1

G.R. No. L-20761

July 27, 1966

LA MALLORCA, petitioner, vs. HONORABLE COURT OF APPEALS,

MARIANO BELTRAN, ET AL., respondents.

G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.

Ahmed Garcia for respondents.

BARRERA, J.:

La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No.
23267-R, holding it liable for quasi-delict and ordering it to pay to respondents Mariano
Beltran, et al., P6,000.00 for the death of his minor daughter Raquel Beltran, plus
P400.00 as actual damages.

The facts of the case as found by the Court of Appeals, briefly are:

On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with
their minor daughters, namely, Milagros, 13 years old, Raquel, about 4½ years old, and
Fe, over 2 years old, boarded the Pambusco Bus No. 352, bearing plate TPU No. 757
(1953 Pampanga), owned and operated by the defendant, at San Fernando, Pampanga,
bound for Anao, Mexico, Pampanga. At the time, they were carrying with them four
pieces of baggages containing their personal belonging. The conductor of the bus, who
happened to be a half-brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A,
B, & C) covering the full fares of the plaintiff and their eldest child, Milagros. No fare
was charged on Raquel and Fe, since both were below the height at which fare is charged
in accordance with the appellant's rules and regulations.

After about an hour's trip, the bus reached Anao whereat it stopped to allow the
passengers bound therefor, among whom were the plaintiffs and their children to get off.
With respect to the group of the plaintiffs, Mariano Beltran, then carrying some of their
baggages, was the first to get down the bus, followed by his wife and his children. Mariano
led his companions to a shaded spot on the left pedestrians side of the road about four
or five meters away from the vehicle. Afterwards, he returned to the bus in controversy
to get his other bayong, which he had left behind, but in so doing, his daughter Raquel
followed him, unnoticed by her father. While said Mariano Beltran was on the running
board of the bus waiting for the conductor to hand him his bayong which he left under
one of its seats near the door, the bus, whose motor was not shut off while unloading,
suddenly started moving forward, evidently to resume its trip, notwithstanding the fact
that the conductor has not given the driver the customary signal to start, since said
conductor was still attending to the baggage left behind by Mariano Beltran. Incidentally,
when the bus was again placed into a complete stop, it had travelled about ten meters
from the point where the plaintiffs had gotten off.

Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the
running board without getting his bayong from the conductor. He landed on the side of
the road almost in front of the shaded place where he left his wife and children. At that
precise time, he saw people beginning to gather around the body of a child lying prostrate
on the ground, her skull crushed, and without life. The child was none other than his
daughter Raquel, who was run over by the bus in which she rode earlier together with
her parents.

For the death of their said child, the plaintiffs commenced the present suit against the
defendant seeking to recover from the latter an aggregate amount of P16,000 to cover
 2

moral damages and actual damages sustained as a result thereof and attorney's fees. After
trial on the merits, the court below rendered the judgment in question.

On the basis of these facts, the trial court found defendant liable for breach of contract
of carriage and sentenced it to pay P3,000.00 for the death of the child and P400.00 as
compensatory damages representing burial expenses and costs.

On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach
of contract in the case, for the reason that when the child met her death, she was no
longer a passenger of the bus involved in the incident and, therefore, the contract of
carriage had already terminated. Although the Court of Appeals sustained this theory, it
nevertheless found the defendant-appellant guilty of quasi-delict and held the latter liable
for damages, for the negligence of its driver, in accordance with Article 2180 of the Civil
Code. And, the Court of Appeals did not only find the petitioner liable, but increased
the damages awarded the plaintiffs-appellees to P6,000.00, instead of P3,000.00 granted
by the trial court.

In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding
it liable for quasi-delict, considering that respondents complaint was one for breach of
contract, and (2) in raising the award of damages from P3,000.00 to P6,000.00 although
respondents did not appeal from the decision of the lower court.

Under the facts as found by the Court of Appeals, we have to sustain the judgement
holding petitioner liable for damages for the death of the child, Raquel Beltran. It may
be pointed out that although it is true that respondent Mariano Beltran, his wife, and
their children (including the deceased child) had alighted from the bus at a place
designated for disembarking or unloading of passengers, it was also established that the
father had to return to the vehicle (which was still at a stop) to get one of his bags or
bayong that was left under one of the seats of the bus. There can be no controversy that
as far as the father is concerned, when he returned to the bus for his bayong which was
not unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. For, the relation of carrier and passenger does not necessarily cease
where the latter, after alighting from the car, aids the carrier's servant or employee in
removing his baggage from the car. The issue to be determined here is whether as to the
child, who was already led by the father to a place about 5 meters away from the bus, the
liability of the carrier for her safety under the contract of carriage also persisted.

It has been recognized as a rule that the relation of carrier and passenger does not cease
at the moment the passenger alights from the carrier's vehicle at a place selected by the
carrier at the point of destination, but continues until the passenger has had a reasonable
time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable
time or a reasonable delay within this rule is to be determined from all the circumstances.
Thus, a person who, after alighting from a train, walks along the station platform is
considered still a passenger. So also, where a passenger has alighted at his destination
and is proceeding by the usual way to leave the company's premises, but before actually
doing so is halted by the report that his brother, a fellow passenger, has been shot, and
he in good faith and without intent of engaging in the difficulty, returns to relieve his
brother, he is deemed reasonably and necessarily delayed and thus continues to be a
passenger entitled as such to the protection of the railroad and company and its agents.

In the present case, the father returned to the bus to get one of his baggages which was
not unloaded when they alighted from the bus. Raquel, the child that she was, must have
followed the father. However, although the father was still on the running board of the
bus awaiting for the conductor to hand him the bag or bayong, the bus started to run, so
that even he (the father) had to jump down from the moving vehicle. It was at this instance
 3

that the child, who must be near the bus, was run over and killed. In the circumstances,
it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very
cautions person" required by Article 1755 of the Civil Code to be observed by a common
carrier in the discharge of its obligation to transport safely its passengers. In the first place,
the driver, although stopping the bus, nevertheless did not put off the engine. Secondly,
he started to run the bus even before the bus conductor gave him the signal to go and
while the latter was still unloading part of the baggages of the passengers Mariano Beltran
and family. The presence of said passengers near the bus was not unreasonable and they
are, therefore, to be considered still as passengers of the carrier, entitled to the protection
under their contract of carriage.

But even assuming arguendo that the contract of carriage has already terminated, herein
petitioner can be held liable for the negligence of its driver, as ruled by the Court of
Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint, which
reads —

That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs'
daughter, was caused by the negligence and want of exercise of the utmost diligence of a
very cautious person on the part of the defendants and their agent, necessary to transport
plaintiffs and their daughter safely as far as human care and foresight can provide in the
operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict,
while incompatible with the other claim under the contract of carriage, is permissible
under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege
causes of action in the alternative, be they compatible with each other or not, to the end
that the real matter in controversy may be resolved and determined.

The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was
predicated when it was alleged in the complaint that "the death of Raquel Beltran,
plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost
diligence of a very cautious person on the part of the defendants and their agent." This
allegation was also proved when it was established during the trial that the driver, even
before receiving the proper signal from the conductor, and while there were still persons
on the running board of the bus and near it, started to run off the vehicle. The
presentation of proof of the negligence of its employee gave rise to the presumption that
the defendant employer did not exercise the diligence of a good father of the family in
the selection and supervision of its employees. And this presumption, as the Court of
Appeals found, petitioner had failed to overcome. Consequently, petitioner must be
adjudged peculiarly liable for the death of the child Raquel Beltran.

The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of
Appeals, however, cannot be sustained. Generally, the appellate court can only pass
upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs
did not appeal from that portion of the judgment of the trial court awarding them on
P3,000.00 damages for the death of their daughter. Neither does it appear that, as
appellees in the Court of Appeals, plaintiffs have pointed out in their brief the inadequacy
of the award, or that the inclusion of the figure P3,000.00 was merely a clerical error, in
order that the matter may be treated as an exception to the general rule. Herein
petitioner's contention, therefore, that the Court of Appeals committed error in raising
the amount of the award for damages is, evidently, meritorious.

WHEREFORE, the decision of the Court of Appeals is hereby modified by sentencing,

the petitioner to pay to the respondents Mariano Beltran, et al., the sum of P3,000.00
 4

for the death of the child, Raquel Beltran, and the amount of P400.00 as actual damages.
No costs in this instance.

SO ORDERED.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and
Castro, JJ., concur. Makalintal, J., concurs in the result.
 5

G.R. No. L-55347

October 4, 1985

PHILIPPINE NATIONAL RAILWAYS, petitioner, vs. THE HONORABLE

COURT OF APPEALS and ROSARIO TUPANG, respondents.

Arturo Samaniego for private respondent.

ESCOLIN, J.:

Invoking the principle of state immunity from suit, the Philippine National Railways,
PNR for short, instituted this petition for review on certiorari to set aside the decision of
the respondent Appellate Court which held petitioner PNR liable for damages for the
death of Winifredo Tupang, a paying passenger who fell off a train operated by the
petitioner.

The pertinent facts are summarized by the respondent court as follows:

The facts show that on September 10, 1972, at about 9:00 o'clock in the evening,
Winifredo Tupang, husband of plaintiff Rosario Tupang, boarded 'Train No. 516 of
appellant at Libmanan, Camarines Sur, as a paying passenger bound for Manila. Due to
some mechanical defect, the train stopped at Sipocot, Camarines Sur, for repairs, taking
some two hours before the train could resume its trip to Manila. Unfortunately, upon
passing Iyam Bridge at Lucena, Quezon, Winifredo Tupang fell off the train resulting in
his death.The train did not stop despite the alarm raised by the other passengers that
somebody fell from the train. Instead, the train conductor Perfecto Abrazado, called the
station agent at Candelaria, Quezon, and requested for verification of the information.
Police authorities of Lucena City were dispatched to the Iyam Bridge where they found
the lifeless body of Winifredo Tupang.

As shown by the autopsy report, Winifredo Tupang died of cardio-respiratory failure

due to massive cerebral hemorrhage due to traumatic injury [Exhibits B and C, Folder
of Exhibits],Tupang was later buried in the public cemetery of Lucena City by the local
police authorities. [Rollo, pp. 91-92]

Upon complaint filed by the deceased's widow, Rosario Tupang, the then Court of First
Instance of Rizal, after trial, held the petitioner PNR liable for damages for breach of
contract of carriage and ordered "to pay the plaintiff the sum of P12,000,00 for the death
of Winifredo Tupang, plus P20,000.00 for loss of his earning capacity and the further
sum of P10,000.00 as moral damages, and P2,000.00 as attorney's fees, and costs.

On appeal, the Appellate Court sustained the holding of the trial court that the PNR did
not exercise the utmost diligence required by law of a common carrier. It further
increased the amount adjudicated by the trial court by ordering PNR to pay the plaintiff
an additional sum of P5,000.00 as exemplary damages.

Moving for reconsideration of the above decision, the PNR raised for the first time, as a
defense, the doctrine of state immunity from suit. It alleged that it is a mere agency of
the Philippine government without distinct or separate personality of its own, and that its
funds are governmental in character and, therefore, not subject to garnishment or
execution. The motion was denied; the respondent court ruled that the ground advanced
could not be raised for the first time on appeal.

Hence, this petition for review.

 6

The petition is devoid of merit. The PNR was created under Rep. Act 4156, as amended.
Section 4 of the said Act provides:

The Philippine national Railways shall have the following powers:

a. To do all such other things and to transact all such business directly or indirectly
necessary, incidental or conducive to the attainment of the purpose of the corporation;
and

b. Generally, to exercise all powers of a corporation under the Corporation Law.

Under the foregoing section, the PNR has all the powers, the characteristics and
attributes of a corporation under the Corporation Law. There can be no question then
that the PNR may sue and be sued and may be subjected to court processes just like any
other corporation.

The petitioner's contention that the funds of the PNR are not subject to garnishment or
execution hardly raises a question of first impression. In Philippine National Railways v.
Union de Maquinistas, et al., then Justice Fernando, later Chief Justice, said. "The main
issue posed in this certiorari proceeding, whether or not the funds of the Philippine
National Railways, could be garnished or levied upon on execution was resolved in two
recent decisions, the Philippine National Bank v. Court of Industrial Relations [81 SCRA
314] and Philippine National Bank v. Hon. Judge Pabalan [83 SCRA 595]. This Court
in both cases answered the question in the affirmative. There was no legal bar to
garnishment or execution. The argument based on non-suability of a state allegedly
because the funds are governmental in character was unavailing.So it must be again."

In support of the above conclusion, Justice Fernando cited the Court's holding in
Philippine National Bank v. Court of Industrial Relations, to wit: "The premise that the
funds could be spoken of as public in character may be accepted in the sense that the
People's Homesite and Housing Corporation was a government-owned entity. It does
not follow though that they were exempt from garnishment. National Shipyard and Steel
Corporation v. Court of Industrial Relations is squarely in point. As was explicitly stated
in the opinion of then Justice, later Chief Justice, Concepcion: "The allegation to the
effect that the funds of the NASSCO are public funds of the government, and that, as
such, the same may not be garnished, attached or levied upon, is untenable for, as a
government- owned and controlled corporation, the NASSCO has a personality of its
own, distinct and separate from that of the Government. It has pursuant to Section 2 of
Executive Order No. 356, dated October 23, 1950 * * *, pursuant to which the
NASSCO has been established- 'all the powers of a corporation under the Corporation
Law * * *

As far back as 1941, this Court in the case of Manila Hotel Employees Association v.
Manila Hotel Co., laid down the rule that "when the government enters into commercial
business, it abandons its sovereign capacity and is to be treated like any other corporation.
[Bank of the U.S. v. Planters' Bank, 9 Waitch 904, L. ed. 244]. By engaging in a particular
business through the instrumentality of a corporation the government divests itself pro
hac vice of its sovereign character, so as to render the corporation subject to the rules of
law governing private corporations. 6 Of Similar import is the pronouncement in Prisco
v. CIR,' that "when the government engages in business, it abdicates part of its sovereign
prerogatives and descends to the level of a citizen, ... . " In fine, the petitioner PNR cannot
legally set up the doctrine of non-suability as a bar to the plaintiff's suit for damages.
 7

The appellate court found, the petitioner does not deny, that the train boarded by the
deceased Winifredo Tupang was so over-crowded that he and many other passengers
had no choice but to sit on the open platforms between the coaches of the train. It is
likewise undisputed that the train did not even slow down when it approached the Iyam
Bridge which was under repair at the time, Neither did the train stop, despite the alarm
raised by other passengers that a person had fallen off the train at lyam Bridge.

The petitioner has the obligation to transport its passengers to their destinations and to
observe extraordinary diligence in doing so. Death or any injury suffered by any of its
passengers gives rise to the presumption that it was negligent in the performance of its
obligation under the contract of carriage. Thus, as correctly ruled by the respondent
court, the petitioner failed to overthrow such presumption of negligence with clear and
convincing evidence.

But while petitioner failed to exercise extraordinary diligence as required by law, it

appears that the deceased was chargeable with contributory negligence. Since he opted
to sit on the open platform between the coaches of the train, he should have held tightly
and tenaciously on the upright metal bar found at the side of said platform to avoid falling
off from the speeding train. Such contributory negligence, while not exempting the PNR
from liability, nevertheless justified the deletion of the amount adjudicated as moral
damages. By the same token, the award of exemplary damages must be set aside.
Exemplary damages may be allowed only in cases where the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner. There being no evidence of
fraud, malice or bad faith on the part of petitioner, the grant of exemplary damages
should be discarded.

WHEREFORE, the decision of the respondent appellate court is hereby modified by

eliminating therefrom the amounts of P10,000.00 and P5,000.00 adjudicated as moral
and exemplary damages, respectively. No costs.

SO ORDERED.

Concepcion, Jr., Cuevas, and Alampay, JJ., concur.

Separate Opinions

AQUINO, J., concurring:

The case of Malong vs. PNR, L-49930, Aug. 7, 1985 (en banc) hold that the PNR is not
immune from suit and is liable as a common carrier for the negligent acts of its
employeees. It is expressly liable for moral damages for the death of a passanger under
arts. 1764 and 2206 of the Civil Code.

ABAD SANTOS, J., concurring:

I concur with the admonition that government owned and/or controlled corporations
should desist from invoking the baseless immunity from suit.
 8

G.R. No. L-30309

November 25, 1983

CLEMENTE BRIÑAS, petitioner, vs. THE PEOPLE OF THE PHILIPPINES and

HONORABLE COURT OF APPEALS, respondents.

Mariano R. Abad for petitioner.

The Solicitor General for respondents.

GUTIERREZ, JR., J.:

This is a petition to review the decision of respondent Court of Appeals, now

Intermediate Appellate Court, affirming the decision of the Court of First Instance of
Quezon, Ninth Judicial District, Branch 1, which found the accused Clemente Briñas
guilty of the crime of DOUBLE HOMICIDE THRU RECKLESS IMPRUDENCE
prior the deaths of Martina Bool and Emelita Gesmundo.

The information charged the accused-appellant. and others as follows:

That on or about the 6th day of January, 1957, in the Municipality of Tiaong, Province
of Quezon, Philippines, and within the jurisdiction of this Hon. Court, the said accused
Victor Milan, Clemente Briñas and Hermogenes Buencamino, being then persons in
charge of passenger Train No. 522-6 of the Manila Railroad Company, then running
from Tagkawayan to San Pablo City, as engine driver, conductor and assistant conductor,
respectively, wilfully and unlawfully drove and operated the same in a negligent, careless
and imprudent manner, without due regard to existing laws, regulations and ordinances,
that although there were passengers on board the passenger coach, they failed to provide
lamps or lights therein, and failed to take the necessary precautions for the safety of
passengers and to prevent accident to persons and damage to property, causing by such
negligence, carelessness and imprudence, that when said passenger Train No. 522-6 was
passing the railroad tracks in the Municipality of Tiaong, Quezon, two of its passengers,
Martina Bool, an old woman, and Emelita Gesmundo, a child about three years of age,
fell from the passenger coach of the said train, as a result of which, they were over run,
causing their instantaneous death. "

The facts established by the prosecution and accepted by the respondent court as basis
for the decision are summarized as follows:

The evidence of the prosecution tends to show that in the afternoon of January 6, 1957,
Juanito Gesmundo bought a train ticket at the railroad station in Tagkawayan, Quezon
for his 55-year old mother Martina Bool and his 3-year old daughter Emelita Gesmundo,
who were bound for Barrio Lusacan, Tiaong, same province. At about 2:00 p.m., Train
No. 522 left Tagkawayan with the old woman and her granddaughter among the
passengers. At Hondagua the train's complement were relieved, with Victor Millan taking
over as engineman, Clemente Briñas as conductor, and Hermogenes Buencamino as
assistant conductor. Upon approaching Barrio Lagalag in Tiaong at about 8:00 p.m. of
that same night, the train slowed down and the conductor shouted 'Lusacan', 'Lusacan'.
Thereupon, the old woman walked towards the left front door facing the direction of
Tiaong, carrying the child with one hand and holding her baggage with the other. When
Martina and Emelita were near the door, the train suddenly picked up speed. As a result
the old woman and the child stumbled and they were seen no more. It took three minutes
more before the train stopped at the next barrio, Lusacan, and the victims were not
among the passengers who disembarked thereat
 9

Next morning, the Tiaong police received a report that two corpses were found along
the railroad tracks at Barrio Lagalag. Repairing to the scene to investigate, they found the
lifeless body of a female child, about 2 feet from the railroad tracks, sprawled to the
ground with her belly down, the hand resting on the forehead, and with the back portion
of the head crushed. The investigators also found the corpse of an old woman about 2
feet away from the railroad tracks with the head and both legs severed and the left hand
missing. The head was located farther west between the rails. An arm was found midway
from the body of the child to the body of the old woman. Blood, pieces of scattered
brain and pieces of clothes were at the scene. Later, the bodies were Identified as those
of Martina Bool and Emelita Gesmundo. Among the personal effects found on Martina
was a train ticket (Exhibits "B").

On January 7, 1957, the bodies of the deceased were autopsied by Dr. Pastor Huertas,
the Municipal Health Officer of Tiaong. Dr. Huertas testified on the cause of death of
the victims as follows:

FISCAL YNGENTE:
Q What could have caused the death of those women?
A Shock.
Q What could have caused that shock?
A Traumatic injury.
Q What could have caused traumatic injury?
A The running over by the wheel of the train.
Q With those injuries, has a person a chance to survive?
A No chance to survive.
Q What would you say death would come?
A Instantaneous.
Q How about the girl, the young girl about four years old, what could have caused the
death?
A Shock too.
Q What could have caused the shock?
A Compound fracture of the skull and going out of the brain.
Q What could have caused the fracture of the skull and the going out of the brain?
A That is the impact against a steel object. (TSN., pp. 81-82, July 1, 1959)

The Court of First Instance of Quezon convicted defendant-appellant Clemente Briñas

for double homicide thru reckless imprudence but acquitted Hermogenes Buencamino
and Victor Millan The dispositive portion of the decision reads:

WHEREFORE, the court finds the defendant Clemente Briñas guilty beyond doubt of
the crime of double homicide thru reckless imprudence, defined and punished under
Article 305 in connection with Article 249 of the Revised Penal Code, and sentences him
to suffer six (6) months and one (1) day of prision correccional to indemnify the heirs of
the deceased Martina Bool and Emelita Gesmundo in the amounts of P6,000 and
P3,000, respectively, with subsidiary imprisonment in case of insolvency not to exceed
one-third of the principal penalty, and to pay the costs.

For lack of sufficient evidence against the defendant Hermogenes Buencamino and on
the ground of reasonable doubt in the case of defendant Victor Millan the court hereby
acquits them of the crime charged in the information and their bail bonds declared
cancelled.

As to the responsibility of the Manila Railroad Company in this case, this will be the
subject of court determination in another proceeding.
 10

On appeal, the respondent Court of Appeals affirmed the judgment of the lower court.

During the pendency of the criminal prosecution in the Court of First Instance of
Quezon, the heirs of the deceased victims filed with the same court, a separate civil action
for damages against the Manila Railroad Company entitled "Civil Case No. 5978,
Manaleyo Gesmundo, et al., v. Manila Railroad Company". The separate civil action was
filed for the recovery of P30,350.00 from the Manila Railroad Company as damages
resulting from the accident.

The accused-appellant alleges that the Court of Appeals made the following errors in its
decision:

I
THE HONORABLE COURT OF APPEALS ERRED IN CONVICTING
PETITIONER-APPELLANT UNDER THE FACTS AS FOUND BY SAID
COURT; and
II
THE HONORABLE COURT OF APPEALS ERRED IN INCLUDING THE
PAYMENT OF DEATH INDEMNITY BY THE PETITIONER- APPELLANT,
WITH SUBSIDIARY IMPRISONMENT IN CASE OF INSOLVENCY, AFTER
THE HEIRS OF THE DECEASED HAVE ALREADY COMMENCED A
SEPARATE CIVIL ACTION FOR DAMAGES AGAINST THE RAILROAD
COMPANY ARISING FROM THE SAME MISHAP.

We see no error in the factual findings of the respondent court and in the conclusion
drawn from those findings.

It is undisputed that the victims were on board the second coach where the petitioner-
appellant was assigned as conductor and that when the train slackened its speed and the
conductor shouted "Lusacan, Lusacan", they stood up and proceeded to the nearest exit.
It is also undisputed that the train unexpectedly resumed its regular speed and as a result
"the old woman and the child stumbled and they were seen no more.

In finding petitioner-appellant negligent, respondent Court

xxx xxx xxx The appellant's announcement was premature and erroneous, for it took a
full three minutes more before the next barrio of Lusacan was reached. In making the
erroneous and premature announcement, appellant was negligent. He ought to have
known that train passengers invariably prepare to alight upon notice from the conductor
that the destination was reached and that the train was about to stop. Upon the facts, it
was the appellant's negligent act which led the victims to the door. Said acts virtually
exposed the victims to peril, for had not the appellant mistakenly made the
announcement, the victims would be safely ensconced in their seats when the train jerked
while picking up speed, Although it might be argued that the negligent act of the appellant
was not the immediate cause of, or the cause nearest in time to, the injury, for the train
jerked before the victims stumbled, yet in legal contemplation appellant's negligent act
was the proximate cause of the injury. As this Court held in Tucker v. Milan, CA G.R.
No. 7059-R, June 3, 1953: 'The proximate cause of the injury is not necessarily the
immediate cause of, or the cause nearest in time to, the injury. It is only when the causes
are independent of each other that the nearest is to be charged with the disaster. So long
as there is a natural, direct and continuous sequence between the negligent act the injury
(sic) that it can reasonably be said that but for the act the injury could not have occurred,
such negligent act is the proximate cause of the injury, and whoever is responsible
therefore is liable for damages resulting therefrom. One who negligently creates a
dangerous condition cannot escape liability for the natural and probable consequences
 11

thereof, although the act of a third person, or an act of God for which he is not
responsible intervenes to precipitate the loss. xxx xxx xxx

It is a matter of common knowledge and experience about common carriers like trains
and buses that before reaching a station or flagstop they slow down and the conductor
announces the name of the place. It is also a matter of common experience that as the
train or bus slackens its speed, some passengers usually stand and proceed to the nearest
exit, ready to disembark as the train or bus comes to a full stop. This is especially true of
a train because passengers feel that if the train resumes its run before they are able to
disembark, there is no way to stop it as a bus may be stopped.

It was negligence on the conductor's part to announce the next flag stop when said stop
was still a full three minutes ahead. As the respondent Court of Appeals correctly
observed, "the appellant's announcement was premature and erroneous.

That the announcement was premature and erroneous is shown by the fact that
immediately after the train slowed down, it unexpectedly accelerated to full speed.
Petitioner-appellant failed to show any reason why the train suddenly resumed its regular
speed. The announcement was made while the train was still in Barrio Lagalag.

The proximate cause of the death of the victims was the premature and erroneous
announcement of petitioner' appelant Briñas. This announcement prompted the victims
to stand and proceed to the nearest exit. Without said announcement, the victims would
have been safely seated in their respective seats when the train jerked as it picked up
speed. The connection between the premature and erroneous announcement of
petitioner-appellant and the deaths of the victims is direct and natural, unbroken by any
intervening efficient causes.

Petitioner-appellant also argues that it was negligence per se for Martina Bool to go to
the door of the coach while the train was still in motion and that it was this negligence
that was the proximate cause of their deaths.

We have carefully examined the records and we agree with the respondent court that the
negligence of petitioner appellant in prematurely and erroneously announcing the next
flag stop was the proximate cause of the deaths of Martina Bool and Emelita Gesmundo.
Any negligence of the victims was at most contributory and does not exculpate the
accused from criminal liability.

With respect to the second assignment of error, the petitioner argues that after the heirs
of Martina Bool and Emelita Gesmundo had actually commenced the separate civil
action for damages in the same trial court during the pendency of the criminal action,
the said court had no more power to include any civil liability in its judgment of
conviction.

The source of the obligation sought to be enforced in Civil Case No. 5978 is culpa
contractual, not an act or omission punishable by law. We also note from the appellant's
arguments and from the title of the civil case that the party defendant is the Manila
Railroad Company and not petitioner-appellant Briñas Culpa contractual and an act or
omission punishable by law are two distinct sources of obligation

The petitioner-appellant argues that since the information did not allege the existence of
any kind of damages whatsoever coupled by the fact that no private prosecutors appeared
and the prosecution witnesses were not interrogated on the issue of damages, the trial
court erred in awarding death indemnity in its judgment of conviction.
 12

A perusal of the records clearly shows that the complainants in the criminal action for
double homicide thru reckless imprudence did not only reserve their right to file an
independent civil action but in fact filed a separate civil action against the Manila Railroad
Company.

The trial court acted within its jurisdiction when, despite the filing with it of the separate
civil action against the Manila Railroad Company, it still awarded death indemnity in the
judgment of conviction against the petitioner appellant

It is well-settled that when death occurs as a result of the commission of a crime, the
following items of damages may be recovered: (1) an indemnity for the death of the
victim; (2) an indemnity for loss of earning capacity of the deceased; (3) moral damages;
(4) exemplary damages; (5) attorney's fees and expenses of litigation, and (6) interest in
proper cases.

The indemnity for loss of earning capacity, moral damages, exemplary damages,
attorney's fees, and interests are recoverable separately from and in addition to the fixed
slim of P12,000.00 corresponding to the indemnity for the sole fact of death. This
indemnity arising from the fact of death due to a crime is fixed whereas the others are
still subject to the determination of the court based on the evidence presented. The fact
that the witnesses were not interrogated on the issue of damages is of no moment because
the death indemnity fixed for death is separate and distinct from the other forms of
indemnity for damages.

WHEREFORE, the judgment appealed from is modified in that the award for death
indemnity is increased to P12,000.00 for the death of Martina Bool instead of P6,000.00
and P12,000.00 for the death of Emelita Gesmundo instead of P3,000.00, but deleting
the subsidiary imprisonment in case of insolvency imposed by the lower court. The
judgment is AFFIRMED in all other respects.

SO ORDERED.

Teehankee (Chairman), Melencio-Herrera; Plana and Relova, JJ., concur.

 13

GR No. 36830
Feb 16, 1933

JAHARA ET AL. v. MINDANAO LUMBER COMPANY

57 Phil. 853

IMPERIAL, J.:

This is an action commenced in the Court of First Instance of Zamboanga by the

plaintiffs for the recovery of compensation from the defendant company for the death of
the workman, Moro Sapturani, in accordance with the provisions of Act No. 3428,
otherwise known as the "Workmen's Compensation Act".

The above-mentioned plaintiffs appealed from the judgment rendered by the trial court
absolving the defendant from the complaint, without special pronouncement as to costs.

Prior to the date of the accident, the late Moro Kingan was engaged in the business of
cutting timber within the defendant's concession, employing laborers for that purpose,
among them Moro Sapturani. Kingan paid his cutters' wages and delivered the timber
and firewood to the defendant company which paid him the corresponding value thereof.
On the morning of February 12, 1930, between 6 and 6.30 o'clock, Sapturani, who was
about to go to the place where he was engaged in cutting timber, by means of the
defendant's train operating in that place, was run over by the last car of the train as it was
moving backwards, and died almost instantly as a result of injuries received on different
parts of his body.

Mora Jahara, the divorced wife of the deceased, his daughters, Albaya and Mandasiang,
and their respective husbands, Ladya and Bachaja, are the plaintiffs and appellants in this
case.

Such are the undisputed facts of record. We shall discuss later how the accident
occurred.

The appellants assign the following alleged errors in the trial court's decision:

"I. The trial court erred in not granting the plaintiffs the period of three days prayed for,
within which to file and introduce as evidence a document showing the gross annual
income for the year 1929 of the defendant corporation, of over P40,000.

"II. The court a quo erred in holding that the accident causing the death of Moro
Sapturani was due to his negligence in trying to embark on the rear platform of the train
of the defendant corporation at the Chinkang Sawmill, Naga-Naga, which was moving
backwards at the time of the accident, and not holding that Moro Sapturani was overrun
and killed by the train of the defendant corporation thru the negligence and carelessness
of the employees of the latter.

"III. The trial court erred in holding that the preponderance of the weight of evidence is
in favor of the defendant and against that of the plaintiffs

"IV. The trial court erred in holding that in view of the negligence of Moro Sapturani,
the defendant can not be made liable for the payment of compensation to the plaintiffs
under the Workmen's Compensation Act No. 3428 as amended by Act No. 3812, and
 14

in not holding that even admitting the facts stated in the decision, the paupers-appellants
are still entitled to their claim under the law.

"V. The trial court erred in denying plaintiffs' motion for new trial."

We shall refrain from considering all of the errors assigned by the appellants, limiting
ourselves to the discussion and solution of the questions relating to the manner in which
the accident happened and whether the accident or Sapturani's death was the result of
his own notorious negligence. Proceeding thus, we shall decide the appeal on its merits.

