Home Insurance Co.

, vs American Steamship Agencies, 23 SCRA 24

NOTES:

Charter Party; Effect where contract is one of affreightment

Where the charter party contract shows that although possession and control of the
ship were not entirely transferred to the charterer, the vessel was chartered to its
full and complete capacity and the charterer had the option to go north or south or
vice-versa, loading, stowing and discharging at its risk and expense, said contract is
one of affreightment rather than a demise. As such, in the absence of stipulation,
the liability of the shipowner for acts or negligence of its captain and crew would
remain.

Stipulation absolving the owner from liability for loss due to the negligence
of its agent is valid
The Civil Code provisions on common carriers, taken from Anglo-American law,
should, following American jurisprudence on the matter, not be applied where the
carrier is not acting as such but as a private carrier. The stipulation in the charter
party absolving the owner from liability for loss due to the negligence of its agent
would be void only if the strict public policy governing common carriers is applied.
Such policy has no force where the public at large is not involved, as in the case of
a ship totally chartered for the use of a single party.

Citadel Lines, Inc. vs CA, 184 SCRA 544

NOTES:

Presumption of fault or negligence of common carrier

Common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to all the
circumstances of each case. If the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extra ordinary diligence as required in Article
1733 of the Civil Code. The duty of the consignee is to prove merely that the goods
were lost. Thereafter, the burden is shifted to the carrier to prove that it has
exercised the extraordinary diligence required by law. And, its extraordinary
responsibility lasts from the time the goods are unconditionally placed in the
possession of, and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the consignee or to the
person who has the right to receive them.
.

PCIC demanded from respondents reimbursement of the entire amount it paid to

Fukuyama, but respondents refused payment.

On March 21, 1994, PCIC filed a complaint for damages against respondents with
the Regional Trial Court (RTC) of Manila, Branch 35.

Respondents filed an Answer with Compulsory Counterclaim denying liability. They

alleged that during the voyage, the vessel encountered strong winds and heavy
seas making the vessel pitch and roll, which caused the subject container with the
cargoes to fall overboard. Respondents contended that the occurrence was a
fortuitous event which exempted them from any liability, and that their liability, if
any, should not exceed US$500 or the limit of liability in the bill of lading,
whichever is lower.

In a Decision dated January 12, 1996, the RTC held that respondents, as common
carrier,2 failed to prove that they observed the required extraordinary diligence to
prevent loss of the subject cargoes in accordance with the pertinent provisions of
the Civil Code.3 The dispositive portion of the Decision reads:

WHEREFORE, judgment is rendered ordering the defendants, jointly and

severally, to pay the plaintiff the Peso equivalent as of February 17, 1994 of
HK$55,000.00 or the sum of P228,085.00, whichever is lower, with costs
against the defendants.4

Respondents' motion for reconsideration was denied by the RTC in an Order dated
February 19, 1996.

Respondents appealed the RTC Decision to the CA.

In a Decision promulgated on February 15, 2000, the CA affirmed the RTC Decision
with modification, thus:

WHEREFORE, the assailed decision is hereby MODIFIED. Appellants Neptune

and Overseas are hereby ordered to pay jointly and severally appellee
PCIC P228,085.00, representing the amount it paid Fukuyama. Costs against
the appellants.5

Respondents moved for reconsideration of the Decision of the CA arguing, among

others, that their liability was only US$1,500 or US$500 per package under the
limited liability provision of the Carriage of Goods by Sea Act (COGSA).

In its Resolution dated April 13, 2000, the CA found the said argument of
respondents to be meritorious. The dispositive portion of the Resolution reads:
 WHEREFORE, the motion is partly granted in the sense that appellants shall
be liable to pay appellee PCIC the value of the three packages lost computed
at the rate of US$500 per package or a total of US$1,500.00. 6

Hence, this petition raising this lone issue:

THE COURT OF APPEALS ERRED IN AWARDING RESPONDENTS DAMAGES

SUBJECT TO THE US$500 PER PACKAGE LIMITATION.

Petitioner contends that the CA erred in awarding damages to respondents subject

to the US$500 per package limitation since the vessel committed a "quasi
deviation" which is a breach of the contract of carriage when it intentionally threw
overboard the container with the subject shipment during the voyage to Manila for
its own benefit or preservation based on a Survey Report7 conducted by Mariner's
Adjustment Corporation, which firm was tasked by petitioner to investigate the loss
of the subject cargoes. According to petitioner, the breach of contract resulted in
the abrogation of respondents' rights under the contract and COGSA including the
US$500 per package limitation. Hence, respondents cannot invoke the benefit of
the US$500 per package limitation and the CA erred in considering the limitation
and modifying its decision accordingly.

The contention lacks merit.

The facts as found by the RTC do not support the new allegation of facts by
petitioner regarding the intentional throwing overboard of the subject cargoes and
quasi deviation. The Court notes that in petitioner's Complaint before the RTC,
petitioner alleged as follows:

xxx       xxx       xxx

2.03 In the course of the maritime voyage from Hongkong to Manila subject

shipment fell overboard while in the custody of the defendants and were
never recovered; it was part of the LCL cargoes packed by defendants in
container IEAU-4592750 that fell overboard during the voyage. 8

Moreover, the same Survey Report cited by petitioner stated:

From the investigation conducted, we noted that Capt. S.L. Halloway, Master
of MV "BALTIMAR ORION" filed a Note of Protest in the City of Manila, and
was notarized on 06 October 1993.

Based on Note of Protest, copy attached hereto for your reference, carrier
vessel sailed from Hongkong on 1st October 1993 carrying containers bound
for Manila.

Apparently, at the time the vessel [was] sailing at about 2400 hours of
2nd October 1993, she encountered winds and seas such as to cause
occasional moderate to heavy pitching and rolling deeply at times. At 0154
 hours, same day, while in position Lat. 20 degrees, 29 minutes North, Long.
115 degrees, 49 minutes East, four (4) x 40 ft. containers were lost/fell
overboard. The numbers of these containers are NUSU-3100789, TPHU
-5262138, IEAU-4592750, NUSU-4515404.

xxx       xxx       xxx

Furthermore, during the course of voyage, high winds and heavy seas were
encountered causing the ship to roll and pitch heavily. The course and speed
was altered to ease motion of the vessel, causing delay and loss of time on
the voyage.

xxx       xxx       xxx

SURVEYORS REMARKS:

In view of the foregoing incident, we are of the opinion that the shipment of
3 cases of Various Warp Yarn on Returnable Beams which were containerized
onto 40 feet LCL (no. IEAU-4592750) and fell overboard the subject vessel
during heavy weather is an "Actual Total Loss".9

The records show that the subject cargoes fell overboard the ship and petitioner
should not vary the facts of the case on appeal. This Court is not a trier of facts,
and, in this case, the factual finding of the RTC and the CA, which is supported by
the evidence on record, is conclusive upon this Court.

As regards the issue on the limited liability of respondents, the Court upholds the
decision of the CA.

Since the subject cargoes were lost while being transported by respondent common
carrier from Hong Kong to the Philippines, Philippine law applies pursuant to the
Civil Code which provides:

Art. 1753. The law of the country to which the goods are to be transported
shall govern the liability of the common carrier for their loss, destruction or
deterioration.

Art. 1766. In all matters not regulated by this Code, the rights and
obligations of common carriers shall be governed by the Code of Commerce
and by special laws.

The rights and obligations of respondent common carrier are thus governed by the
provisions of the Civil Code, and the COGSA,10 which is a special law, applies
suppletorily.

The pertinent provisions of the Civil Code applicable to this case are as follows:
 Art. 1749. A stipulation that the common carrier's liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.

Art. 1750. A contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been fairly and freely
agreed upon.

In addition, Sec. 4, paragraph (5) of the COGSA, which is applicable to all contracts
for the carriage of goods by sea to and from Philippine ports in foreign trade,
provides:

Neither the carrier nor the ship shall in any event be or become liable for any
loss or damage to or in connection with the transportation of goods in an
amount exceeding $500 per package lawful money of the United States, or in
case of goods not shipped in packages, per customary freight unit, or the
equivalent of that sum in other currency, unless the nature and value of such
goods have been declared by the shipper before shipment and inserted in the
bill of lading. This declaration, if embodied in the bill of lading shall be prima
facie evidence, but shall be conclusive on the carrier.

