance plane ticket.Respondent was also negligent in informing her of the wrong flight
of the contract of carriage but days before the scheduled flight. Thus, the schedule through its employee Menor. She insisted that the British Pageant was
present action cannot be dismissed based on the Statue of Limitations provided merely a substitute for the Jewels of Europe tour, such that the cost of the
under Article 29 of the Warsaw Convention. former should be properly set-off against the sum paid for the latter.
For its part, respondent company, through its Operations Manager, Concepcion
Had the present case merely consisted of claims incidental to the airlines’ delay Chipeco, denied responsibility for petitioners failure to join the first tour.
in transporting their passengers, the private respondent’s Complaint would Chipeco insisted that petitioner was informed of the correct departure date,
have been time-barred under Article 29 of the Warsaw Convention. However, which was clearly and legibly printed on the plane ticket. The travel documents
the present case involves a special species of injury resulting from the failure of were given to petitioner two days ahead of the scheduled trip.Petitioner had
PAL and/or Singapore Airlines to transport private respondent from Singapore only herself to blame for missing the flight, as she did not bother to read or
to Jakarta – the profound distress, fear, anxiety and humiliation that private confirm her flight schedule as printed on the ticket.
respondent experienced when, despite PAL’s earlier assurance that Singapore
Airlines confirmed his passage, he was prevented from boarding the plane and ISSUE: Whether or not the respondent company is a common carrier.
he faced the daunting possibility that he would be stranded in Singapore Airport
because the PAL office was already closed.These claims are covered by the Civil RULING: No. Respondent is not an entity engaged in the business of
Code provisions on tort, and not within the purview of the Warsaw Convention. transporting either passengers or goods and is therefore, neither a private nor a
Hence, the applicable prescription period is that provided under Article 1146 of common carrier. Respondent did not undertake to transport petitioner from
the Civil Code. one place to another since its covenant with its customers is simply to make
travel arrangements in their behalf. Respondent’s services as a travel agency
include procuring tickets and facilitating travel permits or visas as well as
booking customers for tours. While petitioner concededly bought her plane
CRISOSTOMO VS. CA ticket through the efforts of respondent company, this does not mean that the
G.R. No. 138334 latter ipso facto is a common carrier. At most, respondent acted merely as an
August 25, 2003 agent of the airline, with whom petitioner ultimately contracted for her carriage
to Europe. Respondent’s obligation to petitioner in this regard was simply to see
FACTS: to it that petitioner was properly booked with the airline for the appointed date
In May 1991, petitioner Estela L. Crisostomo contracted the services of and time. Her transport to the place of destination, meanwhile, pertained
respondent Caravan Travel and Tours International, Inc. to arrange and directly to the airline. It is thus not bound under the law to observe
facilitate her booking, ticketing and accommodation in a tour dubbed Jewels of extraordinary diligence in the performance of its obligation, as petitioner
Europe at a total cost of P74,322.70. Without checking her travel documents, claims. Since the contract between the parties is an ordinary one for services,
petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the the standard of care required of respondent is that of a good father of a family
first leg of her journey from Manila to Hongkong. To petitioners dismay, she under Article 1173 of the Civil Code. Also, we do not agree with the finding of
discovered that the flight she was supposed to take had already departed the the lower court that Menor’s negligence concurred with the negligence of
previous day. She learned that her plane ticket was for the flight scheduled on petitioner and resultantly caused damage to the latter. Menor’s negligence was
June 14, 1991. Subsequently, Menor prevailed upon petitioner to take another not sufficiently proved, considering that the only evidence presented on this
tour the British Pageant which included England, Scotland and Wales in its score was petitioner’s uncorroborated narration of the events.
itinerary. Upon petitioners return from Europe, she demanded from respondent
the reimbursement of P61,421.70, representing the difference between the sum
she paid for Jewels of Europe and the amount she owed respondent for the
British Pageant tour. Despite several demands, respondent company refused to
reimburse the amount, contending that the same was non-
refundable. Petitioner was thus constrained to file a complaint against
respondent for breach of contract of carriage and damages. In her complaint,
petitioner alleged that her failure to join Jewels of Europe was due to
PCI LEASING AND FINANCE, INC., v. UCPB GENERAL INSURANCE CO., INC. registered owner. Instances are numerous where vehicles running on
public highways caused accidents or injuries to pedestrians or other
G.R. No. 162267 vehicles without positive identification of the owner or drivers, or with
very scant means of identification. It is to forestall these circumstances,
so inconvenient or prejudicial to the public, that the motor vehicle
FACTS:A Mitsubishi Lancer car owned by UCPB, insured with UCPB General Insurance registration is primarily ordained, in the interest of the determination
Co., was traversing the Laurel Highway, Barangay Balintawak, LipaCity. It was driven of persons responsible for damages or injuries caused on public
by Flaviano Isaac with Conrado Geronimo (Asst. Manager of said bank), was hit and highways.
bumped by an 18-wheeler Fuso Tanker Truck, owned by defendants-appellants PCI
Leasing & Finance, Inc. allegedly leased to and operated by defendant-appellant Superior 2) NO. The new law, R.A. No. 8556, notwithstanding developments in foreign jurisdictions,
Gas & Equitable Co., Inc. (SUGECO) and driven by its employee, defendant do not supersede or repeal the law on compulsory motor vehicle registration. No part of
appellant Renato Gonzaga. The impact caused heavy damage to the Mitsubishi Lancer car the law expressly repeals Section 5(a) and (e) of R.A. No. 4136, as amended, otherwise
resulting in an explosion of the rear part of the car. The driver and passenger suffered known as the Land Transportation and Traffic Code. Thus, the rule remains the same: a
physical injuries. However, the driver defendant-appellant Gonzaga continued on its way sale, lease, or financial lease, for that matter, that is not registered with the Land
to its destination and did not bother to bring his victims to the hospital. Transportation Office, still does not bind third persons who are aggrieved
As the 18-wheeler truck is registered under the name of PCI Leasing, repeated demands in tortious incidents, for the latter need only to rely on the public registration of a motor
were made by plaintiff-appellee for the payment of the aforesaid amounts. However, no vehicle as conclusive evidence of ownership. A lease such as the one involved in the
payment was made. PCI Leasing and Finance, Inc., (petitioner) interposed the defense that instant case is an encumbrance in contemplation of law, which needs to be registered in
it could not be held liable for the collision, since the driver, Gonzaga, was not its employee, order for it to bind third parties. Under this policy, the evil sought to be avoided is the
but that of its co-defendant SUGECO. In fact, it was SUGECO, that was the actual operator of exacerbation of the suffering of victims of tragic vehicular accidents in not being able to
the truck, pursuant to a Contract of Lease signed by petitioner and SUGECO. Petitioner, identify a guilty party. A contrary ruling will not serve the ends of justice. The failure to
however, admitted that it was the owner of the truck in question. RTC rendered judgment register a lease, sale, transfer or encumbrance, should not benefit the parties responsible,
in favour of UCPB General Insurance and ordered PCI Leasing and Gonzaga, to pay jointly to the prejudice of innocent victims.
and severally the former. CA affirmed with the lower court’s decision.

1) Whether petitioner, as registered owner of a motor vehicle that figured in a quasi- SINGAPORE AIRLINES LIMITED vs. ANDION FERNANDEZ
delict may be held liable, jointly and severally, with the driver thereof, for the damages G.R. No. 142305 December 10, 2003
caused to third parties.
