Professional Documents
Culture Documents
SESSION 3
Cases
II. Common Carrier
Registered Owner
contusions on his head were under treatment for about two (2)
weeks; that for hospitalization, medicine and allied expenses,
Respondent Catuar spent P5,000.00.
- Evidence also shows that as a result of the incident,
Respondent Antonio Sarmiento, Sr. sustained injuries on his
leg; that at first, he was taken to the National Orthopedic
Hospital (Exh. K but later he was confined at the Makati
Medical Center from July 29, to August 29, 1971 and then from
September 15 to 25, 1971; that his leg was in a plaster cast for
a period of eight (8) months; and that for hospitalization and
medical attendance, plaintiff Antonio Sarmiento, Sr. spent no
less than P13,785.25 as evidenced by receipts in his
possession. (Exhs. N to N-1).
- Proofs were adduced also to show that Respondent Antonio
sarmiento Sr. is employed as Assistant Accountant of the
Canlubang Sugar Estate with a salary of P1,200.00 a month;
that as sideline he also works as accountant of United Haulers
Inc. with a salary of P500.00 a month; and that as a result of
this incident, plaintiff Sarmiento was unable to perform his
normal work for a period of at least 8 months.
- On the other hand, evidence shows that the other Respondent
Virgilio Catuar is a Chief Clerk in Canlubang Sugar Estate with
a salary of P500.00 a month, and as a result of the incident, he
was incapacitated to work for a period of one (1) month.
2. The Respondents have filed this case both against Oscar Sabiniano
as driver, and against Gualberto Duavit as owner of the jeep.
- Petitioner Gualberto Duavit, while admitting ownership of the
other jeep (Plate No. 99-07-F-J Manila, 1971), denied that the
driver Oscar Sabiniano was his employee.
- Duavit claimed that he has not been an employer of defendant
Oscar Sabiniano at any time up to the present.
- On the other hand documentary and testimonial evidence show
that driver Oscar Sabiniano was an employee of the Board of
Liquidators from November 14, 1966 up to January 4, 1973
(Annex A of Answer).
- Driver Sabiniano, in his testimony, categorically admitted that
he took the jeep from the garage of defendant Duavit without
the consent or authority of the latter (TSN, September 7, 1978,
p. 8). He testified further, that Duavit even filed charges against
him for theft of the jeep, but which Duavit did not push through
as his (Sabiniano's) parents apologized to Duavit on his behalf.
- Driver Oscar Sabiniano, on the other hand in an attempt to
exculpate himself from liability, makes it appear that he was
taking all necessary precaution while driving and the accident
occurred due to the negligence of Virgilio Catuar. Sabiniano
claims that it was plaintiffs vehicle which hit and bumped their
jeep. (Reno, pp. 21-23)
3. RTC: The trial court found driver Oscar Sabiniano negligent in driving
the vehicle but found no employer-employee relationship between
him and the petitioner because the latter was then a government
employee and he took the vehicle without the authority and consent
of the owner. The petitioner was, thus, absolved from liability under
Article 2180 of the Civil Code.
4. CA: The private respondents appealed the case. On January 7,
1988, the Court of Appeals rendered the questioned decision holding
the Petitioner jointly and severally liable with Sabiniano. The
appellate court in part ruled:
- We cannot go along with appellee's argument. It will be seen
that in Vargas v. Langcay, supra, it was held that it is immaterial
whether or not the driver was actually employed by the
operator of record or registered owner, and it is even not
necessary to prove who the actual owner of the vehicle and
who the employer of the driver is.
- When the Supreme Court ruled, thus: 'We must hold and
consider such owner-operator of record (registered owner) as
the employer in contemplation of law, of the driver,' it cannot be
construed other than that the registered owner is the employer
of the driver in contemplation of law. It is a conclusive
presumption of fact and law, and is not subject to rebuttal of
proof to the contrary. Otherwise, as stated in the decision, we
quote: The purpose of the principles evolved by the decisions
in these matters will be defeated and thwarted if we entertain
Page 1 of 62
ISSUES:
(1) Is the approval of the Public Service Commission necessary for the
sale of a public service vehicle even without conveying therewith the
authority to operate the same? YES.
(2) To what damages is the respondent entitled?
HELD 1: Approval of the Public Service Commission is necessary for sale
of a public service vehicle.
1. The provisions of the statute are clear and prohibit the sale,
alienation, lease, or encumbrance of the property, franchise,
certificate, privileges or rights, or any part thereof of the owner or
operator of the public service Commission.
2. The law was designed primarily for the protection of the public
interest; and until the approval of the Public Service Commission is
obtained the vehicle is, in contemplation of law, still under the service
of the owner or operator standing in the records of the Commission
which the public has a right to rely upon.
HELD 2: Moral damages not recoverable. Actual damages reduced.
1. The P10,000 actual damages awarded by the Court of First Instance
of Manila were reduced by the Court of Appeals to only P2,000, on
the ground that a review of the records failed to disclose a sufficient
basis for the trial court's appraisal, since the only evidence presented
on this point consisted of respondent's bare statement that his
expenses and loss of income amounted to P20,000.
2. On the other hand, "it cannot be denied," the lower court said, "that
appellee (respondent) did incur expenses"' It is well to note further
that respondent was a painter by profession and a professor of Fine
Arts, so that the amount of P2,000 awarded cannot be said to be
excessive.
3. IMPT: Anent the moral damages ordered to be paid to the
respondent, the same must be discarded. We have repeatedly ruled
that moral damages are not recoverable in damage actions predicted
on a breach of the contract of transportation. Where the injured
passenger does not die, moral damages are not recoverable unless it
is proved that the carrier was guilty of malice or bad faith. We think it
is clear that the mere carelessness of the carrier's driver does not per
se constitute of justify an inference of malice or bad faith on the part
of the carrier; and in the case at bar there is no other evidence of
such malice to support the award of moral damages by the CA.
x
FACTS:
1. Respondent was one of the passengers on a jeepney driven by
Eugenio Luga. While the vehicle was descending the Sta. Mesa
bridge at an excessive rate of speed, the driver lost control thereof,
causing it to swerve and to his the bridge wall. The accident occurred
on the morning of March 22, 1953. 5 passengers were injured,
including the respondent who suffered a fracture of the upper right
humerus. He was taken to the National Orthopedic Hospital for
treatment, and later was subjected to a series of operations; the first
on May 23, 1953, when wire loops were wound around the broken
bones and screwed into place; a second, effected to insert a metal
splint, and a third one to remove such splint. At the time of the trial, it
appears that respondent had not yet recovered the use of his right
arm.
2. The driver was charged with serious physical injuries through
reckless imprudence, and upon interposing a plea of guilty was
sentenced accordingly.
3. The contention that the evidence did not sufficiently establish the
identity of the vehicle as the belonging to the petitioner was rejected
by the appellate court which found, among other things, that is
carried plate No. TPU-1163, SERIES OF 1952, Quezon City,
registered in the name of Paz Fores, (appellant herein) and that the
vehicle even had the name of "Doa Paz" painted below its wind
shield. No evidence to the contrary was introduced by the petitioner,
who relied on an attack upon the credibility of the two policemen who
went to the scene of the incident.
4. A point to be further remarked is petitioner's contention that on March
21, 1953, or one day before the accident happened, she allegedly
sold the passenger jeep that was involved therein to a certain
Carmen Sackerman.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16. The Court of Appeals has invoked our rulings in Castro vs. Acro
Taxicab Co., G.R. No. 49155, December 14, 1948 and Layda vs.
Court of Appeals, 90 Phil., 724; but these doctrines were predicated
upon our former law of damages, before judicial discretion in fixing
them became limited by the express provisions of the new Civil Code
(previously quoted). Hence, the aforesaid rulings are now
inapplicable.
17. IMPT:Upon the other hand, the advantageous position of a party
suing a carrier for breach of the contract of transportations explains,
to some extent, the limitations imposed by the new Code on the
amount of the recovery. The action for breach of contract imposes on
the defendant carrier a presumption of liability upon mere proof of
injury to the passenger; that latter is relieved from the duty to
established the fault of the carrier, or of his employees, and the
burden is placed on the carrier to prove that it was due to an
unforseen event or to force majeure (Cangco vs. Manila Railroad
Co., 38 Phil., 768, 777). Moreover, the carrier, unlike in suits for
quasi-delict, may not escape liability by proving that it has exercised
due diligence in the selection and supervision of its employees (Art.
1759, new civil code; Cangco vs. Manila Railroad Co., supra; Prado
vs. Manila Electric Co., 51 Phil., 900).
18. CAB: The difference in conditions, defenses and proof, as well as the
codal concept of quasi-delict as essentially extra contractual
negligence, compel us to differentiate between action ex contractu,
and actions quasi ex delicto, and prevent us from viewing the action
for breach of contract as simultaneously embodying an action on tort.
Neither can this action be taken as one to enforce on employee's
liability under Art. 103 of the Revised Penal Code, since the
responsibility is not alleged to be subsidiary, nor is there on record
any averment or proof that the driver of appellant was insolvent. In
fact, he is not even made a party to the suit.
19. It is also suggested that a carrier's violation of its engagement to
safety transport the passenger involves a breach of the passenger's
confidence, and therefore should be regarded as a breach of contract
in bad faith, justifying recovery of moral damages under Art. 2220.
This theory is untenable, for under it the carrier would always be
deemed in bad faith, in every case its obligation to the passenger is
infringed, and it would be never accountable for simple negligence;
while under the law (Art. 1756). the presumption is that common
carriers acted negligently (and not maliciously), and Art. 1762 speaks
of negligence of the common carrier.
- ART. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in article 1733 and 1755.
- ART. 1762. The contributory negligence of the passenger does
not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common
carrier, but the amount of damages shall be equitably reduced.
- The distinction between fraud, bad faith or malice in the sense
of deliberate or wanton wrong doing and negligence (as mere
carelessness) is too fundamental in our law to be ignored (Arts.
1170-1172); their consequences being clearly differentiated by
the Code.
- ART. 2201. In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is liable shall be those
that are the natural and probable consequences of the breach
of the obligation, and which the parties have foreseen or could
have reasonably foreseen at the time the obligation was
constituted.
- In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation.
20. It is to be presumed, in the absence of statutory provision to the
contrary, that this difference was in the mind of the lawmakers when
in Art. 2220 they limited recovery of moral damages to breaches of
contract in bad faith. It is true that negligence may be occasionally so
gross as to amount to malice; but that fact must be shown in
evidence, and a carrier's bad faith is not to be lightly inferred from a
mere finding that the contract was breached through negligence of
the carrier's employees.
Page 4 of 62
FACTS:
1. Sometime in 1982 private respondent Donato Gonzales purchased
an Isuzu passenger jeepney from Gomercino Vallarta, holder of a
certificate of public convenience for the operation of public utility
vehicles plying the Monumento-Bulacan route.
2. While private respondent Gonzales continued offering the jeepney for
public transport services he did not have the registration of the
vehicle transferred in his name nor did he secure for himself a
certificate of public convenience for its operation. Thus Vallarta
remained on record as its registered owner and operator.
3. On 22 July 1990, while the jeepney was running northbound along
the North Diversion Road somewhere in Meycauayan, Bulacan, it
collided with a ten-wheeler-truck owned by petitioner Abelardo Lim
and driven by his co-petitioner Esmadito Gunnaban. Gunnaban
owned responsibility for the accident, explaining that while he was
traveling towards Manila the truck suddenly lost its brakes. To avoid
colliding with another vehicle, he swerved to the left until he reached
the center island. However, as the center island eventually came to
an end, he veered farther to the left until he smashed into a Ferroza
automobile, and later, into private respondent's passenger jeepney
driven by one Virgilio Gonzales. The impact caused severe damage
to both the Ferroza and the passenger jeepney and left one (1)
passenger dead and many others wounded.
4. Petitioner Lim shouldered the costs for hospitalization of the
wounded, compensated the heirs of the deceased passenger, and
had the Ferroza restored to good condition. He also negotiated with
private respondent and offered to have the passenger jeepney
repaired at his shop. Private respondent however did not accept the
offer so Lim offered him P20,000.00, the assessment of the damage
as estimated by his chief mechanic. Again, petitioner Lim's
proposition was rejected; instead, private respondent demanded a
brand-new jeep or the amount of P236,000.00. Lim increased his bid
to P40,000.00 but private respondent was unyielding. Under the
circumstances, negotiations had to be abandoned; hence, the filing of
the complaint for damages by private respondent against petitioners.
5. In his answer Petitioner Lim denied liability by contending that he
exercised due diligence in the selection and supervision of his
employees. He further asserted that as the jeepney was registered in
Vallartas name, it was Vallarta and not private respondent who was
the real party in interest. For his part, petitioner Gunnaban averred
that the accident was a fortuitous event which was beyond his
control.
6. Meanwhile, the damaged passenger jeepney was left by the roadside
to corrode and decay. Private respondent explained that although he
wanted to take his jeepney home he had no capability, financial or
otherwise, to tow the damaged vehicle.
7. The main point of contention between the parties related to the
amount of damages due private respondent. Private respondent
Gonzales averred that per estimate made by an automobile repair
shop he would have to spend P236,000.00 to restore his jeepney to
its original condition. On the other hand, petitioners insisted that they
could have the vehicle repaired for P20,000.00.5
8. RTC: On 1 October 1993 the trial court upheld private respondent's
claim and awarded him P236,000.00 with legal interest from 22 July
1990 as compensatory damages and P30,000.00 as attorney's fees.
In support of its decision, the trial court ratiocinated that as vendee
and current owner of the passenger jeepney private respondent
stood for all intents and purposes as the real party in interest. Even
Vallarta himself supported private respondent's assertion of interest
over the jeepney for, when he was called to testify, he dispossessed
himself of any claim or pretension on the property. Gunnaban was
found by the trial court to have caused the accident since he
panicked in the face of an emergency which was rather palpable from
his act of directing his vehicle to a perilous streak down the fast lane
of the superhighway then across the island and ultimately to the
opposite lane where it collided with the jeepney. On the other hand,
petitioner Lim's liability for Gunnaban's negligence was premised on
his want of diligence in supervising his employees. It was admitted
during trial that Gunnaban doubled as mechanic of the ill-fated truck
despite the fact that he was neither tutored nor trained to handle such
task.6
9. CA: Forthwith, petitioners appealed to the Court of Appeals which, on
17 July 1996, affirmed the decision of the trial court. In upholding the
Page 5 of 62
decision of the court a quo the appeals court concluded that while an
operator under the kabit system could not sue without joining the
registered owner of the vehicle as his principal, equity demanded that
the present case be made an exception. Hence this petition.
PETITIONER CONTENDS:
It is petitioners' contention that the CA erred in sustaining the decision of
the trial court despite their opposition to the well-established doctrine that
an operator of a vehicle continues to be its operator as long as he
remains the operator of record. According to petitioners, to recognize an
operator under the kabit system as the real party in interest and to
countenance his claim for damages is utterly subversive of public policy.
Petitioners further contend that inasmuch as the passenger jeepney was
purchased by private respondent for only P30,000.00, an award of
P236,000.00 is inconceivably large and would amount to unjust
enrichment.
ISSUE: When a passenger jeepney covered by a certificate of public
convenience is sold to another who continues to operate it under the
same certificate of public convenience under the so-called kabit system,
and in the course thereof the vehicle meets an accident through the fault
of another vehicle, may the new owner sue for damages against the
erring vehicle? Otherwise stated, does the new owner have any legal
personality to bring the action, or is he the real party in interest in the suit,
despite the fact that he is not the registered owner under the certificate of
public convenience? YES.
HELD:
1. Petitioners attempt to illustrate that an affirmance of the appealed
decision could be supportive of the pernicious kabit system does not
persuade. Their labored efforts to demonstrate how the questioned
rulings of the courts a quo are diametrically opposed to the policy of
the law requiring operators of public utility vehicles to secure a
certificate of public convenience for their operation is quite
unavailing.
2. The kabit system is an arrangement whereby a person who has
been granted a certificate of public convenience allows other persons
who own motor vehicles to operate them under his license,
sometimes for a fee or percentage of the earnings. Although the
parties to such an agreement are not outrightly penalized by law, the
kabit system is invariably recognized as being contrary to public
policy and therefore void and inexistent under Art. 1409 of the Civil
Code.
3. IMPT: In the early case of Dizon v. Octavio, the Court explained that
one of the primary factors considered in the granting of a certificate of
public convenience for the business of public transportation is the
financial capacity of the holder of the license, so that liabilities arising
from accidents may be duly compensated. The kabit system renders
illusory such purpose and, worse, may still be availed of by the
grantee to escape civil liability caused by a negligent use of a vehicle
owned by another and operated under his license. If a registered
owner is allowed to escape liability by proving who the supposed
owner of the vehicle is, it would be easy for him to transfer the
subject vehicle to another who possesses no property with which to
respond financially for the damage done. Thus, for the safety of
passengers and the public who may have been wronged and
deceived through the baneful kabit system, the registered owner of
the vehicle is not allowed to prove that another person has become
the owner so that he may be thereby relieved of responsibility.
Subsequent cases affirm such basic doctrine.
4. IMPT: It would seem then that the thrust of the law in enjoining the
kabit system is not so much as to penalize the parties but to identify
the person upon whom responsibility may be fixed in case of an
accident with the end view of protecting the riding public. The policy
therefore loses its force if the public at large is not deceived, much
less involved.
5. CAB: In the present case it is at once apparent that the evil sought to
be prevented in enjoining the kabit system does not exist.
- First, neither of the parties to the pernicious kabit system is
being held liable for damages.
- Second, the case arose from the negligence of another vehicle
in using the public road to whom no representation, or
misrepresentation, as regards the ownership and operation of
6.
7.
8.
9.
10.
11.
12.
FACTS:
1. Sometime in 1966, the spouses Nicasio M. Ocampo and Francisca
Garcia, herein private respondents, purchased in installment from the
Delta Motor Sales Corporation five (5) Toyota Corona Standard cars
to be used as taxicabs.
2. Since they had no franchise to operate taxicabs, they contracted with
petitioner Lita Enterprises, Inc., through its representative, Manuel
Concordia, for the use of the latter's certificate of public convenience
in consideration of an initial payment of P1,000.00 and a monthly
rental of P200.00 per taxicab unit. To effectuate the agreement, the
cars were registered in the name of petitioner Lita Enterprises, Inc,
Possession, however, remained with spouses Ocampo who operated
and maintained the same under the name Acme Taxi, petitioner's
trade name.
3. About a year later, on March 18, 1967, 1 of said taxicabs driven by
their employee, Emeterio Martin, collided with a motorcycle whose
driver, one Florante Galvez, died from the head injuries sustained
therefrom.
4. CFI: A criminal case was eventually filed against the driver Emeterio
Martin, while a civil case for damages was instituted by Rosita
Sebastian Vda. de Galvez, heir of the victim, against Lita Enterprises,
Inc., as registered owner of the taxicab in the latter case, Civil Case
No. 72067 of the Court of First Instance of Manila, petitioner Lita
Enterprises, Inc. was adjudged liable for damages in the amount of
P25,000.00 and P7,000.00 for attorney's fees.
- This decision having become final, a writ of execution was
issued. One of the vehicles of respondent spouses with Engine
No. 2R-914472 was levied upon and sold at public auction for
12,150.00 to one Sonnie Cortez, the highest bidder. Another
car with Engine No. 2R-915036 was likewise levied upon and
sold at public auction for P8,000.00 to a certain Mr. Lopez.
5. Thereafter, in March 1973, respondent Nicasio Ocampo decided to
register his taxicabs in his name. He requested the manager of
petitioner Lita Enterprises, Inc. to turn over the registration papers to
him, but the latter allegedly refused. Hence, he and his wife filed a
complaint against Lita Enterprises, Inc., Rosita Sebastian Vda. de
Galvez, Visayan Surety & Insurance Co. and the Sheriff of Manila for
reconveyance of motor vehicles with damages, docketed as Civil
Case No. 90988 of the Court of First Instance of Manila. Trial on the
merits ensued and on July 22, 1975, the said court rendered a
decision, the dispositive portion of which reads: WHEREFORE, the
complaint is hereby dismissed as far as defendants Rosita Sebastian
Vda. de Galvez, Visayan Surety & Insurance Company and the
Sheriff of Manila are concerned. Defendant Lita Enterprises, Inc., is
ordered to transfer the registration certificate of the 3 Toyota cars not
levied upon with Engine Nos. 2R-230026, 2R-688740 and
2R-585884 [Exhs. A, B, C and D] by executing a deed of conveyance
in favor of the plaintiff. Plaintiff is, however, ordered to pay Lita
Enterprises, Inc., the rentals in arrears for the certificate of
convenience from March 1973 up to May 1973 at the rate of P200 a
month per unit for the three cars. Petitioner Lita Enterprises, Inc.
moved for reconsideration of the decision, but the same was denied
by the court a quo on October 27, 1975. (p. 121, Ibid.)
