Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-20761

July 27, 1966

LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents.
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No.
23267-R, holding it liable for quasi-delict and ordering it to pay to respondents Mariano
Beltran, et al., P6,000.00 for the death of his minor daughter Raquel Beltran, plus
P400.00 as actual damages.
The facts of the case as found by the Court of Appeals, briefly are:
On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with
their minor daughters, namely, Milagros, 13 years old, Raquel, about 4 years old, and
Fe, over 2 years old, boarded the Pambusco Bus No. 352, bearing plate TPU No. 757
(1953 Pampanga), owned and operated by the defendant, at San Fernando, Pampanga,
bound for Anao, Mexico, Pampanga. At the time, they were carrying with them four
pieces of baggages containing their personal belonging. The conductor of the bus, who
happened to be a half-brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A,
B, & C) covering the full fares of the plaintiff and their eldest child, Milagros. No fare was
charged on Raquel and Fe, since both were below the height at which fare is charged in
accordance with the appellant's rules and regulations.
After about an hour's trip, the bus reached Anao whereat it stopped to allow the
passengers bound therefor, among whom were the plaintiffs and their children to get off.
With respect to the group of the plaintiffs, Mariano Beltran, then carrying some of their
baggages, was the first to get down the bus, followed by his wife and his children.
Mariano led his companions to a shaded spot on the left pedestrians side of the road
about four or five meters away from the vehicle. Afterwards, he returned to the bus in
controversy to get his other bayong, which he had left behind, but in so doing, his
daughter Raquel followed him, unnoticed by her father. While said Mariano Beltran was
on the running board of the bus waiting for the conductor to hand him his bayong which
he left under one of its seats near the door, the bus, whose motor was not shut off while
unloading, suddenly started moving forward, evidently to resume its trip,
notwithstanding the fact that the conductor has not given the driver the customary
signal to start, since said conductor was still attending to the baggage left behind by
Mariano Beltran. Incidentally, when the bus was again placed into a complete stop, it
had travelled about ten meters from the point where the plaintiffs had gotten off.
Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the
running board without getting his bayong from the conductor. He landed on the side of
the road almost in front of the shaded place where he left his wife and children. At that
1

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
2

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 over and killed. In the
circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost
diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be
observed by a common carrier in the discharge of its obligation to transport safely its
passengers. In the first place, the driver, although stopping the bus, nevertheless did not
put off the engine. Secondly, he started to run the bus even before the bus conductor
gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the
bus was not unreasonable and they are, therefore, to be considered still as passengers
of the carrier, entitled to the protection under their contract of carriage.
But even assuming arguendo that the contract of carriage has already terminated,
herein petitioner can be held liable for the negligence of its driver, as ruled by the Court
of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint,
which reads
That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs'
daughter, was caused by the negligence and want of exercise of the utmost diligence of
a very cautious person on the part of the defendants and their agent, necessary to
transport plaintiffs and their daughter safely as far as human care and foresight can
provide in the operation of their vehicle.
is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict,
while incompatible with the other claim under the contract of carriage, is permissible
under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege
causes of action in the alternative, be they compatible with each other or not, to the end
that the real matter in controversy may be resolved and determined.4
The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was
predicated when it was alleged in the complaint that "the death of Raquel Beltran,
plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost
diligence of a very cautious person on the part of the defendants and their agent." This
allegation was also proved when it was established during the trial that the driver, even
before receiving the proper signal from the conductor, and while there were still persons
on the running board of the bus and near it, started to run off the vehicle. The
presentation of proof of the negligence of its employee gave rise to the presumption that
the defendant employer did not exercise the diligence of a good father of the family in
the selection and supervision of its employees. And this presumption, as the Court of
Appeals found, petitioner had failed to overcome. Consequently, petitioner must be
adjudged peculiarily liable for the death of the child Raquel Beltran.
The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of
Appeals, however, cannot be sustained. Generally, the appellate court can only pass
upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs
did not appeal from that portion of the judgment of the trial court awarding them on
3

P3,000.00 damages for the death of their daughter. Neither does it appear that, as
appellees in the Court of Appeals, plaintiffs have pointed out in their brief the
inadequacy of the award, or that the inclusion of the figure P3,000.00 was merely a
clerical error, in order that the matter may be treated as an exception to the general
rule.5 Herein petitioner's contention, therefore, that the Court of Appeals committed
error in raising the amount of the award for damages is, evidently,
meritorious.1wph1.t
Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the
petitioner to pay to the respondents Mariano Beltran, et al., the sum of P3,000.00 for the
death of the child, Raquel Beltran, and the amount of P400.00 as actual damages. No
costs in this instance. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 77679

September 30, 1987

VICENTE VERGARA, petitioner,

vs.
THE COURT OF APPEALS and AMADEO AZARCON, respondents.
RESOLUTION

PADILLA, J.:
An action for damages based on quasi-delict (Art. 2176 of the Civil Code) was filed by
private respondent against petitioner. The action arose from a vehicular accident that
occurred on 5 August 1979 in Gapan, Nueva Ecija, when Martin Belmonte, while driving a
cargo truck belonging to petitioner, rammed "head-on" the store-residence of the private
respondent, causing damages thereto which were inventoried and assessed at
P53,024.22.
In his answer to the complaint, the petitioner alleged principally: "that his driver Martin
Belmonte operated said cargo truck in a very diligent (and) careful manner; that the
steering wheel refused to respond to his effort and as a result of a blown-out tire and
despite application of his brakes, the said cargo truck hit the store-residence of plaintiff
(private respondent) and that the said accident was an act of God for which he cannot
be held liable." 1
Petitioner also filed a third party complaint against Travellers Insurance and Surety
Corporation, alleging that said cargo truck involved in the vehicular accident, belonging
to the petitioner, was insured by the third party defendant insurance company. Petitioner
asked that the latter be ordered to pay him whatever amount he may be ordered by the
court to pay to the private respondent.
The trial court rendered judgment in favor of private respondent. Upon appeal to the
Court of Appeals, the latter court affirmed in toto the decision of the trial court, which
ordered Petitioner to pay, jointly and severally with Travellers Insurance and Surety
4

Corporation, to the private, respondent the following: (a) P53,024.22 as actual damages;
(b) P10,000.00 as moral damages; (c) P10,000.00 as exemplary damages; and (d) the
sum of P5,000.00 for attorney's fees and the costs. On the third party complaint, the
insurance company was sentenced to pay to the petitioner the following: (a) P50,000.00
for third party liability under its comprehensive accident insurance policy; and (b)
P3,000.00 for and as attorney's fees.
Hence, this petition for review on certiorari.
Petitioner's contention that the respondent court erred in finding him guilty of fault or
negligence is not tenable. It was established by competent evidence that the requisites
of a quasi-delict are present in the case at bar. These requisites are: (1) damages to the
plaintiff; (2) negligence, by act or omission, of which defendant, or some person for
whose acts he must respond, was guilty; and (3) the connection of cause and effect
between such negligence and the damages.
It is undisputed that private respondent suffered damages as a result of an act or
omission of petitioner. The issue of whether or not this act or omission can be considered
as a "negligent" act or omission was passed upon by the trial court. The findings of said
court, affirmed by the respondent court, which we are not prepared to now disturb, show
that the fact of occurrence of the "vehicular accident" was sufficiently established by the
policy report and the testimony of Patrolman Masiclat. And the fact of negligence may be
deduced from the surrounding circumstances thereof. According to the police report,
"the cargo truck was travelling on the right side of the road going to Manila and then it
crossed to the center line and went to the left side of the highway; it then bumped a
tricycle; and then another bicycle; and then said cargo truck rammed the store
warehouse of the plaintiff." 2
According to the driver of the cargo truck, he applied the brakes but the latter did not
work due to mechanical defect. Contrary to the claim of the petitioner, a mishap caused
by defective brakes can not be consideration as fortuitous in character. Certainly, the
defects were curable and the accident preventable.
Furthermore, the petitioner failed to adduce any evidence to overcome the disputable
presumption of negligence on his part in the selection and supervision of his driver.
Based on the foregoing finding by the respondent Court that there was negligence on
the part of the petitioner, the petitioner's contention that the respondent court erred in
awarding private respondent actual, moral and exemplary damages as well as attorney's
fees and costs, is untenable.
ACCORDINGLY, the petition is DENIED.
SO ORDERED.
Yap (Chairman), Melencio-Herrera, Paras and Sarmiento

Republic of the Philippines

SUPREME COURT
Manila
5

THIRD DIVISION
G.R. No. L-47822 December 22, 1988
PEDRO DE GUZMAN, petitioner,
vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents.
Vicente D. Millora for petitioner.
Jacinto Callanta for private respondent.

FELICIANO, J.:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and
scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material,
respondent would bring such material to Manila for resale. He utilized two (2) six-wheeler
trucks which he owned for hauling the material to Manila. On the return trip to
Pangasinan, respondent would load his vehicles with cargo which various merchants
wanted delivered to differing establishments in Pangasinan. For that service, respondent
charged freight rates which were commonly lower than regular commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized
dealer of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted
with respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of
General Milk in Makati, Rizal, to petitioner's establishment in Urdaneta on or before 4
December 1970. Accordingly, on 1 December 1970, respondent loaded in Makati the
merchandise on to his trucks: 150 cartons were loaded on a truck driven by respondent
himself, while 600 cartons were placed on board the other truck which was driven by
Manuel Estrada, respondent's driver and employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes
never reached petitioner, since the truck which carried these boxes was hijacked
somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took
with them the truck, its driver, his helper and the cargo.
On 6 January 1971, petitioner commenced action against private respondent in the Court
of First Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of
the lost merchandise, plus damages and attorney's fees. Petitioner argued that private
respondent, being a common carrier, and having failed to exercise the extraordinary
diligence required of him by the law, should be held liable for the value of the
undelivered goods.
In his Answer, private respondent denied that he was a common carrier and argued that
he could not be held responsible for the value of the lost goods, such loss having been
due to force majeure.
On 10 December 1975, the trial court rendered a Decision 1 finding private respondent
to be a common carrier and holding him liable for the value of the undelivered goods (P
22,150.00) as well as for P 4,000.00 as damages and P 2,000.00 as attorney's fees.

On appeal before the Court of Appeals, respondent urged that the trial court had erred in
considering him a common carrier; in finding that he had habitually offered trucking
services to the public; in not exempting him from liability on the ground of force
majeure; and in ordering him to pay damages and attorney's fees.
The Court of Appeals reversed the judgment of the trial court and held that respondent
had been engaged in transporting return loads of freight "as a casual
occupation a sideline to his scrap iron business" and not as a common carrier.
Petitioner came to this Court by way of a Petition for Review assigning as errors the
following conclusions of the Court of Appeals:
1.

that private respondent was not a common carrier;

2.

that the hijacking of respondent's truck was force majeure; and

3.
that respondent was not liable for the value of the undelivered cargo. (Rollo, p.
111)
We consider first the issue of whether or not private respondent Ernesto Cendana may,
under the facts earlier set forth, be properly characterized as a common carrier.
The Civil Code defines "common carriers" in the following terms:
Article 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.
The above article makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as an
ancillary activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids making
any distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
services to the "general public," i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general population.
We think that Article 1733 deliberaom making such distinctions.
So understood, the concept of "common carrier" under Article 1732 may be seen to
coincide neatly with the notion of "public service," under the Public Service Act
(Commonwealth Act No. 1416, as amended) which at least partially supplements the law
on common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the
Public Service Act, "public service" includes:
... every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any
common carrier, railroad, street railway, traction railway, subway motor vehicle, either
for freight or passenger, or both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express service, steamboat, or
steamship line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant,
ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water
supply and power petroleum, sewerage system, wire or wireless communications
7

systems, wire or wireless broadcasting stations and other similar public services. ...
(Emphasis supplied)
It appears to the Court that private respondent is properly characterized as a common
carrier even though he merely "back-hauled" goods for other merchants from Manila to
Pangasinan, although such back-hauling was done on a periodic or occasional rather
than regular or scheduled manner, and even though private respondent's principal
occupation was not the carriage of goods for others. There is no dispute that private
respondent charged his customers a fee for hauling their goods; that fee frequently fell
below commercial freight rates is not relevant here.
The Court of Appeals referred to the fact that private respondent held no certificate of
public convenience, and concluded he was not a common carrier. This is palpable error.
A certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers. That liability arises the moment a
person or firm acts as a common carrier, without regard to whether or not such carrier
has also complied with the requirements of the applicable regulatory statute and
implementing regulations and has been granted a certificate of public convenience or
other franchise. To exempt private respondent from the liabilities of a common carrier
because he has not secured the necessary certificate of public convenience, would be
offensive to sound public policy; that would be to reward private respondent precisely for
failing to comply with applicable statutory requirements. The business of a common
carrier impinges directly and intimately upon the safety and well being and property of
those members of the general community who happen to deal with such carrier. The law
imposes duties and liabilities upon common carriers for the safety and protection of
those who utilize their services and the law cannot allow a common carrier to render
such duties and liabilities merely facultative by simply failing to obtain the necessary
permits and authorizations.
We turn then to the liability of private respondent as a common carrier.
Common carriers, "by the nature of their business and for reasons of public policy" 2 are
held to a very high degree of care and diligence ("extraordinary diligence") in the
carriage of goods as well as of passengers. The specific import of extraordinary diligence
in the care of goods transported by a common carrier is, according to Article 1733,
"further expressed in Articles 1734,1735 and 1745, numbers 5, 6 and 7" of the Civil
Code.
Article 1734 establishes the general rule that common carriers are responsible for the
loss, destruction or deterioration of the goods which they carry, "unless the same is due
to any of the following causes only:
(1)
(2)
(3)
(4)
(5)

Flood, storm, earthquake, lightning or other natural disaster or calamity;

Act of the public enemy in war, whether international or civil;
Act or omission of the shipper or owner of the goods;
The character-of the goods or defects in the packing or-in the containers; and
Order or act of competent public authority.