In this case, Bill of Lading No. 0396180 stipulates:

Neither the Carrier nor the vessel shall in any event become liable for any
loss of or damage to or in connection with the transportation of Goods in an
amount exceeding US$500 (which is the package or shipping unit limitation
under U.S. COGSA) per package or in the case of Goods not shipped in
packages per shipping unit or customary freight, unless the nature and
value of such Goods have been declared by the Shipper before
shipment and inserted in this Bill of Lading and the Shipper has paid
additional charges on such declared value. . . .

The bill of lading11 submitted in evidence by petitioner did not show that the shipper
in Hong Kong declared the actual value of the goods as insured by Fukuyama
before shipment and that the said value was inserted in the Bill of Lading, and so
no additional charges were paid. Hence, the stipulation in the bill of lading that the
carrier's liability shall not exceed US$500 per package applies.

Such stipulation in the bill of lading limiting respondents' liability for the loss of the
subject cargoes is allowed under Art. 1749 of the Civil Code, and Sec. 4, paragraph
(5) of the COGSA. Everett Steamship Corporation v. Court of Appeals 12 held:

A stipulation in the bill of lading limiting the common carrier's liability for loss
or destruction of a cargo to a certain sum, unless the shipper or owner
declares a greater value, is sanctioned by law, particularly Articles 1749 and
1750 of the Civil Code which provide:
 'Art. 1749. A stipulation that the common carrier's liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.'

'Art. 1750. A contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been fairly and freely
agreed upon.'

Such limited-liability clause has also been consistently upheld by this court in
a number of cases. Thus, in Sea-Land Service, Inc. vs. Intermediate
Appellate Court, we ruled:

'It seems clear that even if said section 4 (5) of the Carriage of Goods by Sea
Act did not exist, the validity and binding effect of the liability limitation
clause in the bill of lading here are nevertheless fully sustainable on the basis
alone of the cited Civil Code Provisions. That said stipulation is just and
reasonable is arguable from the fact that it echoes Art. 1750 itself in
providing a limit to liability only if a greater value is not declared for the
shipment in the bill of lading. To hold otherwise would amount to questioning
the justness and fairness of the law itself.... But over and above that
consideration, the just and reasonable character of such stipulation is implicit
in it giving the shipper or owner the option of avoiding accrual of liability
limitation by the simple and surely far from onerous expedient of declaring
the nature and value of the shipment in the bill of lading.'

The CA, therefore, did not err in holding respondents liable for damages to
petitioner subject to the US$500 per package limited- liability provision in the bill of
lading.

WHEREFORE, the petition is DENIED. The Resolution of the Court of Appeals in

CA-G.R. CV No. 52855 promulgated on April 13, 2000 is hereby AFFIRMED.

G.R. No. 95582  October 7, 1991

DANGWA vs CA, GR. NO 95582, October 7, 1991
Lessons Applicable: Actionable Document (Transportation)
Laws Applicable: Art. 1733, Art. 1755

If the bus started moving slowly when the passenger is boarding the same,
is the passenger negligent?

No. 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, the bus had "just started" and "was still in slow motion" at the point where
the victim had boarded and was on its platform. (Dangwa vs. CA, G.R. No. 95582,
October 7, 1991)
FACTS:
 May 13, 1985: Theodore M. Lardizabal was driving a passenger bus
belonging to Dangwa Transportation Co. Inc. (Dangwa)  
 The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro
alighted
 Pedro Cudiamat fell from the platform of the bus when it
suddenly accelerated forward
 Pedro was ran over by the rear right tires of the vehicle
 Theodore first brought his other passengers and cargo to their
respective destinations before bringing Pedro to Lepanto Hospital where he
expired
 Private respondents filed a complaint for damages against Dangwa for the
death of Pedro Cudiamat
 Dangwa: observed and continued to observe the extraordinary
diligence required in the operation of the co. and the supervision of the
employees even as they are not absolute insurers of the public at large
 RTC: in favour of Dangwa holding Pedrito as negligent and his negligence
was the cause of his death but still ordered to pay in equity P 10,000 to the
heirs of Pedrito
 CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual
and compensatory damages and cost of the suit

ISSUE: W/N Dangwa should be held liable for the negligence of its driver Theodore

HELD: YES. CA affirmed.

 A public utility once it stops, is in effect making a continuous offer to bus
riders (EVEN when moving as long as it is still slow in motion)
 Duty of the driver: do NOT make acts that would have the effect of
increasing peril to a passenger while he is attempting to board the same
 Premature acceleration of the bus in this case = breach of duty
 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
 Duty extends to boarding and alighting
 GR: 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
 EX: carrier to prove that it has exercised extraordinary diligence as
prescribed in Art. 1733 and 1755 of the Civil Code
 Failure to immediately bring Pedrito to the hospital despite his serious
condition = patent and incontrovertible proof of their negligence
 Hospital was in Bunk 56
 1st proceeded to Bunk 70 to allow a passenger (who later called the
family of Pedrito on his own will) to alight and deliver a refrigerator
 In tort, actual damages is based on net earnings
 Baliwag Transit, Inc. vs Court of Appeals, Spouses Antonio Garcia & Leticia
Garcia, A & J Trading and Julio Recontique
G.R. No. 116110, May 15, 1996
256 SCRA 746
FACTS:
Respondent Leticia Garcia, and her five-year old son, Allan Garcia, boarded Baliwag
Transit Bus bound for Cabanatuan City. At about 7:30 in the evening the bus
passengers saw a cargo truck parked at the shoulder of the national highway. A
kerosene lamp appeared at the edge of the road to serve as a warning device. The
driver and the helper of the parked truck owned by respondent A & J Trading were
replacing a flat tire. However the bus driver was driving fast and was conversing
with his co-employees while driving. The passengers pleaded for its driver to slow
down, but their plea was ignored. The bus collided with the cargo truck causing the
death of the bus driver and the helper of the truck and injury to the passengers.
Respondents Leticia and Allan experienced physical suffering, mental anguish and
serious anxiety by reason of the accident. Leticia underwent an operation to replace
her broken hip bone with a metal plate. She was confined at the National
Orthopedic Hospital for 45 days and her son was also confined in the hospital for his
foot injury.
ISSUES:
1. Whether or not petitioner carrier is liable for the injury of its passengers.
2. Whether or not respondent company and driver were also liable for failing to
display an early warning device.
3. Whether or not the injured passengers are entitled to moral damages.
RULING:
1. Yes. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious
person, with due regard for all the circumstances. In a contract of carriage, it is
presumed that the common carrier was at fault or was negligent when a passenger
dies or is injured. Unless the presumption is rebutted, the court need not even
make an express finding of fault or negligence on the part of the common carrier.
This statutory presumption may only be overcome by evidence that the carrier
exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the
Civil Code. However, under Article 1759, common carriers are liable for the death of
or injuries to passengers through the negligence or wilful 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 do not cease upon proof that they exercised all the diligence of a
good father of a family in the selection or supervision of their employees.
In this case, Baliwag, as a common carrier, breached its contract of carriage when
it failed to deliver its passengers, Leticia and Allan Garcia to their destination safe
and sound. Baliwag failed to prove that it exercised extraordinary diligence. On the
contrary, the evidence demonstrates its driver’s recklessness.
2. No. The evidence shows that the truck driver and his helper placed a kerosene
lamp or torch at the edge of the road, near the rear portion of the truck to serve as
an early warning device. This substantially complies with Section 34 (g) of the Land
Transportation and Traffic Code
3. Yes. In a breach of contract of carriage, moral damages are recoverable if the
carrier, through its agent, acted fraudulently or in bad faith. The evidence shows
the gross negligence of the driver of Baliwag bus which amounted to bad faith.

