G.R. No.

95582 October 7, 1991

DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y

MALECDAN, petitioners,
vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT
BANDOY, FERNANDO CUDLAMAT, MARRIETA CUDIAMAT, NORMA
CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA
CUDIAMAT, all Heirs of the late Pedrito Cudiamat represented by
Inocencia Cudiamat, respondents.

Francisco S. Reyes Law Office for petitioners.

Antonio C. de Guzman for private respondents.

REGALADO, J.:

On May 13, 1985, private respondents filed a complaint 1 for damages against
petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident
which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet.
Among others, it was alleged that on said date, while petitioner Theodore M.
Lardizabal was driving a passenger bus belonging to petitioner corporation in a
reckless and imprudent manner and without due regard to traffic rules and
regulations and safety to persons and property, it ran over its passenger,
Pedrito Cudiamat. However, instead of bringing Pedrito immediately to the
nearest hospital, the said driver, in utter bad faith and without regard to the
welfare of the victim, first brought his other passengers and cargo to their
respective destinations before banging said victim to the Lepanto Hospital
where he expired.

On the other hand, petitioners alleged that they had observed and continued to
observe the extraordinary diligence required in the operation of the
transportation company and the supervision of the employees, even as they
add that they are not absolute insurers of the safety of the public at large.
Further, it was alleged that it was the victim's own carelessness and
negligence which gave rise to the subject incident, hence they prayed for the
dismissal of the complaint plus an award of damages in their favor by way of a
counterclaim.

On July 29, 1988, the trial court rendered a decision, effectively in favor of
petitioners, with this decretal portion:
IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that
Pedrito Cudiamat was negligent, which negligence was the proximate cause of
his death. Nonetheless, defendants in equity, are hereby ordered to pay the
heirs of Pedrito Cudiamat the sum of P10,000.00 which approximates the
amount defendants initially offered said heirs for the amicable settlement of the
case. No costs.

SO ORDERED. 2

Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3
in CA-G.R.
CV No. 19504 promulgated on August 14, 1990, set aside the decision of the
lower court, and ordered petitioners to pay private respondents:

1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for

death of the victim Pedrito Cudiamat;

2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;

3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as

actual and compensatory damages;

4. The costs of this suit. 4

Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated October 4, 1990,

5hence this petition with the central issue herein being whether respondent
court erred in reversing the decision of the trial court and in finding petitioners
negligent and liable for the damages claimed.

It is an established principle that the factual findings of the Court of Appeals as

a rule are final and may not be reviewed by this Court on appeal. However, this
is subject to settled exceptions, one of which is when the findings of the
appellate court are contrary to those of the trial court, in which case a
reexamination of the facts and evidence may be undertaken. 6
In the case at bar, the trial court and the Court of Appeal have discordant positions as to who between the petitioners

an the victim is guilty of negligence. Perforce, we have had to conduct an evaluation of the evidence in this case for

the prope calibration of their conflicting factual findings and legal conclusions.

The lower court, in declaring that the victim was negligent, made the following findings:

This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving vehicle, especially with one of

his hands holding an umbrella. And, without having given the driver or the conductor any indication that he wishes to

board the bus. But defendants can also be found wanting of the necessary diligence. In this connection, it is safe to

assume that when the deceased Cudiamat attempted to board defendants' bus, the vehicle's door was open instead

of being closed. This should be so, for it is hard to believe that one would even attempt to board a vehicle (i)n motion if

the door of said vehicle is closed. Here lies the defendant's lack of diligence. Under such circumstances, equity

demands that there must be something given to the heirs of the victim to assuage their feelings. This, also considering

that initially, defendant common carrier had made overtures to amicably settle the case. It did offer a certain monetary

consideration to the victim's heirs. 7

However, respondent court, in arriving at a different opinion, declares that:

From the testimony of appellees'own witness in the person of Vitaliano Safarita, it is evident that the subject bus was

at full stop when the victim Pedrito Cudiamat boarded the same as it was precisely on this instance where a certain

Miss Abenoja alighted from the bus. Moreover, contrary to the assertion of the appellees, the victim did indicate his

intention to board the bus as can be seen from the testimony of the said witness when he declared that Pedrito

Cudiamat was no longer walking and made a sign to board the bus when the latter was still at a distance from him. It

was at the instance when Pedrito Cudiamat was closing his umbrella at the platform of the bus when the latter made a

sudden jerk movement (as) the driver commenced to accelerate the bus.