It is important to point out that the above list of causes of loss, destruction or
deterioration which exempt the common carrier for responsibility therefor, is a closed
list. Causes falling outside the foregoing list, even if they appear to constitute a species
of force majeure fall within the scope of Article 1735, which provides as follows:

In all cases other than those mentioned in numbers 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. (Emphasis supplied)
Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific
cause alleged in the instant case the hijacking of the carrier's truck does not fall
within any of the five (5) categories of exempting causes listed in Article 1734. It would
follow, therefore, that the hijacking of the carrier's vehicle must be dealt with under the
provisions of Article 1735, in other words, that the private respondent as common carrier
is presumed to have been at fault or to have acted negligently. This presumption,
however, may be overthrown by proof of extraordinary diligence on the part of private
respondent.
Petitioner insists that private respondent had not observed extraordinary diligence in the
care of petitioner's goods. Petitioner argues that in the circumstances of this case,
private respondent should have hired a security guard presumably to ride with the truck
carrying the 600 cartons of Liberty filled milk. We do not believe, however, that in the
instant case, the standard of extraordinary diligence required private respondent to
retain a security guard to ride with the truck and to engage brigands in a firelight at the
risk of his own life and the lives of the driver and his helper.
The precise issue that we address here relates to the specific requirements of the duty of
extraordinary diligence in the vigilance over the goods carried in the specific context of
hijacking or armed robbery.
As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under
Article 1733, given additional specification not only by Articles 1734 and 1735 but also
by Article 1745, numbers 4, 5 and 6, Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be considered unreasonable, unjust and
contrary to public policy:
xxx

xxx

xxx

(5)
that the common carrier shall not be responsible for the acts or omissions 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; and
(7)
that the common carrier shall 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. (Emphasis supplied)
Under Article 1745 (6) above, a common carrier is held responsible and will not be
allowed to divest or to diminish such responsibility even for acts of strangers like
thieves or robbers, except where such thieves or robbers in fact acted "with grave or
irresistible threat, violence or force." We believe and so hold that the limits of the duty of
extraordinary diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or irresistible threat,
violence or force."
9

In the instant case, armed men held up the second truck owned by private respondent
which carried petitioner's cargo. The record shows that an information for robbery in
band was filed in the Court of First Instance of Tarlac, Branch 2, in Criminal Case No. 198
entitled "People of the Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina,
Oscar Oria and one John Doe." There, the accused were charged with willfully and
unlawfully taking and carrying away with them the second truck, driven by Manuel
Estrada and loaded with the 600 cartons of Liberty filled milk destined for delivery at
petitioner's store in Urdaneta, Pangasinan. The decision of the trial court shows that the
accused acted with grave, if not irresistible, threat, violence or force. 3 Three (3) of the
five (5) hold-uppers were armed with firearms. The robbers not only took away the truck
and its cargo but also kidnapped the driver and his helper, detaining them for several
days and later releasing them in another province (in Zambales). The hijacked truck was
subsequently found by the police in Quezon City. The Court of First Instance convicted all
the accused of robbery, though not of robbery in band. 4
In these circumstances, we hold that the occurrence of the loss must reasonably be
regarded as quite beyond the control of the common carrier and properly regarded as a
fortuitous event. It is necessary to recall that even common carriers are not made
absolute insurers against all risks of travel and of transport of goods, and are not held
liable for acts or events which cannot be foreseen or are inevitable, provided that they
shall have complied with the rigorous standard of extraordinary diligence.
We, therefore, agree with the result reached by the Court of Appeals that private
respondent Cendana is not liable for the value of the undelivered merchandise which
was lost because of an event entirely beyond private respondent's control.
ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and the Decision of
the Court of Appeals dated 3 August 1977 is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-31379 August 29, 1988
COMPAIA MARITIMA, petitioner,
vs.
COURT OF APPEALS and VICENTE CONCEPCION, respondents.
Rafael Dinglasan for petitioner.
Benjamin J. Molina for private respondent.

FERNAN, C.J.:
10

Petitioner Compaia Maritima seeks to set aside through this petition for review on
certiorari the decision 1 of the Court of Appeals dated December 5, 1965, adjudging
petitioner liable to private respondent Vicente E. Concepcion for damages in the amount
of P24,652.97 with legal interest from the date said decision shall have become final, for
petitioner's failure to deliver safely private respondent's payloader, and for costs of suit.
The payloader was declared abandoned in favor of petitioner.
The facts of the case are as follows:
Private respondent Vicente E. Concepcion, a civil engineer doing business under the
name and style of Consolidated Construction with office address at Room 412, Don
Santiago Bldg., Taft Avenue, Manila, had a contract with the Civil Aeronautics
Administration (CAA) sometime in 1964 for the construction of the airport in Cagayan de
Oro City Misamis Oriental.
Being a Manila based contractor, Vicente E. Concepcion had to ship his construction
equipment to Cagayan de Oro City. Having shipped some of his equipment through
petitioner and having settled the balance of P2,628.77 with respect to said shipment,
Concepcion negotiated anew with petitioner, thru its collector, Pacifico Fernandez, on
August 28, 1964 for the shipment to Cagayan de Oro City of one (1) unit payloader, four
(4) units 6x6 Reo trucks and two (2) pieces of water tanks. He was issued Bill of Lading
113 on the same date upon delivery of the equipment at the Manila North Harbor. 2
These equipment were loaded aboard the MV Cebu in its Voyage No. 316, which left
Manila on August 30, 1964 and arrived at Cagayan de Oro City in the afternoon of
September 1, 1964. The Reo trucks and water tanks were safely unloaded within a few
hours after arrival, but while the payloader was about two (2) meters above the pier in
the course of unloading, the swivel pin of the heel block of the port block of Hatch No. 2
gave way, causing the payloader to fall. 3 The payloader was damaged and was
thereafter taken to petitioner's compound in Cagayan de Oro City.
On September 7, 1964, Consolidated Construction, thru Vicente E. Concepcion, wrote
Compaia Maritima to demand a replacement of the payloader which it was considering
as a complete loss because of the extent of damage. 4 Consolidated Construction
likewise notified petitioner of its claim for damages. Unable to elicit response, the
demand was repeated in a letter dated October 2, 1964. 5
Meanwhile, petitioner shipped the payloader to Manila where it was weighed at the San
Miguel Corporation. Finding that the payloader weighed 7.5 tons and not 2.5 tons as
declared in the B-111 of Lading, petitioner denied the claim for damages of Consolidated
Construction in its letter dated October 7, 1964, contending that had Vicente E.
Concepcion declared the actual weight of the payloader, damage to their ship as well as
to his payloader could have been prevented. 6
To replace the damaged payloader, Consolidated Construction in the meantime bought a
new one at P45,000.00 from Bormaheco Inc. on December 3, 1964, and on July 6, 1965.,
Vicente E. Concepcion filed an action for damages against petitioner with the then Court
of First Instance of Manila, Branch VII, docketed as Civil Case No. 61551, seeking to
recover damages in the amount of P41,225.00 allegedly suffered for the period of 97
days that he was not able to employ a payloader in the construction job at the rate of
P450.00 a day; P34,000.00 representing the cost of the damaged payloader; Pl 1, 000.
00 representing the difference between the cost of the damaged payloader and that of
the new payloader; P20,000.00 representing the losses suffered by him due to the
11

diversion of funds to enable him to buy a new payloader; P10,000.00 as attorney's fees;
P5,000.00 as exemplary damages; and cost of the suit. 7
After trial, the then Court of First Instance of Manila, Branch VII, dismissed on April 24,
1968 the complaint with costs against therein plaintiff, herein private respondent Vicente
E. Concepcion, stating that the proximate cause of the fall of the payloader was Vicente
E. Concepcion's act or omission in having misrepresented the weight of the payloader as
2.5 tons instead of its true weight of 7.5 tons, which underdeclaration was intended to
defraud Compaia Maritima of the payment of the freight charges and which likewise led
the Chief Officer of the vessel to use the heel block of hatch No. 2 in unloading the
payloader. 8
From the adverse decision against him, Vicente E. Concepcion appealed to the Court of
Appeals which, on December 5, 1965 rendered a decision, the dispositive portion of
which reads:
IN VIEW WHEREOF, judgment must have to be as it is hereby reversed; defendant is
condemned to pay unto plaintiff the sum in damages of P24,652.07 with legal interest
from the date the present decision shall have become final; the payloader is declared
abandoned to defendant; costs against the latter. 9
Hence, the instant petition.
The principal issue in the instant case is whether or not the act of private respondent
Vicente E. Concepcion in furnishing petitioner Compaia Maritima with an inaccurate
weight of 2.5 tons instead of the payloader's actual weight of 7.5 tons was the proximate
and only cause of the damage on the Oliver Payloader OC-12 when it fell while being
unloaded by petitioner's crew, as would absolutely exempt petitioner from liability for
damages under paragraph 3 of Article 1734 of the Civil Code, which provides:
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:
xxx

xxx

xxx

(3)

Act or omission of the shipper or owner of the goods.

