Aboitiz Shipping Corporation vs.
Insurance Company of North America a foreign corporation duly licensed to do business in the Philippines; thus, it lacks
Facts: MSAS Cargo International Limited and/or Associated and/or Subsidiary
Companies (MSAS) procured a marine insurance policy from respondent ICNA UK
Limited of London. The insurance was for a transshipment of certain wooden
work tools and workbenches purchased for the consignee Science Teaching
Improvement Project (STIP), Ecotech Center, Sudlon Lahug, Cebu City, Philippines.
ICNA issued an “all-risk” open marine policy.
The ship arrived and docked at the Manila International Container Port and was
received by petitioner Aboitiz Shipping Corporation (Aboitiz) through its duly
authorized booking representative, Aboitiz Transport System. The bill of lading
issued by Aboitiz contained the notation “grounded outside warehouse.” The
container van was transferred to another crate/container van without any
notation on the condition of the cargo on the Stuffing/Stripping Report. The
vessel left Manila en route to Cebu City.
The shipment arrived in Cebu City. The petitioner’s checker noted that the crates
were slightly broken or cracked at the bottom.
The cargo was withdrawn by the representative of the consignee, Science
Teaching Improvement Project (STIP) and delivered to Don Bosco Technical High
School, Punta Princesa, Cebu City.
Mayo B. Perez, then Claims Head of petitioner, received a telephone call from
Willig informing him that the cargo sustained water damage. ICNA (Insurance
company) filed a formal claim against Aboitiz.
ICNA’s (insurance company) Contention: the damage sustained by the shipment
was exclusively and solely brought about by the fault and negligence of Aboitiz
when the shipment was left grounded outside its warehouse prior to delivery.
Aboitiz’s Contention: Disavowed any liability and asserted that the claim had no
factual and legal bases. It countered that the complaint stated no cause of action,
plaintiff ICNA had no personality to institute the suit, the cause of action was
barred, and the suit was premature there being no claim made upon Aboitiz.
RTC: Ruled against ICNA. ICNA failed to prove that it is the real party-in-interest to
pursue the claim against Aboitiz. ICNA also failed to produce evidence that it was
capacity to sue.
CA: Reversed RTC. The right of subrogation accrues simply upon payment by the
insurance company of the insurance claim. As subrogee, ICNA is entitled to
reimbursement from Aboitiz, even assuming that it is an unlicensed foreign
corporation.
Issue/s:
1. Is respondent ICNA the real party-in-interest that possesses the right of
subrogation to claim reimbursement from petitioner Aboitiz?
2. If so, can petitioner be held liable on the claim for damages?
Ruling:
1st Issue: Yes. While it was the ICNA UK Limited which issued the subject marine
policy, the present suit was filed by the said company’s authorized agent in
Manila. It was the domestic corporation that brought the suit and not the foreign
company. Its authority is expressly provided for in the open policy which includes
the ICNA office in the Philippines as one of the foreign company’s agents.
2ns Issue: Yes. Petitioner failed to exercise extraordinary diligence.
The shipment arrived in the port of Manila and was received by petitioner for
carriage on July 26, 1993. On the same day, it was stripped from the container
van. Five days later, on July 31, 1993, it was re-stuffed inside another container
van. On August 1, 1993, it was loaded onto another vessel bound for Cebu. During
the period between July 26 to 31, 1993, the shipment was outside a container van
and kept in storage by petitioner. The bill of lading issued by petitioner on July 31,
1993 contains the notation “grounded outside warehouse,” suggesting that from
July 26 to 31, the goods were kept outside the warehouse. And since evidence
showed that rain fell over Manila during the same period, We can conclude that
this was when the shipment sustained water damage.
Extraordinary diligence must include safeguarding the shipment from damage
coming from natural elements such as rainfall. Aside from denying that the
“grounded outside warehouse” notation referred not to the crate for shipment
but only to the carrier van, petitioner failed to mention where exactly the goods
were stored during the period in question. It failed to show that the crate was
properly stored indoors during the time when it exercised custody before
shipment to Cebu.
Tabacalera Insurance Co. vs. North America
Facts: Sacks of corn grains valued at P3,500,640.00 were shipped on board North
Front 777, a vessel owned by North Front Shipping Services, Inc. The cargo was
consigned to Republic Flour Mills Corporation in Manila and insured with the
herein mentioned insurance companies.
The vessel left Cagayan de Oro City on 2 August 1990 and arrived Manila on 16
August 1990. It was only unloaded until 5 September 1990 or twenty (20) days
after the arrival of the barge at the wharf of Republic Flour Mills Corporation in
Pasig City. When the cargo was eventually unloaded there was a shortage of
26.333 metric tons. The remaining merchandise was already moldy, rancid and
deteriorating.