2) Whether petitioner, as a financing company, is absolved from liability by the enactment FACTS:
of Republic Act (R.A.) No. 8556, or the Financing Company Act of 1998. Respondent Andion Fernandez is an acclaimed soprano here in the Philippines
and abroad. At the time of the incident, she was availing an educational grant
RULING: from the Federal Republic of Germany, pursuing a Master’s Degree in Music
1) YES. The principle of holding the registered owner of a vehicle liable for quasi- majoring in Voice.
delicts resulting from its use is well-established in jurisprudence. As explained in the case
of Erezo v. Jepte, thus: She was invited to sing before the King and Queen of Malaysia. For this singing
Registration is required not to make said registration the operative act engagement, an airline passage ticket was purchased from petitioner Singapore
by which ownership in vehicles is transferred, as in land registration Airlines which would transport her to Manila from Frankfurt, Germany on
cases, because the administrative proceeding of registration does not January 28, 1991. From Manila, she would proceed to Malaysia on the next day.
bear any essential relation to the contract of sale between the parties It was necessary for the respondent to pass by Manila in order to gather her
(Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use wardrobe; and to rehearse and coordinate with her pianist her repertoire for
and operation of the vehicle upon any public highway (section 5 [a], Act the aforesaid performance.
No. 3992, as amended.) The main aim of motor vehicle registration is
to identify the owner so that if any accident happens, or that any The petitioner issued the respondent a Singapore Airlines ticket for Flight No.
damage or injury is caused by the vehicle on the public highways, SQ 27, leaving Frankfurt, Germany on January 27, 1991 bound for Singapore
responsibility therefor can be fixed on a definite individual, the with onward connections from Singapore to Manila. On January 27, 1991, Flight
No. SQ 27 left Frankfurt but arrived in Singapore two hours late or at about 1.FIFTY THOUSAND (P50,000.00) PESOS as compensatory or actual damages;
11:00 in the morning of January 28, 1991. By then, the aircraft bound for Manila 2. TWO HUNDRED and FIFTY THOUSAND (P250,000.00) PESOS as moral
had left as scheduled, leaving the respondent and about 25 other passengers damages considering plaintiff’s professional standing in the field of culture at
stranded in the Changi Airport in Singapore. home and abroad;
3. ONE HUNDRED THOUSAND (P100,000.00) PESOS as exemplary damages;
Upon disembarkation at Singapore, the respondent approached the transit 4. SEVENTY-FIVE THOUSAND (P75,000.00) PESOS as attorney’s fees; and
counter who referred her to the nightstop counter and told the lady employee 5. To pay the costs of suit.
thereat that it was important for her to reach Manila on that day, January 28,
1991. The lady employee told her that there were no more flights to Manila for The CA promulgated the assailed decision of the RTC
that day and that respondent had no choice but to stay in Singapore. Upon
respondent’s persistence, she was told that she can actually fly to Hong Kong ISSUE: Whether or not the petitioner is liable for breach of contract of carriage?
going to Manila but since her ticket was non-transferable, she would have to pay
for the ticket. The respondent could not accept the offer because she had no HELD: Yes.
money to pay for it. Her pleas for the respondent to make arrangements to
transport her to Manila were unheeded. When an airline issues a ticket to a passenger, confirmed for a particular flight
on a certain date, a contract of carriage arises. The passenger then has every
The respondent then requested the lady employee to use their phone to make a right to expect that he be transported on that flight and on that date. If he does
call to Manila. Over the employees’ reluctance, the respondent telephoned her not, then the carrier opens itself to a suit for a breach of contract of carriage.
mother to inform the latter that she missed the connecting flight. The
respondent was able to contact a family friend who picked her up from the The contract of air carriage is a peculiar one. Imbued with public interest, the
airport for her overnight stay in Singapore. law requires common carriers to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious
The next day, after being brought back to the airport, the respondent proceeded persons with due regard for all the circumstances. In an action for breach of
to petitioner’s counter which says: "Immediate Attention To Passengers with contract of carriage, the aggrieved party does not have to prove that the
Immediate Booking." There were four or five passengers in line. The respondent common carrier was at fault or was negligent. All that is necessary to prove is
approached petitioner’s male employee at the counter to make arrangements the existence of the contract and the fact of its non-performance by the carrier.
for immediate booking only to be told: "Can’t you see I am doing something."
She explained her predicament but the male employee uncaringly retorted: "It’s Since the petitioner did not transport the respondent as covenanted by it on
your problem, not ours." said terms, the petitioner clearly breached its contract of carriage with the
respondent. The respondent had every right to sue the petitioner for this
The respondent never made it to Manila and was forced to take a direct flight breach. The defense that the delay was due to fortuitous events and beyond
from Singapore to Malaysia on January 29, 1991, through the efforts of her petitioner’s control is unavailing. In PAL vs. CA, 22 we held that:
mother and travel agency in Manila. Her mother also had to travel to Malaysia
bringing with her respondent’s wardrobe and personal things needed for the .... Undisputably, PAL’s diversion of its flight due to inclement weather was a
performance that caused them to incur an expense of about P50,000. fortuitous event. Nonetheless, such occurrence did not terminate PAL’s contract
with its passengers. Being in the business of air carriage and the sole one to
As a result of this incident, the respondent’s performance before the Royal operate in the country, PAL is deemed to be equipped to deal with situations as
Family of Malaysia was below par. Because of the rude and unkind treatment in the case at bar. What we said in one case once again must be stressed, i.e., the
she received from the petitioner’s personnel in Singapore, the respondent was relation of carrier and passenger continues until the latter has been landed at
engulfed with fear, anxiety, humiliation and embarrassment causing her to the port of destination and has left the carrier’s premises. Hence, PAL
suffer mental fatigue and skin rashes. She was thereby compelled to seek necessarily would still have to exercise extraordinary diligence in safeguarding
immediate medical attention upon her return to Manila for "acute urticaria." the comfort, convenience and safety of its stranded passengers until they have
reached their final destination...
The RTC rendered a decision ordering defendant Singapore Airlines is to pay
herein plaintiff Andion H. Fernandez the sum of: "...If the cause of non-fulfillment of the contract is due to a fortuitous event, it
has to be the sole and only cause (Art. 1755 C.C., Art. 1733 C.C.). Since part of the
failure to comply with the obligation of common carrier to deliver its enrichment or fraternal interest, and not personal ill will, may well have been
passengers safely to their destination lay in the defendant’s failure to provide the motive; but it is malice nevertheless. Bad faith was imputed by the trial
comfort and convenience to its stranded passengers using extraordinary court when it found that the petitioner’s employees at the Singapore airport did
diligence, the cause of non-fulfillment is not solely and exclusively due to not accord the respondent the attention and treatment allegedly warranted
fortuitous event, but due to something which defendant airline could have under the circumstances. The lady employee at the counter was unkind and of
prevented, defendant becomes liable to plaintiff." no help to her. The respondent further alleged that without her threats of suing
the company, she was not allowed to use the company’s phone to make long
Indeed, in the instant case, petitioner was not without recourse to enable it to distance calls to her mother in Manila. The male employee at the counter where
fulfill its obligation to transport the respondent safely as scheduled as far as it says: "Immediate Attention to Passengers with Immediate Booking" was rude
human care and foresight can provide to her destination. Tagged as a premiere to her when he curtly retorted that he was busy attending to other passengers
airline as it claims to be and with the complexities of air travel, it was certainly in line. The trial court concluded that this inattentiveness and rudeness of
well-equipped to be able to foresee and deal with such situation. The petitioner’s personnel to respondent’s plight was gross enough amounting to
petitioner’s indifference and negligence by its absence and insensitivity was bad faith. This is a finding that is generally binding upon the Court which we
exposed by the trial court, thus: find no reason to disturb.