Petitioner claims absolute exemption under this provision upon the reasoning that
private respondent's act of furnishing it with an inaccurate weight of the payloader
constitutes misrepresentation within the meaning of "act or omission of the shipper or
owner of the goods" under the above- quoted article. It likewise faults the respondent
Court of Appeals for reversing the decision of the trial court notwithstanding that said
appellate court also found that by representing the weight of the payloader to be only
2.5 tons, private respondent had led petitioner's officer to believe that the same was
within the 5 tons capacity of the heel block of Hatch No. 2. Petitioner would thus insist
that the proximate and only cause of the damage to the payloader was private
respondent's alleged misrepresentation of the weight of the machinery in question;
hence, any resultant damage to it must be borne by private respondent Vicente E.
Concepcion.
The general rule under Articles 1735 and 1752 of the Civil Code is that common carriers
are presumed to have been at fault or to have acted negligently in case the goods
transported by them are lost, destroyed or had deteriorated. To overcome the
presumption of liability for the loss, destruction or deterioration of the goods under
12

Article 1735, the common carriers must prove that they observed extraordinary
diligence as required in Article 1733 of the Civil Code. The responsibility of observing
extraordinary diligence in the vigilance over the goods is further expressed in Article
1734 of the same Code, the article invoked by petitioner to avoid liability for damages.
Corollary is the rule that mere proof of delivery of the goods in good order to a common
carrier, and of their arrival at the place of destination in bad order, makes out prima
facie case against the common carrier, so that if no explanation is given as to how the
loss, deterioration or destruction of the goods occurred, the common carrier must be
held responsible. 10 Otherwise stated, it is incumbent upon the common carrier to prove
that the loss, deterioration or destruction was due to accident or some other
circumstances inconsistent with its liability.
In the instant case, We are not persuaded by the proferred explanation of petitioner
alleged to be the proximate cause of the fall of the payloader while it was being
unloaded at the Cagayan de Oro City pier. Petitioner seems to have overlooked the
extraordinary diligence required of common carriers in the vigilance over the goods
transported by them by virtue of the nature of their business, which is impressed with a
special public duty.
Thus, Article 1733 of the Civil Code provides:
Art. 1733. Common carriers, from the nature of their business and for reason 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, ...
The extraordinary diligence in the vigilance over the goods tendered for shipment
requires the common carrier to know and to follow the required precaution for avoiding
damage to, or destruction of the goods entrusted to it for safe carriage and delivery. It
requires common carriers to render service with the greatest skill and foresight and "to
use all reasonable means to ascertain the nature and characteristic of goods tendered
for shipment, and to exercise due care in the handling and stowage including such
methods as their nature requires." 11 Under Article 1736 of the Civil Code, the
responsibility to observe extraordinary diligence commences and lasts from the time the
goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to
the consignee, or to the person who has the right to receive them without prejudice to
the provisions of Article 1738.
Where, as in the instant case, petitioner, upon the testimonies of its own crew, failed to
take the necessary and adequate precautions for avoiding damage to, or destruction of,
the payloader entrusted to it for safe carriage and delivery to Cagayan de Oro City, it
cannot be reasonably concluded that the damage caused to the payloader was due to
the alleged misrepresentation of private respondent Concepcion as to the correct and
accurate weight of the payloader. As found by the respondent Court of Appeals, the fact
is that petitioner used a 5-ton capacity lifting apparatus to lift and unload a visibly heavy
cargo like a payloader. Private respondent has, likewise, sufficiently established the
laxity and carelessness of petitioner's crew in their methods of ascertaining the weight
of heavy cargoes offered for shipment before loading and unloading them, as is
customary among careful persons.
13

It must be noted that the weight submitted by private respondent Concepcion appearing
at the left-hand portion of Exhibit 8 12 as an addendum to the original enumeration of
equipment to be shipped was entered into the bill of lading by petitioner, thru Pacifico
Fernandez, a company collector, without seeing the equipment to be shipped. 13 Mr.
Mariano Gupana, assistant traffic manager of petitioner, confirmed in his testimony that
the company never checked the information entered in the bill of lading. 14 Worse, the
weight of the payloader as entered in the bill of lading was assumed to be correct by Mr.
Felix Pisang, Chief Officer of MV Cebu. 15
The weights stated in a bill of lading are prima facie evidence of the amount received
and the fact that the weighing was done by another will not relieve the common carrier
where it accepted such weight and entered it on the bill of lading. 16 Besides, common
carriers can protect themselves against mistakes in the bill of lading as to weight by
exercising diligence before issuing the same. 17
While petitioner has proven that private respondent Concepcion did furnish it with an
inaccurate weight of the payloader, petitioner is nonetheless liable, for the damage
caused to the machinery could have been avoided by the exercise of reasonable skill
and attention on its part in overseeing the unloading of such a heavy equipment. And
circumstances clearly show that the fall of the payloader could have been avoided by
petitioner's crew. Evidence on record sufficiently show that the crew of petitioner had
been negligent in the performance of its obligation by reason of their having failed to
take the necessary precaution under the circumstances which usage has established
among careful persons, more particularly its Chief Officer, Mr. Felix Pisang, who is tasked
with the over-all supervision of loading and unloading heavy cargoes and upon whom
rests the burden of deciding as to what particular winch the unloading of the payloader
should be undertaken. 18 While it was his duty to determine the weight of heavy cargoes
before accepting them. Mr. Felix Pisang took the bill of lading on its face value and
presumed the same to be correct by merely "seeing" it. 19 Acknowledging that there
was a "jumbo" in the MV Cebu which has the capacity of lifting 20 to 25 ton cargoes, Mr.
Felix Pisang chose not to use it, because according to him, since the ordinary boom has a
capacity of 5 tons while the payloader was only 2.5 tons, he did not bother to use the
"jumbo" anymore. 20
In that sense, therefore, private respondent's act of furnishing petitioner with an
inaccurate weight of the payloader upon being asked by petitioner's collector, cannot be
used by said petitioner as an excuse to avoid liability for the damage caused, as the
same could have been avoided had petitioner utilized the "jumbo" lifting apparatus
which has a capacity of lifting 20 to 25 tons of heavy cargoes. It is a fact known to the
Chief Officer of MV Cebu that the payloader was loaded aboard the MV Cebu at the
Manila North Harbor on August 28, 1964 by means of a terminal crane. 21 Even if
petitioner chose not to take the necessary precaution to avoid damage by checking the
correct weight of the payloader, extraordinary care and diligence compel the use of the
"jumbo" lifting apparatus as the most prudent course for petitioner.
While the act of private respondent in furnishing petitioner with an inaccurate weight of
the payloader cannot successfully be used as an excuse by petitioner to avoid liability to
the damage thus caused, said act constitutes a contributory circumstance to the
damage caused on the payloader, which mitigates the liability for damages of petitioner
in accordance with Article 1741 of the Civil Code, to wit:
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
14

common carrier, the latter shall be liable in damages, which however, shall be equitably
reduced.
We find equitable the conclusion of the Court of Appeals reducing the recoverable
amount of damages by 20% or 1/5 of the value of the payloader, which at the time the
instant case arose, was valued at P34,000. 00, thereby reducing the recoverable amount
at 80% or 4/5 of P34,000.00 or the sum of P27,200.00. Considering that the freight
charges for the entire cargoes shipped by private respondent amounting to P2,318.40
remained unpaid.. the same would be deducted from the P27,000.00 plus an additional
deduction of P228.63 representing the freight charges for the undeclared weight of 5
tons (difference between 7.5 and 2.5 tons) leaving, therefore, a final recoverable amount
of damages of P24,652.97 due to private respondent Concepcion.
Notwithstanding the favorable judgment in his favor, private respondent assailed the
Court of Appeals' decision insofar as it limited the damages due him to only P24,652.97
and the cost of the suit. Invoking the provisions on damages under the Civil Code, more
particularly Articles 2200 and 2208, private respondent further seeks additional
damages allegedly because the construction project was delayed and that in spite of his
demands, petitioner failed to take any steps to settle his valid, just and demandable
claim for damages.
We find private respondent's submission erroneous. It is well- settled that an appellee,
who is not an appellant, may assign errors in his brief where his purpose is to maintain
the judgment on other grounds, but he may not do so if his purpose is to have the
judgment modified or reversed, for, in such case, he must appeal. 22 Since private
respondent did not appeal from the judgment insofar as it limited the award of damages
due him, the reduction of 20% or 1/5 of the value of the payloader stands.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court
of Appeals is hereby AFFIRMED in all respects with costs against petitioner. In view of the
length of time this case has been pending, this decision is immediately executory.
Gutierrez, Jr., Feliciano, Bidin and Cortes JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-48757 May 30, 1988
MAURO GANZON, petitioner,
vs.
COURT OF APPEALS and GELACIO E. TUMAMBING, respondents.
Antonio B. Abinoja for petitioner.
Quijano, Arroyo & Padilla Law Office for respondents.

15

SARMIENTO, J.:
The private respondent instituted in the Court of First Instance of Manila 1 an action
against the petitioner for damages based on culpa contractual. The antecedent facts, as
found by the respondent Court, 2 are undisputed:
On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B. Ganzon
to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the
lighter LCT "Batman" (Exhibit 1, Stipulation of Facts, Amended Record on Appeal, p. 38).
Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles
where it docked in three feet of water (t.s.n., September 28, 1972, p. 31). On December
1, 1956, Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza,
captain of the lighter, for loading which was actually begun on the same date by the
crew of the lighter under the captain's supervision. When about half of the scrap iron
was already loaded (t.s.n., December 14, 1972, p. 20), Mayor Jose Advincula of
Mariveles, Bataan, arrived and demanded P5,000.00 from Gelacio Tumambing. The latter
resisted the shakedown and after a heated argument between them, Mayor Jose
Advincula drew his gun and fired at Gelacio Tumambing (t.s.n., March 19, 1971, p. 9;
September 28, 1972, pp. 6-7).<re||an1w> The gunshot was not fatal but
Tumambing had to be taken to a hospital in Balanga, Bataan, for treatment (t.s.n., March
19, 1971, p. 13; September 28, 1972, p. 15).
After sometime, the loading of the scrap iron was resumed. But on December 4, 1956,
Acting Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno
Niza and his crew to dump the scrap iron (t.s.n., June 16, 1972, pp. 8-9) where the lighter
was docked (t.s.n., September 28, 1972, p. 31). The rest was brought to the compound
of NASSCO (Record on Appeal, pp. 20-22). Later on Acting Mayor Rub issued a receipt
stating that the Municipality of Mariveles had taken custody of the scrap iron (Stipulation
of Facts, Record on Appeal, p. 40; t.s.n., September 28, 1972, p. 10.)
On the basis of the above findings, the respondent Court rendered a decision, the
dispositive portion of which states:
WHEREFORE, the decision appealed from is hereby reversed and set aside and a new
one entered ordering defendant-appellee Mauro Ganzon to pay plaintiff-appellant
Gelacio E. Tumambimg the sum of P5,895.00 as actual damages, the sum of P5,000.00
as exemplary damages, and the amount of P2,000.00 as attorney's fees. Costs against
defendant-appellee Ganzon. 3
In this petition for review on certiorari, the alleged errors in the decision of the Court of
Appeals are:
I
THE COURT OF APPEALS FINDING THE HEREIN PETITIONER GUILTY OF BREACH OF THE
CONTRACT OF TRANSPORTATION AND IN IMPOSING A LIABILITY AGAINST HIM
COMMENCING FROM THE TIME THE SCRAP WAS PLACED IN HIS CUSTODY AND CONTROL
HAVE NO BASIS IN FACT AND IN LAW.
II
THE APPELLATE COURT ERRED IN CONDEMNING THE PETITIONER FOR THE ACTS OF HIS
EMPLOYEES IN DUMPING THE SCRAP INTO THE SEA DESPITE THAT IT WAS ORDERED BY
THE LOCAL GOVERNMENT OFFICIAL WITHOUT HIS PARTICIPATION.
16

III
THE APPELLATE COURT FAILED TO CONSIDER THAT THE LOSS OF THE SCRAP WAS DUE
TO A FORTUITOUS EVENT AND THE PETITIONER IS THEREFORE NOT LIABLE FOR LOSSES
AS A CONSEQUENCE THEREOF. 4
The petitioner, in his first assignment of error, insists that the scrap iron had not been
unconditionally placed under his custody and control to make him liable. However, he
completely agrees with the respondent Court's finding that on December 1, 1956, the
private respondent delivered the scraps to Captain Filomeno Niza for loading in the
lighter "Batman," That the petitioner, thru his employees, actually received the scraps is
freely admitted. Significantly, there is not the slightest allegation or showing of any
condition, qualification, or restriction accompanying the delivery by the private
respondent-shipper of the scraps, or the receipt of the same by the petitioner. On the
contrary, soon after the scraps were delivered to, and received by the petitionercommon carrier, loading was commenced.
By the said act of delivery, the scraps were unconditionally placed in the possession and
control of the common carrier, and upon their receipt by the carrier for transportation,
the contract of carriage was deemed perfected. Consequently, the petitioner-carrier's
extraordinary responsibility for the loss, destruction or deterioration of the goods
commenced. Pursuant to Art. 1736, such extraordinary responsibility would cease only
upon the delivery, actual or constructive, by the carrier to the consignee, or to the
person who has a right to receive them. 5 The fact that part of the shipment had not
been loaded on board the lighter did not impair the said contract of transportation as the
goods remained in the custody and control of the carrier, albeit still unloaded.
The petitioner has failed to show that the loss of the scraps was due to any of the
following causes enumerated in Article 1734 of the Civil Code, namely:
(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 or 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.

