GR No.

172682, July 27, 2016

Sulpicio Lines Inc. v Napoleon Sisante

Nature of Action: Action for damages for breach of contract of carriage.

FACTS:

The M/V Princess of the Orient, a passenger vessel owned and operated
by the petitioner, sank near Fortune Island in Batangas. Of the 388 recorded
passengers, 150 were lost. Napoleon Sesante, then a member of the
Philippine National Police (PNP) and a lawyer, was one of the passengers
who survived the sinking. He sued the petitioner for breach of contract and
damages. In its defense, the petitioner insisted on the seaworthiness of the M/
V Princess of the Orient due to its having been cleared to sail from the Port of
Manila by the proper authorities; that the sinking had been due to force
majeure; that it had not been negligent; and that its officers and crew had
also not been negligent because they had made preparations to abandon the
vessel because they had launched life rafts and had provided the passengers
assistance in that regard. The RTC rendered judgement in favor of plaintiff
Napoleon Sesante and ordered defendant to pay temperate and moral
damages. The RTC observed that the petitioner, being negligent, was liable to
Sesante pursuant to Articles 1739 and 1759 of the Civil Code. The CA
reduced the award of the temperate damages to the approximate cost of
Sesante's lost personal belongings and held that petitioner remained civilly
liable.

The petitioner has attributed the sinking of the vessel to the storm
notwithstanding its position on the seaworthiness of M/V Princess of the
Orient. Yet, the findings of the BMI directly contradicted the petitioner's
attribution, as the BMI found that petitioner’s fault was the immediate and
proximate cause of the sinking due to the Captain's erroneous maneuvers of
the M/V Princess of the Orient minutes before she sunk.

ISSUE:

Whether or not the petitioner is liable for moral damages.

RULING:
 Yes. The Court awarded moral damages due to the totality of the
negligence by the officers and crew of the Princess of the Orient coupled
with the seeming indifference of the petitioner to render assistance to
Sesante.

The petitioner argues that moral damages could be meted against a

common carrier only in the following instances, to wit: (1) in the situations
enumerated by Article 2201 of the Civil Code; (2) in cases of the death of a
passenger; or (3) where there was bad faith on the part of the common
carrier. It contends that none of these instances obtained herein; hence, the
award should be deleted.

We agree with the petitioner that moral damages may be recovered in

an action upon breach of contract of carriage only when: (a) death of a
passenger results, or (b) it is proved that the carrier was guilty of fraud and
bad faith, even if death does not result. However, moral damages may be
awarded if the contractual breach is found to be wanton and deliberately
injurious, or if the one responsible acted fraudulently or with malice or bad
faith.

The negligent acts of the officers and crew of M/V Princess of the
Orient could not be ignored in view of the extraordinary duty of the common
carrier to ensure the safety of the passengers. The totality of the negligence by
the officers and crew of M/V Princess of the Orient, coupled with the
seeming indifference of the petitioner to render assistance to Sesante,
warranted the award of moral damages.

Servando vs. Philippine Steam Navigation Co.

(117 SCRA 832) 

Facts: Bico and Servando loaded on board the FS-176 the following cargoes:
1.528 cavans of rice and 44 cartons of colored paper, toys and general
merchandise. Upon the arrival of the vessel, the cargoes were discharged,
complete and in good order to the warehouse of the Bureau of Customs. At
2:00 pm of the same day, a fire of unknown reasons razed the warehouse.
Before the fire, Bico was able to take delivery of 907 cavans of rice. The
petitioners are now claiming for the value of the destroyed goods from the
common carrier. 

The Trial Court ordered the respondent to pay the plaintiffs the amount of
their lost goods on the basis that the delivery of the shipment to the
warehouse is not the delivery contemplated by Article 1736 of the New Civil
Code, since the loss occurred before actual or constructive delivery. The
petitioners argued that the stipulation in the bills of lading does not bind
them because they did not sign the same. The stipulation states that the
carrier shall not be responsible for loss unless such loss was due to the
carrier’s negligence. Neither shall it be liable for loss due to fortuitous events
such as dangers of the sea and war. 

Issue: Whether or not the carrier should be held liable for the destruction of
the goods 

Held: No. There is nothing on record to show that the carrier incurred in
delay in the performance of its obligation. Since the carrier even notified the
plaintiffs of the arrival of their shipments and had demanded that they be
withdrawn. 

The carrier also cannot be charged with negligence since the storage of the
goods was in the Customs warehouse and was undoubtedly made with their
knowledge and consent. Since the warehouse belonged and maintained by
the Government, it would be unfair to impute negligence to the appellant
since it has no control over the same.

Philcomsat v. Globe Telecom

429 SCRA 153, G.R. No. 147324
(May 25, 2004)

FACTS:

1. Respondent Globe is provider of communications facilities for US bases in Clark

and Subic for the US Defense Communication Agency.
2. Respondent Globe then contracted with local service provider Philippine
Communications Satellite Corporation (Philcomsat) for the provision of
communication facilities.
3. On May 7, 1991, Petitioner Philcomsat and Respondent Globe entered into
AGREEMENT to provide earth station for 5 years. They knew then that the Military
Base Agreement was to expire in 1991.
4. In September 1991, Senate did not renew the Military Base Agreement.
5. In August 1992, Globe notified Philcomsat of its intention to discontinue
Agreement citing force majeur. This is provided for in Sec. 8 [Default] of the said
Agreement.
6. US was set to leave by December, 1992.
7. After the US left, Philcomsa demanded out from Globe the standing obligation of
$5M from the Agreement. Philcomsat filed suit.in RTC.
8. RTC ordered Globe to pay Philcomsat $92 (rentals for the month of Dec. 1992).
9. CA ruled that the occurrence of Senat’s non-ratification was indeed force majeur.
But CA still held Globe liable to US’ rent of $92K for the month of December,
1992.
10. They raised to Court via Petition for Review.

ISSUE:
1. Whether or not US withdrawal following Senate’s non-ratification
constituted force majeur?

RULING: CA decision AFFIRMED.

RATIO:
1. Article 1174 of the Civil Code exempts Obligor from liability due to force majeur
which are unforeseeable or unavoidable.
2. Section 8 of the Agreement also states “laws, order of the Philippine
government” as force majeur. Nothing in Section 8 runs contrary to Art. 1174 of the
Civil Code.
3. Requisites for Force Majeur: a) Event is independent of human will; b) Event
must render impossible for Debtor to fulfill obligation in normal manner; c) Obligor
must be free of participation or aggravation of injury to the Creditor. (NOTE: Case
did not include the unforeseeable and unavoidable aspect.)
4. Both parties had no control over the non-renewal of the Bases Agreement for the
prerogative to do so belonged to Philippine Senate. Nor did they have control of
the US’ withdrawal in December 1992.
5. Events made it impossible for the continuation of the Agreement until the end of
the 5-year term without fault of either party.