(a) Under Section 9.1 of its Traffic Manual (Exhibit 4) "…flights can be delayed Article 2232 of the Civil Code provides that in a contractual or quasi-contractual
to await the uplift of connecting cargo and passengers arriving on a late in- relationship, exemplary damages may be awarded only if the defendant had
bound flight…" As adverted to by the trial court,…"Flight SQ-27/28 maybe acted in a "wanton, fraudulent, reckless, oppressive or malevolent manner." In
delayed for about half an hour to transfer plaintiff to her connecting flight. As this case, petitioner’s employees acted in a wanton, oppressive or malevolent
pointed out above, delay is normal in commercial air transportation" (RTC manner. The award of exemplary damages is, therefore, warranted in this case.
Decision, p. 22); or

(b) Petitioner airlines could have carried her on one of its flights bound for
Hongkong and arranged for a connecting flight from Hongkong to Manila all on JAPAN AIRLINES v. ASUNCION
the same date. But then the airline personnel who informed her of such
possibility told her that she has to pay for that flight. Regrettably, respondent Facts:
did not have sufficient funds to pay for it. Knowing the predicament of the Spouses Michael and Jeanette Asuncion boarded Japan Airlines for Los
respondent, petitioner did not offer to shoulder the cost of the ticket for that Angeles. Their trip had a stop-over in Narita. The stop over included an
flight; or overnight stay in Hotel Nikko Narita. Upon arrival in Narita, the spouses were
denied “shore” pass by the Japanese Immigration. The spouses stayed in Narita
(c) As noted by the trial court from the account of petitioner’s witness, Bob Airport Rest house instead of the Hotel Nikko Narita. Specific instruction were
Khkimyong, that "a passenger such as the plaintiff could have been given to to “watch over” the spouses so as not to escape. The spouses were
accommodated in another international airline such as Lufthansa to bring the charged $400 each for their accommodation, security service and meals.
plaintiff to Singapore early enough from Frankfurt provided that there was The spouses then instituted a complaint for breach of contract because
prior communication from that station to enable her to catch the connecting Japan Airlines did not fully apprise them of their travel requirements and they
flight to Manila because of the urgency of her business in Manila. were rudely and forcibly detained at Narita Airport.

When a passenger contracts for a specific flight, he has a purpose in making that Issue: Whether or not JAL is liable for breach of contract.
choice which must be respected. This choice, once exercised, must not be
impaired by a breach on the part of the airline without the latter incurring any Held:
liability. For petitioner’s failure to bring the respondent to her destination, as No. Under Article 1755 of the Civil Code, a common carrier such as JAL
scheduled, we find the petitioner clearly liable for the breach of its contract of is bound to carry its passengers safely as far as human care and foresight can
carriage with the respondent. provide, using the utmost diligence of very cautious persons, with due regard
for all the circumstances. When an airline issues a ticket to a passenger,
We are convinced that the petitioner acted in bad faith. Bad faith means a confirmed for a particular flight on a certain date, a contract of carriage arises.
breach of known duty through some motive of interest or ill will. Self- The passenger has every right to expect that he be transported on that flight
and on that date and it becomes the carriers obligation to carry him and his a. The death, wounding or other bodily injury of a passenger if the
luggage safely to the agreed destination. If the passenger is not so transported accident causing it took place on board the aircraft or I the course of its
or if in the process of transporting he dies or is injured, the carrier may be held operations of embarking or disembarking;
liable for a breach of contract of carriage. b. The destruction or loss of, or damage to, any registered luggage or
We find that JAL did not breach its contract of carriage with goods, if the occurrence causing it took place during the carriage by air;
respondents. It may be true that JAL has the duty to inspect whether its and
passengers have the necessary travel documents, however, such duty does not c. Delay in the transportation by air of passengers, luggage or goods.
extend to checking the veracity of every entry in these documents. JAL could not The convention however denies to the carrier availment of the provisions which
vouch for the authenticity of a passport and the correctness of the entries exclude or limit his liability, if the damage is caused by his wilful misconduct, or
therein. The power to admit or not an alien into the country is a sovereign act by such default on his part as is considered to be equivalent to wilful
which cannot be interfered with even by JAL. This is not within the ambit of the misconduct. The Convention does not thus operate as an exclusive enumeration
contract of carriage entered into by JAL and herein respondents. As such, JAL of the instances of an airline's liability, or as an absolute limit of the extent of
should not be faulted for the denial of respondents shore pass applications. that liability. It should be deemed a limit of liability only in those cases where
the cause of the death or injury to person, or destruction, loss or damage to
property or delay in its transport is not attributable to or attended by any wilful
ALITALIA v. IAC; GR 71929; December 4, 1990 misconduct, bad faith, recklessness, or otherwise improper conduct on the part
of any official or employee for which the carrier is responsible, and there is
FACTS: Dr.Felipa Pablo, an associate professor in the University of the otherwise no special or extraordinary form of resulting injury.
Philippines, and a research grantee of the Philippine Atomic Energy Agency was In the case at bar, no bad faith or otherwise improper conduct may be ascribed
invited to take part at a meeting of the Department of Researchand Isotopes of to the employees of petitioner airline; and Dr. Pablo's luggage was eventually
the United Nations in Ispra, Italy. To fulfill this engagement, Dr. Pablo booked returned to her, belatedly, it is true, but without appreciable damage. The fact is,
passage onpetitioner airline, ALITALIA.She arrived in Milan on the day before nevertheless, that some species of injury was caused to Dr. Pablo because
the meeting. She was however told by the ALITALIA personnel there at Milan petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the
that her luggage was "delayed inasmuch as the same . . . (was) in one of the time appointed - a breach of its contract of carriage. Certainly, the compensation
succeeding flights from Rometo Milan." Her luggage consisted of two (2) for the injury suffered by Dr. Pablo cannot under the circumstances be
suitcases: one contained her clothing and other personal items; theother, her restricted to that prescribed by the Warsaw Convention for delay in the
scientific papers, slides and other research material. But the other flights transport of baggage.
arriving from Rome did not have her baggage on board. By then feeling 2) YES. The opportunity to claim this honor or distinction was irretrievably lost
desperate, she went to Rome to try to locate her bags herself. to Dr. Pablo because of Alitalia's breach of its contract.Apart from this, there can
However, her baggage could not be found. Completely distraught and be no doubt that Dr. Pablo underwent profound distress and anxiety,
discouraged, she returned to Manilawithout attending the meeting in Ispra, whichgradually turned to panic and finally despair, from the time she learned
Italy. that her suitcases were missing up tothe time when, having gone to Rome, she
Once back in Manila she demanded that ALITALIA make reparation for the finally realized that she would no longer be able to take part in theconference.
damages thus suffered by her. She rejected Alitalia’s offer of free airline tickets As she herself put it, she "was really shocked and distraught and
and commenced an action for damages. As it turned out, the luggage was confused."Certainly, the compensation for the injury suffered by Dr. Pablo
actually forwarded to Ispra, but only a day after the scheduled appearance. It cannot under the circumstances be restrictedto that prescribed by the Warsaw
was returned to herafter 11 months. The trial court ruled in favor of Dr. Pablo Convention for delay in the transport of baggage.
awarding P20,000 as nominal damages, theAppellate Court not only affirmed
the Trial Court's decision but also increased the award of nominal
damagespayable by ALITALIA to P40,000.