Republic Flour Mills Corporation rejected the entire cargo and formally demanded
from North Front Shipping Services, Inc., payment for the damages suffered by it.
The demands however were unheeded. The insurance companies were force
obliged to pay Republic Flour Mills Corporation P2,189,433.40.
The Marine Cargo Adjusters hired by the insurance companies conducted a
survey and found cracks in the bodega of the barge and heavy concentration of
molds on the tarpaulins and wooden boards. They did not notice any seals in the
hatches.
North Front Shipping Services, Inc.’s Contention: The barge was inspected prior to
the actual loading and was found adequate and seaworthy. In addition, they were
issued a permit to sail by the Coast Guard. The tarpaulins were doubled and
brand new and the hatches were properly sealed. They did not encounter big
waves hence it was not possible for water to seep in. He further averred that the
corn grains were farm wet and not properly dried when loaded.
RTC: North Front Shipping Services is not negligent. The contract entered into
between North Front Shipping Services, Inc., and Republic Flour Mills Corporation
was a charterparty agreement. As such, only ordinary diligence in the care of
goods was required of North Front Shipping Services, Inc. The inspection of the
barge by the shipper and the representatives of the shipping company before
actual loading, coupled with the Permit to Sail issued by the Coast Guard, sufficed
to meet the degree of diligence required of the carrier.
CA: Affirmed RTC.
Issue/s: Whether or not North Front Shipping is liable.
Ruling: Yes. It failed to exercise extraordinary diligence required on common
carriers.
North Front Shipping Services, Inc., is a corporation engaged in the business of
transporting cargo and offers its services indiscriminately to the public. It is
without doubt a common carrier. As such it is required to observe extraordinary
diligence in its vigilance over the goods it transports.
The proofs presented by North Front Shipping Services, Inc., were insufficient to
rebut the prima facie presumption of private respondent’s negligence, more so if
we consider the evidence adduced by petitioners. It is not denied by the
insurance companies that the vessel was indeed inspected before actual loading
and that North Front 777 was issued a Permit to Sail. They proved the fact of
shipment and its consequent loss or damage while in the actual possession of the
carrier. Notably, the carrier failed to volunteer any explanation why there was
spoilage and how it occurred. On the other hand, it was shown during the trial
that the vessel had rusty bulkheads and the wooden boards and tarpaulins bore
heavy concentration of molds. The tarpaulins used were not new, contrary to the
claim of North Front Shipping Services, Inc., as there were already several patches
on them, hence, making it highly probable for water to enter.
However, we cannot attribute the destruction, loss or deterioration of the cargo
solely to the carrier. We find the consignee Republic Flour Mills Corporation guilty
of contributory negligence. It was seasonably notified of the arrival of the barge
but did not immediately start the unloading operations. For its contributory
negligence, Republic Flour Mills Corporation should share at least 40% of the loss.
Mendoza vs. Philippine Air Lines, Inc.
Facts: Jose Mendoza was the owner of the Cita Theater located in the City of
Naga where he used to exhibit movie pictures booked from movie producers or
film owners in Manila. During a fiesta, he decided to exhibit a film.
He contracted with the LVN pictures Inc., a movie producer in Manila for him to
show during the town fiesta the Tagalog film entitled "Himala ng Birhen" or
Miracle of the Virgin. In pursuance of the agreement between the LVN Pictures
Inc. and Mendoza, the former on September 17th, 1948, delivered to the
defendant Philippine Airlines (PAL) a can containing the film "Himala ng Birhen"
consigned to the Cita Theater. However, this can of film was not unloaded at Pili
Air Port and it was brought back to Manila. After investigation and search in the
Manila office, Mendoza received it the following day and exhibited the film but he
had missed his opportunity to realize a large profit as he expected for the people
after the fiesta had already left for their towns. Mendoza brought action against
PAL.
Issue/s: Whether or not PAL is liable for damages suffered by Mendoza.
Ruling: No. The defendant company cannot be held liable for damages where it
could not have foreseen the damages that would be suffered by the plaintiff upon
failure to deliver the can of film for reason that the plans of the plaintiff to exhibit
that film during the town fiesta and his preparation, specially the announcement
of said exhibition by poster and advertisement in the newspapers were not called
to the defendant's attention.
Common carriers are not obligated by law to carry and to deliver merchandise,
and persons are not vested with the right to prompt delivery, unless such
common carriers previously assume the obligation. Said rights and obligations are
created by a specific contract entered into by the parties.