Evidently, the incident took place due to the gross negligence of the appellee-driver in prematurely stepping on the

accelerator and in not waiting for the passenger to first secure his seat especially so when we take into account that

the platform of the bus was at the time slippery and wet because of a drizzle. The defendants-appellees utterly failed

to observe their duty and obligation as common carrier to the end that they should observe extra-ordinary diligence in

the vigilance over the goods and for the safety of the passengers transported by them according to the circumstances

of each case (Article 1733, New Civil Code). 8

After a careful review of the evidence on record, we find no reason to disturb the above holding of the Court of Appeals.

Its aforesaid findings are supported by the testimony of petitioners' own witnesses. One of them, Virginia Abalos,

testified on cross-examination as follows:

Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the incident, there is a crossing?

A The way going to the mines but it is not being pass(ed) by the bus.

Q And the incident happened before bunkhouse 56, is that not correct?

A It happened between 54 and 53 bunkhouses. 9

The bus conductor, Martin Anglog, also declared:

Q When you arrived at Lepanto on March 25, 1985, will you please inform this Honorable Court if there was anv

unusual incident that occurred?

A When we delivered a baggage at Marivic because a person alighted there between Bunkhouse 53 and 54.

Q What happened when you delivered this passenger at this particular place in Lepanto?

A When we reached the place, a passenger alighted and I signalled my driver. When we stopped we went out

because I saw an umbrella about a split second and I signalled again the driver, so the driver stopped and we went

down and we saw Pedrito Cudiamat asking for help because he was lying down.

Q How far away was this certain person, Pedrito Cudiamat, when you saw him lying down — from the bus how far was

he?

A It is about two to three meters.

Q On what direction of the bus was he found about three meters from the bus, was it at the front or at the back?
A At the back, sir. 10 (Emphasis supplied.)

The foregoing testimonies show that the place of the accident and the place where one of the passengers alighted

were both between Bunkhouses 53 and 54, hence the finding of the Court of Appeals that the bus was at full stop

when the victim boarded the same is correct. They further confirm the conclusion that the victim fell from the platform

of the bus when it suddenly accelerated forward and was run over by the rear right tires of the vehicle, as shown by the

physical evidence on where he was thereafter found in relation to the bus when it stopped. Under such circumstances,

it cannot be said that the deceased was guilty of negligence.

The contention of petitioners that the driver and the conductor had no knowledge that the victim would ride on the bus,

since the latter had supposedly not manifested his intention to board the same, does not merit consideration. When

the bus is not in motion there is no necessity for a person who wants to ride the same to signal his intention to board. A

public utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty of the

driver and the conductor, every time the bus stops, to do no act that would have the effect of increasing the peril to a

passenger while he was attempting to board the same. The premature acceleration of the bus in this case was a

breach of such duty. 11

It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to

stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter,

and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their

conveyances while they are doing so. 12

Further, even assuming that the bus was moving, the act of the victim in boarding the same cannot be considered

negligent under the circumstances. As clearly explained in the testimony of the aforestated witness for petitioners,

Virginia Abalos, th bus had "just started" and "was still in slow motion" at the point where the victim had boarded and

was on its platform. 13

It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly.

14An ordinarily prudent person would have made the attempt board the
moving conveyance under the same or similar circumstances. The fact that
passengers board and alight from slowly moving vehicle is a matter of
common experience both the driver and conductor in this case could not have
been unaware of such an ordinary practice.

The victim herein, by stepping and standing on the platform of the bus, is
already considered a passenger and is entitled all the rights and protection
pertaining to such a contractual relation. Hence, it has been held that the duty
which the carrier passengers owes to its patrons extends to persons boarding
cars as well as to those alighting therefrom. 15

Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordina

diligence for the safety of the passengers transported by the according to all the circumstances of each case. 16
A
common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence very cautious persons,
with a due regard for all the circumstances. 17

It has also been repeatedly held that in an action based on a contract of carriage, the court need not make an express

finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought by the

passenger. By contract of carriage, the carrier assumes the express obligation to transport the passenger to his

destination safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that

might be suffered by the passenger is right away attributable to the fault or negligence of the carrier. This is an

exception to the general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove

that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. 18

Moreover, the circumstances under which the driver and the conductor failed to bring the gravely injured victim

immediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defies

understanding and can even be stigmatized as callous indifference. The evidence shows that after the accident the

bus could have forthwith turned at Bunk 56 and thence to the hospital, but its driver instead opted to first proceed to