ISSUES: 1) W/N the Warsaw Convention should have been applied to limit Sabena Belgian World Airlines v. CA
ALITALIA'S liability G.R. No. 104685; March 14, 1996
2) W/N Dr. Pablo is entitled to nominal damages Vitug, J.
HELD: 1) NO. Under the Warsaw Convention, an air carrier is made liable for
damages for: Facts: Respondent Ma. Paula San Agustin was a passenger on board Flight
SN284 of petitioner airline from Casablanca to Brussels, Belgium on her way
back to Manila. She checked in her luggage containing valuables: jewelries,
clothes, shoes/bag, accessories, and the luggage itself, with the total amount of PURITA S. MAPA, CARMINA S. MAPA and CORNELIO P. MAPA, petitioners,
$4,265. She stayed overnight in Brussels and her luggage was left on board the vs. COURT OF APPEALS and TRANS-WORLD AIRLINES INC., respondents.
Upon arrival at Manila, she submitted her tag for the release of her FACTS:
luggage but was informed that it was missing. She submitted a property 1. Plaintiffs Cornelio P. Mapa and Purita S. Mapa, both established businessmen
irregularity report, and subsequently a formal complaint with the petitioner’s are respectable members of the society. Plaintiffs entered into contract of air
local manager. transportation with defendant TWA, tickets purchased in Thailand. Said TWA
When she followed up her luggage claim, she was informed that the tickets are for Los Angeles to New York, New York to Boston.
luggage was found in the Brussels office and was assured that the luggage
would be shipped to the Manila office. However, she was later on informed that 2. Purita and Carmina departed for Boston, taking a connecting flight on TWA
the luggage was lost for the second time. carrier from New York, checking in seven (7) pieces of luggage at the TWA
She demanded from the Airline the money value of the luggage and its counter in the Airport. The seven baggages were received by a porter who
contents or its exchange value, but the latter refused to settle the claim, alleging issued seven TWA baggage receipts.
that the loss was due to her contributory negligence since: she did not declare
the value of her luggage; she neglected to claim her baggage at the Brussels 3. Plaintiffs were instructed to proceed to gate 35 for boarding. The TWA
Airport; that the airline incorporated in all its tickets a warning that ‘Items of stewardess informed plaintiffs that they were at the wrong gate because their
value should be carried on your person and that some carriers assume no flight was boarding at gate 1, plaintiffs rushed to gate 1 which was in another
liability for fragile, valuable or perishable articles and that further information building terminal. At gate 1, they were told that flight 901 had just departed.
may be obtained from the carrier for guidance’; and that its liability should be However, they were consoled that another flight was leaving for Boston after 30
limited only to $20 per kilo due to the failure to declare a higher value. minutes and plaintiffs could use the same boarding pass for the next flight.
The RTC ordered petitioner to pay San Agustin the amount of the
luggage, moral and exemplary damages, and attorney’s fees. On appeal, the CA 4. Purita and Carmina were able to board the next flight. Upon arriving in
affirmed the decision of the RTC. Boston, plaintiffs Purita and Carmina proceeded to the carousel to claim their
baggages and found only three out of the seven they checked in, they
Issue: Whether or not petitioner airline is liable for the value of the lost immediately reported the loss of their four baggages to TWA. TWA's
luggage. representative confidently assured them that their baggages would be located
within 24 hours and not more than 48 hours.
Ruling: Yes. It is undisputed that the respondent’s luggage was lost while it was
in the custody of petitioner. The appellate court was correct in declaring 5. The plaintiffs received a letter from TWA, apologizing for failure to locate the
petitioner as guilty of gross negligence in handling petitioner’s luggage having missing luggage and requesting plaintiffs to accomplish a passenger property
lost it twice. These foreclose whatever rights petitioner might have had to the questionnaire which they duly accomplished, taking pains to write down in
possible limitation of liabilities enjoyed by international air carriers under the detail the contents of each missing baggage. The total value of the lost items
Warsaw Convention for undeclared property. amounted to $11, 283.79.
The Warsaw Convention denies to the carrier availment of the
provisions which exclude or limit his liability if the damage is caused by his 6. Plaintiffs wrote TWA demanding indemnification for the grave damage and
willful misconduct or by such default on his part as, in accordance with the law injury suffered by the plaintiffs. TWA again assured plaintiffs that intensive
of the court seized of the case, is considered to be equivalent to willful search was being conducted.
misconduct, or if the damage is similarly caused by any agent of the carrier
acting within the scope of his employment. 7. Later on, TWA offered to amicably settle the case by giving plaintiffs two
Under domestic law and jurisprudence (the Philippines being the options: (a) transportation credit for future TWA travel or (b) cash settlement.
country of destination), the attendance of gross negligence (given the Five months lapsed without any result on TWAs intensive search, plaintiffs-
equivalent of fraud or bad faith) holds the common carrier liable for all damages appellants opted for transportation credit for future TWA travel.
which can be reasonably attributed, although unforeseen, to the non-
performance of the obligation, including moral and exemplary damages.
 8. TWA disregarded plaintiffs option and unilaterally declared the payment of
$2,560.00 as constituting full satisfaction of the plaintiffs claim. The plaintiffs
accepted the check as partial payment for the actual cost of their lost baggages does not deny the assertion of the petitioners that those contracts were
and their contents. Despite demands, TWA failed and refused without just cause independent of the TWA tickets issued in Bangkok, Thailand.
to indemnify the plaintiffs for the grave injury and damages they have suffered. The flaw of respondents position is the presumption that the parties have
regarded as an undivided carriage or as a single operation the carriage from
9. The petitioners filed with the trial court a complaint for damages, TWA Manila to Los Angeles through PAL then to New York-Boston- St. Louis-Chicago
alleged lack of jurisdiction of Philippine courts over the action for damages through TWA.
pursuant to the Warsaw Convention, the action could only be brought either in
Bangkok where the contract was entered into, or in Boston which was the place
of destination, or in Kansas City which is the carrier's domicile and principal G.R. No. L-51910 August 10, 1989
place of business. LITONJUA SHIPPING COMPANY INC., petitioner vs.NATIONAL SEAMEN
10. TWA further alleged that pursuant to the Warsaw Convention and the FELICIANO, J.:
Notice of Baggage Limitations at the back of the tickets, its liability to the
petitioners is limited to maximum liability of $640.00 per bag or $2,560.00 for FACTS:
the four pieces of baggage, which the petitioners have been offered and have Petitioner Litonjua is the duly appointed local crewing Managing Office of the
accepted. Fairwind Shipping Corporation ('Fairwind). M/V Dufton Bay is an ocean-going
vessel of foreign registry owned by the R.D. Mullion Ship Broking Agency Ltd.