Where failure to exhibit films on a certain day would spell substantial damages or
considerable loss of profits, including waste of efforts on preparations and
expense incurred in advertisements; exhibitors, for their security, may either get
hold of the films well ahead of the time of exhibition in order to make allowances
for any hitch in the delivery, or else enter into a special contract or make a
suitable arrangement with the common carrier for the prompt delivery of the
fihns, calling the attention of the carrier to the circumstances surrounding the
case and the approximate amount of damages to be suffered in case of delay.
Picart vs. Smith
Facts: The plaintiff was riding on his pony over Carlatan bridge. Before he had
gotten half way across, the defendant approached from the opposite direction in
an automobile, going at the rate of about ten or twelve miles per hour. As the
defendant neared the bridge, he saw a horseman on it and blew his horn to give
warning of his approach.
The plaintiff, it appears, saw the automobile coming and heard the warning
signals. However, being perturbed by the novelty of the apparition or the rapidity
of the approach, he pulled the pony closely up against the railing on the right side
of the bridge instead of going to the left. He says that the reason he did this was
that he thought he did not have sufficient time to get over to the other side.
When he had gotten quite near, there being then no possibility of the horse
getting across to the other side, the defendant quickly turned his car sufficiently
to the right to escape hitting the horse alongside of the railing where it was then
standing; but in so doing the automobile passed in such close proximity to the
animal that it became frightened and turned its body across the bridge with its
head toward the railing. In so doing, it was struck on the hock of the left hind leg
by the flange of the car and the limb was broken. The horse fell and its rider was
thrown off with some violence.
Issue/s: Whether or not the defendant in maneuvering his car in the manner
above described was guilty of negligence such as gives rise to a civil obligation to
repair the damage done.
Ruling: Yes, he is liable.
The test by which to determine the existence of negligence in a particular case
may be stated as follows: Did the defendant in doing the alleged negligent act use
that reasonable care and caution which an ordinarily prudent person would have
used in the same situation? If not, then he is guilty of negligence.
As the defendant started across the bridge, he had the right to assume that the
horse and rider would pass over to the proper side; but as he moved toward the
center of the bridge it was demonstrated to his eyes that this would not be done;
and he must in a moment have perceived that it was too late for the horse to
cross with safety in front of the moving vehicle. In the nature of things this
change of situation occurred while the automobile was yet some distance away;
and from this moment it was no longer within the power of the plaintiff to escape
being run down by going to a place of greater safety. The control of the situation
had then passed entirely to the defendant; and it was his duty either to bring his
car to an immediate stop or, seeing that there were no other persons on the
bridge, to take the other side and pass sufficiently far away from the horse to
avoid the danger of collision. He was, we think, deceived into doing this by the
fact that the horse had not yet exhibited fright. But in view of the known nature
of horses, there was an appreciable risk that, if the animal in question was
unacquainted with automobiles, he might get excited and jump under the
conditions which here confronted him.
Lu Do & Lu Ym Corp. vs. Binamira
Facts: Delta Photo Supply Company of New York shipped on board the M/S
"FERNSIDE" at New York, U.S.A., six cases of films and/or photographic supplies
consigned to the order of respondent I. V. Binamira.
Petitioner, as agent of the carrier, hired the Cebu Stevedoring Company, Inc. to
unload its cargo. During the discharge, good order cargo was separated from the
bad order cargo on board the ship, and a separate list of bad order cargo was
prepared by Pascual Villamor, checker of the stevedoring company. The shipment
in question was not included in the report of bad order cargo of both checkers,
indicating that it was discharged from the ship in good order and condition.
Three days after the goods were unloaded, respondent took delivery of his six
cases of photographic supplies from the arrastre operator. He discovered that the
cases showed, signs of pilferage and, consequently, he hired marine surveyors, R.
J. del Pan & Company, Inc. to examine them. The finding of the surveyors showed
that some films and photographic supplies were missing valued at P324.63.
Issue/s: Whether or not the carrier is responsible for the loss considering that the
same occurred after the shipment was discharged from the ship and placed in the
possession and custody of the customs authorities.
CA: Carrier is responsible. A common carrier has the legal duty to deliver goods to
a consignee in the same condition in which it received them xxx and we believe
delivery to the customs authorities is not the delivery contemplated by Article
1736 xxx
Ruling: No.
While we agree with the Court of Appeals that while delivery of the cargo to the
customs authorities is not delivery to the consignee, or "to the person who has a
right to receive them", contemplated in Article 1736, because in such case the
goods are still in the hands of the Government and the owner cannot exercise
dominion over them, we believe however that the parties may agree to limit the
liability of the carrier considering that the goods have still to go through the
inspection of the customs authorities before they are actually turned over to
the consignee.