The trial court declared that the deceased was notoriously negligent in connection with
the accident, because the evidence shows that he tried to board the rear platform of the
car as it was moving backwards; that he succeeded in getting a foothold but failing to
obtain a hold of the car, he fell to the ground and was run over by the train.

We have reviewed all the evidence presented and find that the conclusions reached by
the trial court are supported by a preponderance thereof. We note that the plaintiffs'
witnesses named Bachaja and Mandasiang gave a different version of the accident stating
that the deceased, who was between the rails at that time, was knocked down and run
over by the train as it was moving backwards, without the engineer noticing him, but we
agree with the trial court that this story is improbable and inaccurate. As stated by the
trial court, it was difficult for the accident to happen in this manner because, even without
the warning of the whistles, Sapturani should have been aware of the proximity of the
train and could easily have avoided it by only getting off the rails.

Turning to the legal aspect of the case, we likewise agree with the lower court that
Sapturani acted with notorious negligence in attempting to board the train in the manner
in which he did and, consequently, the action cannot be maintained in accordance with
subdivision 3 of section 4 of Act No. 3428 which provides that no action for the recovery
of compensation shall prosper when the accident upon which it is based is due to the
notorious negligence of the workman.

The judgment appealed from should be, as it is hereby, affirmed without costs, inasmuch
as the appellants are paupers.

SO ORDERED.

Villamor, Villa-Real, Hull, and Vickers, JJ., concur.

 15

G.R. No. L-29889

May 31, 1979

VICTORINO CUSI and PILAR POBRE, plaintiffs-appellees, vs. PHILIPPINE

NATIONAL RAILWAYS, defendant-appellant.

Leopoldo M. Abellera for appellant.

Francisco V. Marasigan for appellees.

GUERRERO, J.:

Direct appeal from the decision of the Court of First Instance of Rizal ordering
defendant-appellant to indemnify the plaintiffs- appellees in the total amount of Two
Hundred Thirty-Nine Thousand and Six Hundred Forty-Eight Pesos, and Seventy-Two
Centavos (P239,648.72) for injuries received in a collision caused by the gross negligence
of defendant-appellant, plus Ten Thousand Pesos (P10,000.00) as attorney's fees and
expenses of litigation.

Upon the amended and supplemental complaints for damages filed by plaintiffs-
appellees, the spouses Victorino Cusi and Pilar Pobre before the Court of First Instance
of Rizal against the Manila Railroad Company, now the Philippine National Railways and
duly answered by the latter and after due hearing. the following facts appear as
undisputed: On the night of October 5, 1963, plaintiffs-appellees attended a birthday
party inside the United Housing Subdivision in Paranaque, Rizal. After the party which
broke up at about 11 o'clock that evening, the plaintiffs appellees proceeded home in
their Vauxhall car with Victorino Cusi at the wheel. Upon reaching the railroad tracks,
finding that the level crossing bar was raised and seeing that there was no flashing red
light, and hearing no whistle from any coming train, Cusi merely slack ened his speed
and proceeded to cross the tracks. At the same time, a train bound for Lucena traversed
the crossing, resulting in a collision between the two. The impact threw the plaintiffs-
appellees out of their car which was smashed. One Benjamin Franco, who came from
the same party and was driving a vehicle right behind them, rushed to their aid and
brought them. to San Juan de Dios Hospital for emergency treatment. Later, the
plaintiffs-appellees were transferred to the Philippine General Hospital. A week later,
Mrs. Cusi transferred to the Manila Doctors Hospital where Dr. Manuel Rivera, head of
the Orthopedic and Fracture Service of the Philippine General Hospital performed on
her a second operation and continued to treat her until her discharge from the hospital
on November 2, 1963. Thereafter, Dr. Rivera treated her as an out-patient until the end
of February, 1964 although by that time the fractured bones had not yet healed. Mrs.
Cusi was also operated on by Dr. Francisco Aguilar, Director of the National Orthopedic
Hospital, in May, 1964 and in August, 1965, after another operation in her upper body
from the chest to the abdomen, she was placed in cast for some three (3) months and
her right arm immobilized by reason of the past

As enumerated in the Medical Certificate (Exh. "J"), Mrs. Cusi suffered the following:
(1) Fracture open middle third humerus right
(2) Fracture mandible right paramedian
(3) Fracture fibula left distal
(4) Concussion, cerebral
(5) Abrasions, multiple (face, head, lumbosacral and extremities)
(6) Lacerations (2) right temporal
(7) Contusions with hematoma left forehead and parieto occipital right.

For these injuries, she underwent a total of four surgical opera. petitions in a period of
two years. As a result of the fracture on her right arm, there was a shortening of about 1
 16

cm. of that arm. She lost the flexibility of her wrist, elbow and shoulder. Up to the time
she took the witness stand in August, 1966, she still had an intermedullary nail in the
bone of her right arm Likewise, Victorino Cusi suffered brain injuries which affected his
speech, memory, sense of hearing and neck movement. For a long period, he also felt
pain all over his body.

Victorino Cusi claimed that prior to the accident he was a successful businessman — the
Special Assistant to the Dolor Lopez Enterprises, the managing partner of Cusi and
Rivera Partnership, the manager of his ricemill, and with substantial investments in other
business enterprises. As a result of his injuries, he was unable to properly attend to his
various business undertakings. On the other hand, his wife, Pilar, was a skilled music and
piano teacher. After the accident, she lost the dexterity of her fingers forcing her to quit
her profession. She also bore ugly scars on several parts of her body, and she suffered
anxiety of a possible miscarriage being then five (5) months pregnant at the time of the
accident.

The defense is centered on the proposition that the gross negligence of Victorino Cusi
was the proximate cause of the collision; that had he made a full stop before traversing
the crossing as required by section 56(a) of Act 3992 (Motor Vehicle Law), he could have
seen and heard the approach of the train, and thus, there would have been no collision.

After a protracted trial, the lower court rendered the decision now subject of the appeal.
Defendant-appellant seeks the reversal of said decision; but should we affirm the same,
that the award be reduced to a reasonable amount.

As the action is predicated on negligence, the New Civil Code 1 making clear that
"whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done the crucial question posed in the petition at bar is
the existence of negligence on the part of defendant-appellant as found by the lower
court.

1. The question of negligence being one of fact, the lower court's finding of negligence
on the part of the defendant appellant deserves serious consideration by the Court. It
commands great respect and weight, the reason being that the trial judge, having the
advantage of hearing the parties testify and of observing their demeanor on the witness
stand, is better situated to make conclusions of facts. Thus, it has been the standing
practice of appellate courts to accord lower court's judgments the presumption of
correctness. And unless it can be shown that error or errors, substantial in character, be
shown in the conclusion arrived at, or that there was abuse in judicial scrutiny, We are
bound by their judgments. On this ground alone We can rest the affirmance of the
judgment appealed from.

2. Nor is the result different even if no such presumption were indulged in, that is, even
if We were to resolve whether or not there exist compelling reasons for an ultimate
reversal.

The judicial pronouncement below that the gross negligence of defendant-appellant was
the proximate cause of the collision has been thoroughly reviewed by this Court and we
fully affirm the same.

Negligence has been defined by Judge Cooley in his work on Torts 3d ed sec. 1324 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." By such a test, it can readily be seen that there is no hard
and fast rule whereby such degree of care and vigilance is measured, it is dependent upon
 17

the circumstances in which a person finds himself so situated. All that the law requires is
that it is always incumbent upon a person to use that care and diligence expected of
reasonable men under similar circumstances.

These are the circumstances attendant to the collision. Undisputably, the warning devices
installed at the railroad crossing were manually operated; there were only 2 shifts of
guards provided for the operation thereof — one, the 7:00 A.M. to 3:00 P. M. shift, and
the other, the 3:00 P.M. to 11:00 P.M. shift. On the night of the accident, the train for
Lucena was on an unscheduled trip after 11:00 P.M. During that precise hour, the
warning devices were not operating for no one attended to them. Also, as observed by
the lower court, the locomotive driver did not blow his whistle, thus: "... he simply sped
on without taking an extra precaution of blowing his whistle from a distance of 50 to 10
meters from the crossing. That the train was running at full speed is attested to by the
fact that notwithstanding the application of the emergency brakes, the train did not stop
until it reached a distance of around 100 meters."

These facts assessed together show the inadequacy, nay, the absence, of precautions
taken by the defendant appellant to warn the travelling public of the impending danger.
It is clear to Us that as the signal devices were wholly manually-operated, there was an
urgent need for a flagman or guard to man the crossing at all times. As it was, the crossing
was left unattended to after eleven o'clock every night and on the night of the accident.
We cannot in all reason justify or condone the act of the defendant-appellant allowing
the subject locomotive to travel through the unattended crossing with inoperative signal
devices, but without sending any of its employees to operate said signal devices so as to
warn oncoming motorists of the approach of one of its locomotives. It is not surprising
therefore that the in operation of the warning devices created a situation which was
misunderstood by the riding public to mean safe passage. Jurisprudence recognizes that
if warning devices are installed in railroad crossings, the travelling public has the right to
rely on such warning devices to put them on their guard and take the necessary
precautions before crossing the tracks. A need, therefore, exists for the railroad company
to use reasonable care to keep such devices in good condition and in working order, or
to give notice that they are not operating, since if such a signal is misunderstood it is a
menace. Thus, it has been held that if a railroad company maintains a signalling device
at a crossing to give warning of the approach of a train, the failure of the device to operate
is generally held to be evidence of negligence, which maybe considered with all the
circumstances of the case in determining whether the railroad company was negligent as
a matter of fact.

The set of circumstances surrounding the collision subject of this case is very much
similar to that of Lilius v. Manila Railroad Company, 59 Phil. 758 (1934), where this
Court upheld the lower court's finding of negligence on the part of defendant locomotive
company upon the following facts —

... on the part of the defendant company, for not having had on that occasion any
semaphore at the crossing at Dayap to serve as a warning to passersby of its existence in
order that they might take the necessary precautions before crossing the railroad; and,
on the part of its employees — the flagman and switchman, for not having remained at
his post at the crossing in question to warn passersby of the approaching train; the station
master, for failure to send the said flagman and switchman to his post on time; and the
engineer, for not having taken the necessary precautions to avoid an accident, in view of
the absence of said flagman and switchman, by slackening his speed and continuously
ringing the bell and blowing the whistle before arriving at the crossing.

Defendant-appellant rests its defense mainly on Section 56(a) of the Motor Vehicle Law.
Thus:
 18

Section 56(a) — Traversing through streets and railroad crossing, etc, — All vehicles
moving on the public highways shall be brought to a full stop before traversing any
'through street' or railroad crossing. Whenever any such 'through street' or crossing is so
designated and signposted, it shall be unlawful for the driver of any vehicle to fail to stop
within twenty meters but not less than two and one-half meters from such through street
or railroad crossing.

The defense presupposes that the failure of plaintiffs-appellees to stop before proceeding
to traverse the crossing constitutes contributory negligence, thereby precluding them
from recovering indemnity for their injuries and damages.

The candor of defendant-appellant in interposing such a defense is doubtful. As

seemingly observed by the lower court, the defense, through inadvertence or
deliberateness, did not pursue further the excepting clause of the same section thus to go
on:

Provided, however, that the driver of a passenger automobile or motorcycle may instead
of coming to a full stop, slow down to not more than ten kilometers per hour whenever
it is apparent that no hazard exists.

After a thorough perusal of the facts attendant to the case, this Court is in fun accord with
the lower court. Plaintiff appellee Victorino Cusi had exercised all the necessary
precautions required of him as to avoid injury to -himself and to others. We find no need
for him to have made a full stop; relying on his faculties of sight and hearing, Victorino
Cusi had no reason to anticipate the impending danger. The record shows that the
spouses Cusi previously knew of the existence of the railroad crossing, having stopped at
the guardhouse to ask for directions before proceeding to the party. At the crossing, they
found the level bar raised, no warning lights flashing nor warning bells ringing, nor whistle
from an oncoming train. They safely traversed the crossing. On their return home, the
situation at the crossing did not in the least change, except for the absence of the guard
or flagman. Hence, on the same impression that the crossing was safe for passage as
before, plaintiff-appellee Victorino Cusi merely slackened his speed and proceeded to
cross the tracks, driving at the proper rate of speed for going over railroad crossings. Had
defendant-appellant been successful in establishing that its locomotive driver blew his
whistle to warn motorists of his approach to compensate for the absence of the warning
signals, and that Victorino Cusi, instead of stopping or slackening his speed, proceeded
with reckless speed and regardless of possible or threatened danger, then We would have
been put in doubt as to the degree of prudence exercised by him and would have, in all
probability, declared him negligent. 6 But as the contrary was established, we remain
convinced that Victorino Cusi had not, through his own negligence, contributed to the
accident so as to deny him damages from the defendant-appellant.

The only question that now remains to be resolved is the reasonableness of the amount
awarded as damages to the plaintiffs- appellees.

The following actual expenses and losses are fully substantiated:

(a) Hospital bills of Mrs. Cusi from October, 1963 to May, 1964 in the amount of
Thirteen Thousand Five Hundred Fifty Pesos and Five Centavos (P13,550.05);
(b) Another hospital bill of Mrs. Cusi in 1965 in the amount of Three Thousand and
One Pesos and Ninety Centavos (P3,001.90);
(c) Doctor's fees for two surgical operations performed on Mrs. Cusi by one Dr. Manuel
Rivera in the amount of One Thousand and Five Hundred Pesos (Pl,500.00);
 19

(d) Loss of Victorino's wrist watch valued at Two Hundred and Fifty Pesos (P250.00);
(e) Loss of Pilar's half of her pair of demand earrings(l-½carrats) valued at Two Thousand
Seven Hundred and Fifty Pesos (P2,750,00);
(f) Repair of the damaged Vauxhall car in the amount of Two Thousand Eight Hundred
and Ninety Four Pesos and Seventy- Seven Centavos (P2,894.77).

The total award of actual damages in the amount of Twenty Three Thousand Nine
Hundred Forty-Six Pesos and Seventy-Two Centavos (P23,946.72) is, therefore, correct.

The lower court awarded Twenty-One Thousand Six Hundred Pesos (P21,600.00) to
Mrs. Cusi for loss of income for the three years that she was under constant medical
treatment, and Fourteen Thousand Pesos (P14,000.00) for impairment of her earning
capacity; and Forty Thousand Pesos (P 40,000.00) to Mr. Cusi for loss of income for the
eight months that he was disabled and impairment of his earning capacity. We find the
award reasonable. The records show that Mrs. Cusi, previously a skilled piano teacher
averaging a monthly income of Six Hundred Pesos (P600.00), cannot now teach nor play
the piano since the accident which resulted in the loss of the dexterity of her fingers;
likewise, Mr. Cusi cannot now vigorously attend to his businesses which previously netted
him a monthly average income of Five Thousand Pesos (P5,000.00).

As regards the award of Twenty Thousand Pesos (P20,000.00) for profits which
Victorino Cusi failed to realize from a certain real estate transaction with the Dolor Lopez
Enterprises, we affirm the same as the defendant-appellant has failed to present an iota
of evidence to overcome plaintiffs-appellees' evidence credited by the lower court as to
the certainty of the materialization of the stated transaction.

The award of Seventy Thousand Pesos (P70,000.00) to Mrs. Cusi and Fifty Thousand
Pesos (P50,000.00) to Victorino Cusi as moral damages is not excessive. In their own
respective fields of endeavor, both were successful. Now they have to bear throughout
their whole lifetime the humiliation wrought by their physical deformities which no doubt
affected, and will continue to do so, their social lives, their financial undertakings, and
even their mental attitudes.

Likewise, the amount of Ten Thousand Pesos (P10,000.00) given as attorney's fees and
expenses of litigation is not unreasonable. The total amount of damages awarded by the
trial court should bear legal interest at 6% from the rendition of the j judgment, which
was on March 26, 1968.

WHEREFORE, the judgment of the lower court is hereby AFFIRMED with the
modification that the total amount of damages shall bear legal interest at six per cent (6%)
from the rendition of the decision dated March 26, 1968.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Fernandez, De Castro, and Melencio-Herrera, JJ.,

concur.
 20

G.R. No. L-39587

March 24, 1934

ALEKO E. LILIUS, ET AL., plaintiffs-appellants, vs. THE MANILA RAILROAD

COMPANY, defendant-appellant.

Harvey and O'Brien for plaintiffs-appellants.

Jose C. Abreu for defendant-appellant.

VILLA-REAL, J.:

This case involves two appeals, one by the defendant the Manila Railroad Company, and
the other by the plaintiffs Aleko E. Lilius et al., from the judgment rendered by the Court
of First Instance of Manila, the dispositive part of which reads as follows:

Wherefore, judgment is rendered ordering the defendant company to pay to the

plaintiffs, for the purposes above stated, the total amount of P30,865, with the costs of
the suit. And although the suit brought by the plaintiffs has the nature of a joint action, it
must be understood that of the amount adjudicated to the said plaintiffs in this judgment,
the sum of P10,000 personally belongs to the plaintiff Sonja Maria Lilius; the sum of
P5,000, to the plaintiff Brita Marianne Lilius; the sum of P250, to Dr. Marfori of the
Calauan Hospital, Province of Laguna, and the balance to the plaintiff Aleko E. Lilius.

In support of its appeal, the appellant the Manila Railroad Company assigns nine alleged
errors committed by the trial court in its said judgment, which will be discussed in the
course of this decision.

As a ground of their appeal, the appellants Aleko E. Lilius et al., in turn, assign two
alleged errors as committed by the same court a quo in its judgment in question, which
will be discussed later.

This case originated from a complaint filed by Aleko E. Lilius et al., praying, under the
facts therein alleged, that the Manila Railroad Company be ordered to pay to said
plaintiffs, by way of indemnity for material and moral damages suffered by them through
the fault and negligence of the said defendant entity's employees, the sum of P50,000
plus legal interest thereon from the date of the filing of the complaint, with costs.

The defendant the Manila Railroad Company, answering the complaint, denies each and
every allegation thereof and, by way of special defense, alleges that the plaintiff Aleko E.
Lilius, with the cooperation of his wife and coplaintiff, negligently and recklessly drove
his car, and prays that it be absolved from the complaint.

The following facts have been proven at the trial, some without question and the others
by a preponderance of evidence, to wit:

The plaintiff Aleko E. Lilius has, for many years, been a well-known and reputed
journalist, author and photographer. At the time of the collision in question, he was a
staff correspondent in the Far East of the magazines The American Weekly of New York
and The Sphere of London.

Some of his works have been translated into various languages. He had others in
preparation when the accident occurred. According to him, his writings netted him a
monthly income of P1,500. He utilized the linguistic ability of his wife Sonja Maria Lilius,
who translated his articles and books into English, German, and Swedish. Furthermore,
she acted as his secretary.
 21

At about 7 o'clock on the morning of May 10, 1931, the plaintiff, his wife Sonja Maria
Lilius, and his 4-year old daughter Brita Marianne Lilius, left Manila in their Studebaker
car — driven by the said plaintiff Aleko E. Lilius — for the municipality of Pagsanjan,
Province of Laguna, on a sight-seeing trip. It was the first time that he made said trip
although he had already been to many places, driving his own car, in and outside the
Philippines. Where the road was clear and unobstructed, the plaintiff drove at the rate
of from 19 to 25 miles an hour. Prior thereto, he had made the trip as far as Calauan,
but never from Calauan to Pagsanjan, via Dayap. He was entirely unacquainted with the
conditions of the road at said points and had no knowledge of the existence of a railroad
crossing at Dayap. Before reaching the crossing in question, there was nothing to indicate
its existence and inasmuch as there were many houses, shrubs and trees along the road,
it was impossible to see an approaching train. At about seven or eight meters from the
crossing, coming from Calauan, the plaintiff saw an autotruck parked on the left side of
the road.

Several people, who seemed to have alighted from the said truck, were walking on the
opposite side. He slowed down to about 12 miles an hour and sounded his horn for the
people to get out of the way. With his attention thus occupied, he did not see the crossing
but he heard two short whistles. Immediately afterwards, he saw a huge black mass fling
itself upon him, which turned out to be locomotive No. 713 of the defendant company's
train coming eastward from Bay to Dayap station. The locomotive struck the plaintiff's
car right in the center. After dragging the said car a distance of about ten meters, the
locomotive threw it upon a siding. The force of the impact was so great that the plaintiff's
wife and daughter were thrown from the car and were picked up from the ground
unconscious and seriously hurt. In spite of the efforts of engineer Andres Basilio, he was
unable to stop the locomotive until after it had gone about seventy meters from the
crossing.

On the afternoon of the same day, the plaintiff's entered St. Paul's Hospital in the City
of Manila where they were treated by Dr. Waterous. The plaintiff Aleko E. Lilius
suffered from a fractured nose, a contusion above the left eye and a lacerated wound on
the right leg, in addition to multiple contusions and scratches on various parts of the
body. As a result of the accident, the said plaintiff was highly nervous and very easily
irritated, and for several months he had great difficulty in concentrating his attention on
any matter and could not write articles nor short stories for the newspapers and
magazines to which he was a contributor, thus losing for some time his only means of
livelihood.

The plaintiff Sonja Maria Lilius suffered from fractures of the pelvic bone, the tibia and
fibula of the right leg, below the knee, and received a large lacerated wound on the
forehead. She underwent two surgical operations on the left leg for the purpose of joining
the fractured bones but said operations notwithstanding, the leg in question still continues
deformed. In the opinion of Dr. Waterous, the deformity is permanent in character and
as a result the plaintiff will have some difficulty in walking. The lacerated wound, which
she received on her forehead, has left a disfiguring scar.

The child Brita Marianne Lilius received two lacerated wounds, one on the forehead
and the other on the left side of the face, in addition to fractures of both legs, above and
below the knees. Her condition was serious and, for several days, she was hovering
between life and death. Due to a timely and successful surgical operation, she survived
her wounds. The lacerations received by the child have left deep scars which will
permanently disfigure her face, and because of the fractures of both legs, although now
completely cured, she will be forced to walk with some difficulty and continuous extreme
care in order to keep her balance.
 22

Prior to the accident, there had been no notice nor sign of the existence of the crossing,
nor was there anybody to warn the public of approaching trains. The flagman or
switchman arrived after the collision, coming from the station with a red flag in one hand
and a green one in the other, both of which were wound on their respective sticks. The
said flagman and switchman had many times absented himself from his post at the
crossing upon the arrival of a train. The train left Bay station a little late and therefore
traveled at great speed.

Upon examination of the oral as well as of the documentary evidence which the parties
presented at the trial in support of their respective contentions, and after taking into
consideration all the circumstances of the case, this court is of the opinion that the
accident was due to negligence on the part of the defendant-appellant company, for not
having had on that occasion any semaphore at the crossing at Dayap, to serve as a warning
to passers-by of its existence in order that they might take the necessary precautions
before crossing the railroad; and, on the part of its employees — the flagman and
switchman, for not having remained at his post at the crossing in question to warn passers-
by of the approaching train; the stationmaster, for failure to send the said flagman and
switchman to his post on time; and the engineer, for not having taken the necessary
precautions to avoid an accident, in view of the absence of said flagman and switchman,
by slackening his speed and continuously ringing the bell and blowing the whistle before
arriving at the crossing. Although it is probable that the defendant-appellant entity
employed the diligence of a good father of a family in selecting its aforesaid employees,
however, it did not employ such diligence in supervising their work and the discharge of
their duties because, otherwise, it would have had a semaphore or sign at the crossing
and, on previous occasions as well as on the night in question, the flagman and switchman
would have always been at his post at the crossing upon the arrival of a train. The
diligence of a good father of a family, which the law requires in order to avoid damage,
is not confined to the careful and prudent selection of subordinates or employees but
includes inspection of their work and supervision of the discharge of their duties.

However, in order that a victim of an accident may recover indemnity for damages from
the person liable therefor, it is not enough that the latter has been guilty of negligence,
but it is also necessary that the said victim has not, through his own negligence,
contributed to the accident, inasmuch as nobody is a guarantor of his neighbor's personal
safety and property, but everybody should look after them, employing the care and
diligence that a good father of a family should apply to his own person, to the members
of his family and to his property, in order to avoid any damage. It appears that the herein
plaintiff-appellant Aleko E. Lilius took all precautions which his skill and the presence
of his wife and child suggested to him in order that his pleasure trip might be enjoyable
and have a happy ending, driving his car at a speed which prudence demanded according
to the circumstances and conditions of the road, slackening his speed in the face of an
obstacle and blowing his horn upon seeing persons on the road, in order to warn them
of his approach and request them to get out of the way, as he did when he came upon
the truck parked on the left hand side of the road seven or eight meters from the place
where the accident occurred, and upon the persons who appeared to have alighted from
the said truck. If he failed to stop, look and listen before going over the crossing, in spite
of the fact that he was driving at 12 miles per hour after having been free from obstacles,
it was because, his attention having been occupied in attempting to go ahead, he did not
see the crossing in question, nor anything, nor anybody indicating its existence, as he
knew nothing about it beforehand. The first and only warning, which he received of the
impending danger, was two short blows from the whistle of the locomotive immediately
preceding the collision and when the accident had already become inevitable.
 23

In view of the foregoing considerations, this court is of the opinion that the defendant
the Manila Railroad Company alone is liable for the accident by reason of its own
negligence and that of its employees, for not having employed the diligence of a good
father of a family in the supervision of the said employees in the discharge of their duties.

The next question to be decided refers to the sums of money fixed by the court a quo as
indemnities for damages which the defendant company should pay to the plaintiffs-
appellants.

With respect to the plaintiff-appellant Aleko E. Lilius, although this court believes his
claim of a net income of P1,500 a month to be somewhat exaggerated, however, the sum
of P5,000, adjudicated to him by the trial court as indemnity for damages, is reasonable.

As to the sum of P10,635 which the court awards to the plaintiffs by way of indemnity
for damages, the different items thereof representing doctor's fees, hospital and nursing
services, loss of personal effects and torn clothing, have duly been proven at the trial and
the sum in question is not excessive, taking into consideration the circumstances in which
the said expenses have been incurred.

Taking into consideration the fact that the plaintiff Sonja Maria Lilius, wife of the plaintiff
Aleko E. Lilius is — in the language of the court, which saw her at the trial — "young and
beautiful and the big scar, which she has on her forehead caused by the lacerated wound
received by her from the accident, disfigures her face and that the fracture of her left leg
has caused a permanent deformity which renders it very difficult for her to walk", and
taking into further consideration her social standing, neither is the sum of P10,000,
adjudicated to her by the said trial court by way of indemnity for patrimonial and moral
damages, excessive. In the case of Gutierrez vs. Gutierrez (56 Phil., 177), the right leg of
the plaintiff Narciso Gutierrez was fractured as a result of a collision between the autobus
in which he was riding and the defendant's car, which fractured required medical
attendance for a considerable period of time. On the day of the trial the fracture had not
yet completely healed but it might cause him permanent lameness. The trial court
sentenced the defendants to indemnify him in the sum of P10,000 which this court
reduced to P5,000, in spite of the fact that the said plaintiff therein was neither young nor
good-looking, nor had he suffered any facial deformity, nor did he have the social
standing that the herein plaintiff-appellant Sonja Maria Lilius enjoys.

As to the indemnity of P5,000 in favor of the child Brita Marianne Lilius, daughter of
Aleko E. Lilius and Sonja Maria Lilius, neither is the same excessive, taking into
consideration the fact that the lacerations received by her have left deep scars that
permanently disfigure her face and that the fractures of both her legs permanently render
it difficult for her to walk freely, continuous extreme care being necessary in order to
keep her balance in addition to the fact that all of this unfavorably and to a great extent
affect her matrimonial future.

With respect to the plaintiffs' appeal, the first question to be decided is that raised by
the plaintiff Aleko E. Lilius relative to the insufficiency of the sum of P5,000 which the
trial court adjudicated to him by way of indemnity for damages consisting in the loss of
his income as journalist and author as a result of his illness. This question has impliedly
been decided in the negative when the defendant-appellant entity's petition for the
reduction of said indemnity was denied, declaring it to be reasonable.

As to the amount of P10,000 claimed by the plaintiff Aleko E. Lilius as damages for the
loss of his wife's services in his business as journalist and author, which services consisted
in going over his writings, translating them into English, German and Swedish, and acting
as his secretary, in addition to the fact that such services formed part of the work whereby
 24

he realized a net monthly income of P1,500, there is no sufficient evidence of the true
value of said services nor to the effect that he needed them during her illness and had to
employ a translator to act in her stead.

The plaintiff Aleko E. Lilius also seeks to recover the sum of P2,500 for the loss of what
is called Anglo-Saxon common law "consortium" of his wife, that is, "her services, society
and conjugal companionship", as a result of personal injuries which she had received
from the accident now under consideration.

In the case of Goitia vs. Campos Rueda (35 Phil., 252, 255, 256), this court, interpreting
the provisions of the Civil Marriage Law of 1870, in force in these Islands with reference
to the mutual rights and obligations of the spouses, contained in articles 44-48 thereof,
said as follows:

The above quoted provisions of the Law of Civil Marriage and the Civil Code fix the
duties and obligations of the spouses. The spouses must be faithful to, assist, and support
each other. The husband must live with and protect his wife. The wife must obey and
live with her husband and follow him when he changes his domicile or residence, except
when he removes to a foreign country. . . .

Therefore, under the law and the doctrine of this court, one of the husband's rights is to
count on his wife's assistance. This assistance comprises the management of the home
and the performance of household duties, including the care and education of the
children and attention to the husband upon whom primarily devolves the duty of
supporting the family of which he is the head. When the wife's mission was circumscribed
to the home, it was not difficult to assume, by virtue of the marriage alone, that she
performed all the said tasks and her physical incapacity always redounded to the
husband's prejudice inasmuch as it deprived him of her assistance. However, nowadays
when women, in their desire to be more useful to society and to the nation, are
demanding greater civil rights and are aspiring to become man's equal in all the activities
of life, commercial and industrial, professional and political, many of them spending
their time outside the home, engaged in their businesses, industry, profession and within
a short time, in politics, and entrusting the care of their home to a housekeeper, and their
children, if not to a nursemaid, to public or private institutions which take charge of
young children while their mothers are at work, marriage has ceased to create the
presumption that a woman complies with the duties to her husband and children, which
the law imposes upon her, and he who seeks to collect indemnity for damages resulting
from deprivation of her domestic services must prove such services. In the case under
consideration, apart from the services of his wife Sonja Maria Lilius as translator and
secretary, the value of which has not been proven, the plaintiff Aleko E. Lilius has not
presented any evidence showing the existence of domestic services and their nature,
rendered by her prior to the accident, in order that it may serve as a basis in estimating
their value.

Furthermore, inasmuch as a wife's domestic assistance and conjugal companionship are

purely personal and voluntary acts which neither of the spouses may be compelled to
render (Arroyo vs. Vazquez de Arroyo, 42 Phil., 54), it is necessary for the party claiming
indemnity for the loss of such services to prove that the person obliged to render them
had done so before he was injured and that he would be willing to continue rendering
them had he not been prevented from so doing.

In view of the foregoing considerations this court is of the opinion and so holds: (1) That
a railroad company which has not installed a semaphore at a crossing an does not see to
it that its flagman and switchman faithfully complies with his duty of remaining at the
crossing when a train arrives, is guilty of negligence and is civilly liable for damages
 25

suffered by a motorist and his family who cross its line without negligence on their part;
(2) that an indemnity of P10,000 for a permanent deformity on the face and on the left
leg, suffered by a young and beautiful society woman, is not excessive; (3) that an
indemnity of P5,000 for a permanent deformity on the face and legs of a four-year old
girl belonging to a well-to-do family, is not excessive; and (4) that in order that a husband
may recover damages for deprivation of his wife's assistance during her illness from an
accident, it is necessary for him to prove the existence of such assistance and his wife's
willingness to continue rendering it had she not been prevented from so doing by her
illness.

The plaintiffs-appellants are entitled to interest of 6 percent per annum on the amount
of the indemnities adjudicated to them, from the date of the appealed judgment until this
judgment becomes final, in accordance with the provisions of section 510 of Act No.
190.