Hence, the petitioner is presumed to have been at fault or to have acted negligently. 6
By reason of this presumption, the court is not even required to make an express finding
of fault or negligence before it could hold the petitioner answerable for the breach of the
contract of carriage. Still, the petitioner could have been exempted from any liability had
he been able to prove that he observed extraordinary diligence in the vigilance over the
goods in his custody, according to all the circumstances of the case, or that the loss was
due to an unforeseen event or to force majeure. As it was, there was hardly any attempt
on the part of the petitioner to prove that he exercised such extraordinary diligence.
It is in the second and third assignments of error where the petitioner maintains that he
is exempt from any liability because the loss of the scraps was due mainly to the
intervention of the municipal officials of Mariveles which constitutes a caso fortuito as
defined in Article 1174 of the Civil Code. 7
17

We cannot sustain the theory of caso fortuito. In the courts below, the petitioner's
defense was that the loss of the scraps was due to an "order or act of competent public
authority," and this contention was correctly passed upon by the Court of Appeals which
ruled that:
... In the second place, before the appellee Ganzon could be absolved from responsibility
on the ground that he was ordered by competent public authority to unload the scrap
iron, it must be shown that Acting Mayor Basilio Rub had the power to issue the disputed
order, or that it was lawful, or that it was issued under legal process of authority. The
appellee failed to establish this. Indeed, no authority or power of the acting mayor to
issue such an order was given in evidence. Neither has it been shown that the cargo of
scrap iron belonged to the Municipality of Mariveles. What we have in the record is the
stipulation of the parties that the cargo of scrap iron was accilmillated by the appellant
through separate purchases here and there from private individuals (Record on Appeal,
pp. 38-39). The fact remains that the order given by the acting mayor to dump the scrap
iron into the sea was part of the pressure applied by Mayor Jose Advincula to shakedown
the appellant for P5,000.00. The order of the acting mayor did not constitute valid
authority for appellee Mauro Ganzon and his representatives to carry out.
Now the petitioner is changing his theory to caso fortuito. Such a change of theory on
appeal we cannot, however, allow. In any case, the intervention of the municipal officials
was not In any case, of a character that would render impossible the fulfillment by the
carrier of its obligation. The petitioner was not duty bound to obey the illegal order to
dump into the sea the scrap iron. Moreover, there is absence of sufficient proof that the
issuance of the same order was attended with such force or intimidation as to
completely overpower the will of the petitioner's employees. The mere difficulty in the
fullfilment of the obligation is not considered force majeure. We agree with the private
respondent that the scraps could have been properly unloaded at the shore or at the
NASSCO compound, so that after the dispute with the local officials concerned was
settled, the scraps could then be delivered in accordance with the contract of carriage.
There is no incompatibility between the Civil Code provisions on common carriers and
Articles 361 8 and 362 9 of the Code of Commerce which were the basis for this Court's
ruling in Government of the Philippine Islands vs. Ynchausti & Co.10 and which the
petitioner invokes in tills petition. For Art. 1735 of the Civil Code, conversely stated,
means that the shipper will suffer the losses and deterioration arising from the causes
enumerated in Art. 1734; and in these instances, the burden of proving that damages
were caused by the fault or negligence of the carrier rests upon him. However, the
carrier must first establish that the loss or deterioration was occasioned by one of the
excepted causes or was due to an unforeseen event or to force majeure. Be that as it
may, insofar as Art. 362 appears to require of the carrier only ordinary diligence, the
same is .deemed to have been modified by Art. 1733 of the Civil Code.
Finding the award of actual and exemplary damages to be proper, the same will not be
disturbed by us. Besides, these were not sufficiently controverted by the petitioner.
WHEREFORE, the petition is DENIED; the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against the petitioner.
This decision is IMMEDIATELY EXECUTORY.
Yap, C.J., Paras and Padilla, JJ., concur.
18

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

I am constrained to dissent.
It is my view that petitioner can not be held liable in damages for the loss and
destruction of the scrap iron. The loss of said cargo was due to an excepted cause an
'order or act of competent public authority" (Article 1734[5], Civil Code).
The loading of the scrap iron on the lighter had to be suspended because of Municipal
Mayor Jose Advincula's intervention, who was a "competent public authority." Petitioner
had no control over the situation as, in fact, Tumambing himself, the owner of the cargo,
was impotent to stop the "act' of said official and even suffered a gunshot wound on the
occasion.
When loading was resumed, this time it was Acting Mayor Basilio Rub, accompanied by
three policemen, who ordered the dumping of the scrap iron into the sea right where the
lighter was docked in three feet of water. Again, could the captain of the lighter and his
crew have defied said order?
Through the "order" or "act" of "competent public authority," therefore, the performance
of a contractual obligation was rendered impossible. The scrap iron that was dumped
into the sea was "destroyed" while the rest of the cargo was "seized." The seizure is
evidenced by the receipt issues by Acting Mayor Rub stating that the Municipality of
Mariveles had taken custody of the scrap iron. Apparently, therefore, the seizure and
destruction of the goods was done under legal process or authority so that petitioner
should be freed from responsibility.
Art. 1743. If through 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.

THIRD DIVISION
[G.R. No. 143133. June 5, 2002]
BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES TRANSPORT
SERVICES, INC., petitioners, vs. PHILIPPINE FIRST INSURANCE CO., INC., respondent.
DECISION
PANGANIBAN, J.:
Proof of the delivery of goods in good order to a common carrier and of their arrival in
bad order at their destination constitutes prima facie fault or negligence on the part of
the carrier. If no adequate explanation is given as to how the loss, the destruction or the
deterioration of the goods happened, the carrier shall be held liable therefor.
19

Statement of the Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the July
15, 1998 Decision[1] and the May 2, 2000 Resolution[2] of the Court of Appeals[3] (CA)
in CA-GR CV No. 53571. The decretal portion of the Decision reads as follows:
WHEREFORE, in the light of the foregoing disquisition, the decision appealed from is
hereby REVERSED and SET ASIDE. Defendants-appellees are ORDERED to jointly and
severally pay plaintiffs-appellants the following:
1) FOUR Hundred Fifty One Thousand Twenty-Seven Pesos and 32/100 (P451,027.32) as
actual damages, representing the value of the damaged cargo, plus interest at the legal
rate from the time of filing of the complaint on July 25, 1991, until fully paid;
2) Attorneys fees amounting to 20% of the claim; and
3) Costs of suit.[4]
The assailed Resolution denied petitioners Motion for Reconsideration.
The CA reversed the Decision of the Regional Trial Court (RTC) of Makati City (Branch
134), which had disposed as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, dismissing the
complaint, as well as defendants counterclaim.[5]
The Facts
The factual antecedents of the case are summarized by the Court of Appeals in this wise:
On June 13, 1990, CMC Trading A.G. shipped on board the MN Anangel Sky at Hamburg,
Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila
consigned to the Philippine Steel Trading Corporation. On July 28, 1990, MN Anangel Sky
arrived at the port of Manila and, within the subsequent days, discharged the subject
cargo. Four (4) coils were found to be in bad order B.O. Tally sheet No. 154974. Finding
the four (4) coils in their damaged state to be unfit for the intended purpose, the
consignee Philippine Steel Trading Corporation declared the same as total loss.
Despite receipt of a formal demand, defendants-appellees refused to submit to the
consignees claim. Consequently, plaintiff-appellant paid the consignee five hundred six
thousand eighty six & 50/100 pesos (P506,086.50), and was subrogated to the latters
rights and causes of action against defendants-appellees. Subsequently, plaintiffappellant instituted this complaint for recovery of the amount paid by them, to the
consignee as insured.
Impugning the propriety of the suit against them, defendants-appellees imputed that the
damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or
defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency of
packing thereof, or to the act or omission of the shipper of the goods or their
representatives. In addition thereto, defendants-appellees argued that their liability, if
there be any, should not exceed the limitations of liability provided for in the bill of
lading and other pertinent laws. Finally, defendants-appellees averred that, in any event,
they exercised due diligence and foresight required by law to prevent any damage/loss
to said shipment.[6]
20

Ruling of the Trial Court

The RTC dismissed the Complaint because respondent had failed to prove its claims with
the quantum of proof required by law.[7]
It likewise debunked petitioners counterclaim, because respondents suit was not
manifestly frivolous or primarily intended to harass them.[8]
Ruling of the Court of Appeals
In reversing the trial court, the CA ruled that petitioners were liable for the loss or the
damage of the goods shipped, because they had failed to overcome the presumption of
negligence imposed on common carriers.
The CA further held as inadequately proven petitioners claim that the loss or the
deterioration of the goods was due to pre-shipment damage.[9] It likewise opined that
the notation metal envelopes rust stained and slightly dented placed on the Bill of
Lading had not been the proximate cause of the damage to the four (4) coils.[10]
As to the extent of petitioners liability, the CA held that the package limitation under
COGSA was not applicable, because the words L/C No. 90/02447 indicated that a higher
valuation of the cargo had been declared by the shipper. The CA, however, affirmed the
award of attorneys fees.
Hence, this Petition.[11]
Issues
In their Memorandum, petitioners raise the following issues for the Courts consideration:
I
Whether or not plaintiff by presenting only one witness who has never seen the subject
shipment and whose testimony is purely hearsay is sufficient to pave the way for the
applicability of Article 1735 of the Civil Code;
II
Whether or not the consignee/plaintiff filed the required notice of loss within the time
required by law;
III
Whether or not a notation in the bill of lading at the time of loading is sufficient to show
pre-shipment damage and to exempt herein defendants from liability;
IV
Whether or not the PACKAGE LIMITATION of liability under Section 4 (5) of COGSA is
applicable to the case at bar.[12]
In sum, the issues boil down to three:
21

1. Whether petitioners have overcome the presumption of negligence of a common

carrier
2. Whether the notice of loss was timely filed
3. Whether the package limitation of liability is applicable
This Courts Ruling
The Petition is partly meritorious.
First Issue:
Proof of Negligence
Petitioners contend that the presumption of fault imposed on common carriers should
not be applied on the basis of the lone testimony offered by private respondent. The
contention is untenable.
Well-settled is the rule that common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence and vigilance with
respect to the safety of the goods and the passengers they transport.[13] Thus, common
carriers are required to render service with the greatest skill and foresight and to use all
reason[a]ble means to ascertain the nature and characteristics of the goods tendered for
shipment, and to exercise due care in the handling and stowage, including such methods
as their nature requires.[14] The extraordinary responsibility lasts from the time the
goods are unconditionally placed in the possession of and received for transportation by
the carrier until they are delivered, actually or constructively, to the consignee or to the
person who has a right to receive them.[15]
This strict requirement is justified by the fact that, without a hand or a voice in the
preparation of such contract, the riding public enters into a contract of transportation
with common carriers.[16] Even if it wants to, it cannot submit its own stipulations for
their approval.[17] Hence, it merely adheres to the agreement prepared by them.
Owing to this high degree of diligence required of them, common carriers, as a general
rule, are presumed to have been at fault or negligent if the goods they transported
deteriorated or got lost or destroyed.[18] That is, unless they prove that they exercised
extraordinary diligence in transporting the goods.[19] In order to avoid responsibility for
any loss or damage, therefore, they have the burden of proving that they observed such
diligence.[20]
However, the presumption of fault or negligence will not arise[21] if the loss is due to
any of the following causes: (1) flood, storm, earthquake, lightning, or other natural
disaster or calamity; (2) an act of the public enemy in war, whether international or civil;
(3) an act or omission of the shipper or owner of the goods; (4) the character of the
goods or defects in the packing or the container; or (5) an order or act of competent
public authority.[22] This is a closed list. If the cause of destruction, loss or deterioration
is other than the enumerated circumstances, then the carrier is liable therefor.[23]
Corollary to the foregoing, mere proof of delivery of the goods in good order to a
common carrier and of their arrival in bad order at their destination constitutes a prima
facie case of fault or negligence against the carrier. If no adequate explanation is given
as to how the deterioration, the loss or the destruction of the goods happened, the
transporter shall be held responsible.[24]
22