In the bill of lading that was issued covering the shipment in question, both the
carrier and the consignee have stipulated to limit the responsibility of the carrier
for the loss or damage that may be caused to the goods before they are actually
delivered.
It therefore appears clear that the carrier does not assume liability for any loss or
damage to the goods once they have been "taken into the custody of customs or
other authorities", or when they have been delivered at ship's tackle. These
stipulations are clear. They have been adopted precisely to mitigate the
responsibility of the carrier considering the present law on the matter, and we
find nothing therein that is contrary to morals or public policy that may justify
their nullification.
REGIONAL CONTAINER LINES VS THE NETHERLANDS
Facts: 405 cartons of Epoxy Molding Compound were consigned to be shipped
from Singapore to Manila for Temic Telefunken Microelectronics Philippines
(Temic). As the cargo was highly perishable, the inside of the container had to be
kept at a temperature of 0º Celsius. Pacific Eagle then loaded the refrigerated
container on board the M/V Piya Bhum, a vessel owned by RCL.
After unloading the refrigerated container, it was plugged to the power terminal
of the pier to keep its temperature constant. Fidel Rocha, accompanied by two
surveyors, conducted a survey which they found that based on the temperature
chart, the temperature reading was constant from October 18, 1995 to October
25, 1995 at 0º Celsius. However, at midnight of October 25, 1995—when the
cargo had already been unloaded from the ship—the temperature fluctuated
with a reading of 33º Celsius. Rocha believed the fluctuation was caused by the
burnt condenser fan motor of the refrigerated container.
Temic received the shipment. It found the cargo completely damaged. Temic filed
a claim for cargo loss against Netherlands Insurance. The latter paid under the
Marine Insurance Policy.
Netherlands Insurance filed a complaint for subrogation of insurance settlement
with the Regional Trial Court, Branch 5, Manila, against “the unknown owner of
M/V Piya Bhum” and TMS Ship Agencies (TMS), the latter thought to be the local
agent of M/V Piya Bhum’s unknown owner. It then filed an amended complaint
impleading EDSA Shipping, RCL, Eagle Liner Shipping Agencies, U-Freight
Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional defendants.
RTC: While there was valid subrogation, the defendants (Netherlands) could not
be held liable for the loss or damage, as their respective liabilities ended at the
time of the discharge of the cargo from the ship at the Port of Manila. RCL and
Edsa Shipping Agency is liable.
CA: Affirmed RTC.
Issue/s: Whether the CA correctly held RCL and EDSA Shipping liable as common
carriers under the theory of presumption of negligence.
Ruling: Yes.
A common carrier is presumed to have been negligent if it fails to prove that it
exercised extraordinary vigilance over the goods it transported.8 When the goods
shipped are either lost or arrived in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there need not be
an express finding of negligence to hold it liable.
To overcome the presumption of negligence, the common carrier must establish
by adequate proof that it exercised extraordinary diligence over the goods. It
must do more than merely show that some other party could be responsible for
the damage.10 In the present case, RCL and EDSA Shipping failed to prove that
they did exercise that degree of diligence required by law over the goods they
transported. Indeed, there is sufficient evidence showing that the fluctuation of
the temperature in the refrigerated container van, as recorded in the
temperature chart, occurred after the cargo had been discharged from the vessel
and was already under the custody of the arrastre operator, ICTSI. This evidence,
however, does not disprove that the condenser fan—which caused the
fluctuation of the temperature in the refrigerated container—was not damaged
while the cargo was being unloaded from the ship. It is settled in maritime law
jurisprudence that cargoes while being unloaded generally remain under the
custody of the carrier; 11 RCL and EDSA Shipping failed to dispute this.
Loadstar Shipping Co., Inc. vs. Pioneer Asia Insurance Corp
Facts: Petitioner Loadstar is the registered owner and operator of the vessel M/V
Weasel. Loadstar entered into a voyage-charter with Northern Mindanao
Transport Company, Inc. for the carriage of 65,000 bags of cement from Iligan
City to Manila. The shipper was Iligan Cement Corporation, while the consignee in
Manila was Market Developers, Inc.
Prior to the voyage, the consignee insured the shipment of cement with
respondent Pioneer Asia Insurance Corporation for P1,400,000, for which
respondent issued Marine Open Policy No. MOP-006 dated September 17, 1980,
covering all shipments made on or after September 30, 1980.