ISSUE:Whether the contracts of transportation were contracts of international ("Mullion"). While the Dufton Bay was in the port of Cebu and while under
transportation under the Warsaw Convention which removes jurisdiction from charter by Fairwind, the vessel's master contracted the services of, among
Philippine courts others, private respondent Gregorio Candongo to serve as Third Engineer for a
period of twelve (12) months with a monthly wage of US$500.00.This
HELD: No. agreement was executed before the Cebu Area Manning Unit of the
It appears clear to us that TWA itself impliedly admit that if the sole basis were NSB.Thereafter, private respondent boarded the vessel.
the two TWA tickets for Los Angeles-New York-Boston-St. Louis-Chicago, the
contracts cannot be brought within the term international transportation, as Before, the expiration of contract, respondent was required to disembark at
defined in Article I(2) of the Warsaw Convention. As provided therein, a Malaysia and was returned to the Philippines. The cause of the discharge was
contract is one of international transportation only if according to the contract described in his Seaman's Book as “by owner's arrange.”
made by the parties, the place of departure and the place of destination,
whether or not there be a break in the transportation or a transshipment, are Candongo filed a complaint before public respondent NSB against Mullion for
situated either within the territories of two High Contracting Parties, or within violation of contract and against Litonjua as agent of shipowner and of the
the territory of a single High Contracting Party, if there is an agreed stopping charterer of the vessel.
place within a territory subject to the sovereignty, mandate or authority of
another power, even though that power is not a party to this convention. NSB rendered a judgment by default for failure of petitioners to appear during
the initial hearing. It ordered Mullion and Litonjua, jointly and solidarily to pay
The contracts of transportation in this case are evidenced by the two TWA Candongohis unpaid salaries because there was no sufficient or valid cause for
tickets. It is obvious that the place of departure and the place of destination are the respondents to terminate the service of the complainant, hence, a violation
all in the territory of the United States, or of a single High Contracting Party. The of the conditions of the contract of employment.
contracts, therefore, cannot come within the purview of the first category of
international transportation. Neither can it be under the second category since Litonjua contends that the shipowner, nor the charterer, was the employer of
there was NO agreed stopping place within a territory subject to the private respondent; and that liability for damages cannot be imposed upon
sovereignty, mandate, or authority of another power. petitioner which was a mere agent of the charterer.It insisted that private
respondent's contract of employment and affidavit of undertaking clearly
It must be underscored that the first category of international transportation showed that the party with whom he had contracted was none other than
under the Warsaw Convention is based on the contract made by the parties. Mullion, the shipowner, represented by the ship's master. Petitioner also points
TWA does not claim that the Manila-Los Angeles contracts of transportation to the circumstance that the discharge and the repatriation of private
which brought Purita and Carmina to Los Angeles were also its contracts. It respondent were specified in his Seaman's Book as having been "by owner's
arrange." Petitioner Litonjua thus argues that being the agent of the charterer certainly in effect represented that it was taking care of the crewing and other
and not of the shipowner, it accordingly should not have been held liable on the requirements of a vessel chartered by its principal, Fairwind. In so doing,
contract of employment of private respondent. petitioner Litonjua certainly in effect represented that it was taking care of the
crewing and other requirements of a vessel chartered by its principal, Fairwind.
ISSUE: Whether or not petitioner Litonjua may be held liable to private
respondent Candongoon the contract of employment Lastly, there is the circumstance that extreme hardship would result for the
private respondent if petitioner Litonjua, as Philippine agent of the charterer, is
HELD: YES. not held liable to private respondent upon the contract of employment.
The first basis is the charter party which existed between Mullion, the Candongoand the other Filipino crew members would be defenseless against a
shipowner, and Fairwind, the charterer. breach of their respective contracts.

It is well settled that in a demise or bare boat charter, the charterer is treated as While wages of crew members constitute a maritime lien upon the vessel,
owner pro hac vice of the vessel, the charterer assuming in large measure the private respondent is in no position to enforce that lien. If only because the
customary rights and liabilities of the shipowner in relation to third persons vessel, being one of foreign registry and not ordinarily doing business in the
who have dealt with him or with the vessel. In such case, the Master of the Philippines or making regular calls on Philippine ports cannot be effectively
vessel is the agent of the charterer and not of the shipowner.The charterer or held to answer for such claims in a Philippine forum.
owner pro hac vice, and not the general owner of the vessel, is held liable for the
expenses of the voyage including the wages of the seamen. Petitioner Litonjua, should it be held liable for the claims, would be better
placed to secure reimbursement from its principal,Fairwind. In turn,
It is important to note that petitioner Litonjua did not place into the record of Fairwindmay seek and obtain recourse from Mullion, the foreign shipowner,
this case a copy of the charter party covering the M/V Dufton Bay. We must should Fairwind feel entitled to reimbursement of the amounts paid to private
assume that petitioner Litonjua was aware of the nature of a bareboat or demise respondent through petitioner Litonjua.
charter and that if petitioner did not see fit to include in the record a copy of the
charter party, which had been entered into by its principal, it was because the Therefore, private respondent was properly regarded as an employee of the
charter party and the provisions thereof were not supportive of the position charterer Fairwind and that petitioner Litonjua may be held to answer to
adopted by petitioner Litonjua in the present case, a position diametrically private respondent for the latter's claims as the agent in the Philippines of
opposed to the legal consequence of a bareboat charter.Treating Fairwind as Fairwind.
owner pro hac vice, petitioner Litonjua having failed to show that it was not
such, we believe and so hold that petitioner Litonjua, as Philippine agent of the
charterer, may be held liable on the contract of employment between the ship MARANAN VS. PEREZ G.R. No. L-22272 June 26, 1967
captain and the private respondent.
There is a second and ethically more compelling basis for holding petitioner Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and
Litonjua liable on the contract of employment of private respondent. The operated by Pascual Perez when he was stabbed and killed by the driver,
charterer of the vessel, Fairwind, clearly benefitted from the employment of Simeon Valenzuela. Rogelio's mother, filed an action in the Court of First
private respondent as Third Engineer of the Dufton Bay, along with the ten (10) Instance of Batangas to recover damages from Perez and Valenzuela for the
other Filipino crewmembers recruited at the same occasion.If private death of her son. Defendants asserted that the deceased was killed in self-
respondent had not agreed to serve as such Third Engineer, the ship would not defense, since he first assaulted the driver by stabbing him from behind.
have been able to proceed with its voyage.The statement of account which Defendant Perez further claimed that the death was a caso fortuito for which the
the Dufton Bay'sMaster had signed and which pertained to the salary of private carrier was not liable. Defendant-appellant relies solely on the ruling
respondent had referred to a Philippine agency which would take care of enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884, that the carrier is
disbursing or paying such account. There is no question that Philippine agency under no absolute liability for assaults of its employees upon the passengers.
was the Philippine agent of the charterer Fairwind. Moreover, there is also no
question that petitioner Litonjua did assist the Master of the vessel in locating ISSUE:
and recruiting private respondent as Third Engineer of the vessel as well as ten Whether or not the carrier is liable for the assaults of its employees upon the
(10) other Filipino seamen as crew members. In so doing, petitioner Litonjua passengers.