That petitioners failed to rebut the prima facie presumption of negligence is revealed in
the case at bar by a review of the records and more so by the evidence adduced by
respondent.[25]
First, as stated in the Bill of Lading, petitioners received the subject shipment in good
order and condition in Hamburg, Germany.[26]
Second, prior to the unloading of the cargo, an Inspection Report[27] prepared and
signed by representatives of both parties showed the steel bands broken, the metal
envelopes rust-stained and heavily buckled, and the contents thereof exposed and rusty.
Third, Bad Order Tally Sheet No. 154979[28] issued by Jardine Davies Transport Services,
Inc., stated that the four coils were in bad order and condition. Normally, a request for a
bad order survey is made in case there is an apparent or a presumed loss or damage.
[29]
Fourth, the Certificate of Analysis[30] stated that, based on the sample submitted and
tested, the steel sheets found in bad order were wet with fresh water.
Fifth, petitioners -- in a letter[31] addressed to the Philippine Steel Coating Corporation
and dated October 12, 1990 -- admitted that they were aware of the condition of the four
coils found in bad order and condition.
These facts were confirmed by Ruperto Esmerio, head checker of BM Santos Checkers
Agency. Pertinent portions of his testimony are reproduce hereunder:
Q. Mr. Esmerio, you mentioned that you are a Head Checker. Will you inform the
Honorable Court with what company you are connected?
A. BM Santos Checkers Agency, sir.
Q. How is BM Santos Checkers Agency related or connected with defendant Jardine
Davies Transport Services?
A. It is the company who contracts the checkers, sir.
Q. You mentioned that you are a Head Checker, will you inform this Honorable Court your
duties and responsibilities?
A. I am the representative of BM Santos on board the vessel, sir, to supervise the
discharge of cargoes.
xxxxxxxxx
Q. On or about August 1, 1990, were you still connected or employed with BM Santos as
a Head Checker?
A. Yes, sir.
Q. And, on or about that date, do you recall having attended the discharging and
inspection of cold steel sheets in coil on board the MV/AN ANGEL SKY?
A. Yes, sir, I was there.
23

xxxxxxxxx
Q. Based on your inspection since you were also present at that time, will you inform this
Honorable Court the condition or the appearance of the bad order cargoes that were
unloaded from the MV/ANANGEL SKY?
ATTY. MACAMAY:
Objection, Your Honor, I think the document itself reflects the condition of the cold steel
sheets and the best evidence is the document itself, Your Honor that shows the condition
of the steel sheets.
COURT:
Let the witness answer.
A. The scrap of the cargoes is broken already and the rope is loosen and the cargoes are
dent on the sides.[32]
All these conclusively prove the fact of shipment in good order and condition and the
consequent damage to the four coils while in the possession of petitioner,[33] who
notably failed to explain why.[34]
Further, petitioners failed to prove that they observed the extraordinary diligence and
precaution which the law requires a common carrier to know and to follow, to avoid
damage to or destruction of the goods entrusted to it for safe carriage and delivery.[35]
True, the words metal envelopes rust stained and slightly dented were noted on the Bill
of Lading; however, there is no showing that petitioners exercised due diligence to
forestall or lessen the loss.[36] Having been in the service for several years, the master
of the vessel should have known at the outset that metal envelopes in the said state
would eventually deteriorate when not properly stored while in transit.[37] Equipped
with the proper knowledge of the nature of steel sheets in coils and of the proper way of
transporting them, the master of the vessel and his crew should have undertaken
precautionary measures to avoid possible deterioration of the cargo. But none of these
measures was taken.[38] Having failed to discharge the burden of proving that they
have exercised the extraordinary diligence required by law, petitioners cannot escape
liability for the damage to the four coils.[39]
In their attempt to escape liability, petitioners further contend that they are exempted
from liability under Article 1734(4) of the Civil Code. They cite the notation metal
envelopes rust stained and slightly dented printed on the Bill of Lading as evidence that
the character of the goods or defect in the packing or the containers was the proximate
cause of the damage. We are not convinced.
From the evidence on record, it cannot be reasonably concluded that the damage to the
four coils was due to the condition noted on the Bill of Lading.[40] The aforecited
exception refers to cases when goods are lost or damaged while in transit as a result of
the natural decay of perishable goods or the fermentation or evaporation of substances
liable therefor, the necessary and natural wear of goods in transport, defects in
packages in which they are shipped, or the natural propensities of animals.[41] None of
these is present in the instant case.
24

Further, even if the fact of improper packing was known to the carrier or its crew or was
apparent upon ordinary observation, it is not relieved of liability for loss or injury
resulting therefrom, once it accepts the goods notwithstanding such condition.[42] Thus,
petitioners have not successfully proven the application of any of the aforecited
exceptions in the present case.[43]
Second Issue:
Notice of Loss
Petitioners claim that pursuant to Section 3, paragraph 6 of the Carriage of Goods by Sea
Act[44] (COGSA), respondent should have filed its Notice of Loss within three days from
delivery. They assert that the cargo was discharged on July 31, 1990, but that
respondent filed its Notice of Claim only on September 18, 1990.[45]
We are not persuaded. First, the above-cited provision of COGSA provides that the notice
of claim need not be given if the state of the goods, at the time of their receipt, has been
the subject of a joint inspection or survey. As stated earlier, prior to unloading the cargo,
an Inspection Report[46] as to the condition of the goods was prepared and signed by
representatives of both parties.[47]
Second, as stated in the same provision, a failure to file a notice of claim within three
days will not bar recovery if it is nonetheless filed within one year.[48] This one-year
prescriptive period also applies to the shipper, the consignee, the insurer of the goods or
any legal holder of the bill of lading.[49]
In Loadstar Shipping Co., Inc. v. Court of Appeals,[50] we ruled that a claim is not barred
by prescription as long as the one-year period has not lapsed. Thus, in the words of the
ponente, Chief Justice Hilario G. Davide Jr.:
Inasmuch as the neither the Civil Code nor the Code of Commerce states a specific
prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA)--which
provides for a one-year period of limitation on claims for loss of, or damage to, cargoes
sustained during transit--may be applied suppletorily to the case at bar.
In the present case, the cargo was discharged on July 31, 1990, while the Complaint[51]
was filed by respondent on July 25, 1991, within the one-year prescriptive period.
Third Issue:
Package Limitation
Assuming arguendo they are liable for respondents claims, petitioners contend that their
liability should be limited to US$500 per package as provided in the Bill of Lading and by
Section 4(5)[52] of COGSA.[53]
On the other hand, respondent argues that Section 4(5) of COGSA is inapplicable,
because the value of the subject shipment was declared by petitioners beforehand, as
evidenced by the reference to and the insertion of the Letter of Credit or L/C No.
90/02447 in the said Bill of Lading.[54]
A bill of lading serves two functions. First, it is a receipt for the goods shipped.[55]
Second, it is a contract by which three parties -- namely, the shipper, the carrier, and the
consignee -- undertake specific responsibilities and assume stipulated obligations.[56] In
a nutshell, the acceptance of the bill of lading by the shipper and the consignee, with full
25

knowledge of its contents, gives rise to the presumption that it constituted a perfected
and binding contract.[57]
Further, a stipulation in the bill of lading limiting to a certain sum the common carriers
liability for loss or destruction of a cargo -- unless the shipper or owner declares a
greater value[58] -- is sanctioned by law.[59] There are, however, two conditions to be
satisfied: (1) the contract is reasonable and just under the circumstances, and (2) it has
been fairly and freely agreed upon by the parties.[60] The rationale for, this rule is to
bind the shippers by their agreement to the value (maximum valuation) of their goods.
[61]
It is to be noted, however, that the Civil Code does not limit the liability of the common
carrier to a fixed amount per package.[62] In all matters not regulated by the Civil Code,
the right and the obligations of common carriers shall be governed by the Code of
Commerce and special laws.[63] Thus, the COGSA, which is suppletory to the provisions
of the Civil Code, supplements the latter by establishing a statutory provision limiting
the carriers liability in the absence of a shippers declaration of a higher value in the bill
of lading.[64] The provisions on limited liability are as much a part of the bill of lading as
though physically in it and as though placed there by agreement of the parties.[65]
In the case before us, there was no stipulation in the Bill of Lading[66] limiting the
carriers liability. Neither did the shipper declare a higher valuation of the goods to be
shipped. This fact notwithstanding, the insertion of the words L/C No. 90/02447 cannot
be the basis for petitioners liability.
First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit
obtained by the shipper for the importation of steel sheets did not effect a declaration of
the value of the goods as required by the bill.[67] That notation was made only for the
convenience of the shipper and the bank processing the Letter of Credit.[68]
Second, in Keng Hua Paper Products v. Court of Appeals,[69] we held that a bill of lading
was separate from the Other Letter of Credit arrangements. We ruled thus:
(T)he contract of carriage, as stipulated in the bill of lading in the present case, must be
treated independently of the contract of sale between the seller and the buyer, and the
contract of issuance of a letter of credit between the amount of goods described in the
commercial invoice in the contract of sale and the amount allowed in the letter of credit
will not affect the validity and enforceability of the contract of carriage as embodied in
the bill of lading. As the bank cannot be expected to look beyond the documents
presented to it by the seller pursuant to the letter of credit, neither can the carrier be
expected to go beyond the representations of the shipper in the bill of lading and to
verify their accuracy vis--vis the commercial invoice and the letter of credit. Thus, the
discrepancy between the amount of goods indicated in the invoice and the amount in
the bill of lading cannot negate petitioners obligation to private respondent arising from
the contract of transportation.[70]
In the light of the foregoing, petitioners liability should be computed based on US$500
per package and not on the per metric ton price declared in the Letter of Credit.[71] In
Eastern Shipping Lines, Inc. v. Intermediate Appellate Court[72] we explained the
meaning of package:
When what would ordinarily be considered packages are shipped in a container supplied
by the carrier and the number of such units is disclosed in the shipping documents, each
26

of those units and not the container constitutes the package referred to in the liability
limitation provision of Carriage of Goods by Sea Act.
Considering, therefore, the ruling in Eastern Shipping Lines and the fact that the Bill of
Lading clearly disclosed the contents of the containers, the number of units, as well as
the nature of the steel sheets, the four damaged coils should be considered as the
shipping unit subject to the US$500 limitation.
WHEREFORE, the Petition is partly granted and the assailed Decision MODIFIED.
Petitioners liability is reduced to US$2,000 plus interest at the legal rate of six percent
from the time of the filing of the Complaint on July 25, 1991 until the finality of this
Decision, and 12 percent thereafter until fully paid. No pronouncement as to costs.
SO ORDERED.
Sandoval-Gutierrez, and Carpio, JJ., concur.
Puno, J., (Chairman), abroad, on official leave.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 95536

March 23, 1992

ANICETO G. SALUDO, JR., MARIA SALVACION SALUDO, LEOPOLDO G. SALUDO and

SATURNINO G. SALUDO, petitioners,
vs.
HON. COURT OF APPEALS, TRANS WORLD AIRLINES, INC., and PHILIPPINE AIRLINES, INC.,
respondents.

REGALADO, J.:
Assailed in this petition for review on certiorari is the decision in CA-G.R. CV No. 20951 of
respondent Court of Appeals 1 which affirmed the decision of the trial court 2 dismissing
for lack of evidence herein petitioners' complaint in Civil Case No R-2101 of the then
Court of First Instance of Southern Leyte, Branch I.
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
27

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). 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 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-ORD01180454 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. 1TWA). "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. 6-TWA), 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
28

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 6 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.
As earlier stated, the court below absolved the two respondent airlines companies of
liability. 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.
In predictable disagreement and dissatisfaction with the conclusions reached by
respondent appellate court, petitioners now urge this Court to review the appealed
decision and to resolve whether or not (1) the delay in the delivery of the casketed
remains of petitioners' mother was due to the fault of respondent airline companies, (2)
the one-day delay in the delivery of the same constitutes contractual breach as would
entitle petitioners to damages, (3) damages are recoverable by petitioners for the
humiliating, arrogant and indifferent acts of the employees of TWA and PAL, and (4)
private respondents should be held liable for actual, moral and exemplary damages,
aside from attorney's fees and litigation expenses. 8
At the outset and in view of the spirited exchanges of the parties on this aspect, it is to
be stressed that only questions of law may be raised in a petition filed in this Court to
review on certiorari the decision of the Court of Appeals. 9 This being so, the factual
findings of the Court of Appeals are final and conclusive and cannot be reviewed by the
Supreme Court. The rule, however, admits of established exceptions, to wit: (a) where
there is grave abuse of discretion; (b) when the finding is grounded entirely on
speculations, surmises or conjectures;(c) when the inference made is manifestlymistaken, absurd or impossible; (d) when the judgment of the Court of Appeals was
based on a misapprehension of facts; (e) when the factual findings are conflicting; (f)
when the Court of Appeals, in making its findings, went beyond the issues of the case
and the same are contrary to the admissions of both appellant and appellee; 10 (g)
when the Court of Appeals manifestly overlooked certain relevant facts not disputed by
the parties and which, if properly considered, would justify a different conclusion; 11 and
(h) where the findings of fact of the Court of Appeals are contrary to those of the trial
29

court, or are mere conclusions without citation of specific evidence, or where the facts of
set forth by the petitioner are not disputed by the respondent, or where the findings of
fact of the Court of Appeals are premised on the absence of evidence and are
contradicted by the evidence on record. 12
To distinguish, a question of law is one which involves a doubt or controversy on what
the law is on a certain state of facts; and, a question of fact, contrarily, is one in which
there is a doubt or difference as to the truth or falsehood of the alleged facts. 13 One
test, it has been held, is whether the appellate court can determine the issue raised
without reviewing or evaluating the evidence, in which case it is a question of law,
otherwise it will be a question of fact. 14
Respondent airline companies object to the present recourse of petitioners on the
ground that this petition raises only factual questions. 15 Petitioners maintain otherwise
or, alternatively, they are of the position that, assuming that the petition raises factual
questions, the same are within the recognized exceptions to the general rule as would
render the petition cognizable and worthy of review by the Court. 16
Since it is precisely the soundness of the inferences or conclusions that may be drawn
from the factual issues which are here being assayed, we find that the issues raised in
the instant petition indeed warrant a second look if this litigation is to come to a
reasonable denouement. A discussion seriatim of said issues will further reveal that the
sequence of the events involved is in effect disputed. Likewise to be settled is whether
or not the conclusions of the Court of Appeals subject of this review indeed find
evidentiary and legal support.
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." 17
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. 07901180454 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.
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)." 19
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. 20 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. 21 The two-fold
character of a bill of lading is all too familiar; it is a receipt as to the quantity and
30