NOTES:
Evidence – To prove actual damages, the best evidence available to the injured
party must be presented. The court cannot rely on uncorroborated testimony whose
truth is suspect but must depend upon competent proof that damages have been
actually suffered.
When the goods shipped either are lost or arrive in damaged condition, a
presumption arises against the carrier of its failure to observe that requisite
diligence, and there need not be an express finding of negligence to hold it liable.
(Eastern Shipping Lines, Inc. vs. Court of Appeals, 234 SCRA 78 [1994])
When one devotes his property to a use in which the public has an interest, he, in
effect, grants to the public an interest in that use, and must submit to the control
by the public for the common good, to the extent of the interest he has thus
created. (Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239 SCRA 386 [1994])

Vicente Calalas vs. Court of Appeals, Eliza Jujeurche Sunga and Francisco
Salva
G.R. No. 122039, May 31, 2000
332 SCRA 356
FACTS:
Respondent, Eliza Sunga took a passenger jeepney owned and operated by
petitioner Vicente Calalas. The jeepney was already filled with passengers so she
was given by the conductor an “extension seat,” a wooden stool at the back of the
door. As she was seated at the rear end of the vehicle, Sunga gave way to the
outgoing passenger. Unfortunately, a truck driven by Iglecerio Verena and owned
by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga
was injured.
Sunga then filed a complaint for damages against Calalas, alleging violation of the
contract of carriage by the former in failing to exercise the diligence required of him
as a common carrier. Calalas, on the other hand, filed a third-party complaint
against Francisco Salva, the owner of the truck.

RTC’s decision: Absolved Calalas of liability and ruled that Salva as third-party

defendant was responsible for the accident. It took cognizance of another case
(Civil Case No. 3490), filed by Calalas against Salva and Verena, for quasi-delict, in
which Branch 37 of the same court held Salva and his driver Verena jointly liable to
Calalas for the damage to his jeepney.
CA’s decision: reversed RTC’s ruling on the ground that Sunga’s cause of action was
based on a contract of carriage, not quasi-delict, and that the common carrier failed
to exercise the diligence required under the Civil Code. It also dismissed the third-
party complaint against Salva and adjudged Calalas liable for damages to Sunga.
ISSUES:
1. Whether or not respondent passenger is bound by the ruling in Civil Case No.
3490 finding the driver and the owner of the truck liable for quasi-delict.
2. Whether or not respondent carrier is responsible for the injury caused to its
passenger when the accident was caused by another vehicle.
3. Whether or not the bumping of the jeepney by the truck owned by Salva was a
caso fortuito.
4. Whether or not respondent passenger is entitled to moral damages.
RULING:
1. No. The principle of res judicata does not apply where a party in a pending case
was never a party in a previous one. And besides, the issues in Civil Case No. 3490
and in the present case are not the same. The issue in Civil Case No. 3490 was
whether Salva and his driver Verena were liable for quasi-delict for the damage
caused to petitioner’s jeepney. On the other hand, the issue in this case is whether
petitioner is liable on his contract of carriage. The first, quasi-delict, also known
as culpa aquiliana or  culpa extra contractual, has as its source the negligence of the
tortfeasor. The second, breach of contract or culpa contractual, is premised upon
the negligence in the performance of a contractual obligation.
2. Yes. The liability of petitioner arises from his negligence in the performance of
his contractual obligation or breach of contract of carriage. Art. 1756 of the Civil
Code provides that common carriers are presumed to have been at fault or to have
acted negligently in case of death or injuries to passengers, unless they prove that
they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the
Code. This provision necessarily shifts to the common carrier the burden of proof. It
is now the duty of petitioner to prove that he observed extraordinary diligence in
the care of his passengers. However, in this case, petitioner failed to prove that he
observed extraordinary diligence in the care of his passengers. It was found that
the jeepney was not properly parked and he took more passengers than the
allowed seating capacity.

3. No. The taking of an “extension seat” is not an implied assumption of risk on the
part of the passenger. A caso fortuito is an event which could not be foreseen, or
which, though foreseen, was inevitable. This requires that the following
requirements be present: (a) the cause of the breach is independent of the obligor’s
will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to
render it impossible for the obligor to fulfill his obligation in a normal manner, and
(d) the obligor did not take part in causing the injury to the creditor. Petitioner
should have foreseen the danger of parking his jeepney with its body protruding
two meters into the highway.
4. No. Petitioner did not act in bad faith in the performance of the contract of
carriage. As a general rule, moral damages are not recoverable in actions for
damages predicated on a breach of contract for it is not one of the items
enumerated under Art. 2219 of the Civil Code. As an exception, such damages are
recoverable: (1) in cases in which the mishap results in the death of a passenger,
as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the
cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.

NOTES:
In quasi-delict, the negligence or fault should be clearly established because it s the
basis of the action, whereas in breach of contract, the action can be prosecuted
merely by proving the existence of the contract and the fact that the obligor, in this
case the common carrier failed to transport his passenger safely to his destination.

Doctrine of Proximate Cause

The doctrine of proximate cause is applicable only in actions for quasi-delicts, not in
actions involving breach of contract.
Presumption of Negligence
Upon the happening of the accident, the presumption of negligence at once arises,
and it becomes the duty of a common carrier to prove that he observed
extraordinary diligence in the care of his passengers.
Bad faith
The common carrier’s admission in open court that his driver failed to assist the
injured passenger in going to a nearby hospital cannot be construed as an
admission of bad faith.
The rules on extraordinary responsibility of common carriers remain basically
unchanged even when the contract is breached by tort although noncontradictory
principles on quasi-delict may then be assimilated as also forming part of the
governing law. (Sabena Belgian World Airlines vs. Court of Appeals, 255 SCRA 38
[1996])

Proximate cause, which is determined by a mixed consideration of logic, common

sense, policy and precedent, is that cause which, in natural and continuous
sequence, unbroken by any efficient intervening cause, produces the injury, and
without which the result would not have occured. (Bank of the Philippine Islands vs.
Court of Appeals, 641 SCRA 326 [2000])
While the driver of an improperly parked vehicle may be liable in case of collision,
the driver of a moving vehicle who had no opportunity to avoid the collision due to
his own making is not relieved of liability, such as when his negligence is the
immediate and proximate cause of the collision. (Austria vs. Court of Appeals, 327
SCRA 668 [2000])

Fabre vs. CA, 259 SCRA 426

G.R. No. 111127. July 26, 1996
FACTS:
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda
minibus. They used the bus principally in connection with a bus service for school
children which they operated in Manila. The couple had a driver, Porfirio
J. Cabil, whom they hired after trying him out for two weeks. His job was to take
school children to and from the St. Scholastica’s College in Malate,
Manila.
Private respondent Word for the World Christian Fellowship Inc. (WWCF)arranged
with petitioners for the transportation of 33 members of its Young
Adults Ministry from Manila to La Union and back in consideration of
which private respondent paid petitioners the amount of P3,000.00.
The usual route to Caba, La Union was through Carmen, Pangasinan. However, the
bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar
with the area ,it being his first trip to La Union, was forced to takea detour through
the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil
came upon a sharp curve on the highway, running on a south to east direction,
which he described as “siete.” The road was slippery because it was raining,
causing the bus, which was running at the speed of 50 kilometers per hour, to skid
to the left road shoulder. The bus hit the left traffic steel brace and sign along the
road and rammed the fence of one Jesus Escano, then turned over and landed
on its left side, coming to a full stop only after a series of impacts.
The bus came to rest off the road. A coconut tree which it had hit fell on it and
smashed its front portion. The driver, petitioner Cabil, claimed he did not see the
curve until it was too late. He said he was not familiar with the area and he could
not have seen the curve despite the care he took in driving the bus, because it was
dark and there was no sign on the road. He said that he saw the curve when he
was already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers
per hour, but it was too late. The Lingayen police investigated the incident the next
day. On the basis of their finding they filed a criminal complaint against the driver,
Porfirio Cabil. The case was later filed with the Lingayen Regional Trial
Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the damage to the
latter’s fence. On the basis of Escano’s affidavit of desistance the case against
petitioners Fabre was dismissed.
Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati,
Metro Manila. As a result of the accident, she is now suffering from paraplegia and
is permanently paralyzed from the waist down. During the trial she described the
operations she underwent and adduced evidence regarding the cost of her
treatment and therapy.
The trial court found that no convincing evidence was shown that the
minibus was properly checked for travel to a long distance trip and that the driver
was properly screened and tested before being admitted for employment.
Indeed, all the evidence presented have shown the negligent act of the defendants
which ultimately resulted to the accident subject of this case.
The trial court ordered herein petitioners to pay Word for the World
Christian Fellowship, Inc. and Ms. Amyline Antonio for they were the only oneswho
adduced evidence for their claim for damages. The Court of Appeals affirmed the
decision of the trial court with respect to Amyline Antonio but dismissed it with
respect to the other plaintiffs on the ground that they failed to prove their
respective claims. Hence, this petition.

