Transportation Laws (Midterms)

Case Digests
1. DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN, petitioners,
vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA
CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late
Pedrito Cudiamat represented by Inocencia Cudiamat, respondents.
G.R. No. 95582 October 7, 1991
Lessons Applicable: Actionable Document (Transportation)
FACTS:

May 13, 1985: Theodore M. Lardizabal was driving a passenger bus belonging to Dangwa Transportation Co. Inc.
(Dangwa)

The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted

Pedro Cudiamat fell from the platform of the bus when it suddenly accelerated forward

Pedro was ran over by the rear right tires of the vehicle

Theodore first brought his other passengers and cargo to their respective destinationsbefore bringing Pedro to Lepanto
Hospital where he expired

Private respondents filed a complaint for damages against Dangwa for the death of Pedro Cudiamat

Dangwa: observed and continued to observe the extraordinary diligence required in the operation of the co. and the
supervision of the employees even as they are not absolute insurers of the public at large

RTC: in favour of Dangwa holding Pedrito as negligent and his negligence was the cause of his death but still ordered to
pay in equity P 10,000 to the heirs of Pedrito

CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual and compensatory damages and cost of the
suit
ISSUE: W/N Dangwa should be held liable for the negligence of its driver Theodore
HELD: YES. CA affirmed.

A public utility once it stops, is in effect making a continuous offer to bus riders (EVEN when moving as long as it is still
slow in motion)

Duty of the driver: do NOT make acts that would have the effect of increasing peril to a passenger while he is attempting
to board the same

Premature acceleration of the bus in this case = breach of duty

Stepping and standing on the platform of the bus is already considered a passenger and is entitled all the rights and
protection pertaining to such a contractual relation

Duty extends to boarding and alighting

GR: By contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination
safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by
the passenger is right away attributable to the fault or negligence of the carrier

EX: carrier to prove that it has exercised extraordinary diligence as prescribed in Art. 1733 and 1755 of the Civil Code

Failure to immediately bring Pedrito to the hospital despite his serious condition = patent and incontrovertible proof of
their negligence

Hospital was in Bunk 56

1st proceeded to Bunk 70 to allow a passenger (who later called the family of Pedrito on his own will) to alight and
deliver a refrigerator

In tort, actual damages is based on net earnings

2. PAN AMERICAN WORLD AIRWAYS, INC., petitioner,
vs.
INTERMEDIATE APPELLATE COURT, RENE V. PANGAN, SOTANG BASTOS PRODUCTIONS and ARCHER PRODUCTIONS,
respondents.
G.R. No. 70462 August 11, 1988
FACTS: On 25 April 1978, Rene V. Pangan, president and general manager of the Sotang Bastos and Archer Productions, while in
San Francisco, California and Primo Quesada of Prime Films, San Francisco, California, entered into an agreement whereby the
former, for and in consideration of the amount of US $2,500.00 per picture, bound himself to supply the latter with three films.
Ang Mabait, Masungit at ang Pangit, Big Happening with Chikiting and Iking, and Kambal Dragon for exhibition in the United
States. It was also their agreement that Pangan, et. al. would provide the necessary promotional and advertising materials for said
films on or before 30 May 1978.
On his way home to the Philippines, Pangan visited Guam where he contacted Leo Slutchnick of the Hafa Adai
Organization. Pangan likewise entered into a verbal agreement with Slutchnick for the exhibition of two of the films a at the Hafa
Adai Theater in Guam on 30 May 1978 for the consideration of P7,000.00 per picture. Pangan undertook to provide the necessary
promotional and advertising materials for said films on or before the exhibition date on 30 May 1978.
By virtue of the agreements, Pangan caused the preparation of the requisite promotional handbills and still pictures for
which he paid the total sum of P12,900.00. Likewise in preparation for his trip abroad to comply with his contracts, Pangan
purchased 14 clutch bags, 4 capiz lamps and 4 barong tagalog, with a total value of P4,400.00.
On 18 May 1978, Pangan obtained from Pan Ams Manila Office, through the Your Travel Guide, an economy class
airplane ticket 0269207406324 for passage from Manila to Guam on Pan Ams Flight 842 of 27 May 1978, upon payment by
Pangan of the regular fare. The Your Travel Guide is a tour and travel office owned and managed by plaintiffs witness Mila de la
Rama.
On 27 May 1978, two hours before departure time Pangan was at Pan Ams ticket counter at the Manila International
Airport and presented his ticket and checked in his two luggages, for which he was given baggage claim tickets 963633 and
963649. The two luggages contained the promotional and advertising materials, the clutch bags, barong tagalog and his personal
belongings. Subsequently, Pangan was informed that his name was not in the manifest and so he could not take Flight 842 in the
economy class. Since there was no space in the economy class, Pangan took the first class because he wanted to be on time in
Guam to comply with his commitment, paying an additional sum of $112.00.
When Pangan arrived in Guam on the date of 27 May 1978, his two luggages did not arrive with his flight, as a
consequence of which his agreements with Slutchnick and Quesada for the exhibition of the films in Guam and in the United
States were cancelled. Thereafter, he filed a written claim for his missing luggages.
Upon arrival in the Philippines, Pangan contacted his lawyer, who made the necessary representations to protest as to
the treatment which he received from the employees of PanAm and the loss of his two luggages. Pan Am assured Pangan that his
grievances would be investigated and given its immediate consideration. Due to Pan Ams failure to communicate with Pangan
about the action taken on his protests, a complaint was filed by Pangan.
The CFI found Pan Am liable and (1) ordered Pan Am to pay Pangan, et. al. the sum of P83,000.00, for actual damages,
with interest thereon at the rate of 14% per annum from 6 December 1978, when the complaint was filed, until the same is fully
paid, plus the further sum of P10,000.00 as attorneys fees; (2) ordered Pan Am to pay Pangan the sum of P8,123.34, for
additional actual damages, with interest thereon at the rate of 14% per annum from 6 December 1978, until the same is fully
paid; (3) dismissed the counterclaim interposed by Pan-Am; and (4) ordered Pan-Am to pay the costs of suit.
On appeal, the then Intermediate Appellate Court affirmed the trial court decision. Hence, the petition for review.
ISSUES:

1. Whether or not the respondent court erred as a matter of law in affirming the trial court's award of actual damages beyond the
limitation of liability set forth in the Warsaw Convention and the contract of carriage.
2. Whether or not the respondent court erred as a matter of law in affirming the trial court's award of actual damages consisting
of alleged lost profits in the face of this Court's ruling concerning special or consequential damages as set forth in Mendoza v.
Philippine Airlines [90 Phil. 836 (1952).
HELD:
1. The Supreme Court granted the Petition, set aside the Decision of the Intermediate Appellate Court, and
rendered a new judgment ordering Pan Am to pay Pangan damages in the amount of US$600.00 or its equivalent
in Philippine currency at the time of actual payment.
- Pertinent Condition of Carriage printed at the back of the ticket
The pertinent Condition of Carriage printed at the back of the plane ticket reads: (8) BAGGAGE LIABILITY . . . The total
liability of the Carrier for lost or damage baggage of the passenger is LIMITED TO P100.00 for each ticket unless a passenger
declares a higher valuation in excess of P100.00, but not in excess, however, of a total valuation of P1,000.00 and additional
charges are paid pursuant to Carriers tariffs.
-Ong Yiu case applicable
In the case of Ong Yiu v. Court of Appeals [G.R. No. L-40597, June 29, 1979, 91 SCRA 223), the Court sustained the
validity of a printed stipulation at the back of an airline ticket limiting the liability of the carrier for lost baggage to a specified
amount and ruled that the carriers liability was limited to said amount since the passenger did not declare a higher value, much
less pay additional charges. The ruling in Ong Yiu squarely applicable to the instant case. Herein, on the basis of the stipulations
printed at the back of the ticket, Pan Ams liability for the lost baggage of Pangan is limited to $600.00 ($20.00 x 30 kilos) as the
latter did not declare a higher value for his baggage and pay the corresponding additional charges.
-Provisions in plane ticket a contract of adhesion; Contracts of adhesion not entirely prohibited.
While it may be true that Pangan had not signed the plane ticket (Article 1750), he is nevertheless bound by the
provisions thereof. Such provisions have been held to be a part of the contract of carriage and valid and binding upon the
passenger regardless of the latters lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion,
in regards which it has been said that contracts of adhesion wherein one party imposes a ready-made form of contract on the
other, as the plane ticket, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, he gives his consent.
-Shewaram case not applicable
The ruling in Shewaram v. Philippine Air Lines, Inc. where the Court held that the stipulation limiting the carriers liability
to a specified amount was invalid, finds no application in the instant case, as the ruling in said case was premised on the finding
that the conditions printed at the back of the ticket were so small and hard to read that they would not warrant the presumption
that the passenger was aware of the conditions and that he had freely and fairly agreed thereto. Herein, similar facts that would
make the case fall under the exception have not been alleged, much less shown to exist.
2. Pan Am not liable for lost profits when film showing contracts were cancelled; Mendoza vs. PAL
-The Court finds itself unable to agree with the decision of the trial court, and affirmed by the Court of Appeals, awarding
Pangan damages as and for lost profits when their contracts to show the films in Guam and San Francisco, California were
cancelled. The rule laid down in Mendoza v. Philippine Air Lines, Inc. [90 Phil. 836 (1952)] cannot be any clearer: Under Art. 1107
of the Civil Code, a debtor in good faith may be held liable only for damages that were foreseen or might have been foreseen at
the time the contract of transportation was entered into. Herein, in the absence of a showing that Pan Ams attention was called
to the special circumstances requiring prompt delivery of Pangans luggages, Pan Am cannot be held liable for the
cancellation of Pangans contracts as it could not have foreseen such an eventuality when it accepted the luggages
for transit.
Requisite for liability for special damages; Chapman vs. Fargo, L.R.A. (1918 F, p. 1049)
-Before defendant could be held to special damages such as the present alleged loss of profits on account of delay or
failure of delivery it must have appeared that he had notice at the time of delivery to him of the particular
circumstances attending the shipment and which probably would lead to such special loss if he defaulted. Or, as the
rule has been stated in another form in order to impose on the defaulting party further liability than for damages naturally and
directly i.e., in the ordinary course of things arising from a breach of contract such unusual or extraordinary
damages must have been brought within the contemplation of the parties as the probable result of breach at the
time of or prior to contracting. Generally notice then of any special circumstances which will show that the damages to be
anticipated from a breach would be enhanced has been held sufficient far this effect. The attention of the common carrier must be
called to the nature of the articles shipped, the purpose of shipment, and the desire to rush the shipment.

3. ABOITIZ SHIPPING CORPORATION

vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA, and
PIONEER STEVEDORING CORPORATION
G.R. No. 84458 November 6, 1989
Facts:
Anacleto Viana boarded the vessel M/V Antonia owned by Aboitiz. After said vessel had landed, the Pioneer Stevedoring
Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement
dated July 26, 1975 between the third party defendant Pioneer Stevedoring Corporation and Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel
and one (1) hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said
vessel. While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously
remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to
the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the
vessel and the crane. He was thereafter brought to the hospital where he later expired three (3) days thereafter.
The trial court ordered Aboitiz to pay the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever
amount the latter paid the Vianas. On reconsideration, the trial court absolved Pioneer from liability for failure of the Vianas and
Aboitiz to preponderantly establish a case of negligence against the crane operator. Not satisfied with the modified judgment of
the trial court, Aboitiz appealed the same to respondent Court of Appeals which affirmed the findings of of the trial court.
Issue:

Whether the deceased is still considered a passenger at the time the accident occurred
Held: The deceased is still a passenger. The rule is that the relation of carrier and passenger continues until the passenger has
been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a
reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving
the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be
determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure.
The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his
destination if, for example, such person remains in the carrier's premises to claim his baggage.
It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of vessels are allotted a
longer period of time to disembark from the ship than other common carriers such as a passenger bus. With respect to the bulk of
cargoes and the number of passengers it can load, such vessels are capable of accommodating a bigger volume of both as
compared to the capacity of a regular commuter bus. Consequently, a ship passenger will need at least an hour as is the usual
practice, to disembark from the vessel and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his
luggage in a very short period of time. Verily, petitioner cannot categorically claim, through the bare expedient of comparing the
period of time entailed in getting the passenger's cargoes, that the ruling in La Mallorca is inapplicable to the case at bar. On the
contrary, if we are to apply the doctrine enunciated therein to the instant petition, we cannot in reason doubt that the victim
Anacleto Viana was still a passenger at the time of the incident. When the accident occurred, the victim was in the act of
unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not only
to bring its passengers safely to their destination but also to afford them a reasonable time to claim their baggage.
Articles Applied:
Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all
the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and
7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any
of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost,
destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as required in Article 1733.
Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the
possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier
to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738.
Art. 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in full force and effect even
when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in
transitu.
Art. 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored
in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has
had reasonable opportunity thereafter to remove them or otherwise dispose of them.
Art. 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been the
proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss
before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be
exempted from liability for the loss, destruction, or deterioration of the goods. The same duty is incumbent upon the common
carrier in case of an act of the public enemy referred to in Article 1734, No. 2.
Art. 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not free such
carrier from responsibility.
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the proximate cause
thereof being the negligence of the common carrier, the latter shall be liable in damages, which however, shall be equitably
reduced.
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods, or the
faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss.
Art. 1743. If through the order of public authority the goods are seized or destroyed, the common carrier is not responsible,
provided said public authority had power to issue the order.
Articles Applied:
Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss,
destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary
prudence in the vigilance over the movables transported;
(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat,
violence or force, is dispensed with or diminished;

(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the defective
condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage.
Art. 1746. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the common carrier
refused to carry the goods unless the former agreed to such stipulation.
Art. 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual
route, the contract limiting the common carrier's liability cannot be availed of in case of the loss, destruction, or deterioration of
the goods.
Art. 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid.
Art. 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss, destruction, or deterioration of
the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.
Art. 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract
refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is
reasonable, just and in consonance with public policy.
Art. 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the
common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration.
Art. 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for
their loss, destruction or deterioration.
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or
in that of his employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotelkeepers shall be applicable.
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.
Art. 1757. The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be
dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.
Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid,
but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier's liability.
Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the
former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of
the common carriers.
This liability of the common carriers 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.
Art. 1760. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation,
by the posting of notices, by statements on the tickets or otherwise.
Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.
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.
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of
other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission.
4. SWEET LINES, INC., petitioner,
vs.
HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and
ROGELIO TIRO, respondents
G.R. No. L-37750 May 19, 1978
Sweet Lines Inc. v. Teves
G.R. No. L-37750
Facts:
Private respondents Atty. Leovigildo Tandog and Rogelio Tirog bought tickets at the branch office of the petitioner, a shipping
company transporting inter-island passengers and cargoes, at the Cagayan de Oro City. Respondents were to board M/S Sweet
Hope,however upon learning that it will not be proceeding to Bohol they decided to board M/S Sweet Town. On such vessel the
respondents agreed to hide at the cargo section to avoid inspection of the officers of the Philippine Coast guard.
After suffering the inconviences in the cargo section and paying other tickets because those that are in their possession were no
honored. The respondents sued the petitioners in the Court of First Instance of Misamis Oriental for breach of contract of carriage
in the alleged sum of P110,000.00.
Petitioners moved for the dismissal of the complaint on the ground of improper venue for Conditon No. 14 printed on the ticket
essentially provides that any actions arising out of the ticket will be filed at the competent court of Cebu.
The trial court ruled in favor of the respondents after denying the motion for dismissal. Having exhausted all the remedies
available and still failed to obtain a ruling in their favor, the petitioner filed this instant petition for prohibition with preliminary
injunction.
The Supreme Court gave due course to their petition and required them to submit their memoranda in support of their respective
contention.
Respondents contend that condition No. 14 is not a part of the contract of carriage and that it is an independent contract requiring
the mutual consent of the parties. In the case at bar the consent of the respondents was not sought it was imposed on them
unilaterally. Venue of actions can only be waived if there is a written agreement of the parties. Condition No.14 not being agreed
to by the respondents is not valid and enforceable. Supposing that it is otherwise, it is not exclusive and does not, therefore
exclude the filing of the action in Misamis Oriental.
Petioner contend that condition No. 14 is valid and enforceable because private respondents acceded to it when they purchased
passage tickets and it is an effective waiver of venue, valid and binding as such, since it is printed in bold and capital letters and
not in fine print and merely assigns the place where the action arising from the contract is instituted. That condition No. 14 is

unequivocal and mandatory, the words and phrases any and all, irrespective of where it is issued, and shall leave no doubt
that the intention of Condition No. 14 is to fix the venue in the City of Cebu, to the exclusion of all other places.
Issue:
Whether or not condition No. 14 is valid and enforceable.
Held:
Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue may be changed or
transferred from one province to another by agreement of the parties in writing pursuant to Rule 4, Section 3, of the Rules of
Court, such an agreement will not be held valid where it practically negates the action of the claimants, such as the private
respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as
well as his witnesses and to promote the ends of justice. Considering the expense and trouble a passenger residing outside of
Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The
condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the
respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of
Misamis Oriental, as was done in the instant case, will not cause inconvience to, much less prejudice, petitioner.
Public policy is . . . that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be
injurious to the public or against the public good . . .. Under this principle . . . freedom of contract or private dealing is restricted
by law for the good of the public. Clearly, Condition No. 14, if enforced, will be subversive of the public good or interest, since it
will frustrate in meritorious cases, actions of passenger claimants outside of Cebu City, thus placing petitioner company at a
decided advantage over said persons, who may have perfectly legitimate claims against it. The said condition should, therefore,
be declared void and unenforceable, as contrary to public policy to make the courts accessible to all who may have need of
their services.

5. LA MALLORCA, petitioner,
vs. HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents
G.R. No. L-20761 July 27, 1966
La Mallorca v. Court of Appeals
17 SCRA 739
Facts:
Plaintiffs husband and wife, together with their minor children, boarded a La Mallorca bus. Upon arrival at their
destination, plaintiffs and their children alighted from the bus and the father led them to a shaded spot about 5 meters from the
vehicle. The father returned to the bus to get a piece of baggage which was not unloaded. He was followed by her daughter
Raquel. While the father was still on the running board awaiting for the conductor to give his baggage, the bus started to run so
that the father had to jump. Raquel, who was near the bus, was run over and killed.
Lower court rendered judgment for the plaintiff which was affirmed by CA, holding La Mallorca liable for quasi-delict and
ordering it to pay P6,000 plus P400. La Mallorco contended that when the child was killed, she was no longer a passenger and
therefore the contract of carriage terminated.
Issue:
Whether or not the contractual obligation between the parties ceases the moment the passenger alighted form the
vehicle.
Held:
On the question whether the liability of the carrier, as to the child who was already led a place 5 meters from the bus
under the contract of carrier, still persists, we rule in the affirmative. It is a recognized rules that the relation between carrier and
passengers does not cease at the moment the passenger alights from the carriers premises, to be determined from the
circumstances. In this case, there was no utmost diligence. Firstly, the driver, although stopping the bus, did not put off the
engine. Secondly, he started to run the bus even before the bus conductor gave him the signal and while the latter was unloading
cargo. Here, the presence of said passenger near the bus was not unreasonable and the duration of responsibility still exists.
Averment of quasi-delict is permissible under the Rules of Court, although incompatible with the contract of carriage. The Rules of
Court allows the plaintiffs to allege causes of action in the alternative, be they compatible with each other or not (Sec. 2, Rule 1).
Even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held liable for the
negligence of its driver pursuant to Art. 2180 of NCC. Decision MODIFIED. Only question raised in the briefs can be passed upon,
and as plaintiffs did not appeals the award of P3,000.00 the increase by the CA of the award to P6,000.00 cannot be sustained.
Aboitiz Shipping Corporation vs. Court of Appeals
188 SCRA 387
Facts:
Anacleto Viana was a passenger of M/V Antonia bound for Manila which was owned by defendant Aboitiz. After the said
vessel has landed, the Pioneer Stevedoring Corp., as the arrastre operator, took over the exclusive control of the cargoes loaded
on it. One hour after the passengers had disembarked, Pioneer Stevedoring started operation by unloading the cargoes using its
crane. Viana who had already disembarked remembered that some of his cargoes were still inside the vessel. While pointing to
the crew of the vessel the place where his cargoes were, the crane hit him, pinning him between the side of the vessel and the
crane which resulted to his death. Vianas wife filed a complaint for damages against Aboitiz for breach of contract f carriage.
Aboitiz, however filed a third party complaint against Pioneer since it had control completely over the vessel during the incident.
Furthermore, petitioner contends that one hour has already elapsed from the time Viana disembarked, thus he has already ceased
to be a passenger.
Issue:
Whether or not Aboitiz is liable for the death of Viana.
Held:
The Supreme Court held that the failure of Aboitiz to exercise extraordinary diligence for the safety of its passengers
makes Aboitiz liable. It has been recognized as a rule that the relation of the carrier and passenger does not cease the moment

the passenger alights from the carriers vehicle, but continues until the passenger has had a reasonable time or a reasonable
opportunity to leave the carriers premises. A reasonable time or a reasonable delay within this rule is to be determined from all
the circumstances. The primary factor to be considered is the existence of a reasonable cause as will justify the presence of the
victim on or near the petitioners vessel. In the case at bar, such justifiable cause exists because he had to come back for his
cargo. Aboitiz has failed to safeguard its passenger with extraordinary diligence in requiring or seeing to it that precautionary
measures were strictly and actually enforced to subserve their purpose of preventing entry into a forbidden area.