M/V Weasel left Iligan City for Manila in good weather. However, at 4:31 in the
morning of June 25, 1984, Captain Vicente C. Montera, master of M/V Weasel,
ordered the vessel to be forced aground. Consequently, the entire shipment of
cement was good as gone due to exposure to sea water. Petitioner thus failed to
deliver the goods to the consignee in Manila. The consignee demanded from
petitioner full reimbursement of the cost of the lost shipment. Petitioner,
however, refused to reimburse the consignee despite repeated demands.
Respondent insurance company paid the consignee P1,400,000 plus an additional
amount of P500,000, the value of the lost shipment of cement. In return, the
consignee executed a Loss and Subrogation Receipt in favor of respondent
concerning the latter’s subrogation rights against petitioner. Hence, respondent
insurance company filed a complaint docketed as Civil Case No. 86-37957, against
petitioner.
Issue/s:
1. Whether or not petitioner is a common or a private carrier?
2. In either case, did petitioner exercise the required diligence i.e., the
extraordinary diligence of a common carrier or the ordinary diligence of a
private carrier.
Ruling:
1st Issue: Petitioner is a corporation engaged in the business of transporting cargo
by water and for compensation, offering its services indiscriminately to the public.
Thus, without doubt, it is a common carrier. However, petitioner entered into a
voyage-charter with the Northern Mindanao Transport Company, Inc. Now, had
the voyage-charter converted petitioner into a private carrier?
We think not. The voyage-charter agreement between petitioner and Northern
Mindanao Transport Company, Inc. did not in any way convert the common
carrier into a private carrier. We have already resolved this issue with finality in
Planters Products, Inc. v. Court of Appeals11 where we ruled that:
“It is therefore imperative that a public carrier shall remain as such,
notwithstanding the charter of the whole or portion of a vessel by one or more
persons, provided the charter is limited to the ship only, as in the case of a
time-charter or voyage-charter. It is only when the charter includes both the
vessel and its crew, as in a bareboat or demise that a common carrier becomes
private, at least insofar as the particular voyage covering the charter-party is
concerned. Indubitably, a shipowner in a time or voyage charter retains
possession and control of the ship, although her holds may, for the moment, be
the property of the charterer.”
Conformably, petitioner remains a common carrier notwithstanding the existence
of the charter agreement with the Northern Mindanao Transport Company, Inc.
since the said charter is limited to the ship only and does not involve both the
vessel and its crew. As elucidated in Planters Products, its charter is only a
voyage-charter, not a bareboat charter. As a common carrier, petitioner is
required to observe extraordinary diligence in the vigilance over the goods it
transports.
2nd Issue: Petitioner claims that the loss of the goods was due to a fortuitous
event under Art 1974(1). Yet, its claim is not substantiated. On the contrary, we
find supported by evidence on record the conclusion of the trial court and the
Court of Appeals that the loss of the entire shipment of cement was due to the
gross negligence of petitioner. Records show that in the evening of June 24, 1984,
the sea and weather conditions in the vicinity of Negros Occidental were calm.
The records reveal that petitioner took a shortcut route, instead of the usual
route, which exposed the voyage to unexpected hazard. Petitioner has only itself
to blame for its misjudgment.
M. Ruiz Highway Transit, Inc. vs. Court of Appeals
Facts: In the morning of May 22, 1964, spouses Guillermo Monserrat and Marta
Consignado and their child, Victoria, were paying passengers in a bus of
defendant transportation company driven by co-defendant Buena, bound for
Antipolo, Rizal. In Sta. Rosa, Laguna, while the bus was running, a rear tire
exploded, blasting a hole in the very place where Victoria was standing in front of
her mother. As a result, the child fell through the hole, and died that same
morning from injuries sustained in.
Court of First Instance: Dismissed the complaint on the ground that (1) the
accident was not due to negligence of the carrier, but was an act of God; and (2)
even if negligence was attributable to defendants, their liability had been
discharged, as evidenced by Exhibits 2 and 3 quoted in the footnote.
Court of Appeals: Reversed the judgment, upon the finding that (1) defendants
failed to prove the extraordinary -diligence required of carriers; and (2) Exhibits 2
and 3 did not effect a waiver of plaintiffs' right to damages.
Issue/s: Whether or not the petitioner is liable.
Ruling: Petitioner is liable. Respondents and the child were paying passengers in
the bus; petitioners were duty bound to transport them, using the utmost
diligence of very cautious persons. Therein they failed. The child died because the
floor of the bus gave way; this reinforces the presumption that petitioners had
neglected to provide a safe conveyance (Art. 1756, New Civil Code). Evidence of
the required extraordinary diligence was not introduced to rebut the
presumption.
