FOOD TERMINAL INCORPORATED, Petitioner, v.

COURT OF APPEALS AND BASIC

FOODS CORPORATION, Respondents.

Facts:

• Basic Food was engaged in the business of manufacturing food and allied products
using for the production of Res Star compressed yeast which required storage in
a refrigerated space to avoid spoilage.
• FTI was engaged in the business of goods or merchandise for compensation at
its refrigerated warehouse.
• That the plaintiff deposited for cold storage with the defendant 1770 cartons of
Red Star compressed yeast. Because of the latter’s negligence, its failure to
control the temperature in its warehouse were stored a total of 383.6 cartons worth
not less than 161,000 were spoiled.
• That, the plaintiff demanded from FTI the payment of the total value of the spoiled
compressed yeast.
Issue:
Whether or not petitioner is negligent in the care and custody of respondent’s goods during
storage.
Ruling:
Yes. Petitioner practically admitted that it failed to maintain the agreed temperature of the
cold storage area at 2 to 4 degrees centigrade at all times, and this caused the deterioration of
the yeast stored therein. Nonetheless, petitioner claimed that temperature was not the sole cause
for the deterioration of respondent’s goods. Since negligence has been established, petitioner’s
liability for damages is inescapable.

PRISCILLA L. TAN, petitioner,

vs.
NORTHWEST AIRLINES, INC., respondent.

Facts:

• Priscilla L. Tan and Connie Tan boarded Northwest Airlines Flight 29 in Chicago,
U. S. A. bound for the Philippines, with a stop-over at Detroit, U. S. A.
• They arrived at the (NAIA) on June 1, 1994 at about 10:40 in the evening.
Petitioner and her companion Connie Tan found that their baggage was missing.
• They returned to the airport in the evening of the following day and they were
informed that their baggage might still be in another plane in Tokyo, Japan.
• On June 3, 1994, they recovered their baggage and discovered that some of its
contents were destroyed and soiled.
 • They demanded from Northwest Airlines compensation for the damages they
suffered.
• That Northwest Airline contends that the baggage was loaded in another
Northwest Airline flight since the baggage could not be carried on the same flight
because of weight and balance restrictions.
• That when petitioner received her baggage damaged condition, Northwest offered
either to reimburse the cost or repair of the bags or to reimburse the cost for the
purchase of new bags upon submission of the receipts.
Issue:
Whether or not respondent is liable for moral and exemplary damages for the willful
misconduct and breach of the contract of air carriage.
Ruling:
No. Respondent was not guilty of willful misconduct. For willful misconduct to exist there
must be a showing that the acts complained of were impelled by an intention to violate the law,
or were in persistent disregard of one's rights. There was nothing in the conduct of respondent
which showed that they were motivated by malice or bad faith in loading her baggages on another
plane. Due to weight and balance restrictions, as a safety measure, respondent airline had to
transport the baggages on a different flight, but with the same expected date and time of arrival
in the Philippines. It is admitted that respondent failed to deliver petitioner's luggages on time.
However, there was no showing of malice in such failure. By its concern for safety, respondent
had to ship the baggages in another flight with the same date of arrival.

COLLIN A. MORRIS and THOMAS P. WHITTIER, petitioner,

vs.
COURT OF APPEALS (Tenth Division) and SCANDINAVIAN AIRLINES
SYSTEM, respondents.

Facts:

• Petitioners Collin A. Morris and Thomas P. Whittier were American citizens; the
vice-president for technical service and the director for quality assurance,
respectively, of Sterling Asia, a foreign corporation.
• Respondent Scandinavian Airline has been engaged in the commercial air
transport of passengers.
• Petitioner Morris and co-petitioner Whittier had a series of business meetings with
Japanese businessmen in Japan.
• They requested their travel agent, Staats Travel Service. Inc. to book them as first-
class passengers in SAS Manila-Tokyo flight on February 14, 1978.
 • Respondent booked them as first-class passengers on Flight SK 893, Manila-
Tokyo flight on February 14, 1978, at 3:50 in the afternoon. A limousine service of
the travel agency fetched petitioners. They went to the Manila International Airport
and arrived at 2:35 in the afternoon.
• Upon arrival at the airport, representatives of the travel agency met petitioners. It
took petitioners two to three minutes to clear their bags at the customs section.
• After that, they proceed to the SAS check-in counter and presented their tickets,
passports, immigration cards and travel documents to Ms. Erlinda Ponce at the
reception desk.
• Petitioners noticed that their travel documents were not being processed at the
check-in counter.
• They were informed that there were no more seats on the plane for which reason
they could not be accommodated on the flight. They were not accommodated on
the flight because they checked-in after the flight manifest had been closed forty
(40) minutes prior to the plane's departure. Petitioners' seats were given to
economy class passengers who were upgraded to first class.
Issue:
Whether or not petitioners are entitled to damages.
Ruling:
No. Assuming arguendo that breach of contract of carriage may be attributed to
respondent, petitioners' travails were directly traceable to their failure to check-in on time, which
lewd to respondent's refusal to accommodate them on the flight. The rule is that moral damages
are recoverable in a damage suit predicated upon a breach of contract of carriage only where (a)
the mishap result in the death of a passenger and (b) it is proved that the carrier was guilty of
fraud and bad faith even if death does not result.
For having arrived at the airport after the closure of the flight manifest, respondent's
employee could not be faulted for not entertaining petitioners' tickets and travel documents for
processing, as the checking in of passengers for SAS Flight SK 893 was finished, there was no
fraud or bad faith as would justify the court's award or normal damages. Bad faith does not simply
connote bad judgement or negligence, it imports a dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of known duty through some motive or interest or ill will that
partakes of the nature of fraud. In the instant case, respondent's denial of petitioners' boarding on
SAS Flight 893 was not attended by bad faith or malice.
 ESTELA L. CRISOSTOMO, Petitioner,
vs.
The Court of Appeals and CARAVAN TRAVEL & TOURS INTERNATIONAL,
INC., Respondents.

Facts:

• Estela Crisostomo contracted Caravan Travel and Tours Int’l Inc.’s services to
facilitate her booking, ticketing, and accommodation in a European tour.
• Her niece, Ms. Menor was the company’s ticketing manager. Ms. Menor delivered
the travel documents and plane tickets to Estela on a Wednesday and told Estela
to be at the NAIA on Saturday, 2hrs. before her flight.
• Estela paid the full price of the package. Estela did not check her travel documents
and proceeded to NAIA on Saturday for her flight, but discovered that the flight she
was supposed to take already left the day before.
• She complained to Ms. Menor, who in turn convinced her to take another tour
package. Estela thereafter claimed reimbursement difference between what Estela
paid for the first tour package and what she owed for the 2nd tour package which
she was able to avail, but Caravan refused.
• Estela filed a complaint against CARAVAN for breach of contract of carriage and
damages.
Issue:
Whether or not Caravan was a common carrier to which the duty of exercising
extraordinary diligence can be imputed.
Ruling:
No. Caravan is not a common carrier under CC 1732 as it is NOT an entity engaged in
the business of transporting either passengers or goods. Its business is making travel
arrangements for its customers, NOT transporting passengers or goods from one place to
another. The contract between Caravan and Estela is an ordinary contract for services, which
only requires, as the standard of care, the diligence of a good father of a family under CC 1173.
Diligence of a good father of a family = Reasonable care consistent with that which an ordinarily
prudent person would have observed when confronted with a similar situation. Caravan’s failure
to present Menor as witness to rebut Estela’s assertion that Caravan did not clearly indicate the
date and time of her flight DID NOT GIVERISE TO AN UNFAVORABLE INFERENCE against
Caravan. It was physically impossible to have Menor testify as she was already working in France
when the complaint was filed. In any case, both parties could’ve obtained Menor’s testimony so it
was wrong for the court to hold that there is a presumption that Caravan willfully suppressed
evidence (under Rule 131, Section 3e). Menor’s negligence was not sufficiently proved
since it was only based on Estela’s uncorroborated narration of events. The party alleging
a fact has the burden of proving it; a mere allegation cannot take the place of evidence. After
the travel documents and plane tickets were delivered to Estela, she had the obligation to take
ordinary care of her concerns, at least reading the documents delivered to her to keep
herself informed about the important details regarding her trip. Fault or negligence of the obligor
consists in his failure to exercise due care and prudence in the performance of the obligation as
the nature of the obligation so demands. In the case at bar, the evidence on record shows that
respondent company performed its duty diligently and did not commit any contractual breach.