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
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. 23 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.
Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for
transportation but, when issued, is competent and prima facie, but not conclusive,
evidence of delivery to the carrier. A bill of lading, when properly executed and delivered
to a shipper, is evidence that the carrier has received the goods described therein for
shipment. Except as modified by statute, it is a general rule as to the parties to a
contract of carriage of goods in connection with which a bill of lading is issued reciting
that goods have been received for transportation, that the recital being in essence a
receipt alone, is not conclusive, but may be explained, varied or contradicted by parol or
other evidence. 24
While we agree with petitioners' statement that "an airway bill estops the carrier from
denying receipt of goods of the quantity and quality described in the bill," a further
reading and a more faithful quotation of the authority cited would reveal that "(a) bill of
lading may contain constituent elements of estoppel and thus become something more
than a contract between the shipper and the carrier. . . . (However), as between the
shipper and the carrier, when no goods have been delivered for shipment no recitals in
the bill can estop the carrier from showing the true facts . . . Between the consignor of
goods and receiving carrier, recitals in a bill of lading as to the goods shipped raise only
a rebuttable presumption that such goods were delivered for shipment. As between the
consignor and a receiving carrier, the fact must outweigh the recital." 25 (Emphasis
supplied)
For this reason, we must perforce allow explanation by private respondents why, despite
the issuance of the airway bill and the date thereof, they deny having received the
remains of Crispina Saludo on October 26, 1976 as alleged by petitioners.
The findings of the trial court, as favorably adopted by the Court of Appeals and which
we have earner quoted, provide us with the explanation that sufficiently over comes the
presumption relied on by petitioners in insisting that the remains of their mother were
delivered to and received by private respondents on October 26, 1976. Thus
. . . 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) (Exh. 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 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. G-TWA). C.M.A.S. booked the
shipment with PAL thru the carrier's agent Air Care International, with Pomierski F.H. as
31

the shipper and Mario (Maria) Saludo as the consignee. PAL Airway Bill No. 07901180454 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 of the same date, and from Manila to Cebu on board PA L
Flight 149 of October 29, 1976 (See Exh. E, also Exh. 1-PAL). 26 (Emphasis ours.)
Moreover, we are persuaded to believe private respondent PAL's account as to what
transpired October 26, 1976:
. . . Pursuant thereto, on 26 October 1976, CMAS acting upon the instruction of
Pomierski, F.H., the shipper requested booking of the casketed remains of Mrs. Cristina
(sic) Saludo on board PAL's San Francisco-Manila Flight No. PR 107 on October 27, 1976.
2.
To signify acceptance and confirmation of said booking, PAL issued to said
Pomierski F.H., PAL Airway Bill No. 079-01180454 dated October 27, 1976 (sic,
"10/26/76"). PAL confirmed the booking and transporting of the shipment on board of its
Flight PR 107 on October 27, 1976 on the basis of the representation of the shipper
and/or CMAS that the said cargo would arrive in San Francisco from Chicago on board
United Airlines Flight US 121 on 27 October 1976. 27
In other words, on October 26, 1976 the cargo containing the casketed remains of
Crispina Saludo was booked for PAL Flight Number PR-107 leaving San Francisco for
Manila on October 27, 1976, PAL Airway Bill No. 079-01180454 was issued, not as
evidence of receipt of delivery of the cargo on October 26, 1976, but merely as a
confirmation of the booking thus made for the San Francisco-Manila flight scheduled on
October 27, 1976. Actually, it was not until 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. 28
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, 29 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. 30 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. 31 Where
such a delivery has thus been accepted by the carrier, the liability of the common carrier
commences eo instanti. 32
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.
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
32

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, C.M.A.S. made all
the necessary arrangements such as flights, transfers, etc. for shipment of the
remains of Crispina Saludo.
The remains were taken on October 26th, 1976, to C.M.A.S. at the airport. These people
made all the necessary arrangements, such as flights, transfers, etc. This is a national
service used by undertakers throughout the nation. They furnished the air pouch which
the casket is enclosed in, and they see that the remains are taken to the proper air
frieght terminal. I was very surprised when Miss Saludo called me to say that the
remains were not at the west coast terminal. I immediately called C.M.A.S. They called
me back in a matter of ten minutes to inform me that the remains were on a plane to
Mexico City. The man said that there were two bodies at the terminal, and somehow they
were switched. . . . (Exb. 6 "TWA", which is the memo or incident report enclosed in
the stationery of Walter Pomierski & Sons Ltd.)
Consequently, when the cargo was received from C.M.A.S. at the Chicago airport
terminal for shipment, which was supposed to contain the remains of Crispina Saludo, Air
Care International and/or TWA, had no way of determining its actual contents, since the
casket was hermetically sealed by the Philippine Vice-Consul in Chicago and in an air
33

pouch of C.M.A.S., to the effect that Air Care International and/or TWA had to rely on the
information furnished by the shipper regarding the cargo's content. Neither could Air
Care International and/or TWA open the casket for further verification, since they were
not only without authority to do so, but even prohibited.
Thus, under said circumstances, no fault and/or negligence can be attributed to PAL
(even if Air Care International should be considered as an agent of PAL) and/or TWA, the
entire fault or negligence being exclusively with C.M.A.S. 33 (Emphasis supplied.)
It can correctly and logically be concluded, therefore, that the switching occurred or,
more accurately, was discovered on October 27, 1976; and based on the above findings
of the Court of appeals, it happened while the cargo was still with CMAS, well before the
same was place in the custody of private respondents.
Thus, while the Air Cargo Transfer Manifest of TWA of October 27, 1976 34 was signed by
Garry Marcial of PAL at 1400H, or 2:00 P.M., on the same date, thereby indicating
acknowledgment by PAL of the transfer to them by TWA of what was in truth the
erroneous cargo, said misshipped cargo was in fact withdrawn by CMAS from PAL as
shown by the notation on another copy of said manifest 35 stating "Received by CMAS
Due to switch in Chicago 10/27-1805H," the authenticity of which was never challenged.
This shows that said misshipped cargo was in fact withdrawn by CMAS from PAL and the
correct shipment containing the body of Crispina Saludo was received by PAL only on
October 28, 1976, at 1945H, or 7:45 P.M., per American Airlines Interline Freight Transfer
Manifest No. AA204312. 36
Witness the deposition of TWA's ramp serviceman, Michael Giosso, on this matter:
ATTY. JUAN COLLAS, JR.:
On that date, do (sic) you have occasion to handle or deal with the transfer of cargo from
TWA Flight No. 603 to PAL San Francisco?
MICHAEL GIOSSO:
Yes, I did.
ATTY. JUAN COLLAS, JR.:
What was your participation with the transfer of the cargo?
MICHAEL GIOSSO:
I manifested the freight on a transfer manifest and physically moved it to PAL and
concluded the transfer by signing it off.
ATTY. JUAN COLLAS, JR.:
You brought it there yourself?
MICHAEL GIOSSO:
Yes sir.
ATTY. JUAN COLIAS, JR.:
34

Do you have anything to show that PAL received the cargo from TWA on October 27,
1976?
MICHAEL GIOSSO:
Yes, I do.
(Witness presenting a document)
ATTY. JUAN COLLAS, JR.:
For purposes of clarity, Exhibit I is designated as Exhibit I-TWA.
xxx

xxx

xxx

ATTY. JUAN COLLAS, JR.:

This Exhibit I-TWA, could you tell what it is, what it shows?
MICHAEL GIOSSO:
It shows transfer of manifest on 10-27-76 to PAL at 1400 and verified with two signatures
as it completed the transfer.
ATTY. JUAN COLLAS, JR.:
Very good,. Who was the PAL employee who received the cargo?
MICHAEL GIOSSO:
The name is Garry Marcial." 37
The deposition of Alberto A. Lim, PAL's cargo supervisor at San Francisco, as deponentwitness for PAL, makes this further clarification:
ATTY. CESAR P. MANALAYSAY:
You mentioned Airway Bill, Mr. Lim. I am showing to you a PAL Airway Bill Number
01180454 which for purposes of evidence, I would like to request that the same be
marked as evidence Exhibit I for PAL.
xxx

xxx

xxx

In what circumstances did you encounter Exhibit I-PAL?

ALBERTO A. LIM:
If I recall correctly, I was queried by Manila, our Manila office with regard to a certain
complaint that a consignee filed that this shipment did not arrive on the day that the
consignee expects the shipment to arrive.
ATTY CESAR P. MANALAYSAY:
35

Okay. Now, upon receipt of that query from your Manila office, did you conduct any
investigation to pinpoint the possible causes of mishandling?
ALBERTO A. LIM:
Yes.
xxx

xxx

xxx

ATTY. CESAR P. MANALAYSAY:

What is the result of your investigation?
ALBERTO A. LIM:
In the course of my investigation, I found that we received the body on October 28,
1976, from American Airlines.
ATTY. CESAR P. MANALAYSAY:
What body are you referring to?
xxx

xxx

xxx

ALBERTO A. LIM:
The remains of Mrs. Cristina (sic) Saludo.
ATTY. CESAR P. MANALAYSAY:
Is that the same body mentioned in this Airway Bill?
ALBERTO A. LIM:
Yes.
ATTY. CESAR P. MANALAYSAY:
What time did you receive said body on October 28, 1976?
ALBERTO A. LIM:
If I recall correctly, approximately 7:45 of October 28, 1976.
ATTY. CESAR P. MANALAYSAY:
Do you have any proof with you to back the statement?
ALBERTO A. LIM:
Yes. We have on our records a Transfer Manifest from American Airlines Number 204312
showing that we received a human remains shipment belong to Mrs. Cristina (sic) Saludo
or the human remains of Mrs. Cristina (sic) Saludo.
36

ATTY. CESAR P. MAIALAYSAY:

At this juncture, may I request that the Transfer Manifest referred to by the witness be
marked as an evidence as Exhibit II-PAL.
xxx

xxx

xxx

Mr. Lim, yesterday your co-defendant TWA presented as their Exhibit I evidence tending
to show that on October 27, 1976 at about 2:00 in the, afternoon they delivered to you a
cargo bearing human remains. Could you go over this Exhibit I and please give us your
comments as to that exhibit?
ATTY. ALBERTO C. MENDOZA:
That is a vague question. I would rather request that counsel propound specific
questions rather than asking for comments on Exhibit I-TWA.
ATTY. CESAR P. MANALAYSAY:
In that case, I will reform my question. Could you tell us whether TWA in fact delivered to
you the human remains as indicated in that Transfer Manifest?
ALBERTO A. LIM:
Yes, they did.
ATTY. CESAR P. MANALAYSAY:
I noticed that the Transfer Manifest of TWA marked as Exhibit I-TWA bears the same
numbers or the same entries as the Airway Bill marked as Exhibit I-A PAL tending to
show that this is the human remains of Mrs Cristina (sic) Saludo. Could you tell us
whether this is true?
ALBERTO A. LIM:
It is true that we received human remains shipment from TWA as indicated on this
Transfer Manifest. But in the course of investigation, it was found out that the human
remains transferred to us is not the remains of Mrs. Cristina (sic) Saludo this is the
reason why we did not board it on our flight. 38
Petitioners consider TWA's statement that "it had to rely on the information furnished by
the shipper" a lame excuse and that its failure to prove that its personnel verified and
identified the contents of the casket before loading the same constituted negligence on
the part of TWA. 39
We upbold the favorable consideration by the Court of Appeals of the following findings
of the trial court:
It was not (to) TWA, but to C.M.A.S. that the Pomierski & Son Funeral Home delivered the
casket containing the remains of Crispina Saludo. TWA would have no knowledge
therefore that the remains of Crispina Saludo were not the ones inside the casket that
was being presented to it for shipment. TWA would have to rely on there presentations of
C.M.A.S. The casket was hermetically sealed and also sealed by the Philippine Vice
Consul in Chicago. TWA or any airline for that matter would not have opened such a
37

sealed casket just for the purpose of ascertaining whose body was inside and to make
sure that the remains inside were those of the particular person indicated to be by
C.M.A.S. TWA had to accept whatever information was being furnished by the shipper or
by the one presenting the casket for shipment. And so as a matter of fact, TWA carried to
San Francisco and transferred to defendant PAL a shipment covered by or under PAL
Airway Bill No. 079-ORD-01180454, the airway bill for the shipment of the casketed
remains of Crispina Saludo. Only, it turned out later, while the casket was already with
PAL, that what was inside the casket was not the body of Crispina Saludo so much so
that it had to be withdrawn by C.M.A.S. from PAL. The body of Crispina Saludo had been
shipped to Mexico. The casket containing the remains of Crispina Saludo was
transshipped from Mexico and arrived in San Francisco the following day on board
American Airlines. It was immediately loaded by PAL on its flight for Manila.
The foregoing points at C.M.A.S., not defendant TWA much less defendant PAL, as the
ONE responsible for the switching or mix-up of the two bodies at the Chicago Airport
terminal, and started a chain reaction of the misshipment of the body of Crispina Saludo
and a one-day delay in the delivery thereof to its destination. 40
Verily, no amount of inspection by respondent airline companies could have guarded
against the switching that had already taken place. Or, granting that they could have
opened the casket to inspect its contents, private respondents had no means of
ascertaining whether the body therein contained was indeed that of Crispina Saludo
except, possibly, if the body was that of a male person and such fact was visually
apparent upon opening the casket. However, to repeat, private respondents had no
authority to unseal and open the same nor did they have any reason or justification to
resort thereto.
It is the right of the carrier to require good faith on the part of those persons who deliver
goods to be carried, or enter into contracts with it, and inasmuch as the freight may
depend on the value of the article to be carried, the carrier ordinarily has the right to
inquire as to its value. Ordinarily, too, it is the duty of the carrier to make inquiry as to
the general nature of the articles shipped and of their value before it consents to carry
them; and its failure to do so cannot defeat the shipper's right to recovery of the full
value of the package if lost, in the absence of showing of fraud or deceit on the part of
the shipper. In the absence of more definite information, the carrier has a the right to
accept shipper's marks as to the contents of the package offered for transportation and
is not bound to inquire particularly about them in order to take advantage of a false
classification and where a shipper expressly represents the contents of a package to be
of a designated character, it is not the duty of the carrier to ask for a repetition of the
statement nor disbelieve it and open the box and see for itself. 41 However, where a
common carrier has reasonable ground to suspect that the offered goods are of a
dangerous or illegal character, the carrier has the right to know the character of such
goods and to insist on an inspection, if reasonable and practical under the
circumstances, as a condition of receiving and transporting such goods. 42
It can safely be said then that a common carrier is entitled to fair representation of the
nature and value of the goods to be carried, with the concomitant right to rely thereon,
and further noting at this juncture that a carrier has no obligation to inquire into the
correctness or sufficiency of such information. 43 The consequent duty to conduct an
inspection thereof arises in the event that there should be reason to doubt the veracity
of such representations. Therefore, to be subjected to unusual search, other than the
routinary inspection procedure customarily undertaken, there must exist proof that
would justify cause for apprehension that the baggage is dangerous as to warrant
exhaustive inspection, or even refusal to accept carriage of the same; and it is the failure
38

of the carrier to act accordingly in the face of such proof that constitutes the basis of the
common carrier's liability. 44
In the case at bar, private respondents had no reason whatsoever to doubt the truth of
the shipper's representations. The airway bill expressly providing that "carrier certifies
goods received below were received for carriage," and that the cargo contained
"casketed human remains of Crispina Saludo," was issued on the basis of such
representations. The reliance thereon by private respondents was reasonable and, for so
doing, they cannot be said to have acted negligently. Likewise, no evidence was adduced
to suggest even an iota of suspicion that the cargo presented for transportation was
anything other than what it was declared to be, as would require more than routine
inspection or call for the carrier to insist that the same be opened for scrutiny of its
contents per declaration.
Neither can private respondents be held accountable on the basis of petitioners'
preposterous proposition that whoever brought the cargo to the airport or loaded it on
the airplane did so as agent of private respondents, so that even if CMAS whose services
were engaged for the transit arrangements for the remains was indeed at fault, the
liability therefor would supposedly still be attributable to private respondents.
While we agree that the actual participation of CMAS has been sufficiently and correctly
established, to hold that it acted as agent for private respondents would be both an
inaccurate appraisal and an unwarranted categorization of the legal position it held in
the entire transaction.
It bears repeating that CMAS was hired to handle all the necessary shipping
arrangements for the transportation of the human remains of Crispina Saludo to Manila.
Hence, it was to CMAS that the Pomierski & Son Funeral Home, as shipper, brought the
remains of petitioners' mother for shipment, with Maria Saludo as consignee. Thereafter,
CMAS booked the shipment with PAL through the carrier's agent, Air Care International.
45 With its aforestated functions, CMAS may accordingly be classified as a forwarder
which, by accepted commercial practice, is regarded as an agent of the shipper and not
of the carrier. As such, it merely contracts for the transportation of goods by carriers,
and has no interest in the freight but receives compensation from the shipper as his
agent. 46
At this point, it can be categorically stated that, as culled from the findings of both the
trial court and appellate courts, the entire chain of events which culminated in the
present controversy was not due to the fault or negligence of private respondents.
Rather, the facts of the case would point to CMAS as the culprit. Equally telling of the
more likely possibility of CMAS' liability is petitioners' letter to and demanding an
explanation from CMAS regarding the statement of private respondents laying the blame
on CMAS for the incident, portions of which, reading as follows:
. . . we were informed that the unfortunate a mix-up occurred due to your
negligence. . . .
Likewise, the two airlines pinpoint the responsibility upon your agents. Evidence were
presented to prove that allegation.
On the face of this overwhelming evidence we could and should have filed a case
against you. . . . 47

39

clearly allude to CMAS as the party at fault. This is tantamount to an admission by

petitioners that they consider private respondents without fault, or is at the very least
indicative of the fact that petitioners entertained serious doubts as to whether herein
private respondents were responsible for the unfortunate turn of events.
Undeniably, petitioners' grief over the death of their mother was aggravated by the
unnecessary inconvenience and anxiety that attended their efforts to bring her body
home for a decent burial. This is unfortunate and calls for sincere commiseration with
petitioners. But, much as we would like to give them consolation for their undeserved
distress, we are barred by the inequity of allowing recovery of the damages prayed for
by them at the expense of private respondents whose fault or negligence in the very
acts imputed to them has not been convincingly and legally demonstrated.
Neither are we prepared to delve into, much less definitively rule on, the possible liability
of CMAS as the evaluation and adjudication of the same is not what is presently at issue
here and is best deferred to another time and addressed to another forum.
II.
Petitioners further fault the Court of Appeals for ruling that there was no
contractual breach on the part of private respondents as would entitle petitioners to
damages.
Petitioners hold that respondent TWA, by agreeing to transport the remains of
petitioners' mother on its Flight 131 from Chicago to San Francisco on October 27, 1976,
made itself a party to the contract of carriage and, therefore, was bound by the terms of
the issued airway bill. When TWA undertook to ship the remains on its Flight 603, ten
hours earlier than scheduled, it supposedly violated the express agreement embodied in
the airway bill. It was allegedly this breach of obligation which compounded, if not
directly caused, the switching of the caskets.
In addition, petitioners maintain that since there is no evidence as to who placed the
body on board Flight 603, or that CMAS actually put the cargo on that flight, or that the
two caskets at the Chicago airport were to be transported by the same airline, or that
they came from the same funeral home, or that both caskets were received by CMAS,
then the employees or agents of TWA presumably caused the mix-up by loading the
wrong casket on the plane. For said error, they contend, TWA must necessarily be
presumed negligent and this presumption of negligence stands undisturbed unless
rebutting evidence is presented to show that the switching or misdelivery was due to
circumstances that would exempt the carrier from liability.
Private respondent TWA professes otherwise. Having duly delivered or transferred the
cargo to its co-respondent PAL on October 27, 1976 at 2:00 P.M., as supported by the
TWA Transfer Manifest, TWA faithfully complied with its obligation under the airway bill.
Said faithful compliance was not affected by the fact that the remains were shipped on
an earlier flight as there was no fixed time for completion of carriage stipulated on.
Moreover, the carrier did not undertake to carry the cargo aboard any specified aircraft,
in view of the condition on the back of the airway bill which provides:
CONDITIONS OF CONTRACT
xxx

xxx

xxx

It is agreed that no time is fixed for the completion of carriage hereunder and that
Carrier may without notice substitute alternate carriers or aircraft. Carrier assumes no
obligation to carry the goods by any specified aircraft or over any particular route or
40

routes or to make connection at any point according to any particular schedule, and
Carrier is hereby authorized to select, or deviate from the route or routes of shipment,
notwithstanding that the same may be stated on the face hereof. The shipper
guarantees payment of all charges and advances. 48
Hence, when respondent TWA shipped the body on earlier flight and on a different
aircraft, it was acting well within its rights. We find this argument tenable.
The contention that there was contractual breach on the part of private respondents is
founded on the postulation that there was ambiguity in the terms of the airway bill,
hence petitioners' insistence on the application of the rules on interpretation of contracts
and documents. We find no such ambiguity. The terms are clear enough as to preclude
the necessity to probe beyond the apparent intendment of the contractual provisions.
The hornbook rule on interpretation of contracts consecrates the primacy of the
intention of the parties, the same having the force of law between them. When the terms
of the agreement are clear and explicit, that they do not justify an attempt to read into
any alleged intention of the parties, the terms are to be understood literally just as they
appear on the face of the contract. 49 The various stipulations of a contract shall be
interpreted together 50 and such a construction is to be adopted as will give effect to all
provisions thereof. 51 A contract cannot be construed by parts, but its clauses should be
interpreted in relation to one another. The whole contract must be interpreted or read
together in order to arrive at its true meaning. Certain stipulations cannot be segregated
and then made to control; neither do particular words or phrases necessarily determine
the character of a contract. The legal effect of the contract is not to be determined alone
by any particular provision disconnected from all others, but in the ruling intention of the
parties as gathered from all the language they have used and from their
contemporaneous and subsequent acts. 52
Turning to the terms of the contract at hand, as presented by PAL Air Waybill No. 07901180454, respondent court approvingly quoted the trial court's disquisition on the
aforequoted condition appearing on the reverse side of the airway bill and its disposition
of this particular assigned error:
The foregoing stipulation fully answers plaintiffs' objections to the one-day delay and the
shipping of the remains in TWA Flight 603 instead of TWA Flight 131. Under the
stipulation, parties agreed that no time was fixed to complete the contract of carriage
and that the carrier may, without notice, substitute alternate carriers or aircraft. The
carrier did not assume the obligation to carry the shipment on any specified aircraft.
xxx

xxx

xxx

Furthermore, contrary to the claim of plaintiffs-appellants, the conditions of the Air

Waybill are big enough to be read and noticed. Also, the mere fact that the cargo in
question was shipped in TWA Flight 603, a flight earlier on the same day than TWA Flight
131, did not in any way cause or add to the one-day delay complained of and/or the
switching or mix-up of the bodies. 53
Indubitably, that private respondent can use substitute aircraft even without notice and
without the assumption of any obligation whatsoever to carry the goods on any specified
aircraft is clearly sanctioned by the contract of carriage as specifically provided for under
the conditions thereof.