Bunk 70 to allow a passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. The

vacuous reason given by petitioners that it was the wife of the deceased who caused the delay was tersely and

correctly confuted by respondent court:

... The pretension of the appellees that the delay was due to the fact that they had to wait for about twenty minutes for

Inocencia Cudiamat to get dressed deserves scant consideration. It is rather scandalous and deplorable for a wife
whose husband is at the verge of dying to have the luxury of dressing herself up for about twenty minutes before

attending to help her distressed and helpless husband. 19

Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70 was to inform the victim's

family of the mishap, since it was not said bus driver nor the conductor but the companion of the victim who informed

his family thereof. 20

In fact, it was only after the refrigerator was unloaded that one
of the passengers thought of sending somebody to the house of the victim, as
shown by the testimony of Virginia Abalos again, to wit:

Q Why, what happened to your refrigerator at that particular time?

A I asked them to bring it down because that is the nearest place to our house
and when I went down and asked somebody to bring down the refrigerator, I
also asked somebody to call the family of Mr. Cudiamat.

COURT:

Q Why did you ask somebody to call the family of Mr. Cudiamat?

A Because Mr. Cudiamat met an accident, so I ask somebody to call for the
family of Mr. Cudiamat.

Q But nobody ask(ed) you to call for the family of Mr. Cudiamat?

A No sir. 21

With respect to the award of damages, an oversight was, however, committed by respondent Court of Appeals in

computing the actual damages based on the gross income of the victim. The rule is that the amount recoverable by

the heirs of a victim of a tort is not the loss of the entire earnings, but rather the loss of that portion of the earnings

which the beneficiary would have received. In other words, only net earnings, not gross earnings, are to be considered,

that is, the total of the earnings less expenses necessary in the creation of such earnings or income and minus living

and other incidental expenses. 22

We are of the opinion that the deductible living and other expense of the deceased may fairly and reasonably be fixed

at P500.00 a month or P6,000.00 a year. In adjudicating the actual or compensatory damages, respondent court found

that the deceased was 48 years old, in good health with a remaining productive life expectancy of 12 years, and then

earning P24,000.00 a year. Using the gross annual income as the basis, and multiplying the same by 12 years, it

accordingly awarded P288,000. Applying the aforestated rule on computation based on the net earnings, said award

must be, as it hereby is, rectified and reduced to P216,000.00. However, in accordance with prevailing jurisprudence,

the death indemnity is hereby increased to P50,000.00. 23

WHEREFORE, subject to the above modifications, the challenged judgment and resolution of respondent Court of

Appeals are hereby AFFIRMED in all other respects.

SO ORDERED.

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

G.R. No. 145804 February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners,

vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT
SECURITY AGENCY, respondents.

DECISION

VITUG, J.:

The case before the Court is an appeal from the decision and resolution of the
Court of Appeals, promulgated on 27 April 2000 and 10 October 2000,
respectively, in CA-G.R. CV No. 60720, entitled "Marjorie Navidad and Heirs of
the Late Nicanor Navidad vs. Rodolfo Roman, et. al.," which has modified the
decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig City,
exonerating Prudent Security Agency (Prudent) from liability and finding Light
Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on
account of the death of Nicanor Navidad.

On 14 October 1993, about half an hour past seven o’clock in the evening,
Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing
a "token" (representing payment of the fare). While Navidad was standing on
the platform near the LRT tracks, Junelito Escartin, the security guard
assigned to the area approached Navidad. A misunderstanding or an
altercation between the two apparently ensued that led to a fist fight. No
evidence, however, was adduced to indicate how the fight started or who,
between the two, delivered the first blow or how Navidad later fell on the LRT
tracks. At the exact moment that Navidad fell, an LRT train, operated by
petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving
train, and he was killed instantaneously.

On 08 December 1994, the widow of Nicanor, herein respondent Marjorie

Navidad, along with her children, filed a complaint for damages against
Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization,
Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and
Roman filed a counterclaim against Navidad and a cross-claim against
Escartin and Prudent. Prudent, in its answer, denied liability and averred that it
had exercised due diligence in the selection and supervision of its security
guards.