Petitioners venture to guess that it was due either to accidental puncture by a
sharp instrument, as a nail, or to latent defect in the tire. Evidence should have
been—but was not—presented to establish such defense, Even conceding that
the tire blow-out was accidental, we could still hold the carrier liable for failure to
provide a safe floor in the bus.
Exhibits 2 and 3 are not proof that petitioners have discharged their legal liability
to claimants. What is expressed there is the latter's belief—clearly erroneous—
that petitioners are not liable to them and acknowledgment of the voluntary help
extended by petitioner transportation company. The belief is baseless. That
respondents entertained such an ill-founded impression is not to be wondered at.
They are ignorant, illiterate, indigent, and, at the time they signed Exhibits 2 and
3, thoroughly confused and distracted by the death of their child. These factual
findings cannot be reviewed by this Court. Signed statements of the claimants
expressing their belief that the transportation company is not liable then are not
proof that the latter have discharged their legal liability to claimants, where such
belief is erroneous and said claimants are ignorant.
A common carrier neglects its duty to transport its passengers safely where one
of its passengers died because the floor of its bus gave way after a tire blow-out
caused by overcrowding, overspeeding and weak flooring.
Philippine National Railways Corporation vs. Vizcara
Facts: At about three o’clock in the morning, Reynaldo Vizcara (Reynaldo) was
driving a passenger jeepney headed towards Bicol to deliver onion crops, with his
companions, namely, Cresencio Vizcara (Cresencio), Crispin Natividad (Crispin),
Samuel Natividad (Samuel), Dominador Antonio.
While crossing the railroad track in Tiaong, Quezon, a Philippine National Railways
(PNR) train, then being operated by respondent Japhet Estranas (Estranas),
suddenly turned up and rammed the passenger jeepney. The collision resulted to
the instantaneous death of Reynaldo, Cresencio, Crispin, and Samuel. On the
other hand, Dominador and Joel, sustained serious physical injuries.
At the time of the accident, there was no level crossing installed at the railroad
crossing. Additionally, the “Stop, Look and Listen” signage was poorly maintained.
The “Stop” signage was already faded while the “Listen” signage was partly
blocked by another signboard.
Joel and Dominador, together with the heirs of the deceased victims, namely,
Purificacion Vizcara, Marivic Vizcara, Cresencia Natividad and Hector Vizcara, filed
an action for damages against PNR, Estranas and Ben Saga, the alternate driver of
the train.
Respondent’s Contention: The proximate cause of the fatalities and serious
physical injuries sustained by the victims of the accident was the petitioners’
gross negligence in not providing adequate safety measures to prevent injury to
persons and properties.
Petitioner’s Contention: They exercised due diligence in operating the train and
monitoring its roadworthiness. They asseverate that right before the collision,
Estranas was driving the train at a moderate speed. Four hundred (400) meters
away from the railroad crossing, he started blowing his horn to warn motorists of
the approaching train. When the train was only fifty (50) meters away from the
intersection, respondent Estranas noticed that all vehicles on both sides of the
track were already at a full stop. Thus, he carefully proceeded at a speed of
twenty-five (25) kilometers per hour, still blowing the train’s horn. However,
when the train was already ten (10) meters away from the intersection, the
passenger jeepney being driven by Reynaldo suddenly crossed the tracks.
RTC: In favor of respondents.
CA: Affirmed RTC with modification of damages. PNR’s failure to install sufficient
safety devices in the area, such as flagbars or safety railroad bars and signage,
was the proximate cause of the accident.
Issue/s:
1. Whether or not petitioners’ negligence was the proximate cause of the
accident.
2. Whether or not there was contributory negligence on the part of the
respondents.
3. Whether or not the doctrine of last clear chance is applicable.
Ruling:
1st Issue: Petitioner is negligent. At any rate, the records bear out that the factual
circumstances of the case were meticulously scrutinized by both the RTC and the
CA before arriving at the same finding of negligence on the part of the
petitioners, and we found no compelling reason to disturb the same. Both courts
ruled that the petitioners fell short of the diligence expected of it, taking into
consideration the nature of its business, to forestall any untoward incident. In
particular, the petitioners failed to install safety railroad bars to prevent motorists
from crossing the tracks in order to give way to an approaching train. Aside from
the absence of a crossing bar, the “Stop, Look and Listen” signage installed in the
area was poorly maintained, hence, inadequate to alert the public of the
impending danger. A reliable signaling device in good condition, not just a
dilapidated “Stop, Look and Listen” signage, is needed to give notice to the public.