6. CA: On appeal by petitioner, docketed as CA-G.R. No. 59157-R, the
Intermediate Appellate Court modified the decision by including as
part of its dispositive portion another paragraph, to wit: In the event
the condition of the 3 Toyota rears will no longer serve the purpose of
the deed of conveyance because of their deterioration, or because
Page 7 of 62
FACTS:
1. Plaintiff (FC Fisher) is a stockholder in the Respondent Company
(Yangco Steamship Company), the owner of a large number of steam
vessels, duly licensed to engage in the coastwise trade of the
Philippine Islands
2. The directors of the Respondent Company adopted a resolution
which was ratified and affirmed by the shareholders of the company,
"expressly declaring and providing that the classes of merchandise to
be carried by the company in its business as a common carrier do
not include dynamite, powder or other explosives, and expressly
prohibiting the officers, agents and servants of the company from
offering to carry, accepting for carriage said dynamite, powder or
other explosives;"
3. Respondent Acting Collector of Customs demanded and required of
the company the acceptance and carriage of such explosives; that he
has refused and suspended the issuance of the necessary clearance
documents of the vessels of the company unless and until the
company consents to accept such explosives for carriag.
4. Plaintiff Stockholder is advised and believes that should the company
decline to accept such explosives for carriage, the Respondent
Attorney-General of the Philippine Islands and the Respondent
prosecuting attorney of the city of Manila intend to institute
proceedings under the penal provisions of sections 4, 5, and 6 of Act
No. 98 of the Philippine Commission against the company, its
managers, agents and servants, to enforce the requirements of the
Acting Collector of Customs as to the acceptance of such explosives
for carriage.
5. Notwithstanding the demands of the Plaintiff Stockholder, the
manager, agents and servants of the company decline and refuse to
cease the carriage of such explosives, on the ground that by reason
of the severity of the penalties with which they are threatened upon
failure to carry such explosives, they cannot subject themselves to
"the ruinous consequences which would inevitably result" from failure
on their part to obey the demands and requirements of the Acting
Collector of Customs as to the acceptance for carriage of explosives;
6. Plaintiff Stockholder believes that the Acting Collector of Customs
erroneously construes the provisions of Act No. 98 in holding that
they require the company to accept such explosives for carriage
notwithstanding the above mentioned resolution of the directors and
stockholders of the company, and that if the Act does in fact require
the company to carry such explosives it is to that extent
unconstitutional and void;
7. Notwithstanding this belief of complainant as to the true meaning of
the Act, the questions involved cannot be raised by the refusal of the
company or its agents to comply with the demands of the Acting
Collector of Customs, without the risk of irreparable loss and damage
resulting from his refusal to facilitate the documentation of the
company's vessels, and without assuming the company to test the
questions involved by refusing to accept such explosives for carriage.
8. The prayer of the complaint is as follows: Wherefore your petitioner
prays to this honorable court as follows:
- First. That to the due hearing of the above entitled action be
issued a writ of prohibition perpetually restraining the
respondent Yangco Steamship Company, its appraisers,
agents, servants or other representatives from accepting to
carry and from carrying, in steamers of said company
dynamite, powder or other explosive substance, in accordance
with the resolution of the board of directors and of the
shareholders of said company.
- Second. That a writ of prohibition be issued perpetually
enjoining the respondent J.S. Stanley as Acting Collector of
Customs of the Philippine Islands, his successors, deputies,
servants or other representatives, from obligating the said
Yangco Steamship Company, by any means whatever, to carry
dynamite, powder or other explosive substance.
- Third. That a writ of prohibition be issued perpetually enjoining
the respondent Ignacio Villamor as Attorney-General of the
Philippine Islands, and W.H. Bishop as prosecuting attorney of
ISSUE: Whether the refusal of the owners and officers of a steam vessel,
duly licensed to engage in the coastwise trade of the Philippine Islands
and engaged in that trade as a common carrier, to accept for carriage
"dynamite, powder or other explosives" from any and all shippers who
may offer such explosives for carriage can be held to be a lawful act
without regard to any question as to the conditions under which such
explosives are offered to carriage, or as to the suitableness of the vessel
for the transportation of such explosives, or as to the possibility that the
refusal to accept such articles of commerce in a particular case may have
the effect of subjecting any person or locality or the traffic in such
explosives to an undue, unreasonable or unnecessary prejudice or
discrimination.
HELD:
1. To this complaint the respondents demurred, and we are of opinion
that the demurrer must be sustained, on the ground that the
complaint does not set forth facts sufficient to constitute a cause of
action.
2. It will readily be seen that plaintiff seeks in these proceedings to
enjoin the steamship company from accepting for carriage on any of
its vessels, dynamite, powder or other explosives, under any
conditions whatsoever; to prohibit the Collector of Customs and the
prosecuting officers of the government from all attempts to compel
the company to accept such explosives for carriage on any of its
vessels under any conditions whatsoever; and to prohibit these
officials from any attempt to invoke the penal provisions of Act No.
98, in any case of a refusal by the company or its officers so to do;
and this without regard to the conditions as to safety and so forth
under which such explosives are offered for carriage, and without
regard also to any question as to the suitableness for the
transportation of such explosives of the particular vessel upon which
the shipper offers them for carriage; and further without regard to any
question as to whether such conduct on the part of the steamship
company and its officers involves in any instance an undue,
unnecessary or unreasonable discrimination to the prejudice of any
person, locality or particular kind of traffic.
3. There are no allegations in the complaint that for some special and
sufficient reasons all or indeed any of the company's vessels are
unsuitable for the business of transporting explosives; or that
shippers have declined or will in future decline to comply with such
reasonable regulations and to take such reasonable precautions as
may be necessary and proper to secure the safety of the vessels of
the company in transporting such explosives. Indeed the contention
of petitioner is that a common carrier in the Philippine Islands may
decline to accept for carriage any shipment of merchandise of a class
which it expressly or impliedly declines to accept from all shippers
alike, because as he contends "the duty of a common carrier to carry
for all who offer arises from the public profession he has made, and
limited by it."
4. In support of this contention counsel cites for a number of English
and American authorities, discussing and applying the doctrine of the
common law with reference to common carriers. But it is
unnecessary now to decide whether, in the absence of statute, the
principles on which the American and English cases were decided
would be applicable in this jurisdiction. The duties and liabilities of
common carriers in this jurisdiction are defined and fully set forth in
Act No. 98 of the Philippine Commission, and until and unless that
statute be declared invalid or unconstitutional, we are bound by its
provisions.
5. Sections 2, 3 and 4 of the Act are as follows:
- SEC. 2. It shall be unlawful for any common carrier engaged in
the transportation of passengers or property as above set forth
to make or give any unnecessary or unreasonable preference
or advantage to any particular person, company, firm,
corporation or locality, or any particular kind of traffic in any
Page 9 of 62
6.
7.
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that the language of the statute itself refutes any contention as to its
invalidity based on the alleged unreasonableness of its mandatory or
prohibitory provisions.
So also we may dismiss without much discussion the contentions as
to the invalidity of the statute, which are based on the alleged
excessive severity of the penalties prescribed for violation of its
provisions. Upon general principles it is peculiarly and exclusively
within the province of the legislator to prescribe the pains and
penalties which may be imposed upon persons convicted of
violations of the laws in force within his territorial jurisdiction. With the
exercise of his discretion in this regard where it is alleged that
excessive fines or cruel and unusual punishments have been
prescribed, and even in such cases the courts will not presume to
interfere in the absence of the clearest and most convincing
argument and proof in support of such contentions. (Weems vs.
United States, 217 U.S., 349; U.S. vs. Pico, 18 Phil. Rep., 386.) We
need hardly add that there is no ground upon which to rest a
contention that the penalties prescribed in the statute under
consideration are either excessive or cruel and unusual, in the sense
in which these terms are used in the organic legislation in force in the
Philippine Islands.
But it is contended that on account of the penalties prescribed the
statute should be held invalid upon the principles announced in Ex
parte Young (209 U.S., 123, 147, 148); Cotting vs. Goddard (183
U.S., 79, 102); Mercantile Trust Co. vs. Texas Co. (51 Fed., 529);
Louisville Ry. vs. McCord (103 Fed., 216); Cons. Gas Co. vs. Mayer
(416 Fed., 150). We are satisfied however that the reasoning of those
cases is not applicable to the statute under consideration. The
principles announced in those decisions are fairly indicated in the
following citations found in petitioner's brief: But when the legislature,
in an effort to prevent any inquiry of the validity of a particular statute,
so burdens any challenge thereof in the courts that the party affected
is necessarily constrained to submit rather than take the chances of
the penalties imposed, then it becomes a serious question whether
the party is not deprived of the equal protection of the laws. (Cotting
vs. Goddard, 183 U. S., 79, 102.)
It may therefore be said that when the penalties for disobedience are
by fines so enormous and imprisonment so severe as to intimidate
the company and its officers from resorting to the courts to test the
validity of the legislation, the result is the same as if the law in terms
prohibited the company from seeking judicial construction of laws
which deeply affect its rights.
It is urged that there is no principle upon which to base the claim that
a person is entitled to disobey a statute at least once, for the purpose
of testing its validity, without subjecting himself to the penalties for
disobedience provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law creating offenses in
the nature of misdemeanors or felonies relates to a subject over
which the jurisdiction of the legislature is complete in any event. In
the case, however, of the establishment of certain rates without any
hearing, the validity of such rates necessarily depends upon whether
they are high enough to permit at least some return upon the
investment (how much it is not now necessary to state), and an
inquiry as to that fact is a proper subject of judicial investigation. If it
turns out that the rates are too low for that purpose, then they are
illegal. Now, to impose upon a party interested the burden of
obtaining a judicial decision of such a question (no prior hearing
having been given) only upon the condition that, if unsuccessful, he
must suffer imprisonment and pay fines, as provided in these acts, is,
in effect, to close up all approaches to the courts, and thus prevent
any hearing upon the question whether the rates as provided by the
acts are not too low, and therefore invalid. The distinction is obvious
between a case where the validity of the act depends upon the
existence of a fact which can be determined only after investigation
of a very complicated and technical character, and the ordinary case
of a statute upon a subject requiring no such investigation, and over
which the jurisdiction of the legislature is complete in any event.
We hold, therefore, that the provisions of the acts relating to the
enforcement of the rates, either for freight or passengers, by
imposing such enormous fines and possible imprisonment as a result
of an unsuccessful effort to test the validity of the laws themselves,
are unconstitutional on their face, without regard to the question of
Page 10 of 62
the insufficiency of those rates. (Ex parte Young, 209 U.S., 123 147,
148.)
17. An examination of the general provisions of our statute, of the
circumstances under which it was enacted, the mischief which it
sought to remedy and of the nature of the penalties prescribed for
violations of its terms convinces us that, unlike the statutes under
consideration in the above cited cases, its enactment involved no
attempt to prevent common carriers "from resorting to the courts to
test the validity of the legislation;" no "effort to prevent any inquiry" as
to its validity. It imposes no arbitrary obligation upon the company to
do or to refrain from doing anything. It makes no attempt to compel
such carriers to do business at a fixed or arbitrarily designated rate,
at the risk of separate criminal prosecutions for every demand of a
higher or a different rate. Its penalties can be imposed only upon
proof of "unreasonable," "unnecessary" and "unjust" discriminations,
and range from a maximum which is certainly not excessive for
willful, deliberate and contumacious violations of its provisions by a
great and powerful corporation, to a minimum which may be a merely
nominal fine. With so wide a range of discretion for a contention on
the part of any common carrier that it or its officers are "intimidated
from resorting to the courts to test the validity" of the provisions of the
statute prohibiting such "unreasonable," "unnecessary" and "unjust"
discriminations, or to test in any particular case whether a given
course of conduct does in fact involve such discrimination. We will
presume, for the purpose of declaring the statute invalid, that there is
so real a danger that the Courts of First Instance and this court on
appeal will abuse the discretion thus conferred upon us, as to
intimidate any common carrier, acting in good faith, from resorting to
the courts to test the validity of the statute. Legislative enactments,
penalizing unreasonable discriminations, unreasonable restraints of
trade, and unreasonable conduct in various forms of human activity
are so familiar and have been so frequently sustained in the courts,
as to render extended discussion unnecessary to refute any
contention as to the invalidity of the statute under consideration,
merely it imposes upon the carrier the obligation of adopting one of
various courses of conduct open to it, at the risk of incurring a
prescribed penalty in the event that the course of conduct actually
adopted by it should be held to have involved an unreasonable,
unnecessary or unjust discrimination. Applying the test announced in
Ex parte Young, supra, it will be seen that the validity of the Act does
not depend upon "the existence of a fact which can be determined
only after investigation of a very complicated and technical
character," and that "the jurisdiction of the legislature" over the
subject with which the statute deals "is complete in any event." There
can be no real question as to the plenary power of the legislature to
prohibit and to penalize the making of undue, unreasonable and
unjust discriminations by common carriers to the prejudice of any
person, locality or particular kind of traffic. (See Munn vs. Illinois, 94
U.S., 113, and other cases hereinafter cited in support of this
proposition.)
18. Petitioner: Counsel for petitioner contends also that the statute, if
construed so as to deny the right of the steamship company to elect
at will whether or not it will engage in a particular business, such as
that of carrying explosives, is unconstitutional "because it is a
confiscation of property, a taking of the carrier's property without due
process of law," and because it deprives him of his liberty by
compelling him to engage in business against his will. The argument
continues as follows:
- To require of a carrier, as a condition to his continuing in said
business, that he must carry anything and every thing is to
render useless the facilities he may have for the carriage of
certain lines of freight. It would be almost as complete a
confiscation of such facilities as if the same were destroyed.
Their value as a means of livelihood would be utterly taken
away. The law is a prohibition to him to continue in business;
the alternative is to get out or to go into some other business
the same alternative as was offered in the case of the Chicago
& N.W. Ry. vs. Dey (35 Fed. Rep., 866, 880), and which was
there commented on as follows: "Whatever of force there may
be in such arguments, as applied to mere personal property
capable of removal and use elsewhere, or in other business, it
is wholly without force as against railroad corporations, so large
a proportion of whose investment is in the soil and fixtures
22.
23.
24.
25.
26.
green, blue or black jusi, and duly equipped therefor would manifestly
be guilty of "giving an unnecessary and unreasonable preference to a
particular kind of traffic" and of subjecting to "an undue and
reasonable prejudice a particular kind of traffic," should he decline to
carry red jusi, to the prejudice of a particular shipper or of those
engaged in the manufacture of that kind of jusi, basing his refusal on
the ground of "mere whim or caprice" or of mere personal
convenience. So a public carrier of passengers would not be
permitted under this statute to absolve himself from liability for a
refusal to carry a Chinaman, a Spaniard, an American, a Filipino, or a
mestizo by proof that from "mere whim or caprice or personal
scruple," or to suit his own convenience, or in the hope of increasing
his business and thus making larger profits, he had publicly
announced his intention not to carry one or other of these classes of
passengers.
IMPT: The nature of the business of a common carrier as a public
employment is such that it is clearly within the power of the state to
impose such just and reasonable regulations thereon in the interest
of the public as the legislator may deem proper. Of course such
regulations must not have the effect of depriving an owner of his
property without due process of law, nor of confiscating or
appropriating private property without just compensation, nor of
limiting or prescribing irrevocably vested rights or privileges lawfully
acquired under a charter or franchise. But aside from such
constitutional limitations, the determination of the nature and extent
of the regulations which should be prescribed rests in the hands of
the legislator.
IMPT: Common carriers exercise a sort of public office, and have
duties to perform in which the public is interested. Their business is,
therefore, affected with a public interest, and is subject of public
regulation. (New Jersey Steam Nav. Co. vs. Merchants Bank, 6 How.,
344, 382; Munn vs. Illinois, 94 U.S., 113, 130.) Indeed, this right of
regulation is so far beyond question that it is well settled that the
power of the state to exercise legislative control over railroad
companies and other carriers "in all respects necessary to protect the
public against danger, injustice and oppression" may be exercised
through boards of commissioners. (New York etc. R. Co. vs. Bristol,
151 U.S., 556, 571; Connecticut etc. R. Co. vs. Woodruff, 153 U.S.,
689.)
Regulations limiting of passengers the number of passengers that
may be carried in a particular vehicle or steam vessel, or forbidding
the loading of a vessel beyond a certain point, or prescribing the
number and qualifications of the personnel in the employ of a
common carrier, or forbidding unjust discrimination as to rates, all
tend to limit and restrict his liberty and to control to some degree the
free exercise of his discretion in the conduct of his business. But
since the Granger cases were decided by the Supreme Court of the
United States no one questions the power of the legislator to
prescribe such reasonable regulations upon property clothed with a
public interest as he may deem expedient or necessary to protect the
public against danger, injustice or oppression. (Munn vs. Illinois, 94
U.S., 113, 130; Chicago etc. R. Co. vs. Cutts, 94 U.S., 155; Budd vs.
New York, 143 U.S., 517; Cotting vs. Goddard, 183 U.S., 79.)
IMPT: The right to enter the public employment as a common carrier
and to offer one's services to the public for hire does not carry with it
the right to conduct that business as one pleases, without regard to
the interest of the public and free from such reasonable and just
regulations as may be prescribed for the protection of the public from
the reckless or careless indifference of the carrier as to the public
welfare and for the prevention of unjust and unreasonable
discrimination of any kind whatsoever in the performance of the
carrier's duties as a servant of the public.
Business of certain kinds, including the business of a common
carrier, holds such a peculiar relation to the public interest that there
is superinduced upon it the right of public regulation. (Budd vs. New
York, 143 U.S., 517, 533.) When private property is "affected with a
public interest it ceases to be juris privati only." Property becomes
clothed with a public interest when used in a manner to make it of
public consequence and affect the community at large. "When,
therefore, one devotes his property to a use in which the public has
an interest, he, in effect, grants to the public an interest in that use,
and must submit to be controlled by the public for the common good,
to the extent of the interest he has thus created. He may withdraw his
27.
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32.
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35.
36.
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common carrier to the public for hire, that the statute steps in and
prescribes that he must treat all alike, that he may not pick and
choose which customer he will serve, and, specifically, that he shall
not make any undue or unreasonable preferences or discriminations
whatsoever to the prejudice not only of any person or locality but also
of any particular kind of traffic.
IMPT: The legislator having enacted a regulation prohibiting common
carriers from giving unnecessary or unreasonable preferences or
advantages to any particular kind of traffic or subjecting any particular
kind of traffic to any undue or unreasonable prejudice or
discrimination whatsoever, it is clear that whatever may have been
the rule at the common law, common carriers in this jurisdiction
cannot lawfully decline to accept a particular class of goods for
carriage, to the prejudice of the traffic in those goods, (UNLESS) it
appears that for some sufficient reason the discrimination against the
traffic in such goods is reasonable and necessary. Mere whim or
prejudice will not suffice. The grounds for the discrimination must be
substantial ones, such as will justify the courts in holding the
discrimination to have been reasonable and necessary under all
circumstances of the case.
CAB: The prayer of the petition in the case at bar cannot be granted
unless we hold that the refusal of the defendant steamship company
to accept for carriage on any of its vessels "dynamite, gunpowder or
other explosives" would in no instance involve a violation of the
provisions of this statute. There can be little doubt, however, that
cases may and will arise wherein the refusal of a vessel "engaged in
the coastwise trade of the Philippine Islands as a common carrier" to
accept such explosives for carriage would subject some person,
company, firm or corporation, or locality, or particular kind of traffic to
a certain prejudice or discrimination. Indeed it cannot be doubted that
the refusal of a "steamship company, the owner of a large number of
vessels" engaged in that trade to receive for carriage any such
explosives on any of its vessels would subject the traffic in such
explosives to a manifest prejudice and discrimination. The only
question to be determined therefore is whether such prejudice or
discrimination might in any case prove to be undue, unnecessary or
unreasonable.
This of course is, in each case, a question of fact, and we are of the
opinion that the facts alleged in the complaint are not sufficient to
sustain a finding in favor of the contentions of the petitioner. It is not
alleged in the complaint that "dynamite, gunpowder and other
explosives" can in no event be transported with reasonable safety on
board steam vessels engaged in the business of common carriers. It
is not alleged that all, or indeed any of the defendant steamship
company's vessels are unsuited for the carriage of such explosives. It
is not alleged that the nature of the business in which the steamship
company is engaged is such as to preclude a finding that a refusal to
accept such explosives on any of its vessels would subject the traffic
in such explosives to an undue and unreasonable prejudice and
discrimination.