PHILIPPINE NATIONAL RAILWAYS and VIRGILIO J. BORJA, Petitioners,

vs.
COURT OF APPEALS (Second Division), CORAZON C. AMORES, MA. EMILIE A. MOJICA,
CECILE C. SISON, DINO C. AMORES, LARISA C. AMORES, ARMAND JINO C. AMORES
and JOHN C. AMORES, Respondents.

Facts:

• Amores was traversing the railroad tracks in Kahilum II Street, Pandacan,

Manila. Before crossing the railroad track, he stopped for a while then proceeded
accordingly.
• Unfortunately, just as Amores was at the intersection, a Philippine National
Railways train turned up and collided with the car. At the time of the mishap, there
was neither a signal nor a crossing bar at the intersection to warn motorists of an
approaching train.
• Aside from the railroad track, the only visible warning sign at that
time was the defective standard signboard STOP, LOOK and LISTEN wherein
the sign Listen was lacking while that of Look was bent. No whistle blow from the
train was likewise heard before it finally bumped the car of Amores.
• After impact, the car was dragged about ten meters beyond the center of the
crossing. Amores died as a consequence thereof.
• On July 22, 1992, the heirs of Amores, consisting of his surviving wife
and six children, herein respondents, filed a Complaint for Damages against
petitioners PNR and Virgilio J. Borja, PNRs locomotive driver at the time of the
incident, before the RTC of Manila.
• In their complaint, respondents averred that the trains’ speedometer was
defective, and that the petitioners’ negligence was the proximate cause of the
mishap for their failure to take precautions to prevent injury to persons and property
despite the dense population in the vicinity. They then prayed for actual and moral
damages, as well as attorney’s fees.
Issue:
Whether or not there was negligence on the part of the petitioners.
Ruling:
Yes. Negligence has been defined as the failure to observe for the protection of the
interests of another person that degree of care, precaution, and vigilance, which the
circumstances justly demand, whereby such other person suffers injury. The petitioners
were negligent when the collision took place. The transcript of stenographic notes
reveals that the train was running at a fast speed because notwithstanding the
application of the ordinary and emergency brakes, the train still dragged the car some distance
away from the point of impact. Evidence likewise unveils the inadequate precautions taken
by petitioner PNR to forewarn the public of the impending danger. Aside from not having any
crossing bar, no flagman or guard to man the intersection at all times was posted on the day of
the incident. A reliable signaling device in good condition, not just a dilapidated Stop,
Look and Listen signage because of many years of neglect, is needed to give notice to the
public.
The failure of the PNR to put a cross bar, or signal light, flagman or switchman, or
semaphore is evidence of negligence and disregard of the safety of the public, even if there is no
law or ordinance requiring it, because public safety demands that said device or equipment be
installed. Article 2180 of the New Civil Code discusses the liability of the employer
once negligence or fault on the part of the employee has been established. The employer is
actually liable on the assumption of “juris tantum” that the employer failed to exercise
“diligentissimi patris families” in the selection and supervision of its employees. The liability is
primary and can only be negated by showing due diligence in the selection and supervision of the
employee, a factual matter that has not been demonstrated. Even the existence of hiring
procedures and supervisory employees cannot be incidentally invoked to overturn the
presumption of negligence on the part of the employer.