The LRTA and Roman presented their evidence while Prudent and Escartin,
instead of presenting evidence, filed a demurrer contending that Navidad had
failed to prove that Escartin was negligent in his assigned task. On 11 August
1998, the trial court rendered its decision; it adjudged:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and

against the defendants Prudent Security and Junelito Escartin ordering the
latter to pay jointly and severally the plaintiffs the following:

"a) 1) Actual damages of P44,830.00;

2) Compensatory damages of P443,520.00;

3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;

"b) Moral damages of P50,000.00;

"c) Attorney’s fees of P20,000;

"d) Costs of suit.

"The complaint against defendants LRTA and Rodolfo Roman are dismissed
for lack of merit.

"The compulsory counterclaim of LRTA and Roman are likewise dismissed." 1

Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate

court promulgated its now assailed decision exonerating Prudent from any
liability for the death of Nicanor Navidad and, instead, holding the LRTA and
Roman jointly and severally liable thusly:

"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating

the appellants from any liability for the death of Nicanor Navidad, Jr. Instead,
appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held
liable for his death and are hereby directed to pay jointly and severally to the
plaintiffs-appellees, the following amounts:

a) P44,830.00 as actual damages;

b) P50,000.00 as nominal damages;

c) P50,000.00 as moral damages;

d) P50,000.00 as indemnity for the death of the deceased; and

e) P20,000.00 as and for attorney’s fees."2

The appellate court ratiocinated that while the deceased might not have then
as yet boarded the train, a contract of carriage theretofore had already existed
when the victim entered the place where passengers were supposed to be
after paying the fare and getting the corresponding token therefor. In
exempting Prudent from liability, the court stressed that there was nothing to
link the security agency to the death of Navidad. It said that Navidad failed to
show that Escartin inflicted fist blows upon the victim and the evidence merely
established the fact of death of Navidad by reason of his having been hit by the
train owned and managed by the LRTA and operated at the time by Roman.
The appellate court faulted petitioners for their failure to present expert
evidence to establish the fact that the application of emergency brakes could
not have stopped the train.

The appellate court denied petitioners’ motion for reconsideration in its

resolution of 10 October 2000.

In their present recourse, petitioners recite alleged errors on the part of the
appellate court; viz:

"I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED

BY DISREGARDING THE FINDINGS OF FACTS BY THE
TRIAL COURT
 "II.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED

IN FINDING THAT PETITIONERS ARE LIABLE FOR THE
DEATH OF NICANOR NAVIDAD, JR.

"III.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED

IN FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF
LRTA."3

Petitioners would contend that the appellate court ignored the evidence and
the factual findings of the trial court by holding them liable on the basis of a
sweeping conclusion that the presumption of negligence on the part of a
common carrier was not overcome. Petitioners would insist that Escartin’s
assault upon Navidad, which caused the latter to fall on the tracks, was an act
of a stranger that could not have been foreseen or prevented. The LRTA would
add that the appellate court’s conclusion on the existence of an
employer-employee relationship between Roman and LRTA lacked basis
because Roman himself had testified being an employee of Metro Transit and
not of the LRTA.

Respondents, supporting the decision of the appellate court, contended that a

contract of carriage was deemed created from the moment Navidad paid the
fare at the LRT station and entered the premises of the latter, entitling Navidad
to all the rights and protection under a contractual relation, and that the
appellate court had correctly held LRTA and Roman liable for the death of
Navidad in failing to exercise extraordinary diligence imposed upon a common
carrier.

Law and jurisprudence dictate that a common carrier, both from the nature of
its business and for reasons of public policy, is burdened with the duty of
exercising utmost diligence in ensuring the safety of passengers. 4 The Civil
Code, governing the liability of a common carrier for death of or injury to its
passengers, provides:

"Article 1755. A common carrier is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.
"Article 1756. In case of death of or injuries to passengers, common carriers
are presumed to have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as prescribed in articles 1733
and 1755."

"Article 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the former’s employees,
although such employees may have acted beyond the scope of their authority
or in violation of the orders of the common carriers.

"This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employees."

"Article 1763. A common carrier is responsible for injuries suffered by a

passenger on account of the willful acts or negligence of other passengers or
of strangers, if the common carrier’s employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act
or omission."