ISSUE:
Whether or not the petitioners, jointly or solidarily, were negligent and if they are
liable for damages and to what extent.

HELD:
The finding that Cabil drove his bus negligently, while his employer, the Fabres,
who owned the bus, failed to exercise the diligence of a good father of the family in
the selection and supervision of their employee is fully supported by the evidence
on record. These factual findings of the two courts we regard as final and
conclusive, supported as they are by the evidence. Indeed, it was admitted
by Cabil that on the night in question, it was raining, and, as a
consequence, the road was slippery, and it was dark. He averred these facts to
justify his failure to see that there lay a sharp curve ahead.
However, it is undisputed that Cabil drove his bus at the speed of 50 kilometers
per hour and only slowed down when he noticed the curve some 15 to 30 meters
ahead. By then it was too late for him to avoid falling off the road. Given the
conditions of the road and considering that the trip was Cabil’s first one outside of
Manila, Cabil should have driven his vehicle at a moderate speed.
There is testimony that the vehicles passing on that portion of the road should only
be running 20kilometers per hour, so that at 50 kilometers per hour, Cabil was
running at a very high speed.Considering the foregoing, the fact that it was raining
and the road was slippery, that it was dark, that he drove his bus at 50 kilometers
an hour when even on a good day the normal speed was only 20 kilometers an
hour, and that he was unfamiliar with the terrain, Cabil was grossly negligent and
should beheld liable for the injuries suffered by private respondent Amyline Antonio.
Pursuant to Articles 2176 and 2180 of the Civil Code his negligence gave rise to
the presumption that his employers, the Fabres, were themselves
negligent in the selection and supervision of their employee. Due diligence in
selection of employees is not satisfied by finding that the applicant possessed a
professional driver’s license. The employer should also examine the applicant for his
qualifications, experience and record of service.
Due diligence in supervision, on the other hand, requires the formulation of rules
and regulations for the guidance of employees and the issuance of
proper instructions as well as actual implementation and monitoring of
consistent compliance with the rules.
In the case at bar, the Fabres, in allowing Cabil to drive the bus to LaUnion,
apparently did not consider the fact that Cabil had been driving for schoolchildren
only, from their homes to the St. Scholastica’s College in Metro Manila. hey had
hired him only after a two-week apprenticeship. They had tested him for certain
matters, such as whether he could remember the names of the
children he would be taking to school, which were irrelevant to his qualification to
drive on a long distance travel, especially considering that the trip to La
Union was his first. The existence of hiring procedures and supervisory policies
cannot be casually invoked to overturn the presumption of negligence on the part of
an employer. Petitioners argue that they are not a common carrier,
hence, ordinary diligence or diligence of a good father of a family is only the
degree of diligence due of them. As already stated, this case actually involves a
contract of carriage. Petitioners, the Fabres, did not have to be engaged in the
business of public transportation for the provisions of the Civil Code on common
carriers to apply to them. The article makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity.
As common carriers, the Fabres were bound to exercise “extraordinary diligence”
for the safe transportation of the passengers to their destination. This duty of care
is not excused by proof that they exercised the diligence of a good father of the
family in the selection and supervision of their employee.
The 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.
The decision of the Court of Appeals is affirmed with modification as to the award
of damages. Petitioners are ordered to pay jointly and severally the
private respondent Amyline Antonio.

WILLIAM TIU, doing business under the name and style of "D’ Rough
Riders," and VIRGILIO TE LAS PIÑAS, Petitioners –versus- PEDRO A.
ARRIESGADO, BENJAMIN CONDOR, SERGIO PEDRANO and PHILIPPINE
PHOENIX SURETY AND INSURANCE, INC., Respondents. G.R. No. 138060,
SECOND DIVISION, September 1, 2004, CALLEJO, SR., J

We cannot subscribe to respondents Condor and Pedrano’s claim that they should
be absolved from liability because, as found by the trial and appellate courts, the
proximate cause of the collision was the fast speed at which petitioner Laspiñas
drove the bus. To accept this proposition would be to come too close to wiping out
the fundamental principle of law that a man must respond for the foreseeable
consequences of his own negligent act or omission. Indeed, our law on quasi-delicts
seeks to reduce the risks and burdens of living in society and to allocate them
among its members. To accept this proposition would be to weaken the very bonds
of society.

FACTS: At about 10:00 p.m. of March 15, 1987, the cargo truck marked "Condor
Hollow Blocks and General Merchandise" bearing plate number GBP-675 was loaded
with firewood in Bogo, Cebu and left for Cebu City.
Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just as the truck passed
over a bridge, one of its rear tires exploded. The driver, Sergio Pedrano, then
parked along the right side of the national highway and removed the damaged tire
to have it vulcanized at a nearby shop, about 700 meters away.
Pedrano left his helper, Jose Mitante, Jr. to keep watch over the stalled vehicle, and
instructed the latter to place a spare tire six fathoms away behind the stalled truck
to serve as a warning for oncoming vehicles. The truck’s tail lights were also left on.
It was about 12:00 a.m., March 16, 1987.
At about 4:45 a.m., D’ Rough Riders passenger bus with plate number PBP-724
driven by Virgilio Te Laspiñas was cruising along the national highway of Sitio
Aggies, Poblacion, Compostela, Cebu. The passenger bus was also bound for Cebu
City, and had come from Maya, Daanbantayan, Cebu. Among its passengers were
the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado, who were seated at
the right side of the bus, about three (3) or four (4) places from the front seat.
As the bus was approaching the bridge, Laspiñas saw the stalled truck, which was
then about 25 meters away. He applied the breaks and tried to swerve to the left to
avoid hitting the truck. But it was too late; the bus rammed into the truck’s left
rear. The impact damaged the right side of the bus and left several passengers
injured. Pedro Arriesgado lost consciousness and suffered a fracture in his right
colles. His wife, Felisa, was brought to the Danao City Hospital. She was later
transferred to the Southern Island Medical Center where she died shortly
thereafter.
Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of
carriage, damages and attorney’s fees before the Regional Trial Court of Cebu City
against the petitioners, D’ Rough Riders bus operator William Tiu and his driver,
Virgilio Te Laspiñas on May 27, 1987. The respondent alleged that the passenger
bus in question was cruising at a fast and high speed along the national road, and
that petitioner Laspiñas did not take precautionary measures to avoid the accident.
The petitioners, for their part, filed a Third-Party Complaint against the following:
respondent Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tiu’s
insurer; respondent Benjamin Condor, the registered owner of the cargo truck; and
respondent Sergio Pedrano, the driver of the truck. They alleged that petitioner
Laspiñas was negotiating the uphill climb along the national highway of Sitio
Aggies, Poblacion, Compostela, in a moderate and normal speed. It was further
alleged that the truck was parked in a slanted manner, its rear portion almost in the
middle of the highway, and that no early warning device was displayed. Petitioner
Laspiñas promptly applied the brakes and swerved to the left to avoid hitting the
truck head-on, but despite his efforts to avoid damage to property and physical
injuries on the passengers, the right side portion of the bus hit the cargo truck’s left
rear.

ISSUES:
1. W/N petitioner Laspiñas was negligent in driving the ill-fated bus. (Yes)
2. W/N petitioner Tiu failed to overcome the presumption of negligence against him
as one engaged in the business of common carriage. (Yes)
3. W/N the doctrine of Last Clear Chance is applicable in the case. (No)
4. W/N respondents Pedrano and Condor were negligent. (Yes)
5. W/N respondent PPSII as insurer is liable. (Yes)

HELD:
1. Petitioner Laspiñas’ negligence in driving the bus is apparent in the records. By
his own admission, he had just passed a bridge and was traversing the highway of
Compostela, Cebu at a speed of 40 to 50 kilometers per hour before the collision
occurred. The maximum speed allowed by law on a bridge is only 30 kilometers per
hour. And, as correctly pointed out by the trial court, petitioner Laspiñas also
violated Section 35 of the Land Transportation and Traffic Code, Republic Act No.
4136, as amended:

Sec. 35. Restriction as to speed. – (a) Any person driving a motor vehicle on a
highway shall drive the same at a careful and prudent speed, not greater nor less
than is reasonable and proper, having due regard for the traffic, the width of the
highway, and or any other condition then and there existing; and no person shall
drive any motor vehicle upon a highway at such speed as to endanger the life, limb
and property of any person, nor at a speed greater than will permit him to bring the
vehicle to a stop within the assured clear distance ahead. Under Article 2185 of the
Civil Code, a person driving a vehicle is presumed negligent if at the time of the
mishap, he was violating any traffic regulation.