RULING: damage. 4 Consolidated Construction likewise notified petitioner of its claim for
Yes. The attendant facts and controlling law of that case and the one at bar are damages. Unable to elicit response, the demand was repeated in a letter dated
very different however. In the Gillaco case, the passenger was killed outside the October 2, 1964. 5
scope and the course of duty of the guilty employee. Now here, the killing was
perpetrated by the driver of the very cab transporting the passenger, in whose Meanwhile, petitioner shipped the payloader to Manila where it was weighed at
hands the carrier had entrusted the duty of executing the contract of carriage. In the San Miguel Corporation. Finding that the payloader weighed 7.5 tons and
other words, unlike the Gillaco case, the killing of the passenger here took place not 2.5 tons as declared in the B-111 of Lading, petitioner denied the claim for
in the course of duty of the guilty employee and when the employee was acting damages of Consolidated Construction in its letter dated October 7, 1964,
within the scope of his duties. Moreover, the Gillaco case was decided under the contending that had Vicente E. Concepcion declared the actual weight of the
provisions of the Civil Code of 1889 which, unlike the present Civil Code, did not payloader, damage to their ship as well as to his payloader could have been
impose upon common carriers absolute liability for the safety of passengers prevented. 6
against wilful assaults or negligent acts committed by their employees. Unlike On July 6, 1965., Vicente E. Concepcion filed an action for damages against
the old Civil Code, the new Civil Code of the Philippines expressly makes the petitioner with the then Court of First Instance of Manila, Branch VII, docketed
common carrier liable for intentional assaults committed by its employees upon as Civil Case No. 61551, seeking to recover damages in the amount of
its passengers, by the wording of Art. 1759. Accordingly, it is the carrier's strict P41,225.00 allegedly suffered for the period of 97 days that he was not able to
obligation to select its drivers and similar employees with due regard not only employ a payloader in the construction job at the rate of P450.00 a day;
to their technical competence and physical ability, but also, no less important, to P34,000.00 representing the cost of the damaged payloader; P11, 000. 00
their total personality, including their patterns of behavior, moral fibers, and representing the difference between the cost of the damaged payloader and that
social attitude. of the new payloader; P20,000.00 representing the losses suffered by him due
to the diversion of funds to enable him to buy a new payloader; P10,000.00 as
attorney's fees; P5,000.00 as exemplary damages; and cost of the suit. 7
G.R. No. L-31379 August 29, 1988 RTC: dismissed the complaint, with costs against Concepcion
CA: ruled in favor of Concepcion
Being a Manila — based contractor, Vicente E. Concepcion had to ship his ISSUE: whether or not the act of private respondent Vicente E. Concepcion in
construction equipment to Cagayan de Oro City. Having shipped some of his furnishing petitioner CompañiaMaritima with an inaccurate weight of 2.5 tons
equipment through petitioner and having settled the balance of P2,628.77 with instead of the payloader's actual weight of 7.5 tons was the proximate and only
respect to said shipment, Concepcion negotiated anew with petitioner, thru its cause of the damage on the Oliver Payloader OC-12 when it fell while being
collector, Pacifico Fernandez, on August 28, 1964 for the shipment to Cagayan unloaded by petitioner's crew, as would absolutely exempt petitioner from
de Oro City of one (1) unit payloader, four (4) units 6x6 Reo trucks and two (2) liability for damages under paragraph 3 of Article 1734 of the Civil Code
pieces of water tanks. He was issued Bill of Lading 113 on the same date upon
delivery of the equipment at the Manila North Harbor. 2 HELD: NO.
The general rule under Articles 1735 and 1752 of the Civil Code is that common
These equipment were loaded aboard the MV Cebu in its Voyage No. 316, which carriers are presumed to have been at fault or to have acted negligently in case
left Manila on August 30, 1964 and arrived at Cagayan de Oro City in the the goods transported by them are lost, destroyed or had deteriorated. To
afternoon of September 1, 1964. The Reo trucks and water tanks were safely overcome the presumption of liability for the loss, destruction or deterioration
unloaded within a few hours after arrival, but while the payloader was about of the goods under Article 1735, the common carriers must prove that they
two (2) meters above the pier in the course of unloading, the swivel pin of the observed extraordinary diligence as required in Article 1733 of the Civil Code.
heel block of the port block of Hatch No. 2 gave way, causing the payloader to The responsibility of observing extraordinary diligence in the vigilance over the
fall. 3 The payloader was damaged and was thereafter taken to petitioner's goods is further expressed in Article 1734 of the same Code, the article invoked
compound in Cagayan de Oro City. by petitioner to avoid liability for damages.

On September 7, 1964, Consolidated Construction, thru Vicente E. Concepcion, Corollary is the rule that mere proof of delivery of the goods in good order to a
wrote CompañiaMaritima to demand a replacement of the payloader which it common carrier, and of their arrival at the place of destination in bad order,
was considering as a complete loss because of the extent of makes out prima facie case against the common carrier, so that if no explanation
is given as to how the loss, deterioration or destruction of the goods occurred, The weights stated in a bill of lading are prima facie evidence of the amount
the common carrier must be held responsible. 10 Otherwise stated, it is received and the fact that the weighing was done by another will not relieve the
incumbent upon the common carrier to prove that the loss, deterioration or common carrier where it accepted such weight and entered it on the bill of
destruction was due to accident or some other circumstances inconsistent with lading. 16 Besides, common carriers can protect themselves against mistakes in
its liability. the bill of lading as to weight by exercising diligence before issuing the same. 17
In the instant case, We are not persuaded by the proferred explanation of While petitioner has proven that private respondent Concepcion did furnish it
petitioner alleged to be the proximate cause of the fall of the payloader while it with an inaccurate weight of the payloader, petitioner is nonetheless liable, for
was being unloaded at the Cagayan de Oro City pier. Petitioner seems to have the damage caused to the machinery could have been avoided by the exercise of
overlooked the extraordinary diligence required of common carriers in the reasonable skill and attention on its part in overseeing the unloading of such a
vigilance over the goods transported by them by virtue of the nature of their heavy equipment. And circumstances clearly show that the fall of the payloader
business, which is impressed with a special public duty. could have been avoided by petitioner's crew. Evidence on record sufficiently
show that the crew of petitioner had been negligent in the performance of its
Thus, Article 1733 of the Civil Code provides: obligation by reason of their having failed to take the necessary precaution
Art. 1733. Common carriers, from the nature of their business and for reason of under the circumstances which usage has established among careful persons,
public policy, are bound to observe extraordinary diligence in the vigilance over more particularly its Chief Officer, Mr. Felix Pisang, who is tasked with the over-
the goods and for the safety of the passengers transported by them according to all supervision of loading and unloading heavy cargoes and upon whom rests
all the circumstances of each case. the burden of deciding as to what particular winch the unloading of the
Such extraordinary diligence in the vigilance over the goods is further payloader should be undertaken. Acknowledging that there was a "jumbo" in
expressed in Articles 1734, 1735 and 1745, Nos. 5, 6 and 7, ... the MV Cebu which has the capacity of lifting 20 to 25 ton cargoes, Mr. Felix
Pisang chose not to use it, because according to him, since the ordinary boom
The extraordinary diligence in the vigilance over the goods tendered for has a capacity of 5 tons while the payloader was only 2.5 tons, he did not bother
shipment requires the common carrier to know and to follow the required to use the "jumbo" anymore. 20
precaution for avoiding damage to, or destruction of the goods entrusted to it
for safe carriage and delivery. It requires common carriers to render service While the act of private respondent in furnishing petitioner with an inaccurate
with the greatest skill and foresight and "to use all reasonable means to weight of the payloader cannot successfully be used as an excuse by petitioner
ascertain the nature and characteristic of goods tendered for shipment, and to to avoid liability to the damage thus caused, said act constitutes a contributory
exercise due care in the handling and stowage including such methods as their circumstance to the damage caused on the payloader, which mitigates the
nature requires."11 Under Article 1736 of the Civil Code, the responsibility to liability for damages of petitioner in accordance with Article 1741 of the Civil
observe extraordinary diligence commences and lasts from the time the goods Code, to wit:
are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the Art. 1741. If the shipper or owner merely contributed to the loss, destruction or
carrier to the consignee, or to the person who has the right to receive them deterioration of the goods, the proximate cause thereof being the negligence of
without prejudice to the provisions of Article 1738. the common carrier, the latter shall be liable in damages, which however, shall
be equitably reduced.
Where, as in the instant case, petitioner, upon the testimonies of its own crew,
failed to take the necessary and adequate precautions for avoiding damage to,
or destruction of, the payloader entrusted to it for safe carriage and delivery to EASTERN SHIPPING LINES, INC. vs. INTERMEDIATE APPELLATE COURT
Cagayan de Oro City, it cannot be reasonably concluded that the damage caused G.R. No. L-69044 May 29, 1987
to the payloader was due to the alleged misrepresentation of private MELENCIO-HERRERA, J.:
respondent Concepcion as to the correct and accurate weight of the payloader.