Plaintiff's contention in this regard is as follows: In the present case,
the respondent company has expressly and publicly renounced the
carriage of explosives, and expressly excluded the same terms from
the business it conducts. This in itself were sufficient, even though
such exclusion of explosives were based on no other ground than the
mere whim, caprice or personal scruple of the carrier. It is
unnecessary, however, to indulge in academic discussion of a moot
question, for the decision not a carry explosives rests on substantial
grounds which are self-evident.
We think however that the answer to the question whether such a
refusal to carry explosives involves an unnecessary or unreasonable
preference or advantage to any person, locality or particular kind of
traffic or subjects any person, locality or particular to traffic to an
undue or unreasonable prejudice and discrimination is by no means
"self-evident," and that it is a question of fact to be determined by the
particular circumstances of each case.
CAB: The words "dynamite, powder or other explosives" are broad
enough to include matches, and other articles of like nature, and may
fairly be held to include also kerosene oil, gasoline and similar
products of a highly inflammable and explosive character. Many of
these articles of merchandise are in the nature of necessities in any
country open to modern progress and advancement. We are not fully
advised as to the methods of transportation by which they are made
4.
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and all other high explosives when offered for shipment. (See
paragraph 3 of the complaint.)
I base my opinion for a dismissal of the complaint on the ground that
the plaintiff has not alleged in his complaint a single one of the
grounds, apart from that of being a stockholder, necessary for him to
allege to maintain a shareholder's action.
In the case of Hawes vs. Oakland (104 U.S., 450) it was said relative
to the right of a stockholder to bring an action which should regularly
be bought by the company of which he is a stockholder:
We understand that doctrine to be that, to enable a stockholder in a
corporation to sustain in a court of equity in his own name, a suit
founded on a right of action existing in the corporation itself, and in
which the corporation itself is the appropriate plaintiff, there must
exist as the foundation of the suit:
Some action or threatened action of the managing board of directors
or trustees of the corporation, which is beyond the authority conferred
on them by their character or other source of organization;
Or such a fraudulent transaction, completed or contemplated by the
acting managers, in connection with some other party, or among
themselves, or with other shareholders as will in serious injury to the
corporation, or to the interest of the other shareholders;
Or where the board of directors, or a majority of them, are acting for
their own interest, in a manner destructive of the corporation itself, or
of the rights of the other shareholders;
Or where the majority of shareholders themselves are oppressively
and illegally pursuing a course in the name of the corporation, which
is in violation of the rights of the other shareholders, and which can
only be restrained by the aid of a court of equity.
It was also said: "In this country the cases outside of the Federal
Courts are not numerous, and while they admit the right of a
stockholder to sue in cases where the corporation is the proper party
to bring the suit, they limit this right to cases where the directors are
guilty of a fraud or a breach of trust, or are proceeding ultra vires."
Further on in the same case we find: "Conceding appellant's
construction of the company's charter to be correct, there is nothing
which forbids the corporation from dealing with the city in the manner
it has done. That city conferred on the company valuable rights by
special ordinance; namely, the use of the streets for the laying of its
pipes, and the privilege of furnishing water to the whole population.
It may be the exercise of the highest wisdom, to let the city use the
water in the manner complained of. The directors are better able to
act understandingly on this subject than a stockholder residing in
New York. The great body of the stockholders residing in Oakland or
other places in California may take this view of it, and be content to
abide by the action of their directors."
This case is conclusive of the right of the plaintiff in the case at bar to
maintain the action. The complaint is devoid of allegations necessary
to sustain a complaint by a shareholder.
The contention of the plaintiff based upon the case of Ex parte Young
(209 U.S. 123) is not sustained by that case. The decision there
requires precisely the same allegations in the complaint as does the
case of Hawes vs. Oakland. Not one of those allegations appears in
the complaint in the case at bar except the allegation that the plaintiff
is a stockholder.
Indeed, not only does the complaint lack allegations essential to its
sufficiency, but it contains allegations which affirmatively show the
plaintiff is not entitled to maintain the action. I do not stop to
enumerate them all. I call attention to one only, namely the allegation
that the company, by its authorized officials, has acted in strict
conformity with the plaintiff's wishes and has refused to accept
dynamite for carriage. This allegation shows that the plaintiff has
been able to obtain his remedy and accomplish his purpose within
the corporation itself, and it is sufficient, therefore, under the case of
Hawes vs. Oakland and that of Ex parte Young, to require that the
demurrer be sustained.
I am opposed to a decision of this case on the merits.
In the first place, there has been no adequate discussion of the
merits by the parties. Substantially all of the brief of the government
was devoted to what may be called the technical defects of the
complaint, such as I have referred to above. Indeed, it is doubtful if
any portion of the brief can be said to be directly a discussion of the
merits.
Page 14 of 62
19. In the second place, there is no real pending in this court. It is clear
from the complaint that the case is a collusive one (not in any
improper sense) between the plaintiff and the defendant company.
There is no reason found in the complaint why the company should
not have brought the action itself, every member of the board of
directors and every stockholder, according to the allegations of the
complaint, being in absolute accord with the contentions of the
plaintiff on the proposition that the company should not carry
dynamite, and having passed unanimously resolutions to that effect.
Moreover, there has been no violation of Act No. 98. No shipper, or
any other person, has offered dynamite to the defendant company for
shipment, and, accordingly, the defendant company has not refused t
o accept dynamite for carriage. Nor have the defendant government
officials begun proceedings, or threatened to bring proceedings,
against the defendant company in any given case. According to the
allegations of the complaint, the parties are straw parties and the
case a straw case.
20. In the third place, Act No. 98, under which this proceeding is brought
and under which, it is alleged, the defendant public officers are
threatening to enforce, has been repealed, in so far as it affects
public service corporations, by Act No. 2307, as amended by Act No.
2362. More than that; not only has the law been repealed, but
proceedings of this character have been placed, in the first instance,
under the exclusive jurisdiction of the Board of Public Utilities. I am
unable to see why this court should, under the facts of this case,
undertake to render a decision on the merits when the Act under
which it is brought has been repealed and the jurisdiction to render a
decision on the subject matter involved has been turned over to
another body. As I have said before, it was unnecessary to a decision
of this case to touch the merits in any way; and I am opposed to an
attempt to lay down a doctrine on a subject which is within the
exclusive jurisdiction of another body created by law expressly for the
purpose of removing such cases as this from the jurisdiction of the
courts.
21. I am of the opinion that the complaint should be dismissed, but upon
grounds apart from the merits. If the merits of the case were alone to
govern, I should be distinctly in favor of the plaintiff's contention so far
as it relates to the carriage of dynamite on ships carrying
passengers; and, while I am opposed to a decision on the merits of
this case, nevertheless, the merits having been brought into the case
by the opinion of some of my brethren, I desire to refer briefly to the
jurisprudence of the subject.
22. So far as my researches go, the proposition that passenger boats
must carry dynamite and other high explosives is without support in
the decisions of any English speaking country. I have been unable to
find a case anywhere which lays down such a doctrine. Indeed, I
have been unable to find a case which holds that freight boats must
carry dynamite or other high explosives. Every case that I have been
able to find states a contrary doctrine; and neither in courts nor in text
books is there even a hint supporting the contention of my brethren.
The opinion cites no authorities to support it; and I am constrained to
believe that, in any opinion so elaborately written, cases to support its
thesis would have been cited if any such existed.
23. On page 372, Vol. 6 of Cyc., will be found the following: "Common
carriers owe to the public the duty of carrying indifferently for all who
may employ them, and in the order in which the application is made,
and without discrimination as to terms. They may, however, restrict
their business so as to exclude particular classes of goods, and they
are not bound to receive dangerous articles, such as nitro-glycerine,
dynamite, gunpowder, oil of vitriol, matches, etc."
24. In the case of California Powder Works vs. Atlantic and Pacific R. R.
Co. (113 Cal., 329), it was said: "Nor are the exemptions contained in
the contract of the shipping order void for lack of consideration. The
defendant was not obliged to received and transport the powder at
all. A common carrier is not bound to receive ... dangerous articles,
as nitro-glycerine, dynamite, gunpowder, aqua fortis, oil of vitriol,
matches, etc."
25. This, so far as I can learn, is the universal doctrine. The California
case is reproduced in 36 L.R.A., 648 and has appended to it a note.
It is well known that the L.R.A. cites in its notes all of the cases
reasonably obtainable relative to the subject matter of the case which
it annotates. The note in L.R.A. with reference to the California case
cites a considerable number of authorities holding that a carrier of
26.
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45. Human ingenuity has been continuously exercised for ages to make
sea travel safe, that men might sail the seas with as little risk as
possible; that they might rely upon the quality of the ship and the
character and experiences of the sailors who manned her; that they
might feel that the dangers of the deep had been reduced to the
minimum. Not only this; the abilities of legislators have been taxed to
the same end; to frame that would ensure seaworthy ships, safe
appliances, and reliable officers and crews; to curb the avarice of
those who would subordinate the safety of passengers to a desire for
freight; and to so regulate travel by sea that all might safely confide
their property and their lives to the ships sailing under the flag of their
country. Can a decision which requires passenger ships to carry
dynamite and all high explosives be made to harmonize with this
purpose? What is there in the Philippine Islands to justify the
requirement that passenger ships carry dynamite, while in the United
States the carrying of dynamite by passenger ships is a crime? Why
should passengers in the Philippine Islands be subjected to
conditions which are abhorent in the United States? Why compel
shipowners in the Philippine Islands to perform acts which, if done in
the United States, would send them to the penitentiary?
46. I do not believe that we should require passengers to travel on ships
carrying, perhaps, many tons of nitro-glycerine, dynamite or
gunpowder in their holds; nor do I believe that any public official
should do anything calculated to add to the calamity of fire, collision,
or shipwreck the horrors of explosion.
SEPARATE OPINION: ARAULLO, J., dissenting.
1. I do not agree with the decision of the majority of this court in this
case, first, because one of the grounds of the demurrer to the
complaint the first one is that of lack of legal capacity to sue on
the part of the plaintiff and nothing is said in the decision regarding
this very important point. It is one which ought to have received
special attention, even before the other alleged in the demurrer that
the complaint does not state facts sufficient to constitute a cause of
action, and the only one that received any consideration in the
decision in question. Second, because notwithstanding that in the
decision no consideration was paid to the alleged lack of legal
capacity on the part of the plaintiff, he is, reason of the demurrer
being sustained, authorized to present an amended complaint within
ten days, an authorization which could not and should not have on
the part of said plaintiff was not lacking.
2. DECISION OF MARCH 31, 1915. CARSON, J.: This case is again
before us upon a demurrer interposed by the respondent officials of
the Philippine Government to an amended complaint filed after
publication of our decision sustaining the demurrer to the original
complaint. In our former opinion, entered November 5, 1914, we
sustained the demurrer on the ground that the original complaint did
not set forth facts sufficient to constitute a cause of action. In that
decision we held that the statute (Act No. 98) the validity of which
was attacked by counsel por plaintiff was, when rightly construed, a
valid and constitutional enactment, and ruled: That whatever may
have been the rule at the common law, common carriers in this
jurisdiction cannot lawfully decline to accept a particular class in
those goods, unless it appears that for some sufficient reason the
discrimination against the traffic in such goods is reasonable and
necessary. Mere prejudice or whim will not suffice. The grounds of
the discrimination must be substantial ones, such as will justify the
courts in holding the discrimination to have been reasonable and
necessary under all the circumstances of the case. x x x The traffic in
dynamite, gunpowder and other explosives is vitally essential to the
material and general welfare of the people of these Islands. If
dynamite, gunpowder and other explosives are to continue in general
use throughout the Philippines, they must be transported by water
from port to port in the various islands which make up the
Archipelago. We are satisfied therefore that the refusal by a particular
vessel, engaged as a common carrier of merchandise in the
coastwise trade of the Philippine Islands, to accept any or all of these
explosives for carriage would constitute a violation of the prohibitions
against discriminations penalized under the statue, unless it can be
shown by affirmative evidence that there is so real and substantial a
danger of disaster necessarily involved in the carriage of any or all of
these articles of merchandise as to render such refusal a due or a
Page 16 of 62
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17. Under the provisions of sections 226 and 516 of the Code of Civil
Procedure jurisdiction in prohibition proceedings is conferred upon
the courts when the complaint alleges "the proceedings of any
inferior tribunal, corporation, board, or person, whether exercising
functions judicial or ministerial, were without or in excess of the
jurisdiction of such tribunal, corporation, board or person." It is
manifest therefore that the allegations of the amended complaint,
even if true, will not sustain the issuance of a writ of prohibition
without further amendment unless they be construed to in effect a
charge that the respondent officials are abusing the discretion
conferred upon them in the exercise of their authority in such manner
that the acts complained of should be held to be without or in excess
of their jurisdiction.
18. It may well be doubted whether the doctrine of the case Ex parte
Young (supra), relied upon by the plaintiff in his argument be invoked
in support of a right of action predicated upon such premises; so
also, since the acts complained of in the amended complaint are
alleged to have been done at a date subsequent to the enactment of
the statutes creating the Board of Public Utility Commissioners, it
may well be doubted whether the courts should entertain prohibition
proceedings seeking to restrain alleged abuses of discretion on the
part of officers and officials of the Government, and of public service
corporations with regard to the rules under which such corporations
are operated, until and unless redress for the alleged wrong has
been sought at the hands of the Board.
19. We do not deem it expedient or necessary, however, to consider or
decide any of these questions at this time, because we are of opinion
that we should not permit our original jurisdiction to be set in motion
upon the allegations of the amended complaint.
20. It is true that this court is clothed with original jurisdiction in
prohibition proceedings (sec. 516, Act No. 190). But this jurisdiction is
concurrent with the original jurisdiction of the various Courts of First
Instance throughout the Islands, except in cases where the writ runs
to restrain those courts themselves, when of course it is exclusive;
and we are satisfied that it could have been the intention of the
legislator to require this court to assume original jurisdiction in all
cases wherein the plaintiff elects to invoke it. Such a practice might
result in overwhelming this court with the duty of entertaining and
deciding original proceedings which from their nature could much
better be adjudicated in the trial courts; and in unnecessarily diverting
the time and attention of the court from its important appellate
functions to the settlement of controversies of no especial interest to
the public at large, in the course of which it might become necessary
to take testimony and to make findings touching complicated and
hotly contested issues of fact.
21. We are of opinion and so hold that unless special reasons appear
therefor, this court should decline to permit its original jurisdiction to
be invoked in prohibition proceedings, and this especially when the
adjudication of the issues raised involves the taking of evidence and
the making of findings touching controverted facts, which, as a rule,
can be done so much better in the first instance by a trial court than
an appellate court organized as is ours.
22. Spelling on Injunctions and Other Extraordinary Remedies (vol. 2, p.
1493), in discussing the cases in which the appellate courts in the
United States permit their original jurisdiction to be invoked where
that jurisdiction is concurrent with that of some inferior court, says:
23. Of the plan of concurrent jurisdiction West Virginia may be taken as
an illustration. The Supreme Court of Appeals of that State has
concurrent original jurisdiction with the circuit courts in cases of
prohibition, but by a rule adopted by the former court it will not take
such original jurisdiction unless reasons appear therefor.
24. We deemed it proper to assume jurisdiction to adjudicate and decide
the issues raised by the rulings on the original complaint, involving as
they did a question as to the validity of a public statute of vital interest
to shippers and shipowners generally as also to the public at large,
presenting for determination no difficult or complicated questions of
fact: but we are satisfied that we should decline to take jurisdiction of
the matters relied upon in the amended complaint in support of
plaintiff's prayer for the writ.
25. The question of the construction and validity of the statute having
been disposed of in our ruling on the demurrer to the original
complaint, it must be apparent that of the allegations of the amended
complaint are sufficient to maintain the plaintiff's action for a writ of
FACTS:
Page 18 of 62
Where the loading on deck has taken place with the consent of
3.
4.
5.
6.
7.
FACTS:
1. In September of the year 1916, the Plaintiff G. Martini, Ltd.,
arranged with the Defendant company, as agents of the
Eastern and Australian Steamship Company, for the shipment
of 219 cases or packages of chemical products from Manila,
Philippine Islands, to Kobe, Japan. The goods were embarked
at Manila on the steamship Eastern, and were carried to Kobe
on the deck of that ship. Upon arrival at the port of destination
it was found that the chemicals comprised in the shipment had
suffered damage from the effects of both fresh and salt water;
and the present action was instituted by the Plaintiff to recover
the amount of the damage thereby occasioned.
2. CFI: In the Court of First Instance judgment was rendered in
favor of the Plaintiffs for the sum of P34,997.56, with interest
8.
from March 24, 1917, and costs of the proceeding. From this
judgment the Defendant appealed.
- That the damage was caused by water, either falling in
the form of rain or splashing aboard by the action of wind
and waves, is unquestionable; and the contention of the
Plaintiff is that it was the duty of the ships company to
stow this cargo in the hold and not to place it in an
exposed position on the open deck.
- The defense is that by the contract of affreightment the
cargo in question was to be carried on deck at the
shippers risk; and attention is directed to the fact that on
the face of each bill of lading is clearly stamped with a
rubber stencil in conspicuous letters the words on deck
at shippers risk.
Defendant: In this connection the Defendant Company relies
upon paragraph 19 of the several bills of lading issued for
transportation of this cargo, which reads as follows:
19. Goods signed for on this bill of lading as carried on deck
are entirely at shippers risk, whether carried on deck or under
hatches, and the steamer is not liable for any loss or damage
from any cause whatever.
Plaintiff: The Plaintiff insists that the agreement was that the
cargo in question should be carried in the ordinary manner,
that is, in the ships hold, and that the Plaintiff never gave its
consent for the goods to be carried on deck.
The material facts bearing on this controverted point appear to
be these: On September 15, 1916, the Plaintiff applied to the
Defendant for necessary space on the steamship Eastern,
and received a shipping order, which constituted authority for
the ships officers to receive the cargo aboard. One part of this
document contained a form which, when signed by the mate,
would constitute the mates receipt, showing that the cargo
had been taken on.
Ordinarily the shipper is supposed to produce the mates
receipt to the agents of the ships company, who thereupon
issue the bill of lading to the shipper. When, however, the
shipper, as not infrequently happens, desires to procure the
bill of lading before he obtains the mates receipt, it is
customary for him to enter into a written obligation, binding
himself, among other things, to abide by the terms of the
mates receipt.
In the present instance the mates receipt did not come to the
Plaintiffs hand until Monday night, but as the Plaintiff was
desirous of obtaining the bills of lading on the Saturday
morning preceding in order that he might negotiate them at
the bank, a request was made for the delivery of the bills of
lading on that day To effectuate this, the Plaintiff was required
to enter into the written obligation, calling itself a letter of
guarantee, which was introduced in evidence as Exhibit D-C.
This document is of the date of September 16, 1916, and of
the following tenor: In consideration of your signing us clean
B/L for the undermentioned cargo per above steamer to be
shipped on or under deck at ships option, for Kobe without
production of the mates receipt, we hereby guarantee to hold
you free from any responsibility by your doing so, and for any
expense should the whole or part of the cargo be shut out, or
otherwise, and to hand you said mates receipt as soon as it
reaches us and to abide by all clauses and notations on the
same.
In conformity with the purpose of this document the bills of
lading were issued, and the negotiable copies were, upon the
same day, negotiated at the bank by the Plaintiff for 90 per
cent of the invoice value of the goods. As already stated these
bills of lading contained on their face, conspicuously stenciled,
the words on deck at shippers risks. The mates receipt,
received by the Plaintiff 2 days later also bore the notation on
Page 20 of 62
9.
10.
11.
12.
and that their protest was a mere formality. Codina admits that
he was informed by Basa that the cargo could not be carried
under the hatches, and that if Martini & Company were
dissatisfied to have it carried on deck, they could discharge it.
He denies being told that it could be taken off in Macondray &
Companys boats. Codina further states that when the
conversation was broken off for the purpose of enabling him to
communicate with Martini, he consulted with the latter, and
was directed to say that Martini & Company did not consent
for the cargo to be carried on deck and that it must be
discharged. Upon returning to the telephone, he found that the
connection had been broken, and he says that he was
thereafter unable to get Macondray & Company by telephone
during that afternoon, although he attempted to do so more
than once.
HELD (Consent of shipment on deck): Consent given.