2. Evidence may be submitted to overcome such presumption of negligence, it must

be shown that the carrier observed the required extraordinary diligence, which
means that the carrier must show the utmost diligence of very cautious persons as
far as human care and foresight can provide, or that the accident was caused by
fortuitous event. As correctly found by the trial court, petitioner Tiu failed to
conclusively rebut such presumption. The negligence of petitioner Laspiñas as
driver of the passenger bus is, thus, binding against petitioner Tiu, as the owner of
the passenger bus engaged as a common carrier.
3. It is inapplicable in the instant case, as it only applies in a suit between the
owners and drivers of two colliding vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its contractual obligations, for it
would be inequitable to exempt the negligent driver and its owner on the ground
that the other driver was likewise guilty of negligence.43 The common law notion of
last clear chance permitted courts to grant recovery to a plaintiff who has also been
negligent provided that the defendant had the last clear chance to avoid the
casualty and failed to do so. Accordingly, it is difficult to see what role, if any, the
common law of last clear chance doctrine has to play in a jurisdiction where the
common law concept of contributory negligence as an absolute bar to recovery by
the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil
Code. Thus, petitioner Tiu cannot escape liability for the death of respondent
Arriesgado’s wife due to the negligence of petitioner Laspiñas, his employee, on this
score.
4. The manner in which the truck was parked clearly endangered oncoming traffic
on both sides, considering that the tire blowout which stalled the truck in the first
place occurred in the wee hours of the morning. The Court can only now surmise
that the unfortunate incident could have been averted had respondent Condor, the
owner of the truck, equipped the said vehicle with lights, flares, or, at the very
least, an early warning device. Hence, we cannot subscribe to respondents Condor
and Pedrano’s claim that they should be absolved from liability because, as found
by the trial and appellate courts, the proximate cause of the collision was the fast
speed at which petitioner Laspiñas drove the bus. To accept this proposition would
be to come too close to wiping out the fundamental principle of law that a man
must respond for the foreseeable consequences of his own negligent act or
omission. Indeed, our law on quasi-delicts seeks to reduce the risks and burdens of
living in society and to allocate them among its members. To accept this
proposition would be to weaken the very bonds of society.
5. The nature of Compulsory Motor Vehicle Liability Insurance is such that it is
primarily intended to provide compensation for the death or bodily injuries suffered
by innocent third parties or passengers as a result of the negligent operation and
use of motor vehicles. The victims and/or their dependents are assured of
immediate financial assistance, regardless of the financial capacity of motor vehicle
owners.

SULPICIO LINES, INC, Petitioner –versus- NAPOLEON SESANTE, NOW

SUBSTITUTED BY MARIBEL ATILANO, KRISTEN MARIE, CHRISTIAN IONE,
KENNETH KERRN AND KARISNA KATE, ALL SURNAMED SESANTE,
Respondents G.R. NO. 172682, July 27, 2016, FIRST DIVISION, BERSAMIN,
J.

Section 1, Rule 87 of the Rules of Court enumerates the following actions that
survive the death of a party, namely: (1) recovery of real or personal property, or
an interest from the estate; (2) enforcement of liens on the estate; and (3)
recovery of damages for an injury to person or property. Sesante's claim against
the petitioner involved his personal injury caused by the breach of the contract of
carriage and hence, the complaint survived his death, and could be continued by his
heirs following the rule on substitution.

Clearly, the trial court is not required to make an express finding of the common
carrier's fault or negligence. The presumption of negligence applies so long as there
is evidence showing that: (a) a contract exists between the passenger and the
common carrier; and (b) the injury or death took place during the existence of such
contract. In such event, the burden shifts to the common carrier to prove its
observance of extraordinary diligence, and that an unforeseen event or force
majeure had caused the injury. However, for a common carrier to be absolved from
liability in case of force majeure, it is not enough that the accident was caused by a
fortuitous event. The common carrier must still prove that it did not contribute to
the occurrence of the incident due to its own or its employees' negligence.

FACTS: On September 18, 1998, at around 12:55 p.m., 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 alleging that Sulpicio Lines committed bad faith
in allowing the vessel to sail despite the storm signal. 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.
RTC rendered its judgment against defendant Sulpicio Lines ordering it to pay
Temperate damages in the amount of P400,000.00 and Moral damages in the
amount of P1,000,000.00. CA promulgated its assailed decision. It lowered the
temperate damages to P120,000.00, which approximated the cost of Sesante's lost
personal belongings; and held that despite the seaworthiness of the vessel, the
petitioner remained civilly liable because its officers and crew had been negligent in
performing their duties.

During the pendency of the case, herein petitioner died and was substituted by his
heirs

ISSUES:
1. Is the complaint for breach of contract and damages a personal action that does
not survive the death of the plaintiff? (NO)
2. Is the petitioner liable for damages under Article 1759 of the Civil Code?(YES)
3. Is there sufficient basis for awarding moral, temperate and exemplary damages?
(YES)

RULING:
1. An action for breach of contract of carriage survives the death of the plaintiff.
The petitioner urges that Sesante's complaint for damages was purely personal and
cannot be transferred to his heirs upon his death. Hence, the complaint should be
dismissed because the death of the plaintiff abates a personal action. Section 1,
Rule 87 of the Rules of Court enumerates the following actions that survive the
death of a party, namely: (1) recovery of real or personal property, or an interest
from the estate; (2) enforcement of liens on the estate; and (3) recovery of
damages for an injury to person or property. Sesante's claim against the petitioner
involved his personal injury caused by the breach of the contract of carriage and
hence, the complaint survived his death, and could be continued by his heirs
following the rule on substitution.
2. The petitioner is liable for breach of contract of carriage.
Article 1759 of the Civil Code does not establish a presumption of negligence
because it explicitly makes the common carrier liable in the event of death or injury
to passengers due to the negligence or fault of the common carrier's employees.

Clearly, the trial court is not required to make an express finding of the common
carrier's fault or negligence. The presumption of negligence applies so long as there
is evidence showing that: (a) a contract exists between the passenger and the
common carrier; and (b) the injury or death took place during the existence of such
contract. In such event, the burden shifts to the common carrier to prove its
observance of extraordinary diligence, and that an unforeseen event or force
majeure had caused the injury. However, for a common carrier to be absolved from
liability in case of force majeure, it is not enough that the accident was caused by a
fortuitous event. The common carrier must still prove that it did not contribute to
the occurrence of the incident due to its own or its employees' negligence. 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
Board of Marine Inquiry (BMI) directly contradicted the petitioner's attribution. The
BMI found that the "erroneous maneuvers" during the ill-fated voyage by the
captain of the petitioner's vessel had caused the sinking. After the vessel had
cleared Limbones Point while navigating towards the direction of Fortune Island, the
captain already noticed the listing of the vessel by three degrees to the portside of
the vessel, but, according to the BMI, he did not exercise prudence as required by
the situation in which his vessel was suffering the battering on the starboard side
by big waves of seven to eight meters high and strong southwesterly winds of 25
knots. The BMI pointed out that he should have considerably reduced the speed of
the vessel based on his experience about the vessel - a close-type ship of seven
decks, and of a wide and high superstructure - being vulnerable if exposed to
strong winds and high waves. He ought to have also known that maintaining a high
speed under such circumstances would have shifted the solid and liquid cargo of the
vessel to port, worsening the tilted position of the vessel. It was only after a few
minutes thereafter that he finally ordered the speed to go down to 14 knots, and to
put ballast water to the starboardheeling tank to arrest the continuous listing at
portside. By then, his moves became an exercise in futility because, according to
the BMI, the vessel was already listing to her portside between 15 to 20 degrees,
which was almost the maximum angle of the vessel's loll. It then became inevitable
for the vessel to lose her stability.

As borne out by the aforequoted findings of the BMI, the immediate and proximate
cause of the sinking of the vessel had been the gross negligence of its captain in
maneuvering the vessel.
3. The award of moral damages and temperate damages is proper.