The law requires common carriers to carry passengers safely using the utmost
diligence of very cautious persons with due regard for all circumstances. 5
Such duty of a common carrier to provide safety to its passengers so obligates
it not only during the course of the trip but for so long as the passengers are
within its premises and where they ought to be in pursuance to the contract of
carriage.6 The statutory provisions render a common carrier liable for death of
or injury to passengers (a) through the negligence or wilful acts of its
employees or b) on account of wilful acts or negligence of other passengers or
of strangers if the common carrier’s employees through the exercise of due
diligence could have prevented or stopped the act or omission. 7 In case of
such death or injury, a carrier is presumed to have been at fault or been
negligent, and8 by simple proof of injury, the passenger is relieved of the duty
to still establish the fault or negligence of the carrier or of its employees and
the burden shifts upon the carrier to prove that the injury is due to an
unforeseen event or to force majeure.9 In the absence of satisfactory
explanation by the carrier on how the accident occurred, which petitioners,
according to the appellate court, have failed to show, the presumption would
be that it has been at fault,10 an exception from the general rule that
negligence must be proved.11

The foundation of LRTA’s liability is the contract of carriage and its obligation
to indemnify the victim arises from the breach of that contract by reason of its
failure to exercise the high diligence required of the common carrier. In the
discharge of its commitment to ensure the safety of passengers, a carrier may
choose to hire its own employees or avail itself of the services of an outsider or
an independent firm to undertake the task. In either case, the common carrier
is not relieved of its responsibilities under the contract of carriage.

Should Prudent be made likewise liable? If at all, that liability could only be for
tort under the provisions of Article 217612 and related provisions, in
conjunction with Article 2180,13 of the Civil Code. The premise, however, for
the employer’s liability is negligence or fault on the part of the employee. Once
such fault is established, the employer can then be made liable on the basis of
the presumption juris tantum that the employer failed to exercise diligentissimi
patris families in the selection and supervision of its employees. The liability is
primary and can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been shown. Absent
such a showing, one might ask further, how then must the liability of the
common carrier, on the one hand, and an independent contractor, on the other
hand, be described? It would be solidary. A contractual obligation can be
breached by tort and when the same act or omission causes the injury, one
resulting in culpa contractual and the other in culpa aquiliana, Article 2194 14 of
the Civil Code can well apply.15 In fine, a liability for tort may arise even under
a contract, where tort is that which breaches the contract. 16 Stated differently,
when an act which constitutes a breach of contract would have itself
constituted the source of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been breached by tort,
thereby allowing the rules on tort to apply.17

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the
late Nicanor Navidad, this Court is concluded by the factual finding of the Court
of Appeals that "there is nothing to link (Prudent) to the death of Nicanor
(Navidad), for the reason that the negligence of its employee, Escartin, has not
been duly proven x x x." This finding of the appellate court is not without
substantial justification in our own review of the records of the case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is

guilty of any culpable act or omission, he must also be absolved from liability.
Needless to say, the contractual tie between the LRT and Navidad is not itself
a juridical relation between the latter and Roman; thus, Roman can be made
liable only for his own fault or negligence.

The award of nominal damages in addition to actual damages is untenable.

Nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him.18 It is an established rule that nominal damages cannot
co-exist with compensatory damages.19

WHEREFORE, the assailed decision of the appellate court is AFFIRMED with

MODIFICATION but only in that (a) the award of nominal damages is
DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No
costs.

SO ORDERED.

G.R. No. 92288 February 9, 1993

BRITISH AIRWAYS, INC., petitioner,

vs.
THE HON. COURT OF APPEALS, Twelfth Division, and FIRST
INTERNATIONAL TRADING AND GENERAL SERVICES, respondents.

Quasha, Asperilla, Ancheta, Peña & Nolasco for petitioner.

Monina P. Lee for private respondent.

NOCON, J.:

This is a petition for review on certiorari to annul and set aside the decision
dated November 15, 1989 of the Court of Appeals1 affirming the decision of
the trial court2 in ordering petitioner British Airways, Inc. to pay private
respondent First International Trading and General Services actual damages,
moral damages, corrective or exemplary damages, attorney's fees and the
costs as well as the Resolution dated February 15, 1990 3 denying petitioner's
Motion for Reconsideration in the appealed decision.