It is the responsibility of the railroad company to use reasonable care to keep the
signal devices in working order. Failure to do so would be an indication of
negligence.25 Having established the fact of negligence on the part of the
petitioners, they were rightfully held liable for damages.
2nd Issue: No. Contributory negligence is an act or omission amounting to want of
ordinary care on the part of the person injured which, concurring with the
defendant’s negligence, is the proximate cause of the injury.
Here, we cannot see how the respondents could have contributed to their injury
when they were not even aware of the forthcoming danger. It was established
during the trial that the jeepney carrying the respondents was following a ten-
wheeler truck which was only about three to five meters ahead. When the truck
proceeded to traverse the railroad track, Reynaldo, the driver of the jeepney,
simply followed through. He did so under the impression that it was safe to
proceed. It bears noting that the prevailing circumstances immediately before the
collision did not manifest even the slightest indication of an imminent harm. To
begin with, the truck they were trailing was able to safely cross the track.
Likewise, there was no crossing bar to prevent them from proceeding or, at least,
a stoplight or signage to forewarn them of the approaching peril. Thus, relying on
his faculties of sight and hearing, Reynaldo had no reason to anticipate the
impending danger.
rd
3 Issue: The doctrine of last clear chance provides that where both parties are
negligent but the negligent act of one is appreciably later in point of time than
that of the other, or where it is impossible to determine whose fault or
negligence brought about the occurrence of the incident, the one who had the
last clear opportunity to avoid the impending harm but failed to do so, is
chargeable with the consequences arising therefrom.
To reiterate, the proximate cause of the collision was the petitioners’ negligence
in ensuring that motorists and pedestrians alike may safely cross the railroad
track. The unsuspecting driver and passengers of the jeepney did not have any
participation in the occurrence of the unfortunate incident which befell them.
Likewise, they did not exhibit any overt act manifesting disregard for their own
safety. Thus, absent preceding negligence on the part of the respondents, the
doctrine of last clear chance cannot be applied.
Vector Shipping Corporation vs. Macasa
Facts: Spouses Cornelio (Cornelio) and Anacleta Macasa (Anacleta), together
with their eight-year old grandson, Ritchie Macasa, (Ritchie) boarded the MV
Doña Paz, owned and operated by respondent Sulpicio Lines, Inc. (Sulpicio Lines),
at Tacloban, Leyte bound for Manila. MV Doña Paz collided with the MT Vector.
Only twenty-six persons survived: 24 passengers of MV Doña Paz and 2 crew
members of MT Vector.
When they heard the news that MV Doña Paz was rammed at sea by another
vessel, bewildered, the Macasas went to the office of Sulpicio Lines to check on
the veracity of the news, but the latter denied that such an incident occurred.
According to the Macasas, Sulpicio Lines was uncooperative and was reluctant to
entertain their inquiries. Later, they were forced to rely on their own efforts to
search for the bodies of their loved ones, but to no avail.
The Macasas manifested that before they filed a case in court, Sulpicio Lines,
through counsel, intimated its intention to settle, and offered the amount of
P250,000.00 for the death of Cornelio, Anacleta and Ritchie. The Macasas
rejected the said offer. Thus, on October 2, 1991, the Macasas filed a Complaint
for Damages arising out of breach of contract of carriage against Sulpicio Lines
before the RTC.
Petitioner’s Contention: the factual findings of the BMI are not binding on the
Court as such is limited to administrative liabilities and does not absolve the
common carrier from its failure to observe extraordinary diligence; that this
Court’s ruling in Caltex (Philippines), Inc. v. Sulpicio Lines, Inc. is not res adjudicata
to this case, since there were several other cases which did not reach this Court
but, however, attained finality, previously holding that petitioners and Sulpicio
Lines are jointly and severally liable to the victims; that the collision was solely
due to the fault of MV Doña Paz as it was guilty of navigational fault and
negligence; that due to the absence of the ship captain and other competent
officers who were not at the bridge at the time of collision, and running at a
speed of 16.5 knots, it was the MV Doña Paz which rammed MT Vector; and that
it was improbable for a slower vessel like MT Vector which, at the time, was
running at a speed of merely 4.5 knots to ram a much faster vessel like the MV
Doña Paz.
Sulpicio Lines’ Contention: the BMI proceedings are administrative in nature and
can proceed independently of any civil action filed with the regular courts; that
the BMI findings, as affirmed by the Philippine Coast Guard, holding that MT
Vector was solely at fault at the time of collision, were based on substantial
evidence and by reason of its special knowledge and technical expertise, the
BMI’s findings of facts are generally accorded respect by the courts; and that, as
such, said BMI factual findings cannot be the subject of the instant petition for
review asking this Court to look again into the pieces of evidence already
presented.