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. The totality of the
negligence by the officers and crew of M/V Princess of the Orient warranted the
award of moral damages.

With regard to the temperate damages, the petitioner contends that its liability for
the loss of Sesante' s personal belongings should conform with Art. 1754. The
petitioner denies liability because Sesante' s belongings had remained in his
custody all throughout the voyage until the sinking, and he had not notified the
petitioner or its employees about such belongings. Hence, absent such notice,
liability did not attach to the petitioner.

Accordingly, actual notification was not necessary to render the petitioner as the
common carrier liable for the lost personal belongings of Sesante. By allowing him
to board the vessel with his belongings without any protest, the petitioner became
sufficiently notified of such belongings. So long as the belongings were brought
inside the premises of the vessel, the petitioner was thereby effectively notified and
consequently duty-bound to observe the required diligence in ensuring the safety of
the belongings during the voyage. Applying Article 2000 of the Civil Code, the
petitioner assumed the liability for loss of the belongings caused by the negligence
of its officers or crew. In view of the Court’s finding that the negligence of the
officers and crew of the petitioner was the immediate and proximate cause of the
sinking of the M/V Princess of the Orient, its liability for Sesante's lost personal
belongings was beyond question.

The Court also awarded exemplary damages even if the same was not specifically
prayed for in the complaint. The Court has the discretion to award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner. Accordingly, the Court fix the sum of Pl,000,000.00 in order to
serve fully the objective of exemplarity among those engaged in the business of
transporting passengers and cargo by sea

JOSE SANICO and VICENTE CASTRO, Petitioners –versus- WERHERLINA P.

COLIPANO, Respondent G.R. No. 209969, September 27, 2017, SECOND
DIVISION, CAGUIOA, J.

Since the cause of action is based on a breach of a contract of carriage, the liability
of the owner is direct as the contract is between him and the passenger. The driver
cannot be made liable as he is not a party to the contract of carriage.

FACTS: On December 25, 1993, Christmas Day, Colipano and her daughter were
paying passengers in the jeepney operated by Sanico, which was driven by Castro.
Colipano claimed she was made to sit on an empty beer case at the edge of the
rear entrance/exit of the jeepney with her sleeping child on her lap. And, at an
uphill incline in the road to Carmen, Cebu, the jeepney slid backwards because it
did not have the power to reach the top. Colipano pushed both her feet against the
step board to prevent herself and her child from being thrown out of the exit, but
because the step board was wet, her left foot slipped and got crushed between the
step board and a coconut tree which the jeepney bumped, causing the jeepney to
stop its backward movement. Colipano's leg was badly injured and was eventually
amputated. Sanico claimed however that the event was due to engine failure, that
he paid for all the hospital and medical expenses of Colipano, and that Colipano
eventually freely and voluntarily executed an Affidavit of Desistance and Release of
Claim.

ISSUE: Whether or not Sanico and Castro breached the contract of carriage with
Colipano.

RULING: Only Sanico breached the contract of carriage. Since the cause of action
is based on a breach of a contract of carriage, the liability of Sanico is direct as the
contract is between him and Colipano. Castro, being merely the driver of Sanico's
jeepney, cannot be made liable as he is not a party to the contract of carriage.
Although he was driving the jeepney, he was a mere employee of Sanico, who was
the operator and owner of the jeepney. The obligation to carry Colipano safely to
her destination was with Sanico. In fact, the elements of a contract of carriage
existed between Colipano and Sanico: consent, as shown when Castro, as employee
of Sanico, accepted Colipano as a passenger when he allowed Colipano to board the
jeepney, and as to Colipano, when she boarded the jeepney; cause or
consideration, when Colipano, for her part, paid her fare; and, object, the
transportation of Colipano from the place of departure to the place of destination.

Specific to a contract of carriage, the Civil Code requires common carriers to

observe extraordinary diligence in safely transporting their passengers. Article 1733
of the Civil Code states:

ART. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in
Articles 1734, 1735 and 1745, Nos. 5, 6, and 7, while the extraordinary diligence
for the safety of the passengers is further set forth in Articles 1755 and 1756.

This extraordinary diligence, following Article 1755 of the Civil Code, means that
common carriers have the obligation to carry passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances.

In case of death of or injury to their passengers, Article 1756 of the Civil Code
provides that common carriers are presumed to have been at fault or negligent,
and this presumption can be overcome only by proof of the extraordinary diligence
exercised to ensure the safety of the passengers.

Being an operator and owner of a common carrier, Sanico was required to observe
extraordinary diligence in safely transporting Colipano. When Colipano's leg was
injured while she was a passenger in Sanico's jeepney, the presumption of fault or
negligence on Sanico's part arose and he had the burden to prove that he exercised
the extraordinary diligence required of him. He failed to do this.

In Calalas v. Court of Appeals, the Court found that allowing the respondent in that
case to be seated in an extension seat, which was a wooden stool at the rear of the
jeepney, "placed [the respondent] in a peril greater than that to which the other
passengers were exposed." The Court further ruled that the petitioner in Calalas
was not only "unable to overcome the presumption of negligence imposed on him
for the injury sustained by [the respondent], but also, the evidence shows he was
actually negligent in transporting passengers."

Calalas squarely applies here. Sanico failed to rebut the presumption of fault or
negligence under the Civil Code. More than this, the evidence indubitably
established Sanico's negligence when Castro made Colipano sit on an empty beer
case at the edge of the rear entrance/exit of the jeepney with her sleeping child on
her lap, which put her and her child in greater peril than the other passengers. As
the CA correctly held:

For the driver, Vicente Castro, to allow a seat extension made of an empty
case of beer clearly indicates lack of prudence. Permitting Colipano to occupy an
improvised seat in the rear portion of the jeepney, with a child on her lap to boot,
exposed her and her child in a peril greater than that to which the other passengers
were exposed. The use of an improvised seat extension is undeniable, in view of the
testimony of plaintiff's witness, which is consistent with Colipano's testimonial
assertion.

Further, the defense of engine failure, instead of exonerating Sanico, only

aggravated his already precarious position. The engine failure "hinted lack of
regular check and maintenance to ensure that the engine is at its best, considering
that the jeepney regularly passes through a mountainous area." This failure to
ensure that the jeepney can safely transport passengers through its route which
required navigation through a mountainous area is proof of fault on Sanico's part.

ALFREDO MANAY, JR., FIDELINO SAN LUIS, ADRIAN SAN LUIS, ANNALEE
SAN LUIS, MARK ANDREW JOSE, MELISSA JOSE, CHARLOTTE JOSE, DAN
JOHN DE GUZMAN, PAUL MARK BALUYOT, AND CARLOS S. JOSE,
Petitioners, -versus- CEBU AIR,INC, Respondent. G.R. No. 210621, SECOND
DIVISION, April 04, 2016, LEONEN., J.:

The airline must exercise extraordinary diligence in the fulfillment of the terms and
conditions of the contract of carriage. The passenger, however, has the correlative
obligation to exercise ordinary diligence in the conduct of his or her affairs.
Contrary to petitioner's claim, the evidence on record shows that respondent
exercised due diligence in performing its obligations under the contract and
followed standard procedure in rendering its services to petitioner. As correctly
observed by the lower court, the plane ticket issued to petitioner clearly reflected
the departure date and time, contrary to petitioner's contention. The travel
documents, consisting of the tour itinerary, vouchers and instructions, were
likewise delivered to petitioner two days prior to the trip. Respondent also properly
booked petitioner for the tour, prepared the necessary documents and procured the
plane tickets. It arranged petitioner's hotel accommodation as well as food, land
transfers and sightseeing excursions, in accordance with its avowed undertaking.

FACTS: On June 13, 2008, Carlos S. Jose (Jose) purchased 20 Cebu Pacific round-
trip tickets from Manila to Palawan for himself and on behalf of his relatives and
friends. He made the purchase at Cebu Pacific's branch office in Robinsons Galleria.

Jose alleged that he specified to "Alou," the Cebu Pacific ticketing agent, that his
preferred date and time of departure from Manila to Palawan should be on July 20,
2008 at 0820 (or 8:20 a.m.) and that his preferred date and time for their flight
back to Manila should be on July 22, 2008 at 1615 (or 4:15 p.m.). He alleged that
after paying for the tickets, Alou printed the tickets, which consisted of three (3)
pages, and recapped only the first page to him. Since the first page contained the
details he specified to Alou, he no longer read the other pages of the flight
information.
Jose and his 19 companions boarded the 0820 Cebu Pacific flight to Palawan and
had an enjoyable stay. However, during the processing of their boarding passes for
their flight back to Manila, they were informed by Cebu Pacific personnel that nine
(9)17 of them could not be admitted because their tickets were for the 1005 (or
10:05 a.m.) flight earlier that day. Jose informed the ground personnel that he
personally purchased the tickets and specifically instructed the ticketing agent that
all 20 of them should be on the 4:15 p.m. flight to Manila.

Upon checking the tickets, they learned that only the first two (2) pages had the
schedule Jose specified. They were left with no other option but to rebook their
tickets.

Later in July 2008, Jose went to Cebu Pacific's ticketing office in Robinsons Galleria
to complain about the allegedly erroneous booking and the rude treatment that his
group encountered from the ground personnel in Palawan. He alleged that instead
of being assured by the airline that someone would address the issues he raised, he
was merely "given a run around."

Jose and his companions were frustrated and annoyed by Cebu Pacific's handling of
the incident so they sent the airline demand letters asking for a reimbursement of
P42,955.00, representing the additional amounts spent to purchase the nine (9)
tickets, the accommodation, and meals of the four (4) that were left behind.
Eventually, Jose and his companions were filed a Complaint for Damages against
Cebu Pacific.
In its Answer, Cebu Pacific essentially denied all the allegations in the Complaint
and insisted that Jose was given a full recap of the tickets. It also argued that Jose
had possession of the tickets 37 days before the scheduled flight; hence, he had
sufficient time and opportunity to check the flight information and itinerary.

The Metropolitan Trial Court rendered its Decision ordering Cebu Pacific to pay Jose
and his companions. The Metropolitan Trial Court found that as a common carrier,
Cebu Pacific should have exercised extraordinary diligence in performing its
contractual obligations.

Cebu Pacific appealed to the Regional Trial Court, reiterating that its ticketing agent
gave Jose a full recap of the tickets he purchased. The RTC rendered the Decision
dismissing the appeal. Upon appeal, the Court of Appeals reversed the decisions of
the Metropolitan Trial Court and the Regional Trial Court. According to the Court of
Appeals, the extraordinary diligence expected of common carriers only applies to
the carriage of passengers and not to the act of encoding the requested flight
schedule. It was incumbent upon the passenger to exercise ordinary care in
reviewing flight details and checking schedules.

ISSUE: Whether Cebu Pacific is liable. (NO)

RULING: Common carriers are required to exercise extraordinary diligence in the

performance of its obligations under the contract of carriage. This extraordinary
diligence must be observed not only in the transportation of goods and services but
also in the issuance of the contract of carriage, including its ticketing operations.
Respondent, as one of the four domestic airlines in the country, is a common carrier
required by law to exercise extraordinary diligence. Extraordinary diligence requires
that the common carrier must transport goods and passengers "safely as far as
human care and foresight can provide," and it must exercise the "utmost diligence
of very cautious persons . . . with due regard for all the circumstances.

When a common carrier, through its ticketing agent, has not yet issued a ticket to
the prospective passenger, the transaction between them is still that of a seller and
a buyer. The obligation of the airline to exercise extraordinary diligence commences
upon the issuance of the contract of carriage. Ticketing, as the act of issuing the
contract of carriage, is necessarily included in the exercise of extraordinary
diligence.

A contract of carriage is defined as "one whereby a certain person or association of

persons obligate themselves to transport persons, things, or news from one place
to another for a fixed price."In Cathay Pacific Airways v. Reyes: [W]hen an airline
issues a ticket to a passenger confirmed on a particular flight, on a certain date, a
contract of carriage arises, and the passenger has every right to expect that he
would fly on that flight and on that date. If he does not, then the carrier opens itself
to a suit for breach of contract of carriage. (Emphasis supplied)
Once a plane ticket is issued, the common carrier binds itself to deliver the
passenger safely on the date and time stated in the ticket. The contractual
obligation of the common carrier to the passenger is governed principally by what is
written on the contract of carriage.

In this case, both parties stipulated that the flight schedule stated on the nine (9)
disputed tickets was the 10:05 a.m. flight of July 22, 2008. According to the
contract of carriage, respondent's obligation as a common carrier was to transport
nine (9) of the petitioners safely on the 10:05 a.m. flight of July 22, 2008.

The common carrier's obligation to exercise extraordinary diligence in the issuance

of the contract of carriage is fulfilled by requiring a full review of the flight
schedules to be given to a prospective passenger before payment. Based on the
information stated on the contract of carriage, all three (3) pages were recapped to
petitioner Jose.

The only evidence petitioners have in order to prove their true intent of having the
entire group on the 4:15 p.m. flight is petitioner Jose's self-serving testimony that
the airline failed to recap the last page of the tickets to him. They have neither
shown nor introduced any other evidence before the Metropolitan Trial Court,
Regional Trial Court, Court of Appeals, or this Court.

Even assuming that the ticketing agent encoded the incorrect flight information, it
is incumbent upon the purchaser of the tickets to at least check if all the
information is correct before making the purchase. Once the ticket is paid for and
printed, the purchaser is presumed to have agreed to all its terms and conditions.
In Ong Yiu v. Court of Appeals:

While it may be true that petitioner had not signed the plane ticket, he is
nevertheless bound by the provisions thereof. "Such provisions have been held to
be a part of the contract of carriage, and valid and binding upon the passenger
regardless of the latter's lack of knowledge or assent to the regulation." It is what is
known as a contract of "adhesion," in regards which it has been said that contracts
of adhesion wherein one party imposes a ready made form of contract on the other,
as the plane ticket in the case at bar, are contracts not entirely prohibited. The one
who adheres to the contract is in reality free to reject it entirely; if he adheres, he
gives his consent.

This is not the first time that this Court has explained that an air passenger has the
correlative duty to exercise ordinary care in the conduct of his or her affairs.

In Crisostomo v. Court of Appeals, Estela Crisostomo booked a European tour with

Caravan Travel and Tours, a travel agency. She was informed by Caravan's travel
agent to be at the airport on Saturday, two (2) hours before her flight. Without
checking her travel documents, she proceeded to the airport as planned, only to
find out that her flight was actually scheduled the day before. She subsequently
filed a suit for damages against Caravan Travel and Tours based on the alleged
negligence of their travel agent in informing her of the wrong flight details.
This Court, while ruling that a travel agency was not a common carrier and was not
bound to exercise extraordinary diligence in the performance of its obligations, also
laid down the degree of diligence concurrently required of passengers: Contrary to
petitioner's claim, the evidence on record shows that respondent exercised due
diligence in performing its obligations under the contract and followed standard
procedure in rendering its services to petitioner. As correctly observed by the lower
court, the plane ticket issued to petitioner clearly reflected the departure date and
time, contrary to petitioner's contention. The travel documents, consisting of the
tour itinerary, vouchers and instructions, were likewise delivered to petitioner two
days prior to the trip. Respondent also properly booked petitioner for the tour,
prepared the necessary documents and procured the plane tickets. It arranged
petitioner's hotel accommodation as well as food, land transfers and sightseeing
excursions, in accordance with its avowed undertaking.

Therefore, it is clear that respondent performed its prestation under the contract as
well as everything else that was essential to book petitioner for the tour. Had
petitioner exercised due diligence in the conduct of her affairs, there would have
been no reason for her to miss the flight. Needless to say, after the travel papers
were delivered to petitioner, it became incumbent upon her to take ordinary care of
her concerns. This undoubtedly would require that she at least read the documents
in order to assure herself of the important details regarding the trip. (Emphasis
supplied)

Most of the petitioners were balikbayans. It is reasonable to presume that they

were adequately versed with the procedures of air travel, including familiarizing
themselves with the itinerary before departure. Moreover, the tickets were issued
37 days before their departure from Manila and 39 days from their departure from
Palawan. There was more than enough time to correct any alleged mistake in the
flight schedule.

Petitioners, in failing to exercise the necessary care in the conduct of their affairs,
were without a doubt negligent. Thus, they are not entitled to damages.