As found by the respondent Court of Appeals, the fact is that petitioner used a 5- Facts:
ton capacity lifting apparatus to lift and unload a visibly heavy cargo like a These two cases, both for the recovery of the value of cargo insurance, arose
payloader. Private respondent has, likewise, sufficiently established the laxity from the same incident, the sinking of the M/S ASIATICA when it caught fire,
and carelessness of petitioner's crew in their methods of ascertaining the resulting in the total loss of ship and cargo. A vessel operated by petitioner
weight of heavy cargoes offered for shipment before loading and unloading Eastern Shipping Lines, Inc loaded at Kobe, Japan for transportation to
them, as is customary among careful persons. Manilacargoes consigned to Philippine Blooming Mills Co., Inc, and consigned to
Central Textile Mills, Inc. Both sets of goods were insured against marine risk been lost. Petitioner Carrier has also proved that the loss was caused by fire.
for their stated value. Enroute for Kobe, Japan, to Manila, the vessel caught fire The burden then is upon Petitioner Carrier to proved that it has exercised the
and sank, resulting in the total loss of ship and cargo. The respective respondent extraordinary diligence required by law.
Insurers paid the corresponding marine insurance values to the consignees
concerned and were thus subrogated unto the rights of the latter as the insured.
Respondent insurance companies filed suit against Petitioner Carrier for the Sulpicio Lines vs. Curso
recovery of the insured value of the cargo lost with the then Court of First G.R. No. 157009
Instance of Manila imputing unseaworthiness of the ship and non-observance of March 17, 2010
extraordinary diligence by petitioner Carrier.
Petitioner Carrier denied liability on the principal grounds that the fire which FACTS:
caused the sinking of the ship is an exempting circumstance under Section 4(2) On October 23, 1988, Dr. Curso boarded at
(b) of the Carriage of Goods by Sea Act (COGSA); and that when the loss of fire is the port of Manila the MV Doa Marilyn, an inter-island vessel owned and
established, the burden of proving negligence of the vessel is shifted to the operated by petitioner Sulpicio Lines, Inc., bound for Tacloban City.
cargo shipper. Unfortunately, the MV Doa Marilyn sank in the afternoon of October 24,
1988 while at sea due to the inclement sea and weather conditions brought
Issue: about by Typhoon Unsang. The body of Dr. Curso was not recovered, along with
(1) Which law should govern — the Civil Code provisions on Common carriers hundreds of other passengers of the ill-fated vessel. At the time of his death,
or the Carriage of Goods by Sea Act? Dr. Curso was 48 years old, and employed as a resident physician at
(2) Who has the burden of proof to show negligence of the carrier? the Naval District Hospital in Naval, Biliran. He had a basic monthly salary
of P3,940.00, and would have retired from government service by December 20,
Held: 2004 at the age of 65.
(1)The law of the country to which the goods are to be transported governs the On January 21, 1993, the respondents, allegedly the surviving brothers and
liability of the common carrier in case of their loss, destruction or sisters of Dr. Curso, sued the petitioner in the RTC in Naval, Biliran to claim
deterioration. As the cargoes in question were transported from Japan to the damages based on breach of contract of carriage by sea, averring that the
Philippines, the liability of Petitioner Carrier is governed primarily by the Civil petitioner had acted negligently in transporting Dr. Curso and the other
Code. 5 However, in all matters not regulated by said Code, the rights and passengers. The petitioner denied liability, insisting that the sinking of the
obligations of common carrier shall be governed by the Code of Commerce and vessel was due to force majeure (i.e., Typhoon Unsang), which exempted a
by special laws. 6 Thus, the Carriage of Goods by Sea Act, a special law, is common carrier from liability.
suppletory to the provisions of the Civil Code. Petitioner insists that the CA committed grievous errors in holding that the
respondents were entitled to moral damages as the brothers and sisters of the
(2)Under the Civil Code, common carriers, from the nature of their business and late Dr. Curso; that the CA thereby disregarded Article 1764 and Article 2206 of
for reasons of public policy, are bound to observe extraordinary diligence in the the Civil Code, and the ruling in Receiver for North Negros Sugar Co., Inc. v. Ybaez,
vigilance over goods, according to all the circumstances of each case. 8Common whereby the Supreme Court disallowed the award of moral damages in favor of
carriers are responsible for the loss, destruction, or deterioration of the goods the brothers and sisters of a deceased passenger in an action upon breach of a
unless the same is due to any of the following causes only: contract of carriage.
(1) Flood, storm, earthquake, lightning or other natural disaster or calamity; ISSUE:
xxxxxxxxx Are the brothers and sisters of a deceased passenger in a case of breach of
contract of carriage entitled to an award of moral damages against the carrier?
Petitioner Carrier claims that the loss of the vessel by fire exempts it from
liability under the phrase "natural disaster or calamity. " However, we are of the RULING:
opinion that fire may not be considered a natural disaster or calamity. This must As a general rule, moral damages are not recoverable in actions for damages
be so as it arises almost invariably from some act of man or by human predicated on a breach of contract, unless there is fraud or bad faith. As an
means. 10 It does not fall within the category of an act of God unless caused by exception, moral damages may be awarded in case of breach of contract of
lightning 11 or by other natural disaster or calamity. 12 It may even be caused carriage that results in the death of a passenger, in accordance with Article
by the actual fault or privity of the carrier. In this case, the respective Insurers. 1764, in relation to Article 2206 (3), of the Civil Code. The omission from Article
assubrogees of the cargo shippers, have proven that the transported goods have 2206 (3) of the brothers and sisters of the deceased passenger reveals the
legislative intent to exclude them from the recovery of moral damages for arrastre operator, is responsible during the unloading of the cargoes and is still
mental anguish by reason of the death of the bound to exercise extraordinary diligence at the time. The CA also considered
deceased. Inclusio unius est exclusio alterius. To be entitled to moral damages, that OFII is liable, agreeing with UCPB's contention that OFII is a common
the respondents must have a right based upon law. It is true that under Article carrier bound to observe extraordinary diligence and is presumed to be at fault
1003 of the Civil Code they succeeded to the entire estate of the late Dr. Curso in or have acted negligently for such damage.
the absence of the latters descendants, ascendants, illegitimate children, and
surviving spouse. However, they were not included among the persons entitled ISSUE: Whether Westwind and OFII are liable to exercise extraordinary
to recover moral damages, as enumerated in Article 2219 of the Civil Code. diligence.
In fine, moral damages may be recovered in an action upon breach of contract of
carriage only when: (a) where death of a passenger results, or (b) it is proved RULING: YES. Common carriers, from the nature of their business and for
that the carrier was guilty of fraud and bad faith, even if death does not reasons of public policy, are bound to observe extraordinary diligence in the
result. Article 2206 of the Civil Code entitles the descendants, ascendants, vigilance over the goods transported by them. The extraordinary responsibility
illegitimate children, and surviving spouse of the deceased passenger to of the common carrier lasts from the time the goods are unconditionally placed
demand moral damages for mental anguish by reason of the death of the in the possession of, and received by the carrier for transportation until the
deceased. same are delivered, actually or constructively, by the carrier to the consignee, or
to the person who has a right to receive them. In this case, since the discharging
of the containers/skids, which were covered by only one bill of lading, had not
WESTWIND SHIPPING CORPORATION v. UCPB GENERAL INSURANCE CO. yet been completed at the time the damage occurred, there is no reason to imply
G.R. No. 200289; November 25,2013 that there was already delivery, actual or constructive, of the cargoes to ATI.
The mere proof of delivery of goods in good order to the carrier, and their
FACTS: Kinshu Mataichi Corporation shipped from the port of Kobe, Japan, 197 arrival in the place of destination in bad order, make out a prima facie case
metal containers/skids of tin-free steel for delivery to the consignee, San Miguel against the carrier, so that if no explanation is given as to how the injury
Corporation (SMC). The shipment was loaded and received clean on board M/V occurred, the carrier must be held responsible. It is incumbent upon the carrier
Golden Harvest Voyage No. 66, a vessel owned and operated by Westwind to prove that the loss was due to accident or some other circumstances
Shipping Corporation. SMC insured the cargoes against all risks with UCPB inconsistent with its liability. The contention of OFII is likewise untenable. A
General Insurance Co., Inc. The shipment arrived in Manila and was discharged customs broker has been regarded as a common carrier because transportation
in the custody of the arrastre operator, Asian Terminals, Inc (ATI). During the of goods is an integral part of its business. Article 1732 does not distinguish
unloading operation, six containers/skids sustained dents and punctures from between one whose principal business activity is the carrying of goods and one
the forklift used by the stevedores of Ocean Terminal Services, Inc (OTSI) in who does such carrying only as an ancillary activity. The contention, therefore,
centering and shuttling the containers/skids. Orient Freight Intemational, Inc. of petitioner that it is not a common carrier but a customs broker whose
(OFII), the customs broker of SMC, withdrew from ATI the 197 containers/skids principal function is to prepare the correct customs declaration and proper
and delivered the same at SMC's warehouse. It was discovered upon discharge shipping documents as required by law is bereft of merit. It suffices that
that additional nine containers/skids were also damaged due to the forklift petitioner undertakes to deliver the goods for pecuniary consideration. As the
operations; thus, making the total of 15 containers/skids in bad order. transportation of goods is an integral part of a customs broker, the customs
broker is also a common carrier. For to declare otherwise "would be to deprive
SMC filed a claim against UCPB, Westwind, ATI, and OFII to recover the amount those with whom it contracts the protection which the law affords them
corresponding to the damaged 15 containers/skids. When UCPB paid the total notwithstanding the fact that the obligation to carry goods for its customers, is
sum of Php 292,732.80. SMC signed the subrogation receipt. Thereafter, in the part and parcel of petitioner's business.
exercise of its right of subrogation, UCPB instituted a complaint for damages
against Westwind, ATI, and OFII. The RTC opined that Westwind is not liable, Common carriers, from the nature of their business and for reasons of public
since the discharging of the cargoes were done by ATI personnel using forklifts. policy, are bound to observe extraordinary diligence in vigilance over the goods
It likewise absolved OFII from any liability, reasoning that it never undertook and for the safety of the passengers transported by them, according to all the
the operation of the forklifts which caused the dents and punctures, and that it circumstances of each case.
merely facilitated the release and delivery of the shipment as the customs
broker and representative of SMC. On appeal by UCPB, the CA reversed and set
aside the trial court ruling. It concluded that the common carrier, not the
AIR FRANCE v. BONIFACIO H. GILLEGO, substituted by his surviving heirs
represented by DOLORES P. GILLEGO Issue:
G.R. No. 165266, December 15, 2010, J. Villarama, Jr. W/N petitioner is liable for breach of contract of carriage.

DOCTRINE: In an action based on a breach of contract of carriage, the Ruling:

aggrieved party does not have to prove that the common carrier was at YES. A business intended to serve the travelling public primarily, a
fault or was negligent. All that he has to prove is the existence of the contract of carriage is imbued with public interest. The law governing common
contract and the fact of its non-performance by the carrier. carriers consequently imposes an exacting standard. Article 1735 of the Civil
Code provides that in case of lost or damaged goods, common carriers are
Facts: presumed to have been at fault or to have acted negligently, unless they prove
Respondent Cong. Gillego was invited to participate as one of the that they observed extraordinary diligence as required by Article 1733. Thus, in
keynote speakers at the 89th Inter-Parliamentary Conference Symposium. On an action based on a breach of contract of carriage, the aggrieved party does not
May 16, 1993, he left Manila on board petitioner Air France’s aircraft bound for have to prove that the common carrier was at fault or was negligent. All that he
Paris. arriving at 5:00AM on May 17. While waiting for his connecting flight to has to prove is the existence of the contract and the fact of its non-performance
Budapest, respondent learned that petitioner had another aircraft bound for by the carrier.
Budapest with an earlier departure time. He made arrangements for the change. The action filed by the respondent is founded on such breach of the
He was given a corresponding ticket, boarding pass and a new baggage claim contract of carriage with petitioner who offered no satisfactory explanation for
stub for his checked-in luggage. However, upon arriving in Budapest, the unreasonable delay in the delivery of respondent’s baggage. Presumption of
respondent was unable to locate his luggage at the claiming section. He sought negligence was not overcome, hence its liability for the delay was sufficiently
assistance from petitioner’s counter at the airport and was advised to just wait established. (However, upon receipt of the said luggage during the pendency of
for his luggage at his hotel and that petitioner’s representatives would take the case in the trial court, respondent did not anymore press on his claim for
charge of delivery. But said luggage was never delivered despite follow-ups. actual or compensatory damages and neither did he adduce evidence of the actual
Upon his return to the Philippines, he immediately wrote to petitioner’s amount of loss and damage incurred by such delayed delivery of his luggage.
Station Manager complaining about the lost luggage and the resulting damages Consequently, the trial court proceeded to determine only the propriety of his
he suffered; that his single luggage contained his personal effects (clothes, claim for moral and exemplary damages, and attorney’s fees.)
toiletries, medicines for his hypertension, and speeches he had prepared.) He In repeatedly ignoring respondent’s inquiries, petitioner’s employees
was left with only his travel documents, pocket money and the clothes he was exhibited an indifferent attitude without due regard for the inconvenience and
wearing. Respondent was forced to shop for personal items. He had to prepare anxiety he experienced after realizing that his luggage was missing. Petitioner
another speech, in which he had difficulty due to lack of data and information. was thus guilty of bad faith in breaching its contract of carriage with the
Petitioner continued to ignore respondent’s repeated follow-ups regarding his respondent, which entitles the latter to the award of moral damages. However,
lost luggage. we agree with petitioner that the sum of ₱1,000,000.00 awarded by the trial
He filed a complaint for damages, alleging that by reason of petitioner’s court is excessive and not proportionate to the loss or suffering inflicted on the
negligence and breach of obligation to transport and deliver his luggage, he passenger under the circumstances.
suffered inconvenience, serious anxiety, physical suffering and sleepless nights.
Petitioner averred that it has taken all necessary measures to avoid loss of
respondent’s baggage, the contents of which respondent did not declare, and
that it has no intent to cause such loss, much less knew that such loss could
occur. The loss of respondent’s luggage is due to or occasioned by force majeure
or fortuitous event or other causes beyond the carrier’s control. Diligent,
sincere and timely efforts were exerted by petitioner to locate respondent’s
missing luggage and attended to his problem with utmost courtesy, concern and
dispatch. Petitioner further asserted that it exercised due diligence in the
selection and supervision of its employees and acted in good faith in denying
respondent’s demand for damages. The claims for actual, moral and exemplary
damages and attorney’s fees therefore have no basis in fact and in law, and are,
moreover speculative and unconscionable.