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 for damages against petitioners
1

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

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

On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with
this decretal portion:

IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito

Cudiamat was negligent, which negligence was the proximate cause of his death.
Nonetheless, defendants in equity, are hereby ordered to pay the heirs of Pedrito
Cudiamat the sum of P10,000.00 which approximates the amount defendants initially
offered said heirs for the amicable settlement of the case. No costs.

SO ORDERED. 2

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

1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the
victim Pedrito Cudiamat;

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

3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and
compensatory damages;

4. The costs of this suit. 4

Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated October 4, 1990, 5
hence this petition with the central issue
herein being whether respondent court erred in reversing the decision of the trial court and
in finding petitioners negligent and liable for the damages claimed.

It is an established principle that the factual findings of the Court of Appeals as a rule are
final and may not be reviewed by this Court on appeal. However, this is subject to settled
exceptions, one of which is when the findings of the appellate court are contrary to those
of the trial court, in which case a reexamination of the facts and evidence may be
undertaken. 6

In the case at bar, the trial court and the Court of Appeal have discordant positions as to who between the petitioners an the victim is

guilty of negligence. Perforce, we have had to conduct an evaluation of the evidence in this case for the prope calibration of their

conflicting factual findings and legal conclusions.

The lower court, in declaring that the victim was negligent, made the following findings:
This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving vehicle, especially with one of his h ands 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 initiall y, 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. 14
An ordinarily prudent person would have
made the attempt board the moving conveyance under the same or similar circumstances.
The fact that passengers board and alight from slowly moving vehicle is a matter of
common experience both the driver and conductor in this case could not have been
unaware of such an ordinary practice.

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

Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordina diligence f or 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 th e 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 deser ves 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 ac tual 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 incid ental 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 gros s 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. The Civil Code, governing the liability of a common
4

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. Such duty of a common
5

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. The statutory provisions render a common
6

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. In case of such death or injury, a carrier is
7

presumed to have been at fault or been negligent, and by simple proof of injury, the
8

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. In the absence of satisfactory explanation by the
9

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, an exception from
10

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 2176 and related provisions, in conjunction with Article 2180, of
12 13

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 of the Civil Code can well apply. In fine, a liability for tort may
14 15

arise even under a contract, where tort is that which breaches the contract. Stated16

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. It is an established rule that
18

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 Appeals affirming the decision of the trial court in
1 2

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 denying petitioner's Motion for Reconsideration in the appealed decision.
3

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. Petitioner's repeated failures to transport private respondent's workers in its flight
9

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 filed by private
11

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. We do 12

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.