It appears on record that on February 15, 1981, private respondent First

International Trading and General Services Co., a duly licensed domestic
recruitment and placement agency, received a telex message from its principal
ROLACO Engineering and Contracting Services in Jeddah, Saudi Arabia to
recruit Filipino contract workers in behalf of said principal.4

During the early part of March 1981, said principal paid to the Jeddah branch
of petitioner British Airways, Inc. airfare tickets for 93 contract workers with
specific instruction to transport said workers to Jeddah on or before March 30,
1981.

As soon as petitioner received a prepaid ticket advice from its Jeddah branch
to transport the 93 workers, private respondent was immediately informed by
petitioner that its principal had forwarded 93 prepaid tickets. Thereafter, private
respondent instructed its travel agent, ADB Travel and Tours. Inc., to book the
93 workers with petitioner but the latter failed to fly said workers, thereby
compelling private respondent to borrow money in the amount of P304,416.00
in order to purchase airline tickets from the other airlines as evidenced by the
cash vouchers (Exhibits "B", "C" and "C-1 to C-7") for the 93 workers it had
recruited who must leave immediately since the visas of said workers are valid
only for 45 days and the Bureau of Employment Services mandates that
contract workers must be sent to the job site within a period of 30 days.

Sometime in the first week of June, 1981, private respondent was again
informed by the petitioner that it had received a prepaid ticket advice from its
Jeddah branch for the transportation of 27 contract workers. Immediatety,
private respondent instructed its travel agent to book the 27 contract workers
with the petitioner but the latter was only able to book and confirm 16 seats on
its June 9, 1981 flight. However, on the date of the scheduled flight only 9
workers were able to board said flight while the remaining 7 workers were
rebooked to June 30, 1981 which bookings were again cancelled by the
petitioner without any prior notice to either private respondent or the workers.
Thereafter, the 7 workers were rebooked to the July 4,1981 flight of petitioner
with 6 more workers booked for said flight. Unfortunately, the confirmed
bookings of the 13 workers were again cancelled and rebooked to July 7,
1981.

On July 6, 1981, private respondent paid the travel tax of the said workers as
required by the petitioner but when the receipt of the tax payments was
submitted, the latter informed private respondent that it can only confirm the
seats of the 12 workers on its July 7, 1981 flight. However, the confirmed seats
of said workers were again cancelled without any prior notice either to the
private respondent or said workers. The 12 workers were finally able to leave
for Jeddah after private respondent had bought tickets from the other airlines.
As a result of these incidents, private respondent sent a letter to petitioner
demanding compensation for the damages it had incurred by the latter's
repeated failure to transport its contract workers despite confirmed bookings
and payment of the corresponding travel taxes.

On July 23, 1981, the counsel of private respondent sent another letter to the
petitioner demanding the latter to pay the amount of P350,000.00 representing
damages and unrealized profit or income which was denied by the petitioner.

On August 8, 1981, private respondent received a telex message from its

principal cancelling the hiring of the remaining recruited workers due to the
delay in transporting the workers to Jeddah.5

On January 27, 1982, private respondent filed a complaint for damages

against petitioner with the Regional Trial Court of Manila, Branch 1 in Civil
Case No. 82-4653.

On the other hand, petitioner, alleged in its Answer with counterclaims that it
received a telex message from Jeddah on March 20, 1981 advising that the
principal of private respondent had prepaid the airfares of 100 persons to
transport private respondent's contract workers from Manila to Jeddah on or
before March 30, 1981. However, due to the unavailability of space and limited
time, petitioner had to return to its sponsor in Jeddah the prepaid ticket advice
consequently not even one of the alleged 93 contract workers were booked in
any of its flights.

On June 5, 1981, petitioner received another prepaid ticket advice to transport

16 contract workers of private respondent to Jeddah but the travel agent of the
private respondent booked only 10 contract workers for petitioner's June 9,
1981 flight. However, only 9 contract workers boarded the scheduled flight with
1 passenger not showing up as evidenced by the Philippine Airlines'
passenger manifest for Flight BA-020 (Exhibit "7", "7-A", "7-B" and "7-C").6

Thereafter, private respondent's travel agent booked seats for 5 contract

workers on petitioner's July 4, 1981 flight but said travel agent cancelled the
booking of 2 passengers while the other 3 passengers did not show up on said
flight.