41

Petitioners' invocation of the interpretative rule in the Rules of Court that written words
control printed words in documents, 54 to bolster their assertion that the typewritten
provisions regarding the routing and flight schedule prevail over the printed conditions,
is tenuous. Said rule may be considered only when there is inconsistency between the
written and printed words of the contract.
As previously stated, we find no ambiguity in the contract subject of this case that would
call for the application of said rule. In any event, the contract has provided for such a
situation by explicitly stating that the above condition remains effective
"notwithstanding that the same (fixed time for completion of carriage, specified aircraft,
or any particular route or schedule) may be stated on the face hereof." While petitioners
hinge private respondents' culpability on the fact that the carrier "certifies goods
described below were received for carriage," they may have overlooked that the
statement on the face of the airway bill properly and completely reads
Carrier certifies goods described below were received for carriage subject to the
Conditions on the reverse hereof the goods then being in apparent good order and
condition except as noted hereon. 55 (Emphasis ours.)
Private respondents further aptly observe that the carrier's certification regarding receipt
of the goods for carriage "was of a smaller print than the condition of the Air Waybill,
including Condition No. 5 and thus if plaintiffs-appellants had recognized the former,
then with more reason they were aware of the latter. 56
In the same vein, it would also be incorrect to accede to the suggestion of petitioners
that the typewritten specifications of the flight, routes and dates of departures and
arrivals on the face of the airway bill constitute a special contract which modifies the
printed conditions at the back thereof. We reiterate that typewritten provisions of the
contract are to be read and understood subject to and in view of the printed conditions,
fully reconciling and giving effect to the manifest intention of the parties to the
agreement.
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. 57 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. 58
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. 59
Echoing the findings of the trial court, the respondent court correctly declared that
In a similar case of delayed delivery of air cargo under a very similar stipulation
contained in the airway bill which reads: "The carrier does not obligate itself to carry the
goods by any specified aircraft or on a specified time. Said carrier being hereby
authorized to deviate from the route of the shipment without any liability therefor", our
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Supreme Court ruled 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. Said rights and
obligations are created by a specific contract entered into by the parties (Mendoza vs.
PAL, 90 Phil. 836).
There is no showing by plaintiffs that such a special or specific contract had been
entered into between them and the defendant airline companies.
And this special contract for prompt delivery should call the attention of the carrier to
the circumstances surrounding the case and the approximate amount of damages to be
suffered in case of delay (See Mendoza vs. PAL, supra). There was no such contract
entered into in the instant case. 60
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.
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.
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. 61
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. 62 However, Ong Yiu vs. Court of Appeals, et al
63 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
43

consent. 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.
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.
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 the absence of specific routing instructions or
directions by the shipper, it is plainly incumbent upon the carrier to exercise its rights
with due deference to the rights, interests and convenience of its customers.
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.
64 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, 65 a conclusion concurred in by respondent court and
which we are not inclined to disturb.
We are further convinced that when TWA opted to ship the remains of Crispina Saludo on
an earlier flight, it did so in the exercise of sound discretion and with reasonable
prudence, as shown by the explanation of its counsel in his letter of February 19, 1977 in
response to petitioners' demand letter:
Investigation of TWA's handling of this matter reveals that although the shipment was
scheduled on TWA Flight 131 of October 27, 1976, it was actually boarded on TWA Flight
603 of the same day, approximately 10 hours earlier, in order to assure that the
shipment would be received in San Francisco in sufficient time for transfer to PAL. This
transfer was effected in San Francisco at 2:00 P.M. on October 27, 1976. 66
Precisely, private respondent TWA knew of the urgency of the shipment by reason of this
notation on the lower portion of the airway bill: "All documents have been certified.
Human remains of Cristina (sic) Saludo. Please return bag first available flight to SFO."
Accordingly, TWA took it upon itself to carry the remains of Crispina Saludo on an earlier
flight, which we emphasize it could do under the terms of the airway bill, to make sure
that there would be enough time for loading said remains on the transfer flight on board
PAL.

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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.
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.
Respondent appellate court found merit in and reproduced the trial court's refutation of
this assigned error:
About the only evidence of plaintiffs that may have reference to the manner with which
the personnel of defendants treated the two plaintiffs at the San Francisco Airport are
the following pertinent portions of Maria Saludo's testimony:
Q

When you arrived there, what did you do, if any?

A
I immediately went to the TWA counter and I inquired about whether my mother
was there or if' they knew anything about it.
Q

What was the answer?

They said they do not know. So, we waited.

About what time was that when you reached San Francisco from Chicago?

I think 5 o'clock. Somewhere around that in the afternoon.

You made inquiry it was immediately thereafter?

Right after we got off the plane.

Q
Up to what time did you stay in the airport to wait until the TWA people could tell
you the whereabouts?
A
Sorry, Sir, but the TWA did not tell us anything. We stayed there until about 9
o'clock. They have not heard anything about it. They did not say anything.
Q
Do you want to convey to the Court that from 5 up to 9 o'clock in the evening you
yourself went back to the TWA and they could not tell you where the remains of your
mother were?
A

Yes sir.

And after nine o'clock, what did you do?

A
I told my brother my Mom was supposed to be on the Philippine Airlines flight.
"Why don't" we check with PAL instead to see if she was there?" We tried to comfort
45

each other. I told him anyway that was a shortest flight from Chicago to California. We
will be with our mother on this longer flight. So, we checked with the PAL.
Q

What did you find?

We learned, Yes, my Mom would be on the flight.

Who was that brother?

Saturnino Saludo.

And did you find what was your flight from San Francisco to the Philippines?

A
I do not know the number. It was the evening flight of the Philippine Airline(s) from
San Francisco to Manila.
Q

You took that flight with your mother?

We were scheduled to, Sir.

Q
Now, you could not locate the remains of your mother in San Francisco could you
tell us what did you feel?
A

After we were told that my mother was not there?

Q
After you learned that your mother could not fly with you from Chicago to
California?
A
Well, I was very upset. Of course, I wanted the confirmation that my mother was in
the West Coast. The fliqht was about 5 hours from Chicago to California. We waited
anxiously all that time on the plane. I wanted to be assured about my mother's remains.
But there was nothing and we could not get any assurance from anyone about it.
Q
Your feeling when you reached San Francisco and you could not find out from the
TWA the whereabouts of the remains, what did you feel?
A
Something nobody would be able to describe unless he experiences it himself. It is
a kind of panic. I think it's a feeling you are about to go crazy. It is something I do not
want to live through again. (Inting, t.s.n., Aug. 9, 1983, pp. 14-18).
The foregoing 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. 67
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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 TWA's employees dealt with
petitioners was not grossly humiliating, arrogant or indifferent as would assume the
proportions of malice or bad faith and lay the basis for an award of the damages
claimed. It must however, be pointed out that the lamentable actuations of respondent
TWA's employees leave much to be desired, particularly so in the face of petitioners'
grief over the death of their mother, exacerbated by the tension and anxiety wrought by
the impasse and confusion over the failure to ascertain over an appreciable period of
time what happened to her remains.
Airline companies are hereby sternly admonished that it is their duty not only to cursorily
instruct but to strictly require their personnel to be more accommodating towards
customers, passengers and the general public. After all, common carriers such as airline
companies are in the business of rendering public service, which is the primary reason
for their enfranchisement and recognition in our law. Because the passengers in a
contract of carriage do not contract merely for transportation, they have a right to be
treated with kindness, respect, courtesy and consideration. 68 A contract to transport
passengers is quite different in kind and degree from any other contractual relation, and
generates a relation attended with public duty. The operation of a common carrier is a
business affected with public interest and must be directed to serve the comfort and
convenience of passengers. 69 Passengers are human beings with human feelings and
emotions; they should not be treated as mere numbers or statistics for revenue.
The records reveal that petitioners, particularly Maria and Saturnino Saludo, agonized for
nearly five hours, over the possibility of losing their mother's mortal remains,
unattended to and without any assurance from the employees of TWA that they were
doing anything about the situation. This is not to say that petitioners were to be regaled
with extra special attention. They were, however, entitled to the understanding and
humane consideration called for by and commensurate with the extraordinary diligence
required of common carriers, and not the cold insensitivity to their predicament. It is
hard to believe that the airline's counter personnel were totally helpless about the
situation. Common sense would and should have dictated that they exert a little extra
effort in making a more extensive inquiry, by themselves or through their superiors,
rather than just shrug off the problem with a callous and uncaring remark that they had
no knowledge about it. With all the modern communications equipment readily available
to them, which could have easily facilitated said inquiry and which are used as a matter
of course by airline companies in their daily operations, their apathetic stance while not
legally reprehensible is morally deplorable.
Losing a loved one, especially one's, parent, is a painful experience. Our culture accords
the tenderest human feelings toward and in reverence to the dead. That the remains of
the deceased were subsequently delivered, albeit belatedly, and eventually laid in her
final resting place is of little consolation. The imperviousness displayed by the airline's
personnel, even for just that fraction of time, was especially condemnable particularly in
the hour of bereavement of the family of Crispina Saludo, intensified by anguish due to
the uncertainty of the whereabouts of their mother's remains. Hence, it is quite apparent
that private respondents' personnel were remiss in the observance of that genuine
human concern and professional attentiveness required and expected of them.
The foregoing observations, however, do not appear to be applicable or imputable to
respondent PAL or its employees. No attribution of discourtesy or indifference has been
made against PAL by petitioners and, in fact, petitioner Maria Saludo testified that it was
to PAL that they repaired after failing to receive proper attention from TWA. It was from
47

PAL that they received confirmation that their mother's remains would be on the same
flight to Manila with them.
We find the following substantiation on this particular episode from the deposition of
Alberto A. Lim, PAL's cargo supervisor earlier adverted to, regarding their investigation of
and the action taken on learning of petitioner's problem:
ATTY. ALBERTO C. MENDOZA:
Yes.
Mr. Lim, what exactly was your procedure adopted in your so called investigation?
ALBERTO A. LIM:
I called the lead agent on duty at that time and requested for a copy of airway bill,
transfer manifest and other documents concerning the shipment.
ATTY ALBERTO C. MENDOZA:
Then, what?
ALBERTO A. LIM:
They proceeded to analyze exactly where PAL failed, if any, in forwarding the human
remains of Mrs. Cristina (sic) Saludo. And I found out that there was not (sic) delay in
shipping the remains of Mrs. Saludo to Manila. Since we received the body from
American Airlines on 28 October at 7:45 and we expedited the shipment so that it could
have been loaded on our flight leaving at 9:00 in the evening or just barely one hour and
15 minutes prior to the departure of the aircraft. That is so (sic) being the case, I
reported to Manila these circumstances. 70
IV.
Finally, petitioners insist, as a consequence of the delay in the shipment of their
mother's remains allegedly caused by wilful contractual breach, on their entitlement to
actual, moral and exemplary damages as well as attorney's fees, litigation expenses,
and legal interest.
The uniform decisional tenet in our jurisdiction bolds that moral damages may be
awarded for wilful or fraudulent breach of contract 71 or when such breach is attended
by malice or bad faith. 72 However, in the absence of strong and positive evidence of
fraud, malice or bad faith, said damages cannot be awarded. 73 Neither can there be an
award of exemplary damages 74 nor of attorney's fees 75 as an item of damages in the
absence of proof that defendant acted with malice, fraud or bad faith.
The censurable conduct of TWA's employees cannot, however, be said to have
approximated the dimensions of fraud, malice or bad faith. It can be said to be more of a
lethargic reaction produced and engrained in some people by the mechanically routine
nature of their work and a racial or societal culture which stultifies what would have
been their accustomed human response to a human need under a former and different
ambience.
Nonetheless, the facts show that petitioners' right to be treated with due courtesy in
accordance with the degree of diligence required by law to be exercised by every
common carrier was violated by TWA and this entitles them, at least, to nominal
48

damages from TWA alone. Articles 2221 and 2222 of the Civil Code make it clear that
nominal damages are not intended for indemnification of loss suffered but for the
vindication or recognition of a right violated of invaded. They are recoverable where
some injury has been done but the amount of which the evidence fails to show, the
assessment of damages being left to the discretion of the court according to the
circumstances of the case. 76 In the exercise of our discretion, we find an award of
P40,000.00 as nominal damages in favor of, petitioners to be a reasonable amount
under the circumstances of this case.
WHEREFORE, with the modification that an award of P40,000.00 as and by way of
nominal damages is hereby granted in favor of petitioners to be paid by respondent
Trans World Airlines, the appealed decision is AFFIRMED in all other respects.
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Nocon, JJ., concur.

49