Phil. Rabbit Bus Lines v. Intermediate Appellate Court

G.R. No. 66102-04, 30 August 1990, 189 SCRA 158
FACTS:

On December 24, 1966,passengers boarded the jeepney owned by spouses Isidro

Mangune and Guillerma Carreon and driven by Tranquilino Manalo at Pampanga
bound for Pangasinan for P24.00. Upon reaching Tarlac, the right rear wheel of the
jeepney detached causing it to run in an unbalanced position. Driver Manalo
stepped on the brake, causing the jeepney to make a U-turn, invading and
eventually stopping on the opposite lane of the road (the jeepney’sfront faced the
south (from where it came) and its rear faced the north (towards where it was
going).The jeepney occupied and blocked the greater portion of the western lane,
which is the right of way of vehicles coming from the north.
Petitioner Phil. Rabbit Bus Lines claims that almost immediately after the sudden U-
turn the busbumped the right rear portion of the jeep. Defendants, on the other
hand, claim that the bus stoppeda few minutes before hitting the jeepney. Either
way, as a result of the collision, three passengers of the jeepney (Catalina Pascua,
Erlinda Meriales and Adelaida Estomo) died while the other jeepneypassengers
sustained physical injuries.A criminal complaint was filed against the two drivers for
Multiple Homicide. The case against delosReyes (driver of Phil. Rabbit) was
dismissed for insufficieny of evidence. Manalo (jeepney driver) was convicted and
sentenced to suffer imprisonment.

Three complaints for recovery of damages were then filed before the CFI of
Pangasinan: (1) SpousesCasiano Pascua and Juana Valdez sued as heirs of Catalina
Pascua while Caridad Pascua sued in her behalf; (2) Spouses Manuel Millares and
Fidencia Arcica sued as heirs of Erlinda Meriales; and (3) spouses Mariano Estomo
and Dionisia Sarmiento sued as heirs of Adelaida Estomo. All three cases impleaded
spouses Mangune and Carreon, Manalo (jeepney owners), Rabbit and delos Reyes
as defendants. Plaintiffs anchored their suits against spouses Mangune andCarreon
and Manalo on their contractual liability. As against Rabbit and delos Reyes,
plaintiffs basedtheir suits on their culpability for a quasi-delict.

The respondent court applied primarily (1) the doctrine of last clear chance, (2) the
presumption that drivers who bump the rear of another vehicle guilty and the cause
of the accident unless contradicted by other evidence, and (3) the substantial factor
test concluded that delos Reyes was negligent.

ISSUE:

Whether or not the doctrine of last clear chance is applicable in this case.

RULING:

No. The doctrine is not applicable.

The principle about “the last clear” chance, would call for application in a suit
between the owners and drivers of the two colliding vehicles. It does not arise
where a passenger demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to exempt the negligent driver of
the jeepney and its owners on the ground that the other driver was likewise guilty
of negligence.” This was the ruling in Anuran, et al. v. Buño et al., G.R. Nos. L-
21353 and L-21354, May 20, 1966, 17 SCRA 224. Thus, the respondent court erred
in applying said doctrine.

On the presumption that drivers who bump the rear of another vehicle guilty and
the cause of the accident, unless contradicted by other evidence, the respondent
court said:
. . . the jeepney had already executed a complete turnabout and at the time of
impact was already facing the western side of the road. Thus the jeepney assumed
a new frontal position vis a vis, the bus, and the bus assumed a new role of
defensive driving. The spirit behind the presumption of guilt on one who bumps the
rear end of another vehicle is for the driver following a vehicle to be at all times
prepared of a pending accident should the driver in front suddenly come to a full
stop, or change its course either through change of mind of the front driver,
mechanical trouble, or to avoid an accident. The rear vehicle is given the
responsibility of avoiding a collision with the front vehicle for it is the rear vehicle
who has full control of the situation as it is in a position to observe the vehicle in
front of it.

The above discussion would have been correct were it not for the undisputed fact
that the U-turn made by the jeepney was abrupt.The jeepney, which was then
traveling on the eastern shoulder, making a straight, skid mark of approximately 35
meters, crossed the eastern lane at a sharp angle, making a skid mark of
approximately 15 meters from the eastern shoulder to the point of impact (Exhibit
“K” Pascua). Hence, delos Reyes could not have anticipated the sudden U-turn
executed by Manalo. The respondent court did not realize that the presumption was
rebutted by this piece of evidence.

Philippine Air Lines vs. Court of Appeals

GR 120262, 17 July 1997)

FACTS:

On 23 October 1988, Leovigildo A. Pantejo, then City Fiscal of Surigao City, boarded
a PAL plane in Manila and disembarked in Cebu City where he was supposed to take
his connecting flight to Surigao City. However, due to typhoon Osang, the
connecting flight to Surigao City was cancelled. To accommodate the needs of its
stranded passengers, PAL initially gave out cash assistance of P 100.00 and, the
next day, P200.00, for their expected stay of 2 days in Cebu. Pantejo requested
instead that he be billeted in a hotel at the PAL’s expense because he did not have
cash with him at that time, but PAL refused. Thus, Pantejo was forced to seek and
accept the generosity of a co-passenger, an engineer named Andoni Dumlao, and
he shared a room with the latter at Sky View Hotel with the promise to pay his
share of the expenses upon reaching Surigao. On 25 October 1988 when the flight
for Surigao was resumed, Pantejo came to know that the hotel expenses of his co-
passengers, one Superintendent Ernesto Gonzales and a certain Mrs. Gloria Rocha,
an Auditor of the Philippine National Bank, were reimbursed by PAL. At this point,
Pantejo informed Oscar Jereza, PAL’s Manager for Departure Services at Mactan
Airport and who was in charge of cancelled flights, that he was going to sue the
airline for discriminating against him. It was only then that Jereza offered to pay
Pantejo P300.00 which, due to the ordeal and anguish he had undergone, the latter
declined.

Pantejo filed a suit for damages against PAL with the RTC of Surigao City which,
after trial, rendered judgment, ordering PAL to pay Pantejo P300.00 for actual
damages, P150,000.00 as moral damages, P100,000.00 as exemplary damages,
P15,000.00 as attorney’s fees, and 6% interest from the time of the filing of the
complaint until said amounts shall have been fully paid, plus costs of suit.
On appeal, the appellate court affirmed the decision of the court a quo, but with the
exclusion of the award of attorney’s fees and litigation expenses.

The Supreme Court affirmed the challenged judgment of Court of Appeals, subject
to the modification regarding the computation of the 6% legal rate of interest on
the monetary awards granted therein to Pantejo.

ISSUE:

Whether petitioner airlines acted in bad faith when it failed and refused to provide
hotel accommodations for respondent Pantejo or to reimburse him for hotel
expenses incurred by reason of the cancellation of its connecting flight to Surigao
City due to force majeur.

HELD:
A contract to transport passengers is quite different in kind and degree from any
other contractual relation, and this is because of the relation which an air carrier
sustains with the public. Its business is mainly with the travelling public. It invites
people to avail of the comforts and advantages it offers. The contract of air
carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier’s employees naturally could give ground for an action for
damages.

The discriminatory act of PAL against Pantejo ineludibly makes the former liable for
moral damages under Article 21 in relation to Article 2219 (10) of the Civil Code. As
held in Alitalia Airways vs. CA, et al., such inattention to and lack of care by the
airline for the interest of its passengers who are entitled to its utmost consideration,
particularly as to their convenience, amount to bad faith which entitles the
passenger to the award of moral damages.

Moral damages are emphatically not intended to enrich a plaintiff at the expense of
the defendant. They are awarded only to allow the former to obtain means,
diversion, or amusements that will serve to alleviate the moral suffering he has
undergone due to the defendant’s culpable action and must, perforce, be
proportional to the suffering inflicted. However, substantial damages do not
translate into excessive damages. Herein, except for attorney’s fees and costs of
suit, it will be noted that the Courts of Appeals affirmed point by point the factual
findings of the lower court upon which the award of damages had been based.

The interest of 6% imposed by the court should be computed from the date of
rendition of judgment and not from the filing of the complaint.

The rule has been laid down in Eastern Shipping Lines, Inc. vs. Court of Appeals, et.
al. that “when an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages except when or until the demand can
be established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.” This is because at the time of the filling
of the complaint, the amount of the damages to which Pantejo may be entitled
remains unliquidated and not known, until it is definitely ascertained, assessed and
determined by the court, and only after the presentation of proof thereon.