WHEREFORE, not finding any error in the judgment appealed from, it is hereby
affirmed in toto, with the sole modification that interest of 6 per cent per annum from
the date of the appealed judgment until this judgment becomes final will be added to the
indemnities granted, with the costs of both instances against the appellant.

SO ORDERED.

Malcolm, Hull, Imperial, and Goddard, JJ., concur.

 26

G.R. No. 157917

August 29, 2012

SPOUSES TEODORO and NANETTE PERENA, Petitioners, vs. SPOUSES

TERESITA PHILIPPINE NICOLAS and L. ZARATE, NATIONAL RAILWAYS,
and the COURT OF APPEALS Respondents.

BERSAMIN, J.:

The operator of a. school bus service is a common carrier in the eyes of the law. He is
bound to observe extraordinary diligence in the conduct of his business. He is presumed
to be negligent when death occurs to a passenger. His liability may include indemnity for
loss of earning capacity even if the deceased passenger may only be an unemployed high
school student at the time of the accident.

The Case

By petition for review on certiorari, Spouses Teodoro and Nanette Perefia (Perefias)
appeal the adverse decision promulgated on November 13, 2002, by which the Court of
Appeals (CA) affirmed with modification the decision rendered on December 3, 1999
by the Regional Trial Court (RTC), Branch 260, in Parañaque City that had decreed
them jointly and severally liable with Philippine National Railways (PNR), their co-
defendant, to Spouses Nicolas and Teresita Zarate (Zarates) for the death of their 15-
year old son, Aaron John L. Zarate (Aaron), then a high school student of Don Bosco
Technical Institute (Don Bosco).

Antecedents

The Pereñas were engaged in the business of transporting students from their respective
residences in Parañaque City to Don Bosco in Pasong Tamo, Makati City, and back. In
their business, the Pereñas used a KIA Ceres Van (van) with Plate No. PYA 896, which
had the capacity to transport 14 students at a time, two of whom would be seated in the
front beside the driver, and the others in the rear, with six students on either side. They
employed Clemente Alfaro (Alfaro) as driver of the van.

In June 1996, the Zarates contracted the Pereñas to transport Aaron to and from Don
Bosco. On August 22, 1996, as on previous school days, the van picked Aaron up around
6:00 a.m. from the Zarates’ residence. Aaron took his place on the left side of the van
near the rear door. The van, with its air-conditioning unit turned on and the stereo
playing loudly, ultimately carried all the 14 student riders on their way to Don Bosco.
Considering that the students were due at Don Bosco by 7:15 a.m., and that they were
already running late because of the heavy vehicular traffic on the South Superhighway,
Alfaro took the van to an alternate route at about 6:45 a.m. by traversing the narrow path
underneath the Magallanes Interchange that was then commonly used by Makati-bound
vehicles as a short cut into Makati. At the time, the narrow path was marked by piles of
construction materials and parked passenger jeepneys, and the railroad crossing in the
narrow path had no railroad warning signs, or watchmen, or other responsible persons
manning the crossing. In fact, the bamboo barandilla was up, leaving the railroad crossing
open to traversing motorists.

At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302
(train), operated by Jhonny Alano (Alano), was in the vicinity of the Magallanes
Interchange travelling northbound. As the train neared the railroad crossing, Alfaro
drove the van eastward across the railroad tracks, closely tailing a large passenger bus.
His view of the oncoming train was blocked because he overtook the passenger bus on
 27

its left side. The train blew its horn to warn motorists of its approach. When the train
was about 50 meters away from the passenger bus and the van, Alano applied the
ordinary brakes of the train. He applied the emergency brakes only when he saw that a
collision was imminent. The passenger bus successfully crossed the railroad tracks, but
the van driven by Alfaro did not. The train hit the rear end of the van, and the impact
threw nine of the 12 students in the rear, including Aaron, out of the van. Aaron landed
in the path of the train, which dragged his body and severed his head, instantaneously
killing him. Alano fled the scene on board the train, and did not wait for the police
investigator to arrive.

Devastated by the early and unexpected death of Aaron, the Zarates commenced this
action for damages against Alfaro, the Pereñas, PNR and Alano. The Pereñas and PNR
filed their respective answers, with cross-claims against each other, but Alfaro could not
be served with summons.

At the pre-trial, the parties stipulated on the facts and issues, viz:

A. FACTS:

(1) That spouses Zarate were the legitimate parents of Aaron John L. Zarate;
(2) Spouses Zarate engaged the services of spouses Pereña for the adequate and safe
transportation carriage of the former spouses' son from their residence in Parañaque to
his school at the Don Bosco Technical Institute in Makati City;
(3) During the effectivity of the contract of carriage and in the implementation thereof,
Aaron, the minor son of spouses Zarate died in connection with a vehicular/train
collision which occurred while Aaron was riding the contracted carrier Kia Ceres van of
spouses Pereña, then driven and operated by the latter's employee/authorized driver
Clemente Alfaro, which van collided with the train of PNR, at around 6:45 A.M. of
August 22, 1996, within the vicinity of the Magallanes Interchange in Makati City, Metro
Manila, Philippines;
(4) At the time of the vehicular/train collision, the subject site of the vehicular/train
collision was a railroad crossing used by motorists for crossing the railroad tracks;
(5) During the said time of the vehicular/train collision, there were no appropriate and
safety warning signs and railings at the site commonly used for railroad crossing;
(6) At the material time, countless number of Makati bound public utility and private
vehicles used on a daily basis the site of the collision as an alternative route and short-cut
to Makati;
(7) The train driver or operator left the scene of the incident on board the commuter
train involved without waiting for the police investigator;
(8) The site commonly used for railroad crossing by motorists was not in fact intended
by the railroad operator for railroad crossing at the time of the vehicular collision;
(9) PNR received the demand letter of the spouses Zarate;
(10) PNR refused to acknowledge any liability for the vehicular/train collision
(11) The eventual closure of the railroad crossing alleged by PNR was an internal
arrangement between the former and its project contractor; and
(12) The site of the vehicular/train collision was within the vicinity or less than 100 meters
from the Magallanes station of PNR.

B. ISSUES

(1) Whether or not defendant-driver of the van is, in the performance of his functions,
liable for negligence constituting the proximate cause of the vehicular collision, which
resulted in the death of plaintiff spouses' son;
(2) Whether or not the defendant spouses Pereña being the employer of defendant
Alfaro are liable for any negligence which may be attributed to defendant Alfaro;
 28

(3) Whether or not defendant Philippine National Railways being the operator of the
railroad system is liable for negligence in failing to provide adequate safety warning signs
and railings in the area commonly used by motorists for railroad crossings, constituting
the proximate cause of the vehicular collision which resulted in the death of the plaintiff
spouses' son;
(4) Whether or not defendant spouses Pereña are liable for breach of the contract of
carriage with plaintiff-spouses in failing to provide adequate and safe transportation for
the latter's son;
(5) Whether or not defendants spouses are liable for actual, moral damages, exemplary
damages, and attorney's fees;

(6) Whether or not defendants spouses Teodorico and Nanette Pereña observed the
diligence of employers and school bus operators;
(7) Whether or not defendant-spouses are civilly liable for the accidental death of Aaron
John Zarate;
(8) Whether or not defendant PNR was grossly negligent in operating the commuter train
involved in the accident, in allowing or tolerating the motoring public to cross, and its
failure to install safety devices or equipment at the site of the accident for the protection
of the public;
(9) Whether or not defendant PNR should be made to reimburse defendant spouses for
any and whatever amount the latter may be held answerable or which they may be
ordered to pay in favor of plaintiffs by reason of the action;
(10) Whether or not defendant PNR should pay plaintiffs directly and fully on the
amounts claimed by the latter in their Complaint by reason of its gross negligence;
(11) Whether or not defendant PNR is liable to defendants spouses for actual, moral
and exemplary damages and attorney's fees.

The Zarates’ claim against the Pereñas was upon breach of the contract of carriage for
the safe transport of Aaron; but that against PNR was based on quasi-delict under Article
2176, Civil Code.

In their defense, the Pereñas adduced evidence to show that they had exercised the
diligence of a good father of the family in the selection and supervision of Alfaro, by
making sure that Alfaro had been issued a driver’s license and had not been involved in
any vehicular accident prior to the collision; that their own son had taken the van daily;
and that Teodoro Pereña had sometimes accompanied Alfaro in the van’s trips
transporting the students to school.

For its part, PNR tended to show that the proximate cause of the collision had been the
reckless crossing of the van whose driver had not first stopped, looked and listened; and
that the narrow path traversed by the van had not been intended to be a railroad crossing
for motorists.

Ruling of the RTC

On December 3, 1999, the RTC rendered its decision, disposing:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the

plaintiff and against the defendants ordering them to jointly and severally pay the
plaintiffs as follows:

(1) (for) the death of Aaron- Php50,000.00;

(2) Actual damages in the amount of Php100,000.00;
(3) For the loss of earning capacity- Php2,109,071.00;
 29

(4) Moral damages in the amount of Php4,000,000.00;

(5) Exemplary damages in the amount of Php1,000,000.00;
(6) Attorney’s fees in the amount of Php200,000.00; and
(7) Cost of suit.

SO ORDERED.

On June 29, 2000, the RTC denied the Pereñas’ motion for reconsideration, reiterating
that the cooperative gross negligence of the Pereñas and PNR had caused the collision
that led to the death of Aaron; and that the damages awarded to the Zarates were not
excessive, but based on the established circumstances.

The CA’s Ruling

Both the Pereñas and PNR appealed (C.A.-G.R. CV No. 68916).

PNR assigned the following errors, to wit:

The Court a quo erred in:

1. In finding the defendant-appellant Philippine National Railways jointly and severally

liable together with defendant-appellants spouses Teodorico and Nanette Pereña and
defendant appellant Clemente Alfaro to pay plaintiffs-appellees for the death of Aaron
Zarate and damages.
2. In giving full faith and merit to the oral testimonies of plaintiffs-appellees witnesses
despite overwhelming documentary evidence on record, supporting the case of
defendants-appellants Philippine National Railways.

The Pereñas ascribed the following errors to the RTC, namely:

The trial court erred in finding defendants-appellants jointly and severally liable for
actual, moral and exemplary damages and attorney’s fees with the other defendants.
The trial court erred in dismissing the cross-claim of the appellants Pereñas against the
Philippine National Railways and in not holding the latter and its train driver primarily
responsible for the incident.

The trial court erred in awarding excessive damages and attorney’s fees.

The trial court erred in awarding damages in the form of deceased’s loss of earning
capacity in the absence of sufficient basis for such an award.

On November 13, 2002, the CA promulgated its decision, affirming the findings of the
RTC, but limited the moral damages to ₱ 2,500,000.00; and deleted the attorney’s fees
because the RTC did not state the factual and legal bases, to wit:

WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court,
Branch 260 of Parañaque City is AFFIRMED with the modification that the award of
Actual Damages is reduced to ₱ 59,502.76; Moral Damages is reduced to ₱
2,500,000.00; and the award for Attorney’s Fees is Deleted.

SO ORDERED.

The CA upheld the award for the loss of Aaron’s earning capacity, taking cognizance of
the ruling in Cariaga v. Laguna Tayabas Bus Company and Manila Railroad Company,
 30

7 wherein the Court gave the heirs of Cariaga a sum representing the loss of the
deceased’s earning capacity despite Cariaga being only a medical student at the time of
the fatal incident. Applying the formula adopted in the American Expectancy Table of
Mortality:–

2/3 x (80 - age at the time of death) = life expectancy

the CA determined the life expectancy of Aaron to be 39.3 years upon reckoning his life
expectancy from age of 21 (the age when he would have graduated from college and
started working for his own livelihood) instead of 15 years (his age when he died).
Considering that the nature of his work and his salary at the time of Aaron’s death were
unknown, it used the prevailing minimum wage of ₱ 280.00/day to compute Aaron’s
gross annual salary to be ₱ 110,716.65, inclusive of the thirteenth month pay. Multiplying
this annual salary by Aaron’s life expectancy of 39.3 years, his gross income would
aggregate to ₱ 4,351,164.30, from which his estimated expenses in the sum of ₱
2,189,664.30 was deducted to finally arrive at P 2,161,500.00 as net income. Due to
Aaron’s computed net income turning out to be higher than the amount claimed by the
Zarates, only ₱ 2,109,071.00, the amount expressly prayed for by them, was granted.

On April 4, 2003, the CA denied the Pereñas’ motion for reconsideration.

Issues

In this appeal, the Pereñas list the following as the errors committed by the CA, to wit:

I. The lower court erred when it upheld the trial court’s decision holding the petitioners
jointly and severally liable to pay damages with Philippine National Railways and
dismissing their cross-claim against the latter.
II. The lower court erred in affirming the trial court’s decision awarding damages for loss
of earning capacity of a minor who was only a high school student at the time of his death
in the absence of sufficient basis for such an award.
III. The lower court erred in not reducing further the amount of damages awarded,
assuming petitioners are liable at all.

Ruling

The petition has no merit.

1. Were the Pereñas and PNR jointly and severally liable for damages?

The Zarates brought this action for recovery of damages against both the Pereñas and
the PNR, basing their claim against the Pereñas on breach of contract of carriage and
against the PNR on quasi-delict.

The RTC found the Pereñas and the PNR negligent. The CA affirmed the findings.

We concur with the CA.

To start with, the Pereñas’ defense was that they exercised the diligence of a good father
of the family in the selection and supervision of Alfaro, the van driver, by seeing to it that
Alfaro had a driver’s license and that he had not been involved in any vehicular accident
prior to the fatal collision with the train; that they even had their own son travel to and
from school on a daily basis; and that Teodoro Pereña himself sometimes accompanied
Alfaro in transporting the passengers to and from school. The RTC gave scant
 31

consideration to such defense by regarding such defense as inappropriate in an action

for breach of contract of carriage.

We find no adequate cause to differ from the conclusions of the lower courts that the
Pereñas operated as a common carrier; and that their standard of care was extraordinary
diligence, not the ordinary diligence of a good father of a family.

Although in this jurisdiction the operator of a school bus service has been usually
regarded as a private carrier, 9 primarily because he only caters to some specific or
privileged individuals, and his operation is neither open to the indefinite public nor for
public use, the exact nature of the operation of a school bus service has not been finally
settled. This is the occasion to lay the matter to rest.

A carrier is a person or corporation who undertakes to transport or convey goods or

persons from one place to another, gratuitously or for hire. The carrier is classified either
as a private/special carrier or as a common/public
carrier. A private carrier is one who, without making the activity a vocation, or without
holding himself or itself out to the public as ready to act for all who may desire his or its
services, undertakes, by special agreement in a particular instance only, to transport
goods or persons from one place to another either gratuitously or for hire. The
provisions on ordinary contracts of the Civil Code govern the contract of private
carriage.The diligence required of a private carrier is only ordinary, that is, the diligence
of a good father of the family. In contrast, a common carrier is a person, corporation,
firm or association engaged in the business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation, offering such services to the
public. Contracts of common carriage are governed by the provisions on common
carriers of the Civil Code, the Public Service Act, and other special laws relating to
transportation. A common carrier is required to observe extraordinary diligence, and is
presumed to be at fault or to have acted negligently in case of the loss of the effects of
passengers, or the death or injuries to passengers.

In relation to common carriers, the Court defined public use in the following terms in
United States v. Tan Piaco, viz:

"Public use" is the same as "use by the public". The essential feature of the public use is
not confined to privileged individuals, but is open to the indefinite public. It is this
indefinite or unrestricted quality that gives it its public character. In determining whether
a use is public, we must look not only to the character of the business to be done, but
also to the proposed mode of doing it. If the use is merely optional with the owners, or
the public benefit is merely incidental, it is not a public use, authorizing the exercise of
the jurisdiction of the public utility commission. There must be, in general, a right which
the law compels the owner to give to the general public. It is not enough that the general
prosperity of the public is promoted. Public use is not synonymous with public interest.
The true criterion by which to judge the character of the use is whether the public may
enjoy it by right or only by permission.

In De Guzman v. Court of Appeals, the Court noted that Article 1732 of the Civil Code
avoided any distinction between a person or an enterprise offering transportation on a
regular or an isolated basis; and has not distinguished a carrier offering his services to the
general public, that is, the general community or population, from one offering his
services only to a narrow segment of the general population.

Nonetheless, the concept of a common carrier embodied in Article 1732 of the Civil
Code coincides neatly with the notion of public service under the Public Service Act,
 32

which supplements the law on common carriers found in the Civil Code. Public service,
according to Section 13, paragraph (b) of the Public Service Act, includes:

x x x every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientèle, whether
permanent or occasional, and done for the general business purposes, any common
carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight
or passenger, or both, with or without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat, or steamship line,
pontines, ferries and water craft, engaged in the transportation of passengers or freight or
both, shipyard, marine repair shop, ice-refrigeration plant, canal, irrigation system, gas,
electric light, heat and power, water supply and power petroleum, sewerage system, wire
or wireless communications systems, wire or wireless broadcasting stations and other
similar public services. x x x.

Given the breadth of the aforequoted characterization of a common carrier, the Court
has considered as common carriers pipeline operators, custom brokers and
warehousemen, and barge operators even if they had limited clientèle.

As all the foregoing indicate, the true test for a common carrier is not the quantity or
extent of the business actually transacted, or the number and character of the
conveyances used in the activity, but whether the undertaking is a part of the activity
engaged in by the carrier that he has held out to the general public as his business or
occupation. If the undertaking is a single transaction, not a part of the general business
or occupation engaged in, as advertised and held out to the general public, the individual
or the entity rendering such service is a private, not a common, carrier. The question
must be determined by the character of the business actually carried on by the carrier,
not by any secret intention or mental reservation it may entertain or assert when charged
with the duties and obligations that the law imposes.

Applying these considerations to the case before us, there is no question that the Pereñas
as the operators of a school bus service were: (a) engaged in transporting passengers
generally as a business, not just as a casual occupation; (b) undertaking to carry passengers
over established roads by the method by which the business was conducted; and (c)
transporting students for a fee. Despite catering to a limited clientèle, the Pereñas
operated as a common carrier because they held themselves out as a ready transportation
indiscriminately to the students of a particular school living within or near where they
operated the service and for a fee.

The common carrier’s standard of care and vigilance as to the safety of the passengers is
defined by law. Given the nature of the business and for reasons of public policy, the
common carrier is 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." Article 1755 of the Civil Code specifies that the common
carrier should "carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with a due regard for all the
circumstances." To successfully fend off liability in an action upon the death or injury to
a passenger, the common carrier must prove his or its observance of that extraordinary
diligence; otherwise, the legal presumption that he or it was at fault or acted negligently
would stand. No device, whether by stipulation, posting of notices, statements on tickets,
or otherwise, may dispense with or lessen the responsibility of the common carrier as
defined under Article 1755 of the Civil Code.

And, secondly, the Pereñas have not presented any compelling defense or reason by
which the Court might now reverse the CA’s findings on their liability. On the contrary,
 33

an examination of the records shows that the evidence fully supported the findings of the
CA.

As earlier stated, the Pereñas, acting as a common carrier, were already presumed to be
negligent at the time of the accident because death had occurred to their passenger. The
presumption of negligence, being a presumption of law, laid the burden of evidence on
their shoulders to establish that they had not been negligent. It was the law no less that
required them to prove their observance of extraordinary diligence in seeing to the safe
and secure carriage of the passengers to their destination. Until they did so in a credible
manner, they stood to be held legally responsible for the death of Aaron and thus to be
held liable for all the natural consequences of such death.

There is no question that the Pereñas did not overturn the presumption of their
negligence by credible evidence. Their defense of having observed the diligence of a
good father of a family in the selection and supervision of their driver was not legally
sufficient. According to Article 1759 of the Civil Code, their liability as a common carrier
did not cease upon proof that they exercised all the diligence of a good father of a family
in the selection and supervision of their employee. This was the reason why the RTC
treated this defense of the Pereñas as inappropriate in this action for breach of contract
of carriage.

The Pereñas were liable for the death of Aaron despite the fact that their driver might
have acted beyond the scope of his authority or even in violation of the orders of the
common carrier. In this connection, the records showed their driver’s actual negligence.
There was a showing, to begin with, that their driver traversed the railroad tracks at a
point at which the PNR did not permit motorists going into the Makati area to cross the
railroad tracks. Although that point had been used by motorists as a shortcut into the
Makati area, that fact alone did not excuse their driver into taking that route. On the
other hand, with his familiarity with that shortcut, their driver was fully aware of the risks
to his passengers but he still disregarded the risks. Compounding his lack of care was that
loud music was playing inside the air-conditioned van at the time of the accident. The
loudness most probably reduced his ability to hear the warning horns of the oncoming
train to allow him to correctly appreciate the lurking dangers on the railroad tracks. Also,
he sought to overtake a passenger bus on the left side as both vehicles traversed the
railroad tracks. In so doing, he lost his view of the train that was then coming from the
opposite side of the passenger bus, leading him to miscalculate his chances of beating the
bus in their race, and of getting clear of the train. As a result, the bus avoided a collision
with the train but the van got slammed at its rear, causing the fatality. Lastly, he did not
slow down or go to a full stop before traversing the railroad tracks despite knowing that
his slackening of speed and going to a full stop were in observance of the right of way at
railroad tracks as defined by the traffic laws and regulations. He thereby violated a specific
traffic regulation on right of way, by virtue of which he was immediately presumed to be
negligent

The omissions of care on the part of the van driver constituted negligence, which,
according to Layugan v. Intermediate Appellate Court, is "the omission to do something
which a reasonable man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a prudent and
reasonable man would not do, or as Judge Cooley defines it, ‘(t)he 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 test by which to determine the existence of negligence in a particular case has been
aptly stated in the leading case of Picart v. Smith, thuswise:
 34

The test by which to determine the existence of negligence in a particular case may be
stated as follows: Did the defendant in doing the alleged negligent act use that reasonable
care and caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference
to the personal judgment of the actor in the situation before him. The law considers what
would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given
situation must of course be always determined in the light of human experience and in
view of the facts involved in the particular case. Abstract speculation cannot here be of
much value but this much can be profitably said: Reasonable men govern their conduct
by the circumstances which are before them or known to them. They are not, and are
not supposed to be, omniscient of the future. Hence they can be expected to take care
only when there is something before them to suggest or warn of danger. Could a prudent
man, in the case under consideration, foresee harm as a result of the course actually
pursued? If so, it was the duty of the actor to take precautions to guard against that harm.
Reasonable foresight of harm, followed by the ignoring of the suggestion born of this
prevision, is always necessary before negligence can be held to exist. Stated in these
terms, the proper criterion for determining the existence of negligence in a given case is
this: Conduct is said to be negligent when a prudent man in the position of the tortfeasor
would have foreseen that an effect harmful to another was sufficiently probable to warrant
his foregoing the conduct or guarding against its consequences. (Emphasis supplied)

Pursuant to the Picart v. Smith test of negligence, the Pereñas’ driver was entirely
negligent when he traversed the railroad tracks at a point not allowed for a motorist’s
crossing despite being fully aware of the grave harm to be thereby caused to his
passengers; and when he disregarded the foresight of harm to his passengers by
overtaking the bus on the left side as to leave himself blind to the approach of the
oncoming train that he knew was on the opposite side of the bus.

Unrelenting, the Pereñas cite Phil. National Railways v. Intermediate Appellate Court,35
where the Court held the PNR solely liable for the damages caused to a passenger bus
and its passengers when its train hit the rear end of the bus that was then traversing the
railroad crossing. But the circumstances of that case and this one share no similarities.
In Philippine National Railways v. Intermediate Appellate Court, no evidence of
contributory negligence was adduced against the owner of the bus. Instead, it was the
owner of the bus who proved the exercise of extraordinary diligence by preponderant
evidence. Also, the records are replete with the showing of negligence on the part of both
the Pereñas and the PNR. Another distinction is that the passenger bus in Philippine
National Railways v. Intermediate Appellate Court was traversing the dedicated railroad
crossing when it was hit by the train, but the Pereñas’ school van traversed the railroad
tracks at a point not intended for that purpose.

At any rate, the lower courts correctly held both the Pereñas and the PNR "jointly and
severally" liable for damages arising from the death of Aaron. They had been impleaded
in the same complaint as defendants against whom the Zarates had the right to relief,
whether jointly, severally, or in the alternative, in respect to or arising out of the accident,
and questions of fact and of law were common as to the Zarates.36 Although the basis
of the right to relief of the Zarates (i.e., breach of contract of carriage) against the Pereñas
was distinct from the basis of the Zarates’ right to relief against the PNR (i.e., quasi-delict
under Article 2176, Civil Code), they nonetheless could be held jointly and severally
 35

liable by virtue of their respective negligence combining to cause the death of Aaron. As
to the PNR, the RTC rightly found the PNR also guilty of negligence despite the school
van of the Pereñas traversing the railroad tracks at a point not dedicated by the PNR as
a railroad crossing for pedestrians and motorists, because the PNR did not ensure the
safety of others through the placing of crossbars, signal lights, warning signs, and other
permanent safety barriers to prevent vehicles or pedestrians from crossing there. The
RTC observed that the fact that a crossing guard had been assigned to man that point
from 7 a.m. to 5 p.m. was a good indicium that the PNR was aware of the risks to others
as well as the need to control the vehicular and other traffic there. Verily, the Pereñas
and the PNR were joint tortfeasors.

2. Was the indemnity for loss of Aaron’s earning capacity proper?

The RTC awarded indemnity for loss of Aaron’s earning capacity. Although agreeing
with the RTC on the liability, the CA modified the amount. Both lower courts took into
consideration that Aaron, while only a high school student, had been enrolled in one of
the reputable schools in the Philippines and that he had been a normal and able-bodied
child prior to his death. The basis for the computation of Aaron’s earning capacity was
not what he would have become or what he would have wanted to be if not for his
untimely death, but the minimum wage in effect at the time of his death. Moreover, the
RTC’s computation of Aaron’s life expectancy rate was not reckoned from his age of 15
years at the time of his death, but on 21 years, his age when he would have graduated
from college.

We find the considerations taken into account by the lower courts to be reasonable and
fully warranted.

Yet, the Pereñas submit that the indemnity for loss of earning capacity was speculative
and unfounded.1âwphi1 They cited People v. Teehankee, Jr., where the Court deleted
the indemnity for victim Jussi Leino’s loss of earning capacity as a pilot for being
speculative due to his having graduated from high school at the International School in
Manila only two years before the shooting, and was at the time of the shooting only
enrolled in the first semester at the Manila Aero Club to pursue his ambition to become
a professional pilot. That meant, according to the Court, that he was for all intents and
purposes only a high school graduate.

We reject the Pereñas’ submission.

First of all, a careful perusal of the Teehankee, Jr. case shows that the situation there of
Jussi Leino was not akin to that of Aaron here. The CA and the RTC were not
speculating that Aaron would be some highly-paid professional, like a pilot (or, for that
matter, an engineer, a physician, or a lawyer). Instead, the computation of Aaron’s
earning capacity was premised on him being a lowly minimum wage earner despite his
being then enrolled at a prestigious high school like Don Bosco in Makati, a fact that
would have likely ensured his success in his later years in life and at work.

And, secondly, the fact that Aaron was then without a history of earnings should not be
taken against his parents and in favor of the defendants whose negligence not only cost
Aaron his life and his right to work and earn money, but also deprived his parents of
their right to his presence and his services as well. Our law itself states that the loss of the
earning capacity of the deceased shall be the liability of the guilty party in favor of the
heirs of the deceased, and shall in every case be assessed and awarded by the court "unless
the deceased on account of permanent physical disability not caused by the defendant,
had no earning capacity at the time of his death." Accordingly, we emphatically hold in
favor of the indemnification for Aaron’s loss of earning capacity despite him having been
 36

unemployed, because compensation of this nature is awarded not for loss of time or
earnings but for loss of the deceased’s power or ability to earn money.

This favorable treatment of the Zarates’ claim is not unprecedented. In Cariaga v. Laguna
Tayabas Bus Company and Manila Railroad Company, fourth-year medical student
Edgardo Carriaga’s earning capacity, although he
survived the accident but his injuries rendered him permanently incapacitated, was
computed to be that of the physician that he dreamed to become. The Court considered
his scholastic record sufficient to justify the assumption that he could have finished the
medical course and would have passed the medical board examinations in due time, and
that he could have possibly earned a modest income as a medical practitioner. Also, in
People v. Sanchez, the Court opined that murder and rape victim Eileen Sarmienta and
murder victim Allan Gomez could have easily landed good-paying jobs had they
graduated in due time, and that their jobs would probably pay them high monthly salaries
from ₱ 10,000.00 to ₱ 15,000.00 upon their graduation. Their earning capacities were
computed at rates higher than the minimum wage at the time of their deaths due to their
being already senior agriculture students of the University of the Philippines in Los
Baños, the country’s leading educational institution in agriculture.

3. Were the amounts of damages excessive?

The Pereñas plead for the reduction of the moral and exemplary damages awarded to
the Zarates in the respective amounts of ₱ 2,500,000.00 and ₱ 1,000,000.00 on the
ground that such amounts were excessive.

The plea is unwarranted.

The moral damages of ₱ 2,500,000.00 were really just and reasonable under the
established circumstances of this case because they were intended by the law to assuage
the Zarates’ deep mental anguish over their son’s unexpected and violent death, and their
moral shock over the senseless accident. That amount would not be too much,
considering that it would help the Zarates obtain the means, diversions or amusements
that would alleviate their suffering for the loss of their child. At any rate, reducing the
amount as excessive might prove to be an injustice, given the passage of a long time from
when their mental anguish was inflicted on them on August 22, 1996.

Anent the ₱ 1,000,000.00 allowed as exemplary damages, we should not reduce the
amount if only to render effective the desired example for the public good. As a common
carrier, the Pereñas needed to be vigorously reminded to observe their duty to exercise
extraordinary diligence to prevent a similarly senseless accident from happening again.
Only by an award of exemplary damages in that amount would suffice to instill in them
and others similarly situated like them the ever-present need for greater and constant
vigilance in the conduct of a business imbued with public interest.

WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision
promulgated on November 13, 2002; and ORDER the petitioners to pay the costs of
suit.

SO ORDERED.
 37

G.R. No. L-21291

March 28, 1969

PRECIOLITA V. CORLISS, plaintiff-appellant, vs. THE MANILA RAILROAD

CO., defendant-appellant.

Moises C. Nicomedes for plaintiff-appellant.

The Government Corporate Counsel for defendant-appellee.

FERNANDO, J.:

Youth, the threshold of life, is invariably accompanied by that euphoric sense of well-
being, and with reason. The future, bright with promise, looms ahead. One's powers are
still to be tested, but one feels ready for whatever challenge may come his way. There is
that heady atmosphere of self-confidence, at times carried to excess. The temptation to
take risks is there, ever so often, difficult, if not impossible, to resist. There could be then
a lessening of prudence and foresight, qualities usually associated with age. For death
seems so remote and contingent an event. Such is not always the case though, and a slip
may be attended with consequences at times unfortunate, even fatal.

Some such thought apparently was in the mind of the lower court when it dismissed the
complaint for recovery of damages filed by plaintiff-appellant, Preciolita V. Corliss whose
husband, the late Ralph W. Corliss, was, at the tender age of twenty-one, the victim of a
grim tragedy, when the jeep he was driving collided with a locomotive of defendant-
appellee Manila Railroad Company, close to midnight on the evening of Feb 21, 1957,
at the railroad crossing in Balibago, Angeles, Pampanga, in front of the Clark Air Force
Base. In the decision appealed from, the lower court, after summarizing the evidence,
concluded that the deceased "in his eagerness to beat, so to speak, the oncoming
locomotive, took the risk and attempted to reach the other side, but unfortunately he
became the victim of his own miscalculation."

The negligence imputed to defendant-appellee was thus ruled out by the lower court,
satisfactory proof to that effect, in its opinion, being lacking. Hence this appeal direct to
us, the amount sought in the concept of damages reaching the sum of P282,065.40. An
examination of the evidence of record fails to yield a basis for a reversal of the decision
appealed from. We affirm.

According to the decision appealed from, there is no dispute as to the following: "In
December 1956, plaintiff, 19 years of age, married Ralph W. Corliss Jr., 21 years of age,
...; that Corliss Jr. was an air police of the Clark Air Force Base; that at the time of the
accident, he was driving the fatal jeep; that he was then returning in said jeep, together
with a P.C. soldier, to the Base; and that Corliss Jr. died of serious burns at the Base
Hospital the next day, while the soldier sustained serious physical injuries and burns."

Then came a summary of the testimony of two of the witnesses for plaintiff-appellant.
Thus: "Ronald J. Ennis, a witness of the plaintiff, substantially declared in his deposition,
..., that at the time of the accident, he also awaiting transportation at the entrance of Clark
Field, which was about 40 to 50 yards away from the tracks and that while there he saw
the jeep coming towards the Base. He said that said jeep slowed down before reaching
the crossing, that it made a brief stop but that it did not stop — dead stop. Elaborating,
he declared that while it was slowing down, Corliss Jr. shifted into first gear and that was
what he meant by a brief stop. He also testified that he could see the train coming from
the direction of San Fernando and that he heard a warning but that it was not sufficient
enough to avoid the accident." 3 Also: "Virgilio de la Paz, another witness of the plaintiff,
testified that on the night of February 21, 1957, he was at the Balibago checkpoint and
 38

saw the train coming from Angeles and a jeep going towards the direction of Clark Field.
He stated that he heard the whistle of the locomotive and saw the collision. The jeep,
which caught fire, was pushed forward. He helped the P.C. soldier. He stated that he saw
the jeep running fast and heard the tooting of the horn. It did not stop at the railroad
crossing, according to him."

After which reference was made to the testimony of the main witness for defendant-
appellee, Teodorico Capili, "who was at the engine at the time of the mishap," and who
"testified that before the locomotive, which had been previously inspected and found to
be in good condition approached, the crossing, that is, about 300 meters away, he blew
the siren and repeated it in compliance with the regulations until he saw the jeep suddenly
spurt and that
although the locomotive was running between 20 and 25 kilometers an hour and
although he had applied the brakes, the jeep was caught in the middle of the tracks."

1. The above finding as to the non-existence of negligence attributable to defendant-

appellee Manila Railroad Company comes to us encased in the armor of what admittedly
appears to be a careful judicial appraisal and scrutiny of the evidence of record. It is thus
proof against any attack unless sustained and overwhelming. Not that it is invulnerable,
but it is likely to stand firm in the face of even the most formidable barrage.

In the more traditional terminology, the lower court judgment has in its favor the
presumption of correctness. It is entitled to great respect. After all, the lower court had
the opportunity of weighing carefully what was testified to and apparently did not neglect
it. There is no affront to justice then if its finding be accorded acceptance subject of
course the contingency of reversal if error or errors, substantial in character, be shown in
the conclusion thus arrived at. It is a fair statement of the governing, principle to say that
the appellate function is exhausted when there is found to be a rational basis for the result
reached by the trial court.

As was held in a 1961 decision: "We have already ruled, that when the credibility of
witnesses is the one at issue, the trial court's judgment as to their degree of credence
deserves serious consideration by this Court." An earlier expression of the same view is
found in Jai-Alai Corporation v. Ching Kiat: "After going over the record, we find no
reason for rejecting the findings of the court below. The questions raised hinge on
credibility and it is well-settled that in the absence of compelling reasons, its
determination is best left to the trial judge why had the advantage of hearing the parties
testify and observing their demeanor on the witness stand."

In a 1964 opinion, we adhered to such an approach. Thus: "'Nothing in the record

suggests any arbitrary or abusive conduct on the part of the trial judge in the formulation
of the ruling. His conclusion on the matter is sufficiently borne out by the evidence
presented. We are denied, therefore, the prerogative to disturb that finding, consonant
to the time honored tradition of the Tribunal to hold trial judges better situated to make
conclusions on questions of fact'." On this ground alone we can rest the affirmance of
the judgment appealed from.

2. Nor is the result different even if no such presumption were indulged in and the matter
examined as if we were exercising original and not appellate jurisdiction. The sad and
deplorable situation in which plaintiff-appellant now finds herself, to the contrary
notwithstanding we find no reason for reversing the judgment of the lower court.

This action is predicated on negligence, the Civil Code making clear that whoever by act
or omission causes damage to another, there being negligence, is under obligation to pay
for the damage done. Unless it could be satisfactorily shown, therefore, that defendant-
 39

appellee was guilty of negligence then it could not be held liable. The crucial question,
therefore, is the existence of negligence.

The above Civil Code provision, which is a reiteration of that found in the Civil Code of
Spain, formerly applicable in this jurisdiction, had been interpreted in earlier decisions.
Thus, in Smith v. Cadwallader Gibson Lumber Co., Manresa was cited to the following
effect "'Among the questions most frequently raised and upon which the majority of cases
have been decided with respect to the application of this liability, are those referring to
the determination of the damage or prejudice, and to the fault or negligence of the person
responsible therefor. These are the two indispensable factors in the obligations under
discussion, for without damage or prejudice there can be no liability, and although this
element is present no indemnity can be awarded unless arising from some person's fault
or negligence'."

Negligence was defined by us in two 1912 decisions, United States v. Juanillo and United
States v. Barias. Cooley' formulation was quoted with approval in both the Juanillo and
Barias decisions. Thus: "Judge Cooley in his work on Torts (3d ed.), Sec. 1324, defines
negligence to be: "The failure to observe for the protection of the interests of another
person that degree of care, precaution and vigilance which the circumstance justly
demand whereby such other person suffers injury." There was likewise a reliance on
Ahern v. Oregon Telephone Co. Thus: "Negligence is want of the care required by the
circumstances. It is a relative or comparative, not an absolute term and its application
depends upon the situation of the parties and the degree of care and vigilance which the
circumstances reasonably require. Where the danger is great, a high degree of care is
necessary, and the failure to observe it is a want of ordinary care under the
circumstances."

To repeat, by such a test, no negligence could be imputed to defendant-appellee, and

the action of plaintiff appellee must necessary fail. The facts being what they are, compel
the conclusion that the liability sought to be fastened on defendant-appellee had not
arisen.

3. Plaintiff-appellant, in her brief, however, would seek a reversal of the judgment

appealed from on the ground that there was a failure to appreciate the true situation.
Thus the first three assigned errors are factual in character. The third assigned error
could be summarily disposed of. It would go against the evidence to maintain the view
that the whistle was not sounded and the brakes not applied at a distance of 300 meters
before reaching the crossing.

The first two assigned errors would make much of the failure of the lower court to hold
that the crossing bars not having been put down and there being no guard at the gate-
house, there still was a duty on the part of Corliss to stop his jeep to avoid a collision and
that Teodorico Capili, who drove the engine, was not qualified to do so at the time of
the accident. For one cannot just single out circumstance and then confidently assign to
it decisive weight and significance. Considered separately, neither of the two above errors
assigned would call for a judgment different in character. Nor would a combination of
acts allegedly impressed with negligence suffice to alter the result. The quantum of proof
required still not been met. The alleged errors fail of their said effect. The case for
plaintiff appellant, such as it had not been improved. There is no justification for
reversing the judgment of the lower court.

It cannot be stressed too much that the decisive considerations are too variable, too
dependent in the lid analysis upon a common sense estimate of the situation as it
presented itself to the parties for us to be able to say that this or that element having been
isolated, negligence is shown. The factors that enter the judgment are too many and
 40

diverse for us to imprison them in a formula sufficient of itself to yield the correct answer
to the multi-faceted problems the question of negligence poses. Every case must be
dependent on its facts. The circumstances indicative of lack of due care must be judged
in the light of what could reasonably be expected of the parties. If the objective standard
of prudence be met, then negligence is ruled out.

In this particular case, it would be to show less than fidelity to the controlling facts to
impute negligence to defendant-appellee. The first three errors assigned certainly do not
call for that conclusion.

4. The fourth assigned error is deserving of a more extended treatment. Plaintiff-

appellant apparently had in mind this portion of the opinion of the lower court: "The
weight of authorities is to the effect that a railroad track is in itself a warning or a signal of
danger to those who go upon it, and that those who, for reasons of their own, ignore such
warning, do so at their own risk and responsibility. Corliss Jr., who undoubtedly had
crossed the checkpoint frequently, if not daily, must have known that locomotive engines
and trains usually pass at that particular crossing where the accident had taken place."

Her assignment of error, however, would single out not the above excerpt from the
decision appealed from but what to her is the apparent reliance of the lower court on
Mestres v. Manila Electric Railroad & Light Co. and United States v. Manlabat & Pasibi.
In the Manabat case, the doctrine announced by this Court follows: "A person in control
of an automobile who crosses a railroad, even at a regular road crossing, and who does
not exercise that precaution and that control over it as to be able to stop the same almost
immediately upon the appearance of a train, is guilty of criminal negligence, providing a
collision occurs and injury results. Considering the purposes and the general methods
adopted for the management of railroads and railroad trains, we think it is incumbent
upon one approaching a railroad crossing to use all of his faculties of seeing and hearing.
He should approach a railroad crossing cautiously and carefully. He should look and
listen and do everything that a reasonably prudent man would do before he attempts to
cross the track." The Mestres doctrine in a suit arising from a collision between an
automobile and a street car is substantially similar. Thus: "It may be said, however, that,
where a person is nearing a street crossing toward which a car is approaching, the duty is
on the party to stop and avoid a collision who can most readily adjust himself to the
exigencies of the case, and where such person can do so more readily, the motorman
has a right to presume that such duty will be performed."

It is true, as plaintiff-appellant would now allege that there has been a drift away from the
apparent rigid and inflexible doctrine thus set forth in the two above cases evidenced by
Lilius v. Manila Railroad Co., the controlling facts of which, however, are easily
distinguishable from what had been correctly ascertained in the present case. Such a
deviation from the earlier principle announced is not only true of this jurisdiction but
also of the United States.

This is made clear by Prosser. Speaking of a 1927 decision by Justice Holmes, he had
the following to say: "Especially noteworthy in this respect is the attempt Mr. Justice
Holmes, in Baltimore & Ohio Railway v. Goodman, to 'lay down a standard once for all,'
which would require an automobile driver approaching a railroad crossing with an
obstructed view to stop, look and listen, and if he cannot be sure otherwise that no train
is coming to get out of the car. The basic idea behind this is sound enough: it is by no
means proper care to cross a railroad track without taking reasonable precautions against
a train, and normally such precautions will require looking, hearing, and a stop, or at
least slow speed, where the view is obstructed."
 41

Then, barely seven years later, in 1934, came Pakora v. Wabash Railway, where,
according to Prosser, it being shown that "the only effective stop must be made upon the
railway tracks themselves, in a position of obligation danger, the court disregarded any
such uniform rule, rejecting the 'get out of the car' requirement as 'an uncommon
precaution, likely to be futile and sometimes even dangerous,' and saying that the driver
need not always stop. 'Illustrations such as these,' said Mr. Justice Cardozo 'bear witness
to the need for caution in framing standards of behavior that amount to rules of law....
Extraordinary situations may not wisely or fairly be subjected to tests or regulations that
are fitting for the commonplace or normal."

What Justice Cardozo announced would merely emphasize what was set forth earlier
that each and every, case on questions of negligence is to be decided in accordance with
the peculiar circumstances that present themselves. There can be no hard and fast rule.
There must be that observance of that degree of care, precaution, and vigilance which
the situation demands. Thus defendant-appellee acted. It is undeniable then that no
negligence can rightfully be imputed to it.

What commends itself for acceptance is this conclusion arrived at by the lower court:
"Predicated on the testimonies of the plaintiff's witnesses, on the knowledge of the
deceased and his familiarity with the setup of the checkpoint, the existence of the tracks;
and on the further fact that the locomotive had blown its siren or whistle, which was heard
by said witnesses, it is clear that Corliss Jr. was so sufficiently warned in advance of the
oncoming train that it was incumbent upon him to avoid a possible accident — and this
consisted simply in stopping his vehicle before the crossing and allowing the train to move
on. A prudent man under similar circumstances would have acted in this manner. This,
unfortunately, Corliss, Jr. failed to do."

WHEREFORE, the decision of the lower court of November 29, 1962 dismissing the
complaint, is affirmed. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro,

Capistrano, Teehankee and Barredo, JJ., concur.
 42

G.R. No. L-23129

August 2, 1968

ISIDRA FARAON and LUCIA DE MESA, complainants-appellants, vs. TOMAS

PRIELA, accused-appellee.

De Santos and Delfino for complainants-appellants.

Tomas P. Matic, Jr. for accused-appellee.

CONCEPCION, C.J.:

From a decision of the Court of First Instance of Rizal acquitting defendant Tomas A.
Priela of the crime of damage to property through reckless imprudence, with which he
is charged, the offended parties — namely, Isidra Faraon and Lucia de Mesa, as owners
of a "cadillac" car which was hit by a train operated by Priela as its engineer — have
interposed the present appeal, insofar as the civil aspect of the case is concerned.

Appellants maintain that the lower court erred in finding that the damage to said car was
due to a "freak accident so unusual and so unique as to defy all expectations", and that,
for this reason, they should bear the "unfortunate damage to property" suffered by them.

The first question that suggests itself is whether or not appellants may still pursue the
present appeal and recover damages from Priela, considering that he has been explicitly
acquitted by the trial court, upon the ground that he has not been remiss in his caution
nor in his presence of mind in trying to avoid "freak accident".

Pursuant to Rule 111, section 3(c), of the Rules of Court:.

Extinction of the penal action does not carry with it extinction of the civil, unless the
extinction proceeds from a declaration in a final judgment that the fact from which the
civil might arise did not exist. In other cases, the person entitled to the civil action may
institute it in the jurisdiction and in the manner provided by law against the person who
may be liable for restitution of the thing and reparation or indemnity for the damage
suffered.

In the case at bar, the decision appealed from, which is final and executory as regards its
criminal phase, has not only acquitted Priela, but, also, declared that the collision, which
resulted in the destruction of appellants' car, had not been due to any negligence on his
part. Since appellants' civil action is predicated upon Priela's alleged negligence, which
does not exist, according to said final judgment, it follows necessarily that his acquittal in
the criminal action carries with it the extinction of the civil responsibility arising
therefrom.

Independently of the foregoing, the record does not show that the lower court had erred
in absolving Priela from the charge of negligence.

Indeed, it appears that, said car was, in the afternoon of September 10, 1960, headed for
Manila, coming from a barrio in the Municipality of Muntinlupa, Rizal; that as it was
negotiating the railroad crossing therein, the right front wheel of the car got stuck into a
rut, "right on top of the railroad tracks after passing the second rail"; that despite the
efforts of the driver, who shifted to first gear and then to reverse, the car could not move
either forward or backward; that as the north-bound Diesel train No. 512, operated and
driven by Priela, came into view, after turning a bend, coming from the Bicol region,
Lucia de Mesa got down from the car and signalled it to stop; and that, this
 43

notwithstanding, the train proceeded headlong and hit the car, completely destroying the
same.

The prosecution tried to prove that the train was about 400 yards away when Lucia
signalled thereto to stop, but, the lower court gave more credence to the testimony of
Priela and his fireman, Cecilio Pacion, to the effect that the railroad crossing was
preceded by a curve, bounded on both sides by high earthen embankments which
precluded them from seeing the car until it was about 75 meters away. Moreover, relying
upon the expert evidence given by Cesar Poblete — an engineer who worked in the
mechanical department of the Manila Railroad since 1945, and had specialized in Diesel
locomotives, such as Train No. 512 — said court concluded that, pulling eleven (11)
coaches, at a speed of from 30 to 40 miles an hour, the train would cover a distance of
about 300 meters from the place where its air brakes were applied, and, that it could not
have stopped, therefore, before reaching the place where appellants' car was

Inasmuch as said expert testimony has not been contradicted, and in the light of the
attending circumstances, we are not prepared to disturb the aforementioned findings of
fact, which are partly, if not mainly, dependent upon the credence and weight given by
His Honor the trial Judge, to the testimonial evidence on record.

WHEREFORE, the decision appealed from is hereby affirmed, with the costs of this
instance against appellants, Isidra Faraon and Lucia de Mesa. It is so ordered.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur.
 44

G.R. No. L-45637

May 31, 1985

ROBERTO JUNTILLA, petitioner, vs. CLEMENTE FONTANAR, FERNANDO

BANZON and BERFOL CAMORO, respondents.

Valentin A. Zozobrado for petitioner.

Ruperto N. Alfarara for respondents.

GUTIERREZ, JR., J.:

This is a petition for review, on questions of law, of the decision of the Court of First
Instance of Cebu which reversed the decision of the City Court of Cebu and exonerated
the respondents from any liability arising from a vehicular accident.

The background facts which led to the filing of a complaint for breach of contract and
damages against the respondents are summarized by the Court of First Instance of Cebu
as follows:

The facts established after trial show that the plaintiff was a passenger of the public utility
jeepney bearing plate No. PUJ-71-7 on the course of the trip from Danao City to Cebu
City. The jeepney was driven by defendant Berfol Camoro. It was registered under the
franchise of defendant Clemente Fontanar but was actually owned by defendant
Fernando Banzon. When the jeepney reached Mandaue City, the right rear tire
exploded causing the vehicle to turn turtle. In the process, the plaintiff who was sitting at
the front seat was thrown out of the vehicle. Upon landing on the ground, the plaintiff
momentarily lost consciousness. When he came to his senses, he found that he had a
lacerated wound on his right palm. Aside from this, he suffered injuries on his left arm,
right thigh and on his back. (Exh. "D"). Because of his shock and injuries, he went back
to Danao City but on the way, he discovered that his "Omega" wrist watch was lost. Upon
his arrival in Danao City, he immediately entered the Danao City Hospital to attend to
his injuries, and also requested his father-in-law to proceed immediately to the place of
the accident and look for the watch. In spite of the efforts of his father-in-law, the wrist
watch, which he bought for P 852.70 (Exh. "B") could no longer be found.

xxx xxx xxx

Petitioner Roberto Juntilla filed Civil Case No. R-17378 for breach of contract with
damages before the City Court of Cebu City, Branch I against Clemente Fontanar,
Fernando Banzon and Berfol Camoro.

The respondents filed their answer, alleging inter alia that the accident that caused losses
to the petitioner was beyond the control of the respondents taking into account that the
tire that exploded was newly bought and was only slightly used at the time it blew up.

After trial, Judge Romulo R. Senining of the Civil Court of Cebu rendered judgment in
favor of the petitioner and against the respondents. The dispositive portion of the
decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants and the latter are hereby ordered, jointly and severally, to pay the plaintiff the
sum of P750.00 as reimbursement for the lost Omega wrist watch, the sum of P246.64
as unrealized salary of the plaintiff from his employer, the further sum of P100.00 for
 45

the doctor's fees and medicine, an additional sum of P300.00 for attorney's fees and the
costs.
The respondents appealed to the Court of First Instance of Cebu, Branch XIV.

Judge Leonardo B. Canares reversed the judgment of the City Court of Cebu upon a
finding that the accident in question was due to a fortuitous event. The dispositive portion
of the decision reads:

WHEREFORE, judgment is hereby rendered exonerating the defendants from any

liability to the plaintiff without pronouncement as to costs.

A motion for reconsideration was denied by the Court of First Instance.

The petitioner raises the following alleged errors committed by the Court of First
Instance of Cebu on appeal—

a. The Honorable Court below committed grave abuse of discretion in failing to take
cognizance of the fact that defendants and/or their employee failed to exercise "utmost
and/or extraordinary diligence" required of common carriers contemplated under Art.
1755 of the Civil Code of the Philippines.
b. The Honorable Court below committed grave abuse of discretion by deciding the case
contrary to the doctrine laid down by the Honorable Supreme Court in the case of
Necesito et al. v. Paras, et al.

We find the petition impressed with merit.

The City Court and the Court of First Instance of Cebu found that the right rear tire of
the passenger jeepney in which the petitioner was riding blew up causing the vehicle to
fall on its side. The petitioner questions the conclusion of the respondent court drawn
from this finding of fact.

The Court of First Instance of Cebu erred when it absolved the carrier from any liability
upon a finding that the tire blow out is a fortuitous event. The Court of First Instance of
Cebu ruled that:

After reviewing the records of the case, this Court finds that the accident in question was
due to a fortuitous event. A tire blow-out, such as what happened in the case at bar, is an
inevitable accident that exempts the carrier from liability, there being absence of a
showing that there was misconduct or negligence on the part of the operator in the
operation and maintenance of the vehicle involved. The fact that the right rear tire
exploded, despite being brand new, constitutes a clear case of caso fortuito which can be
a proper basis for exonerating the defendants from liability. ...

The Court of First Instance relied on the ruling of the Court of Appeals in Rodriguez v.
Red Line Transportation Co., CA G.R. No. 8136, December 29, 1954, where the Court
of Appeals ruled that:

A tire blow-out does not constitute negligence unless the tire was already old and should
not have been used at all. Indeed, this would be a clear case of fortuitous event.

The foregoing conclusions of the Court of First Instance of Cebu are based on a
misapprehension of overall facts from which a conclusion should be drawn. The reliance
of the Court of First Instance on the Rodriguez case is not in order. In La Mallorca and
Pampanga Bus Co. v. De Jesus, et al. (17 SCRA 23), we held that:
 46

Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to no liability
for negligence, citing the rulings of the Court of Appeals in Rodriguez v. Red Line
Transportation Co., CA G.R. No. 8136, December 29, 1954, and People v. Palapad,
CA-G.R. No. 18480, June 27, 1958. These rulings, however, not only are not binding on
this Court but were based on considerations quite different from those that obtain in the
case at bar. The appellate court there made no findings of any specific acts of negligence
on the part of the defendants and confined itself to the question of whether or not a tire
blow-out, by itself alone and without a showing as to the causative factors, would generate
liability. ...

In the case at bar, there are specific acts of negligence on the part of the respondents.
The records show that the passenger jeepney turned turtle and jumped into a ditch
immediately after its right rear tire exploded. The evidence shows that the passenger
jeepney was running at a very fast speed before the accident. We agree with the
observation of the petitioner that a public utility jeep running at a regular and safe speed
will not jump into a ditch when its right rear tire blows up. There is also evidence to show
that the passenger jeepney was overloaded at the time of the accident. The petitioner
stated that there were three (3) passengers in the front seat and fourteen (14) passengers
in the rear.

While it may be true that the tire that blew-up was still good because the grooves of the
tire were still visible, this fact alone does not make the explosion of the tire a fortuitous
event. No evidence was presented to show that the accident was due to adverse road
conditions or that precautions were taken by the jeepney driver to compensate for any
conditions liable to cause accidents. The sudden blowing-up, therefore, could have been
caused by too much air pressure injected into the tire coupled by the fact that the jeepney
was overloaded and speeding at the time of the accident.

In Lasam v. Smith (45 Phil. 657), we laid down the following essential characteristics of
caso fortuito:

xxx xxx xxx

... In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents
the following essential characteristics: (1) The cause of the unforeseen and unexpected
occurrence, or of the failure of the debtor to comply with his obligation, must be
independent of the human will. (2) It must be impossible to foresee the event which
constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. (3)
The occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner. And (4) the obligor (debtor) must be free from any
participation in the aggravation of the injury resulting to the creditor. (5 Encyclopedia
Juridica Espanola, 309.)

In the case at bar, the cause of the unforeseen and unexpected occurrence was not
independent of the human will. The accident was caused either through the negligence
of the driver or because of mechanical defects in the tire. Common carriers should teach
their drivers not to overload their vehicles, not to exceed safe and legal speed limits, and
to know the correct measures to take when a tire blows up thus insuring the safety of
passengers at all times. Relative to the contingency of mechanical defects, we held in
Necesito, et al. v. Paras, et al. (104 Phil. 75), that:

... The preponderance of authority is in favor of the doctrine that a passenger is entitled
to recover damages from a carrier for an injury resulting from a defect in an appliance
purchased from a manufacturer, whenever it appears that the defect would have been
discovered by the carrier if it had exercised the degree of care which under the
 47

circumstances was incumbent upon it, with regard to inspection and application of the
necessary tests. For the purposes of this doctrine, the manufacturer is considered as being
in law the agent or servant of the carrier, as far as regards the work of constructing the
appliance. According to this theory, the good repute of the manufacturer will not relieve
the carrier from liability' (10 Am. Jur. 205, s, 1324; see also Pennsylvania R. Co. v. Roy,
102 U.S. 451; 20 L. Ed. 141; Southern R. Co. v. Hussey, 74 ALR 1172; 42 Fed. 2d 70;
and Ed Note, 29 ALR 788.: Ann. Cas. 1916E 929).

The rationale of the carrier's liability is the fact that the passenger has neither choice nor
control over the carrier in the selection and use of the equipment and appliances in use
by the carrier. Having no privity whatever with the manufacturer or vendor of the
defective equipment, the passenger has no remedy against him, while the carrier usually
has. It is but logical, therefore, that the carrier, while not an insurer of the safety of his
passengers, should nevertheless be held to answer for the flaws of his equipment if such
flaws were at all discoverable. ...

It is sufficient to reiterate that the source of a common carrier's legal liability is the
contract of carriage, and by entering into the said contract, it binds itself to carry the
passengers safely as far as human care and foresight can provide, using the utmost
diligence of a very cautious person, with a due regard for all the circumstances. The
records show that this obligation was not met by the respondents.
The respondents likewise argue that the petitioner cannot recover any amount for failure
to prove such damages during the trial. The respondents submit that if the petitioner was
really injured, why was he treated in Danao City and not in Mandaue City where the
accident took place. The respondents argue that the doctor who issued the medical
certificate was not presented during the trial, and hence not cross-examined. The
respondents also claim that the petitioner was not wearing any wrist watch during the
accident.

It should be noted that the City Court of Cebu found that the petitioner had a lacerated
wound on his right palm aside from injuries on his left arm, right thigh and on his back,
and that on his way back to Danao City, he discovered that his "Omega" wrist watch was
lost. These are findings of facts of the City Court of Cebu which we find no reason to
disturb. More so when we consider the fact that the Court of First Instance of Cebu
impliedly concurred in these matters when it confined itself to the question of whether
or not the tire blow out was a fortuitous event.

WHEREFORE, the decision of the Court of First Instance of Cebu, Branch IV appealed
from is hereby REVERSED and SET ASIDE, and the decision of the City Court of
Cebu, Branch I is REINSTATED, with the modification that the damages shall earn
interest at 12% per annum and the attorney's fees are increased to SIX HUNDRED
PESOS (P600.00). Damages shall earn interests from January 27, 1975.

SO ORDERED.

Teehankee (Chairman), Melencio-Herrera, Plana, Relova, De la Fuente and Alampay,

JJ., concur.
 48

G.R. No. 52159

December 22, 1989

JOSE PILAPIL, petitioner, vs. HON. COURT OF APPEALS and ALATCO

TRANSPORTATION COMPANY, INC., respondents.

Martin Badong, Jr. for petitioner.

Eufronio K. Maristela for private respondent.

PADILLA, J.:

This is a petition to review on certiorari the decision* rendered by the Court of Appeals
dated 19 October 1979 in CA-G.R. No. 57354-R entitled "Jose Pilapil, plaintiff-appellee
versus Alatco Transportation Co., Inc., defendant-appellant," which reversed and set
aside the judgment of the Court of First Instance of Camarines Sur in Civil Case No.
7230 ordering respondent transportation company to pay to petitioner damages in the
total sum of sixteen thousand three hundred pesos (P 16,300.00).

The record discloses the following facts:

Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-defendant's bus

bearing No. 409 at San Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M.
While said bus No. 409 was in due course negotiating the distance between Iriga City
and Naga City, upon reaching the vicinity of the cemetery of the Municipality of Baao,
Camarines Sur, on the way to Naga City, an unidentified man, a bystander along said
national highway, hurled a stone at the left side of the bus, which hit petitioner above his
left eye. Private respondent's personnel lost no time in bringing the petitioner to the
provincial hospital in Naga City where he was confined and treated.

Considering that the sight of his left eye was impaired, petitioner was taken to Dr.
Malabanan of Iriga City where he was treated for another week. Since there was no
improvement in his left eye's vision, petitioner went to V. Luna Hospital, Quezon City
where he was treated by Dr. Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and sustained a permanent scar
above the left eye.

Thereupon, petitioner instituted before the Court of First Instance of Camarines Sur,
Branch I an action for recovery of damages sustained as a result of the stone-throwing
incident. After trial, the court a quo rendered judgment with the following dispositive
part:

Wherefore, judgment is hereby entered:

1. Ordering defendant transportation company to pay plaintiff Jose Pilapil the sum of P
10,000.00, Philippine Currency, representing actual and material damages for causing a
permanent scar on the face and injuring the eye-sight of the plaintiff;
2. Ordering further defendant transportation company to pay the sum of P 5,000.00,
Philippine Currency, to the plaintiff as moral and exemplary damages;
3. Ordering furthermore, defendant transportation company to reimburse plaintiff the
sum of P 300.00 for his medical expenses and attorney's fees in the sum of P 1,000.00,
Philippine Currency; and
4. To pay the costs.

SO ORDERED 1
 49

From the judgment, private respondent appealed to the Court of Appeals where the
appeal was docketed as CA-G.R. No. 57354R. On 19 October 1979, the Court of
Appeals, in a Special Division of Five, rendered judgment reversing and setting aside the
judgment of the court a quo.

Hence the present petition.

In seeking a reversal of the decision of the Court of Appeals, petitioner contends that
said court has decided the issue not in accord with law. Specifically, petitioner argues that
the nature of the business of a transportation company requires the assumption of certain
risks, and the stoning of the bus by a stranger resulting in injury to petitioner-passenger
is one such risk from which the common carrier may not exempt itself from liability.

We do not agree.

In consideration of the right granted to it by the public to engage in the business of

transporting passengers and goods, a common carrier does not give its consent to become
an insurer of any and all risks to passengers and goods. It merely undertakes to perform
certain duties to the public as the law imposes, and holds itself liable for any breach
thereof.

Under Article 1733 of the Civil Code, common carriers are required to observe
extraordinary diligence for the safety of the passenger transported by them, according to
all the circumstances of each case. The requirement of extraordinary diligence imposed
upon common carriers is restated in Article 1755: "A common carrier is bound to carry
the passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances." Further, in
case of death of or injuries to passengers, the law presumes said common carriers to be
at fault or to have acted negligently. 2

While the law requires the highest degree of diligence from common carriers in the safe
transport of their passengers and creates a presumption of negligence against them, it
does not, however, make the carrier an insurer of the absolute safety of its passengers. 3

Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and
precaution in the carriage of passengers by common carriers to only such as human care
and foresight can provide. what constitutes compliance with said duty is adjudged with
due regard to all the circumstances.

Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the
part of the common carrier when its passenger is injured, merely relieves the latter, for
the time being, from introducing evidence to fasten the negligence on the former,
because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised
extraordinary diligence as required by law in the performance of its contractual
obligation, or that the injury suffered by the passenger was solely due to a fortuitous event.
4

In fine, we can only infer from the law the intention of the Code Commission and
Congress to curb the recklessness of drivers and operators of common carriers in the
conduct of their business.

Thus, it is clear that neither the law nor the nature of the business of a transportation
company makes it an insurer of the passenger's safety, but that its liability for personal
 50

injuries sustained by its passenger rests upon its negligence, its failure to exercise the
degree of diligence that the law requires. 5

Petitioner contends that respondent common carrier failed to rebut the presumption of
negligence against it by proof on its part that it exercised extraordinary diligence for the
safety of its passengers.

We do not agree.

First, as stated earlier, the presumption of fault or negligence against the carrier is only a
disputable presumption. It gives in where contrary facts are established proving either
that the carrier had exercised the degree of diligence required by law or the injury
suffered by the passenger was due to a fortuitous event. Where, as in the instant case, the
injury sustained by the petitioner was in no way due to any defect in the means of
transport or in the method of transporting or to the negligent or willful acts of private
respondent's employees, and therefore involving no issue of negligence in its duty to
provide safe and suitable cars as well as competent employees, with the injury arising
wholly from causes created by strangers over which the carrier had no control or even
knowledge or could not have prevented, the presumption is rebutted and the carrier is
not and ought not to be held liable. To rule otherwise would make the common carrier
the insurer of the absolute safety of its passengers which is not the intention of the
lawmakers.

Second, while as a general rule, common carriers are bound to exercise extraordinary
diligence in the safe transport of their passengers, it would seem that this is not the
standard by which its liability is to be determined when intervening acts of strangers is to
be determined directly cause the injury, while the contract of carriage Article 1763
governs:

Article 1763. A common carrier is responsible for injuries suffered by a passenger on

account of the wilful acts or negligence of other passengers or of strangers, if the common
carrier's employees through the exercise of the diligence of a good father of a family
could have prevented or stopped the act or omission.

Clearly under the above provision, a tort committed by a stranger which causes injury to
a passenger does not accord the latter a cause of action against the carrier. The negligence
for which a common carrier is held responsible is the negligent omission by the carrier's
employees to prevent the tort from being committed when the same could have been
foreseen and prevented by them. Further, under the same provision, it is to be noted that
when the violation of the contract is due to the willful acts of strangers, as in the instant
case, the degree of care essential to be exercised by the common carrier for the protection
of its passenger is only that of a good father of a family.

Petitioner has charged respondent carrier of negligence on the ground that the injury
complained of could have been prevented by the common carrier if something like
mesh-work grills had covered the windows of its bus.

We do not agree.

Although the suggested precaution could have prevented the injury complained of, the
rule of ordinary care and prudence is not so exacting as to require one charged with its
exercise to take doubtful or unreasonable precautions to guard against unlawful acts of
strangers. The carrier is not charged with the duty of providing or maintaining vehicles
as to absolutely prevent any and all injuries to passengers. Where the carrier uses cars of
the most approved type, in general use by others engaged in the same occupation, and
 51

exercises a high degree of care in maintaining them in suitable condition, the carrier
cannot be charged with negligence in this respect. 6

Finally, petitioner contends that it is to the greater interest of the State if a carrier were
made liable for such stone-throwing incidents rather than have the bus riding public lose
confidence in the transportation system.

Sad to say, we are not in a position to so hold; such a policy would be better left to the
consideration of Congress which is empowered to enact laws to protect the public from
the increasing risks and dangers of lawlessness in society.

WHEREFORE, the judgment appealed from is hereby AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairperson), Sarmiento and Regalado, concur.

 52

G.R. No. 119756

March 18, 1999

FORTUNE EXPRESS, INC., petitioner, vs. COURT OF APPEALS, PAULIE U.

CAORONG, and minor children YASSER KING CAORONG, ROSE HAINNI and
PRINCE ALEXANDER, all surnamed CAORONG, and represented by their mother
PAULIE U. CAORONG, respondents.

MENDOZA, J.:

This is an appeal by petition for review on certiorari of the decision, dated July 29, 1994,
of the Court of Appeals, which reversed the decision of the Regional Trial Court, Branch
VI, Iligan City. The aforesaid decision of the trial court dismissed the complaint of public
respondents against petitioner for damages for breach of contract of carriage filed on the
ground that petitioner had not exercised the required degree of diligence in the operation
of one of its buses. Atty. Talib Caorong, whose heirs are private respondents herein, was
a passenger of the bus and was killed in the ambush involving said bus.

The facts of the instant case are as follows:

Petitioner is a bus company in northern Mindanao. Private respondent Paulie Caorong

is the widow of Atty. Caorong, while private respondents Yasser King, Rose Heinni, and
Prince Alexander are their minor children.

On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in

Kauswagan, Lanao del Norte, resulting in the death of several passengers of the jeepney,
including two Maranaos. Crisanto Generalao, a volunteer field agent of the Constabulary
Regional Security Unit No. X, conducted an investigation of the accident. He found that
the owner of the jeepney was a Maranao residing in Delabayan, Lanao del Norte and
that certain Maranaos were planning to take revenge on the petitioner by burning some
of its buses. Generalao rendered a report on his findings to Sgt. Reynaldo Bastasa of the
Philippine Constabulary Regional Headquarters at Cagayan de Oro. Upon the
instruction of Sgt. Bastasa, he went to see Diosdado Bravo, operations manager of
petitioner, its main office in Cagayan de Oro City. Bravo assured him that the necessary
precautions to insure the safety of lives and property would be taken.1

At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to
be passengers, seized a bus of petitioner at Linamon, Lanao del Norte while on its way
to Iligan City. Among the passengers of the bus was Atty. Caorong. The leader of the
Maranaos, identified as one Bashier Mananggolo, ordered the driver, Godofredo
Cabatuan, to stop the bus on the side of the highway. Mananggolo then shot Cabatuan
on the arm, which caused him to slump on the steering wheel. The one of the
companions of Mananggolo started pouring gasoline inside the bus, as the other held the
passenger at bay with a handgun. Mananggolo then ordered the passenger to get off the
bus. The passengers, including Atty. Caorong, stepped out of the bus and went behind
the bushes in a field some distance from the highway.2

However, Atty. Caorong returned to the bus to retrieve something from the overhead
rack. at that time, one of the armed men was pouring gasoline on the head of the driver.
Cabatuan, who had meantime regained consciousness, heard Atty. Caorong pleading
with the armed men to spare the driver as he was innocent of any wrong doing and was
only trying to make a living. The armed men were, however, adamant as they repeated
the warning that they were going to burn the bus along with its driver. During this
exchange between Atty. Caorong and the assailants, Cabatuan climbed out of the left
window of the bus and crawled to the canal on the opposite side of the highway. He
 53

heard shots from inside the bus. Larry de la Cruz, one of the passengers, saw that Atty.
Caorong was hit. Then the bus was set on fire. Some of the passengers were able to pull
Atty. Caorong out of the burning bus and rush him to the Mercy Community Hospital
in Iligan City, but he died while undergoing operation.3

The private respondents brought this suit for breach of contract of carriage in the
Regional Trial Court, Branch VI, Iligan City. In its decision, dated December 28, 1990,
the trial court dismissed the complaint, holding as follows:

The fact that defendant, through Operations Manager Diosdado Bravo, was informed of
the "rumors" that the Moslems intended to take revenge by burning five buses of
defendant is established since the latter also utilized Crisanto Generalao as a witness. Yet
despite this information, the plaintiffs charge, defendant did not take proper precautions.
. . . Consequently, plaintiffs now fault the defendant for ignoring the report. Their
position is that the defendant should have provided its buses with security guards. Does
the law require common carriers to install security guards in its buses for the protection
and safety of its passengers? Is the failure to post guards on omission of the duty to
"exercise the diligence of a good father of the family" which could have prevented the
killing of Atty. Caorong? To our mind, the diligence demanded by law does not include
the posting of security guard in buses. It is an obligation that properly belongs to the
State. Besides, will the presence of one or two security guards suffice to deter a
determined assault of the lawless and thus prevent the injury complained of? Maybe so,
but again, perhaps not. In other words, the presence of a security guard is not a guarantee
that the killing of Atty. Caorong would have been definitely avoided.

xxx xxx xxx

Accordingly, the failure of defendant to accord faith and credit to the report of Mr.
Generalao and the fact that it did not provide security to its buses cannot, in the light of
the circumstances, be characterized as negligence.

Finally, the evidence clearly shows that the assalants did not have the least intention of
the harming any of the passengers. They ordered all the passengers to alight and set fire
on the bus only after all the passengers were out of danger. The death of Atty. Caorong
was an unexpected and unforseen occurrense over which defendant had no control. Atty.
Caorong performed an act of charity and heroism in coming to the succor of the driver
even in the face of danger. He deserves the undying gratitude of the driver whose life he
saved. No one should blame him for an act of extraordinary charity and altruism which
cost his life. But neither should any blame be laid on the doorstep of defendant. His
death was solely due to the willfull acts of the lawless which defendant could neither
prevent nor to stop.

WHEREFORE, in view of the foregoing, the complaint is hereby dismissed. For lack of
merit, the counter-claim is likewise dismissed. No costs.4

On appeal, however, the Court of Appeals reversed. It held:

In the case at bench, how did defendant-appellee react to the tip or information that
certain Maranao hotheads were planning to burn five of its buses out of revenge for the
deaths of two Maranaos in an earlier collision involving appellee's bus? Except for the
remarks of appellee's operations manager that "we will have our action . . . . and I'll be
the one to settle it personally," nothing concrete whatsoever was taken by appellee or its
employees to prevent the execution of the threat. Defendant-appellee never adopted
even a single safety measure for the protection of its paying passengers. Were there
available safeguards? Of course, there were: one was frisking passengers particularly
 54

those en route to the area where the threats were likely to be carried out such as where
the earlier accident occurred or the place of influence of the victims or their locality. If
frisking was resorted to, even temporarily, . . . . appellee might be legally excused from
liabilty. Frisking of passengers picked up along the route could have been implemented
by the bus conductor; for those boarding at the bus terminal, frisking could have been
conducted by him and perhaps by additional personnel of defendant-appellee. On
hindsight, the handguns and especially the gallon of gasoline used by the felons all of
which were brought inside the bus would have been discovered, thus preventing the
burning of the bus and the fatal shooting of the victim.

Appellee's argument that there is no law requiring it to provide guards on its buses and
that the safety of citizens is the duty of the government, is not well taken. To be sure,
appellee is not expected to assign security guards on all its buses; if at all, it has the duty
to post guards only on its buses plying predominantly Maranaos areas. As discussed in
the next preceding paragraph, least appellee could have done in response to the report
was to adopt a system of verification such as the frisking of passengers boarding at its
buses. Nothing, and no repeat, nothing at all, was done by defendant-appellee to protect
its innocent passengers from the danger arising from the "Maranao threats." It must be
observed that frisking is not a novelty as a safety measure in our society. Sensitive places
— in fact, nearly all important places — have applied this method of security
enhancement. Gadgets and devices are avilable in the market for this purpose. It would
not have weighed much against the budget of the bus company if such items were made
available to its personnel to cope up with situations such as the "Maranaos threats."

In view of the constitutional right to personal privacy, our pronouncement in this decision
should not be construed as an advocacy of mandatory frisking in all public conveyances.
What we are saying is that given the circumstances obtaining in the case at bench that: (a)
two Maranaos died because of a vehicular collision involving one of appellee's vehicles;
(b) appellee received a written report from a member of the Regional Security Unit,
Constabulary Security Group, that the tribal/ethnic group of the two deceased were
planning to burn five buses of appellee out of revenge; and (c) appelle did nothing —
absolutely nothing — for the safety of its passengers travelling in the area of influence of
the victims, appellee has failed to exercise the degree of dilegence required of common
carriers. Hence, appellee must be adjudge liable.

xxx xxx xxx

WHEREFORE the decision appealed from is hereby REVERSED and another

rendered ordering defendant-appellee to pay plaintiffs-appellants the following:

1) P3,399,649.20 as death indemnity;

2) P50,000.00 and P500.00 per appearance as attorney's fee and

Costs against defendant-appellee.5

Hence, this appeal. Petitioner contends:

(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING THE DECISION

OF THE REGIONAL TRIAL COURT DATED DECEMBER 28, 1990
DISMISSING THE COMPLAINT AS WELL AS THE COUNTERCLAIM, AND
FINDING FOR PRIVATE RESPONDENTS BY ORDERING PETITIONER TO
PAY THE GARGANTUAN SUM OF P3,449,649.20 PLUS P500.00 PER
APPEARANCE AS ATTORNEY'S FEES, AS WELL AS DENYING
PETITIONERS MOTION FRO RECONSIDERATION AND THE
SUPPLEMENT TO SAID MOTION, WHILE HOLDING, AMONG OTHERS,
 55

THAT THE PETITIONER BREACHED THE CONTRACT OF THE CARRIAGE

BY ITS FAILURE TO EXCERCISE THE REQUIRED DEGREE OF DILIGENCE;

(B) THAT THE ACTS OF THE MARANAO OUTLAWS WERE SO GRAVE,

IRRESISTABLE, VIOLENT, AND FORCEFULL, AS TO BE REGARDED AS
CASO FORTUITO; AND

(C) THAT PUBLIC RESPONDENT COURT OF APPEALS SERIOUSLY ERRED

IN HOLDING THAT PETITIONER COULD HAVE PROVIDED ADEQUATE
SECURITY IN PREDOMINANTLY MUSLIM AREAS AS PART OF ITS DUTY
TO OBSERVE EXTRA-ORDINARY DILIGENCE AS A COMMON CARRIER.

The instant has no merit.

First. Petitioner's Breach of the Contract of Carriage.

Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries
suffered by a passenger on account of wilfull acts of other passengers, if the employees
of the common carrier could have prevented the act through the exercise of the diligence
of a good father of a family. In the present case, it is clear that because of the negligence
of petitioner's employees, the seizure of the bus by Mananggolo and his men was made
possible.

Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos
were planning to take revenge on the petitioner by burning some of its buses and the
assurance of petitioner's operation manager, Diosdado Bravo, that the necessary
precautions would be taken, petitioner did nothing to protect the safety of its passengers.

Had petitioner and its employees been vigilant they would not have failed to see that the
malefactors had a large quantity of gasoline with them. Under the circumstances, simple
precautionary measures to protect the safety of passengers, such as frisking passengers
and inspecting their baggages, preferably with non-intrusive gadgets such as metal
detectors, before allowing them on board could have been employed without violating
the passenger's constitutional rights. As this Court amended in Gacal v. Philippine Air
Lines, Inc., 6 a common carrier can be held liable for failing to prevent a hijacking by
frisking passengers and inspecting their baggages.

From the foregoing, it is evident that petitioner's employees failed to prevent the attack
on one of petitioner's buses because they did not exercise the diligence of a good father
of a family. Hence, petitioner should be held liable for the death of Atty. Caorong.

Second. Seizure of Petitioner's Bus not a Case of Force Majeure

The petitioner contends that the seizure of its bus by the armed assailants was a fortuitous
event for which it could not be held liable.

Art. 1174 of the Civil Code defines a fortuitous event as an occurence which could not
be foreseen, is inevitable. In Yobido v. Court of Appeals, 7 we held that to considered
as force majeure, it is necessary that (1) the cause of the breach of the obligation must be
independent of the human will; (2) the event must be either unforeseeable or
unavoidable; (3) the occurence must be render it impossible for the debtor to fulfill the
obligation in a normal manner; and (4) the obligor must be free of participation in, or
aggravation of, the injury to the creditor. The absence of any of the requisites mentioned
above would prevent the obligor from being excused from liability.
 56

Thus, in Vasquez v. Court of Appeals, 8 it was held that the common carrier was liable
for its failure to take the necessary precautions against an approaching typhoon, of which
it was warned, resulting in the loss of the lives of several passengers. The event was
forseeable, and, thus, the second requisite mentioned above was not fulfilled. This ruling
applies by analogy to the present case. Despite the report of PC agent Generalao that the
Maranaos were going to attack its buses, petitioner took no steps to safeguard the lives
and properties of its passengers. The seizure of the bus of the petitioner was foreseeable
and, therefore, was not a fortuitous event which would exempt petitioner from liabilty.

Petitioner invokes the ruling in Pilapil v. Court of Appeals, 9 and De Guzman v. Court
of Appeals, 10 in support of its contention that the seizure of its bus by the assailants
constitutes force majeure. In Pilapil v. Court of Appeals, 11 it was held that a common
carrier is not liable for failing to install window grills on its buses to protect the passengers
from injuries cause by rocks hurled at the bus by lawless elements. On the other hand,
in De Guzman v. Court of Appeals, 12 it was ruled that a common carriers is not
responsible for goods lost as a result of a robbery which is attended by grave or irresistable
threat, violence, or force.

It is clear that the cases of Pilapil and De Guzman do not apply to the prensent case. Art.
1755 of the Civil Code provides that "a common carrier is bound to carry the passengers
as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances." Thus, we held in Pilapil and De
Guzman that the respondents therein were not negligent in failing to take special
precautions against threats to the safety of passengers which could not be foreseen, such
as tortious or criminal acts of third persons. In the present case, this factor of
unforeseeability (the second requisite for an event to be considered force majeure) is
lacking. As already stated, despite the report of PC agent Generalao that the Maranaos
were planning to burn some of petitioner's buses and the assurance of petitioner's
operation manager (Diosdado Bravo) that the necessary precautions would be taken,
nothing was really done by petitioner to protect the safety of passengers.

Third. Deceased not Guilty of Contributory Negligence

The petitioner contends that Atty. Caorong was guilty of contributory negligence in
returning to the bus to retrieve something. But Atty. Caorong did not act recklessly. It
should be pointed out that the intended targets of the violence were petitioners and its
employees, not its passengers. The assailant's motive was to retaliate for the loss of life of
two Maranaos as a result of the collision between petitioner's bus and the jeepney in
which the two Maranaos were riding. Mananggolo, the leader of the group which had
hijacked the bus, ordered the passengers to get off the bus as they intended to burn it
and its driver. The armed men actually allowed Atty. Caorong to retrieve something from
the bus. What apparently angered them was his attempt to help the driver of the bus by
pleading for his life. He was playing the role of the good Samaritan. Certainly, this act
cannot considered an act of negligence, let alone recklessness.

Fourth. Petitioner Liable to Private Respaondents for Damages

We now consider the question of damages that the heirs of Atty. Caorong, private
respondents herein, are entitled to recover from the petitioner.

Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof,
provides for the payment of indemnity for the death of passengers caused by the breach
of contract of carriage by a common carrier. Initially fixed in Art. 2206 at P3,000.00, the
amount of the said indemnity for death has through the years been gradually increased
 57

in view of the declining value of the peso. It is presently fixed at P50,000.00. 13 Private
respondents are entitled to this amount.

Actual Damages. Art. 2199 provides that "except as provided by law or by stipulation,
one is entitled to an adequate compensation only for such pecuniary loss suffered by him
as has duly proved." The trial court found that the private respondents spent P30,000.00
for the wake and burial of Atty. Caorong. 14 Since petitioner does not question this
finding of the trial court, it is liable to private respondent in the said amount as actual
damages.

Moral Damages. Under Art. 2206, the "spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral damages for mental anguish by
reason of the death of the deceased." The trial court found that private respondent Paulie
Caorong suffered pain from the death of her husband and worry on how to provide
support for their minor children, private respondents Yasser King, Rose Heinni, and
Prince Alexander. 15 The petitioner likewise does not question this finding of the trial
court. Thus, in accordance with recent decisions of this Court, 16 we hold that the
petitioner is liable to the private respondents in the amount of P100,000.00 as moral
damages for the death of Atty. Caorong.

Exemplary Damages. Art. 2232 provides that "in contracts and quasi-contracts, the court
may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent reckless manner." In the present case, the petitioner acted in
a wanton and reckless manner. Despite warning that the Maranaos were planning to take
revenge against the petitioner by burning some of its buses, and contary to the assurance
made by its operations manager that the necessary precautions would be take, the
petitioner and its employees did nothing to protect the safety of passengers. Under the
circumtances, we deem it reasonable to award private respondents exemplary damages
in the amount of P100,000.00.17

Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as in the
instant case, exemplary damages are awarded. In the recent case of Sulpicio Lines, Inc.
v. Court of Appeals, 18 we held an award of P50,000.00 as attorney's fees to be
reasonable. Hence, the private respondents are entitled to attorney's fees in that amount.

Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in relation to
Art. 2206 thereof, provides that in addition to the indemnity for death arising from the
breach of contrtact of carriage by a common carrier, the "defendant shall be liable for the
loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs
of the latter." The formula established in decided cases for computing net earning
capacity is as follows:19

Gross Necessary

Net Earning = Life x Annual — Living

Capacity Expectancy Income Expenses

Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty
(80) and the age of the deceased. 20 Since Atty. Caorong was 37 years old at that time of
his death, 21 he had a life expectancy of 28 2/3 more years.22 His projected gross annual
income, computed based on his monthly salary of P11,385.00. 23 as a lawyer in the
Department of Agrarian Reform at the time of his death, was P148,005.00. 24 Allowing
for necessary living expenses of fifty percent (50%) 25 of his projected gross annual
income, his total earning capacity amounts to P2,121,404.90. 26 Hence, the petitioner is
 58

liable to the private respondents in the said amount as a compensation for loss of earning
capacity.

WHEREFORE, the decision, dated July 29, 1994, of the Court of Appeals is hereby
AFFIRMED with the MODIFICATION that petitioner Fortune Express, Inc. is
ordered to pay the following amounts to private respondents Paulie, Yasser King, Rose
Heinni, and Prince Alexander Caorong:

1. death indemnity in the amount of fifty thousand pesos (P50,000.00);

2. actual damages in the amount of thirty thousand pesos (P30,000.00);
3. moral damages in the amount of one hundred thousand pesos (P100,000.00);
4. exemplary damages in the amount of one hundred thousand pesos (P100,000.00);
5. attorney's fees in the amount of fifty thousand pesos (P50,000.00);
6. compensation for loss of earning capacity in the amount of two million one hundred
twenty-one thousand four hundred four pesos and ninety centavos (P2,121,404.90); and
7. cost of suits.

SO ORDERED.

Bellosillo, Puno and Buena, JJ., concur.

 59

G.R. No. L-21438

September 28, 1966

AIR FRANCE, petitioner, vs. RAFAEL CARRASCOSO and the HONORABLE

COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.

Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:

The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael
Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages;
P393.20 representing the difference in fare between first class and tourist class for the
portion of the trip Bangkok-Rome, these various amounts with interest at the legal rate,
from the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees;
and the costs of suit.

On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's
plane ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all
other respects", with costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fully supported by the evidence of
record", are:

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila
for Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine
Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to
Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the
Manager of the defendant airline forced plaintiff to vacate the "first class" seat that he was
occupying because, in the words of the witness Ernesto G. Cuento, there was a "white
man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate
his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's
Manager that his seat would be taken over his dead body; a commotion ensued, and,
according to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the
tourist class; when they found out that Mr. Carrascoso was having a hot discussion with
the white man [manager], they came all across to Mr. Carrascoso and pacified Mr.
Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing of May 26,
1959); and plaintiff reluctantly gave his "first class" seat in the plane.3

1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of
respondent Court of Appeals. Petitioner charges that respondent court failed to make
complete findings of fact on all the issues properly laid before it. We are asked to
consider facts favorable to petitioner, and then, to overturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be rendered by
any court of record without expressing therein clearly and distinctly the facts and the law
on which it is based". 5 This is echoed in the statutory demand that a judgment
determining the merits of the case shall state "clearly and distinctly the facts and the law
on which it is based"; 6 and that "Every decision of the Court of Appeals shall contain
complete findings of fact on all issues properly raised before it". 7
 60

A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8

The law, however, solely insists that a decision state the "essential ultimate facts" upon
which the court's conclusion is drawn. 9 A court of justice is not hidebound to write in
its decision every bit and piece of evidence 10 presented by one party and the other upon
the issues raised. Neither is it to be burdened with the obligation "to specify in the
sentence the facts" which a party "considered as proved". 11 This is but a part of the
mental process from which the Court draws the essential ultimate facts. A decision is not
to be so clogged with details such that prolixity, if not confusion, may result. So long as
the decision of the Court of Appeals contains the necessary facts to warrant its
conclusions, it is no error for said court to withhold therefrom "any specific finding of
facts with respect to the evidence for the defense". Because as this Court well observed,
"There is no law that so requires". 12 Indeed, "the mere failure to specify (in the decision)
the contentions of the appellant and the reasons for refusing to believe them is not
sufficient to hold the same contrary to the requirements of the provisions of law and the
Constitution". It is in this setting that in Manigque, it was held that the mere fact that the
findings "were based entirely on the evidence for the prosecution without taking into
consideration or even mentioning the appellant's side in the controversy as shown by his
own testimony", would not vitiate the judgment. 13 If the court did not recite in the
decision the testimony of each witness for, or each item of evidence presented by, the
defeated party, it does not mean that the court has overlooked such testimony or such
item of evidence. 14 At any rate, the legal presumptions are that official duty has been
regularly performed, and that all the matters within an issue in a case were laid before
the court and passed upon by it. 15

Findings of fact, which the Court of Appeals is required to make, maybe defined as "the
written statement of the ultimate facts as found by the court ... and essential to support
the decision and judgment rendered thereon". 16 They consist of the court's
"conclusions" with respect to the determinative facts in issue". 17 A question of law, upon
the other hand, has been declared as "one which does not call for an examination of the
probative value of the evidence presented by the parties." 18

2. By statute, "only questions of law may be raised" in an appeal by certiorari from a

judgment of the Court of Appeals. 19 That judgment is conclusive as to the facts. It is
not appropriately the business of this Court to alter the facts or to review the questions
of fact. 20

With these guideposts, we now face the problem of whether the findings of fact of the
Court of Appeals support its judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from
petitioner a first class ticket. But petitioner asserts that said ticket did not represent the
true and complete intent and agreement of the parties; that said respondent knew that
he did not have confirmed reservations for first class on any specific flight, although he
had tourist class protection; that, accordingly, the issuance of a first class ticket was no
guarantee that he would have a first class ride, but that such would depend upon the
availability of first class seats.

These are matters which petitioner has thoroughly presented and discussed in its brief
before the Court of Appeals under its third assignment of error, which reads: "The trial
court erred in finding that plaintiff had confirmed reservations for, and a right to, first
class seats on the "definite" segments of his journey, particularly that from Saigon to
Beirut". 21
 61

And, the Court of Appeals disposed of this contention thus:

Defendant seems to capitalize on the argument that the issuance of a first-class ticket was
no guarantee that the passenger to whom the same had been issued, would be
accommodated in the first-class compartment, for as in the case of plaintiff he had yet to
make arrangements upon arrival at every station for the necessary first-class reservation.
We are not impressed by such a reasoning. We cannot understand how a reputable firm
like defendant airplane company could have the indiscretion to give out tickets it never
meant to honor at all. It received the corresponding amount in payment of first-class
tickets and yet it allowed the passenger to be at the mercy of its employees. It is more in
keeping with the ordinary course of business that the company should know whether or
riot the tickets it issues are to be honored or not.22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's
contention, thus:

On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no
question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C"
and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony
and testified as follows:

Q. In these tickets there are marks "O.K." From what you know, what does this OK
mean?

A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

xxx xxx xxx

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael
Altonaga that although plaintiff paid for, and was issued a "first class" airplane ticket, the
ticket was subject to confirmation in Hongkong. The court cannot give credit to the
testimony of said witnesses. Oral evidence cannot prevail over written evidence, and
plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses,
and clearly show that the plaintiff was issued, and paid for, a first class ticket without any
reservation whatever.

Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified

that the reservation for a "first class" accommodation for the plaintiff was confirmed. The
court cannot believe that after such confirmation defendant had a verbal understanding
with plaintiff that the "first class" ticket issued to him by defendant would be subject to
confirmation in Hongkong. 23

We have heretofore adverted to the fact that except for a slight difference of a few pesos
in the amount refunded on Carrascoso's ticket, the decision of the Court of First Instance
was affirmed by the Court of Appeals in all other respects. We hold the view that such a
judgment of affirmance has merged the judgment of the lower court. 24 Implicit in that
affirmance is a determination by the Court of Appeals that the proceeding in the Court
of First Instance was free from prejudicial error and "all questions raised by the
assignments of error and all questions that might have been raised are to be regarded as
finally adjudicated against the appellant". So also, the judgment affirmed "must be
 62

regarded as free from all error". 25 We reached this policy construction because nothing
in the decision of the Court of Appeals on this point would suggest that its findings of
fact are in any way at war with those of the trial court. Nor was said affirmance by the
Court of Appeals upon a ground or grounds different from those which were made the
basis of the conclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,
notwithstanding the fact that seat availability in specific flights is therein confirmed, then
an air passenger is placed in the hollow of the hands of an airline. What security then
can a passenger have? It will always be an easy matter for an airline aided by its
employees, to strike out the very stipulations in the ticket, and say that there was a verbal
agreement to the contrary. What if the passenger had a schedule to fulfill? We have long
learned that, as a rule, a written document speaks a uniform language; that spoken word
could be notoriously unreliable. If only to achieve stability in the relations between
passenger and air carrier, adherence to the ticket so issued is desirable. Such is the case
here. The lower courts refused to believe the oral evidence intended to defeat the
covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts
upon which the Court of Appeals predicated the finding that respondent Carrascoso had
a first class ticket and was entitled to a first class seat at Bangkok, which is a stopover in
the Saigon to Beirut leg of the flight. 27 We perceive no "welter of distortions by the
Court of Appeals of petitioner's statement of its position", as charged by petitioner. 28
Nor do we subscribe to petitioner's accusation that respondent Carrascoso
"surreptitiously took a first class seat to provoke an issue". 29 And this because, as
petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm
my seat and because from Saigon I was told again to see the Manager". 30 Why, then,
was he allowed to take a first class seat in the plane at Bangkok, if he had no seat? Or, if
another had a better right to the seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant

claim is that Carrascoso's action is planted upon breach of contract; that to authorize an
award for moral damages there must be an averment of fraud or bad faith;31 and that
the decision of the Court of Appeals fails to make a finding of bad faith. The pivotal
allegations in the complaint bearing on this issue are:

3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for
a valuable consideration, the latter acting as general agents for and in behalf of the
defendant, under which said contract, plaintiff was entitled to, as defendant agreed to
furnish plaintiff, First Class passage on defendant's plane during the entire duration of
plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's return
trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon
to Bangkok, defendant furnished to the plaintiff First Class accommodation but only
after protestations, arguments and/or insistence were made by the plaintiff with
defendant's employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished
plaintiff only Tourist Class accommodations from Bangkok to Teheran and/or
Casablanca, ... the plaintiff has been compelled by defendant's employees to leave the
First Class accommodation berths at Bangkok after he was already seated.
 63

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and

embarrassments brought by defendant's breach of contract was forced to take a Pan
American World Airways plane on his return trip from Madrid to Manila.32

xxx xxx xxx

2. That likewise, as a result of defendant's failure to furnish First Class accommodations

aforesaid, plaintiff suffered inconveniences, embarrassments, and humiliations, thereby
causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation,
and the like injury, resulting in moral damages in the amount of P30,000.00. 33

xxx xxx xxx

The foregoing, in our opinion, substantially aver: First, That there was a contract to
furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg;
Second, That said contract was breached when petitioner failed to furnish first class
transportation at Bangkok; and Third, that there was bad faith when petitioner's
employee compelled Carrascoso to leave his first class accommodation berth "after he
was already, seated" and to take a seat in the tourist class, by reason of which he suffered
inconvenience, embarrassments and humiliations, thereby causing him mental anguish,
serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It
is true that there is no specific mention of the term bad faith in the complaint. But, the
inference of bad faith is there, it may be drawn from the facts and circumstances set forth
therein. 34 The contract was averred to establish the relation between the parties. But
the stress of the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel
placed petitioner on guard on what Carrascoso intended to prove: That while sitting in
the plane in Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat
to a white man; 35 and (b) evidence of bad faith in the fulfillment of the contract was
presented without objection on the part of the petitioner. It is, therefore, unnecessary to
inquire as to whether or not there is sufficient averment in the complaint to justify an
award for moral damages. Deficiency in the complaint, if any, was cured by the evidence.
An amendment thereof to conform to the evidence is not even required. 36 On the
question of bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the plane
belonging to the defendant Air France while at Bangkok, and was transferred to the
tourist class not only without his consent but against his will, has been sufficiently
established by plaintiff in his testimony before the court, corroborated by the
corresponding entry made by the purser of the plane in his notebook which notation
reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and that the
captain refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The
captain of the plane who was asked by the manager of defendant company at Bangkok
to intervene even refused to do so. It is noteworthy that no one on behalf of defendant
ever contradicted or denied this evidence for the plaintiff. It could have been easy for
defendant to present its manager at Bangkok to testify at the trial of the case, or yet to
secure his disposition; but defendant did neither. 37

The Court of appeals further stated —

 64

Neither is there evidence as to whether or not a prior reservation was made by the white
man. Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him
when all the seats had already been taken, surely the plaintiff should not have been
picked out as the one to suffer the consequences and to be subjected to the humiliation
and indignity of being ejected from his seat in the presence of others. Instead of
explaining to the white man the improvidence committed by defendant's employees, the
manager adopted the more drastic step of ousting the plaintiff who was then safely
ensconsced in his rightful seat. We are strengthened in our belief that this probably was
what happened there, by the testimony of defendant's witness Rafael Altonaga who, when
asked to explain the meaning of the letters "O.K." appearing on the tickets of plaintiff,
said "that the space is confirmed for first class. Likewise, Zenaida Faustino, another
witness for defendant, who was the chief of the Reservation Office of defendant, testified
as follows:

"Q How does the person in the ticket-issuing office know what reservation the passenger
has arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better
right" to the seat occupied by Mr. Carrascoso? The record is silent. The defendant airline
did not prove "any better", nay, any right on the part of the "white man" to the "First class"
seat that the plaintiff was occupying and for which he paid and was issued a corresponding
"first class" ticket.

If there was a justified reason for the action of the defendant's Manager in Bangkok, the
defendant could have easily proven it by having taken the testimony of the said Manager
by deposition, but defendant did not do so; the presumption is that evidence willfully
suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, under
the circumstances, the Court is constrained to find, as it does find, that the Manager of
the defendant airline in Bangkok not merely asked but threatened the plaintiff to throw
him out of the plane if he did not give up his "first class" seat because the said Manager
wanted to accommodate, using the words of the witness Ernesto G. Cuento, the "white
man".38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed
did not use the term "bad faith". But can it be doubted that the recital of facts therein
points to bad faith? The manager not only prevented Carrascoso from enjoying his right
to a first class seat; worse, he imposed his arbitrary will; he forcibly ejected him from his
seat, made him suffer the humiliation of having to go to the tourist class compartment -
just to give way to another passenger whose right thereto has not been established.
Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different
from what is understood in law. For, "bad faith" contemplates a "state of mind
affirmatively operating with furtive design or with some motive of self-interest or will or
for ulterior purpose." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in
the judgment of the Court of First Instance, thus:

The evidence shows that the defendant violated its contract of transportation with plaintiff
in bad faith, with the aggravating circumstances that defendant's Manager in Bangkok
went to the extent of threatening the plaintiff in the presence of many passengers to have
him thrown out of the airplane to give the "first class" seat that he was occupying to, again
 65

using the words of the witness Ernesto G. Cuento, a "white man" whom he (defendant's
Manager) wished to accommodate, and the defendant has not proven that this "white
man" had any "better right" to occupy the "first class" seat that the plaintiff was occupying,
duly paid for, and for which the corresponding "first class" ticket was issued by the
defendant to him.40

5. The responsibility of an employer for the tortious act of its employees need not be
essayed. It is well settled in law. 41 For the willful malevolent act of petitioner's manager,
petitioner, his employer, must answer. Article 21 of the Civil Code says:

ART. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon
the provisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42

6. A contract to transport passengers is quite different in kind and degree from any other
contractual relation. 43 And this, 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.

Passengers do not contract merely for transportation. They have a right to be treated by
the carrier's employees with kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is, that any rule or discourteous conduct on the part
of employees towards a passenger gives the latter an action for damages against the
carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach
of contract and a tort, giving a right of action for its agent in the presence of third persons
to falsely notify her that the check was worthless and demand payment under threat of
ejection, though the language used was not insulting and she was not ejected." 46 And
this, because, although the relation of passenger and carrier is "contractual both in origin
and nature" nevertheless "the act that breaks the contract may be also a tort". 47 And in
another case, "Where a passenger on a railroad train, when the conductor came to collect
his fare tendered him the cash fare to a point where the train was scheduled not to stop,
and told him that as soon as the train reached such point he would pay the cash fare from
that point to destination, there was nothing in the conduct of the passenger which justified
the conductor in using insulting language to him, as by calling him a lunatic," 48 and the
Supreme Court of South Carolina there held the carrier liable for the mental suffering
of said passenger.1awphîl.nèt

Petitioner's contract with Carrascoso is one attended with public duty. The stress of
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a
violation of public duty by the petitioner air carrier — a case of quasi-delict. Damages are
proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —

Q You mentioned about an attendant. Who is that attendant and purser?

 66

A When we left already — that was already in the trip — I could not help it. So one of the
flight attendants approached me and requested from me my ticket and I said, What for?
and she said, "We will note that you transferred to the tourist class". I said, "Nothing of
that kind. That is tantamount to accepting my transfer." And I also said, "You are not
going to note anything there because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortable and you don't have
enough leg room, I stood up and I went to the pantry that was next to me and the purser
was there. He told me, "I have recorded the incident in my notebook." He read it and
translated it to me — because it was recorded in French — "First class passenger was forced
to go to the tourist class against his will, and that the captain refused to intervene."

Mr. VALTE —

I move to strike out the last part of the testimony of the witness because the best evidence
would be the notes. Your Honor.

COURT —

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry
in his notebook reading "First class passenger was forced to go to the tourist class against
his will, and that the captain refused to intervene" is predicated upon evidence
[Carrascoso's testimony above] which is incompetent. We do not think so. The subject
of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come
within the proscription of the best evidence rule. Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the
impact of the startling occurrence was still fresh and continued to be felt. The excitement
had not as yet died down. Statements then, in this environment, are admissible as part of
the res gestae. 50 For, they grow "out of the nervous excitement and mental and physical
condition of the declarant". 51 The utterance of the purser regarding his entry in the
notebook was spontaneous, and related to the circumstances of the ouster incident. Its
trustworthiness has been guaranteed. 52 It thus escapes the operation of the hearsay rule.
It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of
petitioner. It would have been an easy matter for petitioner to have contradicted
Carrascoso's testimony. If it were really true that no such entry was made, the deposition
of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in

evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to
grant exemplary damages — in contracts and quasi- contracts. The only condition is that
defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent
 67

manner." 53 The manner of ejectment of respondent Carrascoso from his first class seat
fits into this legal precept. And this, in addition to moral damages.54

9. The right to attorney's fees is fully established. The grant of exemplary damages
justifies a similar judgment for attorneys' fees. The least that can be said is that the courts
below felt that it is but just and equitable that attorneys' fees be given. 55 We do not
intend to break faith with the tradition that discretion well exercised — as it was here —
should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the
Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary
damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily
with the trial court. 56 The Court of Appeals did not interfere with the same. The dictates
of good sense suggest that we give our imprimatur thereto. Because, the facts and
circumstances point to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from
reversible error. We accordingly vote to affirm the same. Costs against petitioner.

SO ORDERED.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and
Castro, JJ., concur.
Bengzon, J.P., J., took no part.
 68

G.R. No. L-6393

January 31, 1955

A. MAGSAYSAY INC., plaintiff-appellee, vs. ANASTACIO AGAN, defendant-

appellant.

Custodio A. Villava for appellant.

Quijano, Alidio and Azores for appellee.

REYES, A. J.:

The S S "San Antonio", vessel owned and operated by plaintiff, left Manila on October
6, 1949, bound for Basco, Batanes, vis Aparri, Cagayan, with general cargo belonging to
different shippers, among them the defendant. The vessel reached Aparri on the 10th of
that month, and after a day's stopover in that port, weighed anchor to proceed to Basco.
But while still in port, it ran aground at the mouth of the Cagayan river, and, attempts to
refloat it under its own power having failed, plaintiff have it refloated by the Luzon
Stevedoring Co. at an agreed compensation. Once afloat the vessel returned to Manila
to refuel and then proceeded to Basco, the port of destination. There the cargoes were
delivered to their respective owners or consignees, who, with the exception of defendant,
made a deposit or signed a bond to answer for their contribution to the average.

On the theory that the expenses incurred in floating the vessel constitute general average
to which both ship and cargo should contribute, plaintiff brought the present action in
the Court of First Instance of Manila to make defendant pay his contribution, which, as
determined by the average adjuster, amounts to P841.40. Defendant, in his answer,
denies liability to his amount, alleging, among other things, that the stranding of the vessel
was due to the fault, negligence and lack of skill of its master, that the expenses incurred
in putting it afloat did not constitute general average, and that the liquidation of the
average was not made in accordance with law. After trial, the lower court found for
plaintiff and rendered judgment against the defendant for the amount of the claim, with
legal interests. From this judgment defendant had appealed directly to this Court.

Although appellant assigns various errors, under our view of the case only the following
need be considered:

The trial court erred in allowing the general average for floating a vessel unintentionally
stranded inside a port and at the mouth of a river during a fine weather.

For the purposes of this assignment of error we may well accept the finding below that
the stranding of plaintiff's vessel was due to the sudden shifting of the sandbars at the
mouth of the river which the port pilot did not anticipate. The standing may, therefore,
be regarded as accidental, and the question is whether the expenses incurred in floating
a vessel so stranded should be considered general average and shared by the cargo
owners.

The law on averages is contained in the Code of Commerce. Under that law, averages
are classified into simple or particular and general or gross. Generally speaking, simple
or particular averages include all expenses and damages caused to the vessel or cargo
which have not inured to the common benefit (Art. 809), and are, therefore, to be borne
only by the owner of the property gave rise to same (Art. 810); while general or gross
averages include "all the damages and expenses which are deliberately caused in order to
save the vessel, its cargo, or both at the same time, from a real and known risk" (Art. 811).
Being for the common benefit, gross averages are to be borne by the owners of the
articles saved (Art. 812).
 69

In classifying averages into simple o particular and general or gross and defining each
class, the Code (Art. 809 and 811) at the same time enumerates certain specific cases as
coming specially under one or the other denomination. Going over the specific cases
enumerated we find that, while the expenses incurred in putting plaintiff's vessel afloat
may well come under number 2 of article 809-which refers to expenses suffered by the
vessel "by reason of an accident of the sea of the force majuere" — and should therefore
be classified as particular average, the said expenses do not fit into any of the specific
cases of general average enumerated in article 811. No. 6 of this article does mention
"expenses caused in order to float a vessel," but it specifically refers to "a vessel
intentionally stranded for the purpose of saving it" and would have no application where,
as in the present case, the stranding was not intentional.

Let us now see whether the expenses here in question could come within the legal
concept of the general average. Tolentino, in his commentaries on the Code of
Commerce, gives the following requisites for general average:

First, there must be a common danger. This means, that both the ship and the cargo,
after has been loaded, are subject to the same danger, whether during the voyage, or in
the port of loading or unloading; that the danger arises from the accidents of the sea,
dispositions of the authority, or faults of men, provided that the circumstances producing
the peril should be ascertained and imminent or may rationally be said to be certain and
imminent. This last requirement exclude measures undertaken against a distant peril.

Second, that for the common safety part of the vessel or of the cargo or both is sacrificed
deliberately.

Third, that from the expenses or damages caused follows the successful saving of the
vessel and cargo.

Fourth, that the expenses or damages should have been incurred or inflicted after taking
proper legal steps and authority. (Vol. 1, 7th ed., p. 155.)

With respect to the first requisite, the evidence does not disclose that the expenses sought
to be recovered from defendant were incurred to save vessel and cargo from a common
danger. The vessel ran aground in fine weather inside the port at the mouth of a river, a
place described as "very shallow". It would thus appear that vessel and cargo were at the
time in no imminent danger or a danger which might "rationally be sought to be certain
and imminent." It is, of course, conceivable that, if left indefinitely at the mercy of the
elements, they would run the risk of being destroyed. But as stated at the above quotation,
"this last requirement excludes measures undertaken against a distant peril." It is the
deliverance from an immediate, impending peril, by a common sacrifice, that constitutes
the essence of general average. (The Columbian Insurance Company of Alexandria vs.
Ashby & Stribling et al., 13 Peters 331; 10 L. Ed., 186). In the present case there is no
proof that the vessel had to be put afloat to save it from imminent danger. What does
appear from the testimony of plaintiff's manager is that the vessel had to be salvaged in
order to enable it "to proceed to its port of destination." But as was said in the case just
cited it is the safety of the property, and not of the voyage, which constitutes the true
foundation of the general average.

As to the second requisite, we need only repeat that the expenses in question were not
incurred for the common safety of vessel and cargo, since they, or at least the cargo, were
not in imminent peril. The cargo could, without need of expensive salvage operation,
have been unloaded by the owners if they had been required to do so.
 70

With respect to the third requisite, the salvage operation, it is true, was a success. But as
the sacrifice was for the benefit of the vessel — to enable it to proceed to destination —
and not for the purpose of saving the cargo, the cargo owners are not in law bound to
contribute to the expenses.

The final requisite has not been proved, for it does not appear that the expenses here in
question were incurred after following the procedure laid down in article 813 et seq.

In conclusion we found that plaintiff not made out a case for general average, with the
result that its claim for contribution against the defendant cannot be granted.

Wherefore, the decision appealed from is reversed and plaintiff's complaint ordered
dismissed with costs.

Paras, C.J., Bengzon, Padilla, Montemayor, Jugo, Bautista Angelo, and Reyes, J.B.L., JJ.,
concur.
 71

G.R. No. L-51910

August 10, 1989

LITONJUA SHIPPING COMPANY INC., petitioner vs. NATIONAL SEAMEN

BOARD and GREGORIO P. CANDONGO respondents.

Ferrer, Valte, Mariano, Sangalang & Villanueva for petitioner.

Estratonico S. Anano for private respondent.

FELICIANO, J.:

In this Petition for Certiorari, petitioner Litonjua Shipping Company, Inc. ("Lintonjua")
seeks to annul and set aside a decision dated, 31 May 1979 of the National Seamen
Board ("NSB") in NSB Case No. 1331-77 affirming the decision dated 17 February 1977
of the NSB hearing officer which adjudged petitioner Litonjua liable to private
respondent for violation of the latter's contract of employment and which ordered
petitioner to pay damages.

Petitioner Litonjua is the duly appointed local crewing Managing Office of the Fairwind
Shipping Corporation ('Fairwind). The M/V Dufton Bay is an ocean-going vessel of
foreign registry owned by the R.D. Mullion Ship Broking Agency Ltd. ("Mullion"). On
11 September 1976, while the Dufton Bay was in the port of Cebu and while under
charter by Fairwind, the vessel's master contracted the services of, among others, private
respondent Gregorio Candongo to serve as Third Engineer for a period of twelve (12)
months with a monthly wage of US$500.00. This agreement was executed before the
Cebu Area Manning Unit of the NSB. Thereafter, private respondent boarded the
vessel. On 28 December 1976, before expiration of his contract, private respondent was
required to disembark at Port Kelang, Malaysia, and was returned to the Philippines on
5 January 1977. The cause of the discharge was described in his Seaman's Book as 'by
owner's arrange".1

Shortly after returning to the Philippines, private respondent filed a complaint before
public respondent NSB, which complaint was docketed as NSB-1331-77, for violation
of contract, against Mullion as the shipping company and petitioner Litonjua as agent of
the shipowner and of the charterer of the vessel.

At the initial hearing, the NSB hearing officer held a conference with the parties, at which
conference petitioner Litonjua was represented by one of its supercargos, Edmond Cruz.
Edmond Cruz asked, in writing, that the hearing be postponed for a month upon the
ground that the employee of Litonjua in charge of the case was out of town. The hearing
officer denied this request and then declared petitioner Litonjua in default. At the
hearing, private respondent testified that when he was recruited by the Captain of the
Dufton Bay, the latter was accompanied to the NSB Cebu Area Manning Unit by two
(2) supercargos sent by petitioner Litonjua to Cebu, and that the two (2) supercargos
Edmond Cruz and Renato Litonjua assisted private respondent in the procurement of
his National Investigation and Security Agency (NISA) clearance. Messrs. Cruz and
Litonjua were also present during private respondent's interview by Captain Ho King Yiu
of the Dufton Bay.

On 17 February 1977, the hearing officer of the NSB rendered a judgment by default, 2
the dispositive portion of which read:

Wherefore, premises considered, judgment is hereby rendered ordering the respondents

R.D. Mullion Shipbrokers Co., Ltd., and Litonjua Shipping Co., Inc., jointly and
solidarily to pay the complainant the sum of four thousand six hundred fifty seven dollars
 72

and sixty three cents ($4,657.63) or its equivalent in the Phil. currency within 10 days
from receipt of the copy of this Decision the payment of which to be coursed through
the then NSB.

The above conclusion was rationalized in the following terms:

From the evidence on record it clearly appears that there was no sufficient or valid cause
for the respondents to terminate the services of complainant prior to 17 September 1977,
which is the expiry date of the contract. For this reason the respondents have violated
the conditions of the contract of employment which is a sufficient justification for this
Board to render award in favor of the complainant of the unpaid salaries due the latter
as damages corresponding to the unexpired portion of the contract including the accrued
leave pay computed on the basis of five [51 days pay for every month of service based at
$500.00 monthly salary. Complainant's wages account further show that he has an
undrawn wage amounting to US$13.19 to be paid by the respondents Philippine agency
together with his accrued leave pay. 3

Petitioner Litonjua filed a motion for reconsideration of the hearing officer's decision;
the motion was denied. Petitioner next filed an "Appeal and/or Motion for
Reconsideration of the Default Judgment dated 9 August 1977" with the central office of
the NSB. NSB then suspended its hearing officer's decision and lifted the order of default
against petitioner Litonjua, thereby allowing the latter to adduce evidence in its own
behalf The NSB hearing officer, on 26 April 1978, made the following findings:

While it appears that in the preparation of the employment papers of the complainant,
what was indicated therein was R.D. Mullion Co. (HK) Ltd. referring to Exhibit "B"
(Standard Format of a Service Agreement) and Exhibit "C" (Affidavit of Undertaking), as
thecompany whom Captain Ho King Yiu, the Master of the vessel Dufton Bay, was
representing to be the shipowner, the fact remains that at the time of the recruitment of
the complainant, as duly verified by the National Seamen Board, Cebu Area Manning
Unit, the Litonjua Shipping Company was the authorized agent of the vessel's charterer,
the Fairwind Shipping Corporation, and that in the recruitment process, the Litonjua
Shipping Company through its supercargos in the persons of Edmund Cruz and Renato
Litonjua, had knowledge thereof and in fact assisted in the interviews conducted by the
Master of the crew applicants as admitted by Renato Litonjua including the acts of
facilitating the crew's NISA clearances as testified to by complainant. Moreover, the
participation of the Litonjua Shipping Corporation in the recruitment of complainant,
together with the other crewmembers, in Cebu in September 1976 can be traced to the
contents of the letter of April 5, 1976 by the Fairwind Shipping Limited, thru its Director
David H.L. Wu addressed to the National Seamen Board, copy of which is on file with
Contracts and Licensing Division, quote:

This is to certify that Messrs. Litonjua Shipping, Inc. is duly appointed local crewing
Managing Office to attend on our Crew requirements as well as attend to our ship's
requirements when in Philippine ports.

We further authorized Litonjua Shipping Co., Inc. to act as local representative who can
sue and be sued, and to bind and sign contracts for our behalf. 4

The NSB then lifted the suspension of the hearing officer's 17 February 1977 decision.

Petitioner Litonjua once more moved for reconsideration. On 31 May 1979, public
respondent NSB rendered a decision 5 which affirmed its hearing offices decision of 17
February 1977 and which read in part as follows:
 73

It is clear that respondent Litonjua Shipping Co., Inc. is the authorized Philippine agent
of Fairwind Shipping Corporation, charterer of the vessel 'Dufton Bay, wherein
complainant, served as 3rd Engineer from 17 September until disembarkation on
December 28, 1976. It is also clear from the complainant's wages account bearing the
heading 'Fairwind Shipping Corporation', signed by the Master of the vessel that the
Philippine agency referred to herein directed to pay the said withdrawn wages of $13.19
is no other than Litonjua Shipping Company, Inc.

From this observation, it can be reasonably inferred that the master of the vessel acted
for and in behalf of Fairwind Shipping Corporation who had the obligation to pay the
salary of the complainant. It necessarily follows that Fairwind Shipping Corporation is
the employer of said complainant. Moreover, it had been established by complainant
that Litonjua Shipping Company, Inc., had knowledge of and participated, through its
employee, in the recruitment of herein complainant.

xxx xxx xxx

In view of the foregoing, and pursuant to Art. 3 of the New Labor Code of the
Philippines, which provides that, 'The state shall afford protection to labor . . .' as well as
the provisions of Art. 4 thereof, that 'all doubts in the implementation and interpretation
of the provisions of the Code, including its implementing rules and regulations, shall be
resolved in favor of labor', it is our conclusion, that the decision dated February 17, 1977,
is based on evidence formally offered and presented during the hearing and that there
was no grave abuse of discretion committed by the hearing officer in finding respondent
Litonjua Shipping Company, Inc., liable to complainant. (Emphasis supplied)

In the instant Petition for Certiorari, petitioner Litonjua assails the decision of public
respondent NSB declaring the charterer Fairwind as employer of private respondent,
and for whose liability petitioner was made responsible, as constituting a grave abuse of
discretion amounting to lack of jurisdiction. The principal if not the sole issue to be
resolved here is whether or not the charterer Fairwind was properly regarded as the
employer of private respondent Candongo.

Petitioner Litonjua makes two (2) principal submissions in support of its contention, to
wit:
1) As a general rule, admiralty law as embodied in the Philippine Code of Commerce
fastens liability for payment of the crew's wages upon the ship owner, and not the
charterer; and
2) The evidence of record is grossly inadequate to shift such liability from the shipowner
to the petitioner.6

Petitioner Litonjua contends that the shipowner, not the charterer, was the employer of
private respondent; and that liability for damages cannot be imposed upon petitioner
which was a mere agent of the charterer. It is insisted that private respondent's contract
of employment and affidavit of undertaking clearly showed that the party with whom he
had contracted was none other than Mullion, the shipowner, represented by the ship's
master. 7 Petitioner also argues that its supercargos merely assisted Captain Ho King Yiu
of the Dufton Bay in being private respondent as Third Engineer. Petitioner also points
to the circumstance that the discharge and the repatriation of private respondent was
specified in his Seaman's Book as having been "by owner's arrange." Petitioner Litonjua
thus argues that being the agent of the charterer and not of the shipowner, it accordingly
should not have been held liable on the contract of employment of private respondent.
 74

We are not persuaded by petitioner's argument. We believe that there are two (2)
grounds upon which petitioner Litonjua may be held liable to the private respondent on
the contract of employment.

The first basis is the charter party which existed between Mullion, the shipowner, and
Fairwind, the charterer. In modern maritime law and usage, there are three (3)
distinguishable types of charter parties: (a) the "bareboat" or "demise" charter; (b) the
"time" charter; and (c) the "voyage" or "trip" charter. A bareboat or demise charter is a
demise of a vessel, much as a lease of an unfurnished house is a demise of real property.
The shipowner turns over possession of his vessel to the charterer, who then undertakes
to provide a crew and victuals and supplies and fuel for her during the term of the charter.
The shipowner is not normally required by the terms of a demise charter to provide a
crew, and so the charterer gets the "bare boat", i.e., without a crew. 8 Sometimes, of
course, the demise charter might provide that the shipowner is to furnish a master and
crew to man the vessel under the charterer's direction, such that the master and crew
provided by the shipowner become the agents and servants or employees of the
charterer, and the charterer (and not the owner) through the agency of the master, has
possession and control of the vessel during the charter period. A time charter, upon the
other hand, like a demise charter, is a contract for the use of a vessel for a specified
period of time or for the duration of one or more specified voyages. In this case, however,
the owner of a time-chartered vessel (unlike the owner of a vessel under a demise or
bare-boat charter), retains possession and control through the master and crew who
remain his employees. What the time charterer acquires is the right to utilize the carrying
capacity and facilities of the vessel and to designate her destinations during the term of
the charter. A voyage charter, or trip charter, is simply a contract of affreightment, that
is, a contract for the carriage of goods, from one or more ports of loading to one or more
ports of unloading, on one or on a series of voyages. In a voyage charter, master and crew
remain in the employ of the owner of the vessel. 9

It is well settled that in a demise or bare boat charter, the charterer is treated as owner
pro hac vice of the vessel, the charterer assuming in large measure the customary rights
and liabilities of the shipowner in relation to third persons who have dealt with him or
with the vessel. 10 In such case, the Master of the vessel is the agent of the charterer and
not of the shipowner.11 The charterer or owner pro hac vice, and not the general owner
of the vessel, is held liable for the expenses of the voyage including the wages of the
seamen.12

It is important to note that petitioner Litonjua did not place into the record of this case
a copy of the charter party covering the M/V Dufton Bay. We must assume that
petitioner Litonjua was aware of the nature of a bareboat or demise charter and that if
petitioner did not see fit to include in the record a copy of the charter party, which had
been entered into by its principal, it was because the charter party and the provisions
thereof were not supportive of the position adopted by petitioner Litonjua in the present
case, a position diametrically opposed to the legal consequence of a bareboat charter.13
Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it
was not such, we believe and so hold that petitioner Litonjua, as Philippine agent of the
charterer, may be held liable on the contract of employment between the ship captain
and the private respondent.

There is a second and ethically more compelling basis for holding petitioner Litonjua
liable on the contract of employment of private respondent. The charterer of the vessel,
Fairwind, clearly benefitted from the employment of private respondent as Third
Engineer of the Dufton Bay, along with the ten (10) other Filipino crewmembers
recruited by Captain Ho in Cebu at the same occasion. 14 If private respondent had not
agreed to serve as such Third Engineer, the ship would not have been able to proceed
 75

with its voyage. The equitable consequence of this benefit to the charterer is, moreover,
reinforced by convergence of other circumstances of which the Court must take account.
There is the circumstance that only the charterer, through the petitioner, was present in
the Philippines. Secondly, the scope of authority or the responsibility of petitioner
Litonjua was not clearly delimited. Petitioner as noted, took the position that its
commission was limited to taking care of vessels owned by Fairwind. But the
documentary authorization read into the record of this case does not make that clear at
all. The words "our ships" may well be read to refer both to vessels registered in the name
of Fairwind and vessels owned by others but chartered by Fairwind. Indeed the
commercial, operating requirements of a vessel for crew members and for supplies and
provisions have no relationship to the technical characterization of the vessel as owned
by or as merely chartered by Fairwind. In any case, it is not clear from the authorization
given by Fairwind to petitioner Litonjua that vessels chartered by Fairwind (and owned
by some other companies) were not to be taken care of by petitioner Litonjua should
such vessels put into a Philippine port. The statement of account which the Dufton Bay's
Master had signed and which pertained to the salary of private respondent had referred
to a Philippine agency which would take care of disbursing or paying such account. 'there
is no question that Philippine agency was the Philippine agent of the charterer Fairwind.
Moreover, there is also no question that petitioner Litonjua did assist the Master of the
vessel in locating and recruiting private respondent as Third Engineer of the vessel as
well as ten (10) other Filipino seamen as crew members. In so doing, petitioner Litonjua
certainly in effect represented that it was taking care of the crewing and other
requirements of a vessel chartered by its principal, Fairwind.15

Last, but certainly not least, there is the circumstance that extreme hardship would result
for the private respondent if petitioner Litonjua, as Philippine agent of the charterer, is
not held liable to private respondent upon the contract of employment. Clearly, the
private respondent, and the other Filipino crew members of the vessel, would be
defenseless against a breach of their respective contracts. While wages of crew members
constitute a maritime lien upon the vessel, private respondent is in no position to enforce
that lien. If only because the vessel, being one of foreign registry and not ordinarily doing
business in the Philippines or making regular calls on Philippine ports cannot be
effectively held to answer for such claims in a Philippine forum. Upon the other hand, it
seems quite clear that petitioner Litonjua, should it be held liable to private respondent
for the latter's claims, would be better placed to secure reimbursement from its principal
Fairwind. In turn, Fairwind would be in an indefinitely better position (than private
respondent) to seek and obtain recourse from Mullion, the foreign shipowner, should
Fairwind feel entitled to reimbursement of the amounts paid to private respondent
through petitioner Litonjua.

We conclude that private respondent was properly regarded as an employee of the

charterer Fairwind and that petitioner Litonjua may be held to answer to private
respondent for the latter's claims as the agent in the Philippines of Fairwind. We think
this result, which public respondent reached, far from constituting a grave abuse of
discretion, is compelled by equitable principles and by the demands of substantial justice.
To hold otherwise would be to leave private respondent (and others who may find
themselves in his position) without any effective recourse for the unjust dismissal and for
the breach of his contract of employment.

WHEREFORE, the Petition for certiorari is DISMISSED and the Decision of the then
National Seamen Board dated 31 May 1979 is hereby AFFIRMED. No pronouncement
as to costs.

SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.
 76

G.R. No. L-17192

March 30, 1963

HONORIO M. BARRIOS, plaintiff-appellant, vs. CARLOS A. GO THONG &

COMPANY, defendant-appellee.

Laput & Jardiel for plaintiff-appellant.

Quisumbing & Quisumbing for defendant-appellee.

BARRERA, J.:

From the decision of the Court of First Instance of Manila (in Civil Case No. 37219)
dismissing with costs his case against defendant Carlos A. Go Thong & Co., plaintiff
Honorio M. Barrios, interposed the present appeal.

The facts of the case, as found by the trial court, are briefly stated in its decision, to wit:

The plaintiff Honorio M. Barrios was, on May 1 and 2, 1958, captain and/or master of
the MV Henry I of the William Lines Incorporated, of Cebu City, plying between and
to and from Cebu City and other southern cities and ports, among which are Dumaguete
City, Zamboanga City, and Davao City. At about 8:00 o'clock on the evening of May 1,
1958, plaintiff in his capacity as such captain and/or master of the aforesaid MV Henry
I, received or otherwise intercepted an S.O.S. or distress signal by blinkers from the MV
Don Alfredo, owned and/or operated by the defendant Carlos A. Go Thong &
Company. Acting on and/or answering the S.O.S. call, the plaintiff Honorio M. Barrios,
also in his capacity as captain and/or master of the MV Henry I, which was then sailing
or navigating from Dumaguete City, altered the course of said vessel, and steered and
headed towards the beckoning MV Don Alfredo, which plaintiff found to be in trouble,
due to engine failure and the loss of her propeller, for which reason, it was drifting slowly
southward from Negros Island towards Borneo in the open China Sea, at the mercy of a
moderate easterly wind. At about 8:25 p.m. on the same day, May 1, 1958, the MV
Henry I, under the command of the plaintiff, succeeded in getting near the MV Don
Alfredo — in fact as near as about seven meters from the latter ship — and with the consent
and knowledge of the captain and/or master of the MV Don Alfredo, the plaintiff caused
the latter vessel to be tied to, or well-secured and connected with two lines from the MV
Henry I; and in that manner, position and situation, the latter had the MV Don Alfredo
in tow and proceeded towards the direction of Dumaguete City, as evidenced by a written
certificate to this effect executed and accomplished by the Master, the Chief Engineer,
the Chief Officer, and the Second Engineer, of the MV Don Alfredo, who were then on
board the latter ship at the time of the occurrence stated above (Exh. A). At about 5:10
o'clock the following morning, May 2, 1958, or after almost nine hours during the night,
with the MV Don Alfredo still in tow by the MV Henry I, and while both vessels were
approaching the vicinity of Apo Islands off Zamboanga town, Negros Oriental, the MV
Lux, a sister ship of the MV Don Alfredo, was sighted heading towards the direction of
the aforesaid two vessels, reaching then fifteen minutes later, or at about 5:25 o'clock on
that same morning. Thereupon, at the request and instance of the captain and/or master
of the MV Don Alfredo, the plaintiff caused the tow lines to be released, thereby also
releasing the MV Don Alfredo.

These are the main facts of the present case as to which plaintiff and defendant quite
agree with each other. As was manifested in its memorandum presented in this case on
August 22, 1958, defendant thru counsel said that there is, indeed, between the parties,
no dispute as to the factual circumstances, but counsel adds that where plaintiff concludes
that they establish an impending sea peril from which salvage of a ship worth more than
P100,000.00, plus life and cargo was done, the defendant insists that the facts made out
 77

no such case, but that what merely happened was only mere towage from which plaintiff
cannot claim any compensation or remuneration independently of the shipping company
that owned the vessel commanded by him.

On the basis of these facts, the trial court (on April 5, 1960) dismissed the case, stating:

Plaintiff bases his claim upon the provisions of the Salvage Law, Act No. 2616, .....

In accordance with the Salvage Law, a ship which is lost or abandoned at sea is
considered a derelict and, therefore, proper subject of salvage. A ship in a desperate
condition, where persons on board are incapable, by reason of their mental and physical
condition, of doing anything for their own safety, is a quasi-derelict and may, likewise, be
the proper subject of salvage. Was the MV Don Alfredo, on May 1, 1958, when her
engine failed and, for that reason, was left drifting without power on the high seas, a
derelict or a quasi-derelict? In other words, was it a ship that was lost or abandoned, or
in a desperate condition, which could not be saved by reason of incapacity or incapacity
of its crew or the persons on board thereof? From all appearances and from the evidence
extant in the records, there can be no doubt, for it seems clear enough, that the MV Don
Alfredo was not a lost ship, nor was it abandoned. Can it be said that the said ship was in
a desperate condition, simply because S.O.S. signals were sent from it?.

From the testimony of the captain of the MV Don Alfredo, the engine failed and the
ship already lost power as early as 8:00 o'clock on the morning of May 1, 1958; although
it was helpless, in the sense that it could not move, it did not drift too far from the place
where it was, at the time it had an engine failure. The weather was fair — in fact, as
described by witnesses, the weather was clear and good. The waves were small, too slight
— there were only ripples on the sea, and the sea was quite smooth. And, during the
night, while towing was going on, there was a moonlight. Inasmuch as the MV Don
Alfredo was drifting towards the open sea, there was no danger of floundering. As
testified to by one of the witnesses, it would take days or even weeks before the ship
could as much as approach an island. And, even then, upon the least indication, the
anchor could always be weighed down, in order to prevent the ship from striking against
the rocks.

"There was no danger of the vessel capsizing, in view of the fairness of the sea, and the
condition of the weather, as described above. As a matter of fact, although the MV Don
Alfredo had a motor launch, and two lifeboats, there was no attempt, much less, was
there occasion or necessity, to lower anyone or all of them, in order to evacuate the
persons on board; nor did the conditions then obtaining require an order to jettison the
cargo.

But, it is insisted for the plaintiff that an S.O.S. or a distress signal was sent from aboard
the MV Don Alfredo, which was enough to establish the fact that it was exposed to
imminent peril at sea. It is admitted by the defendant that such S.O.S. signal was, in fact,
sent by blinkers. However, defendant's evidence shows that Captain Loresto of the MV
Don Alfredo, did not authorize the radio operator of the aforesaid ship to send an S.O.S.
or distress signal, for the ship was never in distress, nor was it exposed to a great imminent
peril of the sea. What the aforesaid Captain told the radio operator to transmit was a
general call; for, at any rate, message had been sent to defendant's office at Cebu City,
which the latter had acknowledged, by sending back a reply stating that help was on the
way. However, as explained by the said radio operator, in spite of his efforts to send a
general call by radio, he did not receive any response. For this reason, the Captain
instructed him to send the general call by blinkers from the deck of the ship; but the call
by blinkers, which follows the dots and dashes method of sending messages, could not
be easily understood by deck officers who ordinarily are not radio operators. Hence, the
 78

only way by which the attention of general officers on deck could be called, was to send
an S.O.S. signal which can be understood by all and sundry.

Be it as it may, the evidence further shows that when the two ships were already within
hearing distance (barely seven meters) of each other, there was a sustained conversation
between Masters and complement of the two vessels, by means of loud speakers and the
radio; and, the plaintiff must have learned of the exact nature and extent of the disability
from which the MV Don Alfredo had suffered — that is, that the only trouble that the
said vessel had developed was an engine failure, due to the loss of its propellers..

It can thus be said that the MV Don Alfredo was not in a perilous condition wherein the
members of its crew would be incapable of doing anything to save passengers and cargo,
and, for this reason, it cannot be duly considered as a quasi-derelict; hence, it was not the
proper subject of salvage, and the Salvage Law, Act No. 2616, is not applicable.

Plaintiff, likewise, predicates his action upon the provisions of Article 2142 of the New
Civil Code, which reads as follows:

Certain lawful, voluntary and unilateral acts give to the juridical relation of quasi-contract
to the end that no one shall be unjustly enriched or benefited at the expense of another.

This does not find clear application to the case at bar, for the reason that it is not the
William Lines, Inc., owners of the MV Henry I which is claiming for damages or
remuneration, because it has waived all such claims, but the plaintiff herein is the Captain
of the salvaging ship, who has not shown that, in his voluntary act done towards and which
benefited the MV Don Alfredo, he had been unduly prejudiced by his employers, the
said William Lines, Incorporated.

What about equity? Does not equity permit plaintiff to recover for his services rendered
and sacrifices made? In this jurisdiction, equity may only be taken into account when the
circumstances warrant its application, and in the absence of any provision of law
governing the matter under litigation. That is not so in the present case.

In view of the foregoing, judgment is hereby rendered dismissing the case with costs
against the plaintiff; and inasmuch as the plaintiff has not been found to have brought the
case maliciously, the counterclaim of the defendant is, likewise, dismissed, without
pronouncement as to costs.

SO ORDERED.

The main issue to be resolved in this appeal is, whether under the facts of the case, the
service rendered by plaintiff to defendant constituted "salvage" or "towage", and if so,
whether plaintiff may recover from defendant compensation for such service.

The pertinent provision of the Salvage Law (Act No. 2616), provides:

SECTION 1. When in case of shipwreck, the vessel or its cargo shall be beyond the
control of the crew, or shall have been abandoned by them, and picked up and conveyed
to a safe place by other persons, the latter shall be entitled to a reward for the salvage.

Those who, not being included in the above paragraph, assist in saving a vessel or its
cargo from shipwreck, shall be entitled to a like reward.

According to this provision, those who assist in saving a vessel or its cargo from
shipwreck, shall be entitled to a reward (salvage). "Salvage" has been defined as "the
 79

compensation allowed to persons by whose assistance a ship or her cargo has been saved,
in whole or in part, from impending peril on the sea, or in recovering such property from
actual loss, as in case of shipwreck, derelict, or recapture." (Blackwall v. Saucelito Tug
Company, 10 Wall. 1, 12, cited in Erlanger & Galinger v. Swedish East Asiatic Co., Ltd.,
34 Phil. 178.) In the Erlanger & Galinger case, it was held that three elements are
necessary to a valid salvage claim, namely, (1) a marine peril, (2) service voluntarily
rendered when not required as an existing duty or from a special contract, and (3) success
in whole or in part, or that the service rendered contributed to such success.1

Was there a marine peril, in the instant case, to justify a valid salvage claim by plaintiff
against defendant? Like the trial court, we do not think there was. It appears that although
the defendant's vessel in question was, on the night of May 1, 1958, in a helpless
condition due to engine failure, it did not drift too far from the place where it was. As
found by the court a quo the weather was fair, clear, and good. The waves were small
and too slight, so much so, that there were only ripples on the sea, which was quite
smooth. During the towing of the vessel on the same night, there was moonlight.
Although said vessel was drifting towards the open sea, there was no danger of it
floundering or being stranded, as it was far from any island or rocks. In case of danger
of stranding, its anchor could released, to prevent such occurrence. There was no danger
that defendant's vessel would sink, in view of the smoothness of the sea and the fairness
of the weather. That there was absence of danger is shown by the fact that said vessel or
its crew did not even find it necessary to lower its launch and two motor boats, in order
to evacuate its passengers aboard. Neither did they find occasion to jettison the vessel's
cargo as a safety measure. Neither the passengers nor the cargo were in danger of
perishing. All that the vessel's crew members could not do was to move the vessel on its
own power. That did not make the vessel a quasi-derelict, considering that even before
the appellant extended the help to the distressed ship, a sister vessel was known to be on
its way to succor it.

If plaintiff's service to defendant does not constitute "salvage" within the purview of the
Salvage Law, can it be considered as a quasi-contract of "towage" created in the spirit of
the new Civil Code? The answer seems to incline in the affirmative, for in consenting to
plaintiff's offer to tow the vessel, defendant (through the captain of its vessel MV Don
Alfredo) thereby impliedly entered into a juridical relation of "towage" with the owner of
the vessel MV Henry I, captained by plaintiff, the William Lines, Incorporated.

Tug which put line aboard liberty ship which was not in danger or peril but which had
reduced its engine speed because of hot grounds, and assisted ship over bar and,
thereafter, dropped towline and stood by while ship proceeded to dock under own
power, was entitled, in absence of written agreement as to amount to be paid for services,
to payment for towage services, and not for salvage services. (Sause, et al. v. United States,
et al., 107 F. Supp. 489)

If the contract thus created, in this case, is one for towage, then only the owner of the
towing vessel, to the exclusion of the crew of the said vessel, may be entitled to
remuneration.

It often becomes material too, for courts to draw a distinct line between salvage and
towage, for the reason that a reward ought sometimes to be given to the crew of the
salvage vessel and to other participants in salvage services; and such reward should not
be given if the services were held to be merely towage. (The Rebecca Shepherd, 148 F.
731.)
 80

The master and members of the crew of a tug were not entitled to participate in payment
by liberty ship for services rendered by tug which were towage services and not salvage
services. (Sause, et al. v. United States, et al., supra.)

"The distinction between salvage and towage is of importance to the crew of the salvaging
ship, for the following reasons: If the contract for towage is in fact towage, then the crew
does not have any interest or rights in the remuneration pursuant to the contract. But if
the owners of the respective vessels are of a salvage nature, the crew of the salvaging ship
is entitled to salvage, and can look to the salvaged vessel for its share. (I Norris, The Law
of Seamen, Sec. 222.)

And, as the vessel-owner, William Lines, Incorporated, had expressly waived its claim
for compensation for the towage service rendered to defendant, it is clear that plaintiff,
whose right if at all depends upon and not separate from the interest of his employer, is
not entitled to payment for such towage service.

Neither may plaintiff invoke equity in support of his claim for compensation against
defendant. There being an express provision of law (Art. 2142, Civil Code) applicable to
the relationship created in this case, that is, that of a quasi-contract of towage where the
crew is not entitled to compensation separate from that of the vessel, there is no occasion
to resort to equitable considerations.

WHEREFORE, finding no reversible error in the decision of the court a quo appealed
from, the same is hereby affirmed in all respects, with costs against the plaintiff-appellant.

SO ORDERED.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes,
Dizon, Regala and Makalintal, JJ., concur.
 81

G.R. No. L-7294

March 22, 1912

G. URRUTIA & COMPANY, plaintiff-appellant, vs. THE PASIG STEAMER AND

LIGHTER CO., defendant-appellee.

Sanz and Opisso for appellant.

Haussermann, Cohn and Fisher for appellee.

TORRES, J.:

This appeal was taken, through a bill of exceptions, by the representative of G. Urrutia
& Co., from a judgment rendered in this case by the Honorable A. S. Crossfield, judge.

Under date of May 19, 1909, counsel for G. Urrutia and Company filed a written
complaint against The Pasig Steamer and Lighter Co., wherein it was alleged that the
plaintiff company was the owner of the steamer Nuestra Señora del Pilar, inscribed in
the marine registry of the port of Manila; that the said vessels was provided with the
proper license to navigate and trade in the waters of the Philippines, was worth P80,000
in cash, and, on the dates mentioned in the complaint, was carrying a cargo valued at
P45,000; that the defendant company was the owner of the steamer San Juan, inscribed
in the marine registry of the port of Manila; that on or about December 6, 1908, while a
storm was raging, the steamer Nuestra Señora del Pilar, belonging to the plaintiff, was
navigating in the direction of the port of Legaspi and, after twenty hours and thirty
minutes, descried, toward Mal-Abrigo, a steamship which had signal flags hoisted,
wherefore the Nuestra Señora del Pilar directed its course towards the said vessel, which
proved to be the San Juan displaying the signals M Y and L D, which mean: "Am unable
to navigate. Will you tow me to a safe anchorage?" that on that occasion, the steamer
Nuestra Señora del Pilar, with great risk to itself, rendered salvage service to the San Juan
by taking it to a safe port, and that, had it not been for the opportune, prompt and
efficacious aid lent by the Nuestra Señora del Pilar, the San Juan and its cargo would
certainly have been totally lost; that the salved steamer, together with its cargo, was worth
on the dates of the salvage and the complaint P100,000, at a true cash valuation; that the
just and adequate remuneration for the salvage service rendered by the Nuestra Señora
del Pilar to the San Juan amounted to the sum of P40,000; and that; notwithstanding that
the plaintiff company had demanded of the defendant concern the payment of the said
sum for the salvage service referred to, and since the 15th of January, the defendant,
without objecting to the amount of the plaintiff's claim, had not paid the same and had
been delaying the payment thereof under futile pretexts: wherefore, the plaintiff prayed
that judgment be rendered in its behalf, to enable it to collect from the defendant the
sum of P40,000, with legal interest thereon from January 15, and the costs.

The defendant demurred to the foregoing complaint, and after the demurrer was
overruled on appeal to this supreme court, the defendant in its answer, among other
allegations, set forth: that it admitted that the plaintiff company was, at the time of the
presentation of the complaint, the owner of the steamer Nuestra Señora del Pilar,
entered in the marine registry of this city and licensed to navigate in the waters of the
Philippines, and admitted the allegations of paragraph 4, relative to the defendant's being
the owner of the San Juan, of the registry of the port of Manila, but expressly denied all
the other allegations contained in paragraph 3 of the complaint, which had reference to
the steamer Nuestra Señora del Pilar and to its cargo, and denied each and all of the
allegations contained in paragraphs 5 to 10, inclusive, of the said complaint. The
defendant, therefore, asked that, after due trial, it be absolved from the complaint and
the plaintiff be sentenced to pay the costs.
 82

The case came to trial, and both parties presented the matter in controversy under
depositions taken by common accord. On April 12, 1911, the trial court rendered
judgment sentencing the defendant company, The Pasig Steamer and Lighter Company,
to pay to the plaintiff company, G. Urrutia & Co. the sum of P1,650, together with
interest thereon at the rate of 6 per cent from the date of the presentation of the
complaint, May 19, 1909, and to bear the costs of the trial. To this judgment the plaintiff
took exception and by a written motion asked for the annulment of the judgment and
the holding of a new trial, on the grounds that the said judgment was not supported by
the evidence, that the conclusions deduced from the facts were openly and manifestly
contrary to the proofs, and that the judgment was contrary to law. This motion was
overruled by an order of April 29, 1911, and exception thereto was taken by the plaintiff
who duly presented the proper bill of exceptions which was certified and forwarded to
the clerk of this court, accompanied by a transcript of all the evidence.

This action is to recover compensation or remuneration for salvage services rendered by

the steamer Nuestra Señora del Pilar to the San Juan, on an occasion when the latter was
in imminent danger from a cyclone then blowing and threatening it; a cable had become
entangled in the propeller of the latter vessel thus making it impossible for it to move in
obedience to its machinery and exposing it to the mercy of the storm that was raging, of
the waves and of the currents between certain islands.

There being no express legislation exactly applicable to cases of salvage, nor legal
principles thereto relating established by the courts, pursuant to the second paragraph of
article 6 of the Civil Code, we must fall back upon the customs of the place, and in the
absence thereof, general principles of law.

When so important a service is rendered as that of salving a vessel with its crew and the
cargo it carries, from a positive danger to which it is exposed, exposed, strict justice
demands that whoever effects so meritorious a service should receive adequate
remuneration therefor, not only on account of act performed in behalf of the shipowner
and the crew, but also because of the danger run by the vessel which made the salvage,
due to the circumstances that existed at the time such service was rendered.

In case a lease of work or services, says article 1544 of the Civil Code, one of the parties
binds himself to execute a work or to render a service to the other for a specified price.
In accordance with the provisions of this article, the service rendered in the natural
course of events and at an ordinary time must be remunerated, unless the service be
rendered gratuitously at the express will of the server. So that, when the steamer Nuestra
Señora del Pilar responded to the call for help, made by means of signals displayed by
the captain of the steamer San Juan, in the midst of a violent storm, which signals
conveyed the information that the latter vessel was unable to navigate for the reason
indicated and required whether the steamer signaled would tow it to a safe anchorage, it
is only just that the steamer San Juan, after having been saved from the danger and
conducted within the bay, called a shipyard, of the Island of Mindoro, should pay, in
recompense for such valuable and extraordinary service, due and proper remuneration
to the owner of the salving vessel, Nuestra Señora del Pilar, once it was satisfactorily
proved that the San Juan could not be guided by its rudder, or navigated by the use of its
engine, on account of a cable having become wrapped and entangled in its propeller, so
that, as a consequence of the said storm, the streamer rolled heavily and was exposed to
certain wreck or stranding upon the coats of the adjacent islands.

The second officer of the San Juan, in his sworn testimony, stated that this steamer, but
for the aid received, would have been exposed to real danger, and that, had it continued
adrift, it might have been stranded, as it was impossible to lower a boat for the purpose
of freeing the propeller from the cable entangled in it, owing to the bad weather and the
 83

heavy seas; an attempt was made to do so, but no one dared to go down to perform this
operation.

The principle has been established by the courts of the United States that when a vessel
has been disabled by the breaking of its shaft at sea and the hoist signals asking for aid,
and another vessel goes to its relief and takes it in tow, such service rendered is one of
salvage, and not merely of towage.

The towage of a vessel in peril to some place of security, when it is unable by itself to
reach the same, is a service of salvage.

The towage of a vessel which has the lost use of its engine by accident, though it is
complete in its hull and masts, is a service of salvage, and it is not necessary that the said
loss be inevitable since, in view of the peril, the vessel could not be salved in any other
way; for it is sufficient that at the moment the service was rendered there was a probable,
threatening danger and reasonable fear that it might strike.

Hence it is not here a question of a simple service of towage in ordinary and normal
whether, but of an extraordinary act of salvage performed in behalf of the steamer San
Juan, in exceptional circumstances and while a cyclone was raging over the part of the
sea where the salved vessel then was, which, in the midst of such peril, was unable to
govern its movements through its engine on account of the inserviceability of its
propeller.

Compensation in such cases as that which occurred to the San Juan, deserves to be
considered as a reward for the service rendered by the Nuestra Señora del Pilar in the
midst of a peril to which the rescued as well as the salving steamer was exposed, and it is
proper that such reward should be made, not only because of the salvage of the vessel
and of the goods carried and the rescue of the crew, but also in order that it may serve
as an incentive to render prompt and efficient aid in such cases when requested by those
who in the midst of such unfortunate circumstances are urgently in need thereof. It
should also be borne in mind that the Nuestra Señora del Pilar is a merchant vessel and
as such should with more reason be favored for the service which it rendered to the San
Juan, which perhaps otherwise might have been lost with all its cargo and crew.

The obligation to remunerate the service before referred to having been shown to be
lawful and just, it only remains to fix the amount thereof. Taking account, then, of the
value of the vessel salved and of its cargo and the circumstances of the occasion, time
and place when and where the service of salvage was performed, it appears just and
equitable to the value thereof at P5,000, considering that while the amount specified in
the judgment appealed from is exceedingly low, on the other hand, that demanded by
the appellant is, in the judgment of this court, excessive.

For the foregoing reasons, it is our opinion that the judgment appealed from should be
affirmed; provided, however that the defendant, The Pasig Steamer and Lighter Co.,
shall pay to the plaintiff, G. Urrutia and Co., the sum of P5,000, with interest thereon at
the rate of six per cent per annum from May 19, 1909, when the complaint was filed,
until its complete payment, and shall also pay the costs of the case.

Arellano, C.J., Mapa, Johnson, Carson and Trent, JJ., concur.

 84

G.R. No. L-12475

March 21, 1918

THE MANILA RAILROAD CO., plaintiff-appellant, vs. MACONDRAY and CO.,

defendant-appellant.

Hartigan and Welch for plaintiff-appellant.

Gilbert, Cohn and Fisher for defendant-appellant.

STREET, J.:

This action was instituted by the plaintiff, the Manila Railroad Company, upon February
24, 1916, in the Court of First Instance of the city of Manila to recover of the defendant,
Macondray and Co., the sum of P75,000, the alleged value of salvage service rendered
on April 6, 1915, by the steamer Hondagua, owned by the plaintiff, to the steamer
Seward, which was owned by the defendant. At the hearing judgment was rendered in
favor of the plaintiff for the sum of P4,000. From this judgment both parties have
appealed, the plaintiff insisting that the amount allowed by the lower court is inadequate,
the defendant that it is excessive.

The facts as found by the judge of the trial court are substantially these: On the date
mentioned the Seward left Saigon for the Philippine Islands, encountering a moderately
high sea. The ship was laden with a cargo of rice, the weight of which, taken in connection
with the condition of the sea, caused the vessel to spring a leak, and her master felt
compelled to return to Saigon. At this juncture the steamship Hondagua was sighted,
whereupon the Seward flew the international code signal "In distress; want immediate
assistance." The Hondagua changed her course and approached the Seward, the latter in
succession displaying the following signals: "I have sprung a leak;" "I wish to be taken in
tow;" "Can you spare hawser;" and "The leak is gaining rapidly." In response to signals
from the Hondagua the Seward sent her own boat to the Hondagua for a heaving line,
by means of which a hawser was passed from the Hondagua to the Seward and the
former, with the latter in tow, then proceeded at half speed towards Saigon. Shortly
afterwards, the Seward signaled "The leak is gaining rapidly," after which the Hondagua
went full speed ahead, until the arrival of both vessels at Cape St. James, at the mouth of
the Saigon River, where they anchored. The towing occupied some four or five hours,
and covered a distance of twenty five or thirty miles. The Seward's engines were kept
working until within an hour of her arrival at Cape St. James, when the water reached the
engine room and put out the fires under the main boiler, leaving only the auxiliary boiler
in use.

The court further found that the value of the Seward upon the arrival at Cape St. James
did not exceed P20,000 and that the value of the cargo was approximately P54,000. The
defendant company had no interest in the cargo, other than that of carrier, and the cargo
was owned by shippers whose names do not appear of record.

There is of course no question as to the liability of the defendant, as owner of the Seward,
for the service rendered by the plaintiff in towing that ship to safety. Nor is there any
dispute over the fact that the service rendered was a salvage service and remunerable as
such. The tow questions properly presented for decisions are these: (1) Is the plaintiff
entitled to recover from the owner of the Seward, in this action, remuneration for saving
the cargo as well as for saving the ship? (2) What is the reasonable compensation which
should be allowed in this action?

Where a ship and its cargo are saved together, as a result of services carried on with a
view to saving both, the salvage allowance should be apportioned between the ship and
 85

cargo in the proportion of their respective values, the same as in a case of general average;
and neither is liable for the salvage due from the other. (35 Cyc., 770; see also 24 Am.
and Eng. Encyc. Law, 2d ed., p. 1219, The Alaska 23 Fed., 597, The Colonel Adams,
19 Fed., 795.)

The salvor must always bear in mind that . . . the interests in ship and in cargo are only
severally liable, each for its proportionate share of the salvage remuneration. If one who
has saved both ship and cargo brings before the court in his salvage action only the ship,
or only the cargo, he will get judgment only for such an amount of reward as the court
finds to be due in respect of the value of that property which is before the court.
(Kennedy on Law of Civil Salvage, p. 186.)

In the case of The Mary Pleasants (Swab., 224), where salvage services had been
rendered to the vessel herself and to the cargo aboard of her, the salvors proceeded
against the ship alone. In the course of his judgment the learned Dr. Lushington said:
"But the real difficulty is, that there is no proceeding against the cargo . . . . The difficulty,
I say, arises from this circumstance, because when the court considers the services
rendered to the ship and cargo, it always estimates the amount of salvage remuneration
according to the value of the ship and cargo taken together. It is contrary to all principles
of justice, if a cargo has received and been benefited by the services so rendered, that the
whole burden of the salvage remuneration should fall on the ship itself."

Not only is the salvage charge a separate and divisible burden as between ship and cargo,
but also as between portions of the cargo belonging to different owners. Thus, in an
appeal by the claimants of the cargo, it was said by the Supreme Court of the United
States:

It is true that the salvage service was in one sense entire; but it certainly cannot deemed
entire for the purpose of founding a right against all the claimants jointly, so as to make
them all jointly responsible for the whole salvage; on the contrary, each claimant is
responsible only for the salvage properly due and chargeable on the gross proceeds or
sales of his own property pro rata. It would otherwise follow that the property of one
claimant might be made chargeable with the payment of the whole salvage, which would
be against the clearest principles of law on this subject. (Straton vs. Jarvis, 8 Pet. [U. S.],
4; see also Shields vs. Thomas, 58 U. S., 3; Spear vs. Place, 11 How., 521.)

These authorities show that there is no common liability for the amounts due from the
ship or other portion of the cargo when the ship and cargo, or either, are brought into
the custody of the court as a result of a proceeding in rem. The rule of liability must be
the same where a personal action is instituted against the owners of the one or the other.
The personal liability of each must be limited to the proportion of the salvage charge
which should be borne by his own property.

If it had been alleged and proved that the ship was unseaworthy when she put to sea or
that the necessity for the salvage service was due to the negligence of the master, or of
the ship's owner, the latter might have been liable, at least between himself and the
shipper, for the entire cost of the service, and this possibly might have changed the
character of the ship's liability to the salvor; or, again, if the claim for compensation had
been limited to the value of the service, considered on the simple basis of work and labor
done, it would have been proper, we think., to assess the entire cost of the service against
the shipowner, because the service was rendered at the request of the master. But when
the claim is put upon the basis of the salvage, the fixing of the compensation goes beyond
the limits of a quantum meruit for the work and labor done and involves the assessment
of bounty. The amount to be allowed upon a claim of this character is in part determined
upon considerations of equity and public policy; and it is not proper, in our opinion, to
 86

make the ship, or the ships owner, liable for the whole, in the absence of some statutory
provisions, or other positive rule of law, fixing such liability on the ship-owner. It results
that, as the owner of the cargo has not been made a party, no recovery can be had in this
action in regard to the service rendered to the cargo.

In fixing the amount of compensation to be awarded for salvage service, it has bee n
declared by the Supreme Court of the United States that the principal circumstances to
be taken into consideration are: (1) The labor expended by the salvors in rendering the
salvage service; (2) The promptitude, skill, and energy displayed in rendering the service
and saving the property; (3) The value of the property employed by the salvors in
rendering the service, and the danger to which such property was exposed; (4) The risk
incurred by the salvors in rescuing the property from the impending peril; (5) The value
of the property salved; and (6) The degree of danger from which the property was
rescued. (The Blackwall, 10 Wall., 1; 19 L. ed., 870.)

In applying these criteria to the case now before us, the following circumstances, not
already noted, are pertinent, namely: the Hondagua was delayed in her voyage about
nine hours, during five of which she was engaged in towing the Seward. This delay caused
her to enter at Iloilo, the port of her arrival instead of the late afternoon of the previous
day; but the unloading of her cargo was not thereby retarded. Considered on the basis of
charter party contract under which she was operating, the Hondagua was earning about
P300 per day, which was considered reasonable compensation for her use, including the
services off officers and crew. The service rendered did not involve any further
expenditure of labor on the part of the salvors than such as was commonly incident to
working the ship. No unusual display of skill and energy on their part was required; and
the condition of the sea was not such as to involve any special risk either to the Hondagua
or her crew. Finally, the danger from which the Seward was rescued was real, as the ship
when taken in tow was confronted by a serious peril. The value of the vessel when saved
was, we think, properly fixed by the trial court at P20,000.

In determining the amount of the award to be allowed in cases of this kind the aim should
be to hold out to seafaring men a fair inducement to the performance of salvage services
without fixing a scale of compensation so high as to cause vessel in need of such services
to hesitate and decline to receive them because of the ruinous cost. That the salvor is
entitled, as of bounty, to something more than mere remuneration for his own work and
the risk incurred by him, is conceded; but certainly the interests of commerce would not
be promoted by the encouragement of exorbitant charges. Towage is not considered a
salvage service of high order of merit; and when the risk is inconsiderable and other
conditions favorable, the compensation to be allowed should be modest in its amount.
Under all the circumstances we think that the sum of P1,000 is adequate for the service
rendered in this case. The judgment of the lower court must accordingly be reduced to
the sum of one thousand pesos (P1,000), with interest at 6 per cent per annum from
February 24, 1916, and for this amount execution will issue. No special finding will be
made as to costs of this instance.

With the modification above indicated the judgment is affirmed. SO ORDERED.

Arellano, C.J., Torres, Carson, Araullo, Malcolm, and Avanceña, JJ., concur.
 87

G.R. No. L-55300

March 15, 1990

FRANKLIN G. GACAL and CORAZON M. GACAL, the latter assisted by her

husband, FRANKLIN G. GACAL, petitioners, vs. PHILIPPINE AIR LINES, INC.,
and THE HONORABLE PEDRO SAMSON C. ANIMAS, in his capacity as
PRESIDING JUDGE of the COURT OF FIRST INSTANCE OF SOUTH
COTABATO, BRANCH I, respondents.

Vicente A. Mirabueno for petitioners.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

PARAS, J.:

This is a, petition for review on certiorari of the decision of the Court of First Instance
of South Cotabato, Branch 1, * promulgated on August 26, 1980 dismissing three (3)
consolidated cases for damages: Civil Case No. 1701, Civil Case No. 1773 and Civil Case
No. 1797 (Rollo, p. 35).

The facts, as found by respondent court, are as follows:

Plaintiffs Franklin G. Gacal and his wife, Corazon M. Gacal, Bonifacio S. Anislag and
his wife, Mansueta L. Anislag, and the late Elma de Guzman, were then passengers
boarding defendant's BAC 1-11 at Davao Airport for a flight to Manila, not knowing that
on the same flight, Macalinog, Taurac Pendatum known as Commander Zapata, Nasser
Omar, Liling Pusuan Radia, Dimantong Dimarosing and Mike Randa, all of Marawi City
and members of the Moro National Liberation Front (MNLF), were their co-passengers,
three (3) armed with grenades, two (2) with .45 caliber pistols, and one with a .22 caliber
pistol. Ten (10) minutes after take off at about 2:30 in the afternoon, the hijackers
brandishing their respective firearms announced the hijacking of the aircraft and directed
its pilot to fly to Libya. With the pilot explaining to them especially to its leader,
Commander Zapata, of the inherent fuel limitations of the plane and that they are not
rated for international flights, the hijackers directed the pilot to fly to Sabah. With the
same explanation, they relented and directed the aircraft to land at Zamboanga Airport,
Zamboanga City for refueling. The aircraft landed at 3:00 o'clock in the afternoon of
May 21, 1976 at Zamboanga Airport. When the plane began to taxi at the runway, it was
met by two armored cars of the military with machine guns pointed at the plane, and it
stopped there. The rebels thru its commander demanded that a DC-aircraft take them
to Libya with the President of the defendant company as hostage and that they be given
$375,000 and six (6) armalites, otherwise they will blow up the plane if their demands
will not be met by the government and Philippine Air Lines. Meanwhile, the passengers
were not served any food nor water and it was only on May 23, a Sunday, at about 1:00
o'clock in the afternoon that they were served 1/4 slice of a sandwich and 1/10 cup of
PAL water. After that, relatives of the hijackers were allowed to board the plane but
immediately after they alighted therefrom, an armored car bumped the stairs. That
commenced the battle between the military and the hijackers which led ultimately to the
liberation of the surviving crew and the passengers, with the final score of ten (10)
passengers and three (3) hijackers dead on the spot and three (3) hijackers captured.

City Fiscal Franklin G. Gacal was unhurt. Mrs. Corazon M. Gacal suffered injuries in the
course of her jumping out of the plane when it was peppered with bullets by the army
and after two (2) hand grenades exploded inside the plane. She was hospitalized at
General Santos Doctors Hospital, General Santos City, for two (2) days, spending
P245.60 for hospital and medical expenses, Assistant City Fiscal Bonifacio S. Anislag
also escaped unhurt but Mrs. Anislag suffered a fracture at the radial bone of her left
 88

elbow for which she was hospitalized and operated on at the San Pedro Hospital, Davao
City, and therefore, at Davao Regional Hospital, Davao City, spending P4,500.00. Elma
de Guzman died because of that battle. Hence, the action of damages instituted by the
plaintiffs demanding the following damages, to wit:

Civil Case No. 1701 —

City Fiscal Franklin G. Gacal and Mrs. Corazon M. Gacal — actual damages: P245.60
for hospital and medical expenses of Mrs Gacal; P8,995.00 for their personal belongings
which were lost and not recovered; P50,000.00 each for moral damages; and P5,000.00
for attorney's fees, apart from the prayer for an award of exemplary damages (Record,
pp. 4-6, Civil Case No. 1701).

Civil Case No. 1773 —

xxx xxx xxx

Civil Case No. 1797 —

xxx xxx xxx

The trial court, on August 26, 1980, dismissed the complaints finding that all the damages
sustained in the premises were attributed to force majeure.

On September 12, 1980 the spouses Franklin G. Gacal and Corazon M. Gacal, plaintiffs
in Civil Case No. 1701, filed a notice of appeal with the lower court on pure questions
of law (Rollo, p. 55) and the petition for review on certiorari was filed with this Court on
October 20, 1980 (Rollo, p. 30).

The Court gave due course to the petition (Rollo, p. 147) and both parties filed their
respective briefs but petitioner failed to file reply brief which was noted by the Court in
the resolution dated May 3, 1982 (Rollo, p. 183).

Petitioners alleged that the main cause of the unfortunate incident is the gross, wanton
and inexcusable negligence of respondent Airline personnel in their failure to frisk the
passengers adequately in order to discover hidden weapons in the bodies of the six (6)
hijackers. They claimed that despite the prevalence of skyjacking, PAL did not use a
metal detector which is the most effective means of discovering potential skyjackers
among the passengers (Rollo, pp. 6-7).

Respondent Airline averred that in the performance of its obligation to safely transport
passengers as far as human care and foresight can provide, it has exercised the utmost
diligence of a very cautious person with due regard to all circumstances, but the security
checks and measures and surveillance precautions in all flights, including the inspection
of baggages and cargo and frisking of passengers at the Davao Airport were performed
and rendered solely by military personnel who under appropriate authority had assumed
exclusive jurisdiction over the same in all airports in the Philippines.

Similarly, the negotiations with the hijackers were a purely government matter and a
military operation, handled by and subject to the absolute and exclusive jurisdiction of
the military authorities. Hence, it concluded that the accident that befell RP-C1161 was
caused by fortuitous event, force majeure and other causes beyond the control of the
respondent Airline.
 89

The determinative issue in this case is whether or not hijacking or air piracy during
martial law and under the circumstances obtaining herein, is a caso fortuito or force
majeure which would exempt an aircraft from payment of damages to its passengers
whose lives were put in jeopardy and whose personal belongings were lost during the
incident.

Under the Civil Code, common carriers are required to exercise extraordinary diligence
in their vigilance over the goods and for the safety of passengers transported by them,
according to all the circumstances of each case (Article 1733). They are presumed at fault
or to have acted negligently whenever a passenger dies or is injured (Philippine Airlines,
Inc. v. National Labor Relations Commission, 124 SCRA 583 [1983]) or for the loss,
destruction or deterioration of goods in cases other than those enumerated in Article
1734 of the Civil Code (Eastern Shipping Lines, Inc. v. Intermediate Appellate Court,
150 SCRA 463 [1987]).

The source of a common carrier's legal liability is the contract of carriage, and by entering
into said contract, it binds itself to carry the passengers safely as far as human care and
foresight can provide. There is breach of this obligation if it fails to exert extraordinary
diligence according to all the circumstances of the case in exercise of the utmost diligence
of a very cautious person (Isaac v. Ammen Transportation Co., 101 Phil. 1046 [1957];
Juntilla v. Fontanar, 136 SCRA 624 [1985]).

It is the duty of a common carrier to overcome the presumption of negligence (Philippine

National Railways v. Court of Appeals, 139 SCRA 87 [1985]) and it must be shown that
the carrier had observed the required extraordinary diligence of a very cautious person
as far as human care and foresight can provide or that the accident was caused by a
fortuitous event (Estrada v. Consolacion, 71 SCRA 523 [1976]). Thus, as ruled by this
Court, no person shall be responsible for those "events which could not be foreseen or
which though foreseen were inevitable. (Article 1174, Civil Code). The term is
synonymous with caso fortuito (Lasam v. Smith, 45 Phil. 657 [1924]) which is of the same
sense as "force majeure" (Words and Phrases Permanent Edition, Vol. 17, p. 362).

In order to constitute a caso fortuito or force majeure that would exempt a person from
liability under Article 1174 of the Civil Code, it is necessary that the following elements
must concur: (a) the cause of the breach of the obligation must be independent of the
human will (the will of the debtor or the obligor); (b) the event must be either
unforeseeable or unavoidable; (c) the event must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free
from any participation in, or aggravation of the injury to the creditor (Lasam v. Smith, 45
Phil. 657 [1924]; Austria v. Court of Appeals, 39 SCRA 527 [1971]; Estrada v.
Consolacion, supra; Vasquez v. Court of Appeals, 138 SCRA 553 [1985]; Juan F. Nakpil
& Sons v. Court of Appeals, 144 SCRA 596 [1986]). Caso fortuito or force majeure, by
definition, are extraordinary events not foreseeable or avoidable, events that could not
be foreseen, or which, though foreseen, are inevitable. It is, therefore, not enough that
the event should not have been foreseen or anticipated, as is commonly believed, but it
must be one impossible to foresee or to avoid. The mere difficulty to foresee the
happening is not impossibility to foresee the same (Republic v. Luzon Stevedoring
Corporation, 21 SCRA 279 [1967]).

Applying the above guidelines to the case at bar, the failure to transport petitioners safely
from Davao to Manila was due to the skyjacking incident staged by six (6) passengers of
the same plane, all members of the Moro National Liberation Front (MNLF), without
any connection with private respondent, hence, independent of the will of either the PAL
or of its passengers.
 90

Under normal circumstances, PAL might have foreseen the skyjacking incident which
could have been avoided had there been a more thorough frisking of passengers and
inspection of baggages as authorized by R.A. No. 6235. But the incident in question
occurred during Martial Law where there was a military take-over of airport security
including the frisking of passengers and the inspection of their luggage preparatory to
boarding domestic and international flights. In fact military take-over was specifically
announced on October 20, 1973 by General Jose L. Rancudo, Commanding General of
the Philippine Air Force in a letter to Brig. Gen. Jesus Singson, then Director of the Civil
Aeronautics Administration (Rollo, pp. 71-72) later confirmed shortly before the
hijacking incident of May 21, 1976 by Letter of Instruction No. 399 issued on April 28,
1976 (Rollo, p. 72).

Otherwise stated, these events rendered it impossible for PAL to perform its obligations
in a nominal manner and obviously it cannot be faulted with negligence in the
performance of duty taken over by the Armed Forces of the Philippines to the exclusion
of the former.

Finally, there is no dispute that the fourth element has also been satisfied. Consequently
the existence of force majeure has been established exempting respondent PAL from
the payment of damages to its passengers who suffered death or injuries in their persons
and for loss of their baggages.

PREMISES CONSIDERED, the petition is hereby DISMISSED for lack of merit and
the decision of the Court of First Instance of South Cotabato, Branch I is hereby
AFFIRMED.

SO ORDERED.

Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.

 91

G.R. No. 150843

March 14, 2003

CATHAY PACIFIC AIRWAYS, LTD., petitioner, vs. SPOUSES DANIEL

VAZQUEZ and MARIA LUISA MADRIGAL VAZQUEZ, respondents.

DAVIDE, JR., C.J.:

Is an involuntary upgrading of an airline passenger’s accommodation from one class to a

more superior class at no extra cost a breach of contract of carriage that would entitle the
passenger to an award of damages? This is a novel question that has to be resolved in
this case.

The facts in this case, as found by the Court of Appeals and adopted by petitioner Cathay
Pacific Airways, Ltd., (hereinafter Cathay) are as follows:

Cathay is a common carrier engaged in the business of transporting passengers and goods
by air. Among the many routes it services is the Manila-Hongkong-Manila course. As
part of its marketing strategy, Cathay accords its frequent flyers membership in its Marco
Polo Club. The members enjoy several privileges, such as priority for upgrading of
booking without any extra charge whenever an opportunity arises. Thus, a frequent flyer
booked in the Business Class has priority for upgrading to First Class if the Business
Class Section is fully booked.

Respondents-spouses Dr. Daniel Earnshaw Vazquez and Maria Luisa Madrigal Vazquez
are frequent flyers of Cathay and are Gold Card members of its Marco Polo Club. On
24 September 1996, the Vazquezes, together with their maid and two friends Pacita Cruz
and Josefina Vergel de Dios, went to Hongkong for pleasure and business.

For their return flight to Manila on 28 September 1996, they were booked on Cathay’s
Flight CX-905, with departure time at 9:20 p.m. Two hours before their time of
departure, the Vazquezes and their companions checked in their luggage at Cathay’s
check-in counter at Kai Tak Airport and were given their respective boarding passes, to
wit, Business Class boarding passes for the Vazquezes and their two friends, and
Economy Class for their maid. They then proceeded to the Business Class passenger
lounge.

When boarding time was announced, the Vazquezes and their two friends went to
Departure Gate No. 28, which was designated for Business Class passengers. Dr.
Vazquez presented his boarding pass to the ground stewardess, who in turn inserted it
into an electronic machine reader or computer at the gate. The ground stewardess was
assisted by a ground attendant by the name of Clara Lai Han Chiu. When Ms. Chiu
glanced at the computer monitor, she saw a message that there was a "seat change" from
Business Class to First Class for the Vazquezes.

Ms. Chiu approached Dr. Vazquez and told him that the Vazquezes’ accommodations
were upgraded to First Class. Dr. Vazquez refused the upgrade, reasoning that it would
not look nice for them as hosts to travel in First Class and their guests, in the Business
Class; and moreover, they were going to discuss business matters during the flight. He
also told Ms. Chiu that she could have other passengers instead transferred to the First
Class Section. Taken aback by the refusal for upgrading, Ms. Chiu consulted her
supervisor, who told her to handle the situation and convince the Vazquezes to accept
the upgrading. Ms. Chiu informed the latter that the Business Class was fully booked,
and that since they were Marco Polo Club members they had the priority to be upgraded
to the First Class. Dr. Vazquez continued to refuse, so Ms. Chiu told them that if they
 92

would not avail themselves of the privilege, they would not be allowed to take the flight.
Eventually, after talking to his two friends, Dr. Vazquez gave in. He and Mrs. Vazquez
then proceeded to the First Class Cabin.

Upon their return to Manila, the Vazquezes, in a letter of 2 October 1996 addressed to
Cathay’s Country Manager, demanded that they be indemnified in the amount of
P1million for the "humiliation and embarrassment" caused by its employees. They also
demanded "a written apology from the management of Cathay, preferably a responsible
person with a rank of no less than the Country Manager, as well as the apology from Ms.
Chiu" within fifteen days from receipt of the letter.

In his reply of 14 October 1996, Mr. Larry Yuen, the assistant to Cathay’s Country
Manager Argus Guy Robson, informed the Vazquezes that Cathay would investigate the
incident and get back to them within a week’s time.

On 8 November 1996, after Cathay’s failure to give them any feedback within its self-
imposed deadline, the Vazquezes instituted before the Regional Trial Court of Makati
City an action for damages against Cathay, praying for the payment to each of them the
amounts of P250,000 as temperate damages; P500,000 as moral damages; P500,000 as
exemplary or corrective damages; and P250,000 as attorney’s fees.

In their complaint, the Vazquezes alleged that when they informed Ms. Chiu that they
preferred to stay in Business Class, Ms. Chiu "obstinately, uncompromisingly and in a
loud, discourteous and harsh voice threatened" that they could not board and leave with
the flight unless they go to First Class, since the Business Class was overbooked. Ms.
Chiu’s loud and stringent shouting annoyed, embarrassed, and humiliated them because
the incident was witnessed by all the other passengers waiting for boarding. They also
claimed that they were unjustifiably delayed to board the plane, and when they were
finally permitted to get into the aircraft, the forward storage compartment was already
full. A flight stewardess instructed Dr. Vazquez to put his roll-on luggage in the overhead
storage compartment. Because he was not assisted by any of the crew in putting up his
luggage, his bilateral carpal tunnel syndrome was aggravated, causing him extreme pain
on his arm and wrist. The Vazquezes also averred that they "belong to the uppermost
and absolutely top elite of both Philippine Society and the Philippine financial
community, [and that] they were among the wealthiest persons in the Philippine[s]."

In its answer, Cathay alleged that it is a practice among commercial airlines to upgrade
passengers to the next better class of accommodation, whenever an opportunity arises,
such as when a certain section is fully booked. Priority in upgrading is given to its frequent
flyers, who are considered favored passengers like the Vazquezes. Thus, when the
Business Class Section of Flight CX-905 was fully booked, Cathay’s computer sorted out
the names of favored passengers for involuntary upgrading to First Class. When Ms.
Chiu informed the Vazquezes that they were upgraded to First Class, Dr. Vazquez
refused. He then stood at the entrance of the boarding apron, blocking the queue of
passengers from boarding the plane, which inconvenienced other passengers. He
shouted that it was impossible for him and his wife to be upgraded without his two friends
who were traveling with them. Because of Dr. Vazquez’s outburst, Ms. Chiu thought of
upgrading the traveling companions of the Vazquezes. But when she checked the
computer, she learned that the Vazquezes’ companions did not have priority for
upgrading. She then tried to book the Vazquezes again to their original seats. However,
since the Business Class Section was already fully booked, she politely informed Dr.
Vazquez of such fact and explained that the upgrading was in recognition of their status
as Cathay’s valued passengers. Finally, after talking to their guests, the Vazquezes
eventually decided to take the First Class accommodation.
 93

Cathay also asserted that its employees at the Hong Kong airport acted in good faith in
dealing with the Vazquezes; none of them shouted, humiliated, embarrassed, or
committed any act of disrespect against them (the Vazquezes). Assuming that there was
indeed a breach of contractual obligation, Cathay acted in good faith, which negates any
basis for their claim for temperate, moral, and exemplary damages and attorney’s fees.
Hence, it prayed for the dismissal of the complaint and for payment of P100,000 for
exemplary damages and P300,000 as attorney’s fees and litigation expenses.

During the trial, Dr. Vazquez testified to support the allegations in the complaint. His
testimony was corroborated by his two friends who were with him at the time of the
incident, namely, Pacita G. Cruz and Josefina Vergel de Dios.

For its part, Cathay presented documentary evidence and the testimonies of Mr. Yuen;
Ms. Chiu; Norma Barrientos, Comptroller of its retained counsel; and Mr. Robson.
Yuen and Robson testified on Cathay’s policy of upgrading the seat accommodation of
its Marco Polo Club members when an opportunity arises. The upgrading of the
Vazquezes to First Class was done in good faith; in fact, the First Class Section is definitely
much better than the Business Class in terms of comfort, quality of food, and service
from the cabin crew. They also testified that overbooking is a widely accepted practice in
the airline industry and is in accordance with the International Air Transport Association
(IATA) regulations. Airlines overbook because a lot of passengers do not show up for
their flight. With respect to Flight CX-905, there was no overall overbooking to a degree
that a passenger was bumped off or downgraded. Yuen and Robson also stated that the
demand letter of the Vazquezes was immediately acted upon. Reports were gathered
from their office in Hong Kong and immediately forwarded to their counsel Atty.
Remollo for legal advice. However, Atty. Remollo begged off because his services were
likewise retained by the Vazquezes; nonetheless, he undertook to solve the problem in
behalf of Cathay. But nothing happened until Cathay received a copy of the complaint
in this case. For her part, Ms. Chiu denied that she shouted or used foul or impolite
language against the Vazquezes. Ms. Barrientos testified on the amount of attorney’s fees
and other litigation expenses, such as those for the taking of the depositions of Yuen and
Chiu.

In its decision1 of 19 October 1998, the trial court found for the Vazquezes and decreed
as follows:

WHEREFORE, finding preponderance of evidence to sustain the instant complaint,

judgment is hereby rendered in favor of plaintiffs Vazquez spouses and against defendant
Cathay Pacific Airways, Ltd., ordering the latter to pay each plaintiff the following:

a) Nominal damages in the amount of P100,000.00 for each plaintiff;

b) Moral damages in the amount of P2,000,000.00 for each plaintiff;
c) Exemplary damages in the amount of P5,000,000.00 for each plaintiff;
d) Attorney’s fees and expenses of litigation in the amount of P1,000,000.00 for each
plaintiff; and
e) Costs of suit.

SO ORDERED.

According to the trial court, Cathay offers various classes of seats from which passengers
are allowed to choose regardless of their reasons or motives, whether it be due to
budgetary constraints or whim. The choice imposes a clear obligation on Cathay to
transport the passengers in the class chosen by them. The carrier cannot, without
exposing itself to liability, force a passenger to involuntarily change his choice. The
upgrading of the Vazquezes’ accommodation over and above their vehement objections
 94

was due to the overbooking of the Business Class. It was a pretext to pack as many
passengers as possible into the plane to maximize Cathay’s revenues. Cathay’s actuations
in this case displayed deceit, gross negligence, and bad faith, which entitled the Vazquezes
to awards for damages.

On appeal by the petitioners, the Court of Appeals, in its decision of 24 July 2001,2
deleted the award for exemplary damages; and it reduced the awards for moral and
nominal damages for each of the Vazquezes to P250,000 and P50,000, respectively, and
the attorney’s fees and litigation expenses to P50,000 for both of them.

The Court of Appeals ratiocinated that by upgrading the Vazquezes to First Class, Cathay
novated the contract of carriage without the former’s consent. There was a breach of
contract not because Cathay overbooked the Business Class Section of Flight CX-905
but because the latter pushed through with the upgrading despite the objections of the
Vazquezes.

However, the Court of Appeals was not convinced that Ms. Chiu shouted at, or meant
to be discourteous to, Dr. Vazquez, although it might seemed that way to the latter, who
was a member of the elite in Philippine society and was not therefore used to being
harangued by anybody. Ms. Chiu was a Hong Kong Chinese whose fractured Chinese
was difficult to understand and whose manner of speaking might sound harsh or shrill to
Filipinos because of cultural differences. But the Court of Appeals did not find her to
have acted with deliberate malice, deceit, gross negligence, or bad faith. If at all, she was
negligent in not offering the First Class accommodations to other passengers. Neither
can the flight stewardess in the First Class Cabin be said to have been in bad faith when
she failed to assist Dr. Vazquez in lifting his baggage into the overhead storage bin. There
is no proof that he asked for help and was refused even after saying that he was suffering
from "bilateral carpal tunnel syndrome." Anent the delay of Yuen in responding to the
demand letter of the Vazquezes, the Court of Appeals found it to have been sufficiently
explained.

The Vazquezes and Cathay separately filed motions for a reconsideration of the decision,
both of which were denied by the Court of Appeals.

Cathay seasonably filed with us this petition in this case. Cathay maintains that the award
for moral damages has no basis, since the Court of Appeals found that there was no
"wanton, fraudulent, reckless and oppressive" display of manners on the part of its
personnel; and that the breach of contract was not attended by fraud, malice, or bad faith.
If any damage had been suffered by the Vazquezes, it was damnum absque injuria, which
is damage without injury, damage or injury inflicted without injustice, loss or damage
without violation of a legal right, or a wrong done to a man for which the law provides no
remedy. Cathay also invokes our decision in United Airlines, Inc. v. Court of Appeals3
where we recognized that, in accordance with the Civil Aeronautics Board’s Economic
Regulation No. 7, as amended, an overbooking that does not exceed ten percent cannot
be considered deliberate and done in bad faith. We thus deleted in that case the awards
for moral and exemplary damages, as well as attorney’s fees, for lack of proof of
overbooking exceeding ten percent or of bad faith on the part of the airline carrier.

On the other hand, the Vazquezes assert that the Court of Appeals was correct in granting
awards for moral and nominal damages and attorney’s fees in view of the breach of
contract committed by Cathay for transferring them from the Business Class to First Class
Section without prior notice or consent and over their vigorous objection. They likewise
argue that the issuance of passenger tickets more than the seating capacity of each section
of the plane is in itself fraudulent, malicious and tainted with bad faith.
 95

The key issues for our consideration are whether (1) by upgrading the seat
accommodation of the Vazquezes from Business Class to First Class Cathay breached its
contract of carriage with the Vazquezes; (2) the upgrading was tainted with fraud or bad
faith; and (3) the Vazquezes are entitled to damages.

We resolve the first issue in the affirmative.

A contract is a meeting of minds between two persons whereby one agrees to give
something or render some service to another for a consideration. There is no contract
unless the following requisites concur: (1) consent of the contracting parties; (2) an object
certain which is the subject of the contract; and (3) the cause of the obligation which is
established.4 Undoubtedly, a contract of carriage existed between Cathay and the
Vazquezes. They voluntarily and freely gave their consent to an agreement whose object
was the transportation of the Vazquezes from Manila to Hong Kong and back to Manila,
with seats in the Business Class Section of the aircraft, and whose cause or consideration
was the fare paid by the Vazquezes to Cathay.

The only problem is the legal effect of the upgrading of the seat accommodation of the
Vazquezes. Did it constitute a breach of contract?

Breach of contract is defined as the "failure without legal reason to comply with the terms
of a contract."5 It is also defined as the "[f]ailure, without legal excuse, to perform any
promise which forms the whole or part of the contract."6

In previous cases, the breach of contract of carriage consisted in either the bumping off
of a passenger with confirmed reservation or the downgrading of a passenger’s seat
accommodation from one class to a lower class. In this case, what happened was the
reverse. The contract between the parties was for Cathay to transport the Vazquezes to
Manila on a Business Class accommodation in Flight CX-905. After checking-in their
luggage at the Kai Tak Airport in Hong Kong, the Vazquezes were given boarding cards
indicating their seat assignments in the Business Class Section. However, during the
boarding time, when the Vazquezes presented their boarding passes, they were informed
that they had a seat change from Business Class to First Class. It turned out that the
Business Class was overbooked in that there were more passengers than the number of
seats. Thus, the seat assignments of the Vazquezes were given to waitlisted passengers,
and the Vazquezes, being members of the Marco Polo Club, were upgraded from
Business Class to First Class.

We note that in all their pleadings, the Vazquezes never denied that they were members
of Cathay’s Marco Polo Club. They knew that as members of the Club, they had priority
for upgrading of their seat accommodation at no extra cost when an opportunity arises.
But, just like other privileges, such priority could be waived. The Vazquezes should have
been consulted first whether they wanted to avail themselves of the privilege or would
consent to a change of seat accommodation before their seat assignments were given to
other passengers. Normally, one would appreciate and accept an upgrading, for it would
mean a better accommodation. But, whatever their reason was and however odd it might
be, the Vazquezes had every right to decline the upgrade and insist on the Business Class
accommodation they had booked for and which was designated in their boarding passes.
They clearly waived their priority or preference when they asked that other passengers
be given the upgrade. It should not have been imposed on them over their vehement
objection. By insisting on the upgrade, Cathay breached its contract of carriage with the
Vazquezes.

We are not, however, convinced that the upgrading or the breach of contract was
attended by fraud or bad faith. Thus, we resolve the second issue in the negative.
 96

Bad faith and fraud are allegations of fact that demand clear and convincing proof. They
are serious accusations that can be so conveniently and casually invoked, and that is why
they are never presumed. They amount to mere slogans or mudslinging unless
convincingly substantiated by whoever is alleging them.

Fraud has been defined to include an inducement through insidious machination.

Insidious machination refers to a deceitful scheme or plot with an evil or devious
purpose. Deceit exists where the party, with intent to deceive, conceals or omits to state
material facts and, by reason of such omission or concealment, the other party was
induced to give consent that would not otherwise have been given.7

Bad faith does not simply connote bad judgment or negligence; it imports a dishonest
purpose or some moral obliquity and conscious doing of a wrong, a breach of a known
duty through some motive or interest or ill will that partakes of the nature of fraud.8

We find no persuasive proof of fraud or bad faith in this case. The Vazquezes were not
induced to agree to the upgrading through insidious words or deceitful machination or
through willful concealment of material facts. Upon boarding, Ms. Chiu told the
Vazquezes that their accommodations were upgraded to First Class in view of their being
Gold Card members of Cathay’s Marco Polo Club. She was honest in telling them that
their seats were already given to other passengers and the Business Class Section was
fully booked. Ms. Chiu might have failed to consider the remedy of offering the First
Class seats to other passengers. But, we find no bad faith in her failure to do so, even if
that amounted to an exercise of poor judgment.

Neither was the transfer of the Vazquezes effected for some evil or devious purpose. As
testified to by Mr. Robson, the First Class Section is better than the Business Class
Section in terms of comfort, quality of food, and service from the cabin crew; thus, the
difference in fare between the First Class and Business Class at that time was $250.9
Needless to state, an upgrading is for the better condition and, definitely, for the benefit
of the passenger.

We are not persuaded by the Vazquezes’ argument that the overbooking of the Business
Class Section constituted bad faith on the part of Cathay. Section 3 of the Economic
Regulation No. 7 of the Civil Aeronautics Board, as amended, provides:

Sec 3. Scope. – This regulation shall apply to every Philippine and foreign air carrier with
respect to its operation of flights or portions of flights originating from or terminating at,
or serving a point within the territory of the Republic of the Philippines insofar as it
denies boarding to a passenger on a flight, or portion of a flight inside or outside the
Philippines, for which he holds confirmed reserved space. Furthermore, this Regulation
is designed to cover only honest mistakes on the part of the carriers and excludes
deliberate and willful acts of non-accommodation. Provided, however, that overbooking
not exceeding 10% of the seating capacity of the aircraft shall not be considered as a
deliberate and willful act of non-accommodation.

It is clear from this section that an overbooking that does not exceed ten percent is not
considered deliberate and therefore does not amount to bad faith.10 Here, while there
was admittedly an overbooking of the Business Class, there was no evidence of
overbooking of the plane beyond ten percent, and no passenger was ever bumped off or
was refused to board the aircraft.

Now we come to the third issue on damages.

 97

The Court of Appeals awarded each of the Vazquezes moral damages in the amount of
P250,000. Article 2220 of the Civil Code provides:

Article 2220. Willful injury to property may be a legal ground for awarding moral
damages if the court should find that, under the circumstances, such damages are justly
due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.

Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. Although incapable of pecuniary computation, moral damages may be recovered
if they are the proximate result of the defendant’s wrongful act or omission.11 Thus, case
law establishes the following requisites for the award of moral damages: (1) there must
be an injury clearly sustained by the claimant, whether physical, mental or psychological;
(2) there must be a culpable act or omission factually established; (3) the wrongful act or
omission of the defendant is the proximate cause of the injury sustained by the claimant;
and (4) the award for damages is predicated on any of the cases stated in Article 2219 of
the Civil Code.12

Moral damages predicated upon a breach of contract of carriage may only be recoverable
in instances where the carrier is guilty of fraud or bad faith or where the mishap resulted
in the death of a passenger.13 Where in breaching the contract of carriage the airline is
not shown to have acted fraudulently or in bad faith, liability for damages is limited to
the natural and probable consequences of the breach of the obligation which the parties
had foreseen or could have reasonably foreseen. In such a case the liability does not
include moral and exemplary damages.14

In this case, we have ruled that the breach of contract of carriage, which consisted in the
involuntary upgrading of the Vazquezes’ seat accommodation, was not attended by fraud
or bad faith. The Court of Appeals’ award of moral damages has, therefore, no leg to
stand on.

The deletion of the award for exemplary damages by the Court of Appeals is correct. It
is a requisite in the grant of exemplary damages that the act of the offender must be
accompanied by bad faith or done in wanton, fraudulent or malevolent manner.15 Such
requisite is absent in this case. Moreover, to be entitled thereto the claimant must first
establish his right to moral, temperate, or compensatory damages.16 Since the
Vazquezes are not entitled to any of these damages, the award for exemplary damages
has no legal basis. And where the awards for moral and exemplary damages are
eliminated, so must the award for attorney’s fees.17

The most that can be adjudged in favor of the Vazquezes for Cathay’s breach of contract
is an award for nominal damages under Article 2221 of the Civil Code, which reads as
follows:

Article 2221 of the Civil Code provides:

Article 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or recognized, and not
for the purpose of indemnifying the plaintiff for any loss suffered by him.

Worth noting is the fact that in Cathay’s Memorandum filed with this Court, it prayed
only for the deletion of the award for moral damages. It deferred to the Court of Appeals’
discretion in awarding nominal damages; thus:
 98

As far as the award of nominal damages is concerned, petitioner respectfully defers to

the Honorable Court of Appeals’ discretion. Aware as it is that somehow, due to the
resistance of respondents-spouses to the normally-appreciated gesture of petitioner to
upgrade their accommodations, petitioner may have disturbed the respondents-spouses’
wish to be with their companions (who traveled to Hong Kong with them) at the Business
Class on their flight to Manila. Petitioner regrets that in its desire to provide the
respondents-spouses with additional amenities for the one and one-half (1 1/2) hour flight
to Manila, unintended tension ensued.18

Nonetheless, considering that the breach was intended to give more benefit and
advantage to the Vazquezes by upgrading their Business Class accommodation to First
Class because of their valued status as Marco Polo members, we reduce the award for
nominal damages to P5,000.

Before writing finis to this decision, we find it well-worth to quote the apt observation of
the Court of Appeals regarding the awards adjudged by the trial court:

We are not amused but alarmed at the lower court’s unbelievable alacrity, bordering on
the scandalous, to award excessive amounts as damages. In their complaint, appellees
asked for P1 million as moral damages but the lower court awarded P4 million; they
asked for P500,000.00 as exemplary damages but the lower court cavalierly awarded a
whooping P10 million; they asked for P250,000.00 as attorney’s fees but were awarded
P2 million; they did not ask for nominal damages but were awarded P200,000.00. It is
as if the lower court went on a rampage, and why it acted that way is beyond all tests of
reason. In fact the excessiveness of the total award invites the suspicion that it was the
result of "prejudice or corruption on the part of the trial court."

The presiding judge of the lower court is enjoined to hearken to the Supreme Court’s
admonition in Singson vs. CA (282 SCRA 149 [1997]), where it said:

The well-entrenched principle is that the grant of moral damages depends upon the
discretion of the court based on the circumstances of each case. This discretion is limited
by the principle that the amount awarded should not be palpably and scandalously
excessive as to indicate that it was the result of prejudice or corruption on the part of the
trial court….
and in Alitalia Airways vs. CA (187 SCRA 763 [1990], where it was held:
Nonetheless, we agree with the injunction expressed by the Court of Appeals that
passengers must not prey on international airlines for damage awards, like "trophies in a
safari." After all neither the social standing nor prestige of the passenger should determine
the extent to which he would suffer because of a wrong done, since the dignity affronted
in the individual is a quality inherent in him and not conferred by these social indicators.
19

We adopt as our own this observation of the Court of Appeals.

WHEREFORE, the instant petition is hereby partly GRANTED. The Decision of the
Court of Appeals of 24 July 2001 in CA-G.R. CV No. 63339 is hereby MODIFIED, and
as modified, the awards for moral damages and attorney’s fees are set aside and deleted,
and the award for nominal damages is reduced to P5,000. No pronouncement on costs.

SO ORDERED.

Vitug, Carpio, and Azcuna, JJ., concur.

Ynares-Santiago, J., on leave.