Sometime in July 1981, the travel agent of the private respondent booked 7
more contract workers in addition to the previous 5 contract workers who were
not able to board the July 4, 1981 flight with the petitioner's July 7, 1981 flight
which was accepted by petitioner subject to reconfirmation.
However on July 6, 1981, petitioner's computer system broke down which
resulted to petitioner's failure to get a reconfirmation from Saudi Arabia Airlines
causing the automatic cancellation of the bookings of private respondent's 12
contract workers. In the morning of July 7, 1981, the computer system of the
petitioner was reinstalled and immediately petitioner tried to reinstate the
bookings of the 12 workers with either Gulf Air or Saudi Arabia Airlines but
both airlines replied that no seat was available on that date and had to place
the 12 workers on the wait list. Said information was duly relayed to the private
respondent and the 12 workers before the scheduled flight.

After due trial on or on August 27, 1985, the trial court rendered its decision,
the dispositive portion of which reads as follows:

WHEREFORE, in view of all the foregoing, this Court renders judgment:

1. Ordering the defendant to pay the plaintiff actual damages in the sum of
P308,016.00;

2. Ordering defendant to pay moral damages to the plaintiff in the amount of

P20,000.00;

3. Ordering the defendant to pay the plaintiff P10,000.00 by way of corrective

or exemplary damages;

4. Ordering the defendant to pay the plaintiff 30% of its total claim for and as
attorney's fees; and

5. To pay the costs.7

On March 13, 1986, petitioner appealed said decision to respondent appellate

court after the trial court denied its Motion for Reconsideration on February 28,
1986.

On November 15, 1989, respondent appellate court affirmed the decision of

the trial court, the dispositive portion of which reads:

WHEREFORE, the decision appealed from is hereby AFFIRMED with costs

against the appellant.8

On December 9, 1989, petitioner filed a Motion for Reconsideration which was

also denied.

Hence, this petition.

It is the contention of petitioner that private respondent has no cause of action
against it there being no perfected contract of carriage existing between them
as no ticket was ever issued to private respondent's contract workers and,
therefore, the obligation of the petitioner to transport said contract workers did
not arise. Furthermore, private respondent's failure to attach any ticket in the
complaint further proved that it was never a party to the alleged transaction.

Petitioner's contention is untenable.

Private respondent had a valid cause of action for damages against petitioner.
A cause of action is an act or omission of one party in violation of the legal right
or rights of the other.9 Petitioner's repeated failures to transport private
respondent's workers in its flight despite confirmed booking of said workers
clearly constitutes breach of contract and bad faith on its part. In resolving
petitioner's theory that private respondent has no cause of action in the instant
case, the appellate court correctly held that:

In dealing with the contract of common carriage of passengers for purpose of

accuracy, there are two (2) aspects of the same, namely: (a) the contract "to
carry (at some future time)," which contract is consensual and is necessarily
perfected by mere consent (See Article 1356, Civil Code of the Philippines),
and (b) the contract "of carriage" or "of common carriage" itself which should
be considered as a real contract for not until the carrier is actually used can the
carrier be said to have already assumed the obligation of a carrier. (Paras,
Civil Code Annotated, Vol. V, p. 429, Eleventh Ed.)

In the instant case, the contract "to carry" is the one involved which is
consensual and is perfected by the mere consent of the parties.

There is no dispute as to the appellee's consent to the said contract "to carry"
its contract workers from Manila to Jeddah. The appellant's consent thereto,
on the other hand, was manifested by its acceptance of the PTA or prepaid
ticket advice that ROLACO Engineering has prepaid the airfares of the
appellee's contract workers advising the appellant that it must transport the
contract workers on or before the end of March, 1981 and the other batch in
June, 1981.

Even if a PTA is merely an advice from the sponsors that an airline is

authorized to issue a ticket and thus no ticket was yet issued, the fact remains
that the passage had already been paid for by the principal of the appellee,
and the appellant had accepted such payment. The existence of this payment
was never objected to nor questioned by the appellant in the lower court. Thus,
the cause or consideration which is the fare paid for the passengers exists in
this case.

The third essential requisite of a contract is an object certain. In this contract

"to carry", such an object is the transport of the passengers from the place of
departure to the place of destination as stated in the telex.

Accordingly, there could be no more pretensions as to the existence of an oral

contract of carriage imposing reciprocal obligations on both parties.

In the case of appellee, it has fully complied with the obligation, namely, the
payment of the fare and its willingness for its contract workers to leave for their
place of destination.

On the other hand, the facts clearly show that appellant was remiss in its
obligation to transport the contract workers on their flight despite confirmation
and bookings made by appellee's travelling agent.

xxx xxx xxx

Besides, appellant knew very well that time was of the essence as the prepaid
ticket advice had specified the period of compliance therewith, and with
emphasis that it could only be used if the passengers fly on BA. Under the
circumstances, the appellant should have refused acceptance of the PTA from
appellee's principal or to at least inform appellee that it could not
accommodate the contract workers.

xxx xxx xxx

While there is no dispute that ROLACO Engineering advanced the payment for
the airfares of the appellee's contract workers who were recruited for ROLACO
Engineering and the said contract workers were the intended passengers in
the aircraft of the appellant, the said contract "to carry" also involved the
appellee for as recruiter he had to see to it that the contract workers should be
transported to ROLACO Engineering in Jeddah thru the appellant's
transportation. For that matter, the involvement of the appellee in the said
contract "to carry" was well demonstrated when
the appellant upon receiving the PTA immediately advised the appellee
thereof. 10

Petitioner also contends that the appellate court erred in awarding actual
damages in the amount of P308,016.00 to private respondent since all
expenses had already been subsequently reimbursed by the latter's principal.
In awarding actual damages to private respondent, the appellate court held
that the amount of P308,016.00 representing actual damages refers to private
respondent's second cause of action involving the expenses incurred by the
latter which were not reimbursed by ROLACO Engineering. However, in the
Complaint 11 filed by private respondent, it was alleged that private respondent
suffered actual damages in the amount of P308,016.00 representing the
money it borrowed from friends and financiers which is P304,416.00 for the 93
airline tickets and P3,600.00 for the travel tax of the 12 workers. It is clear
therefore that the actual damages private respondent seeks to recover are the
airline tickets and travel taxes it spent for its workers which were already
reimbursed by its principal and not for any other expenses it had incurred in
the process of recruiting said contract workers. Inasmuch as all expenses
including the processing fees incurred by private respondent had already been
paid for by the latter's principal on a staggered basis as admitted in open court
by its managing director, Mrs. Bienvenida Brusellas. 12 We do not find
anymore justification in the appellate court's decision in granting actual
damages to private respondent.

Thus, while it may be true that private respondent was compelled to borrow
money for the airfare tickets of its contract workers when petitioner failed to
transport said workers, the reimbursements made by its principal to private
respondent failed to support the latter's claim that it suffered actual damages
as a result of petitioner's failure to transport said workers. It is undisputed that
private respondent had consistently admitted that its principal had reimbursed
all its expenses.

Article 2199 of the Civil Code provides that:

Except as provided by law or by stipulations, one is entitled to an adequate

compensation only for such pecuniary loss suffered by him as he has duly
proved. Such compensation is referred to as actual or compensatory
damages.

Furthermore, actual or compensatory damages cannot be presumed, but must

be duly proved, and proved with reasonable degree of certainty. A court
cannot rely on speculation, conjecture or guesswork as to the fact and amount
of damages, but must depend upon competent proof that they have suffered
and on evidence of the actual amount thereof. 13

However, private respondent is entitled to an award of moral and exemplary

damages for the injury suffered as a result of petitioner's failure to transport the
former's workers because of the latter's patent bad faith in the performance of
its obligation. As correctly pointed out by the appellate court:

As evidence had proved, there was complete failure on the part of the
appellant to transport the 93 contract workers of the appellee on or before
March 30, 1981 despite receipt of the payment for their airfares, and
acceptance of the same by the appellant, with specific instructions from the
appellee's principal to transport the contract workers on or before March 30,
1981. No previous notice was ever registered by the appellant that it could not
comply with the same. And then followed the detestable act of appellant in
unilaterally cancelling, booking and rebooking unreasonably the flight of
appellee's contract workers in June to July, 1981 without prior notice. And all of
these actuations of the appellant indeed constitute malice and evident bad
faith which had caused damage and besmirched the reputation and business
image of the appellee. 14

As to the alleged damages suffered by the petitioner as stated in its

counterclaims, the record shows that no claim for said damages was ever
made by the petitioner immediately after their alleged occurrence therefore
said counterclaims were mere afterthoughts when private respondent filed the
present case.

WHEREFORE, the assailed decision is hereby AFFIRMED with the

MODIFICATION that the award of actual damages be deleted from said
decision.

SO ORDERED.