1. CAB: In the light of all the evidence the conclusion seems
clear enough that, although Martini & Company would have
greatly preferred for the cargo to be carried under the hatches,
they nevertheless consented for it to go on deck. Codina, if
attentive to the interests of his house, must have known from
the tenor of the guaranty to which his signature is affixed that
the Defendant had reserved the right to carry it on deck, and
when the bills of lading were delivered to the Plaintiff they
plainly showed that the cargo would be so carried.
2. CAB: It must therefore be considered that the Plaintiff was
duly affected with notice as to the manner in which the cargo
was shipped. No complaint, however, was made until after the
bills of lading had been negotiated at the bank. When the
manager of Martini & Company first had his attention drawn to
the fact that the cargo was being carried on deck, he called
Codina to account, and the latter found it to his interest to
feign surprise and pretend that he had been deceived by
Macondray & Company. Even then there was time to stop the
shipment, but Martini & Company failed to give the necessary
instructions, thereby manifesting acquiescence in the
accomplished fact.
3. In a later letter of October 25, 1916, addressed to Macondray
& Company, Martini, referring to the incident says: If previous
to the mailing of the documents, you had actually notified us
by phone or otherwise that you could not accept our cargo in
any other way but on deck, we should have promptly given
you instructions to leave it on the lighters and at our disposal.
4. From this it is inferable that one reason why the Plaintiff
allowed the cargo to be carried away without being
discharged, was that the bills had been discounted and to stop
the shipment would have entailed the necessity of refunding
the money which the bank had advanced, with the
inconveniences incident thereto. Another reason apparently
was that Martini discerned, or thought he discerned the
possibility of shifting the risk so as to make it fall upon the
ships company.
5. With reference to the practicability of discharging the cargo in
the late afternoon or evening of Saturday, September 16,
before the ship departed, as it did at 8 p.m. some evidence
was introduced tending to show that in order to get the cargo
off certain formalities were necessary which could not be
accomplished, as for instance, the return of the mates receipt
(which had not yet come to the Plaintiffs hands), the securing
of a permit from the customs authorities, and the securing of
an order of discharge from the steamship company. In view of
the fact that the Plaintiff did nothing whatever looking towards
the discharge of the cargo, not even so much as to notify
Macondray & Company that the cargo must come off, the
proof relative to the practicability of discharge is inconclusive.
Page 21 of 62
4.
5.
6.
7.
8.
9.
10.
11.
absent the excepting causes under Article 1734, attach and the
presumption of fault of the carrier under Article 1735 be invoked.
5. As already demonstrated, the facts in the case at bar belie the
averment that there was delivery of the cargo to the carrier on
October 26, 1976. Rather, as earlier explained, the body intended to
be shipped as agreed upon was really placed in the possession and
control of PAL on October 28, 1976 and it was from that date that
private respondents became responsible for the agreed cargo under
their undertakings in PAL Airway Bill No. 079-01180454.
Consequently, for the switching of caskets prior thereto which was
not caused by them, and subsequent events caused thereby, private
respondents cannot be held liable.
6. The oft-repeated rule regarding a carrier's liability for delay is that in
the absence of a special contract, a carrier is not an insurer against
delay in transportation of goods. When a common carrier undertakes
to convey goods, the law implies a contract that they shall be
delivered at destination within a reasonable time, in the absence, of
any agreement as to the time of delivery. But where a carrier has
made an express contract to transport and deliver property within a
specified time, it is bound to fulfill its contract and is liable for any
delay, no matter from what cause it may have arisen. This result
logically follows from the well-settled rule that where the law creates
a duty or charge, and the party is disabled from performing it without
any default in himself, and has no remedy over, then the law will
excuse him, but where the party by his own contract creates a duty or
charge upon himself, he is bound to make it good notwithstanding
any accident or delay by inevitable necessity because he might have
provided against it by contract. Whether or not there has been such
an undertaking on the part of the carrier to be determined from the
circumstances surrounding the case and by application of the
ordinary rules for the interpretation of contracts.
7. A common carrier undertaking to transport property has the implicit
duty to carry and deliver it within reasonable time, absent any
particular stipulation regarding time of delivery, and to guard against
delay. In case of any unreasonable delay, the carrier shall be liable
for damages immediately and proximately resulting from such neglect
of duty. As found by the trial court, the delay in the delivery of the
remains of Crispina Saludo, undeniable and regrettable as it was,
cannot be attributed to the fault, negligence or malice of private
respondents, a conclusion concurred in by respondent court and
which we are not inclined to disturb.
x
3.
4.
5.
6.
7.
FACTS:
1. The facts, as recounted by the court a quo and adopted by
respondent court after "considering the evidence on record," are as
follows: After the death of plaintiffs' mother, Crispina Galdo Saludo, in
Chicago Illinois, (on) October 23, 1976 (Exh. A), Pomierski and Son
Funeral Home of Chicago, made the necessary preparations and
arrangements for the shipment, of the remains from Chicago to the
Philippines. The funeral home had the remains embalmed (Exb. D)
and secured a permit for the disposition of dead human body on
October 25, 1976 (Exh. C), Philippine Vice Consul in Chicago,
Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on October 26, 1976 at
the Pomierski & Son Funeral Home, sealed the shipping case
containing a hermetically sealed casket that is airtight and waterproof
wherein was contained the remains of Crispina Saludo Galdo (sic)
(Exb. B). On the same date, October 26, 1976, Pomierski brought the
remains to C.M.A.S. (Continental Mortuary Air Services) at the airport
(Chicago) which made the necessary arrangements such as flights,
transfers, etc.; C.M.A.S. is a national service used by undertakers to
throughout the nation (U.S.A.), they furnish the air pouch which the
casket is enclosed in, and they see that the remains are taken to the
proper air freight terminal (Exh. 6-TWA).
2. C.M.A.S. booked the shipment with PAL thru the carrier's agent Air
Care International, with Pomierski F.H. as the shipper and Mario
(Maria) Saludo as the consignee. PAL Airway Bill No. 079-01180454
Ordinary was issued wherein the requested routing was from
Chicago to San Francisco on board TWA Flight 131 of October 27,
1976 and from San Francisco to Manila on board PAL Flight No. 107
8.
9.
10.
of the same date, and from Manila to Cebu on board PAL Flight 149
of October 29, 1976 (See Exh. E., Also Exh. 1-PAL).
In the meantime, plaintiffs Maria Salvacion Saludo and Saturnino
Saludo, thru a travel agent, were booked with United Airlines from
Chicago to California, and with PAL from California to Manila. She
then went to the funeral director of Pomierski Funeral Home who had
her mother's remains and she told the director that they were booked
with United Airlines. But the director told her that the remains were
booked with TWA flight to California. This upset her, and she and her
brother had to change reservations from UA to the TWA flight after
she confirmed by phone that her mother's remains should be on that
TWA flight. They went to the airport and watched from the look-out
area. She saw no body being brought. So, she went to the TWA
counter again, and she was told there was no body on that flight.
Reluctantly, they took the TWA flight upon assurance of her cousin,
Ani Bantug, that he would look into the matter and inform her about it
on the plane or have it radioed to her. But no confirmation from her
cousin reached her that her mother was on the West Coast.
Upon arrival at San Francisco at about 5:00 p.m., she went to the
TWA counter there to inquire about her mother's remains. She was
told they did not know anything about it.
She then called Pomierski that her mother's remains were not at the
West Coast terminal, and Pomierski immediately called C.M.A.S.,
which in a matter of 10 minutes informed him that the remains were
on a plane to Mexico City, that there were two bodies at the terminal,
and somehow they were switched; he relayed this information to Miss
Saludo in California; later C.M.A.S. called and told him they were
sending the remains back to California via Texas (see Exh. 6-TWA).
It-turned out that TWA had carried a shipment under PAL Airway Bill
No. 079-ORD-01180454 on TWA Flight 603 of October 27, 1976, a
flight earlier than TWA Flight 131 of the same date. TWA delivered or
transferred the said shipment said to contain human remains to PAL
at 1400H or 2:00 p.m. of the same date, October 27, 1976 (Bee Exh.
1- TWA). "Due to a switch(ing) in Chicago", this shipment was
withdrawn from PAL by CMAS at 1805H (or 6:05 p.m.) of the same
date, October 27 (Exh. 3-PAL, see Exh. 3-a-PAL).
What transpired at the Chicago (A)irport is explained in a memo or
incident report by Pomierski (Exh. 6-TWA) to Pomierski's lawyers
who in turn referred to said' memo and enclosed it in their
(Pomierski's lawyers) answer dated July 18, 1981 to herein plaintiff's
counsel (See Exh. 5-TWA). In that memo or incident report (Exh. 6TWA), it is stated that the remains (of Crispina Saludo) were taken to
CMAS at the airport; that there were two bodies at the (Chicago
Airport) terminal, and somehow they were switched, that the remains
(of Crispina Saludo) were on a plane to Mexico City; that CMAS is a
national service used by undertakers throughout the nation (U.S.A.),
makes all the necessary arrangements, such as flights, transfers,
etc., and see(s) to it that the remains are taken to the proper air
freight terminal.
The following day October 28, 1976, the shipment or remains of
Crispina Saludo arrived (in) San Francisco from Mexico on board
American Airlines. This shipment was transferred to or received by
PAL at 1945H or 7:45 p.m. (Exh. 2-PAL, Exh. 2-a-PAL). This casket
bearing the remains of Crispina Saludo, which was mistakenly sent to
Mexico and was opened (there), was resealed by Crispin F. Patagas
for shipment to the Philippines (See Exh. B-1). The shipment was
immediately loaded on PAL flight for Manila that same evening and
arrived (in) Manila on October 30, 1976, a day after its expected
arrival on October 29, 1976. 3
In a letter dated December 15, 1976, 4 petitioners' counsel informed
private respondent Trans World Airlines (TWA) of the misshipment
and eventual delay in the delivery of the cargo containing the remains
of the late Crispin Saludo, and of the discourtesy of its employees to
petitioners Maria Salvacion Saludo and Saturnino Saludo. In a
separate letter on June 10, 1977 addressed to co-respondent
Philippine Airlines (PAL), 5 petitioners stated that they were holding
PAL liable for said delay in delivery and would commence judicial
action should no favorable explanation be given.
Both private respondents denied liability. Thus, a damage suit was
filed by petitioners before the then Court of First Instance, Branch III,
Leyte, praying for the award of actual damages of P50,000.00, moral
damages of P1,000,000.00, exemplary damages, attorney's fees and
costs of suit.
Page 25 of 62
11. CFI: As earlier stated, the court below absolved the 2 respondent
airlines companies of liability.
12. CA: The Court of Appeals affirmed the decision of the lower court in
toto, and in a subsequent resolution, 7 denied herein petitioners'
motion for reconsideration for lack of merit.
ISSUE:
1. Whether the delay in the delivery of the casketed remains of was due
to the fault of respondent airline companies
NO. Reliance on airway bill. Fault of CMAS (Letter of
Petitioners = Admission)
2. Whether the 1-day delay in the delivery of the same constitutes
contractual breach as would entitle petitioners to damages
NO. No special or specific contract had been entered
into, the airway bill was clear (no specific airplane etc).
Put on an earlier flight to give more time to assure arrival.
3. Whether damages are recoverable by petitioners for the humiliating,
arrogant and indifferent acts of the employees of TWA and PAL
NO. PAL employees were not rude. It was from the PAL
employees that Petitioners knew the status of transfer.
4. Whether private respondents should be held liable for actual, moral
and exemplary damages, aside from attorney's fees and litigation
expenses.
Nominal damages. No bad faith.
HELD:
1. I. Petitioners fault respondent court for "not finding that private
respondents failed to exercise extraordinary diligence required by law
which resulted in the switching and/or misdelivery of the remains of
Crispina Saludo to Mexico causing gross delay in its shipment to the
Philippines, and consequently, damages to petitioners."
2. Petitioner allege that private respondents received the casketed
remains of petitioners' mother on October 26, 1976, as evidenced by
the issuance of PAL Air Waybill No. 079-01180454 18 by Air Care
International as carrier's agent; and from said date, private
respondents were charged with the responsibility to exercise
extraordinary diligence so much so that for the alleged switching of
the caskets on October 27, 1976, or one day after private
respondents received the cargo, the latter must necessarily be liable.
3. IMPT: To support their assertion, petitioners rely on the jurisprudential
dictum, both under American and Philippine law, that "(t)he issuance
of a bill of lading carries the presumption that the goods were
delivered to the carrier issuing the bill, for immediate shipment, and it
is nowhere questioned that a bill of lading is prima facie evidence of
the receipt of the goods by the carrier. . . . In the absence of
convincing testimony establishing mistake, recitals in the bill of lading
showing that the carrier received the goods for shipment on a
specified date control (13 C.J.S. 235)."
4. IMPT: A bill of lading is a written acknowledgment of the receipt of
the goods and an agreement to transport and deliver them at a
specified place to a person named or on his order. Such instrument
may be called a shipping receipt, forwarder's receipt and receipt for
transportation. The designation, however, is immaterial. It has been
hold that freight tickets for bus companies as well as receipts for
cargo transported by all forms of transportation, whether by sea or
land, fall within the definition. Under the Tariff and Customs Code, a
bill of lading includes airway bills of lading.
- The two-fold character of a bill of lading is all too familiar; it
is a receipt as to the quantity and description of the goods
shipped and a contract to transport the goods to the consignee
or other person therein designated, on the terms specified in
such instrument. 22
5. IMPT: Logically, since a bill of lading acknowledges receipt of goods
to be transported, delivery of the goods to the carrier normally
precedes the issuance of the bill; or, to some extent, delivery of the
goods and issuance of the bill are regarded in commercial practice as
simultaneous acts. However, except as may be prohibited by law,
there is nothing to prevent an inverse order of events, that is, the
execution of the bill of lading even prior to actual possession and
control by the carrier of the cargo to be transported. There is no law
which requires that the delivery of the goods for carriage and the
issuance of the covering bill of lading must coincide in point of time
or, for that matter, that the former should precede the latter.
12.
13.
14.
15.
October 28, 1976 that PAL received physical delivery of the body at
San Francisco, as duly evidenced by the Interline Freight Transfer
Manifest of the American Airline Freight System and signed for by
Virgilio Rosales at 1945H, or 7:45 P.M. on said date.
IMPT: Explicit is the rule under Article 1736 of the Civil Code that the
extraordinary responsibility of the common carrier begins from the
time the goods are delivered to the carrier. This responsibility
remains in full force and effect even when they are temporarily
unloaded or stored in transit, unless the shipper or owner exercises
the right of stoppage in transitu, and terminates only after the lapse of
a reasonable time for the acceptance, of the goods by the consignee
or such other person entitled to receive them. And, there is delivery to
the carrier when the goods are ready for and have been placed in the
exclusive possession, custody and control of the carrier for the
purpose of their immediate transportation and the carrier has
accepted them. Where such a delivery has thus been accepted by
the carrier, the liability of the common carrier commences eo instanti.
Hence, while we agree with petitioners that the extraordinary
diligence statutorily required to be observed by the carrier
instantaneously commences upon delivery of the goods thereto, for
such duty to commence there must in fact have been delivery of the
cargo subject of the contract of carriage. Only when such fact of
delivery has been unequivocally established can the liability for loss,
destruction or deterioration of goods in the custody of the carrier,
absent the excepting causes under Article 1734, attach and the
presumption of fault of the carrier under Article 1735 be invoked.
CAB: As already demonstrated, the facts in the case at bar belie the
averment that there was delivery of the cargo to the carrier on
October 26, 1976. Rather, as earlier explained, the body intended to
be shipped as agreed upon was really placed in the possession and
control of PAL on October 28, 1976 and it was from that date that
private respondents became responsible for the agreed cargo under
their undertakings in PAL Airway Bill No. 079-01180454.
- Consequently, for the switching of caskets prior thereto which
was not caused by them, and subsequent events caused
thereby, private respondents cannot be held liable.
Petitioners, proceeding on the premise that there was delivery of the
cargo to private respondents on October 26,1976 and that the latter's
extraordinary responsibility had by then become operative, insist on
foisting the blame on private respondents for the switching of the two
caskets which occurred on October 27, 1976. It is argued that since
there is no clear evidence establishing the fault Continental Mortuary
Air Services (CMAS) for the mix-up, private respondents are
presumably negligent pursuant to Article 1735 of the Civil Code and,
for failure to rebut such presumption, they must necessarily be held
liable; or, assuming that CMAS was at fault, the same does not
absolve private respondents of liability because whoever brought the
cargo to the airport or loaded it on the plane did so as agent of
private respondents.
- This contention is without merit. As pithily explained by the
Court of Appeals: The airway bill expressly provides that
"Carrier certifies goods described below were received for
carriage", and said cargo was "casketed human remains of
Crispina Saludo," with "Maria Saludo as Consignee; Pomierski
F.H. as Shipper; Air Care International as carrier's agent." On
the face of the said airway bill, the specific flight numbers,
specific routes of shipment and dates of departure and arrival
were typewritten, to wit: Chicago TWA Flight 131/27 to San
Francisco and from San Francisco by PAL 107 on, October 27,
1976 to Philippines and to Cebu via PAL Flight 149 on October
29, 1976. The airway bill also contains the following typewritten
words, as follows: all documents have been examined (sic).
Human remains of Crispina Saludo. Please return back (sic)
first available flight to SFO.
- But, as it turned out and was discovered later the casketed
human remains which was issued PAL Airway Bill
#079-1180454 was not the remains of Crispina Saludo, the
casket containing her remains having been shipped to Mexico
City.
- However, it should be noted that, Pomierski F.H., the shipper of
Mrs. Saludo's remains, hired Continental Mortuary Services
(hereafter referred to as C.M.A.S.), which is engaged in the
business of transporting and forwarding human remains. Thus,
16.
17.
18.
19.
20.
21.
22.
23.
24.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16. Also, the theory of petitioners that the specification of the flights and
dates of departure and arrivals constitute a special contract that
could prevail over the printed stipulations at the back of the airway bill
is vacuous. To countenance such a postulate would unduly burden
the common carrier for that would have the effect of unilaterally
transforming every single bill of lading or trip ticket into a special
contract by the simple expedient of filling it up with the particulars of
the flight, trip or voyage, and thereby imposing upon the carrier duties
and/or obligations which it may not have been ready or willing to
assume had it been timely, advised thereof.
17. Neither does the fact that the challenged condition No. 5 was printed
at the back of the airway bill militate against its binding effect on
petitioners as parties to the contract, for there were sufficient
indications on the face of said bill that would alert them to the
presence of such additional condition to put them on their guard.
Ordinary prudence on the part of any person entering or
contemplating to enter into a contract would prompt even a cursory
examination of any such conditions, terms and/or stipulations.
18. IMPT: There is a holding in most jurisdictions that the acceptance of
a bill of lading without dissent raises a presumption that all terms
therein were brought to the knowledge of the shipper and agreed to
by him, and in the absence of fraud or mistake, he is estopped from
thereafter denying that he assented to such terms. This rule applies
with particular force where a shipper accepts a bill of lading with full
knowledge of its contents, and acceptance under such circumstances
makes it a binding contract. In order that any presumption of assent
to a stipulation in a bill of lading limiting the liability of a carrier may
arise, it must appear that the clause containing this exemption from
liability plainly formed a part of the contract contained in the bill of
lading. A stipulation printed on the back of a receipt or bill of lading or
on papers attached to such receipt will be quite as effective as if
printed on its face, if it is shown that the consignor knew of its terms.
Thus, where a shipper accepts a receipt which states that its
conditions are to be found on the back, such receipt comes within the
general rule, and the shipper is held to have accepted and to be
bound by the conditions there to be found.
19. IMPT: Granting arguendo that Condition No. 5 partakes of the nature
of a contract of adhesion and as such must be construed strictly
against the party who drafted the same or gave rise to any ambiguity
therein, it should be borne in mind that a contract of adhesion may be
struck down as void and unenforceable, for being subversive of
public policy, only when the weaker party is imposed upon in dealing
with the dominant bargaining party and is reduced to the alternative
of taking it or leaving it, completely deprived of the opportunity to
bargain on equal footing. However, Ong Yiu vs. Court of Appeals, et
al. instructs us that contracts of adhesion are not entirely prohibited.
The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, be gives his consent.
20. CAB: Accordingly, petitioners, far from being the weaker party in this
situation, duly signified their presumed assent to all terms of the
contract through their acceptance of the airway bill and are
consequently bound thereby. It cannot be gainsaid that petitioners'
were not without several choices as to carriers in Chicago with its
numerous airways and airliner servicing the same.
21. We wish to allay petitioners' apprehension that Condition No. 5 of the
airway bill is productive of mischief as it would validate delay in
delivery, sanction violations of contractual obligations with impunity or
put a premium on breaches of contract.
22. IMPT: Just because we have said that condition No. 5 of the airway
bill is binding upon the parties to and fully operative in this
transaction, it does not mean, and let this serve as fair warning to
respondent carriers, that they can at all times whimsically seek
refuge from liability in the exculpatory sanctuary of said Condition No.
5 or arbitrarily vary routes, flights and schedules to the prejudice of
their customers. This condition only serves to insulate the carrier
from liability in those instances when changes in routes, flights and
schedules are clearly JUSTIFIED by the peculiar circumstances of a
particular case, or by general transportation practices, customs and
usages, or by contingencies or emergencies in aviation such as
weather turbulence, mechanical failure, requirements of national
security and the like. And even as it is conceded that specific routing
and other navigational arrangements for a trip, flight or voyage, or
variations therein, generally lie within the discretion of the carrier in
23.
24.
25.
26.
HELD:
1. III. Petitioners challenge the validity of respondent court's finding that
private respondents are not liable for tort on account of the
humiliating, arrogant and indifferent acts of their officers and
personnel. They posit that since their mother's remains were
transported ten hours earlier than originally scheduled, there was no
reason for private respondents' personnel to disclaim knowledge of
the arrival or whereabouts of the same other than their sheer
arrogance, indifference and extreme insensitivity to the feelings of
petitioners. Moreover, being passengers and not merely consignors
of goods, petitioners had the right to be treated with courtesy,
respect, kindness and due consideration.
2. In riposte, TWA claims that its employees have always dealt politely
with all clients, customers and the public in general. PAL, on the
other hand, declares that in the performance of its obligation to the
riding public, other customers and clients, it has always acted with
justice, honesty, courtesy and good faith.
3. Respondent appellate court found merit in and reproduced the trial
court's refutation of this assigned error.
4. CAB: The testimony does not show any humiliating or arrogant
manner with which the personnel of both defendants treated the two
plaintiffs. Even their alleged indifference is not clearly established.
The initial answer of the TWA personnel at the counter that they did
not know anything about the remains, and later, their answer that
they have not heard anything about the remains, and the inability of
the TWA counter personnel to inform the two plaintiffs of the
whereabouts of the remains, cannot be said to be total or complete
indifference to the said plaintiffs. At any rate, it is any rude or
discourteous conduct, malfeasance or neglect, the use of abusive or
insulting language calculated to humiliate and shame passenger or
had faith by or on the part of the employees of the carrier that gives
the passenger an action for damages against the carrier (Zulueta vs.
Pan American World Airways, 43 SCRA 397; Air France vs.
Carrascoso, et al., 18 SCRA 155; Lopez, et al. vs. Pan American
World Airways, 16 SCRA 431; Northwest Airlines, Inc. vs. Cuenca, 14
SCRA 1063), and none of the above is obtaining in the instant case.
5. We stand by respondent court's findings on this point, but only to the
extent where it holds that the manner in which private respondent
Page 30 of 62
6.
7.
8.
9.
10.
FACTS:
1. Petitioner Maersk Line is engaged in the transportation of goods by
sea, doing business in the Philippines through its general agent
Compania General de Tabacos de Filipinas.
2. Private respondent Efren Castillo, on the other hand, is the proprietor
of Ethegal Laboratories, a firm engaged in the manufacture of
pharmaceutical products.
3. On November 12, 1976, private respondent ordered from Eli Lilly. Inc.
of Puerto Rico through its (Eli Lilly, Inc.'s) agent in the Philippines,
Elanco Products, 600,000 empty gelatin capsules for the
manufacture of his pharmaceutical products. The capsules were
placed in six (6) drums of 100,000 capsules each valued at US
$1,668.71.
4. Through a Memorandum of Shipment (Exh. "B"; AC GR CV No.
10340, Folder of Exhibits, pp. 5-6), the shipper Eli Lilly, Inc. of Puerto
5.
6.
7.
8.
9.
10.
11.
ISSUES:
1. Whether a defendant's cross-claim against a co-defendant
(petitioner) survives or subsists even after the dismissal of the
complaint against defendant-cross claimant (petitioner) NO.
2. Whether Respondent Castillo is entitled to damages resulting from
delay in the delivery of the shipment in the absence in the bill of
lading of a stipulation on the period of delivery YES.
Page 32 of 62
5.
6.
7.
8.
9.
10.
11.
action is anchored on Article 1170 of the New Civil Code and not
under the law on Admiralty (AC-GR CV No. 10340, Rollo, p. 14).
The bill of lading covering the subject shipment among others, reads:
6. GENERAL (1) The Carrier does not undertake that the goods shall
arrive at the port of discharge or the place of delivery at any particular
time or to meet any particular market or use and save as is provided
in clause 4 the Carrier shall in no circumstances be liable for any
direct, indirect or consequential loss or damage caused by delay. If
the Carrier should nevertheless be held legally liable for any such
direct or indirect or consequential loss or damage caused by delay,
such liability shall in no event exceed the freight paid for the transport
covered by this Bill of Lading. (Exh. "1-A"; AC-G.R. CV No. 10340,
Folder of Exhibits, p. 41)
It is not disputed that the aforequoted provision at the back of the bill
of lading, in fine print, is a contract of adhesion. Generally, contracts
of adhesion are considered void since almost all the provisions of
these types of contracts are prepared and drafted only by one party,
usually the carrier (Sweet Lines v. Teves, 83 SCRA 361 [1978]). The
only participation left of the other party in such a contract is the
affixing of his signature thereto, hence the term "Adhesion" (BPI
Credit Corporation v. Court of Appeals, 204 SCRA 601 [1991];
Angeles v. Calasanz, 135 SCRA 323 [1985]).
Nonetheless, settled is the rule that bills of lading are contracts not
entirely prohibited (Ong Yiu v. Court of Appeals, et al., 91 SCRA 223
[1979]; Servando, et al. v. Philippine Steam Navigation Co., 117
SCRA 832 [1982]). One who adheres to the contract is in reality free
to reject it in its entirety; if he adheres, he gives his consent
(Magellan Manufacturing Marketing Corporation v. Court of Appeals,
et al., 201 SCRA 102 [1991]).
IMPT: In Magellan, (supra), we ruled: It is a long standing
jurisprudential rule that a bill of lading operates both as a receipt and
as contract to transport and deliver the same a therein stipulated. As
a contract, it names the parties, which includes the consignee, fixes
the route, destination, and freight rates or charges, and stipulates the
rights and obligations assumed by the parties. Being a contract, it is
the law between the parties who are bound by its terms and
conditions provided that these are not contrary to law, morals, good
customs, public order and public policy. A bill of lading usually
becomes effective upon its delivery to and acceptance by the
shipper. It is presumed that the stipulations of the bill were, in the
absence of fraud, concealment or improper conduct, known to the
shipper, and he is generally bound by his acceptance whether he
reads the bill or not. (Emphasis supplied)
CAB: However, the aforequoted ruling applies only if such contracts
will not create an absurd situation as in the case at bar. The
questioned provision in the subject bill of lading has the effect of
practically leaving the date of arrival of the subject shipment on the
sole determination and will of the carrier.
IMPT: While it is true that common carriers are not obligated by law
to carry and to deliver merchandise, and persons are not vested with
the right to prompt delivery, unless such common carriers previously
assume the obligation to deliver at a given date or time (Mendoza v.
Philippine Air Lines, Inc., 90 Phil. 836 [1952]), delivery of shipment or
cargo should at least be made within a reasonable time.
In Saludo, Jr. v. Court of Appeals (207 SCRA 498 [1992]) this Court
held: The oft-repeated rule regarding a carrier's liability for delay is
that in the absence of a special contract, a carrier is not an insurer
against delay in transportation of goods. When a common carrier
undertakes to convey goods, the law implies a contract that they shall
be delivered at destination within a reasonable time, in the absence,
of any agreement as to the time of delivery. But where a carrier has
made an express contract to transport and deliver properly within a
specified time, it is bound to fulfill its contract and is liable for any
delay, no matter from what cause it may have arisen. This result
logically follows from the well-settled rule that where the law creates
a duty or charge, and the default in himself, and has no remedy over,
then his own contract creates a duty or charge upon himself, he is
bound to make it good notwithstanding any accident or delay by
inevitable necessity because he might have provided against it by
contract. Whether or not there has been such an undertaking on the
part of the carrier is to be determined from the circumstances
surrounding the case and by application of the ordinary rules for the
interpretation of contracts.
Page 33 of 62
HELD:
1. Article 1601 of the Civil Code prescribes: Carriers of goods by land or
by water shall be subject with regard to the keeping and preservation
of the things entrusted to them, to the same obligations as
determined for innkeepers by articles 1783 and 1784.
2. The provisions of this article shall be understood without prejudice to
what is prescribed by the Code of Commerce with regard to
transportation by sea and land.
3. Article 1602 reads: Carriers are also liable for the loss of and damage
to the things which they receive, (UNLESS) they prove that the loss
or damage arose from a fortuitous event or force majeure.
4. The articles aforecited are as follows:
- ART. 1783. The depositum of goods made by travelers in inns
or hostelries shall also be considered a necessary one. The
keepers of inns and hostelries are liable for them as such
bailees, (provided) that notice thereof may have been given to
them or to their employees, and that the travelers on their part
take the precautions which said innkeepers or their substitutes
may have advised them concerning the care and vigilance of
said goods.
- ART. 1784. The liability referred to in the preceding article shall
include damages to the goods of the travelers caused the
servants or employees of the keepers for inns or hostelries as
well as by strangers, but not those arising from robbery or
which may be caused by any other case of force majeure.
5. Article 361 of the Code of Commerce provides: Merchandise shall be
transported at the risk and venture of the shipper, (UNLESS) the
contrary was expressly stipulated. Therefore, all damages and
impairment suffered by the goods in transportation, by reason of
accident, force majeure, or by virtue of the nature or defect of the
articles, shall be for the account and risk of the shipper. The proof of
these accidents in incumbent on the carrier.
6. ART. 362. The carrier, however, shall be liable for the losses and
damages arising from the causes mentioned in the foregoing article if
it is proved that they occurred on account of his negligence or
because he did not take the precautions usually adopted by careful
persons, (UNLESS) the shipper committed fraud in the bill of lading,
stating that the goods were of a class or quality different from what
they really were. If, notwithstanding the precaution referred to in this
article, the goods transported run the risk of being lost on account of
the nature or by reason of an unavoidable accident, without there
being time for the owners of the same to dispose thereof, the carrier
shall proceed to their sale, placing them for this purpose at the
disposal of the judicial authority or of the officials determined by
special provisions.
7. ART. 363. With the exception of the cases prescribed in the second
paragraph of article 361, the carrier shall be obliged to deliver the
goods transported in the same condition in which, according to the
bill of lading, they were at the time of their receipt, without any
detriment or impairment, and should he not do so, he shall be obliged
to pay the value of the goods not delivered at the point where they
should have been and at the time the delivery should have taken
place. If part of the goods transported should be delivered the
consignee may refuse to receive them, when he proves that he can
not make use thereof without the others.
8. On November 25, 1908, Inchausti & Co. received in Manila from the
Chinaman, Ong Bieng Sip, 205 bundles, bales or cases of goods to
be conveyed by the steamer Sorsogon to the port of Gubat, Province
of Sorsogon, where they were to be transshipped to another vessel
belonging to the defendant company and by the latter transported to
the pueblo of Catarman, Island of Samar, there to be delivered to the
Chinese shipper with whom the defendant party made the shipping
contract. To this end three bills of lading were executed, Nos. 38, 39,
and 76, copies of which, marked as Exhibits A, B, and C, are found
on pages 13, 14, and 15 of the record.
9. The steamer Sorsogon, which carried the goods, arrived at the port
of Gubat on the 28th of that month and as the lorcha Pilar, to which
the merchandise was to be transshipped for its transportation to
Catarman, was not yet there, the cargo was unloaded and stored in
the defendant company's warehouses at that port.
10. Several days later, the lorcha just mentioned arrived at Gubat and,
after the cargo it carried had been unloaded, the merchandise
Page 35 of 62
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31. CAB: In the contract made and entered into by and between the
owner of the goods and the defendant, no term was fixed within
which the said merchandise should be delivered to the former at
Catarman, nor was it proved that there was any delay in loading the
goods and transporting them to their destination. From the 28th of
November, when the steamer Sorsogon arrived at Gubat and landed
the said goods belonging to Ong Bieng Sip to await the lorcha Pilar
which was to convey them to Catarman, as agreed upon, no vessel
carrying merchandise made the voyage from Gubat to the said
pueblo of the Island of Samar, and with Ong Bieng Sip's merchandise
there were also to be shipped goods belonging to the defendant
company, which goods were actually taken on board the said lorcha
and suffered the same damage as those belonging to the Chinaman.
So that there was no negligence, abandonment, or delay in the
shipment of Ong Bieng Sip's merchandise, and all that was done by
the carrier, Inchausti & Co., was what it regularly and usually did in
the transportation by sea from Manila to Catarman of all classes of
merchandise. No attempt has been made to prove that any course
other than the foregoing was pursued by that firm on this occasion;
therefore the defendant party is not liable for the damage occasioned
as a result of the wreck or stranding of the lorcha Pilar because of the
hurricane that overtook this craft while it was anchored in the port of
Gubat, on December 5, 1908, ready to be conveyed to that of
Catarman.
32. It is a fact not disputed, and admitted by the plaintiff, that the lorcha
Pilar was stranded and wrecked on the coast of Gubat during the
night of the 5th or early in the morning of the 6th of December, 1908,
as a result of a violent storm that came from the Pacific Ocean, and,
consequently, it is a proven fact that the loss or damage of the goods
shipped on the said lorcha was due to the force majeure which
caused the wreck of the said craft.
33. According to the aforecited article 361 of the Code of Commerce,
merchandise shall be transported at the risk and venture of the
shipper, unless the contrary be expressly stipulated. No such
stipulation appears of record, therefore, all damages and impairment
suffered by the goods in transportation, by reason of accident, force
majeure, or by virtue of the nature or defect of the articles, are for the
account and risk of the shipper.
34. A final clause of this same article adds that the burden of proof of
these accidents is upon the carrier; the trial record fully discloses that
the loss and damage of the goods shipped by the Chinaman, Ong
Bieng Sip, was due to the stranding and wreck of the lorcha Pilar in
the heavy storm or hurricane aforementioned; this the plaintiff did not
deny, and admitted that it took place between the afternoon of the 5th
and early in the morning of the 6th of December, 1908, so it is
evident that the defendant is exempt from the obligation imposed by
the law to prove the occurrence of the said storm, hurricane, or
cyclone in the port of Gubat, and, therefore, if said goods were lost or
damaged and could not be delivered in Catarman, it was due to a
fortuitous event and a superior, irresistible natural force, or force
majeure, which completely disabled the lorcha intended for their
transportation to the said port of the Island of Samar.
35. The record bears no proof that the said loss or damage caused by
the stranding or wreck of the lorcha Pilar as a result of the storm
mentioned, occurred through carelessness or negligence on the part
of the defendant company, its agents or the patron of the said lorcha,
or because they did not take the precautions usually adopted by
careful and diligent persons, as required by article 362 of the Code of
Commerce; the defendant company, as well as its agents and the
patron of the lorcha, had a natural interest in preserving the craft and
its own goods laden therein an interest equal to that of the
Chinese shipper in preserving his own which were on board the ship
lorcha and, in fact, the defendant, his agents and the patron did
take the measures which they deemed necessary and proper in order
to save the lorcha and its cargo from the impending danger;
accordingly, the patron, as soon as he was informed that a storm was
approaching, proceeded to clear the boat of all gear which might offer
resistance to the wind, dropped the four anchors he had, and even
procured an extra anchor from the land, together with a new cable,
and cast it into the water, thereby adding, in so far as possible, to the
stability and security of the craft, in anticipation of what might occur,
as presaged by the violence of the wind and the heavy sea; and
Inchausti & Company's agent furnished the articles requested by the
Page 37 of 62
36.
37.
38.
39.
patron of the lorcha for the purpose of preventing the loss of the boat;
thus did they all display all the diligence and care such as might have
been employed by anyone in similar circumstances, especially the
patron who was responsible for the lorcha under his charge; nor is it
possible to believe that the latter failed to adopt all the measures that
were necessary to save his own life and those of the crew and to free
himself from the imminent peril of shipwreck.
CAB: In view of the fact that the lorcha Pilar had no means of
changing its anchorage, even supposing that there was a better one,
and was unable to accept help from any steamer that might have
towed it to another point, as wherever it might have anchored, it
would continually have been exposed to the lashing of the waves and
to the fury of the hurricane, for the port of Gubat is a cove or open
roadstead with no shelter whatever from the winds that sweep over it
from the Pacific Ocean, and in view of the circumstances that it was
impossible for the said lorcha, loaded as it then was, to have entered
the Sabang River, even though there had been a steamer to tow it,
not only because of an insufficient depth of water in its channel, but
also on account of the very high bar at the entrance of the said river,
it is incontrovertible that the stranding and wreck of the lorcha Pilar
was due to a fortuitous event or to force majeure and not to the fault
and negligence of the defendant company and its agents or of the
patron, Mariano Gadvilao, inasmuch as the record discloses it to
have been duly proved that the latter, in difficult situation in which
unfortunately the boat under his charge was placed, took all the
precautions that any diligent man should have taken whose duty it
was to save the boat and its cargo, and, by the instinct of selfpreservation, his own life and those of the crew of the lorcha;
therefore, considering the conduct of the patron of the lorcha and that
of the defendant's agent in Gubat, during the time of the occurrence
of the disaster, the defendant company has not incurred any liability
whatever for the loss of the goods, the value of which is demanded
by the plaintiff; it must, besides, be taken into account that the
defendant itself also lost goods of its own and the lorcha too.
From the moment that it is held that the loss of the said lorcha was
due to force majeure, a fortuitous event, with no conclusive proof or
negligence or of the failure to take the precautions such as diligent
and careful persons usually adopt to avoid the loss of the boat and its
cargo, it is neither just nor proper to attribute the loss or damage of
the goods in question to any fault, carelessness, or negligence on the
part of the defendant company and its agents and, especially, the
patron of the lorcha Pilar.
Moreover, it is to be noted that, subsequent to the wreck, the
defendant company's agent took all the requisite measures for the
salvage of such of the goods as could be recovered after the
accident, which he did with the knowledge of the shipper, Ong Bieng
Sip, and, in effecting their sale, he endeavored to secure all possible
advantage to the Chinese shipper; in all these proceedings, as
shown by the record, he acted in obedience to the law.
From all the foregoing it is concluded that the defendant is not liable
for the loss and damage of the goods shipped on the lorcha Pilar by
the Chinaman, Ong Bieng Sip, inasmuch as such loss and damage
were the result of a fortuitous event or force majeure, and there was
no negligence or lack of care and diligence on the part of the
defendant company or its agents.
2. This court holds that the Chinaman must lose his property. This is the
manner in which the defendant lost the goods of the plaintiff: The
Sorsogon, on which the goods were loaded at Manila, arrived at
Gubat about the 28th of November, 1908. A few days later the lorcha
Pilar arrived at Gubat, towed by the tug Texas. The lorcha was
without means of locomotion of its own, except its sails, which, from
the record, appear never to have been used and were substantially
useless, and could move about and protect itself from the weather
only by being towed or "poled." The only boat on the coast owned by
the defendant which could tow the lorcha was the tug Texas.
Sometime before the 5th of December, at least one day before the
storm broke, the goods belonging to the plaintiff were loaded on this
lorcha. The tug Texas, under the orders of the defendant, left the
locality where the lorcha was loaded and did not return until after it
was wrecked.
3. Let us see what were the conditions at the time the defendant
voluntarily and unnecessarily placed the property of the plaintiff on
the lorcha Pilar:
4. (1) It must be remembered that Gubat is located on the Pacific coast.
The waters of Gubat are not protected waters; they are not inclosed;
they are in the form of a bay; they are directly open to the winds from
the Pacific Ocean, without protection or shelter of any kind, except
possibly the mouth of the river, a matter here in dispute and which
will be referred to later. They are likewise open to the full sweep of
the waves of the Pacific coming from its widest reaches.
5. (2) At the time the plaintiff's goods were loaded upon the lorcha Pilar
it was the height of the typhoon season in that locality. The prevailing
winds were from the Pacific. Destructive baguios might reasonably
be expected at any time. It was only with the exercise of diligence
and prudence that shipping could be protected therefrom.
6. (3) As I have before indicated, the lorcha Pilar had substantially no
means of locomotion of its own and depended for its protection in
stormy weather entirely upon the steam tug Texas or being "poled"
into the mouth of the river by its crew. At the time of the storm which
destroyed the lorcha, and for some time prior thereto and for some
days thereafter, the Texas was at the port of Barcelona, on the coast
several miles south of Gubat, having been sent by order of the
defendant, its owner.
7. Summarizing, then, we have the defendant voluntarily placing the
property of the plaintiff upon the kind of craft above described,
dispatching to a distant port substantially the only means of
locomotion and protection which that craft had, except, as we have
said, by being poled, placing that lorcha in waters directly exposed to
the winds and waves of the Pacific and at the mercy of every baguio
that blew; and this during a season of the year when winds were
generally high and destructive baguios might be expected at any
time, and with full knowledge that if a typhoon came while the agents
of the defendant were unprepared the property of the plaintiff would
in all probability be lost.
8. Having these facts in mind, let us see what the agents of the
defendant did to protect the property of the plaintiff which they had
voluntarily placed in a situation of such peril.
9. (4) At the time of the destruction of the lorcha there was a
Government weather observatory at Gubat which received advices
many hours in advance of the approach of a typhoon toward the
locality. It had been there for some years. The purpose of that
observatory was to furnish information to the public concerning the
formation and approach of typhoons from the Pacific and of warning
the people with exposed shipping to take such precautions as were
necessary for its protection. This was known to the defendant's
agents at Gubat. They knew that the observatory had a public office,
open to anybody who cared to visit it, in which would be found all of
the latest information relating to storms and baguios coming from the
Pacific Ocean. They knew that the officials of said observatory were
there for the express purpose of giving such information. The
defendant's agents had at Gubat a barometer and all the other
instruments usually kept by seamen and navigators for forecasting
the weather.
10. (5) As we have said, the storm occurred on the 5th of December. It
wrought its greatest havoc late in the afternoon and the early part of
the night. At about 2 o'clock on the day before the storm, that is, on
the 4th of December, the observatory at Gubat received notice from
the Manila observatory that a baguio was forming in the Pacific
Page 38 of 62
14.
15.
16.
17.
18.
19.
20.
dropping steadily, so much so that their own vessel dared not leave a
port only 10 miles distant on the afternoon before. For eighteen hours
every warning which nature could give, indicating the disaster which
subsequently came, had been repeatedly thrust upon them. Yet they
did nothing. Having placed the goods of the plaintiff in an exposed
and dangerous position, in waters open to the winds and waves of
the Pacific Ocean, at the height of the typhoon season, in a vessel
which had no motive power of its own, and having sent away that
which they themselves substantially admit was its only protection, the
agents of the defendant exercised no care or precaution whatever to
the end that they might protect the goods which they themselves had
so recklessly exposed.
Yet this court, under such circumstances, holds that the defendant
may go in peace and that the plaintiff is the one who must bear the
burden of such negligence.
With that decision I can not agree.
An act of God can not be urged for the protection of a person who
has been guilty of gross negligence in not trying to avert its results.
One who has accepted responsibility for pay can not weakly fold his
hands and say that he was prevented from meeting that responsibility
by an act of God, when the exercise of the ordinary care and
prudence would have averted the results flowing from that act. One
who has placed the property of another, intrusted to his care, in an
unseaworthy craft, upon dangerous waters, cannot absolve himself
by crying, "an act of God," when every effect which a typhoon
produced upon that property could have been avoided by the
exercise of common care and prudence. When the negligence of the
carrier concurs with an act of God producing a loss, the carrier is not
exempted from liability by showing that the immediate cause of the
damage was the act of God; or, as it has been expressed, "when the
loss is caused by the act of God, if the negligence of the carrier
mingles with it as an active and cooperative cause, he is still liable."
The loss and damage to perishable articles in consequence of the
weather will not excuse the carrier if it could have been prevented by
due care and diligence. The carrier must not only show that it did all
that was usual, but all that was necessary to be done under the
circumstances. (Wing vs. New York, etc., Ry. Co., 1 Hilt. (N.Y.), 235;
Philleo vs. Sanford, 17 Tex., 228.) To be exempt from liability for loss
because of an act of God, the common carrier must be free from any
previous negligence or misconduct by which that loss or damage
may have been occasioned. For, although the immediate or
proximate cause of a loss in any given instance may have been what
is termed an act of God, yet if the carrier unnecessarily exposed the
property to such accident by any culpable act or omission of his own,
he is not excused. (Mc-Graw vs. Baltimore and Ohio Ry. Co., 41 Am.
Rep., 696.) In the case of Wolf vs. American Express Co,., 43 Mo.,
421, Wagner, J., said:
The act of God which excuses the carrier must not only be the
proximate cause of the loss, but the better opinion is that it must be
the sole cause. And where the loss is caused by the "act of God," if
the negligence of the carrier mingles with it as an active and
cooperative cause, he is still responsible. (Amies vs. Stevens, 1
Stra., 128.)
Where perishable property, such as potatoes, is received by a
common carrier at a season when a very low temperature may
reasonably apprehended, great diligence should be used in
forwarding such property with dispatch and haste; and where, by a
delay of two or three days, the property is damaged by freezing, the
carrier may be held liable for the damage. (Hewett vs. The Chicago,
B & Q. Ry. Co., 63 Ia., 611.) A carrier is bound to provide a vessel in
all respects adequate to the purpose, with a captain and crew of
requisite skill or ability; and, failing in these particulars, though the
loss be occasioned by an act of God, the carrier may not set up a
providential calamity to protect himself against what may have arisen
from his own folly. (Hart vs. Allen and Grant, 2 Watts (Pa.), 114.)
This doctrine is fully supported by the Spanish authorities on the
subject.
Manresa in his commentaries to section 1105 of the Civil Code of
Spain, volume 8, page 91, says: Elucidation of article 1105 and the
idea of the accident is interesting under the following aspects;
Relation between it and the blame; enumeration of the requisites that
must be present; proof of the event and characterization thereof; and
the consequence it produces. Let us examine them.
Page 39 of 62
21. Even when the distinction is simple and reasonable between blame
for some exempting circumstance (because it may not be serious
enough to involve such blame, under the law or the obligation) and
accident, since the former admits an imputation which the latter
excludes, even when the former may not be the basis for legal
responsibility, and therefore it can not be said that where no
responsible blame exists there the accident commences, yet the
latter is undeniably characterized by unexpectedness and
inevitability, circumstances susceptible of relative interpretation, and
so whatever relates to the blame must be taken into account,
because, as we shall see, it is in certain sense, especially in practical
application, connected with the matter under consideration.
22. Aside from this statement of ideas, there may be another of
consequences, for in the complexity of facts, in the same obligation,
there may be present blame enough to involve such and also
accident. When both causes are present, with separation of time and
affects, for partial breach due to one of them may be possible and
then the other may operate to aggravate or complete these
consequences, the distinction is easy and to each cause may be
assigned its own effect for the corresponding result, as neither
exemption, on account of accident, can be extended to what may be
imputed nor to what in any way depends upon it by basing
responsibility arising from blame on the fact that the damage is the
result thereof.
23. The problem becomes more difficult when both causes concur to
produce the same effect or when, even though the effect may be due
to accident, the obligor has not exercised necessary diligence,
however, blameless he was for the results arising from the breach. In
the first of the last two suppositions, the solution is plain, because
when the obligor incurs the blame of actually producing the result, or
even when it is not the only cause, or even the principal one, there is
still sufficient connection between it and the consequences to cause
them to be imputed to him and, as a voluntary elements exists in the
causes, there is lacking the circumstance indispensable to exemption
on account of accident. The second supposition presents a very
difficult problem of proof, which rests upon the obligor, and calls for a
careful analysis of the origin of the breach. The difficulty in this case
consists in that the blame, in addition to its subjective aspect for
imputing the consequences to the obligor, has an objective aspect, to
wit, that these consequences may rise, that the damage which must
be repaired is caused, in such manner that due diligence may be
lacking and yet not extend to the point of involving responsibility,
because it produces no results. Now then, if an accident occurs
under these conditions, absolutely independent of the negligence that
may have existed, it may have occurred with or without negligence
and therefore any derivation of consequences was lacking, then it
can not be said that responsibility arises therefrom; but to reach this
conclusion there first rests with the obligor proof so difficult that, in
addition to overcoming the presumption of existence of blame, it
involves the very fine distinction of the origin of the breach and
perfectly reveals the occurrence of the accident, joined by their
coexistence, and demonstrating absolute lack of consequences and
influence of blame.
24. In connection with this question, a judgment of November 22, 1904,
declares that there are some events which, independent of the will of
the obligor, hinder the fulfillment of the obligation, and yet do not
constitute cases of force majeure for the purposes of such fulfillment,
because the possibility that they would occur could have been
foreseen, articles 1101 and 1104 being applicable and not article
1105, since negligence or blame is also present from not informing
the obligee, either at first or later on, of the state of affairs and the
situation, so as to avoid the consequent damage. This was the case
of a bull fight that could not be held because the ring was not
completed in time for reasons beyond the control of the contractor,
but the fact that the contract did not state that the ring was
unconstructed and the possibility that it would not be at the time
specified, reveals, in the opinion of the court, the lack of foresight or
the negligence which makes article 1105 inapplicable.
25. In an essentially analogous way, judgments were pronounced on
June 12, 1899 (Tribunal contencioso administrativo), and on October
27, 1905 (Sala tercera), against the company leasing the tobacco
monopoly, for losses caused by theft and fire. It was further decided
in these cases that the company and not the State must bear the
26.
27.
28.
29.
30.
31.
Page 40 of 62
did not timely inform petitioner that the goods were already in Manila in
addition to the fact that private respondent had given petitioner the option
of abandoning the goods in exchange for the demurrages.
ISSUE:
Petitioner, being dissatisfied with the decision of respondent court and the
motion for reconsideration thereof having been denied, invokes the
Court's review powers for the resolution of the issues as to whether or not
respondent court erred (1) in affirming the decision of the trial court which
dismissed petitioner's complaint; and (2) in holding petitioner liable to
private respondents in the amount of P52,102.45. 6
I. Petitioner obstinately faults private respondents for the refusal of its
buyer, Choju Co., Ltd., to take delivery of the exported anahaw fans
resulting in a loss of P174,150.00 representing the purchase price of the
said export items because of violation of the terms and conditions of the
letter of credit issued in favor of the former which specified the
requirement for an on board bill of lading and the prohibition against
transhipment of goods, inasmuch as the bill of lading issued by the latter
bore the notation "received for shipment" and contained an entry
indicating transhipment in Hongkong.
HELD:
1. We find no fault on the part of private respondents. On the matter of
transhipment, petitioner maintains that "... while the goods were
transferred in Hongkong from MV Pacific Despatcher, the feeder
vessel, to MV Oriental Researcher, a mother vessel, the same cannot
be considered transhipment because both vessels belong to the
same shipping company, the private respondent Orient Overseas
Container Lines, Inc." 7 Petitioner emphatically goes on to say: "To
be sure, there was no actual transhipment of the Anahaw fans. The
private respondents have executed a certification to the effect that
while the Anahaw fans were transferred from one vessel to another in
Hong Kong, since the two vessels belong to one and the same
company then there was no transhipment. 8
2. Transhipment, in maritime law, is defined as "the act of taking cargo
out of one ship and loading it in another," 9 or "the transfer of goods
from the vessel stipulated in the contract of affreightment to another
vessel before the place of destination named in the contract has
been reached," 10 or "the transfer for further transportation from one
ship or conveyance to another." 11 Clearly, either in its ordinary or its
strictly legal acceptation, there is transhipment whether or not the
same person, firm or entity owns the vessels. In other words, the fact
of transhipment is not dependent upon the ownership of the
transporting ships or conveyances or in the change of carriers, as the
petitioner seems to suggest, but rather on the fact of actual physical
transfer of cargo from one vessel to another.
3. That there was transhipment within this contemplation is the
inescapable conclusion, as there unmistakably appears on the face
of the bill of lading the entry "Hong Kong" in the blank space labeled
"Transhipment," which can only mean that transhipment actually took
place. 12 This fact is further bolstered by the certification 13 issued
by private respondent F.E. Zuellig, Inc. dated July 19, 1980, although
it carefully used the term "transfer" instead of transhipment.
Nonetheless, no amount of semantic juggling can mask the fact that
transhipment in truth occurred in this case.
4. Petitioner insists that "(c)onsidering that there was no actual
transhipment of the Anahaw fans, then there is no occasion under
which the petitioner can agree to the transhipment of the Anahaw
fans because there is nothing like that to agree to" and "(i)f there is
no actual transhipment but there appears to be a transhipment in the
bill of lading, then there can be no possible reason for it but a mistake
on the part of the private respondents. 14
5. Petitioner, in effect, is saying that since there was a mistake in
documentation on the part of private respondents, such a mistake
militates against the conclusiveness of the bill of lading insofar as it
reflects the terms of the contract between the parties, as an
exception to the parol evidence rule, and would therefore permit it to
explain or present evidence to vary or contradict the terms of the
written agreement, that is, the bill of lading involved herein.
6. It is a long standing jurisprudential rule that a bill of lading operates
both as a receipt and as a contract. It is a receipt for the goods
shipped and a contract to transport and deliver the same as therein
stipulated. As a contract, it names the parties, which includes the
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
6.
7.
8.
9.
10.
11.
12.
13.
It did not, however, allow the grant of damages for the delay in the
performance of the petitioner's obligation as the requirement of demand
set forth in Article 1169 of the Civil Code had not been met by the private
respondent. Besides, it found that the private respondent offered no
evidence to prove that his contract of carriage with the petitioner provided
for liability in case of delay in departure, nor that a designation of the time
of departure was the controlling motive for the establishment of the
contract. On the latter, the court a quo observed that the private
respondent even admitted he was unaware of the vessel's departure time,
and it was only when he boarded the vessel that he became aware of
such. Finally, the respondent Court found no reasonable basis for the
private respondent's belief that demand was useless because the
petitioner had rendered it beyond its power to perform its obligation; on
the contrary, he even admitted that the petitioner had been assuring the
passengers that the vessel would leave on time, and that it could still
perform its obligation to transport them as scheduled.
To justify its award of damages, the Court of Appeals ratiocinated as
follows:
It is an established and admitted fact that the vessel before the voyage
had undergone some repair work on the cylinder head of the engine. It is
likewise admitted by defendant-appellee that it left the port of Cebu City
with only one engine running. Defendant-appellee averred:
. . . The dropping of the vessel's anchor after running slowly on only one
engine when it departed earlier must have alarmed some nervous
passengers . . .
The entries in the logbook which defendant-appellee itself offered as
evidence categorically stated therein that the vessel stopped at Kawit
Island because of engine trouble. It reads:
2330 HRS STBD ENGINE' EMERGENCY STOP
2350 HRS DROP ANCHOR DUE TO ENGINE TROUBLE, 2 ENGINE
STOP.
The stoppage was not to start and synchronized [sic] the engines of the
vessel as claimed by defendant-appellee. It was because one of the
engines of the vessel broke down; it was because of the disability of the
vessel which from the very beginning of the voyage was known to
defendant-appellee.
Defendant-appellee from the very start of the voyage knew for a fact that
the vessel was not yet in its sailing condition because the second engine
was still being repaired. Inspite of this knowledge, defendant-appellee still
proceeded to sail with only one engine running.
Defendant-appellee at that instant failed to exercise the diligence which
all common carriers should exercise in transporting or carrying
passengers. The law does not merely require extraordinary diligence in
the performance of the obligation. The law mandates that common
carrier[s] should exercise utmost diligence the transport of passengers.
Article 1755 of the New Civil Code provides:
Art. 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 a due regard for all the circumstances.
Utmost diligence of a VERY CAUTIOUS person dictates that defendantappellee should have pursued the voyage only when its vessel was
already fit to sail. Defendant-appellee should have made certain that the
vessel [could] complete the voyage before starting [to] sail. Anything less
than this, the vessel [could not] sail . . . with so many passengers on
board it.
However, defendant-appellant [sic] in complete disregard of the safety of
the passengers, chose to proceed with its voyage even if only one engine
was running as the second engine was still being repaired during the
voyage. Defendant-appellee disregarded the not very remote possibility
that because of the disability of the vessel, other problems might occur
which would endanger the lives of the passengers sailing with a disabled
vessel.
As expected, . . . engine trouble occurred. Fortunate[ly] for defendantappellee, such trouble only necessitated the stoppage of the vessel and
did not cause the vessel to capsize. No wonder why some passengers
requested to be brought back to Cebu City. Common carriers which are
mandated to exercise utmost diligence should not be taking these risks.
On this premise, plaintiff-appellant should not be faulted why he chose to
disembark from the vessel with the other passengers when it returned
back to Cebu City. Defendant-appellee may call him a very "panicky
passenger" or a "nervous person", but this will not relieve defendantappellee from the liability it incurred for its failure to exercise utmost
diligence. 13
Page 46 of 62
diligence and obviously acted with bad faith and in a wanton and reckless
manner. On this score, however, the petitioner asserts that the safety or
the vessel and passengers was never at stake because the sea was
"calm" in the vicinity where it stopped as faithfully recorded in the vessel's
log book (Exhibit "4"). Hence, the petitioner concludes, the private
respondent was merely "over-reacting" to the situation obtaining then. 31
We hold that the petitioner's defense cannot exculpate it nor mitigate its
liability. On the contrary, such a claim demonstrates beyond cavil the
petitioner's lack of genuine concern for the safety of its passengers. It
was, perhaps, only providential then the sea happened to be calm. Even
so, the petitioner should not expect its passengers to act in the manner it
desired. The passengers were not stoics; becoming alarmed, anxious, or
frightened at the stoppage of a vessel at sea in an unfamiliar zone as
nighttime is not the sole prerogative of the faint-hearted. More so in the
light of the many tragedies at sea resulting in the loss of lives of hopeless
passengers and damage to property simply because common carriers
failed in their duty to exercise extraordinary diligence in the performance
of their obligations.
We cannot, however, give our affirmance to the award of attorney's fees.
Under Article 2208 of the Civil Code, these are recoverable only in the
concept of actual damages, 32 not as moral damages 33 nor judicial
costs. 34 Hence, to merit such an award, it is settled that the amount
thereof must be proven. 35 Moreover, such must be specifically prayed
for as was not done in this caseand may not be deemed
incorporated within a general prayer for "such other relief and remedy as
this court may deem just and equitable." 36 Finally, it must be noted that
aside from the following, the body of the respondent Court's decision was
devoid of any statement regarding attorney's fees:
Plaintiff-appellant was forced to litigate in order that he can claim moral
and exemplary damages for the suffering he encurred [sic]. He is entitled
to attorney's fees pursuant to Article 2208 of the Civil Code. It states:
Art. 2208. In the absence of stipulation, attorney's fees and expenses of
litigation, other than judicial costs cannot be recovered except:
1. When exemplary damages are awarded;
2. When the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest.
This Court holds that the above does not satisfy the benchmark of
"factual, legal and equitable justification" needed as basis for an award of
attorney's fees. 37 In sum, for lack of factual and legal basis, the award of
attorney's fees must be deleted.
WHEREFORE, the instant petition is DENIED and the challenged
decision of the Court of Appeals in CA-G.R. CV No. 39901 is AFFIRMED
subject to the modification as to the award for attorney's fees which is
hereby SET ASIDE.
Costs against the petitioner.
SO ORDERED.
The issues, albeit not completely novel, are: (a) whether or not a
claim for damage sustained on a shipment of goods can be a
solidary, or joint and several, liability of the common carrier, the
arrastre operator and the customs broker; (b) whether the
payment of legal interest on an award for loss or damage is to be
computed from the time the complaint is filed or from the date the
decision appealed from is rendered; and (c) whether the
applicable rate of interest, referred to above, is twelve percent
(12%) or six percent (6%).
The findings of the court a quo, adopted by the Court of Appeals,
on the antecedent and undisputed facts that have led to the
controversy are hereunder reproduced:
This is an action against defendants shipping company, arrastre
operator and broker-forwarder for damages sustained by a
shipment while in defendants' custody, filed by the insurersubrogee who paid the consignee the value of such losses/
damages.
On December 4, 1981, two fiber drums of riboflavin were shipped
from Yokohama, Japan for delivery vessel "SS EASTERN
COMET" owned by defendant Eastern Shipping Lines under Bill of
Lading
No. YMA-8 (Exh. B). The shipment was insured under plaintiff's
Marine Insurance Policy No. 81/01177 for P36,382,466.38.
Upon arrival of the shipment in Manila on December 12, 1981, it
was discharged unto the custody of defendant Metro Port Service,
Inc. The latter excepted to one drum, said to be in bad order,
which damage was unknown to plaintiff.
On January 7, 1982 defendant Allied Brokerage Corporation
received the shipment from defendant Metro Port Service, Inc.,
one drum opened and without seal (per "Request for Bad Order
Survey." Exh. D).
On January 8 and 14, 1982, defendant Allied Brokerage
Corporation made deliveries of the shipment to the consignee's
warehouse. The latter excepted to one drum which contained
spillages, while the rest of the contents was adulterated/fake (per
"Bad Order Waybill" No. 10649, Exh. E).
Plaintiff contended that due to the losses/damage sustained by
said drum, the consignee suffered losses totaling P19,032.95, due
to the fault and negligence of defendants. Claims were presented
against defendants who failed and refused to pay the same (Exhs.
H, I, J, K, L).
As a consequence of the losses sustained, plaintiff was compelled
to pay the consignee P19,032.95 under the aforestated marine
insurance policy, so that it became subrogated to all the rights of
action of said consignee against defendants (per "Form of
Subrogation", "Release" and Philbanking check, Exhs. M, N, and
O). (pp. 85-86, Rollo.)
There were, to be sure, other factual issues that confronted both
courts. Here, the appellate court said:
Defendants filed their respective answers, traversing the material
allegations of the complaint contending that: As for defendant
Eastern Shipping it alleged that the shipment was discharged in
good order from the vessel unto the custody of Metro Port Service
so that any damage/losses incurred after the shipment was
incurred after the shipment was turned over to the latter, is no
longer its liability (p. 17, Record); Metroport averred that although
subject shipment was discharged unto its custody, portion of the
same was already in bad order (p. 11, Record); Allied Brokerage
alleged that plaintiff has no cause of action against it, not having
negligent or at fault for the shipment was already in damage and
bad order condition when received by it, but nonetheless, it still
exercised extra ordinary care and diligence in the handling/
delivery of the cargo to consignee in the same condition shipment
was received by it.
From the evidence the court found the following:
The issues are:
Page 48 of 62
remanded to the lower court for execution, and this was when the
trial court issued its assailed resolution which applied the 6%
interest per annum prescribed in Article 2209 of the Civil Code. In
their petition for review on certiorari, the petitioners contended that
Central Bank Circular
No. 416, providing thus
By virtue of the authority granted to it under Section 1 of Act 2655,
as amended, Monetary Board in its Resolution No. 1622 dated
July 29, 1974, has prescribed that the rate of interest for the loan,
or forbearance of any money, goods, or credits and the rate
allowed in judgments, in the absence of express contract as to
such rate of interest, shall be twelve (12%) percent per annum.
This Circular shall take effect immediately. (Emphasis found in the
text)
should have, instead, been applied. This Court 6 ruled:
The judgments spoken of and referred to are judgments in
litigations involving loans or forbearance of any money, goods or
credits. Any other kind of monetary judgment which has nothing to
do with, nor involving loans or forbearance of any money, goods or
credits does not fall within the coverage of the said law for it is not
within the ambit of the authority granted to the Central Bank.
xxx xxx xxx
Coming to the case at bar, the decision herein sought to be
executed is one rendered in an Action for Damages for injury to
persons and loss of property and does not involve any loan, much
less forbearances of any money, goods or credits. As correctly
argued by the private respondents, the law applicable to the said
case is Article 2209 of the New Civil Code which reads
Art. 2209. If the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for damages,
there being no stipulation to the contrary, shall be the payment of
interest agreed upon, and in the absence of stipulation, the legal
interest which is six percent per annum.
The above rule was reiterated in Philippine Rabbit Bus Lines, Inc.,
v. Cruz, 7 promulgated on 28 July 1986. The case was for
damages occasioned by an injury to person and loss of property.
The trial court awarded private respondent Pedro Manabat actual
and compensatory damages in the amount of P72,500.00 with
legal interest thereon from the filing of the complaint until fully
paid. Relying on the Reformina v. Tomol case, this Court 8
modified the interest award from 12% to 6% interest per annum
but sustained the time computation thereof, i.e., from the filing of
the complaint until fully paid.
In Nakpil and Sons vs. Court of Appeals, 9 the trial court, in an
action for the recovery of damages arising from the collapse of a
building, ordered,
inter alia, the "defendant United Construction Co., Inc. (one of the
petitioners)
. . . to pay the plaintiff, . . . , the sum of P989,335.68 with interest
at the legal rate from November 29, 1968, the date of the filing of
the complaint until full payment . . . ." Save from the modification
of the amount granted by the lower court, the Court of Appeals
sustained the trial court's decision. When taken to this Court for
review, the case, on 03 October 1986, was decided, thus:
WHEREFORE, the decision appealed from is hereby MODIFIED
and considering the special and environmental circumstances of
this case, we deem it reasonable to render a decision imposing,
as We do hereby impose, upon the defendant and the third-party
defendants (with the exception of Roman Ozaeta) a solidary (Art.
1723, Civil Code, Supra.
p. 10) indemnity in favor of the Philippine Bar Association of FIVE
MILLION (P5,000,000.00) Pesos to cover all damages (with the
exception to attorney's fees) occasioned by the loss of the building
(including interest charges and lost rentals) and an additional ONE
HUNDRED THOUSAND (P100,000.00) Pesos as and for
attorney's fees, the total sum being payable upon the finality of
Page 50 of 62
this decision. Upon failure to pay on such finality, twelve (12%) per
cent interest per annum shall be imposed upon aforementioned
amounts from finality until paid. Solidary costs against the
defendant and third-party defendants (Except Roman Ozaeta).
(Emphasis supplied)
A motion for reconsideration was filed by United Construction,
contending that "the interest of twelve (12%) per cent per annum
imposed on the total amount of the monetary award was in
contravention of law." The Court 10 ruled out the applicability of
the Reformina and Philippine Rabbit Bus Lines cases and, in its
resolution of 15 April 1988, it explained:
There should be no dispute that the imposition of 12% interest
pursuant to Central Bank Circular No. 416 . . . is applicable only in
the following: (1) loans; (2) forbearance of any money, goods or
credit; and
(3) rate allowed in judgments (judgments spoken of refer to
judgments involving loans or forbearance of any money, goods or
credits. (Philippine Rabbit Bus Lines Inc. v. Cruz, 143 SCRA
160-161 [1986]; Reformina v. Tomol, Jr., 139 SCRA 260 [1985]). It
is true that in the instant case, there is neither a loan or a
forbearance, but then no interest is actually imposed provided the
sums referred to in the judgment are paid upon the finality of the
judgment. It is delay in the payment of such final judgment, that
will cause the imposition of the interest.
It will be noted that in the cases already adverted to, the rate of
interest is imposed on the total sum, from the filing of the
complaint until paid; in other words, as part of the judgment for
damages. Clearly, they are not applicable to the instant case.
(Emphasis supplied.)
The subsequent case of American Express International, Inc., vs.
Intermediate Appellate Court 11 was a petition for review on
certiorari from the decision, dated 27 February 1985, of the then
Intermediate Appellate Court reducing the amount of moral and
exemplary damages awarded by the trial court, to P240,000.00
and P100,000.00, respectively, and its resolution, dated 29 April
1985, restoring the amount of damages awarded by the trial court,
i.e., P2,000,000.00 as moral damages and P400,000.00 as
exemplary damages with interest thereon at 12% per annum from
notice of judgment, plus costs of suit. In a decision of 09
November 1988, this Court, while recognizing the right of the
private respondent to recover damages, held the award, however,
for moral damages by the trial court, later sustained by the IAC, to
be inconceivably large. The Court 12 thus set aside the decision of
the appellate court and rendered a new one, "ordering the
petitioner to pay private respondent the sum of One Hundred
Thousand (P100,000.00) Pesos as moral damages, with
six (6%) percent interest thereon computed from the finality of this
decision until paid. (Emphasis supplied)
Reformina came into fore again in the 21 February 1989 case of
Florendo v. Ruiz 13 which arose from a breach of employment
contract. For having been illegally dismissed, the petitioner was
awarded by the trial court moral and exemplary damages without,
however, providing any legal interest thereon. When the decision
was appealed to the Court of Appeals, the latter held:
WHEREFORE, except as modified hereinabove the decision of
the CFI of Negros Oriental dated October 31, 1972 is affirmed in
all respects, with the modification that defendants-appellants,
except defendant-appellant Merton Munn, are ordered to pay,
jointly and severally, the amounts stated in the dispositive portion
of the decision, including the sum of P1,400.00 in concept of
compensatory damages, with interest at the legal rate from the
date of the filing of the complaint until fully paid (Emphasis
supplied.)
The petition for review to this Court was denied. The records were
thereupon transmitted to the trial court, and an entry of judgment
was made. The writ of execution issued by the trial court directed
Qualified By
herein. In the bill of lading that was issued covering the shipment
in question, both the carrier and the consignee have stipulated to
limit the responsibility of the carrier for the loss or damage that
may because to the goods before they are actually delivered by
insert in therein the following provisions:
1. . . . The Carrier shall not be liable in any capacity whatsoever
for any delay, nondelivery or misdelivery, or loss of or damage to
the goods occurring while the goods are not in the actual custody
of the Carrier. . . . (Emphasis ours.)
(Paragraph 1, Exhibit "1")
2. . . . The responsibility of the Carrier in any capacity shall
altogether cease and the goods shall be considered to be
delivered and at their own risk and expense in every respect when
taken into the custody of customs or other authorities. The Carrier
shall not be required to give any notification of disposition of the
goods. . . . (Emphasis ours.)
(Paragraph 12, Exhibit "1")
3. Any provisions herein to the contrary notwithstanding, goods
may be . . . by Carrier at ship's tackle . . . and delivery beyond
ship's tackle shall been tirely at the option of the Carrier and solely
at the expense of the shipper or consignee.
(Paragraph 22, Exhibit "1")
It therefore appears clear that the carrier does not assume liability
for any loss or damage to the goods once they have been "taken
into the custody of customs or other authorities", or when they
have been delivered at ship's tackle. These stipulations are clear.
They have been adopted precisely to mitigate the responsibility of
the carrier considering the present law on the matter, and we find
nothing therein that is contrary to morals or public policy that may
justify their nullification. We are therefore persuaded to conclude
that the carrier is not responsible for the loss in question, it
appearing that the same happened after the shipment had been
delivered to the customs authorities.
Wherefore, the decision appealed from is reversed, without
pronouncement as to costs.
Presumption of Negligence
fact of loss is proved in the manner just stated, it results that there is a
presumption that the petitioner was to blame for the loss; and it was
incumbent upon the petitioner in order to entitle it to relief in the case to
rebut that presumption by proving, as is alleged in the petition, that the
loss was not due to any fault or negligence of the petitioner.
The mere proof of delivery of goods in good order to a carrier, and of their
arrival at the place of destination in bad order, makes out a prima facie
case against the carrier, so that if no explanation is given as to how the
injury occurred, the carrier must be held responsible. (4 R. C. L., p. 917.)
It is incumbent upon the carrier to prove that the loss was due to accident
or some other circumstance inconsistent with its liability. (Articles
361-363, Code of Commerce.) Indeed, if the Government of the Philippine
Islands had instituted an action in a court of law against the petitioner to
recover the value of the oil lost while these consignments were in the
court of transportation, it would, upon the facts appearing before us, have
been entitled to judgment.
From this it is apparent that the mandamus prayed for cannot be granted.
It is a rule of universal application that a petition for extraordinary relief of
the character here sought must show merit. That is, the petitioner's right
to relief must be clear. Such cannot be said to be the case where, as
here, a presumption of responsibility on the part of the petitioner stands
unrefuted upon the record.
We are of the opinion that, in the absence of proof showing that the
carrier was not at fault in respect to the matter under discussion, the
Insular Auditor was entitled to withhold, from the amount admittedly due to
the petitioner for the freight charges, a sum sufficient to cover the value of
the oil lost in transit.
The petition will be dismissed, with costs against the petitioner. So
ordered.
properly manned, equipped and supplied, and fit for the voyage. That the
damage to plaintiff's merchandise, if any, was not caused through the
negligence of the vessel, its master, agent, officers, crew, tackle or
appurtenances, nor by reason of the vessel being unseaworthy or
improperly manned, "but that such damage, if any, resulted from faults or
errors in navigation or in the management of said vessel." As a second
separate and special defense, defendant alleges that in the bill of lading
issued by the defendant to plaintiff, it was agreed in writing that defendant
should not be "held liable for any loss of, or damage to, any of said
merchandise resulting from any of the following causes, to wit: Acts of
God, perils of the sea or other waters," and that plaintiff's damage, if any,
was caused by "Acts of God" or "perils of the sea." As a third special
defense, defendant quoted clause 13 of the bill of lading, in which it is
stated that in no case shall it be held liable "for or in respect to said
merchandise or property beyond the sum of two hundred and fifty dollars
for any piece, package or any article not enclosed in a package, unless a
higher value is stated herein and ad valorem freight paid or assessed
thereon," and that there was no other agreement. That on September 3,
1927 the plaintiff wrote the defendant a letter as follows:
Therefore, I wish to file claim of damage to the meager maximum value
that your bills of lading will indemnify me, that is $250 as per condition 13.
As a fourth special defense, defendant alleges that the damage, if any,
was caused by "sea water," and that the bill of lading exempts defendant
from liability for that cause. That damage by "sea water" is a shipper's
risk, and that defendant is not liable.
As a result of the trial upon such issues, the lower court rendered
judgment for the plaintiff for P2,080, with legal interest thereon from the
date of the final judgment, with costs, from which both parties appealed,
and the plaintiff assigns the following errors:
I. The lower court erred in holding that plaintiff's damage on account of
the loss of the damaged books in the partially damaged case can be
compensated with an indemnity of P450 instead of P750 as claimed by
plaintiff.
II. The lower court, consequently, also erred in giving judgment for plaintiff
for only P2,080 instead of P2,380.
III. The lower court erred in not sentencing defendant to pay legal interest
on the amount of the judgment, at least, from the date of the rendition of
said judgment, namely, January 30, 1928.
The defendant assigns the following errors:
I. The lower court erred in failing to recognize the validity of the limited
liability clause of the bill of lading, Exhibit 2.
II. The lower court erred in holding defendant liable in any amount and in
failing to hold, after its finding as a fact that the damage was caused by
sea water, that the defendant is not liable for such damage by sea water.
III. The lower court erred in awarding damages in favor of plaintiff and
against defendant for P2,080 or in any other amount, and in admitting,
over objection, Exhibits G, H, I and J.
JOHNS, J.:
Plaintiff's contention that he is entitled to P700 for his Encyclopedia
Britannica is not tenable. The evidence shows that the P400 that the court
allowed, he could buy a new set which could contain all of the material
and the subject matter of the one which he lost. Plaintiff's third
assignment of error is well taken, as under all of the authorities, he is
entitled to legal interest from the date of his judgement rendered in the
lower court and not the date when it becomes final. The lower court found
that plaintiff's damage was P2,080, and that finding is sustained by that
evidence. There was a total loss of one case and a partial loss of the
other, and in the very nature of the things, plaintiff could not prove his loss
in any other way or manner that he did prove it, and the trial court who
heard him testify must have been convinced of the truth of his testimony.
There is no claim or pretense that the plaintiff signed the bill of lading or
that he knew of his contents at the time that it was issued. In that situation
he was not legally bound by the clause which purports to limit defendant's
liability. That question was squarely met and decided by this court in banc
in Juan Ysmael and Co., vs. Gabino Baretto and Co., (51 Phil., 90; see
numerous authorities there cited).
Among such authorities in the case of The Kengsington decided by the
Supreme Court of the U.S. January 6, 1902 (46 Law. Ed., 190), in which
the opinion was written by the late Chief Justice White, the syllabus of
which is as follows:
1. Restrictions of the liability of a steamship company for its own
negligence or failure of duty toward the passenger, being against the
public policy enforced by the courts of the United States, will not to be
upheld, though the ticket was issued and accepted in a foreign country
and contained a condition making it subject to the law thereof, which
sustained such stipulation.
2. The stipulation in a steamship passenger's ticket, which compels him to
value his baggage, at a certain sum, far less than it is worth, or, in order to
have a higher value put upon it, to subject it to the provisions of the Harter
Act, by which the carrier would be exempted from all the liability therefore
from errors in navigation or management of the vessel of other negligence
is unreasonable and in conflict with public policy.
3. An arbitrary limitation of 250 francs for the baggage of any steamship
passenger unaccompanied by any right to increase the amount of
adequate and reasonable proportional payment, is void as against public
policy.
Both the facts upon which it is based and the legal principles involved are
square in point in this case.
The defendant having received the two boxes in good condition, its legal
duty was to deliver them to the plaintiff in the same condition in which it
received them. From the time of their delivery to the defendant in New
York until they are delivered to the plaintiff in Manila, the boxes were
under the control and supervision of the defendant and beyond the control
of the plaintiff. The defendant having admitted that the boxes were
damaged while in transit and in its possession, the burden of proof then
shifted, and it devolved upon the defendant to both allege and prove that
the damage was caused by reason of some fact which exempted it from
liability. As to how the boxes were damaged, when or where, was a matter
peculiarly and exclusively within the knowledge of the defendant and in
the very nature of things could not be in the knowledge of the plaintiff. To
require the plaintiff to prove as to when and how the damage was caused
would force him to call and rely upon the employees of the defendant's
ship, which in legal effect would be to say that he could not recover any
damage for any reason. That is not the law.
Shippers who are forced to ship goods on an ocean liner or any other ship
have some legal rights, and when goods are delivered on board ship in
good order and condition, and the shipowner delivers them to the shipper
in bad order and condition, it then devolves upon the shipowner to both
allege and prove that the goods were damaged by the reason of some
fact which legally exempts him from liability; otherwise, the shipper would
be left without any redress, no matter what may have caused the
damage.
The lower court in its opinion says:
The defendant has not even attempted to prove that the two cases were
wet with sea water by fictitious event, force majeure or nature and defect
of the things themselves. Consequently, it must be presumed that it was
by causes entirely distinct and in no manner imputable to the plaintiff, and
of which the steamer President Garfield or any of its crew could not have
been entirely unaware.
And the evidence for the defendant shows that the damage was largely
caused by "sea water," from which it contends that it is exempt under the
provisions of its bill of lading and the provisions of the article 361 of the
Code of Commerce, which is as follows:
Merchandise shall be transported at the risk and venture of the shipper, if
the contrary was not expressly stipulated.
Therefore, all damages and impairment suffered by the goods during the
transportation, by reason of accident, force majeure, or by virtue of the
nature or defect of the articles, shall be for the account and risk of the
shipper.
The proof of these accidents is incumbent on the carrier.
In the final analysis, the cases were received by the defendant in New
York in good order and condition, and when they arrived in Manila, they
were in bad condition, and one was a total loss. The fact that the cases
were damaged by "sea water," standing alone and within itself, is not
evidence that they were damaged by force majeure or for a cause beyond
the defendant's control. The words "perils of the sea," as stated in
defendant's brief apply to "all kinds of marine casualties, such as
shipwreck, foundering, stranding," and among other things, it is said:
"Tempest, rocks, shoals, icebergs and other obstacles are within the
expression," and "where the peril is the proximate cause of the loss, the
shipowner is excused." "Something fortuitous and out of the ordinary
course is involved in both words 'peril' or 'accident'."
Defendant also cites and relies on the case of Government of the
Philippine Islands vs. Ynchausti & Company (40 Phil., 219), but it appears
from a reading of that case that the facts are very different and, hence, it
is not in point. In the instant case, there is no claim or pretense that the
Page 55 of 62
two cases were not in good order when received on board the ship, and it
is admitted that they were in bad order on their arrival at Manila. Hence,
they must have been damaged in transit. In the very nature of things, if
they were damaged by reason of a tempest, rocks, icebergs, foundering,
stranding or the perils of the sea, that would be a matter exclusively within
the knowledge of the officers of defendant's ship, and in the very nature of
things would not be within plaintiff's knowledge, and upon all of such
questions, there is a failure of proof.
The judgment of the lower court will be modified, so as to give the plaintiff
legal interest on the amount of his judgment from the date of its rendition
in the lower court, and in all respects affirmed, with costs. So ordered.
Johnson, Malcolm, Ostrand, Romualdez, and Villa-Real, JJ., concur.
Separate Opinions
STREET, J., dissenting in part:
I gave a hesitating adherence to the decision of this case in division, and
upon further reflection, I am now constrained to record my belief that the
decision is in part erroneous. I agree with the court that the defendant is
liable to the plaintiff, but I think that its liability is limited, under clause 13,
printed on the back of the bill of lading, to the amount of 250 dollars for
each of the two boxes of books comprising this consignment. While the
law does not permit a carrier gratuitously to exempt itself from liability for
the negligence of its servants, it cannot effectually do so for a valuable
consideration; and where freight rates are adjusted upon the basis of a
reasonable limited value per package, where a higher value is not
declared by the shipper, the limitation as to the value is binding. This court
in two well considered decisions has heretofore upheld a limitation of
exactly the character of that indicated in clause 13 (H.E. Heacock Co. vs.
Macondray & Co., 42 Phil., 205; Freixas & Co. vs. Pacific Mail Steamship
Co., 42 Phil., 198); and I am unable to see any sufficient reason for
ignoring those decisions.
6.
CFI Cavite: Awarded P1,000 to the plaintiffs plus P600 as
attorney's fee, plus P100, the value of the merchandise being carried by
Bataclan to Pasay City for sale and which was lost in the fire.
a.
Case involves a breach of contract of transportation
b.
There was negligence on the part of the defendant, through his
agent, the driver Saylon. There is evidence the bus was speeding, as
testified; from the point where one of the front tires burst up to the canal
there was a distance of about 150 meters but because of the velocity, its
momentum carried it over a distance of 150 meters before it fell into the
canal and turned.
c.
The proximate cause of the death of Bataclan was not the
overturning of the bus, but rather, the FIRE; that at the time the fire
started, Bataclan, was still alive, and so damages were awarded, not for
his death, but for the physical injuries suffered by him.
ISSUE: What is the proximate cause of Bataclans death?
HELD: Not the FIRE but OVERTURNING OF BUS
1.
ART. 1733. Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of
each case. Such extraordinary diligence in the vigilance over the goods is
further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while
the extra ordinary diligence for the safety of the passengers is further set
forth in articles 1755 and 1756.
2.
ART. 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 a due regard for all the
circumstances.
3.
ART. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence
as prescribed in articles 1733 and 1755
4.
ART. 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or willful acts of the
former's employees, although such employees may have acted beyond
the scope of their authority or in violation of the order of the common
carriers.
5.
This liability of the common carriers does not cease upon proof
that they exercised all the diligence of a good father of a family in the
selection and supervision of their employees.
6.
ART. 1763. A common carrier responsible for injuries suffered
by a passenger on account of the willful 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.
7.
CAB: There is no question that under the circumstances, the
defendant carrier is liable. The only question is to what degree. We
disagree with CFI that proximate cause was the FIRE.
a.
Proximate cause (Amjur.):
i.
'that cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and
without which the result would not have occurred.'
ii.
'the proximate legal cause is that acting first and producing the
injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close
causal connection with its immediate predecessor, the final event in the
chain immediately effecting the injury as a natural and probable result of
the cause which first acted, under such circumstances that the person
responsible for the first event should, as an ordinary prudent and
intelligent person, have reasonable ground to expect at the moment of his
act or default that an injury to some person might probably result
therefrom.
8.
CAB: In the present case under the circumstances obtaining,
we do not hesitate to hold that the proximate cause was the
OVERTURNING of the bus, this for the reason that when the vehicle
turned not only on its side but completely on its back, the leaking of the
gasoline from the tank was not unnatural or unexpected; that the coming
of the men with a lighted torch was in response to the call for help, made
not only by the passengers, but most probably, by the driver and the
conductor themselves, and that because it was dark (about 2:30 in the
morning), the rescuers had to carry a light with them, and coming as they
did from a rural area where lanterns and flashlights were not available;
Page 56 of 62
and what was more natural than that said rescuers should innocently
approach the vehicle to extend the aid and effect the rescue requested.
9.
CAB: What is more, the burning of the bus can also in part be
attributed to the negligence of the carrier, through is driver and its
conductor. According to the witness, the driver and the conductor were on
the road walking back and forth. They, or at least, the driver should and
must have known that gasoline could and must have leaked, can be smelt
and directed even from a distance, and yet neither the driver nor the
conductor would appear to have cautioned or taken steps to warn the
rescuers not to bring the lighted torch too near the bus.
10.
According to the evidence, one of the passengers who,
because of the injuries suffered by her, was hospitalized, and while in the
hospital, she was visited by the defendant Mariano Medina, and in the
course of his visit, she overheard him speaking to one of his bus
inspectors, telling said inspector to have the tires of the bus changed
immediately because they were already old, and that as a matter of fact,
he had been telling the driver to change the said tires, but that the driver
did not follow his instructions. If this be true, it goes to prove that the
driver had not been diligent and had not taken the necessary precautions
to insure the safety of his passengers. Yet the criminal case against the
driver was provisionally dismissed, because according to the fiscal, the
witnesses on whose testimony he was banking to support the complaint,
either failed or appear or were reluctant to testify. In the public interest the
prosecution of said erring driver should be pursued, this, not only as a
matter of justice, but for the promotion of the safety of passengers on
public utility buses. Let a copy of this decision be furnished the
Department of Justice and the Provincial Fiscal of Cavite.
DISPOSITIVE: AFFIRMED. Rule for PETITIONER, with the modification
that the damages awarded by the trial court are increased to P6,000 and
P800 for the death of Bataclan and for the attorney's fees, respectively.
REGALADO, J.:p
DOCTRINES:
- The victim in the case at bar, by stepping and standing on the platform
of the bus, is already considered a passenger and is entitled to all the
rights and protection pertaining to such a contractual relation.
- The duty which the carrier of passengers owes to its patrons extends
to persons boarding and alighting the cars.
- Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence for the
safety of the passengers transported by them, according to all the
circumstances of each case. 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 a due regard
for all the circumstances.
- By the contract of carriage, the carrier assumes that express
obligation to transport the passenger to his destination safely and to
observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger
is right away attributable to the fault or negligence of the carrier.
- The amount recoverable by the heirs of a victim of a tort is not the loss
of the entire earnings, but the loss of that portion of the earnings which
the beneficiary would have received. In other words, only net earnings,
not gross earnings, are to be considered, that is, the total of the
earnings less expenses necessary in the creation of such earnings or
income and minus living and other incidental expenses.
DIGEST:
1. This is a case where a bus belonging to the Petitioner ran over one
of its passengers because it suddenly accelerated before waiting for
its passenger to secure his seat.
2. As the deceased was boarding the bus, which was at full stop, and
closing his umbrella its the platform, the driver suddenly accelerated
the bus causing him to fall to the ground and hit by the bus rear
tires.
3. Instead of bringing the fallen passenger to the nearest hospital, the
driver opted to bring his other passengers and a refrigerator to their
4.
5.
FACTS:
1. On May 13, 1985, private Respondents filed a complaint for
damages against Petitioners for the death of Pedrito Cudiamat as a
result of a vehicular accident which occurred on March 25, 1985 at
Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged
that on said date, while petitioner Theodore M. Lardizabal was
driving a passenger bus belonging to petitioner corporation in a
reckless and imprudent manner and without due regard to traffic
rules and regulations and safety to persons and property, it ran over
its passenger, Pedrito Cudiamat.
2. However, instead of bringing Pedrito immediately to the nearest
hospital, the said driver, in utter bad faith and without regard to the
welfare of the victim, first brought his other passengers and cargo to
their respective destinations before bringing said victim to the
Lepanto Hospital where he expired.
3. On the other hand, petitioners alleged that they had observed and
continued to observe the extraordinary diligence required in the
operation of the transportation company and the supervision of the
employees, even as they add that they are not absolute insurers of
the safety of the public at large. Further, it was alleged that it was the
victim's own carelessness and negligence which gave rise to the
subject incident, hence they prayed for the dismissal of the complaint
plus an award of damages in their favor by way of a counterclaim.
4. RTC: RTC ruled in favor of petitioners, saying Pedrito Cudiamat was
negligent, which negligence was the proximate cause of his death.
Nonetheless, defendants in equity, are hereby ordered to pay the
heirs of Pedrito Cudiamat the sum of P10,000.00 which
approximates the amount defendants initially offered said heirs for
the amicable settlement of the case.
5. CA: CA set aside the decision of the lower court, and ordered
petitioners to pay private respondents: Indemnity for death of the
victim Pedrito Cudiamat; moral damages; actual and compensatory
damages; costs of this suit.
6. Petitioners' MR was denied by the Court of Appeals in its resolution
dated October 4, 1990, hence this petition.
ISSUE: Whether CA erred in reversing RTC decision and in finding
petitioners negligent and liable for the damages claimed NO.
HELD: CA correct, petitioners liable, deceased not negligent.
1. It is an established principle that the factual findings of the Court of
Appeals as a rule are final and may not be reviewed by this Court on
appeal. However, this is subject to settled exceptions, one of which
is when the findings of the appellate court are contrary to those of
the trial court, in which case a reexamination of the facts and
evidence may be undertaken.
2. In the case at bar, the trial court and the Court of Appeal have
discordant positions as to who between the petitioners an the victim
is guilty of negligence. Perforce, we have had to conduct an
evaluation of the evidence in this case for the proper calibration of
their conflicting factual findings and legal conclusions.
3. The lower court, in declaring that the victim was negligent, made the
following findings: This Court is satisfied that Pedrito Cudiamat was
negligent in trying to board a moving vehicle, especially with one of
his hands holding an umbrella. And, without having given the driver
or the conductor any indication that he wishes to board the bus. But
defendants can also be found wanting of the necessary diligence. In
this connection, it is safe to assume that when the deceased
Cudiamat attempted to board defendants' bus, the vehicle's door
was open instead of being closed. This should be so, for it is hard to
believe that one would even attempt to board a vehicle (i)n motion if
the door of said vehicle is closed. Here lies the defendant's lack of
Page 57 of 62
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
necessity for a person who wants to ride the same to signal his
intention to board. A public utility bus, once it stops, is in effect
making a continuous offer to bus riders. Hence, it becomes the duty
of the driver and the conductor, every time the bus stops, to do no
act that would have the effect of increasing the peril to a passenger
while he was attempting to board the same. The premature
acceleration of the bus in this case was a breach of such duty.
IMPT: It is the duty of common carriers of passengers, including
common carriers by railroad train, streetcar, or motorbus, to stop
their conveyances a reasonable length of time in order to afford
passengers an opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from the sudden
starting up or jerking of their conveyances while they are doing so.
Further, even assuming that the bus was moving, the act of the
victim in boarding the same cannot be considered negligent under
the circumstances. As clearly explained in the testimony of the
aforestated witness for petitioners, Virginia Abalos, the bus had "just
started" and "was still in slow motion" at the point where the victim
had boarded and was on its platform.
IMPT: It is not negligence per se, or as a matter of law, for one
attempt to board a train or streetcar which is moving slowly. An
ordinarily prudent person would have made the attempt board the
moving conveyance under the same or similar circumstances. The
fact that passengers board and alight from slowly moving vehicle is a
matter of common experience both the driver and conductor in this
case could not have been unaware of such an ordinary practice.
IMPT: The victim herein, by stepping and standing on the platform of
the bus, is already considered a passenger and is entitled all the
rights and protection pertaining to such a contractual relation. Hence,
it has been held that the duty which the carrier passengers owes to
its patrons extends to persons boarding cars as well as to those
alighting therefrom.
Common carriers, from the nature of their business and reasons of
public policy, are bound to observe extraordinary diligence for the
safety of the passengers transported by the according to all the
circumstances of each case. A common carrier is bound to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence very cautious persons, with a due regard
for all the circumstances.
IMPT: It has also been repeatedly held that in an action based on a
contract of carriage, the court need not make an express finding of
fault or negligence on the part of the carrier in order to hold it
responsible to pay the damages sought by the passenger. By
contract of carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and observe
extraordinary diligence with a due regard for all the circumstances,
and any injury that might be suffered by the passenger is right away
attributable to the fault or negligence of the carrier. This is an
(EXCEPTION) to the general rule that negligence must be proved,
and it is therefore incumbent upon the carrier to prove that it has
exercised extraordinary diligence as prescribed in Articles 1733 and
1755 of the Civil Code.
CAB: Moreover, the circumstances under which the driver and the
conductor failed to bring the gravely injured victim immediately to the
hospital for medical treatment is a patent and incontrovertible proof
of their negligence. It defies understanding and can even be
stigmatized as callous indifference. The evidence shows that after
the accident the bus could have forthwith turned at Bunk 56 and
thence to the hospital, but its driver instead opted to first proceed to
Bunk 70 to allow a passenger to alight and to deliver a refrigerator,
despite the serious condition of the victim. The vacuous reason
given by petitioners that it was the wife of the deceased who caused
the delay was tersely and correctly confuted by respondent court:
The pretension of the appellees that the delay was due to the fact
that they had to wait for about 20 minutes for Inocencia Cudiamat to
get dressed deserves scant consideration. It is rather scandalous
and deplorable for a wife whose husband is at the verge of dying to
have the luxury of dressing herself up for about twenty minutes
before attending to help her distressed and helpless husband.
CAB: Further, it cannot be said that the main intention of petitioner
Lardizabal in going to Bunk 70 was to inform the victim's family of
the mishap, since it was not said bus driver nor the conductor but the
companion of the victim who informed his family thereof. In fact, it
Page 58 of 62
was only after the refrigerator was unloaded that one of the
passengers thought of sending somebody to the house of the victim.
18. ACTUAL DAMAGES COMPUTATION: With respect to the award of
damages, an oversight was, however, committed by respondent
Court of Appeals in computing the actual damages based on the
gross income of the victim. The rule is that the amount recoverable
by the heirs of a victim of a tort is not the loss of the entire earnings,
but rather the loss of that portion of the earnings which the
beneficiary would have received. In other words, only NET earnings,
not gross earnings, are to be considered, that is, the total of the
earnings less expenses necessary in the creation of such earnings
or income and minus living and other incidental expenses.
19. We are of the opinion that the deductible living and other expense of
the deceased may fairly and reasonably be fixed at P500.00 a month
or P6,000.00 a year. In adjudicating the actual or compensatory
damages, respondent court found that the deceased was 48 years
old, in good health with a remaining productive life expectancy of 12
years, and then earning P24,000.00 a year. Using the gross annual
income as the basis, and multiplying the same by 12 years, it
accordingly awarded P288,000. Applying the aforestated rule on
computation based on the net earnings, said award must be, as it
hereby is, rectified and reduced to P216,000.00. However, in
accordance with prevailing jurisprudence, the death indemnity is
hereby increased to P50,000.00.
DISPOSITIVE: Subject to the above modifications, the challenged
judgment and resolution of respondent Court of Appeals are hereby
AFFIRMED in all other respects. SO ORDERED.
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 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.1 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.2 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.3
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 that the child, who must be near the bus, was run
Page 59 of 62
397 SCRA 75
VITUG, J.:
NATURE: The case before the Court is an appeal from the decision and
resolution of the Court of Appeals, which has modified the decision of
RTC Pasig City, exonerating Prudent Security Agency (Prudent) from
liability and finding Light Rail Transit Authority (LRTA) and
Rodolfo Roman liable for damages on account of the death of Nicanor
Navidad.
DOCTRINES:
- The law requires common carriers to carry passengers safely using
the utmost diligence of very cautious persons with due regard for all
circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for
so long as the passengers are within its premises and where they
ought to be in pursuance to the contract of carriage.
- Instances when a common carrier becomes liable for death of or injury
to passengers.The statutory provisions render a common carrier
liable for death of or injury to passengers (a) through the negligence or
willful acts of its employees or b) on account of willful acts or
negligence of other passengers or of strangers if the common carriers
employees through the exercise of due diligence could have
prevented or stopped the act or omission.
- Presumption of Negligence; In case of such death or injury, a carrier is
presumed to have been at fault or been negligent.In case of such
death or injury, a carrier is presumed to have been at fault or been
negligent, and by simple proof of injury, the passenger is relieved of
the duty to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove that the
injury is due to an unforeseen event or to force majeure.
- Tort; Should Prudent be made likewise liable? If at all, that liability
could only be for tort under the provisions of Article 2176 and related
provisions, in conjunction with Article 2180, of the Civil Code. The
premise, however, for the employers liability is negligence or fault on
the part of the employee. Once such fault is established, the employer
can then be made liable on the basis of the presumption juris tantum
that the employer failed to exercise diligentissimi patris families in the
selection and supervision of its employees. The liability is primary and
can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been
shown.
- In fine, a liability for tort may arise even under a contract, where tort is
that which breaches the contract. A contractual obligation can be
breached by tort and when the same act or omission causes the injury,
one resulting in culpa contractual and the other in culpa aquiliana,
Article 2194 of the Civil Code can well apply. When an act which
constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort,
thereby allowing the rules on tort to apply.
- Damages; Nominal Damages; It is an established rule that nominal
damages cannot co-exist with compensatory damages.The award of
nominal damages in addition to actual damages is untenable. 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. It is an established rule that nominal damages
cannot co-exist with compensatory damages.
FACTS:
1. On 14 October 1993, about half an hour past seven oclock in the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT
station after purchasing a token (representing payment of the
fare). While Navidad was standing on the platform near the LRT
tracks, Junelito Escartin, the security guard assigned to the area
approached Navidad.
A misunderstanding or an altercation
between the two apparently ensued that led to a fist fight. No
evidence, however, was adduced to indicate how the fight started or
who, between the two, delivered the first blow or how Navidad later
fell on the LRT tracks. At the exact moment that Navidad fell, an
LRT train, operated by petitioner Rodolfo Roman, was coming
in. Navidad was struck by the moving train, and he was killed
instantaneously.
2. The widow of Nicanor, herein respondent Marjorie Navidad, along
with her children, filed a complaint for damages against Junelito
Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization,
Inc. (Metro Transit), and Prudent for the death of her
husband. LRTA and Roman filed a counterclaim against Navidad
and a cross-claim against Escartin and Prudent. Prudent, in its
answer, denied liability and averred that it had exercised due
diligence in the selection and supervision of its security guards.
Page 60 of 62
3.
4.
5.
6.
7.
8.
9.
The LRTA and Roman presented their evidence while Prudent and
Escartin, instead of presenting evidence, filed a demurrer
contending that Navidad had failed to prove that Escartin was
negligent in his assigned task.
RTC: RTC ruled against the defendants Prudent Security and
Junelito Escartin ordering the latter to pay jointly and severally the
plaintiffs.
CA: CA exonerated Prudent from any liability for the death of
Nicanor Navidad and, instead, holding the LRTA and Roman jointly
and severally liable.
The appellate court ratiocinated that while the deceased might not
have then as yet boarded the train, a contract of carriage
theretofore had already existed when the victim entered the place
where passengers were supposed to be after paying the fare and
getting the corresponding token therefor.
In exempting Prudent from liability, the court stressed that there was
nothing to link the security agency to the death of Navidad. It said
that Navidad failed to show that Escartin inflicted fist blows upon the
victim and the evidence merely established the fact of death of
Navidad by reason of his having been hit by the train owned and
managed by the LRTA and operated at the time by Roman. The
appellate court faulted petitioners for their failure to present expert
evidence to establish the fact that the application of emergency
brakes could not have stopped the train.
Petitioners would contend that the appellate court ignored the
evidence and the factual findings of the trial court by holding them
liable on the basis of a sweeping conclusion that the presumption of
negligence on the part of a common carrier was not
overcome. Petitioners would insist that Escartins assault upon
Navidad, which caused the latter to fall on the tracks, was an act of
a stranger that could not have been foreseen or prevented. The
LRTA would add that the appellate courts conclusion on the
existence of an employer-employee relationship between Roman
and LRTA lacked basis because Roman himself had testified being
an employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court,
contended that a contract of carriage was deemed created from the
moment Navidad paid the fare at the LRT station and entered the
premises of the latter, entitling Navidad to all the rights and
protection under a contractual relation, and that the appellate court
had correctly held LRTA and Roman liable for the death of Navidad
in failing to exercise extraordinary diligence imposed upon a
common carrier.
ISSUES:
1. Whether there was a contract of carriage YES. Such duty of a
common carrier to provide safety and utmost diligence to its
passengers so obligates it not only during the course of the trip but
for so long as the passengers are within its premises and where
they ought to be in pursuance to the contract of carriage.
2. Whether CA erred in finding petitioners LRTA & Roman liable
PARTLY. Roman absolved.
3. Whether CA erred in finding that Roman is an employee of LRTA
YES.
HELD: CA AFFIRMED. No nominal, only Roman absolved.
1. Law and jurisprudence dictate that a common carrier, both from the
nature of its business and for reasons of public policy, is burdened
with the duty of exercising utmost diligence in ensuring the safety of
passengers.
2. The Civil Code, governing the liability of a common carrier for death
of or injury to its passengers, provides: 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 a due regard for all the circumstances.
3. Article 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, (UNLESS) they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
4. Article 1759. Common carriers are liable for the death of or injuries
to passengers through the negligence or willful acts of the formers
employees, although such employees may have acted beyond the
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