Issue/s:
Ruling: It is a well-established doctrine that in petitions for review on certiorari
under Rule 45 of the Rules of Civil Procedure, only questions of law may be raised
by the parties and passed upon by this Court. Petitioners’ insistence that MV
Doña Paz was at fault at the time of the collision will entail this Court’s review and
determination of the weight, credence, and probative value of the evidence
presented. This Court is being asked to evaluate the pieces of evidence which
were adequately passed upon by both the RTC and the CA. Without doubt, this
matter is essentially factual in character and, therefore, outside the ambit of a
petition for review on certiorari under Rule 45 of the Rules of Civil Procedure.
Petitioners ought to remember that this Court is not a trier of facts.
Air France vs Camilis
Facts: Camilis went on a pilgrimage with a group of Filipinos to selected
countries in Europe. According to respondent: (1) AF’s agent in Paris failed to
inform him of the need to secure a transit visa for Moscow, as a result of which
he was denied entry to Moscow and was subjected to humiliating interrogation
by the police; (2) another AF agent (a certain Ms. Soeyesol) rudely denied his
request to contact his travel companions to inform them that he was being sent
back to Paris from Moscow with a police escort; Ms. Soeyesol even reported him
as a security threat which resulted in his being subjected to further interrogation
by the police in Paris and Rome, and worse, also lifted his flight coupons for the
rest of his trip; (3) AF agents in Rome refused to honor his confirmed flight to
Paris; (4) upon reaching Paris for his connecting flight to Manila, he found out
that the AF agents did not check in his baggage and since he had to retrieve his
bags at the baggage area, he missed his connecting flight; (5) he had to shoulder
his extended stay in Paris for AF’s failure to make good its representation that he
would be given a complimentary motel pass and (6) he was given a computer
print-out of his flight reservation for Manila but when he went to the airport, he
was told that the flight was overbooked. It was only when he made a scene that
the AF agent boarded him on an AF flight to Hongkong and placed him on a
connecting Philippine Airlines flight to Manila.
RTC: AF breached its contract of carriage and that it was liable to pay P200,000
actual damages, P1 million moral damages, P1 million exemplary damages and
P300,000 attorney’s fees to respondent.
CA: Affirmed RTC with modifications. CA ruled that it was respondent (as
passenger), and not AF, who was responsible for having the correct travel
documents. However, the appellate court stated that this fact did not absolve AF
from liability for damages. The CA agreed with the findings of fact of the RTC that
AF’s agents and representatives repeatedly subjected respondent to very poor
service, verbal abuse and abject lack of respect and consideration. As such, AF
was guilty of bad faith for which respondent ought to be compensated. The
appellate court affirmed the award of P1 million moral damages and P300,000
attorney’s fees. However, it reduced the actual damages to US$906 (or its peso
equivalent). According to the CA, this amount represented the expenses
respondent incurred from the time he was unable to join his group in Rome (due
to the unfounded “communiqué” of Ms. Soeyesol that he was a security threat)
up to the time his flight reservation from Paris to Manila was dishonored for
which he was forced to stay in Paris for two additional days.
Issue/s:
1. Whether or not CA’s award of moral and exemplary damages and
attorney’s fees to respondent is correct.
2. Whether or not the interest rate should run not from the time of
respondent’s extrajudicial demand but from the time of judgment of the
RTC.
Ruling:
1st Issue: Petition denied. On the issue pertaining to whether or not respondent
was entitled to damages and attorney’s fees, the same entails a resort to the
parties’ respective evidence. Thus, AF is clearly asking us to consider a question of
fact. Time and again, we have held that the jurisdiction of this Court in a petition
for review on certiorari under Rule 45 is limited only to questions of law,3 save
for certain exceptions,4 none of which are present in this case. Both the RTC and
the CA have competently ruled on the issue of respondent’s entitlement to
damages and attorney’s fees as they properly laid down both the factual and legal
bases for their respective decisions. We see no reason to disturb their findings.

2nd Issue: Pursuant to this ruling, the legal interest is 6% p.a. and it shall be
reckoned from April 25, 2007 when the RTC rendered its judgment, not from the
time of respondent’s extrajudicial demand. This must be so as it was at the time
the RTC rendered its judgment that the quantification of damages may be
deemed to have been reasonably ascertained. Then, from the time this decision
becomes final and executory, the interest rate shall be 12% p.a. until full
satisfaction.

Facts:
Issue/s:
Ruling:

Facts:
Issue/s:
Ruling: