Civil Carriers Must Safely Transport Passengers

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, vs.
MARJORIE
NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY AGENCY,
respondents
G.R. No. 145804. February 6, 2003
Civil Law; Contracts; Contract of Carriage; The law requires common carriers to carry passengers safely
using the utmost diligence of very cautious persons with due regard for all circumstances. The law
requires common carriers to carry passengers safely using the utmost diligence of very cautious persons
with due regard for all circumstances. Such duty of a common carrier to provide safety to its passengers
so obligates it not only during the course of the trip but for so long as the passengers are within its
premises and where they ought to be in pursuance to the contract of carriage.
Same; Same; Same; Instances when a common carrier becomes liable for death of or injury to
passengers. The statutory provisions render a common carrier liable for death of or injury to
passengers (a) through the negligence or willful acts of its employees or b) on account of willful acts
or negligence of other passengers or of strangers if the common carriers employees through the
exercise of due diligence could have prevented or stopped the act or omission.
Same; Same; Same; Presumption of Negligence; In case of such death or injury, a carrier is presumed
to have been at fault or been negligent. I n case of such death or injury, a carrier is presumed to
have been at fault or been negligent, and by simple proof of injury, the passenger is relieved of the
duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts
upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.
Same; Obligations; Tort; The premise, however, for the employers liability is negligence or fault on the
part of the employee.Should Prudent be made likewise liable? If at all, that liability could only be for
tort under the provisions of Article 2176 and related provisions, in conjunction with Article 2180, of the
Civil Code. The premise, however, for the employers liability is negligence or fault on the part of the
employee. Once such fault is established, the employer can then be made liable on the basis of the
presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection and supervision of its employees. The liability is primary and can only be negated by showing
due diligence in the selection and supervision of the employee, a factual matter that has not been
shown.
Same; Same; Same; In fine, a liability for tort may arise even under a contract, where tort is that which
breaches the contract.A contractual obligation can be breached by tort and when the same act or
omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article
2194 of the Civil Code can well apply. In fine, a liability for tort may arise even under a contract, where
tort is that which breaches the contract. Stated differently, when an act which constitutes a breach of
contract would have itself constituted the source of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been breached by tort, thereby allowing the rules
on tort to apply.
Same; Damages; Nominal Damages; It is an established rule that nominal damages cannot co-exist
with compensatory damages.The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It is an established rule that nominal damages
cannot co-exist with compensatory damages.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Office of the Government Corporate Counsel for petitioners.

Mario F. Estayan for private respondent.
Arias Law Offices for M. Navidad and Heirs of the Late N. Navidad, Jr.
VITUG, J.:
The case before the Court is an appeal from the decision and resolution of the Court of Appeals,
promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled
Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et al., which has modified
the decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig City, exonerating Prudent
Security Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo
Roman liable for damages on account of the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad, then drunk,
entered the EDSA LRT station after purchasing a token (representing payment of the fare). While
Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard
assigned to the area approached Navidad. A misunderstanding or an altercation between the two
apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight
started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks.
At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming
in. Navidad was struck by the moving train, and he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her
children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro
Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and Roman
filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its
answer, denied liability and averred that it had exercised due diligence in the selection and supervision
of its security guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting
evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in
his assigned task. On 11 August 1998, the trial court rendered its decision; it adjudged:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants
Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the
following:
a) 1) Actual damages of P44,830.00;

2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;
b) Moral damages of P50,000.00;
c) Attorneys fees of P20,000;
d) Costs of suit.
The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.
The compulsory counterclaim of LRTA and Roman are likewise dismissed.
Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its now
assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead,
holding the LRTA and Roman jointly and severally liable thusly:
WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from any
liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail
Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally
to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;

b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
e) P20,000.00 as and for attorneys fees.
The appellate court ratiocinated that while the deceased might not have then as yet boarded the train,
a contract of carriage theretofore had already existed when the victim entered the place where
passengers were supposed to be after paying the fare and getting the corresponding token therefor.
In exempting Prudent from liability, the court stressed that there was nothing to link the security agency
to the death of Navidad. It said that Navidad failed to show that Escartin inflicted fist blows upon the
victim and the evidence merely established the fact of death of Navidad by reason of his having been
hit by the train owned and managed by the LRTA and operated at the time by Roman. The appellate
court faulted petitioners for their failure to present expert evidence to establish the fact that the
application of emergency brakes could not have stopped the train.
The appellate court denied petitioners motion for reconsideration in its resolution of 10 October 2000.
In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz.:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF FACTS
BY THE TRIAL COURT
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE LIABLE
FOR THE DEATH OF NICANOR NAVIDAD, JR.
III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS AN
EMPLOYEE OF LRTA.
Petitioners would contend that the appellate court ignored the evidence and the factual findings of the
trial court by holding them liable on the basis of a sweeping conclusion that the presumption of
negligence on the part of a common carrier was not overcome. Petitioners would insist that Escartins
assault upon Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could
not have been foreseen or prevented. The LRTA would add that the appellate courts conclusion on the
existence of an employer-employee relationship between Roman and LRTA lacked basis because Roman
himself had testified being an employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court, contended that a contract of carriage was
deemed created from the moment Navidad paid the fare at the LRT station and entered the premises
of the latter, entitling Navidad to all the rights and protection under a contractual relation, and that the
appellate court had correctly held LRTA and Roman liable for the death of Navidad in failing to exercise
extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety
of passengers. The Civil Code, governing the liability of a common carrier for death of or injury to its
passengers, provides:
Article 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence
as prescribed in articles 1733 and 1755.
Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the formers employees, although such employees may have acted beyond
the scope of their authority or in violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of
a good father of a family in the selection and supervision of their employees.
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
willful acts or negligence of other passengers or of strangers, if the common carriers employees through
the exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.
The law requires common carriers to carry passengers safely using the utmost diligence of very cautious
persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so long as the passengers are
within its premises and where they ought to be in pursuance to the contract of carriage. The statutory
provisions render a common carrier liable for death of or injury to passengers (a) through the
negligence or wilful acts of its employees or b) on account of willful acts or negligence of other
passengers or of strangers if the common carriers employees through the exercise of due diligence
could have prevented or stopped the act or omission. In case of such death or injury, a carrier is
presumed to have been at fault or been negligent, and by simple proof of injury, the passenger is
relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the
burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.
In the absence of satisfactory explanation by the carrier on how the accident occurred, which
petitioners, according to the appellate court, have failed to show, the presumption would be that it has
been at fault, an exception from the general rule that negligence must be proved.
The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify the victim
arises from the breach of that contract by reason of its failure to exercise the high diligence required
of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier
may choose to hire its own employees or avail itself of the services of an outsider or an independent
firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under
the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions
of Article 2176 and related provisions, in conjunction with Article 2180, of the Civil Code. The premise,
however, for the employers liability is negligence or fault on the part of the employee. Once such fault
is established, the employer can then be made liable on the basis of the presumption juris tantum that
the employer failed to exercise diligentissimi patris families in the selection and supervision of its
employees. The liability is primary and can only be negated by showing due diligence in the selection
and supervision of the employee, a factual matter that has not been shown. Absent such a showing,
one might ask further, how then must the liability of the common carrier, on the one hand, and an
independent contractor, on the other hand, be described? It would be solidary. A contractual obligation
can be breached by tort and when the same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 2194 of the Civil Code can well apply. In fine, a
liability for tort may arise even under a contract, where tort is that which breaches the contract. Stated
differently, when an act which constitutes a breach of contract would have itself constituted the source
of a quasi-delictual liability had no contract existed between the parties, the contract can be said to
have been breached by tort, thereby allowing the rules on tort to apply.
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this
Court is concluded by the factual finding of the Court of Appeals that there is nothing to link (Prudent)
to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not
been duly proven x x x. This finding of the appellate court is not without substantial justification in our
own review of the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act
or omission, he must also be absolved from liability. Needless to say, the contractual tie between the
LRT and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be
made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is untenable. Nominal damages are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him. It is an established rule that nominal damages cannot co-exist with compensatory
damages.
WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only
in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved
from liability. No costs.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur.
Judgment affirmed with modification.
Note.Where a common carrier failed to exercise the extraordinary diligence required of it, which
resulted in the death of a passenger, it is deemed to have acted recklessly, and the heirs of the
passenger shall be entitled to exemplary damages. (Yobido vs. Court of Appeals, 281 SCRA 1 [1997]).
o0o
NORTHWEST AIRLINES, petitioner, vs. DELFIN S. CATAPANG, respondent
G.R. No. 174364. July 30, 2009
Damages; Common Carriers; So it is that any discourteous conduct on the part of these employees
toward a passenger gives the latter an action for damages against the carrier.Passengers have the
right to be treated by a carriers employees with kindness, respect, courtesy and due consideration.
They are entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is that any discourteous conduct on the part of these employees
toward a passenger gives the latter an action for damages against the carrier. The award of moral and
exemplary damages to respondent is thus justified.
Same; The inclusion of filing fees as part of the actual damages is superfluous if not erroneous, the
same being chargeable to the cost of suit awarded by the trial court and affirmed by the appellate
court.The inclusion of filing fees as part of the actual damages is superfluous, if not erroneous, the
same being chargeable to the cost of suit awarded by the trial court and affirmed by the appellate
court. Sections 8 and 10, Rule 142 of the Rules of Court enlighten: SEC. 8. Costs, how taxed.In
inferior courts, the costs shall be taxed by the justice of the peace or municipal judge and included in
the judgment. In superior courts, costs shall be taxed by the clerk of the corresponding court on five
days written notice given by the prevailing party to the adverse party. With this notice shall be served
a statement of the items of costs claimed by the prevailing party, verified by his oath or that of his
attorney. Objections to the taxation shall be made in writing, specifying the items objected to. Either
party may appeal to the court from the clerks taxation. The costs shall be inserted in the judgment if
taxed before its entry, and payment thereof shall be enforced by execution. x x x x SEC. 10. Costs in
Courts of First Instance.In an action or proceeding pending in a Court of First Instance, the prevailing
party may recover the following costs, and no other: a) For the complaint or answer, fifteen pesos; b)
For his own attendance, and that of his attorney, down to and including final judgment, twenty pesos;
c) For each witness necessarily produced by him, for each days necessary attendance of such witness
at the trial, two pesos, and his lawful traveling fees; d) For each deposition lawfully taken by him, and
produced in evidence, five pesos; e) For original documents, deeds, or papers of any kind produced by
him, nothing; f) For official copies of such documents, deeds, or papers, the lawful fees necessarily
paid for obtaining such copies; g) The lawful fees paid by him in entering and docketing the action or
recording the proceedings, for the service of any process in action, and all lawful clerks fees paid by
him.
Attorneys Fees; The transcript of stenographic notes of the lower courts proceedings do not show that
respondent adduced proof to sustain his general averment of a retainer agreement in the amount of
P200,000.00. The award must be deleted.As for the award of attorneys fees, the trial court did not
state the factual and legal basis thereof. The transcript of stenographic notes of the lower courts
proceedings do not show that respondent adduced proof to sustain his general averment of a retainer
agreement in the amount of P200,000.00. The award must thus be deleted.
Quisumbing, Torres for petitioner.
D.S. Catapang, Jr. Law Office for respondent.
CARPIO-MORALES, J.:
Delfin S. Catapang (respondent), a lawyer and, at the time material to the case at bar, Assistant Vice
President and Head of the Special Projects Department, Corporate Services Division of the United
Coconut Planters Bank (UCPB), was directed by UCPB to go to Paris on a business trip. As he intended
to proceed, after his trip to Paris, to the United States to visit his siblings, he requested First United
Travel, Inc. (FUT) to issue him a ticket that would allow rebooking or rerouting of flights within the
United States.
Complying with respondents requirement, FUT informed him, via telephone, that Northwest Airlines,
Inc. (petitioner) was willing to accommodate his request provided he would pay an additional US$50
for every rebooking or rerouting of flight. Respondent agreed with the condition, hence, FUT, as
petitioners authorized agent, issued respondent a ticket covering the New York to Los Angeles via
Detroit and the Los Angeles to Manila segments of his travel, indicating thereon the following details of
his itinerary:
xxxx
12MAR LV NYC/LAGUARDIA 0935 NORTHWEST

AR LOS ANGELES 1433
VIA DETROIT MI
xxxx
The rebooking/rerouting scheme was annotated on the restriction portion of the ticket issued to
respondent bearing No. 012 6832392670 5 as follows:
No end./7 days adv. Purchase

US$50 rebooking/re-routing/cancellation fee (Underscoring supplied)
On respondents arrival in New York, he called up by telephone petitioners office which informed him
that his ticket was not rebookable or reroutable. He was, nevertheless, advised to go to petitioners
nearest branch office.
Respondent thus proceeded on March 10, 1992 to petitioners ticket office at the World Trade Center
where he was treated in a rude manner by an employee who informed him that his ticket was not
rebookable or reroutable since it was of a restricted type, and that unless he upgraded it by paying
US$644.00, he could not rebook. Left with no choice, respondent paid that amount for rebooking.
Upon his return to the Philippines, respondent, by letter of March 24, 1992, wrote petitioner:
At about 9:30 in the morning of March 11, 1992, I went to the sales office in the World Trade Center
where I explained to your black woman representative my predicament. Your representative rudely told
me that my ticket is the restrictive type and that my flight can not be rebooked or rerouted. I explained
that the only restriction on my ticket is that I should pay US$50.00 if I have to rebook or reroute my
flight and asked your representative to read the restriction. Your representative rudely and impolitely
retorted that I could not understand English and that unless I pay the amount of US$644.00, I cannot
get a rebooking and rerouting. Despite my appeal and protestation, she did not reconsider her decision.
As I was badly needed in Detroit on the evening of the same day and had to be back in Manila on the
14th of March, I was compelled to pay, under protest, the amount of US$644.00 using my American
Express Card as my cash was insufficient to cover the amount. It was only then that I was issued ticket
no. 012:4488:504:099.
Considering that my ticket was cleared with you prior to its issuance and that FUT is your duly accredited
agent, you are bound by the terms of the ticket issued by FUT in your behalf. You have no right to
unilaterally change the tenor of your contract during its effectivity without my consent.
Your airlines willful breach of the terms and conditions of my ticket and the shabby treatment that I
received from your personnel hurt my feeling, humiliated and embarrassed me in the presence of my
brother-in-law and other people nearby who witnessed the incident. The fact that your employee did
that to a bank officer and a lawyer like me only shows that your airline can also do the same to others,
not to mention the poor and hapless persons.
Because I could not bear my wounded feeling, the shabby treat-ment, the humiliation and the
embarrassment that I received from your employee, I asked for the cancellation and refund of my ticket
covering my trip from Los Angeles to the Philippines for which I was given a refund application slip no.
012 0230189256 3 by your ticket counter at the Los Angeles airport on March 12, 1992.
To compensate me for the expenses that I incurred, and the wounded feeling, humiliation and
embarrassment that were caused by your airlines willful breach of contract with me, I demand that
you pay me damages in the amount of P1,000,000.00 within a period of five (5) days from your receipt
hereof. Otherwise, I shall have no alternative but to seek redress from our court of justice and to hold
you liable for all other expenses attendant thereto. (Underscoring supplied)
Respondents letter of demand remained unanswered, unheeded, drawing him to file on July 1, 1992
with the Regional Trial Court (RTC) of Makati a complaint for damages against petitioner.
Petitioner claimed in its Answer that respondents ticket was a discounted one, subject to the rules
which petitioners agents have to abide by. Thus, with respect to the annotation on respondents ticket
of the US$50.00 rebooking charge, petitioner explained that the same was subject to the rules of
applicability, which rules could not be reflected on the ticket.
By Decision of October 5, 2000, Branch 56 of the RTC Makati faulted petitioner for breach of contract
of carriage, disposing as follows:
WHEREFORE, all the foregoing considered, this Court declares defendant liable to pay plaintiff and
orders the latter to pay him the following sums:
1. US$ 823.00 or its Peso equivalent at the time of the payment with legal interest and Php7,372.50
for filing fees as actual damages;
2. P800,000.00 as moral damages;
3. P100,000.00 as exemplary damages;
4. P200,000.00 as and for attorneys fees; and
5. Cost of suit.
SO ORDERED.
On appeal, the Court of Appeals, by Decision of June 30, 2006 affirmed the trial courts Decision with
modification, thus:
WHEREFORE, except for the reduction of the award of moral damages from P800,000.00 to
P400,000.00, the appealed Decision dated October 5, 2000 is affirmed in all other respects.
SO ORDERED. (Underscoring supplied)
Hence, the present petition which assails the award to respondent of moral damages, petitioner positing
that it was not guilty of breach of contract. In any event, it assails the award to respondent of exemplary
damages, it positing that the same is not recoverable in cases of breach of contract of carriage unless
the carrier is guilty of wanton, fraudulent, reckless, oppressive or malevolent conduct of which it is not,
so it claims.
Additionally, petitioner assails 1) the award of attorneys fees, positing that under Article 2208 of the
Civil Code, attorneys fees and expenses of litigation cannot, as a general rule, be recovered, and of
actual damages for respondent did not suffer any pecuniary loss; 2) the order for reimbursement of
filing fees there being no basis; and 3) the award of a total of P700,000.00 in damages for being
excessive and unprecedented.
The petition is bereft of merit.
When respondent inquired from petitioners agent FUT if he would be allowed to rebook/reroute his
flight, FUT advised him that he could, on the condition that he would pay $50 for every rebooking. He
was not told by FUT and the ticket did not reflect it that the ticket being issued to him was a restricted
type to call for its upgrading before a rebooking/ rerouting.
Petitioners reservation supervisor, Amelia Merris, in fact admitted that, as the above-quoted entry on
the restriction portion of the ticket reads, the only restriction on respondents ticket pertains only to
non-endorsement.
A TTY. CATAPANG
Q. x x x Is it a fact that the only restriction on the first line is that no end./7days advance purchase,
is that correct? And what does that phrase no.end/7days purchase means?
A. No end, means non endorsable, sir.
Q. When you say non endorsable you cannot transfer it to another airline?
A. That is right, sir.
xxxx
Q. Based on the restriction, there is no such restriction?
A. Yes, sir. (Underscoring supplied)
Petitioners breach in this case was aggravated by the undenied treatment received by respondent
when he tried to rebook his ticket. Instead of civilly informing respondent that his ticket could not be
rebooked, petitioners agent in New York exhibited rudeness in the presence of respondents brother-
in-law and other customers, insulting respondent by telling him that he could not understand English.
Passengers have the right to be treated by a carriers employees with kindness, respect, courtesy and
due consideration. They are entitled to be protected against personal misconduct, injurious language,
indignities and abuses from such employees. So it is that any discourteous conduct on the part of these
employees toward a passenger gives the latter an action for damages against the carrier.
The award of moral and exemplary damages to respondent is thus justified.
The inclusion of filing fees as part of the actual damages is superfluous, if not erroneous, the same
being chargeable to the cost of suit awarded by the trial court and affirmed by the appellate court.
Sections 8 and 10, Rule 142 of the Rules of Court enlighten:
SEC. 8. Costs, how taxed.In inferior courts, the costs shall be taxed by the justice of the peace or
municipal judge and included in the judgment. In superior courts, costs shall be taxed by the clerk of
the corresponding court on five days written notice given by the prevailing party to the adverse party.
With this notice shall be served a statement of the items of costs claimed by the prevailing party,
verified by his oath or that of his attorney. Objections to the taxation shall be made in writing, specifying
the items objected to. Either party may appeal to the court from the clerks taxation. The costs shall be
inserted in the judgment if taxed before its entry, and payment thereof shall be enforced by execution.
xxxx
SEC. 10. Costs in Courts of First Instance.In an action or proceeding pending in a Court of First
Instance, the prevailing party may recover the following costs, and no other:
a) For the complaint or answer, fifteen pesos;
b) For his own attendance, and that of his attorney, down to and including final judgment, twenty
pesos;
c) For each witness necessarily produced by him, for each days necessary attendance of such witness
at the trial, two pesos, and his lawful traveling fees;
d) For each deposition lawfully taken by him, and produced in evidence, five pesos;
e) For original documents, deeds, or papers of any kind produced by him, nothing;
f) For official copies of such documents, deeds, or papers, the lawful fees necessarily paid for obtaining
such copies;
g) The lawful fees paid by him in entering and docketing the action or recording the proceedings, for
the service of any process in action, and all lawful clerks fees paid by him. (Emphasis and underscoring
supplied)
As for the award of attorneys fees, the trial court did not state the factual and legal basis thereof.8
The transcript of stenographic notes of the lower courts proceedings do not show that respondent
adduced proof to sustain his general averment of a retainer agreement in the amount of P200,000.00.
The award must thus be deleted.
WHEREFORE, the Court of Appeals Decision of June 30, 2006 is AFFIRMED with MODIFICATION in that
the award of attorneys fees is deleted for lack of basis. And the award of actual damages of P7,372.50
representing filing fees is deleted.
JAPAN AIRLINES, petitioner, vs. THE COURT OF APPEALS, ENRIQUE AGANA, MARIA
ANGELA NINA AGANA, ADALIA B. FRANCISCO and JOSE MIRANDA, respondents
G.R. No. 118664. August 7, 1998
Civil Law; Common Carriers; Damages; Common carriers are not absolutely responsible for all injuries
or damages even if the same were caused by a fortuitous event.We are not unmindful of the fact
that in a plethora of cases we have consistently ruled that a contract to transport passengers is quite
different in kind and degree from any other contractual relation. It is safe to conclude that it is a
relationship imbued with public interest. Failure on the part of the common carrier to live up to the
exacting standards of care and diligence renders it liable for any damages that may be sustained by its
passengers. However, this is not to say that common carriers are absolutely responsible for all injuries
or damages even if the same were caused by a fortuitous event. To rule otherwise would render the
defense of force majeure, as an exception from any liability, illusory and ineffective.
Same; Same; Same; There is no question that when a party is unable to fulfill his obligation because
of force majeure, the general rule is that he cannot be held liable for damages for non-performance.
Accordingly, there is no question that when a party is unable to fulfill his obligation because of force
majeure, the general rule is that he cannot be held liable for damages for nonperformance. Corollarily,
when JAL was prevented from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption,
whatever losses or damages in the form of hotel and meal expenses the stranded passengers incurred,
cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of respondents for
their unexpected overnight stay on June 15, 1991. x x x Furthermore, it has been held that airline
passengers must take such risks incident to the mode of travel. In this regard, adverse weather
conditions or extreme climatic changes are some of the perils involved in air travel, the consequences
of which the passenger must assume or expect. After all, common carriers are not the insurer of all
risks.
Same; Same; Same; If the fortuitous event was accompanied by neglect and malfeasance by the
carriers employees, an action for damages against the carrier is permissible.The factual background
of the PAL case is different from the instant petition. In that case there was indeed a fortuitous event
resulting in the diversion of the PAL flight. However, the unforeseen diversion was worsened when
private respondents (passenger) was left at the airport and could not even hitch a ride in a Ford Fiera
loaded with PAL personnel, not to mention the apparent apathy of the PAL station manager as to the
predicament of the stranded passengers. In light of these circumstances, we held that if the fortuitous
event was accompanied by neglect and malfeasance by the carriers employees, an action for damages
against the carrier is permissible. Unfortunately, for private respondents, none of these conditions are
present in the instant petition.
Same; Same; Same; The award of nominal damages is in order; Nominal damages are adjudicated in
order that a right of a plaintiff, which has been violated or invaded by the defendant, may be vindicated
or recognized and not for the purpose of indemnifying any loss suffered by him.Consequently, the
award of nominal damages is in order. Nominal damages are adjudicated in order that a right of a
plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and
not for the purpose of indemnifying any loss suffered by him. The court may award nominal damages
in every obligation arising from any source enumerated in Article 1157, or in every case where any
property right has been invaded.
Quisumbing, Torres & Evangelista for petitioner.
Enrique, Agana & Associates for private respondents.
ROMERO, J.:
Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking the reversal of
the decision of the Court of Appeals, which affirmed with modification the award of damages made by
the trial court in favor of herein private respondents Enrique Agana, Maria Angela Nina Agana, Adelia
Francisco and Jose Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francisco,
California bound for Manila. Likewise, on the same day private respondents Enrique Agana, Maria
Angela Nina Agana and Adelia Francisco left Los Angeles, California for Manila via JAL flight No. JL 061.
As an incentive for travelling on the said airline, both flights were to make an overnight stopover at
Narita, Japan, at the airlines expense, thereafter proceeding to Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikko Narita
for the night. The next day, private respondents, on the final leg of their journey, went to the airport
to take their flight to Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed
Ninoy Aquino International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, private
respondents trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers
on flight No. 741 due to depart on June 16, 1991 and also paid for the hotel expenses for their
unexpected overnight stay. On June 16, 1991, much to the dismay of the private respondents, their
long anticipated flight to Manila was again cancelled due to NAIAs indefinite closure. At this point, JAL
informed the private respondents that it would no longer defray their hotel and accommodation expense
during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to
pay for their accommodations and meal expenses from their personal funds from June 16 to June 21,
1991. Their unexpected stay in Narita ended on June 22, 1991 when they arrived in Manila on board
JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on July 25, 1991, commenced an
action for damages against JAL before the Regional Trial Court of Quezon City, Branch 104. To support
their claim, private respondents asserted that JAL failed to live up to its duty to provide care and comfort
to its stranded passengers when it refused to pay for their hotel and accommodation expenses from
June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was obligated to shoulder
their expenses as long as they were still stranded in Narita. On the other hand, JAL denied this allegation
and averred that airline passengers have no vested right to these amenities in case a flight is cancelled
due to force majeure.
On June 18, 1992, the trial court rendered its judgment in favor of private respondents holding JAL
liable for damages, viz.:
WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan Airlines to pay
the plaintiffs Enrique Agana, Adalia B. Francisco and Maria Angela Nina Agana the sum of One Million
Two Hundred Forty-Six Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda
the sum of Three Hundred Twenty Thousand Six Hundred Sixteen and 31/100 (P320,616.31) as actual,
moral and exemplary damages and pay attorneys fees in the amount of Two Hundred Thousand Pesos
(P200,000.00), and to pay the costs of suit.
Undaunted, JAL appealed the decision before the Court of Appeals, which, however, with the exception
of lowering the damages awarded affirmed the trial courts finding, thus:
Thus, the award of moral damages should be as it is hereby reduced to P200,000.00 for each of the
plaintiffs, the exemplary damages to P300,000.00 and the attorneys fees to P100,000.00 plus the costs.
WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby AFFIRMED in all
other respects.
JAL filed a motion for reconsideration which proved futile and unavailing.
Failing in its bid to reconsider the decision, JAL has now filed this instant petition.
The issue to be resolved is whether JAL, as a common carrier has the obligation to shoulder the hotel
and meal expenses of its stranded passengers until they have reached their final destination, even if
the delay were caused by force majeure.
To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL from proceeding to
Manila on schedule. Likewise, private respondents concede that such event can be considered as force
majeure since their delayed arrival in Manila was not imputable to JAL.
However, private respondents contend that while JAL cannot be held responsible for the delayed arrival
in Manila, it was nevertheless liable for their living expenses during their unexpected stay in Narita since
airlines have the obligation to ensure the comfort and convenience of its passengers. While we
sympathize with the private respondents plight, we are unable to accept this contention.
We are not unmindful of the fact that in a plethora of cases we have consistently ruled that a contract
to transport passengers is quite different in kind and degree from any other contractual relation. It is
safe to conclude that it is a relationship imbued with public interest. Failure on the part of the common
carrier to live up to the exacting standards of care and diligence renders it liable for any damages that
may be sustained by its passengers. However, this is not to say that common carriers are absolutely
responsible for all injuries or damages even if the same were caused by a fortuitous event. To rule
otherwise would render the defense of force majeure, as an exception from any liability, illusory and
ineffective.
Accordingly, there is no question that when a party is unable to fulfill his obligation because of force
majeure, the general rule is that he cannot be held liable for damages for non-performance. Corollarily,
when JAL was prevented from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption,
whatever losses or damages in the form of hotel and meal expenses the stranded passengers incurred,
cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of respondents for
their unexpected overnight stay on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land was an exasperating experience for the
private respondents. To be sure, they underwent distress and anxiety during their unanticipated stay
in Narita, but their predicament was not due to the fault or negligence of JAL but the closure of NAIA
to international flights. Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the
amenities of its stranded passengers by reason of a fortuitous event is too much of a burden to assume.
Furthermore, it has been held that airline passengers must take such risks incident to the mode of
travel. In this regard, adverse weather conditions or extreme climatic changes are some of the perils
involved in air travel, the consequences of which the passenger must assume or expect. After all,
common carriers are not the insurer of all risks.
Paradoxically, the Court of Appeals, despite the presence of force majeure, still ruled against JAL
relying in our decision in PAL v. Court of Appeals, thus:
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting standard
required by law. Undisputably, PALs diversion of its flight due to inclement weather was a fortuitous
event. Nonetheless, such occurrence did not terminate PALs contract with its passengers. Being in the
business of air carriage and the sole one to operate in the country, PAL is deemed equipped to deal
with situations as in the case at bar. What we said in one case once again must be stressed, i.e., the
relation of carrier and passenger continues until the latter has been landed at the port of destination
and has left the carriers premises. Hence, PAL necessarily would still have to exercise extraordinary
diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they
have reached their final destination. On this score, PAL grossly failed considering the then ongoing
battle between government forces and Muslim rebels in Cotabato City and the fact that the private
respondent was a stranger to the place.
The reliance is misplaced. The factual background of the PAL case is different from the instant petition.
In that case there was indeed a fortuitous event resulting in the diversion of the PAL flight. However,
the unforeseen diversion was worsened when private respondents (passenger) was left at the airport
and could not even hitch a ride in a Ford Fiera loaded with PAL personnel, not to mention the apparent
apathy of the PAL station manager as to the predicament of the stranded passengers. In light of these
circumstances, we held that if the fortuitous event was accompanied by neglect and malfeasance by
the carriers employees, an action for damages against the carrier is permissible. Unfortunately, for
private respondents, none of these conditions are present in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL from any liability. It must be noted
that private respondents bought tickets from the United States with Manila as their final destination.
While JAL was no longer required to defray private respondents living expenses during their stay in
Narita on account of the fortuitous event, JAL had the duty to make the necessary arrangements to
transport private respondents on the first available connecting flight to Manila. Petitioner JAL reneged
on its obligation to look after the comfort and convenience of its passengers when it declassified private
respondents from transit passengers to new passengers as a result of which private respondents
were obliged to make the necessary arrangements themselves for the next flight to Manila. Private
respondents were placed on the waiting list from June 20 to June 24. To assure themselves of a seat
on an available flight, they were compelled to stay in the airport the whole day of June 22, 1991 and it
was only at 8:00 p.m. of the aforesaid date that they were advised that they could be accommodated
in said flight which flew at about 9:00 a.m. the next day.
We are not oblivious to the fact that the cancellation of JAL flights to Manila from June 15 to June 21,
1991 caused considerable disruption in passenger booking and reservation. In fact, it would be
unreasonable to expect, considering NAIAs closure, that JAL flight operations would be normal on the
days affected. Nevertheless, this does not excuse JAL from its obligation to make the necessary
arrangements to transport private respondents on its first available flight to Manila. After all, it had a
contract to transport private respondents from the United States to Manila as their final destination.
Consequently, the award of nominal damages is in order. Nominal damages are adjudicated in order
that a right of a plaintiff, which has been violated or invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying any loss suffered by him. The court may award
nominal damages in every obligation arising from any source enumerated in Article 1157, or in every
case where any property right has been invaded.
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated December 22, 1993
is hereby MODIFIED. The award of actual, moral and exemplary damages is hereby DELETED. Petitioner
JAL is ordered to pay each of the private respondents nominal damages in the sum of P100,000.00
each including attorneys fees of P50,000.00 plus costs.
SO ORDERED.
Narvasa (C.J., Chairman), Kapunan and Purisima, JJ., concur.
Judgment modified.
Note.A contract of air carriage generates a relation attended with a public duty and any discourteous
conduct on the part of a carriers employee toward a passenger gives the latter an action for damages
and more so where there is bad faith. (Philippine Airlines, Inc. vs. Court of Appeals, 257 SCRA 33
[1996])
o0o
MR. & MRS. ENGRACIO FABRE, JR.** and PORFIRIO CABIL, petitioners, vs. COURT OF
APPEALS, THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE
ANTONIO, JOHN RICHARDS, GONZALO GONZALES, VICENTE V. QUE, JR., ICLI CORDOVA,
ARLENE GOJOCCO, ALBERTO ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA,
YOLANDA CORDOVA, NOEL ROQUE, EDWARD TAN, ERNESTO NARCISO, ENRIQUETA
LOCSIN, FRANCIS NORMAN O. LOPEZ, JULIUS CAESAR GARCIA, ROSARIO MA. V. ORTIZ,
MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO MARA-MARA, TERESITA REGALA,
MELINDA TORRES, MARELLA MIJARES, JOSEFA CABATINGAN, MARA NADOC, DIANE
MAYO, TESS PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO, CARLOS
RANARIO, ROSAMARIA T. RADOC and BERNADETTE FERRER, respondents
G.R. No. 111127. July 26, 1996
Civil Law; Negligence; Damages; Cabil was grossly negligent and should be held liable for the injuries
suffered by private respondent Amyline Antonio.Considering the foregoingthe fact that it was
raining and the road was slippery, that it was dark, that he drove his bus at 50 kilometers an hour when
even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with
the terrain, Cabil was grossly negligent and should be held liable for the injuries suffered by private
respondent Amyline Antonio.
Same; Same; Same; Cabils negligence gave rise to the presumption that his employers, the Fabres,
were themselves negligent in the selection and supervision of their employee.Pursuant to Arts. 2176
and 2180 of the Civil Code his negligence gave rise to the presumption that his employers, the Fabres,
were themselves negligent in the selection and supervision of their employee.
Same; Same; Same; Employer should also examine the applicant for his qualifications, experience and
record of service.Due diligence in selection of employees is not satisfied by finding that the applicant
possessed a professional drivers license. The employer should also examine the applicant for his
qualifications, experience and record of service. Due diligence in supervision, on the other hand,
requires the formulation of rules and regulations for the guidance of employees and the issuance of
proper instructions as well as actual implementation and monitoring of consistent compliance with the
rules.
Same; Same; Same; The existence of hiring procedures and supervisory policies cannot be casually
invoked to overturn the presumption of negligence on the part of an employer.In the case at bar, the
Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider the fact that Cabil
had been driving for school children only, from their homes to the St. Scholasticas College in Metro
Manila. They had hired him only after a two-week apprenticeship. They had tested him for certain
matters, such as whether he could remember the names of the children he would be taking to school,
which were irrelevant to his qualification to drive on a long distance travel, especially considering that
the trip to La Union was his first. The existence of hiring procedures and supervisory policies cannot be
casually invoked to overturn the presumption of negligence on the part of an employer.
Same; Same; Same; As common carriers, the Fabres were bound to exercise extraordinary diligence
for the safe transportation of the passengers to their destination.As common carriers, the Fabres
were bound to exercise extraordinary diligence for the safe transportation of the passengers to their
destination. This duty of care is not excused by proof that they exercised the diligence of a good father
of the family in the selection and supervision of their employee.
Same; Same; Same; On the theory that petitioners are liable for breach of contract of carriage, the
award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since Cabils gross
negligence amounted to bad faith.With respect to the other awards, while the decisions of the trial
court and the Court of Appeals do not sufficiently indicate the factual and legal basis for them, we find
that they are nevertheless supported by evidence in the records of this case. Viewed as an action for
quasi delict, this case falls squarely within the purview of Art. 2219(2) providing for the payment of
moral damages in cases of quasi delict. On the theory that petitioners are liable for breach of contract
of carriage, the award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since
Cabils gross negligence amounted to bad faith. Amyline Antonios testimony, as well as the testimonies
of her father and copassengers, fully establish the physical suffering and mental anguish she endured
as a result of the injuries caused by petitioners negligence.
Same; Same; Same; In Dangwa Trans. Co., Inc. vs. Court of Appeals, the Court held the bus company
and the driver jointly and severally liable for damages for injuries suffered by a passenger.The
decision of the Court of Appeals can be sustained either on the theory of quasi delict or on that of
breach of contract. The question is whether, as the two courts below held, petitioners, who are the
owners and driver of the bus, may be made to respond jointly and severally to private respondent. We
hold that they may be. In Dangwa Trans. Co., Inc. v. Court of Appeals, on facts similar to those in this
case, this Court held the bus company and the driver jointly and severally liable for damages for injuries
suffered by a passenger. Again, in Bachelor Express, Inc. v. Court of Appeals a driver found negligent
in failing to stop the bus in order to let off passengers when a fellow passenger ran amuck, as a result
of which the passengers jumped out of the speeding bus and suffered injuries, was held also jointly
and severally liable with the bus company to the injured passengers.
Maria del Valle for petitioners.
Eduardo Claudio II for private respondents.
MENDOZA, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals in CA-GR No. 28245,
dated September 30, 1992, which affirmed with modification the decision of the Regional Trial Court of
Makati, Branch 58, ordering petitioners jointly and severally to pay damages to private respondent
Amyline Antonio, and its resolution which denied petitioners motion for reconsideration for lack of
merit.
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used
the bus principally in connection with a bus service for school children which they operated in Manila.
The couple had a driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two weeks.
His job was to take school children to and from the St. Scholasticas College in Malate, Manila.
On November 2, 1984 private respondent Word for the World Christian Fellowship, Inc. (WWCF)
arranged with petitioners for the transportation of 33 members of its Young Adults Ministry from Manila
to La Union and back in consideration of which private respondent paid petitioners the amount of
P3,000.00.
The group was scheduled to leave on November 2, 1984, at 5:00 oclock in the afternoon. However, as
several members of the party were late, the bus did not leave the Tropical Hut at the corner of Ortigas
Avenue and EDSA until 8:00 oclock in the evening. Petitioner Porfirio Cabil drove the minibus.
The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen
was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La
Union), was forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan.
At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway, running on a south to
east direction, which he described as siete. The road was slippery because it was raining, causing the
bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The
bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano,
then turned over and landed on its left side, coming to a full stop only after a series of impacts. The
bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion.
Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the
bus and pinned down by a wooden seat which came off after being unscrewed. It took three persons
to safely remove her from this position. She was in great pain and could not move.
The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He said he was not
familiar with the area and he could not have seen the curve despite the care he took in driving the bus,
because it was dark and there was no sign on the road. He said that he saw the curve when he was
already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers per hour, but it was
too late.
The Lingayen police investigated the incident the next day, November 3, 1984. On the basis of their
finding they filed a criminal complaint against the driver, Porfirio Cabil. The case was later filed with
the Lingayen Regional Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the damage to
the latters fence. On the basis of Escanos affidavit of desistance the case against petitioners Fabre
was dismissed.
Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. As
a result of the accident, she is now suffering from paraplegia and is permanently paralyzed from the
waist down. During the trial she described the operations she underwent and adduced evidence
regarding the cost of her treatment and therapy. Immediately after the accident, she was taken to the
Nazareth Hospital in Ba-ay, Lingayen. As this hospital was not adequately equipped, she was transferred
to the Sto. Nio Hospital, also in the town of Ba-ay, where she was given sedatives. An x-ray was taken
and the damage to her spine was determined to be too severe to be treated there. She was therefore
brought to Manila, first to the Philippine General Hospital and later to the Makati Medical Center where
she underwent an operation to correct the dislocation of her spine.
In its decision dated April 17, 1989, the trial court found that:
No convincing evidence was shown that the minibus was properly checked for travel to a long distance
trip and that the driver was properly screened and tested before being admitted for employment.
Indeed, all the evidence presented have shown the negligent act of the defendants which ultimately
resulted to the accident subject of this case.
Accordingly, it gave judgment for private respondents holding:
Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms. Amyline Antonio were
the only ones who adduced evidence in support of their claim for damages, the Court is therefore not
in a position to award damages to the other plaintiffs.
WHEREFORE, premises considered, the Court hereby renders judgment against defendants Mr. & Mrs.
Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles 2176 and 2180 of the Civil Code of the
Philippines and said defendants are ordered to pay jointly and severally to the plaintiffs the following
amount:
1) P93,657.11 as compensatory and actual damages;

2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages; and
5) 25% of the recoverable amount as attorneys fees;
6) Costs of suit.
SO ORDERED.
The Court of Appeals affirmed the decision of the trial court with respect to Amyline Antonio but
dismissed it with respect to the other plaintiffs on the ground that they failed to prove their respective
claims. The Court of Appeals modified the award of damages as follows:
1) P93,657.11 as actual damages;

2) P600,000.00 as compensatory damages;
4) P20,000.00 as exemplary damages;
5) P10,000.00 as attorneys fees; and
6) Costs of suit.
The Court of Appeals sustained the trial courts finding that petitioner Cabil failed to exercise due care
and precaution in the operation of his vehicle considering the time and the place of the accident. The
Court of Appeals held that the Fabres were themselves presumptively negligent. Hence, this petition.
Petitioners raise the following issues:
I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.

II. WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE INJURIES SUFFERED BY PRIVATE
RESPONDENTS.
III. WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE POSITIVE, UP TO WHAT EXTENT.
Petitioners challenge the propriety of the award of compensatory damages in the amount of
P600,000.00. It is insisted that, on the assumption that petitioners are liable, an award of P600,000.00
is unconscionable and highly speculative. Amyline Antonio testified that she was a casual employee of
a company called Suaco, earning P1,650.00 a month, and a dealer of Avon products, earning an
average of P1,000.00 monthly. Petitioners contend that as casual employees do not have security of
tenure, the award of P600,000.00, considering Amyline Antonios earnings, is without factual basis as
there is no assurance that she would be regularly earning these amounts.
With the exception of the award of damages, the petition is devoid of merit.
First, it is unnecessary for our purpose to determine whether to decide this case on the theory that
petitioners are liable for breach of contract of carriage or culpa contractual or on the theory of quasi
delict or culpa aquiliana as both the Regional Trial Court and the Court of Appeals held, for although
the relation of passenger and carrier is contractual both in origin and nature, nevertheless the act
that breaks the contract may be also a tort. In either case, the question is whether the bus driver,
petitioner Porfirio Cabil, was negligent.
The finding that Cabil drove his bus negligently, while his employer, the Fabres, who owned the bus,
failed to exercise the diligence of a good father of the family in the selection and supervision of their
employee is fully supported by the evidence on record. These factual findings of the two courts we
regard as final and conclusive, supported as they are by the evidence. Indeed, it was admitted by Cabil
that on the night in question, it was raining, and, as a consequence, the road was slippery, and it was
dark. He averred these facts to justify his failure to see that there lay a sharp curve ahead. However,
it is undisputed that Cabil drove his bus at the speed of 50 kilometers per hour and only slowed down
when he noticed the curve some 15 to 30 meters ahead. By then it was too late for him to avoid falling
off the road. Given the conditions of the road and considering that the trip was Cabils first one outside
of Manila, Cabil should have driven his vehicle at a moderate speed. There is testimony that the vehicles
passing on that portion of the road should only be running 20 kilometers per hour, so that at 50
kilometers per hour, Cabil was running at a very high speed.
Considering the foregoingthe fact that it was raining and the road was slippery, that it was dark, that
he drove his bus at 50 kilometers an hour when even on a good day the normal speed was only 20
kilometers an hour, and that he was unfamiliar with the terrain, Cabil was grossly negligent and should
be held liable for the injuries suffered by private respondent Amyline Antonio.
Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his
employers, the Fabres, were themselves negligent in the selection and supervision of their employee.
Due diligence in selection of employees is not satisfied by finding that the applicant possessed a
professional drivers license. The employer should also examine the applicant for his qualifications,
experience and record of service. Due diligence in supervision, on the other hand, requires the
formulation of rules and regulations for the guidance of employees and the issuance of proper
instructions as well as actual implementation and monitoring of consistent compliance with the rules.
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider
the fact that Cabil had been driving for school children only, from their homes to the St. Scholasticas
College in Metro Manila. They had hired him only after a two-week apprenticeship. They had tested
him for certain matters, such as whether he could remember the names of the children he would be
taking to school, which were irrelevant to his qualification to drive on a long distance travel, especially
considering that the trip to La Union was his first. The existence of hiring procedures and supervisory
policies cannot be casually invoked to overturn the presumption of negligence on the part of an
employer.
Petitioners argue that they are not liable because (1) an earlier departure (made impossible by the
congregations delayed meeting) could have averted the mishap and (2) under the contract, the WWCF
was directly responsible for the conduct of the trip. Neither of these contentions hold water. The hour
of departure had not been fixed. Even if it had been, the delay did not bear directly on the cause of the
accident. With respect to the second contention, it was held in an early case that:
[A] person who hires a public automobile and gives the driver directions as to the place to which he
wishes to be conveyed, but exercises no other control over the conduct of the driver, is not responsible
for acts of negligence of the latter or prevented from recovering for injuries suffered from a collision
between the automobile and a train, caused by the negligence either of the locomotive engineer or the
automobile driver.
As already stated, this case actually involves a contract of carriage. Petitioners, the Fabres, did not have
to be engaged in the business of public transportation for the provisions of the Civil Code on common
carriers to apply to them. As this Court has held:
Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both, by land, water, or air for compensation,
offering their services to the public.
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 1732 deliberately refrained from making such distinctions.
As common carriers, the Fabres were bound to exercise extraordinary diligence for the safe
transportation of the passengers to their destination. This duty of care is not excused by proof that
they exercised the diligence of a good father of the family in the selection and supervision of their
employee. As Art. 1759 of the Code provides:
Common carriers are liable for the death of or injuries to passengers through the negligence or wilful
acts of the formers employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers.
The same circumstances detailed above, supporting the finding of the trial court and of the appellate
court that petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify finding them
guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.
Secondly, we sustain the award of damages in favor of Amyline Antonio. However, we think the Court
of Appeals erred in increasing the amount of compensatory damages because private respondents did
not question this award as inadequate. To the contrary, the award of P500,000.00 for compensatory
damages which the Regional Trial Court made is reasonable considering the contingent nature of her
income as a casual employee of a company and as distributor of beauty products and the fact that the
possibility that she might be able to work again has not been foreclosed. In fact she testified that one
of her previous employers had expressed willingness to employ her again.
With respect to the other awards, while the decisions of the trial court and the Court of Appeals do not
sufficiently indicate the factual and legal basis for them, we find that they are nevertheless supported
by evidence in the records of this case. Viewed as an action for quasi delict, this case falls squarely
within the purview of Art. 2219(2) providing for the payment of moral damages in cases of quasi delict.
On the theory that petitioners are liable for breach of contract of carriage, the award of moral damages
is authorized by Art. 1764, in relation to Art. 2220, since Cabils gross negligence amounted to bad
faith. Amyline Antonios testimony, as well as the testimonies of her father and copassengers, fully
establish the physical suffering and mental anguish she endured as a result of the injuries caused by
petitioners negligence.
The award of exemplary damages and attorneys fees was also properly made. However, for the same
reason that it was error for the appellate court to increase the award of compensatory damages, we
hold that it was also error for it to increase the award of moral damages and reduce the award of
attorneys fees, inasmuch as private respondents, in whose favor the awards were made, have not
appealed.
As above stated, the decision of the Court of Appeals can be sustained either on the theory of quasi
delict or on that of breach of contract. The question is whether, as the two courts below held,
petitioners, who are the owners and driver of the bus, may be made to respond jointly and severally to
private respondent. We hold that they may be. In Dangwa Trans. Co., Inc. v. Court of Appeals, on facts
similar to those in this case, this Court held the bus company and the driver jointly and severally liable
for damages for injuries suffered by a passenger. Again, in Bachelor Express, Inc. v. Court of Appeals
a driver found negligent in failing to stop the bus in order to let off passengers when a fellow passenger
ran amuck, as a result of which the passengers jumped out of the speeding bus and suffered injuries,
was held also jointly and severally liable with the bus company to the injured passengers.
The same rule of liability was applied in situations where the negligence of the driver of the bus on
which plaintiff was riding concurred with the negligence of a third party who was the driver of another
vehicle, thus causing an accident. In Anuran v. Buo, Batangas Laguna Tayabas Bus Co. v. Intermediate
Appellate Court, and Metro Manila Transit Corporation v. Court of Appeals, the bus company, its driver,
the operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to
the injured passenger or the latters heirs. The basis of this allocation of liability was explained in Viluan
v. Court of Appeals, thus:
Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while
that of respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we
already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the
negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the
drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Some
members of the Court, though, are of the view that under the circumstances they are liable on quasi-
delict.
It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals this Court exonerated the jeepney
driver from liability to the injured passengers and their families while holding the owners of the jeepney
jointly and severally liable, but that is because that case was expressly tried and decided exclusively on
the theory of culpa contractual. As this Court there explained:
The trial court was therefore right in finding that Manalo [the driver] and spouses Mangune and Carreon
[the jeepney owners] were negligent. However, its ruling that spouses Mangune and Carreon are jointly
and severally liable with Manalo is erroneous. The driver cannot be held jointly and severally liable with
the carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible.
Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual
liability, the carrier is exclusively responsible therefore to the passenger, even if such breach be due to
the negligence of his driver (see Viluan v. The Court of Appeals, et al., G.R. Nos. L-21477-81, April 29,
1966, 16 SCRA 742) . . .
As in the case of BLTB, private respondents in this case and her coplaintiffs did not stake out their claim
against the carrier and the driver exclusively on one theory, much less on that of breach of contract
alone. After all, it was permitted for them to allege alternative causes of action and join as many parties
as may be liable on such causes of action so long as private respondent and her coplaintiffs do not
recover twice for the same injury. What is clear from the cases is the intent of the plaintiff there to
recover from both the carrier and the driver, thus justifying the holding that the carrier and the driver
were jointly and severally liable because their separate and distinct acts concurred to produce the same
injury.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION as to the award
of damages. Petitioners are ORDERED to PAY jointly and severally the private respondent Amyline
Antonio the following amounts:

2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;
4) P20,000.00 as exemplary damages;
5) 25% of the recoverable amount as attorneys fees; and
6) costs of suit.
SO ORDERED.
Regalado (Chairman), Romero, Puno and Torres, Jr., JJ., concur.
Note.Responsibility arising from negligence in the performance of every kind of obligation is

demandable. (Metropolitan Bank and Trust Company vs. Court of Appeals, 237 SCRA 761 [1994])
o0o
SPOUSES DANTE CRUZ and LEONORA CRUZ, petitioners, vs. SUN HOLIDAYS, INC.,
respondent
G.R. No. 186312. June 29, 2010
Civil Law; Common Carriers; Definition of Common Carriers.As De Guzman instructs, Article 1732 of
the Civil Code defining common carriers has deliberately refrained from making distinctions on
whether the carrying of persons or goods is the carriers principal business, whether it is offered on a
regular basis, or whether it is offered to the general public. The intent of the law is thus to not consider
such distinctions. Otherwise, there is no telling how many other distinctions may be concocted by
unscrupulous businessmen engaged in the carrying of persons or goods in order to avoid the legal
obligations and liabilities of common carriers.
Same; Same; Degree of Diligence Required; From the nature of their business and for reasons of public
policy, common carriers are bound to observe extraordinary diligence for the safety of the passengers
transported by them, according to all the circumstances of each case.Under the Civil Code, common
carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence for the safety of the passengers transported by them, according to all the
circumstances of each case. They are bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
Same; Same; Negligence; Presumption of Negligence; When a passenger dies or is injured in the
discharge of a contract of carriage, it is presumed that the common carrier is at fault or negligent.
When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the
common carrier is at fault or negligent. In fact, there is even no need for the court to make an express
finding of fault or negligence on the part of the common carrier. This statutory presumption may only
be overcome by evidence that the carrier exercised extraordinary diligence.
Same; Same; Same; Fortuitous Event; Element of a Fortuitous Event.The elements of a fortuitous
event are: (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtors
to comply with their obligations, must have been independent of human will; (b) the event that
constituted the caso fortuito must have been impossible to foresee or, if foreseeable, impossible to
avoid; (c) the occurrence must have been such as to render it impossible for the debtors to fulfill their
obligation in a normal manner; and (d) the obligor must have been free from any participation in the
aggravation of the resulting injury to the creditor.
Same; Same; Same; Same; To fully free a common carrier from any liability, the fortuitous event must
have been the proximate and only cause of the loss.To fully free a common carrier from any liability,
the fortuitous event must have been the proximate and only cause of the loss. And it should have
exercised due diligence to prevent or minimize the loss before, during and after the occurrence of the
fortuitous event.
Same; Same; Same; Damages; Liability of a common carrier in breach of its contract of carriage
resulting in the death of a passenger.Article 1764 vis--vis Article 2206 of the Civil Code holds the
common carrier in breach of its contract of carriage that results in the death of a passenger liable to
pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity and (3) moral
damages
Fortun, Narvasa & Salazar for petitioners.
Sycip, Salazar, Hernandez & Gatmaitan for respondent.

CARPIO-MORALES, J.:
Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on January 25, 200 against Sun
Holidays, Inc. (respondent) with the Regional Trial Court (RTC) of Pasig City for damages arising from
the death of their son Ruelito C. Cruz (Ruelito) who perished with his wife on September 11, 2000 on
board the boat M/B Coco Beach III that capsized en route to Batangas from Puerto Galera, Oriental
Mindoro where the couple had stayed at Coco Beach Island Resort (Resort) owned and operated by
respondent.
The stay of the newly wed Ruelito and his wife at the Resort from September 9 to 11, 2000 was by
virtue of a tour package-contract with respondent that included transportation to and from the Resort
and the point of departure in Batangas.
Miguel C. Matute (Matute), a scuba diving instructor and one of the survivors, gave his account of the
incident that led to the filing of the complaint as follows:
Matute stayed at the Resort from September 8 to 11, 2000. He was originally scheduled to leave the
Resort in the afternoon of September 10, 2000, but was advised to stay for another night because of
strong winds and heavy rains.
On September 11, 2000, as it was still windy, Matute and 25 other Resort guests including petitioners
son and his wife trekked to the other side of the Coco Beach mountain that was sheltered from the
wind where they boarded M/B Coco Beach III, which was to ferry them to Batangas.
Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera and into
the open seas, the rain and wind got stronger, causing the boat to tilt from side to side and the captain
to step forward to the front, leaving the wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two big waves which came one after the other, M/B
Coco Beach III capsized putting all passengers underwater.
The passengers, who had put on their life jackets, struggled to get out of the boat. Upon seeing the
captain, Matute and the other passengers who reached the surface asked him what they could do to
save the people who were still trapped under the boat. The captain replied Iligtas niyo na lang ang
sarili niyo (Just save yourselves).
Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, Puerto Galera
passed by the capsized M/B Coco Beach III. Boarded on those two boats were 22 persons, consisting
of 18 passengers and four crew members, who were brought to Pisa Island. Eight passengers, including
petitioners son and his wife, died during the incident.
At the time of Ruelitos death, he was 28 years old and employed as a contractual worker for Mitsui
Engineering & Shipbuilding Arabia, Ltd. in Saudi Arabia, with a basic monthly salary of $900.
Petitioners, by letter of October 26, 2000, demanded indemnification from respondent for the death of
their son in the amount of at least P4,000,000.
Replying, respondent, by letter dated November 7, 2000, denied any responsibility for the incident
which it considered to be a fortuitous event. It nevertheless offered, as an act of commiseration, the
amount of P10,000 to petitioners upon their signing of a waiver.
As petitioners declined respondents offer, they filed the Complaint, as earlier reflected, alleging that
respondent, as a common carrier, was guilty of negligence in allowing M/B Coco Beach III to sail
notwithstanding storm warning bulletins issued by the Philippine Atmospheric, Geophysical and
Astronomical Services Administration (PAGASA) as early as 5:00 a.m. of September 11, 2000.
In its Answer, respondent denied being a common carrier, alleging that its boats are not available to
the general public as they only ferry Resort guests and crew members. Nonetheless, it claimed that it
exercised the utmost diligence in ensuring the safety of its passengers; contrary to petitioners
allegation, there was no storm on September 11, 2000 as the Coast Guard in fact cleared the voyage;
and M/B Coco Beach III was not filled to capacity and had sufficient life jackets for its passengers. By
way of Counterclaim, respondent alleged that it is entitled to an award for attorneys fees and litigation
expenses amounting to not less than P300,000.
Carlos Bonquin, captain of M/B Coco Beach III, averred that the Resort customarily requires four
conditions to be met before a boat is allowed to sail, to wit: (1) the sea is calm, (2) there is clearance
from the Coast Guard, (3) there is clearance from the captain and (4) there is clearance from the
Resorts assistant manager. He added that M/B Coco Beach III met all four conditions on September
11, 2000, but a subasco or squall, characterized by strong winds and big waves, suddenly occurred,
causing the boat to capsize.
By Decision of February 16, 2005, Branch 267 of the Pasig RTC dismissed petitioners Complaint and
respondents Counterclaim.
Petitioners Motion for Reconsideration having been denied by Order dated September 2, 2005, they
appealed to the Court of Appeals.
By Decision of August 19, 2008, the appellate court denied petitioners appeal, holding, among other
things, that the trial court correctly ruled that respondent is a private carrier which is only required to
observe ordinary diligence; that respondent in fact observed extraordinary diligence in transporting its
guests on board M/B Coco Beach III; and that the proximate cause of the incident was a squall, a
fortuitous event.
Petitioners Motion for Reconsideration having been denied by Resolution dated January 16, 2009, they
filed the present Petition for Review.
Petitioners maintain the position they took before the trial court, adding that respondent is a common
carrier since by its tour package, the transporting of its guests is an integral part of its resort business.
They inform that another division of the appellate court in fact held respondent liable for damages to
the other survivors of the incident.
Upon the other hand, respondent contends that petitioners failed to present evidence to prove that it
is a common carrier; that the Resorts ferry services for guests cannot be considered as ancillary to its
business as no income is derived therefrom; that it exercised extraordinary diligence as shown by the
conditions it had imposed before allowing M/B Coco Beach III to sail; that the incident was caused by
a fortuitous event without any contributory negligence on its part; and that the other case wherein the
appellate court held it liable for damages involved different plaintiffs, issues and evidence.
The petition is impressed with merit.
Petitioners correctly rely on De Guzman v. Court of Appeals in characterizing respondent 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 deliberately refrained from 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 systems, wire or wireless broadcasting stations and other similar public
services . . . (emphasis and underscoring supplied.)
Indeed, respondent is a common carrier. Its ferry services are so intertwined with its main business as
to be properly considered ancillary thereto. The constancy of respondents ferry services in its resort
operations is underscored by its having its own Coco Beach boats. And the tour packages it offers,
which include the ferry services, may be availed of by anyone who can afford to pay the same. These
services are thus available to the public.
That respondent does not charge a separate fee or fare for its ferry services is of no moment. It would
be imprudent to suppose that it provides said services at a loss. The Court is aware of the practice of
beach resort operators offering tour packages to factor the transportation fee in arriving at the tour
package price. That guests who opt not to avail of respondents ferry services pay the same amount is
likewise inconsequential. These guests may only be deemed to have overpaid.
As De Guzman instructs, Article 1732 of the Civil Code defining common carriers has deliberately
refrained from making distinctions on whether the carrying of persons or goods is the carriers principal
business, whether it is offered on a regular basis, or whether it is offered to the general public. The
intent of the law is thus to not consider such distinctions. Otherwise, there is no telling how many other
distinctions may be concocted by unscrupulous businessmen engaged in the carrying of persons or
goods in order to avoid the legal obligations and liabilities of common carriers.
Under the Civil Code, common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence for the safety of the passengers transported by
them, according to all the circumstances of each case. They are bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances.
When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the
common carrier is at fault or negligent. In fact, there is even no need for the court to make an express
finding of fault or negligence on the part of the common carrier. This statutory presumption may only
be overcome by evidence that the carrier exercised extraordinary diligence.
Respondent nevertheless harps on its strict compliance with the earlier mentioned conditions of voyage
before it allowed M/B Coco Beach III to sail on September 11, 2000. Respondents position does not
impress.
The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical cyclone warnings
for shipping on September 10 and 11, 2000 advising of tropical depressions in Northern Luzon which
would also affect the province of Mindoro. By the testimony of Dr. Frisco Nilo, supervising weather
specialist of PAGASA, squalls are to be expected under such weather condition.
A very cautious person exercising the utmost diligence would thus not brave such stormy weather and
put other peoples lives at risk. The extraordinary diligence required of common carriers demands that
they take care of the goods or lives entrusted to their hands as if they were their own. This respondent
failed to do.
Respondents insistence that the incident was caused by a fortuitous event does not impress either.
The elements of a fortuitous event are: (a) the cause of the unforeseen and unexpected occurrence,
or the failure of the debtors to comply with their obligations, must have been independent of human
will; (b) the event that constituted the caso fortuito must have been impossible to foresee or, if
foreseeable, impossible to avoid; (c) the occurrence must have been such as to render it impossible for
the debtors to fulfill their obligation in a normal manner; and (d) the obligor must have been free from
any participation in the aggravation of the resulting injury to the creditor.
To fully free a common carrier from any liability, the fortuitous event must have been the proximate
and only cause of the loss. And it should have exercised due diligence to prevent or minimize the loss
before, during and after the occurrence of the fortuitous event.
Respondent cites the squall that occurred during the voyage as the fortuitous event that overturned
M/B Coco Beach III. As reflected above, however, the occurrence of squalls was expected under the
weather condition of September 11, 2000. Moreover, evidence shows that M/B Coco Beach III suffered
engine trouble before it capsized and sank. The incident was, therefore, not completely free from
human intervention.
The Court need not belabor how respondents evidence likewise fails to demonstrate that it exercised
due diligence to prevent or minimize the loss before, during and after the occurrence of the squall.
Article 1764 vis--vis Article 2206 of the Civil Code holds the common carrier in breach of its contract
of carriage that results in the death of a passenger liable to pay the following: (1) indemnity for death,
(2) indemnity for loss of earning capacity and (3) moral damages.
Petitioners are entitled to indemnity for the death of Ruelito which is fixed at P50,000.
As for damages representing unearned income, the formula for its computation is:
Net Earning Capacity = life expectancy x (gross annual income - reasonable and necessary living
expenses).
Life expectancy is determined in accordance with the formula:
2 / 3 x [80 age of deceased at the time of death]
The first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 age at death])
adopted in the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table
of Mortality.
The second factor is computed by multiplying the life expectancy by the net earnings of the deceased,
i.e., the total earnings less expenses necessary in the creation of such earnings or income and less
living and other incidental expenses. The loss is not equivalent to the entire earnings of the deceased,
but only such portion as he would have used to support his dependents or heirs. Hence, to be deducted
from his gross earnings are the necessary expenses supposed to be used by the deceased for his own
needs.
In computing the third factornecessary living expense, Smith Bell Dodwell Shipping Agency Corp. v.
Borja teaches that when, as in this case, there is no showing that the living expenses constituted the
smaller percentage of the gross income, the living expenses are fixed at half of the gross income.
Applying the above guidelines, the Court determines Ruelitos life expectancy as follows:
Life expectancy = 2/3 x [80 - age of deceased at the time of death]
2/3 x [80 - 28]
2/3 x [52]
Life expectancy = 35
Documentary evidence shows that Ruelito was earning a basic monthly salary of $900 which, when
converted to Philippine peso applying the annual average exchange rate of $1 = P44 in 2000, amounts
to P39,600. Ruelitos net earning capacity is thus computed as follows:
Net Earning Capacity = life expectancy x (gross annual income -
reasonable and necessary living expenses).
= 35 x (P475,200 - P237,600)
= 35 x (P237,600)
Net Earning Capacity = P8,316,000
Respecting the award of moral damages, since respondent common carriers breach of contract of
carriage resulted in the death of petitioners son, following Article 1764 vis--vis Article 2206 of the Civil
Code, petitioners are entitled to moral damages.
Since respondent failed to prove that it exercised the extraordinary diligence required of common
carriers, it is presumed to have acted recklessly, thus warranting the award too of exemplary damages,
which are granted in contractual obligations if the defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner.
Under the circumstances, it is reasonable to award petitioners the amount of P100,000 as moral
damages and P100,000 as exemplary damages.
Pursuant to Article 2208 of the Civil Code, attorney's fees may also be awarded where exemplary
damages are awarded. The Court finds that 10% of the total amount adjudged against respondent is
reasonable for the purpose.
Finally, Eastern Shipping Lines, Inc. v. Court of Appeals teaches that when an obligation, regardless of
its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can
be held liable for payment of interest in the concept of actual and compensatory damages, subject to
the following rules, to wit
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on

the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or
until the demand can be established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages may be deemed to have
been reasonably ascertained). The actual base for the computation of legal interest shall, in any case,
be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate
of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per
annum from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit. (emphasis supplied).
Since the amounts payable by respondent have been determined with certainty only in the present
petition, the interest due shall be computed upon the finality of this decision at the rate of 12% per
annum until satisfaction, in accordance with paragraph number 3 of the immediately cited guideline in
Eastern Shipping Lines, Inc.
WHEREFORE, the Court of Appeals Decision of August 19, 2008 is REVERSED and SET ASIDE. Judgment
is rendered in favor of petitioners ordering respondent to pay petitioners the following: (1) P50,000 as
indemnity for the death of Ruelito Cruz; (2) P8,316,000 as indemnity for Ruelitos loss of earning
capacity; (3) P100,000 as moral damages; (4) P100,000 as exemplary damages; (5) 10% of the total
amount adjudged against respondent as attorneys fees; and (6) the costs of suit.
The total amount adjudged against respondent shall earn interest at the rate of 12% per annum
computed from the finality of this decision until full payment.
SO ORDERED.
Brion, Bersamin, Abad** and Villarama, Jr., JJ., concur.
Judgment reversed and set aside.
Note.A common carrier is bound by law to exercise extraordinary diligence and utmost care in
ensuring for the safety and welfare of its passengers with due regard for all the circumstances.
(Philippine Airlines, Inc vs. Court of Appeals, 566 SCRA 124 [2008])
o0o
SPOUSES FERNANDO and LOURDES VILORIA, petitioners, vs. CONTINENTAL AIRLINES,
INC., respondent
G.R. No. 188288. January 16, 2012
Civil Law; Agency; Essential Elements of Agency.In Rallos v. Felix Go Chan & Sons Realty Corporation,
81 SCRA 251 (1978), this Court explained the nature of an agency and spelled out the essential
elements thereof: Out of the above given principles, sprung the creation and acceptance of the
relationship of agency whereby one party, called the principal (mandante), authorizes another, called
the agent (mandatario), to act for and in his behalf in transactions with third persons. The essential
elements of agency are: (1) there is consent, express or implied of the parties to establish the
relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent
acts as a representative and not for himself, and (4) the agent acts within the scope of his authority.
Agency is basically personal, representative, and derivative in nature. The authority of the agent to act
emanates from the powers granted to him by his principal; his act is the act of the principal if done
within the scope of the authority. Qui facit per alium facit se. He who acts through another acts
himself.
Same; Same; Sale and Agency, Distinguished.The distinctions between a sale and an agency are
not difficult to discern and this Court, as early as 1970, had already formulated the guidelines that
would aid in differentiating the two (2) contracts. In Commissioner of Internal Revenue v. Constantino,
31 SCRA 779 (1970), this Court extrapolated that the primordial differentiating consideration between
the two (2) contracts is the transfer of ownership or title over the property subject of the contract. In
an agency, the principal retains ownership and control over the property and the agent merely acts on
the principals behalf and under his instructions in furtherance of the objectives for which the agency
was established. On the other hand, the contract is clearly a sale if the parties intended that the delivery
of the property will effect a relinquishment of title, control and ownership in such a way that the
recipient may do with the property as he pleases.
Same; Common Carriers; Quasi-delicts; Air Transportation; Vicarious Liability; An airline company is not
completely exonerated from any liability for the tort committed by its agents employees.An airline
company is not completely exonerated from any liability for the tort committed by its agents employees.
A prior determination of the nature of the passengers cause of action is necessary. If the passengers
cause of action against the airline company is premised on culpa aquiliana or quasi-delict for a tort
committed by the employee of the airline companys agent, there must be an independent showing
that the airline company was at fault or negligent or has contributed to the negligence or tortuous
conduct committed by the employee of its agent. The mere fact that the employee of the airline
companys agent has committed a tort is not sufficient to hold the airline company liable. There is no
vinculum juris between the airline company and its agents employees and the contractual relationship
between the airline company and its agent does not operate to create a juridical tie between the airline
company and its agents employees. Article 2180 of the Civil Code does not make the principal
vicariously liable for the tort committed by its agents employees and the principal-agency relationship
per se does not make the principal a party to such tort; hence, the need to prove the principals own
fault or negligence.
Same; Same; Same; Same; In an action based on a breach of contract of carriage, the aggrieved party
does not have to prove that the common carrier was at fault or was negligent. All that he has to prove
is the existence of the contract and the fact of its non-performance by the carrier.If the passengers
cause of action for damages against the airline company is based on contractual breach or culpa
contractual, it is not necessary that there be evidence of the airline companys fault or negligence. As
this Court previously stated in China Air Lines and reiterated in Air France vs. Gillego, 638 SCRA 472
(2010), in an action based on a breach of contract of carriage, the aggrieved party does not have to
prove that the common carrier was at fault or was negligent. All that he has to prove is the existence
of the contract and the fact of its non-performance by the carrier.
Same; Contracts; Voidable Contracts; Fraud; Prescription; If the consent of the contracting parties was
obtained through fraud, the contract is considered voidable and may be annulled within four (4) years
from the time of the discovery of the fraud.Article 1390, in relation to Article 1391 of the Civil Code,
provides that if the consent of the contracting parties was obtained through fraud, the contract is
considered voidable and may be annulled within four (4) years from the time of the discovery of the
fraud. Once a contract is annulled, the parties are obliged under Article 1398 of the same Code to
restore to each other the things subject matter of the contract, including their fruits and interest.
Same; Same; Same; Same; There is fraud when, through insidious words or machinations of one of
the contracting parties, the other is induced to enter into a contract which, without them, he would not
have agreed to.Under Article 1338 of the Civil Code, there is fraud when, through insidious words or
machinations of one of the contracting parties, the other is induced to enter into a contract which,
without them, he would not have agreed to. In order that fraud may vitiate consent, it must be the
causal (dolo causante), not merely the incidental (dolo incidente), inducement to the making of the
contract. In Samson v. Court of Appeals, 238 SCRA 397 (1994), causal fraud was defined as a
deception employed by one party prior to or simultaneous to the contract in order to secure the consent
of the other. Also, fraud must be serious and its existence must be established by clear and convincing
evidence.
Same; Same; Same; Voidable contracts may be ratified expressly or impliedly. Implied ratification may
take diverse forms, such as by silence or acquiescence; by acts showing approval or adoption of the
contract; or by acceptance and retention of benefits flowing therefrom.Ratification of a voidable
contract is defined under Article 1393 of the Civil Code as follows: Art. 1393. Ratification may be
effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the
reason which renders the contract voidable and such reason having ceased, the person who has a right
to invoke it should execute an act which necessarily implies an intention to waive his right. Implied
ratification may take diverse forms, such as by silence or acquiescence; by acts showing approval or
adoption of the contract; or by acceptance and retention of benefits flowing therefrom.
Same; Same; Same; A party cannot rely on the contract and claim rights or obligations under it and at
the same time impugn its existence or validity.Annulment under Article 1390 of the Civil Code and
rescission under Article 1191 are two (2) inconsistent remedies. In resolution, all the elements to make
the contract valid are present; in annulment, one of the essential elements to a formation of a contract,
which is consent, is absent. In resolution, the defect is in the consummation stage of the contract when
the parties are in the process of performing their respective obligations; in annulment, the defect is
already present at the time of the negotiation and perfection stages of the contract. Accordingly, by
pursuing the remedy of rescission under Article 1191, the Vilorias had impliedly admitted the validity of
the subject contracts, forfeiting their right to demand their annulment. A party cannot rely on the
contract and claim rights or obligations under it and at the same time impugn its existence or validity.
Indeed, litigants are enjoined from taking inconsistent positions.
Same; Common Carriers; As a common carrier whose business is imbued with public interest, the
exercise of extraordinary diligence requires the airline company to inform all of its passengers of all the
terms and conditions governing their contract of carriage.Contrary to CAIs claim, that the subject
tickets are non-transferable cannot be implied from a plain reading of the provision printed on the
subject tickets stating that [t]o the extent not in conflict with the foregoing carriage and other services
performed by each carrier are subject to: (a) provisions contained in this ticket, x x x (iii) carriers
conditions of carriage and related regulations which are made part hereof (and are available on
application at the offices of carrier) x x x. As a common carrier whose business is imbued with public
interest, the exercise of extraordinary diligence requires CAI to inform Spouses Viloria, or all of its
passengers for that matter, of all the terms and conditions governing their contract of carriage. CAI is
proscribed from taking advantage of any ambiguity in the contract of carriage to impute knowledge on
its passengers of and demand compliance with a certain condition or undertaking that is not clearly
stipulated. Since the prohibition on transferability is not written on the face of the subject tickets and
CAI failed to inform Spouses Viloria thereof, CAI cannot refuse to apply the value of Lourdes ticket as
payment for Fernandos purchase of a new ticket.
Same; Contracts; Rescission; The general rule is that rescission of a contract will not be permitted for
a slight or casual breach, but only for such substantial and fundamental violations as would defeat the
very object of the parties in making the agreement.The right to rescind a contract for non-
performance of its stipulations is not absolute. The general rule is that rescission of a contract will not
be permitted for a slight or casual breach, but only for such substantial and fundamental violations as
would defeat the very object of the parties in making the agreement. Whether a breach is substantial
is largely determined by the attendant circumstances.
Remedial Law; Evidence; Newspaper Clippings; Hearsay Evidence Rule; Newspaper clippings are
hearsay if they were offered for the purpose of proving the truth of the matter alleged.The only
evidence the petitioners presented to prove that the price of a round trip ticket between Manila and
Los Angeles at that time was only $856.00 is a newspaper advertisement for another airline company,
which is inadmissible for being hearsay evidence, twice removed. Newspaper clippings are hearsay if
they were offered for the purpose of proving the truth of the matter alleged. As ruled in Feria v. Court
of Appeals, 325 SCRA 525 (2000): [N]ewspaper articles amount to hearsay evidence, twice removed
and are therefore not only inadmissible but without any probative value at all whether objected to or
not, unless offered for a purpose other than proving the truth of the matter asserted. In this case, the
news article is admissible only as evidence that such publication does exist with the tenor of the news
therein stated.
Quasha, Ancheta, Pea & Nolasco for petitioners.
Quisumbing, Torres for respondent.
REYES, J.:
This is a petition for review under Rule 45 of the Rules of Court from the January 30, 2009 Decision of
the Special Thirteenth Division of the Court of Appeals (CA) in CA-G.R. CV No. 88586 entitled Spouses
Fernando and Lourdes Viloria v. Continental Airlines, Inc., the dispositive portion of which states:
WHEREFORE, the Decision of the Regional Trial Court, Branch 74, dated 03 April 2006, awarding
US$800.00 or its peso equivalent at the time of payment, plus legal rate of interest from 21 July 1997
until fully paid, [P]100,000.00 as moral damages, [P]50,000.00 as exemplary damages, [P]40,000.00
as attorneys fees and costs of suit to plaintiffs-appellees is hereby REVERSED and SET ASIDE.
Defendant-appellants counterclaim is DENIED.
Costs against plaintiffs-appellees.
SO ORDERED.
On April 3, 2006, the Regional Trial Court of Antipolo City, Branch 74 (RTC) rendered a Decision, giving
due course to the complaint for sum of money and damages filed by petitioners Fernando Viloria
(Fernando) and Lourdes Viloria (Lourdes), collectively called Spouses Viloria, against respondent
Continental Airlines, Inc. (CAI). As culled from the records, below are the facts giving rise to such
complaint.
On or about July 21, 1997 and while in the United States, Fernando purchased for himself and his wife,
Lourdes, two (2) round trip airline tickets from San Diego, California to Newark, New Jersey on board
Continental Airlines. Fernando purchased the tickets at US$400.00 each from a travel agency called
Holiday Travel and was attended to by a certain Margaret Mager (Mager). According to Spouses
Viloria, Fernando agreed to buy the said tickets after Mager informed them that there were no available
seats at Amtrak, an intercity passenger train service provider in the United States. Per the tickets,
Spouses Viloria were scheduled to leave for Newark on August 13, 1997 and return to San Diego on
August 21, 1997.
Subsequently, Fernando requested Mager to reschedule their flight to Newark to an earlier date or
August 6, 1997. Mager informed him that flights to Newark via Continental Airlines were already fully
booked and offered the alternative of a round trip flight via Frontier Air. Since flying with Frontier Air
called for a higher fare of US$526.00 per passenger and would mean traveling by night, Fernando
opted to request for a refund. Mager, however, denied his request as the subject tickets are non-
refundable and the only option that Continental Airlines can offer is the re-issuance of new tickets within
one (1) year from the date the subject tickets were issued. Fernando decided to reserve two (2) seats
with Frontier Air.
As he was having second thoughts on traveling via Frontier Air, Fernando went to the Greyhound
Station where he saw an Amtrak station nearby. Fernando made inquiries and was told that there are
seats available and he can travel on Amtrak anytime and any day he pleased. Fernando then purchased
two (2) tickets for Washington, D.C.
From Amtrak, Fernando went to Holiday Travel and confronted Mager with the Amtrak tickets, telling
her that she had misled them into buying the Continental Airlines tickets by misrepresenting that Amtrak
was already fully booked. Fernando reiterated his demand for a refund but Mager was firm in her
position that the subject tickets are non-refundable.
Upon returning to the Philippines, Fernando sent a letter to CAI on February 11, 1998, demanding a
refund and alleging that Mager had deluded them into purchasing the subject tickets.
In a letter dated February 24, 1998, Continental Micronesia informed Fernando that his complaint had
been referred to the Customer Refund Services of Continental Airlines at Houston, Texas.
In a letter dated March 24, 1998, Continental Micronesia denied Fernandos request for a refund and
advised him that he may take the subject tickets to any Continental ticketing location for the re-issuance
of new tickets within two (2) years from the date they were issued. Continental Micronesia informed
Fernando that the subject tickets may be used as a form of payment for the purchase of another
Continental ticket, albeit with a re-issuance fee.
On June 17, 1999, Fernando went to Continentals ticketing office at Ayala Avenue, Makati City to have
the subject tickets replaced by a single round trip ticket to Los Angeles, California under his name.
Therein, Fernando was informed that Lourdes ticket was non-transferable, thus, cannot be used for
the purchase of a ticket in his favor. He was also informed that a round trip ticket to Los Angeles was
US$1,867.40 so he would have to pay what will not be covered by the value of his San Diego to Newark
round trip ticket.
In a letter dated June 21, 1999, Fernando demanded for the refund of the subject tickets as he no
longer wished to have them replaced. In addition to the dubious circumstances under which the subject
tickets were issued, Fernando claimed that CAIs act of charging him with US$1,867.40 for a round trip
ticket to Los Angeles, which other airlines priced at US$856.00, and refusal to allow him to use Lourdes
ticket, breached its undertaking under its March 24, 1998 letter.
On September 8, 2000, Spouses Viloria filed a complaint against CAI, praying that CAI be ordered to
refund the money they used in the purchase of the subject tickets with legal interest from July 21, 1997
and to pay P1,000,000.00 as moral damages, P500,000.00 as exemplary damages and P250,000.00 as
attorneys fees.
CAI interposed the following defenses: (a) Spouses Viloria have no right to ask for a refund as the
subject tickets are non-refundable; (b) Fernando cannot insist on using the ticket in Lourdes name for
the purchase of a round trip ticket to Los Angeles since the same is non-transferable; (c) as Mager is
not a CAI employee, CAI is not liable for any of her acts; (d) CAI, its employees and agents did not act
in bad faith as to entitle Spouses Viloria to moral and exemplary damages and attorneys fees. CAI also
invoked the following clause printed on the subject tickets:
3. To the extent not in conflict with the foregoing carriage and other services performed by each
carrier are subject to: (i) provisions contained in this ticket, (ii) applicable tariffs, (iii) carriers conditions
of carriage and related regulations which are made part hereof (and are available on application at the
offices of carrier), except in transportation between a place in the United States or Canada and any
place outside thereof to which tariffs in force in those countries apply.
According to CAI, one of the conditions attached to their contract of carriage is the non-transferability
and non-refundability of the subject tickets.
The RTCs Ruling
Following a full-blown trial, the RTC rendered its April 3, 2006 Decision, holding that Spouses Viloria
are entitled to a refund in view of Magers misrepresentation in obtaining their consent in the purchase
of the subject tickets. The relevant portion of the April 3, 2006 Decision states:
Continental Airlines agent Ms. Mager was in bad faith when she was less candid and diligent in
presenting to plaintiffs spouses their booking options. Plaintiff Fernando clearly wanted to travel via
AMTRAK, but defendants agent misled him into purchasing Continental Airlines tickets instead on the
fraudulent misrepresentation that Amtrak was fully booked. In fact, defendant Airline did not specifically
denied (sic) this allegation.
Plainly, plaintiffs spouses, particularly plaintiff Fernando, were tricked into buying Continental Airline
tickets on Ms. Magers misleading misrepresentations. Continental Airlines agent Ms. Mager further
relied on and exploited plaintiff Fernandos need and told him that they must book a flight immediately
or risk not being able to travel at all on the couples preferred date. Unfortunately, plaintiffs spouses
fell prey to the airlines and its agents unethical tactics for baiting trusting customers.
Citing Articles 1868 and 1869 of the Civil Code, the RTC ruled that Mager is CAIs agent, hence, bound
by her bad faith and misrepresentation. As far as the RTC is concerned, there is no issue as to whether
Mager was CAIs agent in view of CAIs implied recognition of her status as such in its March 24, 1998
letter.
The act of a travel agent or agency being involved here, the following are the pertinent New Civil Code
provisions on agency:
Art. 1868. By the contract of agency a person binds himself to render some service or to do something
in representation or on behalf of another, with the consent or authority of the latter.
Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack
of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf
without authority.
Agency may be oral, unless the law requires a specific form.
As its very name implies, a travel agency binds itself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter. This court takes
judicial notice of the common services rendered by travel agencies that represent themselves as such,
specifically the reservation and booking of local and foreign tours as well as the issuance of airline
tickets for a commission or fee.
The services rendered by Ms. Mager of Holiday Travel agency to the plaintiff spouses on July 21, 1997
were no different from those offered in any other travel agency. Defendant airline impliedly if not
expressly acknowledged its principal-agent relationship with Ms. Mager by its offer in the letter dated
March 24, 1998an obvious attempt to assuage plaintiffs spouses hurt feelings.
Furthermore, the RTC ruled that CAI acted in bad faith in reneging on its undertaking to replace the
subject tickets within two (2) years from their date of issue when it charged Fernando with the amount
of US$1,867.40 for a round trip ticket to Los Angeles and when it refused to allow Fernando to use
Lourdes ticket. Specifically:
Tickets may be reissued for up to two years from the original date of issue. When defendant airline
still charged plaintiffs spouses US$1,867.40 or more than double the then going rate of US$856.00 for
the unused tickets when the same were presented within two (2) years from date of issue, defendant
airline exhibited callous treatment of passengers.
The Appellate Courts Ruling
On appeal, the CA reversed the RTCs April 3, 2006 Decision, holding that CAI cannot be held liable for
Magers act in the absence of any proof that a principal-agent relationship existed between CAI and
Holiday Travel. According to the CA, Spouses Viloria, who have the burden of proof to establish the fact
of agency, failed to present evidence demonstrating that Holiday Travel is CAIs agent. Furthermore,
contrary to Spouses Vilorias claim, the contractual relationship between Holiday Travel and CAI is not
an agency but that of a sale.
Plaintiffs-appellees assert that Mager was a sub-agent of Holiday Travel who was in turn a ticketing
agent of Holiday Travel who was in turn a ticketing agent of Continental Airlines. Proceeding from this
premise, they contend that Continental Airlines should be held liable for the acts of Mager. The trial
court held the same view.
We do not agree. By the contract of agency, a person binds him/herself to render some service or to
do something in representation or on behalf of another, with the consent or authority of the latter. The
elements of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2)
the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for him/herself; and (4) the agent acts within the scope of his/her authority. As
the basis of agency is representation, there must be, on the part of the principal, an actual intention to
appoint, an intention naturally inferable from the principals words or actions. In the same manner,
there must be an intention on the part of the agent to accept the appointment and act upon it. Absent
such mutual intent, there is generally no agency. It is likewise a settled rule that persons dealing with
an assumed agent are bound at their peril, if they would hold the principal liable, to ascertain not only
the fact of agency but also the nature and extent of authority, and in case either is controverted, the
burden of proof is upon them to establish it. Agency is never presumed, neither is it created by the
mere use of the word in a trade or business name. We have perused the evidence and documents so
far presented. We find nothing except bare allegations of plaintiffs-appellees that Mager/Holiday Travel
was acting in behalf of Continental Airlines. From all sides of legal prism, the transaction in issue was
simply a contract of sale, wherein Holiday Travel buys airline tickets from Continental Airlines and then,
through its employees, Mager included, sells it at a premium to clients.
The CA also ruled that refund is not available to Spouses Viloria as the word non-refundable was
clearly printed on the face of the subject tickets, which constitute their contract with CAI. Therefore,
the grant of their prayer for a refund would violate the proscription against impairment of contracts.
Finally, the CA held that CAI did not act in bad faith when they charged Spouses Viloria with the higher
amount of US$1,867.40 for a round trip ticket to Los Angeles. According to the CA, there is no
compulsion for CAI to charge the lower amount of US$856.00, which Spouses Viloria claim to be the
fee charged by other airlines. The matter of fixing the prices for its services is CAIs prerogative, which
Spouses Viloria cannot intervene. In particular:
It is within the respective rights of persons owning and/or operating business entities to peg the
premium of the services and items which they provide at a price which they deem fit, no matter how
expensive or exhorbitant said price may seem vis--vis those of the competing companies. The Spouses
Viloria may not intervene with the business judgment of Continental Airlines.
The Petitioners Case

In this Petition, this Court is being asked to review the findings and conclusions of the CA, as the latters
reversal of the RTCs April 3, 2006 Decision allegedly lacks factual and legal bases. Spouses Viloria claim
that CAI acted in bad faith when it required them to pay a higher amount for a round trip ticket to Los
Angeles considering CAIs undertaking to re-issue new tickets to them within the period stated in their
March 24, 1998 letter. CAI likewise acted in bad faith when it disallowed Fernando to use Lourdes
ticket to purchase a round trip to Los Angeles given that there is nothing in Lourdes ticket indicating
that it is non-transferable. As a common carrier, it is CAIs duty to inform its passengers of the terms
and conditions of their contract and passengers cannot be bound by such terms and conditions which
they are not made aware of. Also, the subject contract of carriage is a contract of adhesion; therefore,
any ambiguities should be construed against CAI. Notably, the petitioners are no longer questioning
the validity of the subject contracts and limited its claim for a refund on CAIs alleged breach of its
undertaking in its March 24, 1998 letter.
The Respondents Case
In its Comment, CAI claimed that Spouses Vilorias allegation of bad faith is negated by its willingness
to issue new tickets to them and to credit the value of the subject tickets against the value of the new
ticket Fernando requested. CAI argued that Spouses Vilorias sole basis to claim that the price at which
CAI was willing to issue the new tickets is unconscionable is a piece of hearsay evidencean
advertisement appearing on a newspaper stating that airfares from Manila to Los Angeles or San
Francisco cost US$818.00. Also, the advertisement pertains to airfares in September 2000 and not to
airfares prevailing in June 1999, the time when Fernando asked CAI to apply the value of the subject
tickets for the purchase of a new one. CAI likewise argued that it did not undertake to protect Spouses
Viloria from any changes or fluctuations in the prices of airline tickets and its only obligation was to
apply the value of the subject tickets to the purchase of the newly issued tickets.
With respect to Spouses Vilorias claim that they are not aware of CAIs restrictions on the subject
tickets and that the terms and conditions that are printed on them are ambiguous, CAI denies any
ambiguity and alleged that its representative informed Fernando that the subject tickets are non-
transferable when he applied for the issuance of a new ticket. On the other hand, the word non-
refundable clearly appears on the face of the subject tickets.
CAI also denies that it is bound by the acts of Holiday Travel and Mager and that no principal-agency
relationship exists between them. As an independent contractor, Holiday Travel was without capacity
to bind CAI.
Issues
To determine the propriety of disturbing the CAs January 30, 2009 Decision and whether Spouses
Viloria have the right to the reliefs they prayed for, this Court deems it necessary to resolve the following
issues:
a. Does a principal-agent relationship exist between CAI and Holiday Travel?
b. Assuming that an agency relationship exists between CAI and Holiday Travel, is CAI bound by the
acts of Holiday Travels agents and employees such as Mager?
c. Assuming that CAI is bound by the acts of Holiday Travels agents and employees, can the
representation of Mager as to unavailability of seats at Amtrak be considered fraudulent as to vitiate
the consent of Spouse Viloria in the purchase of the subject tickets?
d. Is CAI justified in insisting that the subject tickets are non-transferable and non-refundable?
e. Is CAI justified in pegging a different price for the round trip ticket to Los Angeles requested by
Fernando?
f. Alternatively, did CAI act in bad faith or renege its obligation to Spouses Viloria to apply the value
of the subject tickets in the purchase of new ones when it refused to allow Fernando to use Lourdes
ticket and in charging a higher price for a round trip ticket to Los Angeles?
This Courts Ruling
I. A principal-agent relationship exists between CAI and Holiday Travel.
With respect to the first issue, which is a question of fact that would require this Court to review and
re-examine the evidence presented by the parties below, this Court takes exception to the general rule
that the CAs findings of fact are conclusive upon Us and our jurisdiction is limited to the review of
questions of law. It is well-settled to the point of being axiomatic that this Court is authorized to resolve
questions of fact if confronted with contrasting factual findings of the trial court and appellate court
and if the findings of the CA are contradicted by the evidence on record.
According to the CA, agency is never presumed and that he who alleges that it exists has the burden
of proof. Spouses Viloria, on whose shoulders such burden rests, presented evidence that fell short of
indubitably demonstrating the existence of such agency.
We disagree. The CA failed to consider undisputed facts, discrediting CAIs denial that Holiday Travel is
one of its agents. Furthermore, in erroneously characterizing the contractual relationship between CAI
and Holiday Travel as a contract of sale, the CA failed to apply the fundamental civil law principles
governing agency and differentiating it from sale.
In Rallos v. Felix Go Chan & Sons Realty Corporation, this Court explained the nature of an agency and
spelled out the essential elements thereof:
Out of the above given principles, sprung the creation and acceptance of the relationship of agency
whereby one party, called the principal (mandante), authorizes another, called the agent (mandatario),
to act for and in his behalf in transactions with third persons. The essential elements of agency are: (1)
there is consent, express or implied of the parties to establish the relationship; (2) the object is the
execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not
for himself, and (4) the agent acts within the scope of his authority.
Agency is basically personal, representative, and derivative in nature. The authority of the agent to act
emanates from the powers granted to him by his principal; his act is the act of the principal if done
within the scope of the authority. Qui facit per alium facit se. He who acts through another acts
himself.
Contrary to the findings of the CA, all the elements of an agency exist in this case. The first and second
elements are present as CAI does not deny that it concluded an agreement with Holiday Travel, whereby
Holiday Travel would enter into contracts of carriage with third persons on CAIs behalf. The third
element is also present as it is undisputed that Holiday Travel merely acted in a representative capacity
and it is CAI and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday
Travel on its behalf. The fourth element is also present considering that CAI has not made any allegation
that Holiday Travel exceeded the authority that was granted to it. In fact, CAI consistently maintains
the validity of the contracts of carriage that Holiday Travel executed with Spouses Viloria and that
Mager was not guilty of any fraudulent misrepresentation. That CAI admits the authority of Holiday
Travel to enter into contracts of carriage on its behalf is easily discernible from its February 24, 1998
and March 24, 1998 letters, where it impliedly recognized the validity of the contracts entered into by
Holiday Travel with Spouses Viloria. When Fernando informed CAI that it was Holiday Travel who issued
to them the subject tickets, CAI did not deny that Holiday Travel is its authorized agent.
Prior to Spouses Vilorias filing of a complaint against it, CAI never refuted that it gave Holiday Travel
the power and authority to conclude contracts of carriage on its behalf. As clearly extant from the
records, CAI recognized the validity of the contracts of carriage that Holiday Travel entered into with
Spouses Viloria and considered itself bound with Spouses Viloria by the terms and conditions thereof;
and this constitutes an unequivocal testament to Holiday Travels authority to act as its agent. This
Court cannot therefore allow CAI to take an altogether different position and deny that Holiday Travel
is its agent without condoning or giving imprimatur to whatever damage or prejudice that may result
from such denial or retraction to Spouses Viloria, who relied on good faith on CAIs acts in recognition
of Holiday Travels authority. Estoppel is primarily based on the doctrine of good faith and the avoidance
of harm that will befall an innocent party due to its injurious reliance, the failure to apply it in this case
would result in gross travesty of justice. Estoppel bars CAI from making such denial.
As categorically provided under Article 1869 of the Civil Code, [a]gency may be express, or implied
from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf without authority.
Considering that the fundamental hallmarks of an agency are present, this Court finds it rather peculiar
that the CA had branded the contractual relationship between CAI and Holiday Travel as one of sale.
The distinctions between a sale and an agency are not difficult to discern and this Court, as early as
1970, had already formulated the guidelines that would aid in differentiating the two (2) contracts. In
Commissioner of Internal Revenue v. Constantino, this Court extrapolated that the primordial
differentiating consideration between the two (2) contracts is the transfer of ownership or title over the
property subject of the contract. In an agency, the principal retains ownership and control over the
property and the agent merely acts on the principals behalf and under his instructions in furtherance
of the objectives for which the agency was established. On the other hand, the contract is clearly a sale
if the parties intended that the delivery of the property will effect a relinquishment of title, control and
ownership in such a way that the recipient may do with the property as he pleases.
Since the company retained ownership of the goods, even as it delivered possession unto the dealer
for resale to customers, the price and terms of which were subject to the companys control, the
relationship between the company and the dealer is one of agency, tested under the following criterion:
The difficulty in distinguishing between contracts of sale and the creation of an agency to sell has led
to the establishment of rules by the application of which this difficulty may be solved. The decisions
say the transfer of title or agreement to transfer it for a price paid or promised is the essence of sale.
If such transfer puts the transferee in the attitude or position of an owner and makes him liable to the
transferor as a debtor for the agreed price, and not merely as an agent who must account for the
proceeds of a resale, the transaction is a sale; while the essence of an agency to sell is the delivery to
an agent, not as his property, but as the property of the principal, who remains the owner and has the
right to control sales, fix the price, and terms, demand and receive the proceeds less the agents
commission upon sales made. 1 Mechem on Sales, Sec. 43; 1 Mechem on Agency, Sec. 48; Williston
on Sales, 1; Tiedeman on Sales, 1. (Salisbury v. Brooks, 94 SE 117, 118-119)
As to how the CA have arrived at the conclusion that the contract between CAI and Holiday Travel is a
sale is certainly confounding, considering that CAI is the one bound by the contracts of carriage
embodied by the tickets being sold by Holiday Travel on its behalf. It is undisputed that CAI and not
Holiday Travel who is the party to the contracts of carriage executed by Holiday Travel with third
persons who desire to travel via Continental Airlines, and this conclusively indicates the existence of a
principal-agent relationship. That the principal is bound by all the obligations contracted by the agent
within the scope of the authority granted to him is clearly provided under Article 1910 of the Civil Code
and this constitutes the very notion of agency.
II. In actions based on quasi-delict, a principal can only be held liable for the tort committed by its
agents employees if it has been established by preponderance of evidence that the principal was
also at fault or negligent or that the principal exercise control and supervision over them.
Considering that Holiday Travel is CAIs agent, does it necessarily follow that CAI is liable for the fault
or negligence of Holiday Travels employees? Citing China Air Lines, Ltd. v. Court of Appeals, et al., CAI
argues that it cannot be held liable for the actions of the employee of its ticketing agent in the absence
of an employer-employee relationship.
An examination of this Courts pronouncements in China Air Lines will reveal that an airline company is
not completely exonerated from any liability for the tort committed by its agents employees. A prior
determination of the nature of the passengers cause of action is necessary. If the passengers cause
of action against the airline company is premised on culpa aquiliana or quasi-delict for a tort committed
by the employee of the airline companys agent, there must be an independent showing that the airline
company was at fault or negligent or has contributed to the negligence or tortuous conduct committed
by the employee of its agent. The mere fact that the employee of the airline companys agent has
committed a tort is not sufficient to hold the airline company liable. There is no vinculum juris between
the airline company and its agents employees and the contractual relationship between the airline
company and its agent does not operate to create a juridical tie between the airline company and its
agents employees. Article 2180 of the Civil Code does not make the principal vicariously liable for the
tort committed by its agents employees and the principal-agency relationship per se does not make
the principal a party to such tort; hence, the need to prove the principals own fault or negligence.
On the other hand, if the passengers cause of action for damages against the airline company is based
on contractual breach or culpa contractual, it is not necessary that there be evidence of the airline
companys fault or negligence. As this Court previously stated in China Air Lines and reiterated in Air
France vs. Gillego, in an action based on a breach of contract of carriage, the aggrieved party does
not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the
existence of the contract and the fact of its non-performance by the carrier.
Spouses Vilorias cause of action on the basis of Magers alleged fraudulent misrepresentation is clearly
one of tort or quasi-delict, there being no pre-existing contractual relationship between them.
Therefore, it was incumbent upon Spouses Viloria to prove that CAI was equally at fault.
However, the records are devoid of any evidence by which CAIs alleged liability can be substantiated.
Apart from their claim that CAI must be held liable for Magers supposed fraud because Holiday Travel
is CAIs agent, Spouses Viloria did not present evidence that CAI was a party or had contributed to
Magers complained act either by instructing or authorizing Holiday Travel and Mager to issue the said
misrepresentation.
It may seem unjust at first glance that CAI would consider Spouses Viloria bound by the terms and
conditions of the subject contracts, which Mager entered into with them on CAIs behalf, in order to
deny Spouses Vilorias request for a refund or Fernandos use of Lourdes ticket for the re-issuance of
a new one, and simultaneously claim that they are not bound by Magers supposed misrepresentation
for purposes of avoiding Spouses Vilorias claim for damages and maintaining the validity of the subject
contracts. It may likewise be argued that CAI cannot deny liability as it benefited from Magers acts,
which were performed in compliance with Holiday Travels obligations as CAIs agent.
However, a persons vicarious liability is anchored on his possession of control, whether absolute or
limited, on the tortfeasor. Without such control, there is nothing which could justify extending the
liability to a person other than the one who committed the tort. As this Court explained in Cangco v.
Manila Railroad Co.:
With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is
competent for the legislature to electand our Legislature has so electedto limit such liability to cases
in which the person upon whom such an obligation is imposed is morally culpable or, on the contrary,
for reasons of public policy, to extend that liability, without regard to the lack of moral culpability, so
as to include responsibility for the negligence of those persons whose acts or omissions are imputable,
by a legal fiction, to others who are in a position to exercise an absolute or limited control over them.
The legislature which adopted our Civil Code has elected to limit extra-contractual liabilitywith certain
well-defined exceptionsto cases in which moral culpability can be directly imputed to the persons to
be charged. This moral responsibility may consist in having failed to exercise due care in ones own
acts, or in having failed to exercise due care in the selection and control of ones agent or servants, or
in the control of persons who, by reasons of their status, occupy a position of dependency with respect
to the person made liable for their conduct. (emphasis supplied)
It is incumbent upon Spouses Viloria to prove that CAI exercised control or supervision over Mager by
preponderant evidence. The existence of control or supervision cannot be presumed and CAI is under
no obligation to prove its denial or nugatory assertion. Citing Belen v. Belen, this Court ruled in Jayme
v. Apostol, that:
In Belen v. Belen, this Court ruled that it was enough for defendant to deny an alleged employment
relationship. The defendant is under no obligation to prove the negative averment. This Court said:
It is an old and well-settled rule of the courts that the burden of proving the action is upon the plaintiff,
and that if he fails satisfactorily to show the facts upon which he bases his claim, the defendant is under
no obligation to prove his exceptions. This [rule] is in harmony with the provisions of Section 297 of
the Code of Civil Procedure holding that each party must prove his own affirmative allegations, etc.
(citations omitted)
Therefore, without a modicum of evidence that CAI exercised control over Holiday Travels employees
or that CAI was equally at fault, no liability can be imposed on CAI for Magers supposed
misrepresentation.
III. Even on the assumption that CAI may be held liable for the acts of Mager, still, Spouses Viloria
are not entitled to a refund. Magers statement cannot be considered a causal fraud that would justify
the annulment of the subject contracts that would oblige CAI to indemnify Spouses Viloria and return
the money they paid for the subject tickets.
Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of the contracting
parties was obtained through fraud, the contract is considered voidable and may be annulled within
four (4) years from the time of the discovery of the fraud. Once a contract is annulled, the parties are
obliged under Article 1398 of the same Code to restore to each other the things subject matter of the
contract, including their fruits and interest.
On the basis of the foregoing and given the allegation of Spouses Viloria that Fernandos consent to
the subject contracts was supposedly secured by Mager through fraudulent means, it is plainly apparent
that their demand for a refund is tantamount to seeking for an annulment of the subject contracts on
the ground of vitiated consent.
Whether the subject contracts are annullable, this Court is required to determine whether Magers
alleged misrepresentation constitutes causal fraud. Similar to the dispute on the existence of an agency,
whether fraud attended the execution of a contract is factual in nature and this Court, as discussed
above, may scrutinize the records if the findings of the CA are contrary to those of the RTC.
Under Article 1338 of the Civil Code, there is fraud when, through insidious words or machinations of
one of the contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to. In order that fraud may vitiate consent, it must be the causal (dolo causante),
not merely the incidental (dolo incidente), inducement to the making of the contract. In Samson v.
Court of Appeals, causal fraud was defined as a deception employed by one party prior to or
simultaneous to the contract in order to secure the consent of the other.
Also, fraud must be serious and its existence must be established by clear and convincing evidence. As
ruled by this Court in Sierra v. Hon. Court of Appeals, et al., mere preponderance of evidence is not
adequate:
Fraud must also be discounted, for according to the Civil Code:
Art. 1338. There is fraud when, through insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which without them, he would not have agreed to.
Art. 1344. In order that fraud may make a contract voidable, it should be serious and should not have
been employed by both contracting parties.
To quote Tolentino again, the misrepresentation constituting the fraud must be established by full,
clear, and convincing evidence, and not merely by a preponderance thereof. The deceit must be serious.
The fraud is serious when it is sufficient to impress, or to lead an ordinarily prudent person into error;
that which cannot deceive a prudent person cannot be a ground for nullity. The circumstances of each
case should be considered, taking into account the personal conditions of the victim.
After meticulously poring over the records, this Court finds that the fraud alleged by Spouses Viloria
has not been satisfactorily established as causal in nature to warrant the annulment of the subject
contracts. In fact, Spouses Viloria failed to prove by clear and convincing evidence that Magers
statement was fraudulent. Specifically, Spouses Viloria failed to prove that (a) there were indeed
available seats at Amtrak for a trip to New Jersey on August 13, 1997 at the time they spoke with
Mager on July 21, 1997; (b) Mager knew about this; and (c) that she purposely informed them
otherwise.
This Court finds the only proof of Magers alleged fraud, which is Fernandos testimony that an Amtrak
had assured him of the perennial availability of seats at Amtrak, to be wanting. As CAI correctly pointed
out and as Fernando admitted, it was possible that during the intervening period of three (3) weeks
from the time Fernando purchased the subject tickets to the time he talked to said Amtrak employee,
other passengers may have cancelled their bookings and reservations with Amtrak, making it possible
for Amtrak to accommodate them. Indeed, the existence of fraud cannot be proved by mere
speculations and conjectures. Fraud is never lightly inferred; it is good faith that is. Under the Rules of
Court, it is presumed that a person is innocent of crime or wrong and that private transactions have
been fair and regular. Spouses Viloria failed to overcome this presumption.
IV. Assuming the contrary, Spouses Viloria are nevertheless deemed to have ratified the subject
contracts.
Even assuming that Magers representation is causal fraud, the subject contracts have been impliedly
ratified when Spouses Viloria decided to exercise their right to use the subject tickets for the purchase
of new ones. Under Article 1392 of the Civil Code, ratification extinguishes the action to annul a
voidable contract.
Ratification of a voidable contract is defined under Article 1393 of the Civil Code as follows:
Art. 1393. Ratification may be effected expressly or tacitly. It is understood that there is a tacit
ratification if, with knowledge of the reason which renders the contract voidable and such reason having
ceased, the person who has a right to invoke it should execute an act which necessarily implies an
intention to waive his right.
Implied ratification may take diverse forms, such as by silence or acquiescence; by acts showing
approval or adoption of the contract; or by acceptance and retention of benefits flowing therefrom.
Simultaneous with their demand for a refund on the ground of Fernandos vitiated consent, Spouses
Viloria likewise asked for a refund based on CAIs supposed bad faith in reneging on its undertaking to
replace the subject tickets with a round trip ticket from Manila to Los Angeles.
In doing so, Spouses Viloria are actually asking for a rescission of the subject contracts based on
contractual breach. Resolution, the action referred to in Article 1191, is based on the defendants breach
of faith, a violation of the reciprocity between the parties and in Solar Harvest, Inc. v. Davao Corrugated
Carton Corporation, this Court ruled that a claim for a reimbursement in view of the other partys failure
to comply with his obligations under the contract is one for rescission or resolution.
However, annulment under Article 1390 of the Civil Code and rescission under Article 1191 are two (2)
inconsistent remedies. In resolution, all the elements to make the contract valid are present; in
annulment, one of the essential elements to a formation of a contract, which is consent, is absent. In
resolution, the defect is in the consummation stage of the contract when the parties are in the process
of performing their respective obligations; in annulment, the defect is already present at the time of
the negotiation and perfection stages of the contract. Accordingly, by pursuing the remedy of rescission
under Article 1191, the Vilorias had impliedly admitted the validity of the subject contracts, forfeiting
their right to demand their annulment. A party cannot rely on the contract and claim rights or obligations
under it and at the same time impugn its existence or validity. Indeed, litigants are enjoined from taking
inconsistent positions.
V. Contracts cannot be rescinded for a slight or casual breach.
CAI cannot insist on the non-transferability of the subject tickets.
Considering that the subject contracts are not annullable on the ground of vitiated consent, the next
question is: Do Spouses Viloria have the right to rescind the contract on the ground of CAIs supposed
breach of its undertaking to issue new tickets upon surrender of the subject tickets?
Article 1191, as presently worded, states:
The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfilment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment,
if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing,
in accordance with articles 1385 and 1388 and the Mortgage Law.
According to Spouses Viloria, CAI acted in bad faith and breached the subject contracts when it refused
to apply the value of Lourdes ticket for Fernandos purchase of a round trip ticket to Los Angeles and
in requiring him to pay an amount higher than the price fixed by other airline companies.
In its March 24, 1998 letter, CAI stated that non-refundable tickets may be used as a form of payment
toward the purchase of another Continental ticket for $75.00, per ticket, reissue fee ($50.00, per ticket,
for tickets purchased prior to October 30, 1997).
Clearly, there is nothing in the above-quoted section of CAIs letter from which the restriction on the
non-transferability of the subject tickets can be inferred. In fact, the words used by CAI in its letter
supports the position of Spouses Viloria, that each of them can use the ticket under their name for the
purchase of new tickets whether for themselves or for some other person.
Moreover, as CAI admitted, it was only when Fernando had expressed his interest to use the subject
tickets for the purchase of a round trip ticket between Manila and Los Angeles that he was informed
that he cannot use the ticket in Lourdes name as payment.
Contrary to CAIs claim, that the subject tickets are non-transferable cannot be implied from a plain
reading of the provision printed on the subject tickets stating that [t]o the extent not in conflict with
the foregoing carriage and other services performed by each carrier are subject to: (a) provisions
contained in this ticket, x x x (iii) carriers conditions of carriage and related regulations which are made
part hereof (and are available on application at the offices of carrier) x x x. As a common carrier whose
business is imbued with public interest, the exercise of extraordinary diligence requires CAI to inform
Spouses Viloria, or all of its passengers for that matter, of all the terms and conditions governing their
contract of carriage. CAI is proscribed from taking advantage of any ambiguity in the contract of
carriage to impute knowledge on its passengers of and demand compliance with a certain condition or
undertaking that is not clearly stipulated. Since the prohibition on transferability is not written on the
face of the subject tickets and CAI failed to inform Spouses Viloria thereof, CAI cannot refuse to apply
the value of Lourdes ticket as payment for Fernandos purchase of a new ticket.
CAIs refusal to accept Lourdes ticket for the purchase of a new ticket for Fernando is only a casual
breach.
Nonetheless, the right to rescind a contract for non-performance of its stipulations is not absolute. The
general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only
for such substantial and fundamental violations as would defeat the very object of the parties in making
the agreement. Whether a breach is substantial is largely determined by the attendant circumstances.
While CAIs refusal to allow Fernando to use the value of Lourdes ticket as payment for the purchase
of a new ticket is unjustified as the non-transferability of the subject tickets was not clearly stipulated,
it cannot, however be considered substantial. The endorsability of the subject tickets is not an essential
part of the underlying contracts and CAIs failure to comply is not essential to its fulfillment of its
undertaking to issue new tickets upon Spouses Vilorias surrender of the subject tickets. This Court
takes note of CAIs willingness to perform its principal obligation and this is to apply the price of the
ticket in Fernandos name to the price of the round trip ticket between Manila and Los Angeles. CAI
was likewise willing to accept the ticket in Lourdes name as full or partial payment as the case may be
for the purchase of any ticket, albeit under her name and for her exclusive use. In other words, CAIs
willingness to comply with its undertaking under its March 24, 1998 cannot be doubted, albeit tainted
with its erroneous insistence that Lourdes ticket is non-transferable.
Moreover, Spouses Vilorias demand for rescission cannot prosper as CAI cannot be solely faulted for
the fact that their agreement failed to consummate and no new ticket was issued to Fernando. Spouses
Viloria have no right to insist that a single round trip ticket between Manila and Los Angeles should be
priced at around $856.00 and refuse to pay the difference between the price of the subject tickets and
the amount fixed by CAI. The petitioners failed to allege, much less prove, that CAI had obliged itself
to issue to them tickets for any flight anywhere in the world upon their surrender of the subject tickets.
In its March 24, 1998 letter, it was clearly stated that [n]on-refundable tickets may be used as a form
of payment toward the purchase of another Continental ticket and there is nothing in it suggesting
that CAI had obliged itself to protect Spouses Viloria from any fluctuation in the prices of tickets or that
the surrender of the subject tickets will be considered as full payment for any ticket that the petitioners
intend to buy regardless of actual price and destination. The CA was correct in holding that it is CAIs
right and exclusive prerogative to fix the prices for its services and it may not be compelled to observe
and maintain the prices of other airline companies.
The conflict as to the endorsability of the subject tickets is an altogether different matter, which does
not preclude CAI from fixing the price of a round trip ticket between Manila and Los Angeles in an
amount it deems proper and which does not provide Spouses Viloria an excuse not to pay such price,
albeit subject to a reduction coming from the value of the subject tickets. It cannot be denied that
Spouses Viloria had the concomitant obligation to pay whatever is not covered by the value of the
subject tickets whether or not the subject tickets are transferable or not.
There is also no showing that Spouses Viloria were discriminated against in bad faith by being charged
with a higher rate. The only evidence the petitioners presented to prove that the price of a round trip
ticket between Manila and Los Angeles at that time was only $856.00 is a newspaper advertisement
for another airline company, which is inadmissible for being hearsay evidence, twice removed.
Newspaper clippings are hearsay if they were offered for the purpose of proving the truth of the matter
alleged. As ruled in Feria v. Court of Appeals:
[N]ewspaper articles amount to hearsay evidence, twice removed and are therefore not only
inadmissible but without any probative value at all whether objected to or not, unless offered for a
purpose other than proving the truth of the matter asserted. In this case, the news article is admissible
only as evidence that such publication does exist with the tenor of the news therein stated. (citations
omitted)
The records of this case demonstrate that both parties were equally in default; hence, none of them
can seek judicial redress for the cancellation or resolution of the subject contracts and they are therefore
bound to their respective obligations thereunder. As the 1st sentence of Article 1192 provides:
Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first
violated the contract, the same shall be deemed extinguished, and each shall bear his own damages.
(emphasis supplied)
Therefore, CAIs liability for damages for its refusal to accept Lourdes ticket for the purchase of
Fernandos round trip ticket is offset by Spouses Vilorias liability for their refusal to pay the amount,
which is not covered by the subject tickets. Moreover, the contract between them remains, hence, CAI
is duty bound to issue new tickets for a destination chosen by Spouses Viloria upon their surrender of
the subject tickets and Spouses Viloria are obliged to pay whatever amount is not covered by the value
of the subject tickets.
This Court made a similar ruling in Central Bank of the Philippines v. Court of Appeals. Thus:
Since both parties were in default in the performance of their respective reciprocal obligations, that is,
Island Savings Bank failed to comply with its obligation to furnish the entire loan and Sulpicio M.
Tolentino failed to comply with his obligation to pay his P17,000.00 debt within 3 years as stipulated,
they are both liable for damages.
Article 1192 of the Civil Code provides that in case both parties have committed a breach of their
reciprocal obligations, the liability of the first infractor shall be equitably tempered by the courts. WE
rule that the liability of Island Savings Bank for damages in not furnishing the entire loan is offset by
the liability of Sulpicio M. Tolentino for damages, in the form of penalties and surcharges, for not paying
his overdue P17,000.00 debt. x x x.
Another consideration that militates against the propriety of holding CAI liable for moral damages is
the absence of a showing that the latter acted fraudulently and in bad faith. Article 2220 of the Civil
Code requires evidence of bad faith and fraud and moral damages are generally not recoverable in
culpa contractual except when bad faith had been proven. The award of exemplary damages is likewise
not warranted. Apart from the requirement that the defendant acted in a wanton, oppressive and
malevolent manner, the claimant must prove his entitlement to moral damages.
WHEREFORE, premises considered, the instant Petition is DENIED.
SO ORDERED.
Carpio (Chairperson), Perez, Sereno and Perlas-Bernabe,** JJ., concur.
Petition denied.
Notes.Although initially, the burden of proof was with the passenger to prove that there was a breach
of contract of carriage, the burden of evidence shifted to the airline when the former adduced sufficient
evidence to prove the facts he had allegedat that point, the airline had the burden of going forward
to controvert Chiongs prima facie case, the burden of evidence to establish its claim. (Northwest
Airlines, Inc. vs. Chiong, 543 SCRA 308 [2008])
Article 1874 of the Civil Code requires a written authority before an agent can sell an immovable
property, likewise, a special power of attorney is necessary to enter into any contract by which the
ownership of an immovable is transmitted or acquired for a valuable consideration. (Alcantara vs. Nido,
618 SCRA 333 [2010])
Where the cause of action against the driver was based on delict, it is error to hold the employer jointly
and severally liable with him, based on quasi-delict under Articles 2176 and 2180 of the Civil Code
these legal provisions pertain to the vicarious liability of an employer for quasi-delicts that an employee
has committed and do not apply to civil liability arising from delict; If at all, the employers liability may
only be subsidiary. (Calang vs. People, 626 SCRA 679 [2010])
o0o
WILLIAM TIU, doing business under the name and style of D Rough Riders, and
VIRGILIO TE LASPIAS, petitioners, vs. PEDRO A. ARRIESGADO, BENJAMIN CONDOR,
SERGIO PEDRANO and PHILIPPINE PHOENIX SURETY AND INSURANCE, INC.,
respondents
G.R. No. 138060. September 1, 2004
Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence; A man must use
common sense, and exercise due reflection in all his actsit is his duty to be cautious, careful and
prudent, if not from instinct, then through fear of recurring punishment.A man must use common
sense, and exercise due reflection in all his acts; it is his duty to be cautious, careful and prudent, if
not from instinct, then through fear of recurring punishment. He is responsible for such results as
anyone might foresee and for acts which no one would have performed except through culpable
abandon. Otherwise, his own person, rights and property, and those of his fellow beings, would ever
be exposed to all manner of danger and injury.
Same; Same; Same; Same; Same; Negligence; Upon the happening of the accident, the presumption
of negligence at once arises, and it becomes the duty of a common carrier to prove that he observed
extraordinary diligence in the care of his pasengers.Under the said contract of carriage, the petitioners
assumed the express obligation to transport the respondent and his wife to their destination safely and
to observe extraordinary diligence with due regard for all circumstances. Any injury suffered by the
passengers in the course thereof is immediately attributable to the negligence of the carrier. Upon the
happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a
common carrier to prove that he observed extraordinary diligence in the care of his passengers. It must
be stressed that in requiring the highest possible degree of diligence from common carriers and in
creating a presumption of negligence against them, the law compels them to curb the recklessness of
their drivers.
Same; Same; Same; Same; Same; Same; The carrier must show the utmost diligence of very cautious
persons as far as human care and foresight can provide, or that the accident was caused by fortuitous
event. While evidence may be submitted to overcome such presumption of negligence, it must be
shown that the carrier observed the required extraordinary diligence, which means that the carrier must
show the utmost diligence of very cautious persons as far as human care and foresight can provide, or
that the accident was caused by fortuitous event.
Same; Same; Same; Same; Same; Same; Principle of Last Clear Chance; Contrary to the petitioners
contention, the principle of last clear chance is inapplicable in the instant case, as it only applies in a
suit between the owners and drivers of colliding vehicles.Contrary to the petitioners contention, the
principle of last clear chance is inapplicable in the instant case, as it only applies in a suit between the
owners and drivers of two colliding vehicles. It does not arise where a passenger demands responsibility
from the carrier to enforce its contractual obligations, for it would be inequitable to exempt the negligent
driver and its owner on the ground that the other driver was likewise guilty of negligence. The common
law notion of last clear chance permitted courts to grant recovery to a plaintiff who has also been
negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do
so. Accordingly, it is difficult to see what role, if any, the common law of last clear chance doctrine has
to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar
to recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code.
Same; Same; Same; Same; Same; Same; Presumed Negligence; It is such a firmly established principle,
as to have virtually formed part of the law itself, that the negligence of the employee gives rise to the
presumption of negligence on the part of the employer.It is such a firmly established principle, as to
have virtually formed part of the law itself, that the negligence of the employee gives rise to the
presumption of negligence on the part of the employer. This is the presumed negligence in the selection
and supervision of employee. The theory of presumed negligence, in contrast with the American
doctrine of respondeat superior, where the negligence of the employee is conclusively presumed to be
the negligence of the employer, is clearly deducible from the last paragraph of Article 2180 of the Civil
Code which provides that the responsibility therein mentioned shall cease if the employers prove that
they observed all the diligence of a good father of a family to prevent damages. . . .
Same; Same; Same; Same; Same; Same; Indemnity; Compulsory Vehicle Liability Insurance; The
nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily intended to provide
compensation for the death or bodily injuries suffered by innocent third parties or pasengers as a result
of the negligent operation and use of motor vehicles.The nature of Compulsory Motor Vehicle Liability
Insurance is such that it is primarily intended to provide compensation for the death or bodily injuries
suffered by innocent third parties or passengers as a result of the negligent operation and use of motor
vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless
of the financial capacity of motor vehicle owners.
Same; Same; Same; Same; Same; Same; Same; Same; Extent; Although the victim may proceed
directly against the insurer for indemnity, the third party liability is only up to the extent of the insurance
policy and those required by law.Although the victim may proceed directly against the insurer for
indemnity, the third party liability is only up to the extent of the insurance policy and those required by
law. While it is true that where the insurance contract provides for indemnity against liability to third
persons, and such persons can directly sue the insurer, the direct liability of the insurer under indemnity
contracts against third party liability does not mean that the insurer can be held liable in solidum with
the insured and/or the other parties found at fault. For the liability of the insurer is based on contract;
that of the insured carrier or vehicle owner is based on tort. . . .
Same; Same; Same; Same; Same; Same; Exemplary Damages; Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary damages in quasi-delicts if the defendant acted with gross
negligence. While the immediate beneficiaries of the standard of extraordinary diligence are, of
course, the passengers and owners of cargo carried by a common carrier, they are not the only persons
that the law seeks to benefit. For if common carriers carefully observed the statutory standard of
extraordinary diligence in respect of their own passengers, they cannot help but simultaneously benefit
pedestrians and the passengers of other vehicles who are equally entitled to the safe and convenient
use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people
(whether passengers or not) on our highways and buses, the very size and power of which seem to
inflame the minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of
exemplary damages in cases of quasi-delicts if the defendant acted with gross negligence. . . .
Same; Same; Same; Same; Same; Same; Solidary Liability; In case of injury to a passenger due to the
drivers as well as the owners of the two vehicles are jointly and severally liable for damages. The
same rule of liability was applied in situations where the negligence of the driver of the bus on which
plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle,
thus causing an accident. In Anuran v. Buo, Batangas Laguna Tayabas Bus Co. v. Intermediate
v. Court of Appeals, thus: Nor should it make difference that the liability of petitioner [bus owner]
springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-
delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury
to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver
of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable
for damages. Some members of the Court, though, are of the view that under the circumstances they
are liable on quasi-delict.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
Rufino L. Remoreras, Jr. and Sixto Rey M. Orig for petitioners.

Rogelio R. Corro for private respondent Pedro A. Arriesgado.
Glenn N. Jumao-as for respondent B. Condor.
Ma. Cristina G. Laderas for respondent PPSII.
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court from the Decision of the
Court of Appeals in CA-G.R. CV No. 54354 affirming with modification the Decision of the Regional Trial
Court, 7th Judicial Region, Cebu City, Branch 20, in Civil Case No. CEB-5963 for breach of contract of
carriage, damages and attorneys fees, and the Resolution dated February 26, 1999 denying the motion
for reconsideration thereof.
The following facts are undisputed:
At about 10:00 p.m. of March 15, 1987, the cargo truck marked Condor Hollow Blocks and General
Merchandise bearing plate number GBP-675 was loaded with firewood in Bogo, Cebu and left for Cebu
City. Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just as the truck passed over a bridge,
one of its rear tires exploded. The driver, Sergio Pedrano, then parked along the right side of the
national highway and removed the damaged tire to have it vulcanized at a nearby shop, about 700
meters away. Pedrano left his helper, Jose Mitante, Jr. to keep watch over the stalled vehicle, and
instructed the latter to place a spare tire six fathoms away behind the stalled truck to serve as a warning
for oncoming vehicles. The trucks tail lights were also left on. It was about 12:00 a.m., March 16,
1987.
At about 4:45 a.m., D Rough Riders passenger bus with plate number PBP-724 driven by Virgilio Te
Laspias was cruising along the national highway of Sitio Aggies, Poblacion, Compostela, Cebu. The
passenger bus was also bound for Cebu City, and had come from Maya, Daanbantayan, Cebu. Among
its passengers were the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado, who were seated
at the right side of the bus, about three (3) or four (4) places from the front seat.
As the bus was approaching the bridge, Laspias saw the stalled truck, which was then about 25 meters
away. He applied the brakes and tried to swerve to the left to avoid hitting the truck. But it was too
late; the bus rammed into the trucks left rear. The impact damaged the right side of the bus and left
several passengers injured. Pedro Arriesgado lost consciousness and suffered a fracture in his right
colles. His wife, Felisa, was brought to the Danao City Hospital. She was later transferred to the
Southern Island Medical Center where she died shortly thereafter.
Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage, damages and
attorneys fees before the Regional Trial Court of Cebu City, Branch 20, against the petitioners, D
Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspias on May 27, 1987. The
respondent alleged that the passenger bus in question was cruising at a fast and high speed along the
national road, and that petitioner Laspias did not take precautionary measures to avoid the accident.
Thus:
6. That the accident resulted to the death of the plaintiffs wife, Felisa Pepito Arriesgado, as evidenced
by a Certificate of Death, a xerox copy of which is hereto attached as integral part hereof and marked
as ANNEX A, and physical injuries to several of its passengers, including plaintiff himself who
suffered a COLLES FRACTURE RIGHT, per Medical Certificate, a xerox copy of which is hereto attached
as integral part hereof and marked as ANNEX B hereof.
7. That due to the reckless and imprudent driving by defendant Virgilio Te Laspias of the said Rough
Riders passenger bus, plaintiff and his wife, Felisa Pepito Arriesgado, failed to safely reach their
destination which was Cebu City, the proximate cause of which was defendant-drivers failure to observe
utmost diligence required of a very cautious person under all circumstances.
8. That defendant William Tiu, being the owner and operator of the said Rough Riders passenger bus
which figured in the said accident, wherein plaintiff and his wife were riding at the time of the accident,
is therefore directly liable for the breach of contract of carriage for his failure to transport plaintiff and
his wife safely to their place of destination which was Cebu City, and which failure in his obligation to
transport safely his passengers was due to and in consequence of his failure to exercise the diligence
of a good father of the family in the selection and supervision of his employees, particularly defendant-
driver Virgilio Te Laspias.
The respondent prayed that judgment be rendered in his favor and that the petitioners be condemned
to pay the following damages:
1). To pay to plaintiff, jointly and severally, the amount of P30,000.00 for the death and untimely
demise of plaintiffs wife, Felisa Pepito Arriesgado;
2). To pay to plaintiff, jointly and severally, the amount of P38,441.50, representing actual expenses
incurred by the plaintiff in connection with the death/burial of plaintiffs wife;
3). To pay to plaintiff, jointly and severally, the amount of P1,113.80, representing
medical/hospitalization expenses incurred by plaintiff for the injuries sustained by him;
4). To pay to plaintiff, jointly and severally, the amount of P50,000.00 for moral damages;
5). To pay to plaintiff, jointly and severally, the amount of P50,000.00 by way of exemplary damages;
6). To pay to plaintiff, jointly and severally, the amount of P20,000.00 for attorneys fees;
7). To pay to plaintiff, jointly and severally, the amount of P5,000.00 for litigation expenses.
PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS AND REMEDIES IN LAW AND EQUITY.
The petitioners, for their part, filed a Third-Party Complaint on August 21, 1987 against the following:
respondent Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tius insurer; respondent
Benjamin Condor, the registered owner of the cargo truck; and respondent Sergio Pedrano, the driver
of the truck. They alleged that petitioner Laspias was negotiating the uphill climb along the national
highway of Sitio Aggies, Poblacion, Compostela, in a moderate and normal speed. It was further alleged
that the truck was parked in a slanted manner, its rear portion almost in the middle of the highway,
and that no early warning device was displayed. Petitioner Laspias promptly applied the brakes and
swerved to the left to avoid hitting the truck head-on, but despite his efforts to avoid damage to
property and physical injuries on the passengers, the right side portion of the bus hit the cargo trucks
left rear. The petitioners further alleged, thus:
5. That the cargo truck mentioned in the aforequoted paragraph is owned and registered in the name
of the third-party defendant Benjamin Condor and was left unattended by its driver Sergio Pedrano,
one of the third-party defendants, at the time of the incident;
6. That third-party defendant Sergio Pedrano, as driver of the cargo truck with marked (sic) Condor
Hollow Blocks & General Merchandise, with Plate No. GBP-675 which was recklessly and imprudently
parked along the national highway of Compostela, Cebu during the vehicular accident in question, and
third-party defendant Benjamin Condor, as the registered owner of the cargo truck who failed to
exercise due diligence in the selection and supervision of third-party defendant Sergio Pedrano, are
jointly and severally liable to the third-party plaintiffs for whatever liability that may be adjudged against
said third-party plaintiffs or are directly liable of (sic) the alleged death of plaintiffs wife;
7. That in addition to all that are stated above and in the answer which are intended to show reckless
imprudence on the part of the third-party defendants, the third-party plaintiffs hereby declare that
during the vehicular accident in question, third-party defendant was clearly violating Section 34, par.
(g) of the Land Transportation and Traffic Code . . .
...
10. That the aforesaid passenger bus, owned and operated by third-party plaintiff William Tiu, is
covered by a common carrier liability insurance with Certificate of Cover No. 054940 issued by Philippine
Phoenix Surety and Insurance, Inc., Cebu City Branch, in favor of third-party plaintiff William Tiu which
covers the period from July 22, 1986 to July 22, 1987 and that the said insurance coverage was valid,
binding and subsisting during the time of the aforementioned incident (Annex A as part hereof);
11. That after the aforesaid alleged incident, third-party plaintiff notified third-party defendant
Philippine Phoenix Surety and Insurance, Inc., of the alleged incident hereto mentioned, but to no avail;
12. That granting, et arguendo et arguendi, if herein third-party plaintiffs will be adversely adjudged,
they stand to pay damages sought by the plaintiff and therefore could also look up to the Philippine
Phoenix Surety and Insurance, Inc., for contribution, indemnification and/or reimbursement of any
liability or obligation that they might [be] adjudged per insurance coverage duly entered into by and
between third-party plaintiff William Tiu and third-party defendant Philippine Phoenix Surety and
Insurance, Inc.; . . .
The respondent PPSII, for its part, admitted that it had an existing contract with petitioner Tiu, but
averred that it had already attended to and settled the claims of those who were injured during the
incident. It could not accede to the claim of respondent Arriesgado, as such claim was way beyond the
scheduled indemnity as contained in the contract of insurance.
After the parties presented their respective evidence, the trial court ruled in favor of respondent
Arriesgado. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff as against
defendant William Tiu ordering the latter to pay the plaintiff the following amounts:
1The sum of FIFTY THOUSAND PESOS (P50,000.00) as moral damages;

2The sum of FIFTY THOUSAND PESOS (P50,000.00) as exemplary damages;
3The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED FORTY-ONE PESOS (P38,441.00) as actual
damages;
4The sum of TWENTY THOUSAND PESOS (P20,000.00) as attorneys fees;
5The sum of FIVE THOUSAND PESOS (P5,000.00) as costs of suit;
SO ORDERED.
According to the trial court, there was no dispute that petitioner William Tiu was engaged in business
as a common carrier, in view of his admission that D Rough Rider passenger bus which figured in the
accident was owned by him; that he had been engaged in the transportation business for 25 years with
a sole proprietorship; and that he owned 34 buses. The trial court ruled that if petitioner Laspias had
not been driving at a fast pace, he could have easily swerved to the left to avoid hitting the truck, thus,
averting the unfortunate incident. It then concluded that petitioner Laspias was negligent.
The trial court also ruled that the absence of an early warning device near the place where the truck
was parked was not sufficient to impute negligence on the part of respondent Pedrano, since the tail
lights of the truck were fully on, and the vicinity was well lighted by street lamps.16 It also found that
the testimony of petitioner Tiu, that he based the selection of his driver Laspias on efficiency and in-
service training, and that the latter had been so far an efficient and good driver for the past six years
of his employment, was insufficient to prove that he observed the diligence of a good father of a family
in the selection and supervision of his employees.
After the petitioners motion for reconsideration of the said decision was denied, the petitioners elevated
the case to the Court of Appeals on the following issues:
I WHETHER THIRD PARTY DEFENDANT SERGIO PEDRANO WAS RECKLESS AND IMPRUDENT WHEN
HE PARKED THE CARGO TRUCK IN AN OBLIQUE MANNER;
II WHETHER THE THIRD PARTY DEFENDANTS ARE JOINTLY AND SEVERALLY LIABLE DIRECTLY TO
PLAINTIFF-APPELLEE OR TO DEFENDANTS-APPELLANTS FOR WHATEVER LIABILITY THAT MAY BE
ADJUDGED TO THE SAID DEFENDANTS-APPELLANTS;
III WHETHER DEFENDANT-APPELLANT VIRGILIO TE LASPIAS WAS GUILTY OF GROSS NEGLIGENCE;
IV WHETHER DEFENDANT-APPELLANT WILLIAM TIU HAD EXERCISED THE DUE DILIGENCE OF A

GOOD FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF HIS DRIVERS;
V GRANTING FOR THE SAKE OF ARGUMENT THAT DEFENDANT-APPELLANT WILLIAM TIU IS LIABLE
TO PLAINTIFF-APPELLEE, WHETHER THERE IS LEGAL AND FACTUAL BASIS IN AWARDING EXCESSIVE
MORAL DAMAGES, EX[E]MPLARY DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES TO
PLAINTIFF-APPELLEE;
VI WHETHER THIRD PARTY DEFENDANT PHILIPPINE PHOENIX SURETY AND INSURANCE, INC. IS
LIABLE TO DEFENDANT- APPELLANT WILLIAM TIU.
The appellate court rendered judgment affirming the trial courts decision with the modification that
the awards for moral and exemplary damages were reduced to P25,000. The dispositive portion reads:
WHEREFORE, the appealed Decision dated November 6, 1995 is hereby MODIFIED such that the
awards for moral and exemplary damages are each reduced to P25,000.00 or a total of P50,000.00 for
both. The judgment is AFFIRMED in all other respects.
SO ORDERED.
According to the appellate court, the action of respondent Arriesgado was based not on quasi-delict
but on breach of contract of carriage. As a common carrier, it was incumbent upon petitioner Tiu to
prove that extraordinary diligence was observed in ensuring the safety of passengers during
transportation. Since the latter failed to do so, he should be held liable for respondent Arriesgados
claim. The CA also ruled that no evidence was presented against the respondent PPSII, and as such, it
could not be held liable for respondent Arriesgados claim, nor for contribution, indemnification and/or
reimbursement in case the petitioners were adjudged liable.
The petitioners now come to this Court and ascribe the following errors committed by the appellate
court:
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING RESPONDENTS BENJAMIN

CONDOR AND SERGIO PEDRANO GUILTY OF NEGLIGENCE AND HENCE, LIABLE TO RESPONDENT
PEDRO A. ARRIESGADO OR TO PETITIONERS FOR WHATEVER LIABILITY THAT MAY BE ADJUDGED
AGAINST THEM.
II. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONERS GUILTY OF NEGLIGENCE
AND HENCE, LIABLE TO RESPONDENT PEDRO A. ARRIESGADO.
III. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONER WILLIAM TIU LIABLE FOR
EXEMPLARY DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES.
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING RESPONDENT PHILIPPINE
PHOENIX SURETY AND INSURANCE, INC. LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR TO
PETITIONER WILLIAM TIU.
According to the petitioners, the appellate court erred in failing to appreciate the absence of an early
warning device and/or built-in reflectors at the front and back of the cargo truck, in clear violation of
Section 34, par. (g) of the Land Transportation and Traffic Code. They aver that such violation is only
a proof of respondent Pedranos negligence, as provided under Article 2185 of the New Civil Code. They
also question the appellate courts failure to take into account that the truck was parked in an oblique
manner, its rear portion almost at the center of the road. As such, the proximate cause of the incident
was the gross recklessness and imprudence of respondent Pedrano, creating the presumption of
negligence on the part of respondent Condor in supervising his employees, which presumption was not
rebutted. The petitioners then contend that respondents Condor and Pedrano should be held jointly
and severally liable to respondent Arriesgado for the payment of the latters claim.
The petitioners, likewise, aver that expert evidence should have been presented to prove that petitioner
Laspias was driving at a very fast speed, and that the CA could not reach such conclusion by merely
considering the damages on the cargo truck. It was also pointed out that petitioner Tiu presented
evidence that he had exercised the diligence of a good father of a family in the selection and supervision
of his drivers.
The petitioners further allege that there is no legal and factual basis to require petitioner Tiu to pay
exemplary damages as no evidence was presented to show that the latter acted in a fraudulent, reckless
and oppressive manner, or that he had an active participation in the negligent act of petitioner Laspias.
Finally, the petitioners contend that respondent PPSII admitted in its answer that while it had attended
to and settled the claims of the other injured passengers, respondent Arriesgados claim remained
unsettled as it was beyond the scheduled indemnity under the insurance contract. The petitioners argue
that said respondent PPSII should have settled the said claim in accordance with the scheduled
indemnity instead of just denying the same.
On the other hand, respondent Arriesgado argues that two of the issues raised by the petitioners
involved questions of fact, not reviewable by the Supreme Court: the finding of negligence on the part
of the petitioners and their liability to him; and the award of exemplary damages, attorneys fees and
litigation expenses in his favor. Invoking the principle of equity and justice, respondent Arriesgado
pointed out that if there was an error to be reviewed in the CA decision, it should be geared towards
the restoration of the moral and exemplary damages to P50,000 each, or a total of P100,000 which
was reduced by the Court of Appeals to P25,000 each, or a total of only P50,000.
Respondent Arriesgado also alleged that respondents Condor and Pedrano, and respondent Phoenix
Surety, are parties with whom he had no contract of carriage, and had no cause of action against. It
was pointed out that only the petitioners needed to be sued, as driver and operator of the ill-fated bus,
on account of their failure to bring the Arriesgado Spouses to their place of destination as agreed upon
in the contract of carriage, using the utmost diligence of very cautious persons with due regard for all
circumstances.
Respondents Condor and Pedrano point out that, as correctly ruled by the Court of Appeals, the
proximate cause of the unfortunate incident was the fast speed at which petitioner Laspias was driving
the bus owned by petitioner Tiu. According to the respondents, the allegation that the truck was not
equipped with an early warning device could not in any way have prevented the incident from
happening. It was also pointed out that respondent Condor had always exercised the due diligence
required in the selection and supervision of his employees, and that he was not a party to the contract
of carriage between the petitioners and respondent Arriesgado.
Respondent PPSII, for its part, alleges that contrary to the allegation of petitioner Tiu, it settled all the
claims of those injured in accordance with the insurance contract. It further avers that it did not deny
respondent Arriesgados claim, and emphasizes that its liability should be within the scheduled limits of
indemnity under the said contract. The respondent concludes that while it is true that insurance
contracts are contracts of indemnity, the measure of the insurers liability is determined by the insureds
compliance with the terms thereof.
The Courts Ruling
At the outset, it must be stressed that this Court is not a trier of facts. Factual findings of the Court of
Appeals are final and may not be reviewed on appeal by this Court, except when the lower court and
the CA arrived at diverse factual findings. The petitioners in this case assail the finding of both the trial
and the appellate courts that petitioner Laspias was driving at a very fast speed before the bus owned
by petitioner Tiu collided with respondent Condors stalled truck. This is clearly one of fact, not
reviewable by the Court in a petition for review under Rule 45.
On this ground alone, the petition is destined to fail.
However, considering that novel questions of law are likewise involved, the Court resolves to examine
and rule on the merits of the case.
Petitioner Laspias Was negligent in driving The Ill-fated bus
In his testimony before the trial court, petitioner Laspias claimed that he was traversing the two-lane
road at Compostela, Cebu at a speed of only forty (40) to fifty (50) kilometers per hour before the
incident occurred. He also admitted that he saw the truck which was parked in an oblique position at
about 25 meters before impact, and tried to avoid hitting it by swerving to the left. However, even in
the absence of expert evidence, the damage sustained by the truck itself supports the finding of both
the trial court and the appellate court, that the D Rough Rider bus driven by petitioner Laspias was
traveling at a fast pace. Since he saw the stalled truck at a distance of 25 meters, petitioner Laspias
had more than enough time to swerve to his left to avoid hitting it; that is, if the speed of the bus was
only 40 to 50 kilometers per hour as he claimed. As found by the Court of Appeals, it is easier to believe
that petitioner Laspias was driving at a very fast speed, since at 4:45 a.m., the hour of the accident,
there were no oncoming vehicles at the opposite direction. Petitioner Laspias could have swerved to
the left lane with proper clearance, and, thus, could have avoided the truck. Instinct, at the very least,
would have prompted him to apply the breaks to avert the impending disaster which he must have
foreseen when he caught sight of the stalled truck. As we had occasion to reiterate:
A man must use common sense, and exercise due reflection in all his acts; it is his duty to be cautious,
careful and prudent, if not from instinct, then through fear of recurring punishment. He is responsible
for such results as anyone might foresee and for acts which no one would have performed except
through culpable abandon. Otherwise, his own person, rights and property, and those of his fellow
beings, would ever be exposed to all manner of danger and injury.
We agree with the following findings of the trial court, which were affirmed by the CA on appeal:
A close study and evaluation of the testimonies and the documentary proofs submitted by the parties
which have direct bearing on the issue of negligence, this Court as shown by preponderance of evidence
that defendant Virgilio Te Laspias failed to observe extraordinary diligence as a driver of the common
carrier in this case. It is quite hard to accept his version of the incident that he did not see at a
reasonable distance ahead the cargo truck that was parked when the Rough Rider [Bus] just came out
of the bridge which is on an (sic) [more] elevated position than the place where the cargo truck was
parked. With its headlights fully on, defendant driver of the Rough Rider was in a vantage position to
see the cargo truck ahead which was parked and he could just easily have avoided hitting and bumping
the same by maneuvering to the left without hitting the said cargo truck. Besides, it is (sic) shown that
there was still much room or space for the Rough Rider to pass at the left lane of the said national
highway even if the cargo truck had occupied the entire right lane thereof. It is not true that if the
Rough Rider would proceed to pass through the left lane it would fall into a canal considering that there
was much space for it to pass without hitting and bumping the cargo truck at the left lane of said
national highway. The records, further, showed that there was no incoming vehicle at the opposite lane
of the national highway which would have prevented the Rough Rider from not swerving to its left in
order to avoid hitting and bumping the parked cargo truck. But the evidence showed that the Rough
Rider instead of swerving to the still spacious left lane of the national highway plowed directly into the
parked cargo truck hitting the latter at its rear portion; and thus, the (sic) causing damages not only to
herein plaintiff but to the cargo truck as well.
Indeed, petitioner Laspias negligence in driving the bus is apparent in the records. By his own
admission, he had just passed a bridge and was traversing the highway of Compostela, Cebu at a speed
of 40 to 50 kilometers per hour before the collision occurred. The maximum speed allowed by law on
a bridge is only 30 kilometers per hour. And, as correctly pointed out by the trial court, petitioner
Laspias also violated Section 35 of the Land Transportation and Traffic Code, Republic Act No. 4136,
as amended:
Sec. 35. Restriction as to speed.(a) Any person driving a motor vehicle on a highway shall drive the
same at a careful and prudent speed, not greater nor less than is reasonable and proper, having due
regard for the traffic, the width of the highway, and or any other condition then and there existing; and
no person shall drive any motor vehicle upon a highway at such speed as to endanger the life, limb
and property of any person, nor at a speed greater than will permit him to bring the vehicle to a stop
within the assured clear distance ahead.
Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of
the mishap, he was violating any traffic regulation.
Petitioner Tiu failed to Overcome the presumption Of negligence against him as One engaged in the
business Of common carriage
The rules which common carriers should observe as to the safety of their passengers are set forth in
the Civil Code, Articles 1733,32 175533 and 1756. In this case, respondent Arriesgado and his deceased
wife contracted with petitioner Tiu, as owner and operator of D Rough Riders bus service, for
transportation from Maya, Daanbantayan, Cebu, to Cebu City for the price of P18.00. It is undisputed
that the respondent and his wife were not safely transported to the destination agreed upon. In actions
for breach of contract, only the existence of such contract, and the fact that the obligor, in this case
the common carrier, failed to transport his passenger safely to his destination are the matters that need
to be proved. This is because under the said contract of carriage, the petitioners assumed the express
obligation to transport the respondent and his wife to their destination safely and to observe
extraordinary diligence with due regard for all circumstances. Any injury suffered by the passengers in
the course thereof is immediately attributable to the negligence of the carrier. Upon the happening of
the accident, the presumption of negligence at once arises, and it becomes the duty of a common
carrier to prove that he observed extraordinary diligence in the care of his passengers It must be
stressed that in requiring the highest possible degree of diligence from common carriers and in creating
a presumption of negligence against them, the law compels them to curb the recklessness of their
drivers.
While evidence may be submitted to overcome such presumption of negligence, it must be shown that
the carrier observed the required extraordinary diligence, which means that the carrier must show the
utmost diligence of very cautious persons as far as human care and foresight can provide, or that the
accident was caused by fortuitous event. As correctly found by the trial court, petitioner Tiu failed to
conclusively rebut such presumption. The negligence of petitioner Laspias as driver of the passenger
bus is, thus, binding against petitioner Tiu, as the owner of the passenger bus engaged as a common
carrier.
The Doctrine of Last Clear Chance Is Inapplicable in the Case at Bar
Contrary to the petitioners contention, the principle of last clear chance is inapplicable in the instant
case, as it only applies in a suit between the owners and drivers of two colliding vehicles. It does not
arise where a passenger demands responsibility from the carrier to enforce its contractual obligations,
for it would be inequitable to exempt the negligent driver and its owner on the ground that the other
driver was likewise guilty of negligence. The common law notion of last clear chance permitted courts
to grant recovery to a plaintiff who has also been negligent provided that the defendant had the last
clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any,
the common law of last clear chance doctrine has to play in a jurisdiction where the common law
concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been
rejected, as it has been in Article 2179 of the Civil Code.
Thus, petitioner Tiu cannot escape liability for the death of respondent Arriesgados wife due to the
negligence of petitioner Laspias, his employee, on this score.
Respondents Pedrano and Condor were likewise Negligent

In Phoenix Construction, Inc. v. Intermediate Appellate Court, where therein respondent Dionisio
sustained injuries when his vehicle rammed against a dump truck parked askew, the Court ruled that
the improper parking of a dump truck without any warning lights or reflector devices created an
unreasonable risk for anyone driving within the vicinity, and for having created such risk, the truck
driver must be held responsible. In ruling against the petitioner therein, the Court elucidated, thus:
. . . In our view, Dionisios negligence, although later in point of time than the truck drivers negligence,
and therefore closer to the accident, was not an efficient intervening or independent cause. What the
petitioners describe as an intervening cause was no more than a foreseeable consequence of the risk
created by the negligent manner in which the truck driver had parked the dump truck. In other words,
the petitioner truck driver owed a duty to private respondent Dionisio and others similarly situated not
to impose upon them the very risk the truck driver had created. Dionisios negligence was not that of
an independent and overpowering nature as to cut, as it were, the chain of causation in fact between
the improper parking of the dump truck and the accident, nor to sever the juris vinculum of liability. . .
.
...
We hold that private respondent Dionisios negligence was only contributory, that the immediate and
proximate cause of the injury remained the truck drivers lack of due care. . . .
In this case, both the trial and the appellate courts failed to consider that respondent Pedrano was also
negligent in leaving the truck parked askew without any warning lights or reflector devices to alert
oncoming vehicles, and that such failure created the presumption of negligence on the part of his
employer, respondent Condor, in supervising his employees properly and adequately. As we ruled in
Poblete v. Fabros:
It is such a firmly established principle, as to have virtually formed part of the law itself, that the
negligence of the employee gives rise to the presumption of negligence on the part of the employer.
This is the presumed negligence in the selection and supervision of employee. The theory of presumed
negligence, in contrast with the American doctrine of respondeat superior, where the negligence of the
employee is conclusively presumed to be the negligence of the employer, is clearly deducible from the
last paragraph of Article 2180 of the Civil Code which provides that the responsibility therein mentioned
shall cease if the employers prove that they observed all the diligence of a good father of a family to
prevent damages. . . .
The petitioners were correct in invoking respondent Pedranos failure to observe Article IV, Section
34(g) of the Rep. Act No. 4136, which provides:
(g) Lights when parked or disabled.Appropriate parking lights or flares visible one hundred meters
away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in
places that are not well-lighted or is placed in such manner as to endanger passing traffic.
The manner in which the truck was parked clearly endangered oncoming traffic on both sides,
considering that the tire blowout which stalled the truck in the first place occurred in the wee hours of
the morning. The Court can only now surmise that the unfortunate incident could have been averted
had respondent Condor, the owner of the truck, equipped the said vehicle with lights, flares, or, at the
very least, an early warning device. Hence, we cannot subscribe to respondents Condor and Pedranos
claim that they should be absolved from liability because, as found by the trial and appellate courts,
the proximate cause of the collision was the fast speed at which petitioner Laspias drove the bus. To
accept this proposition would be to come too close to wiping out the fundamental principle of law that
a man must respond for the foreseeable consequences of his own negligent act or omission. Indeed,
our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them
among its members. To accept this proposition would be to weaken the very bonds of society.
The Liability of Respondent PPSII as Insurer

The trial court in this case did not rule on the liability of respondent PPSII, while the appellate court
ruled that, as no evidence was presented against it, the insurance company is not liable.
A perusal of the records will show that when the petitioners filed the Third-Party Complaint against
respondent PPSII, they failed to attach a copy of the terms of the insurance contract itself. Only
Certificate of Cover No. 05494051 issued in favor of Mr. William Tiu, Lahug, Cebu City signed by
Cosme H. Boniel was appended to the third-party complaint. The date of issuance, July 22, 1986, the
period of insurance, from July 22, 1986 to July 22, 1987, as well as the following items, were also
indicated therein:
SCHEDULED VEHICLE MODEL - Isuzu Forward

MAKE TYPE OF BODY - Bus
COLOR - blue mixed
BLT FILE NO.
PLATE NO. PBP-724
SERIAL/CHASSIS NO. SER450-1584124
MOTOR NO. 677836
AUTHORIZED CAPACITY 50
UNLADEN WEIGHT - 6 Cyls. Kgs.
SECTION 1/11
*LIMITS OF LIABILITY
PREMIUMS PAID - P540.00
A. THIRD PARTY LIABILITY - P50,000.00
B. PASSENGER LIABILITY
Per Person - P12,000.00
Per Accident - P50,000
In its Answer to the Third-Party Complaint, the respondent PPSII admitted the existence of the contract
of insurance, in view of its failure to specifically deny the same as required under then Section 8(a),
Rule 8 of the Rules of Court, which reads:
Sec. 8. How to contest genuineness of such documents.When an action or defense is founded upon
a written instrument copied in or attached to the corresponding pleading as provided in the preceding
section, the genuineness and due execution of the instrument shall be deemed admitted unless the
adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts; but
the requirement of an oath does not apply when the adverse party does not appear to be a party to
the instrument or when compliance with an order for inspection of the original instrument is refused.
In fact, respondent PPSII did not dispute the existence of such contract, and admitted that it was liable
thereon. It claimed, however, that it had attended to and settled the claims of those injured during the
incident, and set up the following as special affirmative defenses:
Third party defendant Philippine Phoenix Surety and Insurance, Inc. hereby reiterates and incorporates
by way of reference the preceding paragraphs and further states THAT:
8. It has attended to the claims of Vincent Canales, Asuncion Batiancila and Neptali Palces who
sustained injuries during the incident in question. In fact, it settled financially their claims per vouchers
duly signed by them and they duly executed Affidavit[s] of Desistance to that effect, xerox copies of
which are hereto attached as Annexes 1, 2, 3, 4, 5, and 6 respectively;
9. With respect to the claim of plaintiff, herein answering third party defendant through its authorized
insurance adjuster attended to said claim. In fact, there were negotiations to that effect. Only that it
cannot accede to the demand of said claimant considering that the claim was way beyond the scheduled
indemnity as per contract entered into with third party plaintiff William Tiu and third party defendant
(Philippine Phoenix Surety and Insurance, Inc.). Third party Plaintiff William Tiu knew all along the
limitation as earlier stated, he being an old hand in the transportation business; . . .
Considering the admissions made by respondent PPSII, the existence of the insurance contract and the
salient terms thereof cannot be dispatched. It must be noted that after filing its answer, respondent
PPSII no longer objected to the presentation of evidence by respondent Arriesgado and the insured
petitioner Tiu.
Even in its Memorandum before the Court, respondent PPSII admitted the existence of the contract,
but averred as follows:
Petitioner Tiu is insisting that PPSII is liable to him for contribution, indemnification and/or
reimbursement. This has no basis under the contract. Under the contract, PPSII will pay all sums
necessary to discharge liability of the insured subject to the limits of liability but not to exceed the limits
of liability as so stated in the contract. Also, it is stated in the contract that in the event of accident
involving indemnity to more than one person, the limits of liability shall not exceed the aggregate
amount so specified by law to all persons to be indemnified.
As can be gleaned from the Certificate of Cover, such insurance contract was issued pursuant to the
Compulsory Motor Vehicle Liability Insurance Law. It was expressly provided therein that the limit of
the insurers liability for each person was P12,000, while the limit per accident was pegged at P50,000.
An insurer in an indemnity contract for third party liability is directly liable to the injured party up to the
extent specified in the agreement but it cannot be held solidarily liable beyond that amount. The
respondent PPSII could not then just deny petitioner Tius claim; it should have paid P12,000 for the
death of Felisa Arriesgado, and respondent Arriesgados hospitalization expenses of P1,113.80, which
the trial court found to have been duly supported by receipts. The total amount of the claims, even
when added to that of the other injured passengers which the respondent PPSII claimed to have settled,
would not exceed the P50,000 limit under the insurance agreement.
Indeed, the nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily intended
to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers
as a result of the negligent operation and use of motor vehicles. The victims and/or their dependents
are assured of immediate financial assistance, regardless of the financial capacity of motor vehicle
owners. As the Court, speaking through Associate Justice Leonardo A. Quisumbing, explained in
Government Service Insurance System v. Court of Appeals:
However, although the victim may proceed directly against the insurer for indemnity, the third party
liability is only up to the extent of the insurance policy and those required by law. While it is true that
where the insurance contract provides for indemnity against liability to third persons, and such persons
can directly sue the insurer, the direct liability of the insurer under indemnity contracts against third
party liability does not mean that the insurer can be held liable in solidum with the insured and/or the
other parties found at fault. For the liability of the insurer is based on contract; that of the insured
carrier or vehicle owner is based on tort. . . .
Obviously, the insurer could be held liable only up to the extent of what was provided for by the contract
of insurance, in accordance with the CMVLI law. At the time of the incident, the schedule of indemnities
for death and bodily injuries, professional fees and other charges payable under a CMVLI coverage was
provided for under the Insurance Memorandum Circular (IMC) No. 5-78 which was approved on
November 10, 1978. As therein provided, the maximum indemnity for death was twelve thousand
(P12,000.00) pesos per victim. The schedules for medical expenses were also provided by said IMC,
specifically in paragraphs (C) to (G).
Damages to be Awarded
The trial court correctly awarded moral damages in the amount of P50,000 in favor of respondent
Arriesgado. The award of exemplary damages by way of example or correction of the public good, is
likewise in order. As the Court ratiocinated in Kapalaran Bus Line v. Coronado:
. . . While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the
passengers and owners of cargo carried by a common carrier, they are not the only persons that the
law seeks to benefit. For if common carriers carefully observed the statutory standard of extraordinary
diligence in respect of their own passengers, they cannot help but simultaneously benefit pedestrians
and the passengers of other vehicles who are equally entitled to the safe and convenient use of our
roads and highways. The law seeks to stop and prevent the slaughter and maiming of people (whether
passengers or not) on our highways and buses, the very size and power of which seem to inflame the
minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary
damages in cases of quasi-delicts if the defendant acted with gross negligence. . . .
The respondent Pedro A. Arriesgado, as the surviving spouse and heir of Felisa Arriesgado, is entitled
to indemnity in the amount of P50,000.00.
The petitioners, as well as the respondents Benjamin Condor and Sergio Pedrano are jointly and
severally liable for said amount, conformably with the following pronouncement of the Court in Fabre,
Jr. vs. Court of Appeals:
Nor should it make difference that the liability of petitioner [bus owner] springs from contract while
delict.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of
Appeals is AFFIRMED with MODIFICATIONS:
(1) Respondent Philippine Phoenix Surety and Insurance, Inc. and petitioner William Tiu are ORDERED
to pay, jointly and severally, respondent Pedro A. Arriesgado the total amount of P13,113.80;
(2) The petitioners and the respondents Benjamin Condor and Sergio Pedrano are ORDERED to pay,
jointly and severally, respondent Pedro A. Arriesgado P50,000.00 as indemnity; P26,441.50 as actual
damages; P50,000.00 as moral damages; P50,000.00 as exemplary damages; and P20,000.00 as
attorneys fees.
SO ORDERED.
Austria-Martinez (Actg. Chairman), Tinga and Chico-Nazario, JJ., concur.
Puno (Chairman), J., On Official Leave.
Petition partially granted, judgment affirmed with modifica tions.

Note.Neglect or malfeasance of the carriers employees naturally could give ground for an action for
damages. (Morris vs. Court of Appeals, 352 SCRA 428 [2001])
o0o
LUCIA S. PAJARITO, petitioner, vs. HON. ALBERTO V. SEERIS, Presiding Judge of Branch
II, Court of First Instance of Zamboanga; JOSELITO AIZON, and FELIPE AIZON,
respondents
No. L-44627. December 14, 1978
Criminal Law; Action; Quasi-delict; Institution of criminal action carries with it the institution of the civil
action except where there has been a reservation of the latter.Under Article 100 of the Revised Penal
Code, a person criminally liable for a felony is also civilly liable. As a consequence, the institution of the
criminal action carries with it the institution of the civil action arising therefrom, except when there is
a separate civil action or reservation of the latter on the part of the complainant. As explained in
Ramcar, Incorporated v. De Leon: When no civil action is expressly instituted, according to subsection
(a) of section 1 of Rule 107, it shall be impliedly jointly instituted with the criminal action. That means
as if two actions are joined in one as twins, each one complete with the same completeness as any of
the two normal persons composing a twin. It means that the civil action may be tried and prosecuted,
with all the ancillary processes provided by law.
Same; Same; Same; A judgment of conviction against an employee for criminal negligence is conclusive
upon the employer.Considering that the judgment of conviction, sentencing a defendant employee
to pay an indemnity under Articles 102 and 103 of the Revised Penal Code, is conclusive upon the
employer not only with regard to the latters civil liability but also with regard to its amount, this Court
stated in Rotea, that in the action to enforce the employers subsidiary liability, the Court has no other
function than to render decision based upon the indemnity awarded in the criminal case and has no
power to amend or modify it even if in its opinion an error has been committed in the decision. In view
of the foregoing principles, and considering that Felipe Aizon does not deny that he was the registered
operator of the bus but only claims now that he sold the bus to the father of the accused, it would
serve no important purpose to require petitioner to file a separate and independent action against the
employer for the enforcement of the latters subsidiary civil liability. Under the circumstances, it would
not only prolong the litigation but would require the heirs of the deceased victim to incur unnecessary
expenses.
Same; Same; Same; Judgment; Enforcement of subsidiary civil liability of the employer in a criminal
conviction of employee for negligence is part of the proceeding for execution of judgment.The
proceeding for the enforcement of the subsidiary civil liability may be considered as part of the
proceeding for the execution of the judgment. A case in which an execution has been issued is regarded
as still pending so that all proceedings on the execution are proceedings in the suit. There is no question
that the court which rendered the judgment has a general supervisory control over its process of
execution, and this power carries with it the right to determine every question of fact and law which
may be involved in the execution.
Same; Same; Same; Same; Claim of alleged employer that he is not the owner of the bus which figured
in the accident resulting in the conviction of its driver is a matter that can be resolved in the same
criminal case and as part of the proceeding for execution of judgment rendered therein.The validity
of the claim of Felipe Aizon that he is no longer the owner and operator of the ill-fated bus as he sold
it already to Isaac Aizon, father of the accused Joselito Aizon, is a matter that could be litigated and
resolved in the same criminal case. In support of his opposition to the motion of the complainant,
served upon him, for the purpose of the enforcement of his subsidiary liability, Felipe Aizon may adduce
all the evidence necessary for that purpose. Indeed, the enforcement of the employers subsidiary civil
liability may be conveniently litigated within the same proceeding because the execution of the
judgment is a logical and integral part of the case itself. This would certainly facilitate the application
of justice to the rival claims of the contending parties.
ORIGINAL SPECIAL CIVIL ACTION in this Court. Certiorari.
Geronimo Pajarito for petitioner.

Dominador L. Natividad for private respondents.
ANTONIO, J.:
Original special civil action for certiorari.
Private respondent Joselito Aizon was charged before the Court of First Instance of Zamboanga City,
Branch II (respondent Judge Alberto V. Seeris, presiding), with Double Homicide Through Reckless
Imprudence or a violation of Section 48 of Republic Act No. 4136. The pertinent portion of the
Information reads as follows:
That on or about May 9, 1975, in the City of Zamboanga, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, being then the driver of an Isuzu Passenger Bus bearing
Plate No. SB-511 owned and operated by FELIPE AIZON, operating on the public road, and without
taking the necessary precautions, considering the width, traffic, visibility, grades, crossing, curvatures,
and other conditions of the road, so as to avoid accident to persons or damage to properties, did then
and there, through reckless and fast driving, caused the said Isuzu Passenger Bus to turn turtle, as a
result of which, the persons of MYRNA PAJARITO DE SAN LUIS and MUSA BARING, both passengers
on board the said Isuzu passenger bus sustained injuries on their persons which caused their death.
(Italics supplied.)
Upon arraignment, said respondent entered a plea of guilty. In view of said plea, the court rendered
judgment convicting him of the offense charged and sentencing him to indemnify the heirs of the late
Myrna Pajarito de San Luis the amount of P12,000.00 * * *.
After the judgment had become final and executory, a Writ of Execution was issued against Joselito
Aizon for the indemnity of P12,000.00, but the same was returned unsatisfied because of his insolvency.
Whereupon, petitioner Lucia S. Pajarito, mother of the late Myrna Pajarito de San Luis, filed with the
court a quo a motion for the issuance of Subsidiary Writ of Execution and served a copy thereof to
private respondent Felipe Aizon, employer of Joselito Aizon as alleged in the Information. Felipe Aizon
opposed the motion on the grounds, to wit: (1) that he is not the employer of Joselito Aizon, the vehicle
in question having been sold already to Isaac Aizon, father of Joselito, but that the deed of transfer has
not been executed because the full price has not yet been paid; and (2) that in case of insolvency,
Joselito has to suffer subsidiary imprisonment to satisfy the judgment insofar as the indemnity is
concerned.
The court denied petitioners motion for Subsidiary Writ of Execution on the ground that Felipe Aizon,
alleged employer of Joselito, was not a party in the aforesaid criminal case. Said the court:
It is therefore, the well considered opinion of this Court that a separate civil action must be filed by
movant Lucia S. Pajarito against Felipe Aizon in order to enforce the subsidiary liability of the latter
under Article 103 of the Revised Penal Code, as amended. Petitioner moved for reconsideration of the
foregoing ruling, but the same was denied. Hence, this petition.
Petitioner contends that the enforcement of the subsidiary liability under Article 103 of the Revised
Penal Code may be filed under the same criminal case, under which the subsidiary liability was granted;
that respondent Felipe Aizon, alleged employer of Joselito Aizon, was given his day in court, as he was
furnished a copy of the motion for issuance of the Subsidiary Writ of Execution, to which he filed his
opposition; and that, although not made a party in the criminal case, the employer, Felipe Aizon, should
have taken active participation in the defense of his employee, Joselito Aizon.
On the other hand, respondents, in their Comment to the petition which We consider their Answer,
maintain that to enforce the subsidiary liability under Article 103 of the Revised Penal Code, as
amended, a separate civil action must be filed against the employer because under our present judicial
system, before one could he held subsidiary liable, he should be made a party defendant to the action,
which in this case is not legally feasible because respondent Felipe Aizon was not accused together
with Joselito Aizon in Criminal Case No. 512 (1313) for Double Homicide Through Reckless Imprudence.
Obviously, the question to be considered here is whether the subsidiary civil liability established in
Articles 102 and 103 of the Revised Penal Code may be enforced in the same criminal case where the
award was made, or in a separate civil action.
Under Article 100 of the Revised Penal Code, a person criminally liable for a felony is also civilly liable.
As a consequence, the institution of the criminal action carries with it the institution of the civil action
arising therefrom, except when there is a separate civil action or reservation of the latter on the part
of the complainant. As explained in Ramcar, Incorporated v. De Leon: When no civil action is expressly
instituted, according to subsection (a) of section 1 of Rule 107, it shall be impliedly jointly instituted
with the criminal action. That means as if two actions are joined in one as twins, each one complete
with the same completeness as any of the two normal persons composing a twin. It means that the
civil action may be tried and prosecuted, with all the ancillary processes provided by law.
Pursuant to Article 103, in relation to Article 102, of the Revised Penal Code, an employer may be
subsidiary liable for the employees civil liability in a criminal action when: (1) the employer is engaged
in any kind of industry; (2) the employee committed the offense in the discharge of his duties; and (3)
he is insolvent and has not satisfied his civil liability. The subsidiary civil liability of the employer,
however, arises only after conviction of the employee in the criminal case. In Martinez v. Barredo, this
Court ruled that a judgment of conviction sentencing a defendant employee to pay an indemnity, in the
absence of any collusion between the defendant and the offended party, is conclusive upon the
employer in an action for the enforcement of the latters subsidiary liability.
* * * The stigma of a criminal conviction surpasses in effect and implications mere civil liability.
Common sense dictates that a finding of guilt in a criminal case in which proof beyond reasonable doubt
is necessary, should not be nullified in a subsequent civil action requiring only preponderance of
evidence to support a judgment, unless those who support the contrary rule should also hold that an
absolution in a civil case will operate to automatically set aside the verdict against the defendant in the
criminal case. It is anomalous, to say the least, to suppose that the driver, excelling Dr. Jekyll and Mr.
Hyde, could be guilty of reckless negligence in so far as his obligation to pay indemnity is concerned,
and at the same time could be free from any blame when said indemnity is sought to be collected from
his employer, although the right to the indemnity arose from and was based on one and the same act
of the driver.
The employer cannot be said to have been deprived of his day in court, because the situation before
us is not one wherein the employer is sued for a primary liability under article 1903 of the Civil Code,
but one in which enforcement is sought of a subsidiary civil liability incident to and dependent upon his
drivers criminal negligence which is a proper issue to be tried and decided only in a criminal action. In
other words, the employer becomes ipso facto subsidiarily liable upon his drivers conviction and upon
proof of the latters insolvency, in the same way that acquittal wipes out not only the employees primary
civil liability but also his employers subsidiary liability for such criminal negligence. (Almeida et al. vs.
Abaroa, 8 Phil. 178, affirmed in 218 U.S. 476, 54 Law ed., 1116; Wise & Co. vs. Larion, 45 Phil. 314,
320; Francisco vs. Onrubia, 46 Phil. 327; Province of Ilocos Sur vs. Tolentino, G.R. No. 34186, 56 Phil.
829; Moran, Comments on the Rules of Court, Vol. II, p. 403)
It is high time that the employer exercised the greatest care in selecting his employees, taking real
and deep interest in their welfare; intervening in any criminal action brought against them by reason
of or as a result of the performance of their duties, if only in the way of giving them the benefit of
counsel; and consequently doing away with the practice of leaving them to their fates. If these be done,
the American rule requiring notice on the part of the employer shall have been satisfied. (At pp. 3-4)
In Miranda v. Malate Garage & Taxicab, Inc., this Court further amplified the rule that the decision
convicting the employee is binding and conclusive upon the employer, not only with regard to (the
latters) civil liability but also with regard to its amount because the liability of an employer cannot be
separated but follows that of his employee. That is why the law says that his liability is subsidiary
(Article 103, Revised Penal Code). To allow an employer to dispute the civil liability fixed in the criminal
case would be to amend, nullify, or defeat a final judgment rendered by a competent court. And this
Court, in Miranda, further explained that the employer is in substance and in effect a party to the
criminal case, considering the subsidiary liability imposed upon him by law.
It is true that an employer, strictly speaking, is not a party to the criminal case instituted against his
employee, but in substance and in effect he is considering the subsidiary liability imposed upon him by
law. It is his concern, as well as of his employee, to see to it that his interest be protected in the criminal
case by taking virtual participation in the defense of his employee. He cannot leave him to his own fate
because his failure is also his. And if because of his indifference or inaction the employee is convicted
and damages are awarded against him, he cannot later be heard to complain, if brought to court, for
the enforcement of his subsidiary liability, that he was not given his day in court. (At p. 675. Italics
supplied.)
The conclusiveness upon the employer of the judgment of conviction sentencing the employee to pay
civil indemnity, for the enforcement of the employers subsidiary civil liability under Article 103 was
again reiterated in Manalo and Salvador v. Robles Transportation Company, Inc., where the Court ruled
that the sheriffs return submitted in evidence in the action against the employer, Robles Transportation
Company, Inc., showing that the two writs of execution were not satisfied because of the insolvency of
the driver, is a prima facie evidence of the employees insolvency. Similarly, this Court ruled that the
defendants insolvency may be proven by the certificate of the Director of Prisons that the employee is
serving subsidiary imprisonment; or by the certificate of the sheriff that the employee has not satisfied
his pecuniary liability and that no properties have been found registered in his name.
Considering that the judgment of conviction, sentencing a defendant employee to pay an indemnity
under Articles 102 and 103 of the Revised Penal Code, is conclusive upon the employer not only with
regard to the latters civil liability but also with regard to its amount, this Court stated in Rotea, that in
the action to enforce the employers subsidiary liability, the court has no other function than to render
decision based upon the indemnity awarded in the criminal case and has no power to amend or modify
it even if in its opinion an error has been committed in the decision.
In view of the foregoing principles, and considering that Felipe Aizon does not deny that he was the
registered operator of the bus but only claims now that he sold the bus to the father of the accused, it
would serve no important purpose to require petitioner to file a separate and independent action against
the employer for the enforcement of the latters subsidiary civil liability. Under the circumstances, it
would not only prolong the litigation but would require the heirs of the deceased victim to incur
unnecessary expenses. At any rate, the proceeding for the enforcement of the subsidiary civil liability
may be considered as part of the proceeding for the execution of the judgment. A case in which an
execution has been issued is regarded as still pending so that all proceedings on the execution are
proceedings in the suit. There is no question that the court which rendered the judgment has a general
supervisory control over its process of execution, and this power carries with it the right to determine
every question of fact and law which may be involved in the execution.
The validity of the claim of Felipe Aizon that he is no longer the owner and operator of the ill-fated bus
as he sold it already to Isaac Aizon, father of the accused Joselito Aizon, is a matter that could be
litigated and resolved in the same criminal case. In support of his opposition to the motion of the
complainant, served upon him, for the purpose of the enforcement of his subsidiary liability, Felipe
Aizon may adduce all the evidence necessary for that purpose. Indeed, the enforcement of the
employers subsidiary civil liability may be conveniently litigated within the same proceeding because
the execution of the judgment is a logical and integral part of the case itself. This would certainly
facilitate the application of justice to the rival claims of the contending parties. The purpose of
procedure, observed this Court in Manila Railroad Co. v. Attorney General, is not to thwart justice. Its
proper aim is to facilitate the application of justice to the rival claims of the contending parties. It was
created not to hinder and delay but to facilitate and promote the administration of justice. In
proceedings to apply justice, it is the duty of the courts to assist the parties in obtaining just, speedy,
and inexpensive determination of their rival claims. Thus, the Rules require that they should be liberally
construed to promote their object and to assist the parties in obtaining just, speedy, and inexpensive
determination of every action and proceeding.
WHEREFORE, the Orders of respondent Court in Criminal Case No. 512 (1313) dated July 27, 1978 and
August 14, 1976 are hereby set aside. The Court a quo is directed to hear and decide in the same
proceeding the subsidiary liability of the alleged owner and operator of the passenger bus. Costs against
private respondents.
Fernando (Chairman), Aquino, Concepcion Jr., and Santos, JJ., concur.
Barredo, J., concurs in a separate opinion.
BARREDO, J. Concurring:
I concur, but to make matters clearer, I must add that the only issues open at the hearing to be held
by the court a quo are: (1) whether or not Felipe Aizon was the owner of the vehicle driven by the
convicted accused, Joselito Aizon, or, whether or not he was the employer of said accused at the time
of the commission of the offense on May 9, 1975, and (2) whether or not said Joselito Aizon is insolvent.
As stated in the main opinion, the judgment in the criminal case is conclusive upon the employer not
only with regard to his civil liability but also with regard to its amount which is that found in the
judgment of conviction. In other words, what is to be decided by the trial court is not strictly speaking
the subsidiary liability of the employer, Felipe Aizon, for the judgment in the criminal case is deemed
to include that liability, but only the two issues related to it that I have mentioned.
Orders set aside.
Notes.The civil liability may not be enforced in a criminal action where the accused is acquitted.
(People vs. Miranda, 5 SCRA 1067).
An employers subsidiary civil liability cannot be proved in a separate action while the criminal case
against the employee is still pending because such liability is governed not by the Civil Code but by the
Revised Penal Code. (Joaquin vs. Aniceto, 12 SCRA 308.)
The extinction of the penal action does not carry with it the extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment that the fact from which the civil might arise did not
exist. (Faraon vs. Priela, 24 SCRA 582.)
Moral damages may be had where physical injuries ended in death. (People vs. Medrosa, Jr., 62 SCRA
245.)
Employer is liable for damages caused by their employees. (Philippine Rabbit Bus Lines, Inc. vs. Phil-
American Forwarders, Inc., 63 SCRA 231.)
The financial standing of a person responsible for breach of carriage is relevant to the evaluation of
moral damages, although the financial capacity does not determine liability for damage. (Pangasinan
Trans. Co. vs. Legaspi, 12 SCRA 592.)
Where the loss in question was due not to force majeure but to lack of adequate precautions or
measures taken by the carrier to prevent the loss, the carrier is liable. (Compaia Maritima vs. Insurance
Company of North America, 12 SCRA 213.)
Life expectancy is an important in fixing of amount of damages recoverable in death cases arising from
negligence. (BLTB Co., Inc. vs. Court of Appeals, 64 SCRA 427.)
A transportation company may be ordered to produce its general ledgers and financial statements upon
application of claimants under Section 1, Rule 27 of the Rules of Court in an action for damages for
breach of contract of carriage. (Pangasinan Transportation Co. vs. Legaspi, 12 SCRA 592; Yepes and
Susaya vs. Samar Express Transit, 17 SCRA 91.)
o0o
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, vs. MARJORIE
NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY AGENCY,
respondents
G.R. No. 145804. February 6, 2003
Civil Law; Contracts; Contract of Carriage; The law requires common carriers to carry passengers safely
using the utmost diligence of very cautious persons with due regard for all circumstances. The law
requires common carriers to carry passengers safely using the utmost diligence of very cautious persons
with due regard for all circumstances. Such duty of a common carrier to provide safety to its passengers
so obligates it not only during the course of the trip but for so long as the passengers are within its
premises and where they ought to be in pursuance to the contract of carriage.
Same; Same; Same; Instances when a common carrier becomes liable for death of or injury to
passengers. The statutory provisions render a common carrier liable for death of or injury to
passengers (a) through the negligence or willful acts of its employees or b) on account of willful acts
or negligence of other passengers or of strangers if the common carriers employees through the
exercise of due diligence could have prevented or stopped the act or omission.
Same; Same; Same; Presumption of Negligence; In case of such death or injury, a carrier is presumed
to have been at fault or been negligent. I n case of such death or injury, a carrier is presumed to
have been at fault or been negligent, and by simple proof of injury, the passenger is relieved of the
duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts
upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.
Same; Obligations; Tort; The premise, however, for the employers liability is negligence or fault on the
part of the employee.Should Prudent be made likewise liable? If at all, that liability could only be for
tort under the provisions of Article 2176 and related provisions, in conjunction with Article 2180, of the
Civil Code. The premise, however, for the employers liability is negligence or fault on the part of the
employee. Once such fault is established, the employer can then be made liable on the basis of the
presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection and supervision of its employees. The liability is primary and can only be negated by showing
due diligence in the selection and supervision of the employee, a factual matter that has not been
shown.
Same; Same; Same; In fine, a liability for tort may arise even under a contract, where tort is that which
breaches the contract.A contractual obligation can be breached by tort and when the same act or
omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article
2194 of the Civil Code can well apply. In fine, a liability for tort may arise even under a contract, where
tort is that which breaches the contract. Stated differently, when an act which constitutes a breach of
contract would have itself constituted the source of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been breached by tort, thereby allowing the rules
on tort to apply.
Same; Damages; Nominal Damages; It is an established rule that nominal damages cannot co-exist
with compensatory damages.The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It is an established rule that nominal damages
cannot co-exist with compensatory damages.
Office of the Government Corporate Counsel for petitioners.

Mario F. Estayan for private respondent.
Arias Law Offices for M. Navidad and Heirs of the Late N. Navidad, Jr.
VITUG, J.:
The case before the Court is an appeal from the decision and resolution of the Court of Appeals,
promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled
Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et al., which has modified
the decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig City, exonerating Prudent
Security Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo
Roman liable for damages on account of the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad, then drunk,
entered the EDSA LRT station after purchasing a token (representing payment of the fare). While
Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard
assigned to the area approached Navidad. A misunderstanding or an altercation between the two
apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight
started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks.
At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming
in. Navidad was struck by the moving train, and he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her
children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro
Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and Roman
filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its
answer, denied liability and averred that it had exercised due diligence in the selection and supervision
of its security guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting
evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in
his assigned task. On 11 August 1998, the trial court rendered its decision; it adjudged:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants
Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the
following:
a) 1) Actual damages of P44,830.00;

2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;
b) Moral damages of P50,000.00;
c) Attorneys fees of P20,000;
d) Costs of suit.
The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.
The compulsory counterclaim of LRTA and Roman are likewise dismissed.
Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its now
assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead,
holding the LRTA and Roman jointly and severally liable thusly:
WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from any
liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail
Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally
to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
e) P20,000.00 as and for attorneys fees.
The appellate court ratiocinated that while the deceased might not have then as yet boarded the train,
a contract of carriage theretofore had already existed when the victim entered the place where
passengers were supposed to be after paying the fare and getting the corresponding token therefor.
In exempting Prudent from liability, the court stressed that there was nothing to link the security agency
to the death of Navidad. It said that Navidad failed to show that Escartin inflicted fist blows upon the
victim and the evidence merely established the fact of death of Navidad by reason of his having been
hit by the train owned and managed by the LRTA and operated at the time by Roman. The appellate
court faulted petitioners for their failure to present expert evidence to establish the fact that the
application of emergency brakes could not have stopped the train.
The appellate court denied petitioners motion for reconsideration in its resolution of 10 October 2000.
In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz.:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF FACTS
BY THE TRIAL COURT
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE LIABLE
FOR THE DEATH OF NICANOR NAVIDAD, JR.
III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS AN
EMPLOYEE OF LRTA.
Petitioners would contend that the appellate court ignored the evidence and the factual findings of the
trial court by holding them liable on the basis of a sweeping conclusion that the presumption of
negligence on the part of a common carrier was not overcome. Petitioners would insist that Escartins
assault upon Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could
not have been foreseen or prevented. The LRTA would add that the appellate courts conclusion on the
existence of an employer-employee relationship between Roman and LRTA lacked basis because Roman
himself had testified being an employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court, contended that a contract of carriage was
deemed created from the moment Navidad paid the fare at the LRT station and entered the premises
of the latter, entitling Navidad to all the rights and protection under a contractual relation, and that the
appellate court had correctly held LRTA and Roman liable for the death of Navidad in failing to exercise
extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety
of passengers. The Civil Code, governing the liability of a common carrier for death of or injury to its
passengers, provides:
Article 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have
as prescribed in articles 1733 and 1755.
Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the formers employees, although such employees may have acted beyond
the scope of their authority or in violation of the orders of the common carriers.
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
willful acts or negligence of other passengers or of strangers, if the common carriers employees through
the exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.
The law requires common carriers to carry passengers safely using the utmost diligence of very cautious
persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so long as the passengers are
within its premises and where they ought to be in pursuance to the contract of carriage. The statutory
provisions render a common carrier liable for death of or injury to passengers (a) through the
negligence or wilful acts of its employees or b) on account of willful acts or negligence of other
passengers or of strangers if the common carriers employees through the exercise of due diligence
could have prevented or stopped the act or omission. In case of such death or injury, a carrier is
presumed to have been at fault or been negligent, and by simple proof of injury, the passenger is
relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the
burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.
In the absence of satisfactory explanation by the carrier on how the accident occurred, which
petitioners, according to the appellate court, have failed to show, the presumption would be that it has
been at fault, an exception from the general rule that negligence must be proved.
The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify the victim
arises from the breach of that contract by reason of its failure to exercise the high diligence required
of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier
may choose to hire its own employees or avail itself of the services of an outsider or an independent
firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under
the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions
of Article 2176 and related provisions, in conjunction with Article 2180, of the Civil Code. The premise,
however, for the employers liability is negligence or fault on the part of the employee. Once such fault
is established, the employer can then be made liable on the basis of the presumption juris tantum that
the employer failed to exercise diligentissimi patris families in the selection and supervision of its
employees. The liability is primary and can only be negated by showing due diligence in the selection
and supervision of the employee, a factual matter that has not been shown. Absent such a showing,
one might ask further, how then must the liability of the common carrier, on the one hand, and an
independent contractor, on the other hand, be described? It would be solidary. A contractual obligation
can be breached by tort and when the same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 2194 of the Civil Code can well apply. In fine, a
liability for tort may arise even under a contract, where tort is that which breaches the contract. Stated
differently, when an act which constitutes a breach of contract would have itself constituted the source
of a quasi-delictual liability had no contract existed between the parties, the contract can be said to
have been breached by tort, thereby allowing the rules on tort to apply.
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this
Court is concluded by the factual finding of the Court of Appeals that there is nothing to link (Prudent)
to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not
been duly proven x x x. This finding of the appellate court is not without substantial justification in our
own review of the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act
or omission, he must also be absolved from liability. Needless to say, the contractual tie between the
LRT and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be
made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is untenable. Nominal damages are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him. It is an established rule that nominal damages cannot co-exist with compensatory
damages.
WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only
in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved
from liability. No costs.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur.
Note.Where a common carrier failed to exercise the extraordinary diligence required of it, which
resulted in the death of a passenger, it is deemed to have acted recklessly, and the heirs of the
passenger shall be entitled to exemplary damages. (Yobido vs. Court of Appeals, 281 SCRA 1 [1997]).
o0o
PHILTRANCO SERVICE ENTERPRISES, INC. and ROGACIONES MANILHIG, petitioner, vs.
COURT OF APPEALS and HEIRS OF THE LATE RAMON ACUESTA, respondents
G.R. No. 120553. June 17, 1997
Civil Law; Quasi-Delict; Damages; The liability of the registered owner of a public service vehicle, like
petitioner Philtranco, for damages arising from the tortious acts of the driver is primary, direct, and
joint and several or solidary with the driver.We have consistently held that the liability of the
registered owner of a public service vehicle, like petitioner Philtranco, for damages arising from the
tortious acts of the driver is primary, direct, and joint and severally or solidary with the driver. x x x
Since the employers liability is primary, direct and solidary, its only recourse if the judgment for
damages is satisfied by it is to recover what it has paid from its employee who committed the fault or
negligence which gave rise to the action based on quasi-delict.
Same; Same; Same; Award as indemnity for loss of earning capacity, the same must be struck out for
lack of basis.We concur with petitioners view that the trial court intended the award of P200,000.00
as death indemnity not as compensation for loss of earning capacity. Even if the trial court intended
the award is indemnity for loss of earning capacity, the same must be struck out for lack of basis. There
is no evidence on the victims earning capacity and life expectancy.
Same; Same; Same; Moral damages are emphatically not intended to enrich a plaintiff at the expense
of the defendant.Moral damages are emphatically not intended to enrich a plaintiff at the expense of
the defendant. They are awarded only to allow the former to obtain means, diversion, or amusements
that will serve to alleviate the moral suffering he has undergone due to the defendants culpable action
and must, perforce, be proportional to the suffering inflicted. In light of the circumstances in this case,
an award of P50,000 for moral damages is in order.
Same; Same; Same; In quasi-delicts, exemplary damages may be awarded if the party at fault acted
with gross negligence.The award of P500,000 for exemplary damages is also excessive. In quasi-
delicts, exemplary damages may be awarded if the party at fault acted with gross negligence. The
Court of Appeals found that there was gross negligence on the part of petitioner Manilhig. Under Article
2229 of the Civil Code, exemplary damages are imposed by way of example or correction for the public
good, in addition to the moral, temperate, liquidated, or compensatory damages. Considering its
purpose, it must be fair and reasonable in every case and should not be awarded to unjustly enrich a
prevailing party. In the instant case, an award P50,000 for the purpose would be adequate, fair, and
reasonable.
Same; Same; Same; Attorneys Fees; The general rule is that attorneys fees cannot be recovered as
part of damages because of the policy that no premium should be placed on the right to litigate.
Finally, the award of P50,000 for attorneys fees must be reduced. The general rule is that attorneys
fees cannot be recovered as part of damages because of the policy that no premium should be placed
on the right to litigate. Stated otherwise, the grant of attorneys fees as part of damages is the exception
rather than the rule, as counsels fees are not awarded every time a party prevails in a suit. Such
attorneys fees can be awarded in the cases enumerated in Article 2208 of the Civil Code, and in all
cases it must be reasonable.
Bengzon, Narciso, Cudala, Pecson, Bengson and Jimenez for petitioners.
Julio O. Acuesta for private respondent.
7DAVIDE, JR., J.:

The Petitioners interposed this appeal by way of a petition for review under Rule 45 of the Rules of
Court from the 31 January 1995 Decision of the Court of Appeals in CA-G.R. CV No. 41140777 affirming
the 22 January 1993 Decision of Branch 31 of the Regional Trial Court, Calbayog City, in Civil Case No.
373, which ordered the petitioners to pay the private respondents damages as a result of a vehicular
accident.
Civil Case No. 373 was an action against herein petitioners for damages instituted by the heirs of Ramon
A. Acuesta, namely, Gregorio O. Acuesta; Julio O. Acuesta; Ramon O. Acuesta, Jr.; Baltazar O. Acuesta;
Rufino O. Acuesta; Maximo O. Acuesta; Neri O. Acuesta; Luminado O. Acuesta; Rosario Acuesta-Sanz;
and Pamfilo O. Acuesta. Atty. Julio O. Acuesta also appeared as counsel for the plaintiffs (herein private
respondents). The private respondents alleged that the petitioners were guilty of gross negligence,
recklessness, violation of traffic rules and regulations, abandonment of victim, and attempt to escape
from a crime.
To support their allegations, the private respondents presented eight witnesses. On 10 February 1992,
after the cross-examination of the last witness, the private respondents counsel made a reservation to
present a ninth witness. The case was then set for continuation of the trial on 30 and 31 March 1992.
Because of the non-appearance of the petitioners counsel, the 30 March 1992 hearing was cancelled.
The next day, private respondents counsel manifested that he would no longer present the ninth
witness. He thereafter made an oral offer of evidence and rested the case. The trial court summarized
private respondents evidence in this wise:
[I]n the early morning of March 24, 1990, about 6:00 oclock, the victim Ramon A. Acuesta was riding
in his easy rider bicycle (Exhibit O), along the Gomez Street of Calbayog City. The Gomez Street is
along the side of Nijaga Park. On the Magsaysay Blvd., also in Calbayog City, defendant Philtranco
Service Enterprises, Inc. (Philtranco for brevity) Bus No. 4025 with plate No. EVA-725 driven by
defendant Rogasiones Manilhig y Dolira was being pushed by some persons in order to start its engine.
The Magsaysay Blvd. runs perpendicular to Gomez St. and the said Philtranco bus 4025 was heading
in the general direction of the said Gomez Street. Some of the persons who were pushing the bus were
on its back, while the others were on the sides. As the bus was pushed, its engine started thereby the
bus continued on its running motion and it occurred at the time when Ramon A. Acuesta who was still
riding on his bicycle was directly in front of the said bus. As the engine of the Philtranco bus started
abruptly and suddenly, its running motion was also enhanced by the said functioning engine, thereby
the subject bus bumped on the victim Ramon A. Acuesta who, as a result thereof fell and, thereafter,
was run over by the said bus. The bus did not stop although it had already bumped and ran [sic] over
the victim; instead, it proceeded running towards the direction of the Rosales Bridge which is located
at one side of the Nijaga Park and towards one end of the Gomez St., to which direction the victim was
then heading when he was riding on his bicycle. P/Sgt. Yabao who was then jogging thru the Gomez
Street and was heading towards the victim Ramon A. Acuesta as the latter was riding on his bicycle,
saw when the Philtranco bus was being pushed by some passengers, when its engine abruptly started
and when the said bus bumped and ran over the victim. He approached the bus driver defendant
Manilhig herein and signalled to him to stop, but the latter did not listen. So the police officer jumped
into the bus and introducing himself to the driver defendant as policeman, ordered the latter to stop.
The said defendant driver stopped the Philtranco bus near the Nijaga Park and Sgt. Yabao thereafter,
told the driver to proceed to the Police Headquarter which was only 100 meters away from Nijaga Park
because he was apprehensive that the said driver might be harmed by the relatives of the victim who
might come to the scene of the accident. Then Sgt. Yabao cordoned the scene where the vehicular
accident occurred and had P/Cpl. Bartolome Bagot, the Traffic Investigator, conduct an investigation
and make a sketch of the crime scene. Sgt. Yambao Yabao was only about 20 meters away when he
saw the bus of defendant Philtranco bumped [sic] and [sic] ran over the victim. From the place where
the victim was actually bumped by the bus, the said vehicle still had run to a distance of about 15
meters away.
For their part, the petitioners filed an Answer wherein they alleged that petitioner Philtranco exercised
the diligence of a good father of a family in the selection and supervision of its employees, including
petitioner Manilhig who had excellent record as a driver and had undergone months of rigid training
before he was hired. Petitioner Manilhig had always been a prudent professional driver, religiously
observing traffic rules and regulations. In driving Philtrancos buses, he exercised the diligence of a
very cautions person.
As might be expected, the petitioners had a different version of the incident. They alleged that in the
morning of 24 March 1990, Manilhig, in preparation for his trip back to Pasay City, warmed up the
engine of the bus and made a few rounds within the city proper of Calbayog. While the bus was slowly
and moderately cruising along Gomez Street, the victim, who was biking towards the same direction as
the bus, suddenly overtook two tricycles and swerved left to the center of the road. The swerving was
abrupt and so sudden that even as Manilhig applied the brakes and blew the bus horn, the victim was
bumped from behind and run over by the bus. It was neither willful nor deliberate on Manilhigs part to
proceed with the trip after his bus bumped the victim, the truth being that when he looked at his rear-
view window, he saw people crowding around the victim, with others running after his bus. Fearing
that he might be mobbed, he moved away from the scene of the accident and intended to report the
incident to the police. After a man boarded his bus and introduced himself as a policeman, Manilhig
gave himself up to the custody of the police and reported the accident in question.
The petitioners further claimed that it was the negligence of the victim in overtaking two tricycles,
without taking precautions such as seeing first that the road was clear, which caused the death of the
victim. The latter did not even give any signal of his intention to overtake. The petitioners then counter-
claimed for P50,000 as and for attorneys fees; P1 million as moral damages; and P50,000 for litigation
expenses.
However, the petitioners were not able to present their evidence, as they were deemed to have waived
that right by the failure of their counsel to appear at the scheduled hearings on 30 and 31 March 1992.
The trial court then issued an Order declaring the case submitted for decision. Motions for the
reconsideration of the said Order were both denied.
On 22 January 1992, the trial court handed down a decision ordering the petitioners to jointly and
severally pay the private respondents the following amounts:

2) P200,000 as death indemnity for the death of the victim Ramon A. Acuesta;
3) P1 million as moral damages;
4) P500,000 by way of exemplary damages;
5) P50,000 as attorneys fees; and
6) the costs of suit.
Unsatisfied with the judgment, the petitioners appealed to the Court of Appeals imputing upon the trial
court the following errors:
(1) in preventing or barring them from presenting their evidence;

(2) in finding that petitioner Manilhig was at fault;
(3) in not finding that Ramon was the one at fault and his own fault caused, or at least contributed to,
his unfortunate accident;
(4) in awarding damages to the private respondents; and
(5) in finding that petitioner Philtranco was solidarily liable with Manilhig for damages.
In its decision of 31 January 1995, the Court of Appeals affirmed the decision of the trial court. It held
that the petitioners were not denied due process, as they were given an opportunity to present their
defense. The records show that they were notified of the assignment of the case for 30 and 31 March
1992. Yet, their counsel did not appear on the said dates. Neither did he file a motion for postponement
of the hearings, nor did he appeal from the denial of the motions for reconsideration of the 31 March
1992 Order of the trial court. The petitioners have thereby waived their right to present evidence. Their
expectation that they would have to object yet to a formal offer of evidence by the private respondents
was misplaced, for it was within the sound discretion of the court to allow oral offer of evidence.
As to the second and their assigned errors, the respondent court disposed as follows:
. . . We cannot help but accord with the lower courts finding on appellant Manilhigs fault. First, it is
not disputed that the bus driven by appellant Manilhig was being pushed at the time of the unfortunate
happening. It is of common knowledge and experience that when a vehicle is pushed to a jump-start,
its initial movement is far from slow. Rather, its movement is abrupt and jerky and it takes a while
before the vehicle attains normal speed. The lower court had thus enough basis to conclude, as it did,
that the bumping of the victim was due to appellant Manilhigs actionable negligence and inattention.
Prudence should have dictated against jumpstart, was too obvious to be overlooked. Verily, contrary to
their bare arguments, there was gross negligence on the part of appellants.
The doctrine of last clear chance theorized upon by appellants, is inapplicable under the premises
because the victim, who was bumped from behind, obviously, did not of course anticipate a Philtranco
bus being pushed from a perpendicular street.
The respondent court sustained the awards of moral and exemplary damages and of attorneys fees,
for they are warranted under Articles 2206, 2231, and 2208(1), respectively, of the Civil Code. Anent
the solidary liability of petitioner Philtranco, the same finds support in Articles 2180 and 2194 of the
said Code. The defense that Philtranco exercised the diligence of a good father of a family in the
selection and supervision of its employees crumbles in the face of the gross negligence of its driver,
which caused the untimely death of the victim.
Their motion for reconsideration having been denied, the petitioners came to us claiming that the Court
of Appeals gravely erred
. . . IN HOLDING THAT PETITIONERS WAIVED THEIR RIGHT TO PRESENT THEIR EVIDENCE, AND
THAT PETITIONERS WERE NOT DENIED DUE PROCESS.
II
. . . IN APPLYING ART. 2194, INSTEAD OF ART. 2180, OF THE CIVIL CODE, AND IN HOLDING THAT
PETITIONER PHILTRANCO CAN NOT INVOKE THE DEFENSE OF DILIGENCE OF A GOOD FATHER OF A
FAMILY.
III
. . . IN AWARDING DAMAGES TO RESPONDENTS AND/OR IN NOT FINDING THE TRIAL COURTS

AWARD OF DAMAGES EXCESSIVE.
We resolved to give due course to the petition and required the parties to submit their respective
memoranda after due consideration of the allegations, issues, and arguments adduced in the petition,
the comment thereon by the private respondents, and the reply to the comment filed by the petitioners.
The petitioners filed their memorandum in due time; while the private respondents filed theirs only on
3 January 1997, after their counsel was fined in the amount of P1,000 for failure to submit the required
memorandum.
The first imputed error is without merit. The petitioners and their counsel, Atty. Jose Buban, were duly
notified in open court of the order of the trial court of 10 February 1992 setting the case for hearing
on 30 and 31 March 1992. On both dates neither the petitioners nor their counsel appeared. In his
motion for reconsideration, Atty. Buban gave the following reasons for his failure to appear on the said
hearings:
1. That when this case was called on March 27, 1992, counsel was very much indisposed due to the
rigors of a very hectic campaign as he is a candidate for City Councilor of Tacloban; he wanted to leave
for Calbayog City, but he was seized with slight fever on the morning of said date; but then, during the
last hearing, counsel was made to understand that plaintiffs would formally offer their exhibits in
writing, for which reason, counsel for defendants waited for a copy of said formal offer, but counsel did
not receive any copy as counsel for plaintiffs opted to formally offer their exhibits orally in open court;
2. That counsel for defendants, in good faith believed that he would be given reasonable time within
which to comment on the formal offer in writing, only to know that counsel for plaintiffs orally offered
their exhibits in open court and that the same were admitted by the Honorable Court; and that when
this case was called on March 30 and 31, 1992, the undersigned counsel honestly believed that said
schedule would be cancelled, pending on the submission of the comments made by the defendants on
the formal offer; but it was not so, as the exhibits were admitted in open court.
In its order of 26 May 1992, the trial court denied the motion, finding it to be devoid of meritorious
basis, as Atty. Buban could have filed a motion for postponement. Atty. Buban then filed a motion to
reconsider the order of denial, which was likewise denied by the trial court in its order of 12 August
1992. Nothing more was done by the petitioners after receipt of the order of 12 August 1992. A perusal
of the first and second motions for reconsideration discloses absence of any claim that the petitioners
have meritorious defenses. Clearly, therefore, the trial court committed no error in declaring the case
submitted for decision on the basis of private respondents evidence.
The second imputed error is without merit either.
Civil Case No. 373 is an action for damages based on quasidelict15 under Article 2176 and 2180 of the
Civil Code against petitioner Manilhig and his employer, petitioner Philtranco, respectively. These
articles pertinently provide:
ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
...
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks even though the former are not engaged in any business or
industry.
...
The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage.
We have consistently held that the liability of the registered owner of a public service vehicle, like
petitioner Philtranco, for damages arising from the tortious acts of the driver is primary, direct, and
joint and several or solidary with the driver. As to solidarity, Article 2194 expressly provides:
ART. 2194. The responsibility of two or more persons who are liable for a quasi-delict is solidary.
Since the employers liability is primary, direct and solidary, its only recourse if the judgment for
damages is satisfied by it is to recover what it has paid from its employee who committed the fault or
negligence which gave rise to the action based on quasi-delict. Article 2181 of the Civil Code provides:
ART. 2181. Whoever pays for the damage caused by his dependents or employees may recover from
the latter what he has paid or delivered in satisfaction of the claim.
There is, however, merit in the third imputed error.
The trial court erroneously fixed the death indemnity at P200,000. The private respondents defended
the award in their opposition to the Motion for Reconsideration by saying that [i]n the case of Philippine
Airlines, Inc. vs. Court of Appeals, 185 SCRA 110, our Supreme Court held that the award of damages
for death is computed on the basis of the life expectancy of the deceased. In that case, the death
indemnity was computed by multiplying the victims gross annual income by his life expectancy, less
his yearly living expenses. Clearly then, the death indemnity referred to was the additional indemnity
for the loss of earning capacity mentioned in Article 2206(1) of the Civil Code, and not the basic
indemnity for death mentioned in the first paragraph thereof. This article provides as follows:
ART. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity
shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by
the court, unless the deceased on account of permanent physical disability not caused by the defendant,
had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the recipient
who is not an heir called to the decedents inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period of not exceeding five years, the
exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand
moral damage for mental anguish by reason of the death of the deceased.
We concur with petitioners view that the trial court intended the award of P200,000.00 as death
indemnity not as compensation for loss of earning capacity. Even if the trial court intended the award
as indemnity for loss of earning capacity, the same must be struck out for lack of basis. There is no
evidence on the victims earning capacity and life expectancy.
Only indemnity for death under the opening paragraph of Article 2206 is due, the amount of which has
been fixed by current jurisprudence at P50,000.
The award of P1 million for moral damages to the heirs of Ramon Acuesta has no sufficient basis and
is excessive and unreasonable. This was based solely on the testimony of one of the heirs, Atty. Julio
Acuesta, contained in his Direct Testimony. . . As Plaintiff, conducted by Himself, to wit:
Q. What was your feeling or reaction as a result of the death of your father Ramon A. Acuesta?
A. We, the family members, have suffered much from wounded feelings, moral shock, mental anguish,
sleepless nights, to which we are entitled to moral damages at the reasonable amount of ONE MILLION
(P1,000,000.00) PESOS or at the sound discretion of this Hon. Court.
Since the other heirs of the deceased did not take the witness stand, the trial court had no basis for its
award of moral damages to those who did not testify thereon.
Moral damages are emphatically not intended to enrich a plaintiff at the expense of the defendant.
They are awarded only to allow the former to obtain means, diversion, or amusements that will serve
to alleviate the moral suffering he has undergone due to the defendants culpable action and must,
perforce, be proportional to the suffering inflicted. In light of the circumstances in this case, an award
of P50,000 for moral damages is in order.
The award of P500,000 for exemplary damages is also excessive. In quasi-delicts, exemplary damages
may be awarded if the party at fault acted with gross negligence. The Court of Appeals found that there
was gross negligence on the part of petitioner Manilhig. Under Article 2229 of the Civil Code, exemplary
damages are imposed by way of the moral, temperate, liquidated, or compensatory damages.
Considering its purpose, it must be fair and reasonable in every case and should not be awarded to
unjustly enrich a prevailing party. In the instant case, an award P50,000 for the purpose would be
adequate, fair, and reasonable.
Finally, the award of P50,000 for attorneys fees must be reduced. The general rule is that attorneys
fees cannot be recovered as part of damages because of the policy that no premium should be placed
on the right to litigate. Stated otherwise, the grant of attorneys fees as part of damages is the exception
rather than the rule, as counsels fees are not awarded every time a party prevails in a suit. Such
attorneys fees can be awarded in the cases enumerated in Article 2208 of the Civil Code, and in all
cases it must be reasonable. In the instant case, the counsel for the plaintiffs is himself a co-plaintiff;
it is then unlikely that he demanded from his brothers and sisters P100,000 as attorneys fees as alleged
in the complaint and testified to by him. He did not present any written contract for his fees. He is,
however, entitled to a reasonable amount for attorneys fees, considering that exemplary damages are
awarded. Among the instances mentioned in Article 2208 of the Civil Code when attorneys fees may
be recovered is (1) when exemplary damages are awarded. Under the circumstances in this case, an
award of P25,000 for attorneys fees is reasonable.
The petitioners did not contest the award for actual damages fixed by the trial court. Hence, such award
shall stand.
IN VIEW OF THE FOREGOING, the petitioner is hereby partly granted and the challenged decision of
CA-G.R. CV No. 41140 is AFFIRMED, subject to modifications as to the damages awarded, which are
reduced as follows:
(a) Death indemnity, from P200,000 to P50,000;

(b) Moral damages, from P1 million to P50,000;
(c) Exemplary damages, from P500,000 to P50,000; and
(d) Attorneys fees, from P50,000 to P25,000.
No pronouncement as to costs in this instance.
SO ORDERED.
Narvasa (C.J., Chairman), Melo and Panganiban, JJ., concur.
Francisco, J., On leave.
Note.The responsibility of two or more persons or tortfeasors liable for a quasi-delict is joint and
several and the sharing as between such solidary debtors is pro-rata. (Singa-pore Airlines Limited vs.
Court of Appeals, 243 SCRA 143 [1995])
o0o
PAN AMERICAN WORLD AIRWAYS, INC., petitioner, vs. INTERMEDIATE APPELLATE
COURT, RENE V. PANGAN, SOTANG BASTOS PRODUCTIONS and ARCHER PRODUCTIONS,
respondents
No. L-70462. August 11, 1988
Civil Law; Common Carrier; Liability for lost of baggage; Ruling in Ong Yiu vs. Court of Appeals
sustaining the validity of a printed stipulation at the back of an airline ticket limiting liability of the
carrier for lost baggage to a specified amount and that the liability limited to said amount since the
passenger did not declare a higher value much less pay additional charges squarely applicable to the
instant case.We find the ruling in Ong Yiu squarely applicable to the instant case. In said case the
Court, through Justice Melencio-Herrera, stated: Petitioner further contends that respondent Court
committed grave error when it limited PALs carriage liability to the amount of P100.00 as stipulated at
the back of the ticket. . . . We agree with the foregoing finding. The pertinent Condition of Carnage
printed at the back of the plane ticket reads: 8 BAGGAGE LIABILITY. . . The total liability of the Carrier
for lost or damaged baggage of the passenger is LIMITED TO P100.00 for each ticket unless a
passenger declares a higher valuation in excess of P100.00, but not in excess, however of a total
valuation of P1,000.00 and additional charges are paid pursuant to Carriers tariffs. There is no dispute
that petitioner did not declare any higher value for his luggage, much less did he pay any additional
transportation charge.
Same; Same; Same; Same; Fact that petitioner had not signed the plane ticket he is nevertheless bound
by the provisions thereof.While, it may be true that petitioner had not signed the plane ticket (Exh.
12), he is nevertheless bound by the provisions thereof. Such provisions have been held to be a part
of the contract of carriage, and valid and binding upon the passenger regardless of the latters lack of
knowledge or assent to the regulation. [Tannebaum v. National Airline, Inc., 13 Misc. 2d 450, 176
N.Y.S. 2d 400; Lichten v. Eastern Airlines, 87 Fed. Supp. 691; Migoski v. Eastern Air Lines, Inc., Fla.,
63 So. 2d 634.] It is what is known as a contract of adhesion, in regards which it has been said that
contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the
plane ticket in the case at bar, are contracts not entirely prohibited, the one who adheres to the contract
is in reality free to reject it entirely; if he adheres, he gives his consent [Tolentino, Civil Code, Vol IV,
1962 ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyers Journal, Jan. 31, 1951, p. 49]. And as held
in Randolph v. American Airlines, 103 Ohio App. 172, 144 N.E. 2d 878; Rosenchein v. Trans World
Airlines, Inc., 349 S.W. 2d 483, a contract limiting liability upon an agreed valuation does not offend
against the policy of the law forbidding one from contracting against his own negligence.
Same; Same; Same; Ruling in Shewaram vs. PAL Inc. that the stipulation limiting the carriers liability
to a specified amount was invalid finds no application in the instant case.On the other hand, the
ruling in Shewaram v. Philippine Air Lines, Inc. [G.R. No. L-20099, July 2, 1966, 17 SCRA 606], where
the court held that the stipulation limiting the carriers liability to a specified amount was invalid, finds
no application in the instant case, as the ruling in said case was premised on the finding that the
conditions printed at the back of the ticket were so small and hard to read that they would not warrant
the presumption that the passenger was aware of the conditions and that he had freely and fairly
agreed thereto. In the instant case, similar facts that would make the case fall under the exception
have not been alleged, much less shown to exist.
Same; Same; Same; Damages; Court inable to agree with decision of the trial court and affirmed by
the Court of Appeals awarding private respondents damages as and for lost profits.The Court finds
itself unable to agree with the decision of the trial court, and affirmed by the Court of Appeals, awarding
private respondents damages as and for lost profits when their contracts to show the films in Guam
and San Francisco, California were cancelled. The rule laid down in Mendoza v. Philippine Air Lines, Inc.
[90 Phil. 836 (1952)] cannot be any clearer:. . . Under Art. 1107 of the Civil Code, a debtor in good
faith like the defendant herein, may be held liable only for damages that were foreseen or might have
been foreseen at the time the contract of transportation was entered into. The trial court correctly
found that the defendant company could not have foreseen the damages that would be suffered by
Mendoza upon failure to deliver the can of film on the 17th of September, 1948 for the reason that the
plans of Mendoza to exhibit that film during the two fiesta and his preparations, specially the
announcement of said exhibition by posters and advertisement in the newspaper, were not called to
the defendants attention.
Same; Same; Same; Same; Same; Petitioner cannot be held liable for the cancellation of private
respondents contract.Thus, applying the foregoing ruling to the facts of the instant case, in the
absence of a showing that petitioners attention was called to the special circumstances requiring
prompt delivery of private respondent Pangans luggages, petitioner cannot be held liable for the
cancellation of private respondents contracts as it could not have foreseen such an eventuality when
it accepted the luggages for transit.
Same; Same; Same; Attorneys fees; Award of Attorneys fees losses support and must be set aside.
With the Courts holding that petitioners liability is limited to the amount stated in the ticket, the award
of attorneys fees, which is grounded on the alleged unjustified refusal of petitioner to satisfy private
respondents just and valid claim, loses support and must be set aside.
PETITION to review the decision of the Intermediate Appellate Court.
Guerrero & Torres for petitioner.
Jose B. Layug for private respondents.
CORTES, J.:
Before the Court is a petition filed by an international air carrier seeking to limit its liability for lost
baggage, containing promotional and advertising materials for films to be exhibited in Guam and the
U.S.A., clutch bags, barong tagalogs and personal belongings, to the amount specified in the airline
ticket absent a declaration of a higher valuation and the payment of additional charges.
The undisputed facts of the case, as found by the trial court and adopted by the appellate court, are
as follows:
On April 25, 1978, plaintiff Rene V. Pangan, president and general manager of the plaintiffs Sotang
Bastos and Archer Productions, while in San Francisco, California and Primo Quesada of Prime Films,
San Francisco, California, entered into an agreement (Exh. A) whereby the former, for and in
consideration of the amount of US $2,500.00 per picture, bound himself to supply the latter with three
films. Ang Mabait, Masungit at ang Pangit, Big Happening with Chikiting and Iking, and Kambal
Dragon for exhibition in the United States. It was also their agreement that plaintiffs would provide the
necessary promotional and advertising materials for said films on or before May 30, 1978.
On his way home to the Philippines, plaintiff Pangan visited Guam where he contacted Leo Slutchnick
of the Hafa Adai Organization. Plaintiff Pangan likewise entered into a verbal agreement with Slutchnick
for the exhibition of two of the films above-mentioned at the Hafa Adai Theater in Guam on May 30,
1978 for the consideration of P7,000.00 per picture (p. 11, tsn, June 20, 1979). Plaintiff Pangan
undertook to provide the necessary promotional and advertising materials for said films on or before
the exhibition date on May 30, 1978.
By virtue of the above agreements, plaintiff Pangan caused the preparation of the requisite promotional
handbills and still pictures for which he paid the total sum of P12,900.00 (Exhs. B, B-1, C and C-1).
Likewise in preparation for his trip abroad to comply with his contracts, plaintiff Pangan purchased
fourteen clutch bags, four capiz lamps and four barong tagalog, with a total value of P4,400.00 (Exhs.
D, D-1, E, and F).
On May 18, 1978, plaintiff Pangan obtained from defendant Pan Ams Manila Office, through the Your
Travel Guide, an economy class airplane ticket with No. 0269207406324 (Exh. G) for passage from
Manila to Guam on defendants Flight No. 842 of May 27, 1978, upon payment by said plaintiff of the
regular fare. The Your Travel Guide is a tour and travel office owned and managed by plaintiffs witness
Mila de la Rama.
On May 27, 1978, two hours before departure time plaintiff Pangan was at the defendants ticket
counter at the Manila International Airport and presented his ticket and checked in his two luggages,
for which he was given baggage claim tickets Nos. 963633 and 963649 (Exhs. H and H-1). The two
luggages contained the promotional and advertising materials, the clutch bags, barong tagalog and his
personal belongings. Subsequently, Pangan was informed that his name was not in the manifest and
so he could not take Flight No. 842 in the economy class. Since there was no space in the economy
class, plaintiff Pangan took the first class because he wanted to be on time in Guam to comply with his
commitment, paying an additional sum of $112.00.
When plaintiff Pangan arrived in Guam on the date of May 27, 1978, his two luggages did not arrive
with his flight, as a consequence of which his agreements with Slutchnick and Quesada for the exhibition
of the films in Guam and in the United States were cancelled (Exh. L). Thereafter, he filed a written
claim (Exh. J) for his missing luggages.
Upon arrival in the Philippines, Pangan contacted his lawyer, who made the necessary representations
to protest as to the treatment which he received from the employees of the defendant and the loss of
his two luggages (Exh. M, O, Q, S, and T). Defendant Pan Am assured plaintiff Pangan that his
grievances would be investigated and given its immediate consideration (Exhs. N, P and R). Due to the
defendants failure to communicate with Pangan about the action taken on his protests, the present
complaint was filed by the plaintiff. (Pages 4-7, Record On Appeal). [Rollo, pp. 27-29.]
On the basis of these facts, the Court of First Instance found petitioner liable and rendered judgment
as follows:
(1) Ordering defendant Pan American World Airways, Inc. to pay all the plaintiffs the sum of P83,000.00,
for actual damages, with interest thereon at the rate of 14% per annum from December 6, 1978, when
the complaint was filed, until the same is fully paid, plus the further sum of P10,000.00 as attorneys
fees;
(2) Ordering defendant Pan American World Airways, Inc. to pay plaintiff Rene V. Pangan the sum of
P8,123.34, for additional actual damages, with interest thereon at the rate of 14% per annum from
December 6, 1978, until the same is fully paid;
(3) Dismissing the counterclaim interposed by defendant Pan American World Airways, Inc.; and
(4) Ordering defendant Pan American World Airways, Inc. to pay the costs of suit. [Rollo, pp. 106-107.]
On appeal, the then Intermediate Appellate Court affirmed the trial court decision.
Hence, the instant recourse to this Court by petitioner.
The petition was given due course and the parties, as required, submitted their respective memoranda.
In due time the case was submitted for decision.
In assailing the decision of the Intermediate Appellate Court petitioner assigned the following errors:
1. The respondent court erred as a matter of law in affirming the trial courts award of actual damages
beyond the limitation of liability set forth in the Warsaw Convention and the contract of carriage.
2. The respondent court erred as a matter of law in affirming the trial courts award of actual damages
consisting of alleged lost profits in the face of this Courts ruling concerning special or consequential
damages as set forth in Mendoza v. Philippine Airlines [90 Phil. 836 (1952).]
The assigned errors shall be discussed seriatim.
1. The airline ticket (Exh. G) contains the following conditions:
NOTICE
If the passengers journey involves an ultimate destination or stop in a country other than the country
of departure the Warsaw Convention may be applicable and the Convention governs and in most cases
limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage.
See also notice headed Advice to International Passengers on Limitation of Liability.
CONDITIONS OF CONTRACT
1. As used in this contract ticket means this passenger ticket and baggage check of which these
conditions and the notices form part, carriage is equivalent to transportation, carrier means all air
carriers that carry or undertake to carry the passenger or his baggage hereunder or perform any other
service incidental to such air carriage. WARSAW CONVENTION means the convention for the
Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw, 12th October
1929, or that Convention as amended at The Hague, 28th September 1955, whichever may be
applicable.
2.Carriage hereunder is subject to the rules and limitations relating to liability established by the Warsaw
Convention unless such carriage is not international carriage as defined by that Convention.
3. To the extent not in conflict with the foregoing carriage and other services performed by each carrier
are subject to: (i) provisions contained in this ticket, (ii) applicable tariffs, (iii) carriers conditions of
carriage and related regulations which are made part hereof (and are available on application at the
offices of carrier), except in transportation between a place in the United States or Canada and any
place outside thereof to which tariffs in force in those countries apply.
xxx
NOTICE OF BAGGAGE LIABILITY LIMITATIONS
Liability for loss, delay, or damage to baggage is limited as follows unless a higher value is declared in
advance and additional charges are paid: (1) for most international travel (including domestic portions
of international journeys) to approximately $9.07 per pound ($20.00 per kilo) for checked baggage and
$400 per passenger for unchecked baggage: (2) for travel wholly between U.S. points, to $750 per
passenger on most carriers (a few have lower limits). Excess valuation may not be declared on certain
types of valuable articles. Carriers assume no liability for fragile or perishable articles, further
information may be obtained from the carrier. [Italics supplied.].
On the basis of the foregoing stipulations printed at the back of the ticket, petitioner contends that its
liability for the lost baggage of private respondent Pangan is limited to $600.00 ($20.00 x 30 kilos) as
the latter did not declare a higher value for his baggage and pay the corresponding additional charges.
To support this contention, petitioner cites the case of Ong Yiu v. Court of Appeals [G.R. No. L-40597,
June 29, 1979, 91 SCRA 223), where the Court sustained the validity of a printed stipulation at the back
of an airline ticket limiting the liability of the carrier for lost baggage to a specified amount and ruled
that the carriers liability was limited to said amount since the passenger did not declare a higher value,
much less pay additional charges.
We find the ruling in Ong Yiu squarely applicable to the instant case. In said case, the Court, through
Justice Melencio-Herrera, stated:
Petitioner further contends that respondent Court committed grave error when it limited PALs carriage
liability to the amount of P100.00 as stipulated at the back of the ticket. . . .
We agree with the foregoing finding. The pertinent Condition of Carriage printed at the back of the
plane ticket reads:
8. BAGGAGE LIABILITY . . . The total liability of the Carrier for lost or damage baggage of the passenger
is LIMITED TO P100.00 for each ticket unless a passenger declares a higher valuation in excess of
P100.00, but not in excess, however, of a total valuation of P1,000.00 and additional charges are paid
pursuant to Carriers tariffs.
There is no dispute that petitioner did not declare any higher value for his luggage, much less did he
pay any additional transportation charge.
But petitioner argues that there is nothing in the evidence to show that he had actually entered into a
contract with PAL limiting the latters liability for loss or delay of the baggage of its passengers, and
that Article 1750** of the Civil Code has not been complied with.
While it may be true that petitioner had not signed the plane ticket (Exh. 12), he is nevertheless
bound by the provisions thereof. Such provisions have been held to be a part of the contract of
carriage, and valid and binding upon the passenger regardless of the latters lack of knowledge or
assent to the regulation. [Tannebaum v. National Airline, Inc., 13 Misc. 2d 450, 176 N.Y.S. 2d 400;
Lichten v. Eastern Airlines, 87 Fed. Supp. 691; Migoski v. Eastern Air Lines, Inc., Fla., 63 So. 2d 634.]
It is what is known as a contract of adhesion, in regards which it has been said that contracts of
adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket
in the case at bar, are contracts not entirely prohibited. The one who adheres to the contract is in
reality free to reject it entirely; if he adheres, he gives his consent [Tolentino, Civil Code, Vol. IV, 1962
ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyers Journal, Jan. 31, 1951, p. 49]. And as held in
Randolph v. American Airlines, 103 Ohio App. 172, 144 N.E. 2d 878; Rosenchein v. Trans World Airlines,
Inc., 349 S.W. 2d 483, a contract limiting liability upon an agreed valuation does not offend against
the policy of the law forbidding one from contracting against his own negligence.
Considering, therefore, that petitioner had failed to declare a higher value for his baggage, he cannot
be permitted a recovery in excess of P100.00. . . .
On the other hand, the ruling in Shewaram v. Philippine Air Lines, Inc. [G.R. No. L-20099, July 2, 1966,
17 SCRA 606], where the Court held that the stipulation limiting the carriers liability to a specified
amount was invalid, finds no application in the instant case, as the ruling in said case was premised on
the finding that the conditions printed at the back of the ticket were so small and hard to read that
they would not warrant the presumption that the passenger was aware of the conditions and that he
had freely and fairly agreed thereto. In the instant case, similar facts that would make the case fall
under the exception have not been alleged, much less shown to exist.
In view thereof petitioners liability for the lost baggage is limited to $20.00 per kilo or $600.00, as
stipulated at the back of the ticket.
At this juncture, in order to rectify certain misconceptions the Court finds it necessary to state that the
Court of Appeals reliance on a quotation from Northwest Airlines, Inc. v. Cuenca [G.R. No. L-22425,
August 31, 1965, 14 SCRA 1063] to sustain the view that to apply the Warsaw Convention which limits
a carriers liability to US$9.07 per pound or US$20.00 per kilo in cases of contractual breach of
carriage*** is against public policy is utterly misplaced, to say the least. In said case, while the Court,
as quoted in the Intermediate Appellate Courts decision, said:
Petitioner argues that pursuant to those provisions, an air carrier is liable only in the event of death
of a passenger or injury suffered by him, or of destruction or loss of, or damages to any checked
baggage or any goods, or of delay in the transportation by air of passengers, baggage or goods. This
pretense is not borne out by the language of said Articles. The same merely declare the carrier liable
for damages in enumerated cases, if the conditions therein specified are present. Neither said provisions
nor others in the aforementioned Convention regulate or exclude liability for other breaches of contract
by the carrier. Under petitioners theory, an air carrier would be exempt from any liability for damages
in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd.
it prefaced this statement by explaining that:
. . . The case is now before us on petition for review by certiorari, upon the ground that the lower court
has erred: (1) in holding that the Warsaw Convention of October 12, 1929, relative to transportation
by air is not in force in the Philippines: (2) in not holding that respondent has no cause of action; and
(3) in awarding P20,000 as nominal damages.
We deem it unnecessary to pass upon the first assignment of error because the same is the basis of
the second assignment of error, and the latter is devoid of merit, even if we assumed the former to be
well-taken. (Italics supplied.)
Thus, it is quite clear that the Court never intended to, and in fact never did, rule against the validity
of provisions of the Warsaw Convention. Consequently, by no stretch of the imagination may said
quotation from Northwest be considered as supportive of the appellate courts statement that the
provisions of the Warsaw Convention limited a carriers liability are against public policy.
2. The Court finds itself unable to agree with the decision of the trial court, and affirmed by the Court
of Appeals, awarding private respondents damages as and for lost profits when their contracts to show
the films in Guam and San Francisco, California were cancelled.
The rule laid down in Mendoza v. Philippine Air Lines, Inc. [90 Phil. 836 (1952)] cannot be any clearer:
. . . Under Art. 1107 of the Civil Code, a debtor in good faith like the defendant herein, may be held
liable only for damages that were foreseen or might have been foreseen at the time the contract of
transportation was entered into. The trial court correctly found that the defendant company could not
have foreseen the damages that would be suffered by Mendoza upon failure to deliver the can of film
on the 17th of September, 1948 for the reason that the plans of Mendoza to exhibit that film during
the town fiesta and his preparations, specially the announcement of said exhibition by posters and
advertisement in the newspaper, were not called to the defendants attention.
In our research for authorities we have found a case very similar to the one under consideration. In
the case of Chapman vs. Fargo, L.R.A. (1918 F) p. 1049, the plaintiff in Troy, New York, delivered
motion picture films to the defendant Fargo, an express company, consigned and to be delivered to
him in Utica. At the time of shipment the attention of the express company was called to the fact that
the shipment involved motion picture films to be exhibited in Utica, and that they should be sent to
their destination, rush. There was delay in their delivery and it was found that the plaintiff because of
his failure to exhibit the film in Utica due to the delay suffered damages or loss of profits. But the
highest court in the State of New York refused to award him special damages. Said appellate court
observed:
But before defendant could be held to special damages, such as the present alleged loss of profits on
account of delay or failure of delivery, it must have appeared that he had notice at the time of delivery
to him of the particular circumstances attending the shipment, and which probably would lead to such
special loss if he defaulted. Or, as the rule has been stated in another form, in order to impose on the
defaulting party further liability than for damages naturally and directly, i.e., in the ordinary course of
things, arising from a breach of contract, such unusual or extraordinary damages must have been
brought within the contemplation of the parties as the probable result of breach at the time of or prior
to contacting. Generally, notice then of any special circumstances which will show that the damages to
be anticipated from a breach would be enhanced has been held sufficient for this effect.
As may be seen, that New York case is a stronger one than the present case for the reason that the
attention of the common carrier in said case was called to the nature of the articles shipped, the purpose
of shipment, and the desire to rush the shipment, circumstances and facts absent in the present case.
[Italics supplied.]
Thus, applying the foregoing ruling to the facts of the instant case, in the absence of a showing that
petitioners attention was called to the special circumstances requiring prompt delivery of private
respondent Pangans luggages, petitioner cannot be held liable for the cancellation of private
respondents contracts as it could not have foreseen such an eventuality when it accepted the luggages
for transit.
The Court is unable to uphold the Intermediate Appellate Courts disregard of the rule laid down in
Mendoza and affirmance of the trial courts conclusion that petitioner is liable for damages based on
the finding that [t]he undisputed fact is that the contracts of the plaintiffs for the exhibition of the
films in Guam and California were cancelled because of the loss of the two luggages in question. [Rollo,
p. 36] The evidence reveals that the proximate cause of the cancellation of the contracts was private
respondent Pangans failure to deliver the promotional and advertising materials on the dates agreed
upon. For this petitioner cannot be held liable. Private respondent Pangan had not declared the value
of the two luggages he had checked in and paid additional charges. Neither was petitioner privy to
respondents contracts nor was its attention called to the condition therein requiring delivery of the
promotional and advertising materials on or before a certain date.
3. With the Courts holding that petitioners liability is limited to the amount stated in the ticket, the
award of attorneys fees, which is grounded on the alleged unjustified refusal of petitioner to satisfy
private respondents just and valid claim, loses support and must be set aside.
WHEREFORE, the Petition is hereby GRANTED and the Decision of the Intermediate Appellate Court is
SET ASIDE and a new judgment is rendered ordering petitioner to pay private respondents damages in
the amount of US$600.00 or its equivalent in Philippine currency at the time of actual payment.
SO ORDERED.
Fernan, (C.J.), Feliciano and Bidin, JJ., concur.
Gutierrez, Jr., J., no part as I was on leave during the deliberation.
Petition granted. Decision set aside.
Notes.Stipulation in the bill of lading limiting carriers liability to the value of goods appearing therein,
unless shipper declares a quarter value, is valid and binding. (St. Paul Fire and Marine Insurance Co.
vs. Macondray and Co., 70 SCRA 122.)
Limitations of carriers liability for lose or damage to goods is valid. (Servando vs. Philippine Steam
Navigation Co., 117 SCRA 832.)
o0o
DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN,
petitioners, vs. COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT
BANDOY, FERNANDO CUDIAMAT, MARRIETA CUDIAMAT NORMA CUDIAMAT, DANTE
CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late Pedrito
Cudiamat represented by Inocencia Cudiamat, respondents
G.R. No. 95582. October 7, 1991
Civil Law; Contract of carriage; Case at bar; The victim in the case at bar, by stepping and standing on
the platform of the bus, is already considered a passenger and is entitled to all the rights and protection
pertaining to such a contractual relation.The victim herein, by stepping and standing on the platform
of the bus, is already considered a passenger and is entitled to all the rights and protection pertaining
to such a contractual relation. Hence, it has been held that the duty which the carrier of passengers
owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom.
Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence for the safety of the passengers transported by them, according to all
the circumstances of each case. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
Same; Same; Extraordinary diligence; By the contract of carriage, the carrier assumes that express
obligation to transport the passenger to his destination safely and to observe extraordinary diligence
with a due regard for all the circumstances, and any injury that might be suffered by the passenger is
right away attributable to the fault or negligence of the carrier.It has also been repeatedly held that
in an action based on a contract of carriage, the court need not make an express finding of fault or
negligence on the part of the carrier in order to hold it responsible to pay the damages sought by the
passenger, By the contract of carriage, the carrier assumes the express obligation to transport the
passenger to his destination safely and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger is right away attributable to the
fault or negligence of the carrier. This is an exception to the general rule that negligence must be
proved, and it is therefore incumbent upon the carrier to prove that it has exercised extraordinary
diligence as prescribed in Articles 1733 and 1755 of the Civil Code.
Same; Same; Same; Negligence; The failure of the driver and the conductor to immediately bring the
gravely injured victim to the hospital for medical treatment is a patent and incontrovertible proof of
their negligence.Moreover, the circumstances under which the driver and the conductor failed to
bring the gravely injured victim immediately to the hospital for medical treatment is a patent and
incontrovertible proof of their negligence. It defies understanding and can even be stigmatized as
callous indifference. The evidence shows that after the accident the bus could have forthwith turned at
Bunk 56 and thence to the hospital, but its driver instead opted to first proceed to Bunk 70 to allow a
passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. The vacuous
reason given by petitioners that it was the wife of the deceased who caused the delay was tersely and
correctly confuted by respondent court: "x x x The pretension of the appellees that the delay was due
to the fact that they had to wait for about twenty minutes for Inocencia Cudiamat to get dressed
deserves scant consideration. It is rather scandalous and deplorable for a wife whose husband is at the
verge of dying to have the luxury of dressing herself up for about twenty minutes before attending to
help her distressed and helpless husband."
Same; Same; Damages; The amount recoverable by the heirs of a victim of a tort is not the loss of the
entire earnings, but the loss of that portion of the earnings which the beneficiary would have received.
With respect to the award of damages, an oversight was, however, committed by respondent Court of
Appeals in computing the actual damages based on the gross income of the victim. The rule is that the
amount recoverable by the heirs of a victim of a tort is not the loss of the entire earnings, but rather
the loss of that portion of the earnings which the beneficiary would have received. In other words, only
net earnings, not gross earnings, are to be considered, that is, the total of the earnings less expenses
necessary in the creation of such earnings or income and minus living and other incidental expenses.
PETITION to review the judgment and resolution of the Court of Appeals.
Francisco S. Reyes Law Office for petitioners.
Antonio C. de Guzman for private respondents.
REGALADO, J.:
On May 13, 1985, private respondents filed a complaint for damages against petitioners for the death
of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25, 1985 at Marivic,
Sapid, Mankayan, Benguet. Among others, it was alleged that on said date, while petitioner Theodore
M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and
imprudent manner and without due regard to traffic rules and regulations and safety to persons and
property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito immediately
to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of the victim,
first brought his other passengers and cargo to their respective destinations before bringing said victim
to the Lepanto Hospital where he expired.
On the other hand, petitioners alleged that they had observed and continued to observe the
extraordinary diligence required in the operation of the transportation company and the supervision of
the employees, even as they add that they are not absolute insurers of the safety of the public at large.
Further, it was alleged that it was the victim's own carelessness and negligence which gave rise to the
subject incident, hence they prayed for the dismissal of the complaint plus an award of damages in
their favor by way of a counterclaim.
On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with this decretal
portion:
"IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito Cudiamat was
negligent, which negligence was the proximate cause of his death. Nonetheless, defendants in equity,
are hereby ordered to pay the heirs of Pedrito Cudiamat the sum of P10,000.00 which approximates
the amount defendants initially offered said heirs for the amicable settlement of the case. No costs.
"SO ORDERED."
Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision in
CA-G.R. CV No. 19504 promulgated on August 14,1990, set aside the decision of the lower court, and
ordered petitioners to pay private respondents:
"1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the victim Pedrito
Cudiamat;
2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;
3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and compensatory
damages;
4. The costs of this suit."
Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated
October 4, 1990, hence this petition with the central issue herein being whether respondent court erred
in reversing the decision of the trial court and in finding petitioners negligent and liable for the damages
claimed.
It is an established principle that the factual findings of the Court of Appeals as a rule are final and may
not be reviewed by this Court on appeal. However, this is subject to settled exceptions, one of which
is when the findings of the appellate court are contrary to those of the trial court, in which case a re-
examination of the facts and evidence may be undertaken.
In the case at bar, the trial court and the Court of Appeals have discordant positions as to who between
the petitioners and the victim is guilty of negligence. Perforce, we have had to conduct an evaluation
of the evidence in this case for the proper calibration of their conflicting factual findings and legal
conclusions.
The lower court in declaring that the victim was negligent, made the following findings:
"This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving vehicle,
especially with one of his hands holding an umbrella. And, without having given the driver or the
conductor any indication that he wishes to board the bus. But defendants can also be found wanting
of the necessary diligence. In this connection, it is safe to assume that when the deceased Cudiamat
attempted to board defendants' bus, the vehicle's door was open instead of being closed. This should
be so, for it is hard to believe that one would even attempt to board a vehicle (i)n motion if the door
of said vehicle is closed. Here lies the defendant's lack of diligence. Under such circumstances, equity
demands that there must be something given to the heirs of the victim to assuage their feelings. This,
also considering that initially, defendant common carrier had made overtures to amicably settle the
case. It did offer a certain monetary consideration to the victim's heirs."
However, respondent court, in arriving at a different opinion, declares that:
"From the testimony of appellees' own witness in the person of Vitaliano Safarita, it is evident that the
subject bus was at full stop when the victim Pedrito Cudiamat boarded the same as it was precisely on
this instance where a certain Miss Abenoja alighted from the bus. Moreover, contrary to the assertion
of the appellees, the victim did indicate his intention to board the bus as can be seen from the testimony
of the said witness when he declared that Pedrito Cudiamat was no longer walking and made a sign to
board the bus when the latter was still at a distance from him. It was at the instance when Pedrito
Cudiamat was closing his umbrella at the platform of the bus when the latter made a sudden jerk
movement (as) the driver commenced to accelerate the bus.
"Evidently, the incident took place due to the gross negligence of the appellee-driver in prematurely
stepping on the accelerator and in not waiting for the passenger to first secure his seat especially so
when we take into account that the platform of the bus was at the time slippery and wet because of a
drizzle. The defendants-appellees utterly failed to observe their duty and obligation as common carrier
to the end that they should observe extra-ordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them according to the circumstances of each case (Article
1733, New Civil Code)."
After a careful review of the evidence on record, we find no reason to disturb the above holding of the
Court of Appeals. Its aforesaid findings are supported by the testimony of petitioners' own witnesses.
One of them, Virginia Abalos, testified on cross-examination as follows:
"Q: It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the incident, there
is a crossing?
A: The way going to the mines but it is not being pass(ed) by the bus.
Q: And the incident happened before bunkhouse 56, is that not correct?
A: It happened between 54 and 53 bunkhouses. "
The bus conductor, Martin Anglog, also declared:

"Q: When you arrived at Lepanto on March 25, 1985, will you please inform this Honorable Court if
there was any unusual incident that occurred?
A: When we delivered a baggage at Marivic because a person alighted there between Bunkhouse 53
and 54.
Q: What happened when you delivered this passenger at this particular place in Lepanto?
A: When we reached the place, a passenger alighted and I signalled my driver. When we stopped we
went out because I saw an umbrella about a split second and I signalled again the driver, so the driver
stopped and we went down and we saw Pedrito Cudiamat asking for help because he was lying down.
Q: How far away was this certain person, Pedrito Cudiamat, when you saw him lying downfrom the
bus how far was he?
A: It is about two to three meters.
Q: On what direction of the bus was he found about three meters from the bus, was it at the front or
at the back?
A: At the back, sir." (Emphasis supplied.)
The foregoing testimonies show that the place of the accident and the place where one of the
passengers alighted were both between Bunkhouses 53 and 54, hence the finding of the Court of
Appeals that the bus was at full stop when the victim boarded the same is correct. They further confirm
the conclusion that the victim fell from the platform of the bus when it suddenly accelerated forward
and was run over by the rear right tires of the vehicle, as shown by the physical evidence on where he
was thereafter found in relation to the bus when it stopped. Under such circumstances, it cannot be
said that the deceased was guilty of negligence.
The contention of petitioners that the driver and the conductor had no knowledge that the victim would
ride on the bus, since the latter had supposedly not manifested his intention to board the same, does
not merit consideration. When the bus is not in motion there is no necessity for a person who wants to
ride the same to signal his intention to board. A public utility bus, once it stops, is in effect making a
continuous offer to bus riders. Hence, it becomes the duty of the driver and the conductor, every time
the bus stops, to do no act that would have the effect of increasing the peril to a passenger while he
was attempting to board the same. The premature acceleration of the bus in this case was a breach of
such duty.
It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar,
or motorbus, to stop their conveyances a reasonable length of time in order to afford passengers an
opportunity to board and enter, and they are liable for injuries suffered by boarding passengers
resulting from the sudden starting up or jerking of their conveyances while they are doing so.
Further, even assuming that the bus was moving, the act of the victim in boarding the same cannot be
considered negligent under the circumstances. As clearly explained in the testimony of the aforestated
witness for petitioners, Virginia Abalos, the bus had "just started" and "was still in slow motion" at the
point where the victim had boarded and was on its platform.
It is not negligence per se, or as a matter of law, for one to attempt to board a train or streetcar which
is moving slowly. An ordinarily prudent person would have made the attempt to board the moving
conveyance under the same or similar circumstances, The fact that passengers board and alight from
a slowly moving vehicle is a matter of common experience and both the driver and conductor in this
case could not have been unaware of such an ordinary practice.
The victim herein, by stepping and standing on the platform of the bus, is already considered a
passenger and is entitled to all the rights and protection pertaining to such a contractual relation.
Hence, it has been held that the duty which the carrier of passengers owes to its patrons extends to
persons boarding the cars as well as to those alighting therefrom.
Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence for the safety of the passengers transported by them, according to all
the circumstances of each case. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
It has also been repeatedly held that in an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of the carrier in order to hold it responsible
to pay the damages sought by the passenger. By the contract of carriage, the carrier assumes the
express obligation to transport the passenger to his destination safely and to observe extraordinary
diligence with a due regard for all the circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence of the carrier. This is an exception to the
general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove
that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.
Moreover, the circumstances under which the driver and the conductor failed to bring the gravely
injured victim immediately to the hospital for medical treatment is a patent and incontrovertible proof
of their negligence. It defies understanding and can even be stigmatized as callous indifference. The
evidence shows that after the accident the bus could have forthwith turned at Bunk 56 and thence to
the hospital, but its driver instead opted to first proceed to Bunk 70 to allow a passenger to alight and
to deliver a refrigerator, despite the serious condition of the victim. The vacuous reason given by
petitioners that it was the wife of the deceased who caused the delay was tersely and correctly confuted
by respondent court:
"x x x The pretension of the appellees that the delay was due to the fact that they had to wait for about
twenty minutes for Inocencia Cudiamat to get dressed deserves scant consideration. It is rather
scandalous and deplorable for a wife whose husband is at the verge of dying to have the luxury of
dressing herself up for about twenty minutes before attending to help her distressed and helpless
husband."
Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70 was to
inform the victim's family of the mishap, since it was not said bus driver nor the conductor but the
companion of the victim who informed his family thereof. In fact, it was only after the refrigerator was
unloaded that one of the passengers thought of sending somebody to the house of the victim, as shown
by the testimony of
Virginia Abalos again, to wit:
"Q: Why, what happened to your refrigerator at that particular time?
A: I asked them to bring it down because that is the nearest place to our house and when I went down
and asked somebody to bring down the refrigerator, I also asked somebody to call the family of Mr.
Cudiamat.
COURT:
Q: Why did you ask somebody to call the family of Mr. Cudiamat?
A: Because Mr. Cudiamat met an accident, so I ask somebody to call for the family of Mr. Cudiamat.
Q: But nobody ask(ed) you to call for the family of Mr. Cudiamat?
A: No sir."
With respect to the award of damages, an oversight was, however, committed by respondent Court of
Appeals in computing the actual damages based on the gross income of the victim. The rule is that the
amount recoverable by the heirs of a victim of a tort is not the loss of the entire earnings, but rather
the loss of that portion of the earnings which the beneficiary would have received. In other words, only
net earnings, not gross earnings, are to be considered, that is, the total of the earnings less expenses
necessary in the creation of such earnings or income and minus living and other incidental expenses.
We are of the opinion that the deductible living and other expense of the deceased may fairly and
reasonably be fixed at P500.00 a month or P6,000.00 a year. In adjudicating the actual or compensatory
damages, respondent court found that the deceased was 48 years old, in good health with a remaining
productive life expectancy of 12 years, and then earning P24,000.00 a year. Using the gross annual
income as the basis, and multiplying the same by 12 years, it accordingly awarded P288,000. Applying
the aforestated rule on computation based on the net earnings, said award must be, as it hereby is,
rectified and reduced to P216,000.00. However, in accordance with prevailing jurisprudence, the death
indemnity is hereby increased to P50,000.00.
WHEREFORE, subject to the above modifications, the challenged judgment and resolution of
respondent Court of Appeals are hereby AFFIRMED in all other respects.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.
Judgment and resolution affirmed with modifications.
Note.A common carrier is required to exercise the highest degree of care in the discharge of its
business of carriage and transportation. (Philippine Airlines, Inc. vs. Court of Appeals, 106 SCRA 391.)
o0o
SWEET LINES, INC., petitioner vs. HON. BERNARDO TEVES, Presiding Judge, CFI of
Misamis Oriental, Branch VII, LEOVIGILDO TANDOG, JR., and ROGELIO TIRO,
respondents
No. L-37750. May 19, 1978
Civil Law; Common carriers; Contracts of adhesion, concept of.It should be borne in mind, however,
that with respect to the fourteen (14) conditionsone of which is Condition No. 14 which is in issue
in this caseprinted at the back of the passage tickets, there are commonly known as contracts of
adhesion, the validity and/or enforceability of which will have to be determined by the peculiar
circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced.
For (W)hile generally, stipulations in a contract come about after deliberate drafting by the parties
thereto, . . . there are certain contracts almost all the provisions of which have been drafted only by
one party, usually a corporation. Such contracts are called contracts of adhesion, because the only
participation of the other party is the signing of his signature or his adhesion thereto. Insurance
contracts, bills of lading, contracts of sale of lots on the installment plan fall into this category. By the
peculiar circumstances under which contracts of adhesion are entered intonamely, that it is drafted
only by one party, usually the corporation, and is sought to be accepted or adhered to by the other
party, in this instance the passengers, private respondents, who cannot change the same and who are
thus made to adhere hereto on the take it or leave it basiscertain guidelines in the determination
of their validity and/or enforceability have been formulated in order to insure that justice and fair play
characterize the relationship of the contracting parties.
Same; Same; Acute shortage of interisland vessels taken judicial notice of by courts; Passengers of
interisland vessels not expected to examine their ticket for printed conditions therein; Reason.It is a
matter of public knowledge, of which we can take judicial notice, that there is a dearth of and acute
shortage in inter-island vessels plying between the countrys several islands, and the facilities they offer
leave much to be desired. Thus, even under ordinary circumstances, the piers are congested with
passengers and their cargo waiting to be transported. The conditions are even worse at peak and/or
the rainy seasons, when passengers literally scramble to secure whatever accommodations may be
availed of, even through circuitous routes, and/or at the risk of their safetytheir immediate concern,
for the moment, being to be able to board vessels with the hope of reaching their destinations. The
schedules areas often as not if not more sodelayed or altered. This was precisely the experience of
private respondents when they were relocated to M/S Sweet Town from M/S Sweet Hope and then
allegedly exposed to the scorching heat of the sun and the dust coming from the ships cargo of corn
grits, because even the latter vessel was filled to capacity. Under these circumstances, it is hardly just
and proper to expect the passengers to examine their tickets received from crowded/congested
counters, more often than not during rush hours, for conditions that may be printed thereon, much less
charge them with having consented to the conditions, so printed, especially if there are a number of
such conditions in fine print, as in this case.
Same; Same; Condition 14 of shipping ticket which provides that all actions arising out of conditions
and provisions of the ticket irrespective of where issued shall be filed in the City of Cebu is void as it
was prepared solely at petitioners instance without participation of respondents; Courts take judicial
notice of fact that passengers availing of shipping facilities come from low income and less literate
groups.Again, it should be noted that Condition No. 14 was prepared solely at the instance of the
petitioner; respondents had no say in its preparation. Neither did the latter have the opportunity to
take the same into account prior to the purchase of their tickets. For, unlike the small print provisions
of insurance contractsthe common example of contracts of adherencewhich are entered into by the
insured in full awareness of said conditions, since the insured is afforded the opportunity to examine
and consider the same, passengers of inter-island vessels do not have the same chance, since their
alleged adhesion is presumed only from the fact that they purchased the passage tickets. It should also
be stressed that shipping companies are franchise holders of certificates of public convenience and,
therefore, possess a virtual monopoly over the business of transporting passengers between the ports
covered by their franchise. This being so, shipping companies, like petitioner, engaged in inter-island
shipping, have a virtual monopoly of the business of transporting passengers and may thus dictate their
terms of passage, leaving passengers with no choice but to buy their tickets and avail of their vessels
and facilities. Finally, judicial notice may be taken of the fact that the bulk of those who board these
inter-island vessels come from the low-income groups and are less literate, and who have little or no
choice but to avail of petitioners vessels.
Same; Same; Condition 14 subversive of public policy on transfers of venue of actions; Philosophy
behind transfers of venue of actions; Public policy, concept of.Condition No. 14 is subversive of public
policy on transfers of venue of actions. For, although venue may be changed or transferred from one
province to another by agreement of the parties in writing pursuant to Rule 4, Section 3, of the Rules
of Court, such an agreement will not be held valid where it practically negates the action of the
claimants, such as the private respondents herein. The philosophy underlying the provisions on transfer
of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote the ends
of justice. Considering the expense and trouble a passenger residing outside of Cebu City would incur
to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all.
The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner
had branches or offices in the respective ports of call of its vessels and can afford to litigate in any of
these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant
case, will not cause inconvenience to, much less prejudice, petitioner. Public policy is . . . that principle
of the law which holds that no subject or citizen can lawfully do that which has a tendency to be
injurious to the public or against the public good. . .. Under this principle . . . freedom of contract or
private dealing is restricted by law for the good of the public. Clearly, Condition No. 14, if enforced,
will be subversive of the public good or interest, since it will frustrate in meritorious cases, actions of
passenger claimants outside of Cebu City, thus placing petitioner company at a decided advantage over
said persons, who may have perfectly legitimate claims against it. The said condition should, therefore,
be declared void and unenforceable, as contrary to public policyto make the courts accessible to all
who may have need of their services.
Barredo, J., Concurring
Remedial Law; Venue; Civil Law; Common Carriers; Tickets issued by interisland vessel show that
actually no written agreement as to venue between the parties as contemplated by Sec. 3, Rule 4 of
Rules of Court; Where case already in respondent court and no showing that petitioner with its
resources would not suffer inconvenience, trial court can continue proceedings started in said court.
In Hoechst Philippines, Inc. vs. Francisco Torres, et al., G. R. No. L-44351, promulgated May 18, 1978,
We made it clear that although generally, agreements regarding change of venue are enforceable,
there may be instances where for equitable considerations and in the better interest of justice, a court
may justify the laying of the venue in the place fixed by the rules instead of following the written
stipulation of the parties. In the particular case at bar, there is actually no written agreement as to
venue between the parties in the sense contemplated in Section 3 of Rule 4, which governs the matter.
I take it that the importance that a stipulation regarding change of the venue fixed by law entails is
such that nothing less than mutually conscious agreement as to it must be what the rule means. In the
instant case, as well pointed out in the main opinion, the ticket issued to private respondents by
petitioner constitutes at best a contract of adhesion. x x x It is common knowledge that individuals
who avail of common carriers hardly read the fine prints on such tickets to note anything more than
the price thereof and the destination designated therein. Under these circumstances, it would seem
that, since this case is already in respondent court and there is no showing that, with its more or less
known resources as owner of several interisland vessels plying between the different ports of the
Philippines for sometime already, petitioner would be greatly inconvenienced by submitting to the
jurisdiction of said respondent court, it is best to allow the proceedings therein to continue.
ORIGINAL ACTION in the Supreme Court. Prohibition with preliminary injunction.
Filiberto Leonardo, Abelardo C. Almario & Samuel B. Abadiano for petitioner.
Leovigildo Vallar for private respondents.

SANTOS, J.:
This is an original action for Prohibition with Preliminary Injunction filed October 3, 1973 to restrain
respondent Judge from proceeding further with Civil Case No. 4091, entitled Leovigildo D. Tandog, Jr.
and Rogelio Tiro v. Sweet Lines, Inc. after he denied petitioners Motion to Dismiss the complaint, and
the Motion for Reconsideration of said order.
Briefly, the facts of record follow. Private respondents Atty. Leovigildo Tandog and Rogelio Tiro, a
contractor by professions, bought tickets Nos. 0011736 and 011737 for Voyage 90 on December 31,
1971 at the branch office of petitioner, a shipping company transporting inter-island passengers and
cargoes, at Cagayan de Oro City. Respondents were to board petitioners vessel, M/S Sweet Hope
bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel was not proceeding to
Bohol, since many passengers were bound for Surigao, private respondents per advice, went to the
branch office for proper relocation to M/S Sweet Town. Because the said vessel was already filled to
capacity, they were forced to agree to hide at the cargo section to avoid inspection of the officers of
the Philippine Coastguard. Private respondents alleged that they were, during the trip, exposed to
the scorching heat of the sun and the dust coming from the ships cargo of corn grits, and that the
tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and they were constrained
to pay for other tickets. In view thereof, private respondents sued petitioner for damages and for breach
of contract of carriage in the alleged sum of P110,000.00 before respondents Court of First Instance of
Misamis Oriental.
Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised
on the condition printed at the back of the tickets, i.e., Condition No. 14, which reads:
14. It is hereby agreed and understood that any and all actions arising out of the conditions and
provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the
City of Cebu.
The motion was denied by the trial court. Petitioner moved to reconsider the order of denial, but to no
avail. Hence, this instant petition for prohibition with preliminary injunction, alleging that the respondent
judge had departed from the accepted and usual course of judicial proceeding and had acted without
or in excess or in error of his jurisdiction or in gross abuse of discretion.
In Our resolution of November 20, 1973, We restrained respondent Judge from proceeding further with
the case and required respondents to comment. On January 18, 1974, We gave due course to the
petition and required respondents to answer. Therefter, the parties submitted their respective
memoranda in support of their respective contentions.
Presented thus for Our resolution is a question which, to all appearances, is one of first impression, to
witIs Condition No. 14 printed at the back of the petitioners passage tickets purchased by private
respondents, which limits the venue of actions arising from the contract of carriage to the Court of First
Instance of Cebu, valid and enforceable? Otherwise stated, may a common carrier engaged in inter-
island shipping stipulate thru a condition printed at the back of passage tickets to its vessels that any
and all actions arising out of the contract of carriage should be filed only in a particular province or city,
in this case the City of Cebu, to the exclusion of all others?
Petitioner contends that Condition No. 14 is valid and enforceable, since private respondents acceded
to it when they purchased passage tickets at its Cagayan de Oro branch office and took its vessel M/S
Sweet Town for passage to Tagbilaran, Bohol; that the condition fixing the venue of actions in the
City of Cebu is proper since venue may be validly waived, citing cases; that is an effective waiver of
venue, valid and binding as such, since it is printed in bold and capital letters and not in fine print and
merely assigns the place where the action arising from the contract is instituted, likewise citing cases;
and that condition No. 14 is unequivocal and mandatory, the words and phrases any and all,
irrespective of where it is issued, and shall leave no doubt that the intention of Condition No. 14 is
to fix the venue in the City of Cebu, to the exclusion of all other places; that the orders of the respondent
Judge are an unwarranted departure from established jurisprudence governing the case; and that he
acted without or in excess of his jurisdiction in issuing the orders complained of.
On the other hand, private respondents claim that Condition No. 14 is not valid; that the same is not
an essential element of the contract of carriage, being in itself a different agreement which requires
the mutual consent of the parties to it; that they had no say in its preparation, the existence of which
they could not refuse, hence, they had no choice but to pay for the tickets and to avail of petitioners
shipping facilities out of necessity; that the carrier has been exacting too much from the public by
inserting impositions in the passage tickets too burdensome to bear; that the condition which was
printed in fine letters is an imposition on the riding public and does not bind respondents, citing cases;
that while venue of actions may be transferred from one province to another, such arrangement
requires the written agreement of the parties, not to be imposed unilaterally; and that assuming that
the condition is valid, it is not exclusive and does not, therefore, exclude the filing of the action in
Misamis Oriental.
There is no question that there was a valid contract of carriage entered into by petitioner and private
respondents and that the passage tickets, upon which the latter based their complaint, are the best
evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration
and object, are present. As held in Peralta de Guerrero, et al. v. Madrigal Shipping Co., Inc.,
It is a matter of common knowledge that whenever a passenger boards a ship for transportation from
one place to another he is issued a ticket by the shipper which has all the elements of a written contract,
Namely: (1) the consent of the contracting parties manifested by the fact that the passenger boards
the ship and the shipper consents or accepts him in the ship for transportation; (2) cause or
consideration which is the fare paid by the passenger as stated in the ticket; (3) object, which is the
transportation of the passenger from the place of departure to the place of destination which are stated
in the ticket.
It should be borne in mind, however, that with respect to the fourteen (14) conditionsone of which
is Condition No. 14 which is in issue in this caseprinted at the back of the passage tickets, these
are commonly known as contracts of adhesion, the validity and/or enforceability of which will have
to be determined by the peculiar circumstances obtaining in each case and the nature of the conditions
or terms sought to be enforced. For, (W)hile generally, stipulations in a contract come about after
deliberate drafting by the parties thereto, . . . there are certain contracts almost all the provisions of
which have been drafted only by one party, usually a corporation. Such contracts are called contracts
of adhesion, because the only participation of the party is the signing of his signature or his adhesion
thereto. Insurance contracts, bills of lading, contracts of sale of lots on the installment plan fall into this
category.
By the peculiar circumstances under which contracts of adhesion are entered intonamely, that it is
drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the
other party, in this instance the passengers, private respondents, who cannot change the same and
who are thus made to adhere thereto on the take it or leave it basiscertain guidelines in the
determination of their validity and/or enforceability have been formulated in order to insure that justice
and fair play characterize the relationship of the contracting parties. Thus, this Court speaking through
Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock Insurance Co., and later through Justice
Fernando in Fieldman Insurance v. Vargas, held
The courts cannot ignore that nowadays, monopolies, cartels and concentration of capital, endowed
with overwhelming economic power, manage to impose upon parties dealing with them cunningly
prepared agreements that the weaker party may not change one whit, his participation in the
agreement being reduced to the alternative to take it or leave it, labelled since Raymond Saleilles
contracts by adherence (contracts d adhesion) in contrast to those entered into by parties bargaining
on an equal footing. Such contracts (of which policies of insurance and international bill of lading are
prime examples) obviously call for greater strictness and vigilance on the part of the courts of justice
with a view to protecting the weaker party from abuses and imposition, and prevent their becoming
traps for the unwary.
To the same effect and import, and, in recognition of the peculiar character of contracts of this kind,
the protection of the disadvantaged is expressly enjoined by the New Civil Code
In all contractual, property or other relations, when one of the parties is at a disadvantage on account
of his moral dependence, ignorance, indigence, mental weakness, tender age and other handicap,
the courts must be vigilant for his protection.
Considered in the light of the foregoing norms and in the context of circumstances prevailing in the
inter-island shipping industry in the country today, We find and hold that Condition No. 14 printed at
the back of the passage tickets should be held as void and unenforceable for the following reasons
first, under circumstances obtaining in the inter-island shipping industry, it is not just and fair to bind
passengers to the terms of the conditions printed at the back of the passage tickets, on which Condition
No. 14 is printed in fine letters, and second, Condition No. 14 subverts the public policy on transfer of
venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable
passengers in different parts of the country who, under Condition No. 14, will have to file suits against
petitioner only in the City of Cebu.
1. It is a matter of public knowledge, of which We can take judicial notice, that there is a dearth of and
acute shortage in inter island vessels plying between the countrys several islands, and the facilities
they offer leave much to be desired. Thus, even under ordinary circumstances, the piers are congested
with passengers and their cargo waiting to be transported. The conditions are even worse at peak
and/or the rainy seasons, when passengers literally scramble to secure whatever accommodations may
be availed of, even through circuitous routes, and/or at the risk of their safetytheir immediate
concern, for the moment, being to be able to board vessels with the hope of reaching their destinations.
The schedules areas often as not if not more sodelayed or altered. This was precisely the experience
of private respondents when they were relocated to M/S Sweet Town from M/S Sweet Hope and
then allegedly exposed to the scorching heat of the sun and the dust coming from the ships cargo of
corn grits, because even the latter vessel was filled to capacity.
Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets
received from crowded/congested counters, more often than not during rush hours, for conditions that
may be printed thereon, much less charge them with having consented to the conditions, so printed,
especially if there are a number of such conditions in fine print, as in this case.
Again, it should be noted that Condition No. 14 was prepared solely at the instance of the petitioner;
respondents had no say in its preparation. Neither did the latter have the opportunity to take the same
into account prior to the purchase of their tickets. For, unlike the small print provisions of insurance
contractsthe common example of contracts of adherencewhich are entered into by the insured in
full awareness of said conditions, since the insured is afforded the opportunity to examine and consider
the same, passengers of inter-island vessels do not have the same chance, since their alleged adhesion
is presumed only from the fact that they purchased the passage tickets.
It should also be stressed that shipping companies are franchise holders of certificates of public
convenience and, therefore, possess a virtual monopoly over the business of transporting passengers
between the ports covered by their franchise. This being so, shipping companies, like petitioner,
engaged in inter-island shipping, have a virtual monopoly of the business of transporting passengers
and may thus dictate their terms of passage, leaving passengers with no choice but to buy their tickets
and avail of their vessels and facilities. Finally, judicial notice may be taken of the fact that the bulk of
those who board these inter-island vessels come from the low-income groups and are less literate, and
who have little or no choice but to avail of petitioners vessels.
2. Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue
may be changed or transferred from one province to another by agreement of the parties in writing
pursuant to Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid where it
practically negates the action of the claimants, such as the private respondents herein. The philosophy
underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as
his witnesses and to promote the ends of justice.21 Considering the expense and trouble a passenger
residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most
probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends
of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its
vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of
Misamis Oriental, as was done in the instant case, will not cause inconvience to, much less prejudice,
petitioner.
Public policy is . . . that principle of the law which holds that no subject or citizen can lawfully do that
which has a tendency to be injurious to the public or against the public good. . ..22 Under this principle
. . . freedom of contract or private dealing is restricted by law for the good of the public.23 Clearly,
Condition No. 14, if enforced, will be subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger claimants outside of Cebu City, thus placing petitioner company
at a decided advantage over said persons, who may have perfectly legitimate claims against it. The
said condition should, therefore, be declared void and unenforceable, as contrary to public policyto
make the courts accessible to all who may have need of their services.
WHEREFORE, the petition for prohibition is DISMISSED. The restraining order issued on November 20,
1973, is hereby LIFTED and SET ASIDE. Costs against petitioner.
Fernando (Chairman), Aquino, Concepcion Jr., JJ., concur.
Barredo, J., concurs with a separate opinion.
Antonio, J., reserves his vote.
Petition dismissed Order lifted and set aside.
BARREDO, J.: Concurring
I concur in the dismissal of the instant petition. Only a few days ago, in Hoechst Philippines, Inc. vs.
Francisco Torres, et al., G. R. No. L-44351, promulgated May 18, 1978, We made it clear that although
generally, agreements regarding change of venue are enforceable, there may be instances where for
equitable considerations and in the better interest of justice, a court may justify the laying of the venue
in the place fixed by the rules instead of following written stipulation of the parties.
In the particular case at bar, there is actually no written agreement as to venue between the parties in
the sense contemplated in Section 3 of Rule 4, which governs the matter. I take it that the importance
that a stipulation regarding change of the venue fixed by law entails is such that nothing less than
mutually conscious agreement as to it must be what the rule means. In the instant case, as well pointed
out in the main opinion, the ticket issued to private respondents by petitioner constitutes at best a
contract of adhesion. In other words, it is not that kind of a contract where the parties sit down to
deliberate, discuss and agree specifically on all its terms, but rather, one which respondents took no
part at all in preparing, since it was just imposed upon them when they paid for the fare for the freight
they wanted to ship. It is common knowledge that individuals who avail of common carriers hardly read
the fine prints on such tickets to note anything more than the price thereof and the destination
designated therein.
Under these circumstances, it would seem that, since this case is already in respondent court and there
is no showing that, with its more or less known resources as owner of several interisland vessels plying
between the different ports of the Philippines for sometime already, petitioner would be greatly
inconvenienced by submitting to the jurisdiction of said respondent court, it is best to allow the
proceedings therein to continue. I cannot conceive of any juridical injury such a step can cause to
anyone concerned.
I vote to dismiss the petition.

Petition dismissed Order lifted and set aside.
Notes.The contract of air carriage generates a relation attended with a public duty. Neglect or
malfeasance of the carriers employees could give ground for an action for damages. (Zulueta vs. Pan
American World Airways, Inc., 43 SCRA 397).
In case of death of or injuries to passengers, common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed
in articles 1733 and 1744 of the New Civil Code. (Davila vs. Philippine Air Lines, 49 SCRA 497).
The registered owner of a common carrier is liable for damages resulting from a breach of contract of
carriage. The transferee is, however, liable to the registered owner of the vehicle for the damages
cause to passengers. (Perez vs. Gutier-rez, 53 SCRA 149).
A provisional claim filed before the delivery of the cargo, in anticipation of any possible loss or damage
while the cargo is in the arrastre operators custody is premature and specualtive. (American Insurance
Company of Newark vs. Manila Port Service, 72 SCRA 18; Manila Port Service vs. Fortune Insurance &
Surety Co., Inc., 45 SCRA 65).
The 15-day notice to the arrastre operator of any damage or loss of cargo is reckoned from the date
the consignee or claimant learns of the loss or damage or from the date when with the exercise of due
diligence, information regarding the loss or damage could have been obtained. (New Zealand Insurance
Co., Ltd. vs. Manila Port Service, 19 SCRA 801) The reason for this rule is that before the claimant or
consignee learns of the shortage or damage he is in no position to make a claim since the goods are in
the arrastre contractors custody; otherwise the arrastre operator may escape liability by simply
withholding knowledge as to the loss or damage until after the expiration of the 15-day period from
the discharge of the last package from the carrying vessel (Yu Kimteng Construction Corporation vs.
Manila Railroad Company, 15 SCRA 292).
1. Statutory Construction: General terras may be restricted by specific words, with the result that the
general language will be limited by specific language which indicates the statutes object and purpose.
(Colgate Palmolive Philippines, Inc. vs. Gimenez, 1 SCRA 267.)
2. Contracts: Where the provisions of a contract are ambiguous, such ambiguity must be construed
against the party who drafted the same; and it appearing that the contract in question must be
construed against appellant. (Coscolluela vs. Valderrama, 2 SCRA 1095.)
A written document speaks a uniform language; the spoken word could be notoriously unreliable. If
only to achieve stability in the relations between passenger and air carrier, adherence to the terms of
a ticket is desirable. (Air France vs. Carrascoso, 18 SCRA 155.)
A contract between two persons cannot bind another not a party thereto, merely because he is aiyare
of such contract and fcog acted with knowledge thereof. (Manila Port Service vs. Court of Appeals, 20
SCRA 1214.)
3. Venue: The venue of civil actions in the Court of First Instance is where the plaintiff resides or where
the defendant resides or found (Section 1, Rule 5, Rules of Court), but the latter phrase (may be found)
applies only to cases where the defendant has no residence in the Philippines. (Portillo vs. Reyes, 3
SCRA 311.)
The stipulation that the parties agree to sue and be sued in the courts of Manila, does not preclude
the filing of suits in the residence of plaintiff or defendant under Section 2(b), Rule 4, Rules of Court,
in the absence of qualifying or restrictive words in the agreement which would indicate that Manila
alone is the venue agreed upon by the parties (Polytrade Corporation vs. Blanco, 30 SCRA 187.)
o0o
ABOITIZ SHIPPING CORPORATION, petitioner, vs. HON. COURT OF APPEALS, ELEVENTH
DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER
STEVEDORING CORPORATION, respondents
G.R. No. 84458. November 6, 1989
Torts and Damages; Common Carriers; Carrier-passenger relationship continues until the passenger
has been landed at the port of destination and has left the vessel-owners premises.The rule is that
the relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel owners dock or premises. Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the
carriers conveyance or had a reasonable opportunity to leave the carriers premises. All persons who
remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers,
and what is a reasonable time or a reasonable delay within this rule is to be determined from all the
circumstances, and includes a reasonable time to see after his baggage and prepare for his departure.
The carrier-passenger relationship is not terminated merely by the fact that the person transported has
been carried to his destination if, for example, such person remains in the carriers premises to claim
his baggage.
Same; Same; Same; Reasonableness of time should be made to depend on the attending
circumstances, such as the kind of common carrier; the victims presence in the petitioners premises
after the lapse of one hour from the time he disembarked from the vessel is justified, hence he is
deemed still a passenger when the accident occurred.It is apparent from the foregoing that what
prompted the Court to rule as it did in said case is the fact of the passengers reasonable presence
within the carriers premises. That reasonableness of time should be made to depend on the attending
circumstances of the case, such as the kind of common carrier, the nature of its business, the customs
of the place, and so forth, and therefore precludes a consideration of the time element per se without
taking into account such other factors. It is thus of no moment whether in the cited case of La Mallorca
there was no appreciable interregnum for the passenger therein to leave the carriers premises whereas
in the case at bar, an interval of one (1) hour had elapsed before the victim met the accident. The
primary factor to be considered is the existence of a reasonable cause as will justify the presence of
the victim on or near the petitioners vessel. We believe there exists such a justifiable cause. It is of
common knowledge that, by the very nature of petitioners business as a shipper, the passengers of
vessels are allotted a longer period of time to disembark from the ship than other common carriers
such as a passenger bus. x x x It is not definitely shown that one (1) hour prior to the incident, the
victim had already disembarked from the vessel. Petitioner failed to prove this. What is clear to us is
that at the time the victim was taking his cargoes, the vessel had already docked an hour earlier. In
consonance with common shipping procedure as to the minimum time of one (1) hour allowed for the
passengers to disembark, it may be presumed that the victim had just gotten off the vessel when he
went to retrieve his baggage. Yet, even if he had already disembarked an hour earlier, his presence in
petitioners premises was not without cause. The victim had to claim his baggage which was possible
only one (1) hour after the vessel arrived since it was admittedly standard procedure in the case of
petitioners vessels that the unloading operations shall start only after that time. Consequently, under
the foregoing circumstances, the victim Anacleto Viana is still deemed a passenger of said carrier at the
time of his tragic death.
Same; Same; Same; In an action for breach of contract of carriage all that is required of plaintiff is to
prove the existence of such contract and its non-performance by the carrier by the latters failure to
carry the passenger safely to his destination.Under the law, common carriers are, from the nature of
their business and for reasons of public policy, 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. More particularly, a common carrier is bound to carry the passengers safely
with a due regard for all the circumstances. Thus, where a passenger dies or is injured, the common
carrier is presumed to have been at fault or to have acted negligently. This gives rise to an action for
breach of contract of carriage where all that is required of plaintiff is to prove the existence of the
contract of carriage and its non-performance by the carrier, that is, the failure of the carrier to carry
the passenger safely to his destination, which, in the instant case, necessarily includes its failure to
safeguard its passenger with extraordinary diligence while such relation subsists.
Same; Same; Contributory Negligence; Proximate Cause; Petitioners failure to exercise extra-ordinary
diligence was the proximate and direct cause of the victims death, thereby making them liable,
notwithstanding the victims contributory negligence.While the victim was admittedly contributorily
negligent, still petitioners aforesaid failure to exercise extraordinary diligence was the proximate and
direct cause of, because it could definitely have prevented, the formers death. Moreover, in paragraph
5.6 of its petition, at bar, petitioner has expressly conceded the factual finding of respondent Court of
Appeals that petitioner did not present sufficient evidence in support of its submission that the deceased
Anacleto Viana was guilty of gross negligence. Petitioner cannot now be heard to claim otherwise.
APPEAL by certiorari from the decision of the Court of Appeals. Lapena, Jr., J.
Herenio E. Martinez for petitioner.
M.R. Villaluz Law Office for private respondent.
REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision of
respondent Court of Appeals, dated July 29, 1988, the decretal portion of which reads:
WHEREFORE, the judgment appealed from as modified by the order of October 27, 1982, is hereby
affirmed with the modification that appellant Aboitiz Shipping is hereby ordered to pay plaintiff-
appellees the amount of P30,000.00 for the death of Anacleto Viana; actual damages of P9,800.00;
P150,000.00 for unearned income; P7,200.00 as support for deceaseds parents; P20,000.00 as moral
damages; P10,000.00 as attorneys fees; and to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted by respondent court, are
as follows:
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia, owned
by defendant, at the port at San Jose, Occidental Mindoro, bound for Manila, having purchased a ticket
(No. 117392) in the sum of P23.10 (Exh. B). On May 12, 1975, said vessel arrived at Pier 4, North
Harbor, Manila, and the passengers therein disembarked, a gangplank having been provided connecting
the side of the vessel to the pier. Instead of using said gangplank, Anacleto Viana disembarked on the
third deck which was on the level with the pier. After said vessel had landed, the Pioneer Stevedoring
Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the
Memorandum of Agreement dated July 26, 1975 (Exh. 2) between the third party defendant Pioneer
Stevedoring Corporation and defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was
placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it
started operation by unloading the cargoes from said vessel. While the crane was being operated,
Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his
cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the
crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him
between the side of the vessel and the crane. He was thereafter brought to the hospital where he later
expired three (3) days thereafter, on May 15, 1975, the cause of his death according to the Death
Certificate (Exh. C) being hypostatic pneumonia secondary to traumatic fracture of the pubic bone
lacerating the urinary bladder (See also Exh. B). For his hospitalization, medical, burial and other
miscellaneous expenses, Anacletos wife, herein plaintiff, spent a total of P9,800.00 (Exhibits E, E-1,
to E-5). Anacleto Viana who was only forty (40) years old when he met said fateful accident (Exh. E)
was in good health. His average annual income as a farmer or a farm supervisor was 400 cavans of
palay annually. His parents, herein plaintiffs Antonio and Gorgonia Viana, prior to his death had been
recipient of twenty (20) cavans of palay as support or P120.00 monthly. Because of Anacletos death,
plaintiffs suffered mental anguish and extreme worry or moral damages. For the filing of the instant
case, they had to hire a lawyer for an agreed fee of ten thousand (P10,000.00) pesos.
Private respondents Vianas filed a complaint for damages against petitioner corporation (Aboitiz, for
brevity) for breach of contract of carriage.
In its answer, Aboitiz denied responsibility contending that at the time of the accident, the vessel was
completely under the control of respondent Pioneer Stevedoring Corporation (Pioneer, for short) as the
exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the vessel of
Aboitiz. It is also averred that since the crane operator was not an employee of Aboitiz, the latter cannot
be held liable under the fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint against Pioneer imputing liability
thereto for Anacleto Vianas death as having been allegedly caused by the negligence of the crane
operator who was an employee of Pioneer under its exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, raised the defenses that Aboitiz had no cause of
action against Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract of
carriage to which Pioneer is not a party; that Pioneer had observed the diligence of a good father of a
family both in the selection and supervision of its employees as well as in the prevention of damage or
injury to anyone including the victim Anacleto Viana; that Anacleto Vianas gross negligence was the
direct and proximate cause of his death; and that the filing of the third-party complaint was premature
by reason of the pendency of the criminal case for homicide through reckless imprudence filed against
the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, Aboitiz was ordered to pay the Vianas for
damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid
the Vianas. The dispositive portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs:
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the sum of P12,000.00 for the
death of Anacleto Viana; P9,800.00 as actual damages; P533,200.00 value of the 10,664 cavans of
palay computed at P50.00 per cavan; P10,000.00 as attorneys fees; P5,000.00, value of the 100 cavans
of palay as support for five (5) years for deceased (sic) parents, herein plaintiffs Antonio and Gorgonia
Viana computed at P50.00 per cavan; P7,200.00 as support for deceaseds parents computed at
P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as moral
damages, and costs; and
(2) ordering the third party defendant Pioneer Stevedoring Corporation to reimburse defendant and
third party plaintiff Aboitiz Shipping Corporation the said amounts that it is ordered to pay to herein
plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they similarly raised the
trial courts failure to declare that Anacleto Viana acted with gross negligence despite the overwhelming
evidence presented in support thereof. In addition, Aboitiz alleged, in opposition to Pioneers motion,
that under the memorandum of agreement the liability of Pioneer as contractor is automatic for any
damages or losses whatsoever occasioned by and arising from the operation of its arrastre and
stevedoring service.
In an order dated October 27, 1982, the trial court absolved Pioneer from liability for failure of the
Vianas and Aboitiz to preponderantly establish a case of negligence against the crane operator which
the court a quo ruled is never presumed, aside from the fact that the memorandum of agreement
supposedly refers only to Pioneers liability in case of loss or damage to goods handled by it but not in
the case of personal injuries, and, finally, that Aboitiz cannot properly invoke the fellow-servant rule
simply because its liability stems from a breach of contract of carriage. The dispositive portion of said
order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant Pioneer Stevedoring
Corporation is concerned rendered in favor of the plaintiffs:
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the sum of P12,000.00 for
the death of Anacleto Viana; P9,000.00 (sic) as actual damages; P533,200.00 value of the 10,664
cavans of palay computed at P50.00 per cavan; P10,000.00 as attorneys fees; P5,000.00 value of the
100 cavans of palay as support for five (5) years for deceaseds parents, herein plaintiffs Antonio and
Gorgonia Viana, computed at P50.00 per cavan; P7,200.00 as support for deceaseds parents computed
at P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as moral
damages, and costs; and
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic) any liability for the death
of Anacleto Viana, the passenger of M/V Antonia owned by defendant third party plaintiff Aboitiz
Shipping Corporation it appearing that the negligence of its crane operator has not been established
therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to respondent
Court of Appeals which affirmed the findings of the trial court except as to the amount of damages
awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
(A) In holding that the doctrine laid down by this Honorable Court in La Mallorca vs. Court of Appeals,
et al. (17 SCRA 739, July 27, 1966) is applicable to the case in the face of the undisputable fact that
the factual situation under the La Mallorca case is radically different from the facts obtaining in this
case;
(B) In holding petitioner liable for damages in the face of the finding of the court a quo and confirmed
by the Honorable respondent Court of Appeals that the deceased, Anacleto Viana was guilty of
contributory negligence, which, we respectfully submit, contributory negligence was the proximate
cause of his death; specifically the Honorable respondent Court of Appeals failed to apply Art. 1762 of
the New Civil Code;
(C) In the alternative assuming the holding of the Honorable respondent Court of Appeals that
petitioner may be legally condemned to pay damages to the private respondents we respectfully submit
that it committed a reversible error when it dismissed petitioners third party complaint against private
respondent Pioneer Stevedoring Corporation instead of compelling the latter to reimburse the petitioner
for whatever damages it may be compelled to pay to the private respondents Vianas.
At threshold, it is to be observed that both the trial court and respondent Court of Appeals found the
victim Anacleto Viana guilty of contributory negligence, but holding that it was the negligence of Aboitiz
in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes which was
the direct, immediate and proximate cause of the victims death.
I. Petitioner contends that since one (1) hour had already elapsed from the time Anacleto Viana
disembarked from the vessel and that he was given more than ample opportunity to unload his cargoes
prior to the operation of the crane, his presence on the vessel was no longer reasonable and he
consequently ceased to be a passenger. Corollarily, it insists that the doctrine in La Mallorca vs. Court
of Appeals, et al. is not applicable to the case at bar.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at
the port of destination and has left the vessel owners dock or premises. Once created, the relationship
will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from
the carriers conveyance or had a reasonable opportunity to leave the carriers premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined
from all the circumstances, and includes a reasonable time to see after his baggage and prepare for
his departure. The carrier-passenger relationship is not terminated merely by the fact that the person
transported has been carried to his destination if, for example, such person remains in the carriers
premises to claim his baggage.
It was in accordance with this rationale that the doctrine in the aforesaid case of La Mallorca was
enunciated, to wit:
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 carriers 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 carriers premises. And, what is a reasonable time or a reasonable delay within this rule is
to be determined from all the circumstances. Thus, a person who, after alighting from a train, walks
along the station platform is considered still a passenger. So also, where a passenger has alighted at
his destination and is proceeding by the usual way to leave the companys premises, but before actually
doing so is halted by the report that his brother, a fellow passenger, has been shot, and he in good
faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemed
reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the
protection of the railroad company and its agents.
In the present case, the father returned to the bus to get one of his baggages which was not unloaded
when they alighted from the bus. Racquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the bus waiting 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 carriers agent had exercised the utmost
diligence of a very cautious 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. x x x 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.
It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact
of the passengers reasonable presence within the carriers premises. That reasonableness of time
should be made to depend on the attending circumstances of the case, such as the kind of commom
carrier, the nature of its business, the customs of the place, and so forth, and therefore precludes a
consideration of the time element per se without taking into account such other factors. It is thus of
no moment whether in the cited case of La Mallorca there was no appreciable interregnum for the
passenger therein to leave the carriers premises whereas in the case at bar, an interval of one (1) hour
had elapsed before the victim met the accident. The primary factor to be considered is the existence
of a reasonable cause as will justify the presence of the victim on or near the petitioners vessel. We
believe there exists such a justifiable cause.
It is of common knowledge that, by the very nature of petitioners business as a shipper, the passengers
of vessels are allotted a longer period of time to disembark from the ship than other common carriers
such as a passenger bus. With respect to the bulk of cargoes and the number of passengers it can load,
such vessels are capable of accommodating a bigger volume of both as compared to the capacity of a
regular commuter bus. Consequently, a ship passenger will need at least an hour as is the usual
practice, to disembark from the vessel and claim his baggage whereas a bus passenger can easily get
off the bus and retrieve his luggage in a very short period of time. Verily, petitioner cannot categorically
claim, through the bare expedient of comparing the period of time entailed in getting the passengers
cargoes, that the ruling in La Mallorca is inapplicable to the case at bar. On the contrary, if we are to
apply the doctrine enunciated therein to the instant petition, we cannot in reason doubt that the victim
Anacleto Viana was still a passenger at the time of the incident. When the accident occurred, the victim
was in the act of unloading his cargoes, which he had every right to do, from petitioners vessel. As
earlier stated, a carrier is duty bound not only to bring its passengers safely to their destination but
also to afford them a reasonable time to claim their baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim had already disembarked
from the vessel. Petitioner failed to prove this. What is clear to us is that at the time the victim was
taking his cargoes, the vessel had already docked an hour earlier. In consonance with common shipping
procedure as to the minimum time of one (1) hour allowed for the passengers to disembark, it may be
presumed that the victim had just gotten off the vessel when he went to retrieve his baggage. Yet,
even if he had already disembarked an hour earlier, his presence in petitioners premises was not
without cause. The victim had to claim his baggage which was possible only one (1) hour after the
vessel arrived since it was admittedly standard procedure in the case of petitioners vessels that the
unloading operations shall start only after that time. Consequently, under the foregoing circumstances,
the victim Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death.
II. Under the law, common carriers are, from the nature of their business and for reasons of public
policy, 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. More particularly,
a common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances. Thus, where a passenger dies or is injured, the common carrier is presumed to have
been at fault or to have acted negligently. This gives rise to an action for breach of contract of carriage
where all that is required of plaintiff is to prove the existence of the contract of carriage and its non-
performance by the carrier, that is, the failure of the carrier to carry the passenger safely to his
destination, which, in the instant case, necessarily includes its failure to safeguard its passenger with
extraordinary diligence while such relation subsists.
The presumption is, therefore, established by law that in case of a passengers death or injury the
operator of the vessel was at fault or negligent, having failed to exercise extraordinary diligence, and
it is incumbent upon it to rebut the same. This is in consonance with the avowed policy of the State to
afford full protection to the passengers of common carriers which can be carried out only by imposing
a stringent statutory obligation upon the latter. Concomitantly, this Court has likewise adopted a rigid
posture in the application of the law by exacting the highest degree of care and diligence from common
carriers, bearing utmost in mind the welfare of the passengers who often become hapless victims of
indifferent and profit-oriented carriers. We cannot in reason deny that petitioner failed to rebut the
presumption against it. Under the facts obtaining in the present case, it cannot be gainsaid that
petitioner had inadequately complied with the required degree of diligence to prevent the accident from
happening.
As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around
the perimeter of the crane, as claimed by petitioner. It also adverted to the fact that the alleged
presence of visible warning signs in the vicinity was disputable and not indubitably established. Thus,
we are not inclined to accept petitioners explanation that the victim and other passengers were
sufficiently warned that merely venturing into the area in question was fraught with serious peril.
Definitely, even assuming the existence of the supposed cordon of drums loosely placed around the
unloading area and the guards admonitions against entry therein, these were at most insufficient
precautions which pale into insignificance if considered vis-a-vis the gravity of the danger to which the
deceased was exposed. There is no showing that petitioner was extraordinarily diligent in requiring or
seeing to it that said precautionary measures were strictly and actually enforced to subserve their
purpose of preventing entry into the forbidden area. By no stretch of liberal evaluation can such
perfunctory acts approximate the utmost diligence of very cautious persons to be exercised as far
as human care and foresight can provide which is required by law of common carriers with respect to
their passengers.
While the victim was admittedly contributorily negligent, still petitioners aforesaid failure to exercise
extraordinary diligence was the proximate and direct cause of, because it could definitely have
prevented, the formers death. Moreover, in paragraph 5.6 of its petition, at bar, petitioner has expressly
conceded the factual finding of respondent Court of Appeals that petitioner did not present sufficient
evidence in support of its submission that the deceased Anacleto Viana was guilty of gross negligence.
Petitioner cannot now be heard to claim otherwise.
No excepting circumstance being present, we are likewise bound by respondent courts declaration that
there was no negligence on the part of Pioneer Stevedoring Corporation, a confirmation of the trial
courts finding to that effect, hence our conformity to Pioneers being absolved of any liability.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross negligence of
the victim, hence its present contention that the death of the passenger was due to the negligence of
the crane operator cannot be sustained both on grounds of estoppel and for lack of evidence on its
present theory. Even in its answer filed in the court below it readily alleged that Pioneer had taken the
necessary safeguards insofar as its unloading operations were concerned, a fact which appears to have
been accepted by the plaintiff therein by not impleading Pioneer as a defendant, and likewise inceptively
by Aboitiz by filing its third-party complaint only after ten (10) months from the institution of the suit
against it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary diligence required
of, and the corresponding presumption of negligence foisted on, common carriers like Aboitiz. This, of
course, does not detract from what we have said that no negligence can be imputed to Pioneer but,
that on the contrary, the failure of Aboitiz to exercise extraordinary diligence for the safety of its
passenger is the rationale for our finding on its liability.
WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.
Petition denied. Judgment affirmed in toto.
Note.It is the duty of a common carrier to overcome the presumption of negligence that accrues once
its passenger dies of an accident. (Philippine National Railways vs. Court of Appeals, 139 SCRA 87).
o0o
LA MALLORCA, petitioner, vs. HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET
AL., respondents
No. L-20761. July 27, 1966
Common carriers; When relationship of carrier and passenger is terminated; Reasonable time to leave
carriers premises construed.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 a Pambusco
Bus, Upon reaching their destination, plaintiffs and all their daughters alighted from the bus and the
father led his compa-nions to a shaded spot about four or f ive meters away f rom the vehicle. Father
returned to the bus to get a piece of baggage 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 give him the bag or bayong, the bus
started to run, so that 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. Held: In the circumstances, it cannot
be said that the carriers agent had exercised to 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 baggage 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 passengers of the carrier, entitled to protection under their contract of
carriage.
Actions; Quasi-delicts; Pleadings; Averment thereof is permissible under Rules of Court although
incompatible with claim of contract of carriage.The complaint contained 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 f 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. Thus, even assuming
arguendo that the contract of carriage had terminated, herein petitioner can be held liable for the
negligence of its driver. The presentation of proof of the negligence of its driver 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. The petitioner had failed to overcome such
presumption. Consequently, the petitioner must be adjudged pecuniarily liable for the death of the
child.
Appeals; Only questions raised in appellants brief can be passed upon.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 appellants brief. Plaintiff did not appeal from that portion of the judgment of the trial court awarding
them only P3,000.00 damages for the death of their daughter.
PETITION for review by certiorari of a decision of the Court of Appeals.
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
appellants rules and regulations.
After about an hours trip, the bus reached Anao, where at it stopped to allow the passengers bound
therefor, among whom were the plaintiffs and their children to get off. With respect to the group of the
plaintiffs, Mariano Beltran, then carrying some of their baggages, was the first to get down the bus,
followed by his wife and his children. Mariano led his companions to a shaded spot on the.left
pedestrians side of the road about four or five meters away from the vehicle. Afterwards, he returned
to the bus in controversy to get his other bayong, which he had left behind, but in so doing, his daughter
Raquel followed him, unnoticed by her father. While said Mariano Beltran was on the running board of
the bus waiting for the conductor to hand him his bayong which he left under one of its seats near the
door, the bus, whose motor was not shut off while unloading, suddenly started moving forward,
evidently to resume its trip, notwithstanding the fact that the conductor has not given the driver the
customary signal to start, since said conductor was still attending to the baggage left behind by Mariano
Beltran. Incidentally, when the bus was again placed into a complete stop, it had travelled about ten
meters from the point where the plaintiffs had gotten off.
Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running
board without getting his bayong from the conductor. He landed on the side of the road almost in front
of the shaded place where he left his wife and children. At that precise time, he saw people beginning
to gather around the body of a child lying prostrate on the ground, her skull crushed, and without life.
The child was none other than his daughter Raquel, who was run over by the bus in which she rode
earlier together with her parents.
For the death of their said child, the plaintiffs commenced the present suit against the defendant
seeking to recover from the latter an aggregate amount of ?16,000 to cover moral damages and actual
damages sustained as a result thereof and attorneys f ees. Af ter 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
quasidelict, 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 judgment 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 carriers servant or employee in removing his baggage from the car. The issue to be determined
here is whether as to the child, who was already led by the father to a place about 5 meters away from
the bus, the liability of the carrier for her safety under the contract of carriage also persisted.
It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment
the passenger alights from the carriers 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 carriers premises. And, what is a reasonable time or a reasonable delay within this rule is
to be determined from all the circumstances, Thus, a person who, after alighting from a train, walks
along the station platform is considered still a passenger. So also, where a passenger has alighted at
his destination and is proceeding by the usual way to leave the companys premises, but before actually
doing so is halted by the report that his brother, a fellow passenger, has been shot, and he in good
faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemed
reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the
protection of the railroad and company and its agents.
In the present case, the father returned to the bus to get one of his baggages which was not unloaded
when they alighted from the bus. Raquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the bus awaiting for the conductor to
hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down
from the moving vehicle. It was at this instance that the child, who must be near the bus, was run over
and killed. In the circumstances, it cannot be claimed that the carriers 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 saf ely its passengers. In the first place,
the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to
run the bus even before the bus conductor gave him the signal to go and while the latter was still
unloading part of the baggages of the passengers Mariano Beltran and family. The presence of said
passengers near the bus was not unreasonable and they are, therefore, to be considered still as
passengers of the carrier, entitled to the protection under their contract of carriage.
But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can
be held liable for the negligence of its driver, as ruled by the Court of Appeals, pursuant to Article 2180
of the Civil Code. Paragraph 7 of the complaint, which reads
That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs daughter, was
caused by the negligence and want of exercise of the utmost diligence of a very cautious person on
the part of the defendants and their agent, necessary to transport plaintiffs and their daughter safely
as far as human care and foresight can provide in the operation of their vehicle. is clearly an allegation
for quasi-delict. The inclusion of this averment for quasi-delict, while incompatible with the other claim
under the contract of carriage, is permissible under Section 2 of Rule 8 of the New Rules of Court,
which allows a plaintiff to allege causes of action in the alternative, be they compatible with each other
or not, to the end that the real matter in controversy may be resolved and determined.
The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it
was alleged in the complaint that the death of Raquel Beltran, plaintiffs daughter, was caused by the
negligence and want of exercise of the utmost diligence of a very cautious person on the part of the
defendants and their agent. This allegation was also proved when it was established during the trial
that the driver, even before receiving the proper signal from the conductor, and while there were still
persons on the running board of the bus and near it, started to run off the vehicle. The presentation of
proof of the negligence of its employee gave rise to the presumption that the defendant employer did
not exercise the diligence of a good father of the family in the selection and supervision 01 its
employees. And this presumption, as the Court of Appeals found, petitioner had failed to overcome.
Consequently, petitioner must be adjudged pecuniarily 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 appellants brief. Plaintiffs did not appeal from that portion of the judgment of the
trial court awarding them on P3,000.00 damages for the death of their daughter. Neither does it appear
that, as appellees in the Court of Appeals, plaintiffs have pointed out in their brief the inadequacy of
the award, or that the inclusion of the figure P3,000.00 was merely a clerical error, in order that the
matter may be treated as an exception to the general rule. Herein petitioners contention, therefore,
that the Court of Appeals committed error in raising the amount of the award for damages is, evidently,
meritorious.
Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to pay
to the respondents Mariano Beltran, et al., the sum of P3,000.00 for the death of the child, Raquel
Beltran, and the amount of P400.00 as actual damages. No costs in this instance. So ordered.
Chief Justice Concepcion and Justices J.B.L. Reyes, Dizon, Regala, J.P. Bengzon, Zaldivar, Sanchez
and Castro, concur. Mr. Justice Makalintal concurs in the result.
Decision modified.
JOSE BARITUA and JB LINE, petitioners, vs. NIMFA DIVINA MERCADER in her capacity
and as guardian of DARWIN, GIOVANNI, RODEL and DENNIS, all surnamed MERCADER;
LEONIDA Vda. de MERCADER on her behalf and on behalf of her minor child MARY JOY
MERCADER; SHIRLEY MERCADER DELA CRUZ; MARIA THERESA MERCADER-GARCIA;
DANILO MERCADER; JOSE DANTE MERCADER; and JOSEFINA MERCADER, respondents
G.R. No. 136048. January 23, 2001
Actions; Courts; Jurisdiction; Generally, the jurisdiction of a court is determined by the statute in force
at the commencement of the action, unless such statute provides for its retroactive application.
Generally, the jurisdiction of a court is determined by the statute in force at the commencement of the
action, unless such statute provides for its retroactive application. Once the jurisdiction of a court
attaches, it continues until the case is finally terminated. The trial court cannot be ousted therefrom by
subsequent happenings or events, although of a character that would have prevented jurisdiction from
attaching in the first instance.
Same; Docket Fees; The Manchester ruling, which became final in 1987, has no retroactive application
and cannot be invoked in the subject Complaint filed in 1984.The Manchester ruling, which became
final in 1987, has no retroactive application and cannot be invoked in the subject Complaint filed in
1984. The Court explicitly declared: To put a stop to this irregularity, henceforth all complaints,
petitions, answers and other similar pleadings should specify the amount of damages being prayed for
not only in the body of the pleading but also in the prayer, and said damages shall be considered in
the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement
shall not be accepted nor admitted, or shall otherwise be expunged from the record. (emphasis
supplied)
Same; Pleadings and Practice; Motions for Bill of Particulars; A motion for bill of particulars becomes
moot and academic where, prior to its filing, the defendant has already filed his answer and several
other pleadings.We are not impressed. It must be noted that petitioners counsel manifested in open
court his desire to file a motion for a bill of particulars. The RTC gave him ten days from March 12,
1985 within which to do so. He, however, filed the aforesaid motion only on April 2, 1985 or eleven
days past the deadline set by the trial court. Moreover, such motion was already moot and academic
because, prior to its filing, petitioners had already filed their answer and several other pleadings to the
amended Complaint. Section 1, Rule 12 of the Rules of Court, provides: Section 1. When applied for;
purpose.Before responding to a pleading, a party may move for a more definite statement or for a
bill of particulars of any matter which is not averred with sufficient definiteness or particularity to enable
him properly to prepare his responsive pleading. If the pleading is a reply, the motion must be filed
within ten (10) days from service thereof. Such motion shall point out the defects complained of, the
paragraphs wherein they are contained, and the details desired. (emphasis supplied)
Witnesses; Judges cannot be expected to rely on the testimonies of every witnessin ascertaining the
facts, they determine who are credible and who are not.First, judges cannot be expected to rely on
the testimonies of every witness. In ascertaining the facts, they determine who are credible and who
are not. In doing so, they consider all the evidence before them. In other words, the mere fact that
Judge Noynay based his decision on the testimonies of respondents witnesses does not necessarily
mean that he did not consider those of petitioners. Second, we find no sufficient showing that Judge
Operario was overzealous in questioning the witnesses. His questions merely sought to clarify their
testimonies. In all, we reject petitioners contention that their right to adduce evidence was violated.
Common Carriers; By the nature of its business and for reasons of public policy, a common carrier is
bound to carry passengers safely as far as human care and foresight can provide.We agree with the
findings of both courts that petitioners failed to observe extraordinary diligence that fateful morning. It
must be noted that a common carrier, by the nature of its business and for reasons of public policy, is
bound to carry passengers safely as far as human care and foresight can provide. It is supposed to do
so by using the utmost diligence of very cautious persons, with due regard for all the circumstances.
In case of death or injuries to passengers, it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence as prescribed in Articles 1733 and
1755 of the Civil Code.
Evidence; It is a well-settled rule that the trial courts factual findings, when affirmed by the appellate
court, are conclusive and binding, if they are not tainted with arbitrariness or oversight of some fact or
circumstance of significance and influence.We therefore believe that there is no reason to overturn
the assailed CA Decision, which affirmed that of the RTC. It is a well-settled rule that the trial courts
factual findings, when affirmed by the appellate court, are conclusive and binding, if they are not tainted
with arbitrariness or oversight of some fact or circumstance of significance and influence. As clearly
discussed above, petitioners have not presented sufficient ground to warrant a deviation from this rule.
Domingo Lucenario for petitioners.
Mercader & Associates Law Offices for private respondents.
PANGANIBAN, J.:
The Manchester ruling requiring the payment of docket and other fees as a condition for the acquisition
of jurisdiction has no retroactive effect and applies only to cases filed after its finality.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 17, 1998
Decision and the October 28, 1998 Resolution of the Court of Appeals (CA) in CA-GR CV No. 40772.
The decretal portion of said Decision reads as follows:
WHEREFORE, upon all the foregoing premises considered, the DECISION appealed from is AFFIRMED
with the MODIFICATION that the loss of earnings of the late Dominador Mercader is reduced to
P798,000.00.
The assailed Resolution denied petitioners Motion for Reconsideration.
The Court of Appeals sustained the Decision of the Regional Trial Court (RTC) of Laoang, Northern
Samar (Branch 21). Except for the modification of the loss of earnings, it affirmed all the monetary
damages granted by the trial court to respondents. The decretal portion of the assailed RTC Decision
reads as follows:
WHEREFORE, on preponderance of evidence, judgment is for [herein respondents] and against [herein
petitioners], ordering the latter to pay the former:
(a) As compensatory damages for the death of Dominador MercaderP50,000.00;
(b) For the loss of earnings of the late Dominador MercaderP1,660,000.00, more or less, based on
the average life span of 75 years from the time of his death who earned a net income of P5,000.00
monthly out of his business;
(c) Actual damages of P30,000.00 receipted purchases of goods in Manila; P5,750.00 for the first class
coffin and a 15-day wake services evidenced by a receipt marked Exh. D; [P]850.00 for the 50 x 60
headstone, receipt marked Exh. E and P1,590.00Deed of Absolute Sale of a burial lot, marked Exh.
F;
(d) 25% of whatever amount is collected by [respondents] from [petitioners] but no less than
P50,000.00 plus P1,000.00 per hearing by way of attorneys fees;
(e) As moral damagesP50,000.00;
(f) As exemplary damagesP30,000.00; and
(g) To pay the costs.
The Facts
The antecedents of the case are succinctly summarized by the Court of Appeals in this wise:
The original complaint was filed against JB Lines, Inc. [Petitioner JB Lines, Inc.] filed a motion to
dismiss complaint, to strike out false-impertinent matters therefrom, and/or for bill of particulars on the
primary grounds that [respondents] failed to implead Jose Baritua as an indispensable party and that
the cause of action is a suit against a wrong and non-existent party. [Respondents] filed and opposition
to the said motion and an amended complaint.
In an Order dated December 11, 1984 the trial court denied the aforesaid motion and admitted the
amended complaint of [respondents] impleading Jose Baritua and alleged the following:
(10) The late Dominador Mercader is a [b]usinessman mainly engaged in the buy and sell of dry goods
in Laoang, N. Samar. He buys his goods from Manila and bringt[s] them to Laoang, Northern Samar
for sale at his store located in the said locality;
(11) Sometime on March 16, 1983, the late Dominador Mercader boarded [petitioners] bus No. 142
with Plate No. 484 EU at [petitioners] Manila Station/terminal, bound for Brgy. Rawis, Laoang Northern
Samar as a paying passenger;
(12) At that time, Dominador Mercader had with him as his baggage, assorted goods (i.e. long pants,
short pants, dusters, etc.) which he likewise loaded in [petitioners] bus;
(13) The late Dominador Mercader was not able to reach his destination considering that on March 17,
1983 at Bailey (Bugco) Bridge, Barangay Roxas, Mondragon, Northern Samar, while he was on board
[petitioners] bus no. 142 with Plate No. 484 EU, the said bus fell into the river as a result of which the
late Dominador Mercader died. x x x.
(14) The accident happened because [petitioners] driver negligently and recklessly operated the bus
at a fast speed in wanton disregard of traffic rules and regulations and the prevailing conditions then
existing that caused [the] bus to fall into the river.
[Respondents] then filed a motion to declare [petitioners] in default which motion was opposed by
[petitioners]. [Respondents] withdrew the said motion prompting the trial court to cancel the scheduled
hearing of the said motion to declare [petitioners] in default in an Order dated January 23, 1985.
In its answer, [petitioners] denied specifically all the material allegations in the complaint and alleged
the following:
2. The alleged person of Dominador Mercader did not board bus 142 at [petitioners] Manila
station/terminal x x x as a (supposed paying passenger). There is even no statement in the complaint
that Dominador Mercader (if it were true that he was a passenger of bus 142 at the [petitioners]
Manila station/terminal) was issued any passenger-freight ticket conformably with law and practice. It
is a fact of public knowledge that, in compliance with existing rules and laws, [Petitioner] Baritua, as a
public utility operator, issues, thru his conductors, in appropriate situations, to a true passenger, the
familiar and known passenger and freight ticket which reads in part:
NOTICE
Baggage carried at owners risk x x x liability on prepaid freight otherwise declared.

xxx xxx xxx
Whole Fare Paid P_________________

Declared value_______________x x x.
Description of Freight _________________
Signature of Owner.
3. It is also a fact of public knowledge that [Petitioner] Baritua does not have any Manila
station/terminal, because what he has is a Pasay city station.
4. [Petitioner] Baritua had no prior knowledge that, on of about March 17, 1983, and/or previous
thereto, the Bugko Bailey Bridge (across Catarman-Laoang road) in Barangay Roxas, Mondragon,
Northern Samar, was in virtual dilapidated] and dangerous condition, in a state of decay and disrepair,
thus calling for the concerned government and public officials performance of their coordinative and
joint duties and responsibilities, to repair, improve and maintain that bridge, in good and reasonably
safe condition, but, far from performing or complying with said subject duties and responsibilities, the
adverted officials concerned, without just cause, not only failed and neglected to cause such needed
repair, improvement and maintenance of the Bugko Bailey Bridge, on or prior to March 17, 1983, but
also failed, and neglected to either close the Bugko Bridge to public use and travel, and/or to put
appropriate warning and cautionary signs, for repair, improvement, maintenance, and safety purposes.
So that, as a proximate and direct consequence of the aggregate officials nonfeasance, bad faith,
negligence, serious inefficiency, and callous indifference to public safety, that Bugko Bridge collapsed
inward and caved in ruin, on that March 17, 1983, while Barituas bus 142 was cautiously and prudently
passing and travelling across the said bridge, as a result of which the bus fell into the river and sea
waters, despite the exercise and compliance by Baritua and his driver of their duties in the matter of
their requisite degree of diligence, caution and prudence, Baritua also exercised and complied with the
requisite duty of diligence, care, and prudence in the selection and supervision over his driver, contrary
to the baseless imputation in paragraphs 14 and 20 of the original and amended complaints. Moreover,
Baritua and his driver did not violate any traffic rule and regulation, contrary to plaintiffs insinuation.
5. Furthermore, [Petitioner] Baritua and his driver have no causative connection with the alleged death
of Dominador Mercader who, according to a reliable source, was already seriously suffering from a
lingering illness even prior to his alleged demise. Baritua also learned lately, and so it is herein alleged
that Dominador Mercader contributed considerably, to, and/or provided the proximate and direct cause
of his own death, hence, he himself is to be blamed for whatever may have happened to him or for
whatever may have been sustained by his supposed heirs, vis--vis the suit against the wrong party.
6. Baritua and his driver, as earlier stated, did not commit any actionable breach of contract with the
alleged Dominador Mercader or the latters supposed heirs.
7. There is no factual nor any legal basis for plaintiffs proffered claims for damages.
II. AFFIRMATIVE DEFENSES
8. Based on the preceding averments, plaintiffs have neither a cause nor a right of action against
[Petitioner] Baritua and his driver.
8.1. The allegation that supposedly the x x x [plaintiffs are the compulsory heirs of the late
DOMINADOR MERCADER x x x (par. 8, complaint) is too vague and too broad, as the subject allegation
is a bare and pure conclusionary averment unaccompanied by the requisite statement of ultimate facts
constitutive of a cause or right of action.
8.2. Even assuming arguendo, without however conceding, plaintiffs statement of a cause of action,
the complaint is nonetheless replete with false and impertinent matters which fit the rule on striking
out pleadings or parts thereof. To mention only a glaring few:
8.2.a. The allegation on exemplary damages x x x is impertinent and immaterial in the complaint against
a supposed employer. For, even theoretically assuming, without however admitting a negligent act-
omission on the part of a driver, nevertheless, in such a hypothetical situation, the causative negligence,
if any there was, is personal to the wrongdoer, i.e., the employee-driver, to the exclusion of the
employer.
8.2.b. The allegation on supposed minimum life of 75 years and on Tie expects to earn no less than
P1,680,000.00 x x x is false, a pure hyperbole, and bereft of factual and legal basis. Besides, what
jurisprudential rule refers to is only net earning. The law abhors a claim, akin to plaintiffs allegation,
which is manifestly speculative, as it may not exist at all. Furthermore, the questioned allegation in the
plaintiffs original and amended complaints is not preceded by the requisite statement of definitive facts,
nor of any specific fact, which could possibly afford a rational basis for a reasonable expectation of
supposed earning that could be lost, or impaired.
8.2.c. Likewise, the allegations that allegedly x x x the late Dominador Mercader boarded x x x Bus No.
142 x x x and that supposedly the latter had a baggage x x x containing drygoods x x x in which case
[petitioners have] to pay the value thereof in such amount as may be proven by [respondents] in court
during the trial x x x, apart from being false, are offensive to the rule on concise statement of ultimate
facts. The assailed allegations also contravene Interim Rule 11, (i)f any demand is for damages in a
civil action the amount thereof must be specifically alleged In consequence of this averment,
[respondents] have not yet paid the correct docket fee, for which reason, [respondents] case may be
dismissed on that ground alone.
8.3 In violation also of the same Interim Rule 11, regarding the requisite definitive amount of claim,
the allegation on the supposed funeral expense x x x does not also indicate any specific amount. So
with the averment on supposed moral damage which may not be warranted because of absence of
allegation of fraud or bad faith, if any, there was, apart from want of causative connection with the
defendant.
8.4 The allegation in paragraph 15 of the original and amended complaint is also a pure conclusionary
averment, without a factual premise.
9. [Petitioner] JB LINE, impleaded in the amended complaint, is merely a business name and sole
proprietorship of defendant Baritua. As such, JB Line is not a juridical person, nor an entity authorized
by law to sue and be sued, hence, it cannot legally be a party to any action. With this averment,
correlated with that in paragraphs 4-5 hereof, [respondents] amended complaint is essentially a suit
against a wrong party.
The RTC, after due trial, rendered the aforesaid assailed Decision.
Ruling of the Court of Appeals
As earlier stated, the Court of Appeals affirmed the trial courts award of monetary damages in favor of
respondents, except the amount of Dominador Mercaders lost earnings, which it reduced to P798,000.
It held that petitioners failed to rebut the presumption that in the event a passenger died or was injured,
the carrier had acted negligently. Petitioners, it added, presented no sufficient proof that they had
exercised extraordinary diligence.
Hence, this Petition.
The Issues
In their Memorandum, petitioners submit the following issues for our consideration:
I
Did the honorable Court of Appeals (CA) gravely abuse its discretion when it allowed to pass sub silencio
the trial courts failure to rule frontally on petitioners plea for a bill of particulars, and ignored the
nature of respondents prayer in the complaint pleading for an award of
a) P12,000.00representing the death compensation;
b) An amount to be proven in court, representing actual damages;
c)P1,660,000.00 or more as may be proven during the trial, by way of loss of earnings;
d) An amount to be proven in court as and by way of funeral expenses;
e) An amount to be proven during the trial, representing moral damages;
f) An amount to be determined by this Honorable Court, representing exemplary damages;
g) An amount equivalent to 25% of whatever amount the plaintiffs would be able to collect from the
defendant but in no case less than P50,000.00 plus an additional amount of P1,000.00 per hearing as
and by way of Attorneys fees;
II
Did the CA also ignore the fact that the trial court was not paid the correct amount of the docket and
other lawful fees; hence, without jurisdiction over the original and amended complaints or over the
subject matter of the case;
III
Did the CA likewise arbitrarily disregard petitioners constitutional right to procedural due process and
fairness when it ignored and thrust aside their right to present evidence and to expect that their
evidence will be duly considered and appreciated; and
IV
In awarding excessive and extravagant damages, did the CA and the trial court adhere to the rule that
their assailed decision must state clearly and distinctly the facts and the laws on which they are based?
Distilling the alleged errors cited above, petitioners raise two main issues for our consideration: (1)
whether the CA erred in holding that the RTC had jurisdiction over the subject matter of the case, and
(2) whether the CA disregarded petitioners procedural rights.
The Courts Ruling
The Petition is devoid of merit.
First Issue: Jurisdiction
Petitioners contend that since the correct amounts of docket and other lawful fees were not paid by
respondents, then the trial court did not acquire jurisdiction over the subject matter of the case.
The Court, in Manchester Development Corporation v. CA, held that [t]he court acquires jurisdiction
over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fee
based on the amounts sought in the amended pleading, x x x.
Generally, the jurisdiction of a court is determined by the statute in force at the commencement of the
action, unless such statute provides for its retroactive application. Once the jurisdiction of a court
attaches, it continues until the case is finally terminated. The trial court cannot be ousted therefrom by
subsequent happenings or events, although of a character that would have prevented jurisdiction from
attaching in the first instance.
The Manchester ruling, which became final in 1987, has no retroactive application and cannot be
invoked in the subject Complaint filed in 1984. The Court explicitly declared:
To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed for not only in the body of the pleading
but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any
case. Any pleading that fails to comply with this requirement shall not he accepted nor admitted, or
shall otherwise he expunged from the record. (emphasis supplied)
Second Issue: Petitioners Procedural Rights Motion for a Bill of Particulars
Petitioners argue that the Court of Appeals erred when it passed sub silencio on the trial Courts failure
to rule frontally on their plea for a bill of particulars.
We are not impressed. It must be noted that petitioners counsel manifested in open court his desire
to file a motion for a bill of particulars. The RTC gave him ten days from March 12, 1985 within which
to do so. He, however, filed the aforesaid motion only on April 2, 1985 or eleven days past the deadline
set by the trial court. Moreover, such motion was already moot and academic because, prior to its filing,
petitioners had already filed their answer and several other pleadings to the amended Complaint.
Section 1, Rule 12 of the Rules of Court, provides:
Section 1. When applied for; purpose.Before responding to a pleading, a party may move for a more
definite statement or for a bill of particulars of any matter which is not averred with sufficient
definiteness or particularity to enable him properly to prepare his responsive pleading. If the pleading
is a reply, the motion must be filed within ten (10) days from service thereof. Such motion shall point
out the defects complained of, the paragraphs wherein they are contained, and the details desired.
(emphasis supplied)
Petitioners Right to Adduce Evidence
Petitioners also argue that their right to present evidence was violated by the CA, because it did not
consider their contention that the trial judges who heard the case were biasfed and impartial. Petitioners
contend, as they did before the CA, that Judge Tomas B. Noynay based his Decision on certain chosen
partial testimonies of [respondents] witnesses x x x. They further maintain that Judge Fortunato
Operario, who initially handled the case, questioned some witnesses in an overzealous manner and
assum[ed] the dual role of magistrate and advocate.
These arguments are not meritorious. First, judges cannot be expected to rely on the testimonies of
every witness. In ascertaining the facts, they determine who are credible and who are not. In doing
so, they consider all the evidence before them. In other words, the mere fact that Judge Noynay based
his decision on the testimonies of respondents witnesses does not necessarily mean that he did not
consider those of petitioners. Second, we find no sufficient showing that Judge Operario was
overzealous in questioning the witnesses. His questions merely sought to clarify their testimonies. In
all, we reject petitioners contention that their right to adduce evidence was violated.
Alleged Failure to State Clearly the Facts and the Law
We are not convinced by petitioners contention, either, that both the trial and the appellate courts
failed to state clearly and distinctly the facts and the law involved in the case. As can be gleaned from
their Decisions, both courts clearly laid down their bases for awarding monetary damages to
respondents.
Both the RTC and the CA found that a contract of carriage existed between petitioners and Dominador
Mercader when he boarded Bus No. 142 in Pasay City on March 16, 1983. Petitioners failed to transport
him to his destination, because the bus fell into a river while traversing the Bugko Bailey Bridge.
Although he survived the fall, he later died of asphyxia secondary to drowning.
We agree with the findings of both courts that petitioners failed to observe extraordinary diligence18
that fateful morning. It must be noted that a common carrier, by the nature of its business and for
reasons of public policy, is bound to carry passengers safely as far as human care and foresight can
provide. It is supposed to do so by using the utmost diligence of very cautious persons, with due regard
for all the circumstances. In case of death or injuries to passengers, it is presumed to have been at
fault or to have acted negligently, unless it proves that it observed extraordinary diligence as prescribed
in Articles 1733 and 1755 of the Civil Code.
We sustain the ruling of the CA that petitioners failed to prove that they had observed extraordinary
diligence.
First, petitioners did not present evidence on the skill or expertise of the driver of Bus No. 142 or the
condition of that vehicle at the time of the incident.
Second, the bus was overloaded at the time. In fact, several individuals were standing when the incident
occurred.
Third, the bus was overspeeding. Its conductor testified that it had overtaken several buses before it
reached the Bugko Bailey Bridge. Moreover, prior to crossing the bridge, it had accelerated and
maintained its speed towards the bridge.
We therefore believe that there is no reason to overturn the assailed CA Decision, which affirmed that
of the RTC. It is a well-settled rule that the trial courts factual findings, when affirmed by the appellate
court, are conclusive and binding, if they are not tainted with arbitrariness or oversight of some fact or
circumstance of significance and influence. As clearly discussed above, petitioners have not presented
sufficient ground to warrant a deviation from this rule.
Finally, we cannot fault the appellate court in its computation of the damages and lost earnings, since
it effectively computed only net earnings in accordance with existing jurisprudence.
WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. Costs against
petitioners.
SO ORDERED.
Melo (Chairman), Vitug, Gonzaga-Reyes and Sandoval-Gutierrez, JJ., concur.
Petition denied, judgment affirmed.
Notes.While common carriers are required to observe extraordinary diligence and are presumed at
fault, no such presumption applies to private carriers. (Planters Products, Inc. vs. Court of Appeals, 226
SCRA 476 [1993])
The contract of air carnage generates a relation attended with a public duty and any discourteous
conduct on the part of the carriers employees toward a passenger gives the latter an action for
damages against the carrier. (Korean Airlines Co., Ltd. vs. Court of Appeals, 234 SCRA 717 [1994])
In breach of contract of carriage, moral damages may be recovered when it results in the death of a
passenger. (Sulpicio Lines, Inc. vs. Court of Appeals, 246 SCRA 376 [1995])
o0o
ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs. COURT OF APPEALS, LENY
TUMBOY, ARDEE TUMBOY AND JASMIN TUMBOY, respondents
G.R. No. 113003. October 17, 1997
Appeals; Evidence; Factual findings of the Court of Appeals are final and may not be reviewed on appeal
by the Supreme Court except when the lower court and the Court of Appeals arrived at diverse factual
findings.The Court did re-examine the facts and evidence in this case because of the inapplicability
of the established principle that the factual findings of the Court of Appeals are final and may not be
reviewed on appeal by this Court. This general principle is subject to exceptions such as the one present
in this case, namely, that the lower court and the Court of Appeals arrived at diverse factual findings.
However, upon such re-examination, we found no reason to overturn the findings and conclusions of
the Court of Appeals.
Common Carriers; When a passenger boards a common carrier, he takes the risks incidental to the
mode of travel he has takenafter all, a carrier is not an insurer of the safety of its passengers and is
not bound absolutely and at all events to carry them safely and without injury.As a rule, when a
passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken.
After all, a carrier is not an insurer of the safety of its passengers and is not bound absolutely and at
all events to carry them safely and without injury. However, when a passengers is injured or dies while
travelling, the law presumes that the common carrier is negligent. Thus, the Civil Code provides: Art.
1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed
in Articles 1733 and 1755.
Same; Fortuitous Events; Words and Phrases; Characteristics of a Fortuitous Event.In view of the
foregoing, petitioners contention that they should be exempt from liability because the tire blowout
was no more than a fortuitous event that could not have been foreseen, must fail. A fortuitous event
is possessed of the following characteristics: (a) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with his obligations, must be independent of human
will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free from any
participation in the aggravation of the injury resulting to the creditor. As Article 1174 provides, no
person shall be responsible for a fortuitous event which could not be foreseen, or which, though
foreseen, was inevitable. In other words, there must be an entire exclusion of human agency from the
cause of injury or loss.
Same; Same; Under the circumstances of the present case, the explosion of the new tire may not be
considered a fortuitous event.Under the circumstances of this case, the explosion of the new tire may
not be considered a fortuitous event. There are human factors involved in the situation. The fact that
the tire was new did not imply that it was entirely free from manufacturing defects or that it was
properly mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is
of a brand name noted for quality, resulting in the conclusion that it could not explode within five days
use. Be that as it may, it is settled that an accident caused either by defects in the automobile or
through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability
for damages.
Same; Same; A common carrier may not be absolved from liability in case of force majeure or fortuitous
event alonethe common carrier must still prove that it was not negligent in causing the death or
injury resulting from an accident.Moreover, a common carrier may not be absolved from liability in
case of force majeure or fortuitous event alone. The common carrier must still prove that it was not
negligent in causing the death or injury resulting from an accident. This Court has had occasion to
state: While it may be true that the tire that blew-up was still good because the grooves of the tire
were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence
was presented to show that the accident was due to adverse road conditions or that precautions were
taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden
blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled
by the fact that the jeepney was overloaded and speeding at the time of the accident.
Same; Same; Damages; Where a common carrier failed to exercise the extraordinary diligence required
of it, which resulted in the death of a passenger, it is deemed to have acted recklessly, and the heirs
of the passenger shall be entitled to exemplary damages.Moral damages are generally not
recoverable in culpa contractual except when bad faith had been proven. However, the same damages
may be recovered when breach of contract of carriage results in the death of a passenger, as in this
case. Exemplary damages, awarded by way of example or correction for the public good when moral
damages are awarded, may likewise be recovered in contractual obligations if the defendant acted in
wanton, fraudulent, reckless, oppressive, or malevolent manner. Because petitioners failed to exercise
the extraordinary diligence required of a common carrier, which resulted in the death of Tito Tumboy,
it is deemed to have acted recklessly. As such, private respondents shall be entitled to exemplary
damages.
The facts are stated in the opinion on the Court.
Silvanio T. Liza for petitioners.
Gershon A. Patalinghug, Jr. for private respondents.
ROMERO, J.:
In this petition for review on certiorari of the decision of the Court of Appeals, the issue is whether or
not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that exempts the
carrier from liability for the death of a passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin,
boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in
Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded. The bus fell into a ravine
around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-
old Tito Tumboy and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage, damages and attorneys fees
was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido,
its driver, before the Regional Trial Court of Davao City. When the defendants therein filed their answer
to the complaint, they raised the affirmative defense of caso fortuito. They also filed a third-party
complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed an
answer with compulsory counterclaim. At the pre-trial conference, the parties agreed to a stipulation
of facts.
Upon a finding that the third party defendant was not liable under the insurance contract, the lower
court dismissed the third party complaint. No amicable settlement having been arrived at by the parties,
trial on the merits ensued.
The plaintiffs asserted that violation of the contract of carriage between them and the defendants was
brought about by the drivers failure to exercise the diligence required of the carrier in transporting
passengers safely to their place of destination. According to Leny Tumboy, the bus left Mangagoy at
3:00 oclock in the afternoon. The winding road it traversed was not cemented and was wet due to the
rain; it was rough with crushed rocks. The bus which was full of passengers had cargoes on top. Since
it was running fast, she cautioned the driver to slow down but he merely stared at her through the
mirror. At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell into
a ravine.
For their part, the defendants tried to establish that the accident was due to a fortuitous event. Abundio
Salce, who was the bus conductor when the incident happened, testified that the 42-seater bus was
not full as there were only 32 passengers, such that he himself managed to get a seat. He added that
the bus was running at a speed of 60 to 50 and that it was going slow because of the zigzag road.
He affirmed that the left front tire that exploded was a brand new tire that he mounted on the bus
on April 21, 1988 or only five (5) days before the incident. The Yobido Liner secretary, Minerva
Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988 and she was present
when it was mounted on the bus by Salce. She stated that all driver applicants in Yobido Liner
underwent actual driving tests before they were employed. Defendant Cresencio Yobido underwent
such test and submitted his professional drivers license and clearances from the barangay, the fiscal
and the police.
On August 29, 1991, the lower court rendered a decision dismissing the action for lack of merit. On the
issue of whether or not the tire blowout was a caso fortuito, it found that the falling of the bus to the
cliff was a result of no other outside factor than the tire blow-out. It held that the ruling in the La
Mallorca and Pampanga Bus Co. v. De Jesus that a tire blowout is a mechanical defect of the
conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected to
a more thorough or rigid check-up before it took to the road that morning is inapplicable to this case.
It reasoned out that in said case, it was found that the blowout was caused by the established fact that
the inner tube of the left front tire was pressed between the inner circle of the left wheel and the rim
which had slipped out of the wheel. In this case, however, the cause of the explosion remains a
mystery until at present. As such, the court added, the tire blowout was a caso fortuito which is
completely an extraordinary circumstance independent of the will of the defendants who should be
relieved of whatever liability the plaintiffs may have suffered by reason of the explosion pursuant to
Article 1174, of the Civil Code.
Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the lower court the
following errors: (a) finding that the tire blowout was a caso fortuito; (b) failing to hold that the
defendants did not exercise utmost and/or extraordinary diligence required of carriers under Article
1755 of the Civil Code, and (c) deciding the case contrary to the ruling in Juntilla v. Fontanar, and
Necesito v. Paras.
On August 23, 1993, the Court of Appeals rendered the Decision reversing that of the lower court. It
held that:
To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the blow-out, if
due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event. On
the other hand, there may have been adverse conditions on the road that were unforeseeable and/or
inevitable, which could make the blow-out a caso fortuito. The fact that the cause of the blow-out was
not known does not relieve the carrier of liability. Owing to the statutory presumption of negligence
against the carrier and its obligation to exercise the utmost diligence of very cautious persons to carry
the passenger safely as far as human care and foresight can provide, it is the burden of the defendants
to prove that the cause of the blow-out was a fortuitous event. It is not incumbent upon the plaintiff
to prove that the cause of the blow-out is not casofortuito.
Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants
burden. As enunciated in Necesito vs. Paras, the passenger has neither choice nor control over the
carrier in the selection and use of its equipment, and the good repute of the manufacturer will not
necessarily relieve the carrier from liability.
Moreover, there is evidence that the bus was moving fast, and the road was wet and rough. The driver
could have explained that the blow-out that precipitated the accident that caused the death of Toto
Tumboy could not have been prevented even if he had exercised due care to avoid the same, but he
was not presented as witness.
The Court of Appeals thus disposed of the appeal as follows:

WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering
defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in moral
damages, and P7,000.00 for funeral and burial expenses.
SO ORDERED.
The defendants filed a motion for reconsideration of said decision which was denied on November 4,
1993 by the Court of Appeals. Hence, the instant petition asserting the position that the tire blowout
that caused the death of Tito Tumboy was a caso fortuito. Petitioners claim further that the Court of
Appeals, in ruling contrary to that of the lower court, misapprehended facts and, therefore, its findings
of fact cannot be considered final which shall bind this Court. Hence, they pray that this Court review
the facts of the case.
The Court did re-examine the facts and evidence in this case because of the inapplicability of the
established principle that the factual findings of the Court of Appeals are final and may not be reviewed
on appeal by this Court. This general principle is subject to exceptions such as the one present in this
case, namely, that the lower court and the Court of Appeals arrived at diverse factual findings. However,
upon such re-examination, we found no reason to overturn the findings and conclusions of the Court
of Appeals.
As a rule, when a passenger boards a common carrier, he takes the risks incidental to the mode of
travel he has taken. After all, a carrier is not an insurer of the safety of its passengers and is not bound
absolutely and at all events to carry them safely and without injury. However, when a passenger is
injured or dies while travelling, the law presumes that the common carrier is negligent. Thus, the Civil
Code provides:
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in Articles 1733 and 1755.
Article 1755 provides that (a) common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard
for all the circumstances. Accordingly, in culpa contractual, once a passenger dies or is injured, the
carrier is presumed to have been at fault or to have acted negligently. This disputable presumption
may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed
by Articles 1733, 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due
to a fortuitous event.11 Consequently, the court need not make an express finding of fault or negligence
on the part of the carrier to hold it responsible for damages sought by the passenger.
In view of the foregoing, petitioners contention that they should be exempt from liability because the
tire blowout was no more than a fortuitous event that could not have been foreseen, must fail. A
fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent
of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if
it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor. As Article 1174 provides,
no person shall be responsible for a fortuitous event which could not be foreseen, or which, though
Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous
event. There are human factors involved in the situation. The fact that the tire was new did not imply
that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle.
Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality,
resulting in the conclusion that it could not explode within five days use. Be that as it may, it is settled
that an accident caused either by defects in the automobile or through the negligence of its driver is
not a caso fortuito that would exempt the carrier from liability for damages.
Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous
event alone. The common carrier must still prove that it was not negligent in causing the death or injury
resulting from an accident. This Court has had occasion to state:
While it may be true that the tire that blew-up was still good because the grooves of the tire were still
visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence was
presented to show that the accident was due to adverse road conditions or that precautions were taken
by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden blowing-
up, therefore, could have been caused by too much air pressure injected into the tire coupled by the
fact that the jeepney was overloaded and speeding at the time of the accident.
It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was
running at 60-50 kilometers per hour only or within the prescribed lawful speed limit. However, they
failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the
driver to slow down. These contradictory facts must, therefore, be resolved in favor of liability in view
of the presumption of negligence of the carrier in the law. Coupled with this is the established condition
of the road-rough, winding and wet due to the rain. It was incumbent upon the defense to establish
that it took precautionary measures considering partially dangerous condition of the road. As stated
above, proof that the tire was new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier, such
as conducting daily routinary checkups of the vehicles parts. As the late Justice J.B.L. Reyes said:
It may be impracticable, as appellee argues, to require of carriers to test the strength of each and
every part of its vehicles before each trip; but we are of the opinion that a due regard for the carriers
obligations toward the traveling public demands adequate periodical tests to determine the condition
and strength of those vehicle portions the failure of which may endanger the safety of the passen-
gers.
Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing
evidence, petitioners are hereby held liable for damages. Article 1764 in relation to Article 2206 of the
Civil Code prescribes the amount of at least three thousand pesos as damages for the death of a
passenger. Under prevailing jurisprudence, the award of damages under Article 2206 has been
increased to fifty thousand pesos (P50,000.00).
Moral damages are generally not recoverable in culpa contractual except when bad faith had been
proven. However, the same damages may be recovered when breach of contract of carriage results in
the death of a passenger,22 as in this case. Exemplary damages, awarded by way of example or
correction for the public good when moral damages are awarded, may likewise be recovered in
contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent
manner.24 Because petitioners failed to exercise the extraordinary diligence required of a common
carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly.25 As such,
private respondents shall be entitled to exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the modification that
petitioners shall, in addition to the monetary awards therein, be liable for the award of exemplary
damages in the amount of P20,000.00. Costs against petitioners.
SO ORDERED.
Narvasa (C.J., Chairman), Melo, Francisco and Panganiban, JJ., concur.

Notes.In a contract of affreightment a common carrier is not converted into a private carrier but
remains as a common carrier and still liable as such. (Coastwise Lighterage Corporation vs. Court of
Appeals, 245 SCRA 796 [1995])
On no other employer is a greater duty imposed of minimizing absences among crew members than
on common carriers. (Michael, Inc. vs. National Labor Relations Commission, 256 SCRA 461 [1996])
In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. (Baliwag Transit, Inc. vs. Court of Appeals, 256 SCRA 746 [1996])
o0o
BALIWAG TRANSIT, INC., petitioner, vs. COURT OF APPEALS, SPOUSES ANTONIO GARCIA
& LETICIA GARCIA, A & J TRADING AND JULIO RECONTIQUE, respondents
G.R. No. 116110. May 15, 1996
Common Carriers; Presumptions; In a contract of carriage, it is presumed that the common carrier was
at fault or was negligent when a passenger dies or is injured.As a common carrier, Baliwag breached
its contract of carriage when it failed to deliver its passengers, Leticia and Allan Garcia to their
destination safe and sound. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious person, with due regard
for all the circumstances. In a contract of carriage, it is presumed that the common carrier was at fault
or was negligent when a passenger dies or is injured. Unless the presumption is rebutted, the court
need not even make an express finding of fault or negligence on the part of the common carrier. This
statutory presumption may only be overcome by evidence that the carrier exercised extraordinary
diligence as prescribed in Articles 1733 and 1755 of the Civil Code.
Same; Early Warning Devices (EWD); A kerosene lamp or torch at the edge of the road, near the rear
portion of the truck to serve as an early warning device substantially complies with Section 34(g) of the
Land Transportation and Traffic Code.Col. dela Cruz and Romano testified that they did not see any
early warning device at the scene of the accident. They were referring to the triangular reflectorized
plates in red and yellow issued by the Land Transportation Office. However, the evidence shows that
Recontique and Ecala placed a kerosene lamp or torch at the edge of the road, near the rear portion
of the truck to serve as an early warning device. This substantially complies with Section 34 (g) of the
Land Transportation and Traffic Code.
Same; Damages; Evidence; To prove actual damages, the best evidence available to the injured party
must be presentedthe court cannot rely on uncorroborated testimony whose truth is suspect but must
depend upon competent proof that damages have been actually suffered.The propriety of the amount
awarded as hospitalization and medical fees. The award of P25,000.00 is not supported by the evidence
on record. The Garcias presented receipts marked as Exhibits B-1 to B-42 but their total amounted
only to P5,017.74. To be sure, Leticia testified as to the extra amount spent for her medical needs but
without more reliable evidence, her lone testimony cannot justify the award of P25,000.00. To prove
actual damages, the best evidence available to the injured party must be presented. The court cannot
rely on uncorroborated testimony whose truth is suspect, but must depend upon competent proof that
damages have been actually suffered. Thus, we reduce the actual damages for medical and
hospitalization expenses to P5,017.74.
Same; Same; In a breach of contract of carriage, moral damages are recoverable if the carrier, through
its agent, acted fraudulently or in bad faith.The award of moral damages is in accord with law. In a
breach of contract of carriage, moral damages are recoverable if the carrier, through its agent, acted
fraudulently or in bad faith. The evidence shows the gross negligence of the driver of Baliwag bus which
amounted to bad faith.
PETITION for certiorari to review a decision of the Court of Appeals.
Leopoldo C. Sta. Maria for Baliwag Transit, Inc.
Arturo D. Vallar for Sps. Antonio and Leticia Garcia.
Alan A. Leynes for A & J Trading and Julio Recontique.
PUNO, J.:
This is a petition for certiorari to review the Decision of the Court of Appeals in CA-G.R. CV-31246
awarding damages in favor of the spouses Antonio and Leticia Garcia for breach of contract of carriage.
The records show that on July 31, 1980, Leticia Garcia, and her five-year old son, Allan Garcia, boarded
Baliwag Transit Bus No. 2036 bound for Cabanatuan City driven by Jaime Santiago. They took the seat
behind the driver.
At about 7:30 in the evening, in Malimba, Gapan, Nueva Ecija, the bus passengers saw a cargo truck
parked at the shoulder of the national highway. Its left rear portion jutted to the outer lane, as the
shoulder of the road was too narrow to accommodate the whole truck. A kerosene lamp appeared at
the edge of the road obviously to serve as a warning device. The truck driver, Julio Recontique, and
his helper, Arturo Escala, were then replacing a flat tire. The truck is owned by respondent A & J
Trading.
Bus driver Santiago was driving at an inordinately fast speed and failed to notice the truck and the
kerosene lamp at the edge of the road. Santiagos passengers urged him to slow down but he paid
them no heed. Santiago even carried animated conversations with his co-employees while driving.
When the danger of collision became imminent, the bus passengers shouted Babangga tayo!.
Santiago stepped on the brake, but it was too late. His bus rammed into the stalled cargo truck. It
caused the instant death of Santiago and Escala, and injury to several others. Leticia and Allan Garcia
were among the injured passengers.
Leticia suffered a fracture in her pelvis and right leg. They rushed her to the provincial hospital in
Cabanatuan City where she was given emergency treatment. After three days, she was transferred to
the National Orthopedic Hospital where she was confined for more than a month.3 She underwent an
operation for partial hip prosthesis.
Allan, on the other hand, broke a leg. He was also given emergency treatment at the provincial hospital.
Spouses Antonio and Leticia Garcia sued Baliwag Transit, Inc., A & J Trading and Julio Recontique for
damages in the Regional Trial Court of Bulacan. Leticia sued as an injured passenger of Baliwag and as
mother of Allan. At the time of the complaint, Allan was a minor, hence, the suit initiated by his parents
in his favor.
Baliwag, A & J Trading and Recontique disclaimed responsibility for the mishap. Baliwag alleged that
the accident was caused solely by the fault and negligence of A & J Trading and its driver, Recontique.
Baliwag charged that Recontique failed to place an early warning device at the corner of the disabled
cargo truck to warn oncoming vehicles. On the other hand, A & J Trading and Recontique alleged that
the accident was the result of the negligence and reckless driving of Santiago, bus driver of Baliwag.
After hearing, the trial court found all the defendants liable, thus:
xxx
In view thereof, the Court holds that both defendants should be held liable; the defendant Baliwag
Transit, Inc. for having failed to deliver the plaintiff and her son to their point of destination safely in
violation of plaintiffs and defendant Baliwag Transits contractual relation.
The defendant A & J and Julio Recontique for failure to provide its cargo truck with an early warning
device in violation of the Motor Vehicle Law.
The trial court ordered Baliwag, A & J Trading and Recontique to pay jointly and severally the Garcia
spouses the following: (1) P25,000.00 hospitalization and medication fee, (2) P450,000.00 loss of
earnings in eight (8) years, (3) P2,000.00 for the hospitalization of their son Allan Garcia, (4) P50,000.00
moral damages, and (5) P30,000.00 attorneys fee.
On appeal, the Court of Appeals modified the trial courts Decision by absolving A & J Trading from
liability and by reducing the award of attorneys fees to P10,000.00 and loss of earnings to P300,000.00,
respectively.
Baliwag filed the present petition for review raising the following issues:
1. Did the Court of Appeals err in absolving A & J Trading from liability and holding Baliwag solely
liable for the injuries suffered by Leticia and Allan Garcia in the accident?
2. Is the amount of damages awarded by the Court of Appeals to the Garcia spouses correct?
We affirm the factual findings of the Court of Appeals.
As a common carrier, Baliwag breached its contract of carriage when it failed to deliver its passengers,
Leticia and Allan Garcia to their destination safe and sound. A common carrier is bound to carry its
passengers safely as far as human care and foresight can provide, using the utmost diligence of a very
cautious person, with due regard for all the circumstances. In a contract of carriage, it is presumed
that the common carrier was at fault or was negligent when a passenger dies or is injured. Unless the
presumption is rebutted, the court need not even make an express finding of fault or negligence on the
part of the common carrier. This statutory presumption may only be overcome by evidence that the
carrier exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.
The records are bereft of any proof to show that Baliwag exercised extraordinary diligence. On the
contrary, the evidence demonstrates its drivers recklessness. Leticia Garcia testified that the bus was
running at a very high speed despite the drizzle and the darkness of the highway. The passengers
pleaded for its driver to slow down, but their plea was ignored. Leticia also revealed that the driver was
smelling of liquor. She could smell him as she was seated right behind the driver. Another passenger,
Felix Cruz testified that immediately before the collision, the bus driver was conversing with a co-
employee. All these prove the bus drivers wanton disregard for the physical safety of his passengers,
which makes Baliwag as a common carrier liable for damages under Article 1759 of the Civil Code:
Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or willful acts of the formers employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.
a good father of a family in the selection or supervision of their employees.
Baliwag cannot evade its liability by insisting that the accident was caused solely by the negligence of
A & J Trading and Julio Recontique. It harps on their alleged non-use of an early warning device as
testified to by Col. Demetrio dela Cruz, the station commander of Gapan, Nueva Ecija who investigated
the incident, and Francisco Romano, the bus conductor.
The records do not bear out Baliwags contention. Col. dela Cruz and Romano testified that they did
not see any early warning device at the scene of the accident. They were referring to the triangular
reflectorized plates in red and yellow issued by the Land Transportation Office. However, the evidence
shows that Recontique and Ecala placed a kerosene lamp or torch at the edge of the road, near the
rear portion of the truck to serve as an early warning device. This substantially complies with Section
34 (g) of the Land Transportation and Traffic Code, to wit:
(g) Lights and reflector when parked or disabled.Appropriate parking lights or flares visible one
hundred meters away shall be displayed at the corner of the vehicle whenever such vehicle is parked
on highways or in places that are not well-lighted or, is placed in such manner as to endanger passing
traffic. Furthermore, every motor vehicle shall be provided at all times with built-in reflectors or other
similar warning devices either pasted, painted or attached at its front and back which shall likewise be
visible at night at least one hundred meters away. No vehicle not provided with any of the requirements
mentioned in this subsection shall be registered. (emphasis supplied)
Baliwags argument that the kerosene lamp or torch does not substantially comply with the law is
untenable. The aforequoted law clearly allows the use not only of an early warning device of the
triangular reflectorized plates variety but also parking lights or flares visible one hundred meters away.
Indeed, Col. dela Cruz himself admitted that a kerosene lamp is an acceptable substitute for the
reflectorized plates. No negligence, therefore, may be imputed to A & J Trading and its driver,
Recontique.
Anent this factual issue, the analysis of evidence made by the Court of Appeals deserves our
concurrence, viz:
xxx
In the case at bar, both the injured passengers of the Baliwag involved in the accident testified that
they saw some sort of kerosene or a torch on the rear portion of the truck before the accident. Baliwag
Transits conductor attempted to defeat such testimony by declaring that he noticed no early warning
device in front of the truck.
Among the testimonies offered by the witnesses who were present at the scene of the accident, we
rule to uphold the affirmative testimonies given by the two injured passengers and give less credence
to the testimony of the bus conductor who solely testified that no such early warning device exists.
The testimonies of injured passengers who may well be considered as disinterested witness appear to
be natural and more probable than the testimony given by Francisco Romano who is undoubtedly
interested in the outcome of the case, being the conductor of the defendant-appellant Baliwag Transit,
Inc.
It must be borne in mind that the situation then prevailing at the time of the accident was admittedly
drizzly and all dark. This being so, it would be improbable and perhaps impossible on the part of the
truck helper without the torch nor the kerosene to remove the flat tires of the truck. Moreover, witness
including the bus conductor himself admitted that the passengers shouted, that they are going to bump
before the collision which consequently caused the bus driver to apply the brake 3 to 4 meters away
from the truck. Again, without the kerosene nor the torch in front of the truck, it would be improbable
for the driver, more so the passengers to notice the truck to be bumped by the bus considering the
darkness of the place at the time of the accident.
xxx
While it is true that the investigating officer testified that he found no early warning device at the time
of his investigation, We rule to give less credence to such testimony insofar as he himself admitted on
cross examination that he did not notice the presence of any kerosene lamp at the back of the truck
because when he arrived at the scene of the accident, there were already many people surrounding
the place (TSN, Aug. 22, 1989, p. 13). He further admitted that there exists a probability that the lights
of the truck may have been smashed by the bus at the time of the accident considering the location of
the truck where its rear portion was connected with the front portion of the bus (TSN, March 29, 1985,
pp. 11-13). Investigators testimony therefore did not confirm nor deny the existence of such warning
device, making his testimony of little probative value.
II
We now review the amount of damages awarded to the Garcia spouses.
First, the propriety of the amount awarded as hospitalization and medical fees. The award of P25,000.00
is not supported by the evidence on record. The Garcias presented receipts marked as Exhibits B-1
to B-42 but their total amounted only to P5,017.74. To be sure, Leticia testified as to the extra amount
spent for her medical needs but without more reliable evidence, her lone testimony cannot justify the
award of P25,000.00. To prove actual damages, the best evidence available to the injured party must
be presented. The court cannot rely on uncorroborated testimony whose truth is suspect, but must
depend upon competent proof that damages have been actually suffered. Thus, we reduce the actual
damages for medical and hospitalization expenses to P5,017.74.
Second, we find as reasonable the award of P300,000.00 representing Leticias lost earnings. Before
the accident, Leticia was engaged in embroidery, earning P5,000.00 per month. Her injuries forced her
to stop working. Considering the nature and extent of her injuries and the length of time it would take
her to recover, we find it proper that Baliwag should compensate her lost income for five (5) years.
Third, the award of moral damages is in accord with law. In a breach of contract of carriage, moral
damages are recoverable if the carrier, through its agent, acted fraudulently or in bad faith. The
evidence shows the gross negligence of the driver of Baliwag bus which amounted to bad faith. Without
doubt, Leticia and Allan experienced physical suffering, mental anguish and serious anxiety by reason
of the accident. Leticia underwent an operation to replace her broken hip bone with a metal plate. She
was confined at the National Orthopedic Hospital for 45 days. The young Allan was also confined in the
hospital for his foot injury. Contrary to the contention of Baliwag, the decision of the trial court as
affirmed by the Court of Appeals awarded moral damages to Antonio and Leticia Garcia not in their
capacity as parents of Allan. Leticia was given moral damages as an injured party. Allan was also
granted moral damages as an injured party but because of his minority, the award in his favor has to
be given to his father who represented him in the suit.
Finally, we find the award of attorneys fees justified. The complaint for damages was instituted by the
Garcia spouses on December 15, 1982, following the unjustified refusal of Baliwag to settle their claim.
The Decision was promulgated by the trial court only on January 29, 1991 or about nine years later.
Numerous pleadings were filed before the trial court, the appellate court and to this Court. Given the
complexity of the case and the amount of damages involved, the award of attorneys fee for P10,000.00
is just and reasonable.
IN VIEW WHEREOF, the Decision of the respondent Court of Appeals in CA-G.R. CV-31246 is AFFIRMED
with the MODIFICATION reducing the actual damages for hospitalization and medical fees to P5,017.74.
No costs.
SO ORDERED.
Regalado (Chairman), Romero, Mendoza and Torres, Jr., JJ., concur.
Notes.When the goods shipped either are lost or arrive in damaged condition, a presumption arises
against the carrier of its failure to observe that requisite diligence, and there need not be an express
finding of negligence to hold it liable. (Eastern Shipping Lines, Inc. vs. Court of Appeals, 234 SCRA 78
[1994])
When one devotes his property to a use in which the public has an interest, he, in effect, grants to the
public an interest in that use, and must submit to the control by the public for the common good, to
the extent of the interest he has thus created. (Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239
SCRA 386 [1994])
o0o
WILLIAM TIU, doing business under the name and style of D Rough Riders, and
VIRGILIO TE LASPIAS, petitioners, vs. PEDRO A. ARRIESGADO, BENJAMIN CONDOR,
SERGIO PEDRANO and PHILIPPINE PHOENIX SURETY AND INSURANCE, INC.,
respondents
G.R. No. 138060. September 1, 2004
Civil Law; Contracts; Contracts of Carriage; Common Carriers; Extraordinary Diligence; A man must use
common sense, and exercise due reflection in all his actsit is his duty to be cautious, careful and
prudent, if not from instinct, then through fear of recurring punishment.A man must use common
sense, and exercise due reflection in all his acts; it is his duty to be cautious, careful and prudent, if
not from instinct, then through fear of recurring punishment. He is responsible for such results as
anyone might foresee and for acts which no one would have performed except through culpable
abandon. Otherwise, his own person, rights and property, and those of his fellow beings, would ever
be exposed to all manner of danger and injury.
Same; Same; Same; Same; Same; Negligence; Upon the happening of the accident, the presumption
of negligence at once arises, and it becomes the duty of a common carrier to prove that he observed
extraordinary diligence in the care of his pasengers.Under the said contract of carriage, the petitioners
assumed the express obligation to transport the respondent and his wife to their destination safely and
to observe extraordinary diligence with due regard for all circumstances. Any injury suffered by the
passengers in the course thereof is immediately attributable to the negligence of the carrier. Upon the
happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a
common carrier to prove that he observed extraordinary diligence in the care of his passengers. It must
be stressed that in requiring the highest possible degree of diligence from common carriers and in
creating a presumption of negligence against them, the law compels them to curb the recklessness of
their drivers.
Same; Same; Same; Same; Same; Same; The carrier must show the utmost diligence of very cautious
persons as far as human care and foresight can provide, or that the accident was caused by fortuitous
event. While evidence may be submitted to overcome such presumption of negligence, it must be
shown that the carrier observed the required extraordinary diligence, which means that the carrier must
show the utmost diligence of very cautious persons as far as human care and foresight can provide, or
that the accident was caused by fortuitous event.
Same; Same; Same; Same; Same; Same; Principle of Last Clear Chance; Contrary to the petitioners
contention, the principle of last clear chance is inapplicable in the instant case, as it only applies in a
suit between the owners and drivers of colliding vehicles.Contrary to the petitioners contention, the
principle of last clear chance is inapplicable in the instant case, as it only applies in a suit between the
owners and drivers of two colliding vehicles. It does not arise where a passenger demands responsibility
from the carrier to enforce its contractual obligations, for it would be inequitable to exempt the negligent
driver and its owner on the ground that the other driver was likewise guilty of negligence. The common
law notion of last clear chance permitted courts to grant recovery to a plaintiff who has also been
negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do
so. Accordingly, it is difficult to see what role, if any, the common law of last clear chance doctrine has
to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar
to recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code.
Same; Same; Same; Same; Same; Same; Presumed Negligence; It is such a firmly established principle,
as to have virtually formed part of the law itself, that the negligence of the employee gives rise to the
presumption of negligence on the part of the employer.It is such a firmly established principle, as to
have virtually formed part of the law itself, that the negligence of the employee gives rise to the
presumption of negligence on the part of the employer. This is the presumed negligence in the selection
and supervision of employee. The theory of presumed negligence, in contrast with the American
doctrine of respondeat superior, where the negligence of the employee is conclusively presumed to be
the negligence of the employer, is clearly deducible from the last paragraph of Article 2180 of the Civil
Code which provides that the responsibility therein mentioned shall cease if the employers prove that
they observed all the diligence of a good father of a family to prevent damages. . . .
Same; Same; Same; Same; Same; Same; Indemnity; Compulsory Vehicle Liability Insurance; The
nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily intended to provide
compensation for the death or bodily injuries suffered by innocent third parties or pasengers as a result
of the negligent operation and use of motor vehicles.The nature of Compulsory Motor Vehicle Liability
Insurance is such that it is primarily intended to provide compensation for the death or bodily injuries
suffered by innocent third parties or passengers as a result of the negligent operation and use of motor
vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless
of the financial capacity of motor vehicle owners.
Same; Same; Same; Same; Same; Same; Same; Same; Extent; Although the victim may proceed
directly against the insurer for indemnity, the third party liability is only up to the extent of the insurance
policy and those required by law.Although the victim may proceed directly against the insurer for
indemnity, the third party liability is only up to the extent of the insurance policy and those required by
law. While it is true that where the insurance contract provides for indemnity against liability to third
persons, and such persons can directly sue the insurer, the direct liability of the insurer under indemnity
contracts against third party liability does not mean that the insurer can be held liable in solidum with
the insured and/or the other parties found at fault. For the liability of the insurer is based on contract;
that of the insured carrier or vehicle owner is based on tort. . . .
Same; Same; Same; Same; Same; Same; Exemplary Damages; Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary damages in quasi-delicts if the defendant acted with gross
negligence. While the immediate beneficiaries of the standard of extraordinary diligence are, of
course, the passengers and owners of cargo carried by a common carrier, they are not the only persons
that the law seeks to benefit. For if common carriers carefully observed the statutory standard of
extraordinary diligence in respect of their own passengers, they cannot help but simultaneously benefit
pedestrians and the passengers of other vehicles who are equally entitled to the safe and convenient
use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people
(whether passengers or not) on our highways and buses, the very size and power of which seem to
inflame the minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of
exemplary damages in cases of quasi-delicts if the defendant acted with gross negligence. . . .
Same; Same; Same; Same; Same; Same; Solidary Liability; In case of injury to a passenger due to the
drivers as well as the owners of the two vehicles are jointly and severally liable for damages. The
same rule of liability was applied in situations where the negligence of the driver of the bus on which
plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle,
thus causing an accident. In Anuran v. Buo, Batangas Laguna Tayabas Bus Co. v. Intermediate
v. Court of Appeals, thus: Nor should it make difference that the liability of petitioner [bus owner]
springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-
delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury
to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver
of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable
for damages. Some members of the Court, though, are of the view that under the circumstances they
are liable on quasi-delict.
Rufino L. Remoreras, Jr. and Sixto Rey M. Orig for petitioners.

Rogelio R. Corro for private respondent Pedro A. Arriesgado.
Glenn N. Jumao-as for respondent B. Condor.
Ma. Cristina G. Laderas for respondent PPSII.
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court from the Decision of the
Court of Appeals in CA-G.R. CV No. 54354 affirming with modification the Decision of the Regional Trial
Court, 7th Judicial Region, Cebu City, Branch 20, in Civil Case No. CEB-5963 for breach of contract of
carriage, damages and attorneys fees, and the Resolution dated February 26, 1999 denying the motion
for reconsideration thereof.
The following facts are undisputed:
At about 10:00 p.m. of March 15, 1987, the cargo truck marked Condor Hollow Blocks and General
Merchandise bearing plate number GBP-675 was loaded with firewood in Bogo, Cebu and left for Cebu
City. Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just as the truck passed over a bridge,
one of its rear tires exploded. The driver, Sergio Pedrano, then parked along the right side of the
national highway and removed the damaged tire to have it vulcanized at a nearby shop, about 700
meters away. Pedrano left his helper, Jose Mitante, Jr. to keep watch over the stalled vehicle, and
instructed the latter to place a spare tire six fathoms away behind the stalled truck to serve as a warning
for oncoming vehicles. The trucks tail lights were also left on. It was about 12:00 a.m., March 16,
1987.
At about 4:45 a.m., D Rough Riders passenger bus with plate number PBP-724 driven by Virgilio Te
Laspias was cruising along the national highway of Sitio Aggies, Poblacion, Compostela, Cebu. The
passenger bus was also bound for Cebu City, and had come from Maya, Daanbantayan, Cebu. Among
its passengers were the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado, who were seated
at the right side of the bus, about three (3) or four (4) places from the front seat.
As the bus was approaching the bridge, Laspias saw the stalled truck, which was then about 25 meters
away. He applied the brakes and tried to swerve to the left to avoid hitting the truck. But it was too
late; the bus rammed into the trucks left rear. The impact damaged the right side of the bus and left
several passengers injured. Pedro Arriesgado lost consciousness and suffered a fracture in his right
colles. His wife, Felisa, was brought to the Danao City Hospital. She was later transferred to the
Southern Island Medical Center where she died shortly thereafter.
Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage, damages and
attorneys fees before the Regional Trial Court of Cebu City, Branch 20, against the petitioners, D
Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspias on May 27, 1987. The
respondent alleged that the passenger bus in question was cruising at a fast and high speed along the
national road, and that petitioner Laspias did not take precautionary measures to avoid the accident.
Thus:
6. That the accident resulted to the death of the plaintiffs wife, Felisa Pepito Arriesgado, as evidenced
by a Certificate of Death, a xerox copy of which is hereto attached as integral part hereof and marked
as ANNEX A, and physical injuries to several of its passengers, including plaintiff himself who
suffered a COLLES FRACTURE RIGHT, per Medical Certificate, a xerox copy of which is hereto attached
as integral part hereof and marked as ANNEX B hereof.
7. That due to the reckless and imprudent driving by defendant Virgilio Te Laspias of the said Rough
Riders passenger bus, plaintiff and his wife, Felisa Pepito Arriesgado, failed to safely reach their
destination which was Cebu City, the proximate cause of which was defendant-drivers failure to observe
utmost diligence required of a very cautious person under all circumstances.
8. That defendant William Tiu, being the owner and operator of the said Rough Riders passenger bus
which figured in the said accident, wherein plaintiff and his wife were riding at the time of the accident,
is therefore directly liable for the breach of contract of carriage for his failure to transport plaintiff and
his wife safely to their place of destination which was Cebu City, and which failure in his obligation to
transport safely his passengers was due to and in consequence of his failure to exercise the diligence
of a good father of the family in the selection and supervision of his employees, particularly defendant-
driver Virgilio Te Laspias.
The respondent prayed that judgment be rendered in his favor and that the petitioners be condemned
to pay the following damages:
1). To pay to plaintiff, jointly and severally, the amount of P30,000.00 for the death and untimely
demise of plaintiffs wife, Felisa Pepito Arriesgado;
2). To pay to plaintiff, jointly and severally, the amount of P38,441.50, representing actual expenses
incurred by the plaintiff in connection with the death/burial of plaintiffs wife;
3). To pay to plaintiff, jointly and severally, the amount of P1,113.80, representing
medical/hospitalization expenses incurred by plaintiff for the injuries sustained by him;
4). To pay to plaintiff, jointly and severally, the amount of P50,000.00 for moral damages;
5). To pay to plaintiff, jointly and severally, the amount of P50,000.00 by way of exemplary damages;
6). To pay to plaintiff, jointly and severally, the amount of P20,000.00 for attorneys fees;
7). To pay to plaintiff, jointly and severally, the amount of P5,000.00 for litigation expenses.
PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS AND REMEDIES IN LAW AND EQUITY.
The petitioners, for their part, filed a Third-Party Complaint on August 21, 1987 against the following:
respondent Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tius insurer; respondent
Benjamin Condor, the registered owner of the cargo truck; and respondent Sergio Pedrano, the driver
of the truck. They alleged that petitioner Laspias was negotiating the uphill climb along the national
highway of Sitio Aggies, Poblacion, Compostela, in a moderate and normal speed. It was further alleged
that the truck was parked in a slanted manner, its rear portion almost in the middle of the highway,
and that no early warning device was displayed. Petitioner Laspias promptly applied the brakes and
swerved to the left to avoid hitting the truck head-on, but despite his efforts to avoid damage to
property and physical injuries on the passengers, the right side portion of the bus hit the cargo trucks
left rear. The petitioners further alleged, thus:
5. That the cargo truck mentioned in the aforequoted paragraph is owned and registered in the name
of the third-party defendant Benjamin Condor and was left unattended by its driver Sergio Pedrano,
one of the third-party defendants, at the time of the incident;
6. That third-party defendant Sergio Pedrano, as driver of the cargo truck with marked (sic) Condor
Hollow Blocks & General Merchandise, with Plate No. GBP-675 which was recklessly and imprudently
parked along the national highway of Compostela, Cebu during the vehicular accident in question, and
third-party defendant Benjamin Condor, as the registered owner of the cargo truck who failed to
exercise due diligence in the selection and supervision of third-party defendant Sergio Pedrano, are
jointly and severally liable to the third-party plaintiffs for whatever liability that may be adjudged against
said third-party plaintiffs or are directly liable of (sic) the alleged death of plaintiffs wife;
7. That in addition to all that are stated above and in the answer which are intended to show reckless
imprudence on the part of the third-party defendants, the third-party plaintiffs hereby declare that
during the vehicular accident in question, third-party defendant was clearly violating Section 34, par.
(g) of the Land Transportation and Traffic Code . . .
...
10. That the aforesaid passenger bus, owned and operated by third-party plaintiff William Tiu, is
covered by a common carrier liability insurance with Certificate of Cover No. 054940 issued by Philippine
Phoenix Surety and Insurance, Inc., Cebu City Branch, in favor of third-party plaintiff William Tiu which
covers the period from July 22, 1986 to July 22, 1987 and that the said insurance coverage was valid,
binding and subsisting during the time of the aforementioned incident (Annex A as part hereof);
11. That after the aforesaid alleged incident, third-party plaintiff notified third-party defendant
Philippine Phoenix Surety and Insurance, Inc., of the alleged incident hereto mentioned, but to no avail;
12. That granting, et arguendo et arguendi, if herein third-party plaintiffs will be adversely adjudged,
they stand to pay damages sought by the plaintiff and therefore could also look up to the Philippine
Phoenix Surety and Insurance, Inc., for contribution, indemnification and/or reimbursement of any
liability or obligation that they might [be] adjudged per insurance coverage duly entered into by and
between third-party plaintiff William Tiu and third-party defendant Philippine Phoenix Surety and
Insurance, Inc.; . . .
The respondent PPSII, for its part, admitted that it had an existing contract with petitioner Tiu, but
averred that it had already attended to and settled the claims of those who were injured during the
incident. It could not accede to the claim of respondent Arriesgado, as such claim was way beyond the
scheduled indemnity as contained in the contract of insurance.
After the parties presented their respective evidence, the trial court ruled in favor of respondent
Arriesgado. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff as against
defendant William Tiu ordering the latter to pay the plaintiff the following amounts:
1The sum of FIFTY THOUSAND PESOS (P50,000.00) as moral damages;

2The sum of FIFTY THOUSAND PESOS (P50,000.00) as exemplary damages;
3The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED FORTY-ONE PESOS (P38,441.00) as actual
damages;
4The sum of TWENTY THOUSAND PESOS (P20,000.00) as attorneys fees;
5The sum of FIVE THOUSAND PESOS (P5,000.00) as costs of suit;
SO ORDERED.
According to the trial court, there was no dispute that petitioner William Tiu was engaged in business
as a common carrier, in view of his admission that D Rough Rider passenger bus which figured in the
accident was owned by him; that he had been engaged in the transportation business for 25 years with
a sole proprietorship; and that he owned 34 buses. The trial court ruled that if petitioner Laspias had
not been driving at a fast pace, he could have easily swerved to the left to avoid hitting the truck, thus,
averting the unfortunate incident. It then concluded that petitioner Laspias was negligent.
The trial court also ruled that the absence of an early warning device near the place where the truck
was parked was not sufficient to impute negligence on the part of respondent Pedrano, since the tail
lights of the truck were fully on, and the vicinity was well lighted by street lamps.16 It also found that
the testimony of petitioner Tiu, that he based the selection of his driver Laspias on efficiency and in-
service training, and that the latter had been so far an efficient and good driver for the past six years
of his employment, was insufficient to prove that he observed the diligence of a good father of a family
in the selection and supervision of his employees.
After the petitioners motion for reconsideration of the said decision was denied, the petitioners elevated
the case to the Court of Appeals on the following issues:
I WHETHER THIRD PARTY DEFENDANT SERGIO PEDRANO WAS RECKLESS AND IMPRUDENT WHEN
HE PARKED THE CARGO TRUCK IN AN OBLIQUE MANNER;
II WHETHER THE THIRD PARTY DEFENDANTS ARE JOINTLY AND SEVERALLY LIABLE DIRECTLY TO
PLAINTIFF-APPELLEE OR TO DEFENDANTS-APPELLANTS FOR WHATEVER LIABILITY THAT MAY BE
ADJUDGED TO THE SAID DEFENDANTS-APPELLANTS;
III WHETHER DEFENDANT-APPELLANT VIRGILIO TE LASPIAS WAS GUILTY OF GROSS NEGLIGENCE;
IV WHETHER DEFENDANT-APPELLANT WILLIAM TIU HAD EXERCISED THE DUE DILIGENCE OF A

GOOD FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF HIS DRIVERS;
V GRANTING FOR THE SAKE OF ARGUMENT THAT DEFENDANT-APPELLANT WILLIAM TIU IS LIABLE
TO PLAINTIFF-APPELLEE, WHETHER THERE IS LEGAL AND FACTUAL BASIS IN AWARDING EXCESSIVE
MORAL DAMAGES, EX[E]MPLARY DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES TO
PLAINTIFF-APPELLEE;
VI WHETHER THIRD PARTY DEFENDANT PHILIPPINE PHOENIX SURETY AND INSURANCE, INC. IS
LIABLE TO DEFENDANT- APPELLANT WILLIAM TIU.
The appellate court rendered judgment affirming the trial courts decision with the modification that
the awards for moral and exemplary damages were reduced to P25,000. The dispositive portion reads:
WHEREFORE, the appealed Decision dated November 6, 1995 is hereby MODIFIED such that the
awards for moral and exemplary damages are each reduced to P25,000.00 or a total of P50,000.00 for
both. The judgment is AFFIRMED in all other respects.
SO ORDERED.
According to the appellate court, the action of respondent Arriesgado was based not on quasi-delict
but on breach of contract of carriage. As a common carrier, it was incumbent upon petitioner Tiu to
prove that extraordinary diligence was observed in ensuring the safety of passengers during
transportation. Since the latter failed to do so, he should be held liable for respondent Arriesgados
claim. The CA also ruled that no evidence was presented against the respondent PPSII, and as such, it
could not be held liable for respondent Arriesgados claim, nor for contribution, indemnification and/or
reimbursement in case the petitioners were adjudged liable.
The petitioners now come to this Court and ascribe the following errors committed by the appellate
court:
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING RESPONDENTS BENJAMIN

CONDOR AND SERGIO PEDRANO GUILTY OF NEGLIGENCE AND HENCE, LIABLE TO RESPONDENT
PEDRO A. ARRIESGADO OR TO PETITIONERS FOR WHATEVER LIABILITY THAT MAY BE ADJUDGED
AGAINST THEM.
II. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONERS GUILTY OF NEGLIGENCE
AND HENCE, LIABLE TO RESPONDENT PEDRO A. ARRIESGADO.
III. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONER WILLIAM TIU LIABLE FOR
EXEMPLARY DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES.
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING RESPONDENT PHILIPPINE
PHOENIX SURETY AND INSURANCE, INC. LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR TO
PETITIONER WILLIAM TIU.
According to the petitioners, the appellate court erred in failing to appreciate the absence of an early
warning device and/or built-in reflectors at the front and back of the cargo truck, in clear violation of
Section 34, par. (g) of the Land Transportation and Traffic Code. They aver that such violation is only
a proof of respondent Pedranos negligence, as provided under Article 2185 of the New Civil Code. They
also question the appellate courts failure to take into account that the truck was parked in an oblique
manner, its rear portion almost at the center of the road. As such, the proximate cause of the incident
was the gross recklessness and imprudence of respondent Pedrano, creating the presumption of
negligence on the part of respondent Condor in supervising his employees, which presumption was not
rebutted. The petitioners then contend that respondents Condor and Pedrano should be held jointly
and severally liable to respondent Arriesgado for the payment of the latters claim.
The petitioners, likewise, aver that expert evidence should have been presented to prove that petitioner
Laspias was driving at a very fast speed, and that the CA could not reach such conclusion by merely
considering the damages on the cargo truck. It was also pointed out that petitioner Tiu presented
evidence that he had exercised the diligence of a good father of a family in the selection and supervision
of his drivers.
The petitioners further allege that there is no legal and factual basis to require petitioner Tiu to pay
exemplary damages as no evidence was presented to show that the latter acted in a fraudulent, reckless
and oppressive manner, or that he had an active participation in the negligent act of petitioner Laspias.
Finally, the petitioners contend that respondent PPSII admitted in its answer that while it had attended
to and settled the claims of the other injured passengers, respondent Arriesgados claim remained
unsettled as it was beyond the scheduled indemnity under the insurance contract. The petitioners argue
that said respondent PPSII should have settled the said claim in accordance with the scheduled
indemnity instead of just denying the same.
On the other hand, respondent Arriesgado argues that two of the issues raised by the petitioners
involved questions of fact, not reviewable by the Supreme Court: the finding of negligence on the part
of the petitioners and their liability to him; and the award of exemplary damages, attorneys fees and
litigation expenses in his favor. Invoking the principle of equity and justice, respondent Arriesgado
pointed out that if there was an error to be reviewed in the CA decision, it should be geared towards
the restoration of the moral and exemplary damages to P50,000 each, or a total of P100,000 which
was reduced by the Court of Appeals to P25,000 each, or a total of only P50,000.
Respondent Arriesgado also alleged that respondents Condor and Pedrano, and respondent Phoenix
Surety, are parties with whom he had no contract of carriage, and had no cause of action against. It
was pointed out that only the petitioners needed to be sued, as driver and operator of the ill-fated bus,
on account of their failure to bring the Arriesgado Spouses to their place of destination as agreed upon
in the contract of carriage, using the utmost diligence of very cautious persons with due regard for all
circumstances.
Respondents Condor and Pedrano point out that, as correctly ruled by the Court of Appeals, the
proximate cause of the unfortunate incident was the fast speed at which petitioner Laspias was driving
the bus owned by petitioner Tiu. According to the respondents, the allegation that the truck was not
equipped with an early warning device could not in any way have prevented the incident from
happening. It was also pointed out that respondent Condor had always exercised the due diligence
required in the selection and supervision of his employees, and that he was not a party to the contract
of carriage between the petitioners and respondent Arriesgado.
Respondent PPSII, for its part, alleges that contrary to the allegation of petitioner Tiu, it settled all the
claims of those injured in accordance with the insurance contract. It further avers that it did not deny
respondent Arriesgados claim, and emphasizes that its liability should be within the scheduled limits of
indemnity under the said contract. The respondent concludes that while it is true that insurance
contracts are contracts of indemnity, the measure of the insurers liability is determined by the insureds
compliance with the terms thereof.
The Courts Ruling
At the outset, it must be stressed that this Court is not a trier of facts. Factual findings of the Court of
Appeals are final and may not be reviewed on appeal by this Court, except when the lower court and
the CA arrived at diverse factual findings. The petitioners in this case assail the finding of both the trial
and the appellate courts that petitioner Laspias was driving at a very fast speed before the bus owned
by petitioner Tiu collided with respondent Condors stalled truck. This is clearly one of fact, not
reviewable by the Court in a petition for review under Rule 45.
On this ground alone, the petition is destined to fail.
However, considering that novel questions of law are likewise involved, the Court resolves to examine
and rule on the merits of the case.
Petitioner Laspias Was negligent in driving The Ill-fated bus
In his testimony before the trial court, petitioner Laspias claimed that he was traversing the two-lane
road at Compostela, Cebu at a speed of only forty (40) to fifty (50) kilometers per hour before the
incident occurred. He also admitted that he saw the truck which was parked in an oblique position at
about 25 meters before impact, and tried to avoid hitting it by swerving to the left. However, even in
the absence of expert evidence, the damage sustained by the truck itself supports the finding of both
the trial court and the appellate court, that the D Rough Rider bus driven by petitioner Laspias was
traveling at a fast pace. Since he saw the stalled truck at a distance of 25 meters, petitioner Laspias
had more than enough time to swerve to his left to avoid hitting it; that is, if the speed of the bus was
only 40 to 50 kilometers per hour as he claimed. As found by the Court of Appeals, it is easier to believe
that petitioner Laspias was driving at a very fast speed, since at 4:45 a.m., the hour of the accident,
there were no oncoming vehicles at the opposite direction. Petitioner Laspias could have swerved to
the left lane with proper clearance, and, thus, could have avoided the truck. Instinct, at the very least,
would have prompted him to apply the breaks to avert the impending disaster which he must have
foreseen when he caught sight of the stalled truck. As we had occasion to reiterate:
A man must use common sense, and exercise due reflection in all his acts; it is his duty to be cautious,
careful and prudent, if not from instinct, then through fear of recurring punishment. He is responsible
for such results as anyone might foresee and for acts which no one would have performed except
through culpable abandon. Otherwise, his own person, rights and property, and those of his fellow
beings, would ever be exposed to all manner of danger and injury.
We agree with the following findings of the trial court, which were affirmed by the CA on appeal:
A close study and evaluation of the testimonies and the documentary proofs submitted by the parties
which have direct bearing on the issue of negligence, this Court as shown by preponderance of evidence
that defendant Virgilio Te Laspias failed to observe extraordinary diligence as a driver of the common
carrier in this case. It is quite hard to accept his version of the incident that he did not see at a
reasonable distance ahead the cargo truck that was parked when the Rough Rider [Bus] just came out
of the bridge which is on an (sic) [more] elevated position than the place where the cargo truck was
parked. With its headlights fully on, defendant driver of the Rough Rider was in a vantage position to
see the cargo truck ahead which was parked and he could just easily have avoided hitting and bumping
the same by maneuvering to the left without hitting the said cargo truck. Besides, it is (sic) shown that
there was still much room or space for the Rough Rider to pass at the left lane of the said national
highway even if the cargo truck had occupied the entire right lane thereof. It is not true that if the
Rough Rider would proceed to pass through the left lane it would fall into a canal considering that there
was much space for it to pass without hitting and bumping the cargo truck at the left lane of said
national highway. The records, further, showed that there was no incoming vehicle at the opposite lane
of the national highway which would have prevented the Rough Rider from not swerving to its left in
order to avoid hitting and bumping the parked cargo truck. But the evidence showed that the Rough
Rider instead of swerving to the still spacious left lane of the national highway plowed directly into the
parked cargo truck hitting the latter at its rear portion; and thus, the (sic) causing damages not only to
herein plaintiff but to the cargo truck as well.
Indeed, petitioner Laspias negligence in driving the bus is apparent in the records. By his own
admission, he had just passed a bridge and was traversing the highway of Compostela, Cebu at a speed
of 40 to 50 kilometers per hour before the collision occurred. The maximum speed allowed by law on
a bridge is only 30 kilometers per hour. And, as correctly pointed out by the trial court, petitioner
Laspias also violated Section 35 of the Land Transportation and Traffic Code, Republic Act No. 4136,
as amended:
Sec. 35. Restriction as to speed.(a) Any person driving a motor vehicle on a highway shall drive the
same at a careful and prudent speed, not greater nor less than is reasonable and proper, having due
regard for the traffic, the width of the highway, and or any other condition then and there existing; and
no person shall drive any motor vehicle upon a highway at such speed as to endanger the life, limb
and property of any person, nor at a speed greater than will permit him to bring the vehicle to a stop
within the assured clear distance ahead.
Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of
the mishap, he was violating any traffic regulation.
Petitioner Tiu failed to Overcome the presumption Of negligence against him as One engaged in the
business Of common carriage
The rules which common carriers should observe as to the safety of their passengers are set forth in
the Civil Code, Articles 1733,32 175533 and 1756. In this case, respondent Arriesgado and his deceased
wife contracted with petitioner Tiu, as owner and operator of D Rough Riders bus service, for
transportation from Maya, Daanbantayan, Cebu, to Cebu City for the price of P18.00. It is undisputed
that the respondent and his wife were not safely transported to the destination agreed upon. In actions
for breach of contract, only the existence of such contract, and the fact that the obligor, in this case
the common carrier, failed to transport his passenger safely to his destination are the matters that need
to be proved. This is because under the said contract of carriage, the petitioners assumed the express
obligation to transport the respondent and his wife to their destination safely and to observe
extraordinary diligence with due regard for all circumstances. Any injury suffered by the passengers in
the course thereof is immediately attributable to the negligence of the carrier. Upon the happening of
the accident, the presumption of negligence at once arises, and it becomes the duty of a common
carrier to prove that he observed extraordinary diligence in the care of his passengers It must be
stressed that in requiring the highest possible degree of diligence from common carriers and in creating
a presumption of negligence against them, the law compels them to curb the recklessness of their
drivers.
While evidence may be submitted to overcome such presumption of negligence, it must be shown that
the carrier observed the required extraordinary diligence, which means that the carrier must show the
utmost diligence of very cautious persons as far as human care and foresight can provide, or that the
accident was caused by fortuitous event. As correctly found by the trial court, petitioner Tiu failed to
conclusively rebut such presumption. The negligence of petitioner Laspias as driver of the passenger
bus is, thus, binding against petitioner Tiu, as the owner of the passenger bus engaged as a common
carrier.
The Doctrine of Last Clear Chance Is Inapplicable in the Case at Bar
Contrary to the petitioners contention, the principle of last clear chance is inapplicable in the instant
case, as it only applies in a suit between the owners and drivers of two colliding vehicles. It does not
arise where a passenger demands responsibility from the carrier to enforce its contractual obligations,
for it would be inequitable to exempt the negligent driver and its owner on the ground that the other
driver was likewise guilty of negligence. The common law notion of last clear chance permitted courts
to grant recovery to a plaintiff who has also been negligent provided that the defendant had the last
clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any,
the common law of last clear chance doctrine has to play in a jurisdiction where the common law
concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been
rejected, as it has been in Article 2179 of the Civil Code.
Thus, petitioner Tiu cannot escape liability for the death of respondent Arriesgados wife due to the
negligence of petitioner Laspias, his employee, on this score.
Respondents Pedrano and Condor were likewise Negligent

In Phoenix Construction, Inc. v. Intermediate Appellate Court, where therein respondent Dionisio
sustained injuries when his vehicle rammed against a dump truck parked askew, the Court ruled that
the improper parking of a dump truck without any warning lights or reflector devices created an
unreasonable risk for anyone driving within the vicinity, and for having created such risk, the truck
driver must be held responsible. In ruling against the petitioner therein, the Court elucidated, thus:
. . . In our view, Dionisios negligence, although later in point of time than the truck drivers negligence,
and therefore closer to the accident, was not an efficient intervening or independent cause. What the
petitioners describe as an intervening cause was no more than a foreseeable consequence of the risk
created by the negligent manner in which the truck driver had parked the dump truck. In other words,
the petitioner truck driver owed a duty to private respondent Dionisio and others similarly situated not
to impose upon them the very risk the truck driver had created. Dionisios negligence was not that of
an independent and overpowering nature as to cut, as it were, the chain of causation in fact between
the improper parking of the dump truck and the accident, nor to sever the juris vinculum of liability. . .
.
...
We hold that private respondent Dionisios negligence was only contributory, that the immediate and
proximate cause of the injury remained the truck drivers lack of due care. . . .
In this case, both the trial and the appellate courts failed to consider that respondent Pedrano was also
negligent in leaving the truck parked askew without any warning lights or reflector devices to alert
oncoming vehicles, and that such failure created the presumption of negligence on the part of his
employer, respondent Condor, in supervising his employees properly and adequately. As we ruled in
Poblete v. Fabros:
It is such a firmly established principle, as to have virtually formed part of the law itself, that the
negligence of the employee gives rise to the presumption of negligence on the part of the employer.
This is the presumed negligence in the selection and supervision of employee. The theory of presumed
negligence, in contrast with the American doctrine of respondeat superior, where the negligence of the
employee is conclusively presumed to be the negligence of the employer, is clearly deducible from the
last paragraph of Article 2180 of the Civil Code which provides that the responsibility therein mentioned
shall cease if the employers prove that they observed all the diligence of a good father of a family to
prevent damages. . . .
The petitioners were correct in invoking respondent Pedranos failure to observe Article IV, Section
34(g) of the Rep. Act No. 4136, which provides:
(g) Lights when parked or disabled.Appropriate parking lights or flares visible one hundred meters
away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in
places that are not well-lighted or is placed in such manner as to endanger passing traffic.
The manner in which the truck was parked clearly endangered oncoming traffic on both sides,
considering that the tire blowout which stalled the truck in the first place occurred in the wee hours of
the morning. The Court can only now surmise that the unfortunate incident could have been averted
had respondent Condor, the owner of the truck, equipped the said vehicle with lights, flares, or, at the
very least, an early warning device. Hence, we cannot subscribe to respondents Condor and Pedranos
claim that they should be absolved from liability because, as found by the trial and appellate courts,
the proximate cause of the collision was the fast speed at which petitioner Laspias drove the bus. To
accept this proposition would be to come too close to wiping out the fundamental principle of law that
a man must respond for the foreseeable consequences of his own negligent act or omission. Indeed,
our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them
among its members. To accept this proposition would be to weaken the very bonds of society.
The Liability of Respondent PPSII as Insurer

The trial court in this case did not rule on the liability of respondent PPSII, while the appellate court
ruled that, as no evidence was presented against it, the insurance company is not liable.
A perusal of the records will show that when the petitioners filed the Third-Party Complaint against
respondent PPSII, they failed to attach a copy of the terms of the insurance contract itself. Only
Certificate of Cover No. 05494051 issued in favor of Mr. William Tiu, Lahug, Cebu City signed by
Cosme H. Boniel was appended to the third-party complaint. The date of issuance, July 22, 1986, the
period of insurance, from July 22, 1986 to July 22, 1987, as well as the following items, were also
indicated therein:
SCHEDULED VEHICLE MODEL - Isuzu Forward

MAKE TYPE OF BODY - Bus
COLOR - blue mixed
BLT FILE NO.
PLATE NO. PBP-724
SERIAL/CHASSIS NO. SER450-1584124
MOTOR NO. 677836
AUTHORIZED CAPACITY 50
UNLADEN WEIGHT - 6 Cyls. Kgs.
SECTION 1/11
*LIMITS OF LIABILITY
PREMIUMS PAID - P540.00
A. THIRD PARTY LIABILITY - P50,000.00
B. PASSENGER LIABILITY
Per Person - P12,000.00
Per Accident - P50,000
In its Answer to the Third-Party Complaint, the respondent PPSII admitted the existence of the contract
of insurance, in view of its failure to specifically deny the same as required under then Section 8(a),
Rule 8 of the Rules of Court, which reads:
Sec. 8. How to contest genuineness of such documents.When an action or defense is founded upon
a written instrument copied in or attached to the corresponding pleading as provided in the preceding
section, the genuineness and due execution of the instrument shall be deemed admitted unless the
adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts; but
the requirement of an oath does not apply when the adverse party does not appear to be a party to
the instrument or when compliance with an order for inspection of the original instrument is refused.
In fact, respondent PPSII did not dispute the existence of such contract, and admitted that it was liable
thereon. It claimed, however, that it had attended to and settled the claims of those injured during the
incident, and set up the following as special affirmative defenses:
Third party defendant Philippine Phoenix Surety and Insurance, Inc. hereby reiterates and incorporates
by way of reference the preceding paragraphs and further states THAT:
8. It has attended to the claims of Vincent Canales, Asuncion Batiancila and Neptali Palces who
sustained injuries during the incident in question. In fact, it settled financially their claims per vouchers
duly signed by them and they duly executed Affidavit[s] of Desistance to that effect, xerox copies of
which are hereto attached as Annexes 1, 2, 3, 4, 5, and 6 respectively;
9. With respect to the claim of plaintiff, herein answering third party defendant through its authorized
insurance adjuster attended to said claim. In fact, there were negotiations to that effect. Only that it
cannot accede to the demand of said claimant considering that the claim was way beyond the scheduled
indemnity as per contract entered into with third party plaintiff William Tiu and third party defendant
(Philippine Phoenix Surety and Insurance, Inc.). Third party Plaintiff William Tiu knew all along the
limitation as earlier stated, he being an old hand in the transportation business; . . .
Considering the admissions made by respondent PPSII, the existence of the insurance contract and the
salient terms thereof cannot be dispatched. It must be noted that after filing its answer, respondent
PPSII no longer objected to the presentation of evidence by respondent Arriesgado and the insured
petitioner Tiu.
Even in its Memorandum before the Court, respondent PPSII admitted the existence of the contract,
but averred as follows:
Petitioner Tiu is insisting that PPSII is liable to him for contribution, indemnification and/or
reimbursement. This has no basis under the contract. Under the contract, PPSII will pay all sums
necessary to discharge liability of the insured subject to the limits of liability but not to exceed the limits
of liability as so stated in the contract. Also, it is stated in the contract that in the event of accident
involving indemnity to more than one person, the limits of liability shall not exceed the aggregate
amount so specified by law to all persons to be indemnified.
As can be gleaned from the Certificate of Cover, such insurance contract was issued pursuant to the
Compulsory Motor Vehicle Liability Insurance Law. It was expressly provided therein that the limit of
the insurers liability for each person was P12,000, while the limit per accident was pegged at P50,000.
An insurer in an indemnity contract for third party liability is directly liable to the injured party up to the
extent specified in the agreement but it cannot be held solidarily liable beyond that amount. The
respondent PPSII could not then just deny petitioner Tius claim; it should have paid P12,000 for the
death of Felisa Arriesgado, and respondent Arriesgados hospitalization expenses of P1,113.80, which
the trial court found to have been duly supported by receipts. The total amount of the claims, even
when added to that of the other injured passengers which the respondent PPSII claimed to have settled,
would not exceed the P50,000 limit under the insurance agreement.
Indeed, the nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily intended
to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers
as a result of the negligent operation and use of motor vehicles. The victims and/or their dependents
are assured of immediate financial assistance, regardless of the financial capacity of motor vehicle
owners. As the Court, speaking through Associate Justice Leonardo A. Quisumbing, explained in
Government Service Insurance System v. Court of Appeals:
However, although the victim may proceed directly against the insurer for indemnity, the third party
liability is only up to the extent of the insurance policy and those required by law. While it is true that
where the insurance contract provides for indemnity against liability to third persons, and such persons
can directly sue the insurer, the direct liability of the insurer under indemnity contracts against third
party liability does not mean that the insurer can be held liable in solidum with the insured and/or the
other parties found at fault. For the liability of the insurer is based on contract; that of the insured
carrier or vehicle owner is based on tort. . . .
Obviously, the insurer could be held liable only up to the extent of what was provided for by the contract
of insurance, in accordance with the CMVLI law. At the time of the incident, the schedule of indemnities
for death and bodily injuries, professional fees and other charges payable under a CMVLI coverage was
provided for under the Insurance Memorandum Circular (IMC) No. 5-78 which was approved on
November 10, 1978. As therein provided, the maximum indemnity for death was twelve thousand
(P12,000.00) pesos per victim. The schedules for medical expenses were also provided by said IMC,
specifically in paragraphs (C) to (G).
Damages to be Awarded
The trial court correctly awarded moral damages in the amount of P50,000 in favor of respondent
Arriesgado. The award of exemplary damages by way of example or correction of the public good, is
likewise in order. As the Court ratiocinated in Kapalaran Bus Line v. Coronado:
. . . While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the
passengers and owners of cargo carried by a common carrier, they are not the only persons that the
law seeks to benefit. For if common carriers carefully observed the statutory standard of extraordinary
diligence in respect of their own passengers, they cannot help but simultaneously benefit pedestrians
and the passengers of other vehicles who are equally entitled to the safe and convenient use of our
roads and highways. The law seeks to stop and prevent the slaughter and maiming of people (whether
passengers or not) on our highways and buses, the very size and power of which seem to inflame the
minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary
damages in cases of quasi-delicts if the defendant acted with gross negligence. . . .
The respondent Pedro A. Arriesgado, as the surviving spouse and heir of Felisa Arriesgado, is entitled
to indemnity in the amount of P50,000.00.
The petitioners, as well as the respondents Benjamin Condor and Sergio Pedrano are jointly and
severally liable for said amount, conformably with the following pronouncement of the Court in Fabre,
Jr. vs. Court of Appeals:
Nor should it make difference that the liability of petitioner [bus owner] springs from contract while
delict.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of
Appeals is AFFIRMED with MODIFICATIONS:
(1) Respondent Philippine Phoenix Surety and Insurance, Inc. and petitioner William Tiu are ORDERED
to pay, jointly and severally, respondent Pedro A. Arriesgado the total amount of P13,113.80;
(2) The petitioners and the respondents Benjamin Condor and Sergio Pedrano are ORDERED to pay,
jointly and severally, respondent Pedro A. Arriesgado P50,000.00 as indemnity; P26,441.50 as actual
damages; P50,000.00 as moral damages; P50,000.00 as exemplary damages; and P20,000.00 as
attorneys fees.
SO ORDERED.
Austria-Martinez (Actg. Chairman), Tinga and Chico-Nazario, JJ., concur.
Puno (Chairman), J., On Official Leave.
Petition partially granted, judgment affirmed with modifica tions.

Note.Neglect or malfeasance of the carriers employees naturally could give ground for an action for
damages. (Morris vs. Court of Appeals, 352 SCRA 428 [2001])
o0o
GREGORIO PESTAO and METRO CEBU AUTOBUS CORPORATION, petitioners, vs.
Spouses TEOTIMO SUMAYANG and PAZ C. SUMAYANG, respondents
G.R. No. 139875. December 4, 2000
Quasi-Delicts; Common Carriers; A professional driver operating a public transport bus should anticipate
that overtaking at a junction is a perilous maneuver and should thus exercise extreme caution.
Petitioners are raising a question of fact based on Pestaos testimony contradicting that of Eyewitness
Ignacio Neis and on the location of the dents on the bumper and the grill. Neis testified that as the two
vehicles approached the junction, the victim raised his left arm to signal that he was turning left to
Tabagon, but that the latter and his companion were thrown off the motorcycle after it was bumped
by the overspeeding bus. These contentions have already been passed upon by the trial and the
appellate courts. We find no cogent reason to reverse or modify their factual findings. The CA agreed
with the trial court that the vehicular collision was caused by Pestaos negligence when he attempted
to overtake the motorcycle. As a professional driver operating a public transport bus, he should have
anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised
extreme caution.
Evidence; Appeals; Factual findings of the Court of Appeals affirming those of the trial court are
conclusive and binding on the Supreme Court.Factual findings of the CA affirming those of the trial
court are conclusive and binding on this Court. Petitioners failed to demonstrate that this case falls
under any of the recognized exceptions to this rule. Indeed, the issue of negligence is basically factual
and, in quasi-delicts, crucial in the award of damages.
Quasi-Delicts; Employer-Employee Relationship; Under Articles 2180 and 2176 of the Civil Code, owners
and managers are responsible for damages caused by their employees.Under Articles 2180 and 2176
of the Civil Code, owners and managers are responsible for damages caused by their employees. When
an injury is caused by the negligence of a servant or an employee, the master or employer is presumed
to be negligent either in the selection or in the supervision of that employee. This presumption may be
overcome only by satisfactorily showing that the employer exercised the care and the diligence of a
good father of a family in the selection and the supervision of its employee.
Same; Same; Common Carriers; The fact that the driver was able to use a bus with a faulty
speedometer shows that the employer was remiss in the supervision of its employees and in the proper
care of its vehicles.The CA said that allowing Pestao to ply his route with a defective speedometer
showed laxity on the part of Metro Cebu in the operation of its business and in the supervision of its
employees. The negligence alluded to here is in its supervision over its driver, not in that which directly
caused the accident. The fact that Pestao was able to use a bus with a faulty speedometer shows that
Metro Cebu was remiss in the supervision of its employees and in the proper care of its vehicles. It had
thus failed to conduct its business with the diligence required by law.
Same; Same; Damages; The indemnity for death caused by a quasidelict used to be pegged at
P3,000.00, based on Article 2206 of the Civil Code, but the amount has been gradually increased
through the years because of the declining value of our currency, and at present, the prevailing
jurisprudence fixes the amount at P50,000.00.Petitioners aver that the CA erred in increasing the
award for life indemnity from P30,000 to P50,000, without specifying any aggravating circumstance to
justify the increment as provided in the Civil Code. This contention is untenable. The indemnity for
death caused by a quasi-delict used to be pegged at P3,000, based on Article 2206 of the Civil Code.
However, the amount has been gradually increased through the years because of the declining value
of our currency. At present, prevailing jurisprudence fixes the amount at P50,000.
Same; Same; Same; The Supreme Court has consistently computed the loss of earning capacity based
on the life expectancy of the deceased, and not on that of the heir.Petitioners cite Villa Rey Transit,
Inc. v. Court of Appeals, which held: The determination of the indemnity to be awarded to the heirs of
a deceased person has therefore no fixed basis, x x x The life expectancy of the deceased or of the
beneficiary, whichever is shorter, is an important factor, x x x. They contend that the CA used the
wrong basis for its computation of earning capacity. We disagree. The Court has consistently computed
the loss of earning capacity based on the life expectancy of the deceased, and not on that of the heir.
Even Villa Rey Transit did likewise.
Same; Same; Same; The award for loss of earning capacity is based on two factors(1) the number
of years on which the computation of dam
ages is based and (2) the rate at which the loss sustained by the heirs is fixed.The award for loss of
earning capacity is based on two factors: (1) the number of years on which the computation of damages
is based and (2) the rate at which the loss sustained by the heirs is fixed. The first factor refers to the
life expectancy, which takes into consideration the nature of the victims work, lifestyle, age and state
of health prior to the accident. The second refers to the victims earning capacity minus the necessary
living expenses. Stated otherwise, the amount recoverable is that portion of the earnings of the
deceased which the beneficiary would have receivedthe net earnings of the deceased.
Bugarin & Bugarin Law Office for petitioners.
Paterno S. Compra for private respondents.
PANGANIBAN, J.:
Factual findings of the Court of Appeals, affirming those of the trial judge, are binding on this Court. In
quasi-delicts, such findings are crucial because negligence is largely a matter of evidence. In computing
an award for lost earning capacity, the life expectancy of the deceased, not that of the heir, is used as
basis.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the April
21, 1999 Decision and the August 6, 1999 Resolution of the Court of Appeals (CA) in CA-GR CV No.
30289. The questioned Decision disposed as follows:
WHEREFORE, premises considered, the instant appeal is hereby DENIED. The assailed Decision of the
lower court is hereby AFFIRMED with the aforesaid modification regarding the award of death penalty.
The Resolution of August 6, 1999 denied reconsideration.
The Facts
The events leading to this Petition were summarized by the Court of Appeals as follows:
It appears from the records that at around 2:00 oclock [o]n the afternoon of August 9, 1986, Ananias
Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with
him was his friend Manuel Romagos. As they came upon a junction where the highway connected with
the road leading to Tabagon, they were hit by a passenger bus driven by [Petitioner] Gregorio Pestao
and owned by [Petitioner] Metro Cebu Autobus Corporation (Metro Cebu, for brevity), which had tried
to overtake them, sending the motorcycle and its passengers hurtling upon the pavement. Both Ananias
Sumayang and Manuel Romagos were rushed to the hospital in Sogod, where Sumayang was
pronounced dead on arrival. Romagos was transferred to the Cebu Doctors Hospital, but he succumbed
to his injuries the day after.
Apart from the institution of criminal charges against Gregorio Pestao, [Respondents] Teotimo and
Paz Sumayang, as heirs of Ananias Sumayang, filed this civil action for damages against Gregorio
Pestao, as driver of the passenger bus that rammed the deceaseds motorcycle, Metro Cebu, as owner
and operator of the said bus, and Perla Compania de Seguros, as insurer of Metro Cebu. The case was
docketed as Civil Case No. CEB-6108.
On November 9, 1987, upon motion of [Petitioner] Pestao, Judge Pedro C. Son ordered the
consolidation of the said case with Criminal Case No. 10624, pending in Branch 16 of the same Court,
involving the criminal prosecution of Gregorio Pestao for [d]ouble [h]omicide thru [r]eckless
[i]mprudence. Joint trial of the two cases thereafter ensued, where the following assertions were made:
[Respondents] rely mainly on the testimonies of Ignacio Neis, Pat. Aquilino Dinoy and Teotimo
Sumayang, father of the deceased. Neis declared that he saw the incident while he was sitting on a
bench beside the highway; that both vehicles c[a]me from the North; that as the motorcycle
approached the junction to Tab[a]gon, the driver Ananias Sumayang signalled with his left arm to
indicate that he was taking the Tab[a]gon Road; that the motorcycle did turn left but as it did so, it
was bumped by an overspeeding bus; that the force of the impact threw Ananias Sumayang and his
companion Manuel Romagos about 14 meters away. The motorcycle, Neis continued, was badly
damaged as it was dragged by the bus.
On the other hand, Pat. Dinoy testified that he was in the nearby house of Ruben Tiu [when] he heard
the sound or noise caused by the collision; that he immediately went to the scene where he found
Ananias Sumayang and Manuel Romagos lying on the road bleeding and badly injured; that he
requested the driver of a PU vehicle to take them to a hospital; that he took note of the various distances
which he included in his sketch (Exh. J) that the probable point of impact was at the left lane of the
highway and right at the junction to Tab[a]gon (Exh. J-11); that he based his conclusion on the
scratches caused by the motorcycles footrest on the asphalt pavement; that he described the damage
caused to the motorcycle in his sketch (Exh. J); that on the part of the bus, the right end of its front
bumper was bent and the right portion of the radiator grill was dented. Pat. Dinoy acknowledged that
he met at the scene Ignacio Neis who informed him that he saw the incident.
On the contrary, Pestao blamed Sumayang for the accident. He testified that when he first blew the
horn the motorcycle which was about 15 or 20 meters ahead went to the right side of the highway that
he again blew the horn and accelerated in order to overtake the motorcycle; that when he was just
one meter behind, the motorcycle suddenly turned left towards the Tab[a]gon [R]oad and was bumped
by his bus; that he was able to apply his break only after the impact. Pestaos testimony was
corroborated by Ireneo Casilia who declared that he was one of the passengers of the bus; that the
motorcycle suddenly turned left towards Tab[a]gon [R]oad without giving any signal to indicate its
maneuver; that the bus was going at 40 kph when the accident occurred.
To substantiate its defense of bonos pater familias [petitioner] [c]orporation recalled to the witness
box Gregorio Pestao who explained how his driving experience and ability were tested by the company
before he was hired. He further declared that the management gave regular lectures to drivers and
conductors touching on various topics like speeding, parking, loading and treatment of passengers, and
that before he took to the road at 2:30 AM of that day he checked together with the mechanic the tires,
brake, signal lights as well as the tools to be brought along. He did the same thing before commencing
his return trip from Hagnaya, San Remegio later in the day.
The corporation also presented its maintenance supervisor, Agustin Pugeda, Jr., and its manager,
Alfonso Corominas, Jr. who corroborated Pestaos testimony that his driving ability was thoroughly
tested, and that all drivers underwent periodic lecture on various aspects of safety driving including
pertinent traffic regulations. They also confirmed the thorough checkup of every vehicle before it would
depart and that the performance of the drivers was being monitored by several inspectors posted at
random places along the route.
In judgment, the lower court found [petitioners] liable to the [respondents], in the amounts of
P30,000.00 for death indemnity, P829,079 for loss of earning capacity of the deceased Ananias
Sumayang, and P36,000.00 for necessary interment expenses. The liability of defendant Perla
Compania de Seguros, Inc., however, was limited only to the amount stipulated in the insurance policy,
which [was] P12,000 for death indemnity and P4,500.00 for burial expenses.
In so ruling, the lower court found [Petitioner] Pestao to have been negligent in driving the passenger
bus that hit the deceased. It was shown that Pestao negligently attempted to overtake the motorcycle
at a dangerous speed as they were coming upon a junction in the road, and as the motorcycle was
about to turn left towards Tabagon. The court likewise found Metro Cebu directly and primarily liable,
along with Pestao, the latters employer under Article 2180 of the Civil Code, as [Petitioner] Metro
Cebu failed to present evidence to prove that it had observed x x x [the] diligence of a good father of
a family to prevent damage. Nor has Metro Cebu proven that it had exercised due diligence in the
supervision of its employees and in the maintenance of vehicles.
Ruling of the Court of Appeals
The CA affirmed respondents liability for the accident and for Sumayangs death. Pestao was negligent
when he tried to overtake the victims motorcycle at the Tabagon junction. As a professional driver
operating a public transport vehicle, he should have taken extra precaution to avoid accidents, knowing
that it was perilous to overtake at a junction, where adjoining roads had Drought about merging and
diverging traffic.
The appellate court opined that Metro Cebu had shown laxity in the conduct of its operations and in
the supervision of its employees. By allowing the bus to ply its route despite the defective speedometer,
said petitioner showed its indifference towards the proper maintenance of its vehicles. Having failed to
observe the extraordinary diligence required of public transportation companies, it was held vicariously
liable to the victims of the vehicular accident.
In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted indemnity for the
death of the victim. It also affirmed the award of loss of earning capacity based on his life expectancy.
Such liability was assessed, not as a pension for the claiming heirs, but as a penalty and an indemnity
for the drivers negligent act.
Hence, this Petition.
Issues
Petitioners submit the following issues for our consideration:
1. The Court of Appeals misapplied facts of weight and substance affecting the result of the case.
2. The Court of Appeals misapplied R.A. 4136 as regards the behavior of the deceased at the time of
the accident.
3. The Court of Appeals erred in ruling that the award of damages representing income that deceased
could have earned be considered a penalty.
4. The Court of Appeals, contrary to Article 2204, Civil Code, raised the award of P30,000.00 damages
representing indemnity for death to P50,000.00.
5. The Court of Appeals used as basis for the loss of earning capacity, the life expectancy of the
[d]eceased instead of that of the respondents which was shorter.
In short, they raise these questions: whether the CA erred (1) in applying Section 45 of RA 4136 when
it ruled that negligence in driving was the proximate cause of the accident; (2) in increasing the civil
indemnity from P30,000 to P50,000; and (3) in using the life expectancy of the deceased instead of the
life expectancies of respondents.
The Courts Ruling
The Petition has no merit.

First Issue: Negligence
Petitioners contend that Pestao was not under any obligation to slow down when he overtook the
motorcycle, because the deceased had given way to him upon hearing the bus horn. Seeing that the
left side of the road was clearly visible and free of oncoming traffic, Pestao accelerated his speed to
pass the motorcycle. Having given way to the bus, the motorcycle driver should have slowed down until
he had been overtaken.
They further contend that the motorcycle was not in the middle of the road nearest to the junction as
found by the trial and the appellate courts, but was on the inner lane. This explains why the damage
on the bus were all on the right sidethe right end of the bumper and the right portion of the radiator
grill were bent and dented. Hence, they insist that it was the victim who was negligent.
We disagree. Petitioners are raising a question of fact based on Pestaos testimony contradicting that
of Eyewitness Ignacio Neis and on the location of the dents on the bumper and the grill. Neis testified
that as the two vehicles approached the junction, the victim raised his left arm to signal that he was
turning left to Tabagon, but that the latter and his companion were thrown off the motorcycle after it
was bumped by the overspeeding bus.
These contentions have already been passed upon by the trial and the appellate courts. We find no
cogent reason to reverse or modify their factual findings. The CA agreed with the trial court that the
vehicular collision was caused by Pestaos negligence when he attempted to overtake the motorcycle.
As a professional driver operating a public transport bus, he should have anticipated that overtaking at
a junction was a perilous maneuver and should thus have exercised extreme caution.
Factual findings of the CA affirming those of the trial court are conclusive and binding on this Court.
Petitioners failed to demonstrate that this case falls under any of the recognized exceptions to this rule.
Indeed, the issue of negligence is basically factual and, in quasi-delicts, crucial in the award of damages.
Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer and in
implying that the accident could have been avoided had this instrument been properly functioning.
This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code, owners and
managers are responsible for damages caused by their employees. When an injury is caused by the
negligence of a servant or an employee, the master or employer is presumed to be negligent either in
the selection or in the supervision of that employee. This presumption may be overcome only by
satisfactorily showing that the employer exercised the care and the diligence of a good father of a
family in the selection and the supervision of its employee.
The CA said that allowing Pestao to ply his route with a defective speedometer showed laxity on the
part of Metro Cebu in the operation of its business and in the supervision of its employees. Hie
negligence alluded to here is in its supervision over its driver, not in that which directly caused the
accident. The fact that Pestao was able to use a bus with a faulty speedometer shows that Metro Cebu
was remiss in the supervision of its employees and in the proper care of its vehicles. It had thus failed
to conduct its business with the diligence required by law.
Second Issue: Life Indemnity
Petitioners aver that the CA erred in increasing the award for life indemnity from P30,000 to P50,000,
without specifying any aggravating circumstance to justify the increment as provided in the Civil Code.
This contention is untenable. The indemnity for death caused by a quasi-delict used to be pegged at
P3,000, based on Article 2206 of the Civil Code. However, the amount has been gradually increased
through the years because of the declining value of our currency. At present, prevailing jurisprudence
fixes the amount at P50,000.
Third Issue: Loss of Earning Capacity
Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, which held:
The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no
fixed basis, x x x The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an
important factor, x x x.
They contend that the CA used the wrong basis for its computation of earning capacity.
We disagree. The Court has consistently computed the loss of earning capacity based on the life
expectancy of the deceased, and not on that of the heir. Even Villa Rey Transit did likewise.
The award for loss of earning capacity is based on two factors: (1) the number of years on which the
computation of damages is based and (2) the rate at which the loss sustained by the heirs is fixed. The
first factor refers to the life expectancy, which takes into consideration the nature of the victims work,
lifestyle, age and state of health prior to the accident. The second refers to the victims earning capacity
minus the necessary living expenses. Stated otherwise, the amount recoverable is that portion of the
earnings of the deceased which the beneficiary would have receivedthe net earnings of the deceased.
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Cost against
petitioners.
SO ORDERED.
Melo (Chairman), Vitug and Gonzaga-Reyes, JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.-While common carriers are required to observe extraordinary diligence and are presumed at
fault, no such presumption applies to private carriers. (Planters Products, Inc. vs. Court of Appeals, 226
SCRA 476 [19931)
The standard of extraordinary diligence is peculiar to common carriers. (Reyes vs. Sisters of Mercy
Hospital, 340 SCRA 760 [2000])
o0o
ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs. COURT OF APPEALS, LENY
TUMBOY, ARDEE TUMBOY AND JASMIN TUMBOY, respondents
G.R. No. 113003. October 17, 1997
Appeals; Evidence; Factual findings of the Court of Appeals are final and may not be reviewed on appeal
by the Supreme Court except when the lower court and the Court of Appeals arrived at diverse factual
findings.The Court did re-examine the facts and evidence in this case because of the inapplicability
of the established principle that the factual findings of the Court of Appeals are final and may not be
reviewed on appeal by this Court. This general principle is subject to exceptions such as the one present
in this case, namely, that the lower court and the Court of Appeals arrived at diverse factual findings.
However, upon such re-examination, we found no reason to overturn the findings and conclusions of
the Court of Appeals.
Common Carriers; When a passenger boards a common carrier, he takes the risks incidental to the
mode of travel he has takenafter all, a carrier is not an insurer of the safety of its passengers and is
not bound absolutely and at all events to carry them safely and without injury.As a rule, when a
passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken.
After all, a carrier is not an insurer of the safety of its passengers and is not bound absolutely and at
all events to carry them safely and without injury. However, when a passengers is injured or dies while
travelling, the law presumes that the common carrier is negligent. Thus, the Civil Code provides: Art.
1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed
in Articles 1733 and 1755.
Same; Fortuitous Events; Words and Phrases; Characteristics of a Fortuitous Event.In view of the
foregoing, petitioners contention that they should be exempt from liability because the tire blowout
was no more than a fortuitous event that could not have been foreseen, must fail. A fortuitous event
is possessed of the following characteristics: (a) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with his obligations, must be independent of human
will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free from any
participation in the aggravation of the injury resulting to the creditor. As Article 1174 provides, no
person shall be responsible for a fortuitous event which could not be foreseen, or which, though
Same; Same; Under the circumstances of the present case, the explosion of the new tire may not be
considered a fortuitous event.Under the circumstances of this case, the explosion of the new tire may
not be considered a fortuitous event. There are human factors involved in the situation. The fact that
the tire was new did not imply that it was entirely free from manufacturing defects or that it was
properly mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is
of a brand name noted for quality, resulting in the conclusion that it could not explode within five days
use. Be that as it may, it is settled that an accident caused either by defects in the automobile or
through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability
for damages.
Same; Same; A common carrier may not be absolved from liability in case of force majeure or fortuitous
event alonethe common carrier must still prove that it was not negligent in causing the death or
injury resulting from an accident.Moreover, a common carrier may not be absolved from liability in
case of force majeure or fortuitous event alone. The common carrier must still prove that it was not
negligent in causing the death or injury resulting from an accident. This Court has had occasion to
state: While it may be true that the tire that blew-up was still good because the grooves of the tire
were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence
was presented to show that the accident was due to adverse road conditions or that precautions were
taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden
blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled
by the fact that the jeepney was overloaded and speeding at the time of the accident.
Same; Same; Damages; Where a common carrier failed to exercise the extraordinary diligence required
of it, which resulted in the death of a passenger, it is deemed to have acted recklessly, and the heirs
of the passenger shall be entitled to exemplary damages.Moral damages are generally not
recoverable in culpa contractual except when bad faith had been proven. However, the same damages
may be recovered when breach of contract of carriage results in the death of a passenger, as in this
case. Exemplary damages, awarded by way of example or correction for the public good when moral
damages are awarded, may likewise be recovered in contractual obligations if the defendant acted in
wanton, fraudulent, reckless, oppressive, or malevolent manner. Because petitioners failed to exercise
the extraordinary diligence required of a common carrier, which resulted in the death of Tito Tumboy,
it is deemed to have acted recklessly. As such, private respondents shall be entitled to exemplary
damages.
The facts are stated in the opinion on the Court.
Silvanio T. Liza for petitioners.
Gershon A. Patalinghug, Jr. for private respondents.
ROMERO, J.:
In this petition for review on certiorari of the decision of the Court of Appeals, the issue is whether or
not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that exempts the
carrier from liability for the death of a passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin,
boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in
Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded. The bus fell into a ravine
around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-
old Tito Tumboy and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage, damages and attorneys fees
was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido,
its driver, before the Regional Trial Court of Davao City. When the defendants therein filed their answer
to the complaint, they raised the affirmative defense of caso fortuito. They also filed a third-party
complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed an
answer with compulsory counterclaim. At the pre-trial conference, the parties agreed to a stipulation
of facts.
Upon a finding that the third party defendant was not liable under the insurance contract, the lower
court dismissed the third party complaint. No amicable settlement having been arrived at by the parties,
trial on the merits ensued.
The plaintiffs asserted that violation of the contract of carriage between them and the defendants was
brought about by the drivers failure to exercise the diligence required of the carrier in transporting
passengers safely to their place of destination. According to Leny Tumboy, the bus left Mangagoy at
3:00 oclock in the afternoon. The winding road it traversed was not cemented and was wet due to the
rain; it was rough with crushed rocks. The bus which was full of passengers had cargoes on top. Since
it was running fast, she cautioned the driver to slow down but he merely stared at her through the
mirror. At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell into
a ravine.
For their part, the defendants tried to establish that the accident was due to a fortuitous event. Abundio
Salce, who was the bus conductor when the incident happened, testified that the 42-seater bus was
not full as there were only 32 passengers, such that he himself managed to get a seat. He added that
the bus was running at a speed of 60 to 50 and that it was going slow because of the zigzag road.
He affirmed that the left front tire that exploded was a brand new tire that he mounted on the bus
on April 21, 1988 or only five (5) days before the incident. The Yobido Liner secretary, Minerva
Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988 and she was present
when it was mounted on the bus by Salce. She stated that all driver applicants in Yobido Liner
underwent actual driving tests before they were employed. Defendant Cresencio Yobido underwent
such test and submitted his professional drivers license and clearances from the barangay, the fiscal
and the police.
On August 29, 1991, the lower court rendered a decision dismissing the action for lack of merit. On the
issue of whether or not the tire blowout was a caso fortuito, it found that the falling of the bus to the
cliff was a result of no other outside factor than the tire blow-out. It held that the ruling in the La
Mallorca and Pampanga Bus Co. v. De Jesus that a tire blowout is a mechanical defect of the
conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected to
a more thorough or rigid check-up before it took to the road that morning is inapplicable to this case.
It reasoned out that in said case, it was found that the blowout was caused by the established fact that
the inner tube of the left front tire was pressed between the inner circle of the left wheel and the rim
which had slipped out of the wheel. In this case, however, the cause of the explosion remains a
mystery until at present. As such, the court added, the tire blowout was a caso fortuito which is
completely an extraordinary circumstance independent of the will of the defendants who should be
relieved of whatever liability the plaintiffs may have suffered by reason of the explosion pursuant to
Article 1174, of the Civil Code.
Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the lower court the
following errors: (a) finding that the tire blowout was a caso fortuito; (b) failing to hold that the
defendants did not exercise utmost and/or extraordinary diligence required of carriers under Article
1755 of the Civil Code, and (c) deciding the case contrary to the ruling in Juntilla v. Fontanar, and
Necesito v. Paras.
On August 23, 1993, the Court of Appeals rendered the Decision reversing that of the lower court. It
held that:
To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the blow-out, if
due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event. On
the other hand, there may have been adverse conditions on the road that were unforeseeable and/or
inevitable, which could make the blow-out a caso fortuito. The fact that the cause of the blow-out was
not known does not relieve the carrier of liability. Owing to the statutory presumption of negligence
against the carrier and its obligation to exercise the utmost diligence of very cautious persons to carry
the passenger safely as far as human care and foresight can provide, it is the burden of the defendants
to prove that the cause of the blow-out was a fortuitous event. It is not incumbent upon the plaintiff
to prove that the cause of the blow-out is not casofortuito.
Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants
burden. As enunciated in Necesito vs. Paras, the passenger has neither choice nor control over the
carrier in the selection and use of its equipment, and the good repute of the manufacturer will not
necessarily relieve the carrier from liability.
Moreover, there is evidence that the bus was moving fast, and the road was wet and rough. The driver
could have explained that the blow-out that precipitated the accident that caused the death of Toto
Tumboy could not have been prevented even if he had exercised due care to avoid the same, but he
was not presented as witness.
The Court of Appeals thus disposed of the appeal as follows:

WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering
defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in moral
damages, and P7,000.00 for funeral and burial expenses.
SO ORDERED.
The defendants filed a motion for reconsideration of said decision which was denied on November 4,
1993 by the Court of Appeals. Hence, the instant petition asserting the position that the tire blowout
that caused the death of Tito Tumboy was a caso fortuito. Petitioners claim further that the Court of
Appeals, in ruling contrary to that of the lower court, misapprehended facts and, therefore, its findings
of fact cannot be considered final which shall bind this Court. Hence, they pray that this Court review
the facts of the case.
The Court did re-examine the facts and evidence in this case because of the inapplicability of the
established principle that the factual findings of the Court of Appeals are final and may not be reviewed
on appeal by this Court. This general principle is subject to exceptions such as the one present in this
case, namely, that the lower court and the Court of Appeals arrived at diverse factual findings. However,
upon such re-examination, we found no reason to overturn the findings and conclusions of the Court
of Appeals.
As a rule, when a passenger boards a common carrier, he takes the risks incidental to the mode of
travel he has taken. After all, a carrier is not an insurer of the safety of its passengers and is not bound
absolutely and at all events to carry them safely and without injury. However, when a passenger is
injured or dies while travelling, the law presumes that the common carrier is negligent. Thus, the Civil
Code provides:
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in Articles 1733 and 1755.
Article 1755 provides that (a) common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard
for all the circumstances. Accordingly, in culpa contractual, once a passenger dies or is injured, the
carrier is presumed to have been at fault or to have acted negligently. This disputable presumption
may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed
by Articles 1733, 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due
to a fortuitous event.11 Consequently, the court need not make an express finding of fault or negligence
on the part of the carrier to hold it responsible for damages sought by the passenger.
In view of the foregoing, petitioners contention that they should be exempt from liability because the
tire blowout was no more than a fortuitous event that could not have been foreseen, must fail. A
fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent
of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if
it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor. As Article 1174 provides,
no person shall be responsible for a fortuitous event which could not be foreseen, or which, though
Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous
event. There are human factors involved in the situation. The fact that the tire was new did not imply
that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle.
Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality,
resulting in the conclusion that it could not explode within five days use. Be that as it may, it is settled
that an accident caused either by defects in the automobile or through the negligence of its driver is
not a caso fortuito that would exempt the carrier from liability for damages.
Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous
event alone. The common carrier must still prove that it was not negligent in causing the death or injury
resulting from an accident. This Court has had occasion to state:
While it may be true that the tire that blew-up was still good because the grooves of the tire were still
visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence was
presented to show that the accident was due to adverse road conditions or that precautions were taken
by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden blowing-
up, therefore, could have been caused by too much air pressure injected into the tire coupled by the
fact that the jeepney was overloaded and speeding at the time of the accident.
It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was
running at 60-50 kilometers per hour only or within the prescribed lawful speed limit. However, they
failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the
driver to slow down. These contradictory facts must, therefore, be resolved in favor of liability in view
of the presumption of negligence of the carrier in the law. Coupled with this is the established condition
of the road-rough, winding and wet due to the rain. It was incumbent upon the defense to establish
that it took precautionary measures considering partially dangerous condition of the road. As stated
above, proof that the tire was new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier, such
as conducting daily routinary checkups of the vehicles parts. As the late Justice J.B.L. Reyes said:
It may be impracticable, as appellee argues, to require of carriers to test the strength of each and
every part of its vehicles before each trip; but we are of the opinion that a due regard for the carriers
and strength of those vehicle portions the failure of which may endanger the safety of the passen-
gers.
Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing
evidence, petitioners are hereby held liable for damages. Article 1764 in relation to Article 2206 of the
Civil Code prescribes the amount of at least three thousand pesos as damages for the death of a
passenger. Under prevailing jurisprudence, the award of damages under Article 2206 has been
increased to fifty thousand pesos (P50,000.00).
Moral damages are generally not recoverable in culpa contractual except when bad faith had been
proven. However, the same damages may be recovered when breach of contract of carriage results in
the death of a passenger,22 as in this case. Exemplary damages, awarded by way of example or
correction for the public good when moral damages are awarded, may likewise be recovered in
contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent
manner.24 Because petitioners failed to exercise the extraordinary diligence required of a common
carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly.25 As such,
private respondents shall be entitled to exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the modification that
petitioners shall, in addition to the monetary awards therein, be liable for the award of exemplary
damages in the amount of P20,000.00. Costs against petitioners.
SO ORDERED.
Narvasa (C.J., Chairman), Melo, Francisco and Panganiban, JJ., concur.

Notes.In a contract of affreightment a common carrier is not converted into a private carrier but
remains as a common carrier and still liable as such. (Coastwise Lighterage Corporation vs. Court of
Appeals, 245 SCRA 796 [1995])
On no other employer is a greater duty imposed of minimizing absences among crew members than
on common carriers. (Michael, Inc. vs. National Labor Relations Commission, 256 SCRA 461 [1996])
o0o
SPOUSES MARCELO LANDINGIN and RACQUEL BOCASAS, plaintiffs-appellees, vs.
PANGASINAN TRANSPORTATION Co. and MARCELO OLIGAN, defendants-appellants
SPOUSES PEDRO GARCIA and EUFRACIA LANDINGIN, plaintiffs-appellees, vs.

PANGASINAN TRANSPORTATION Co. and MARCELO OLIGAN, defendants-appellants
Nos. L-28014-15. May 29, 1970
Transportation; Common carrier; Duty of common carriers.A common carrier is duty bound to carry
its passengers "safely as far as human care and foresight can provide, using the utmost diligence of
very cautious .persons, with a due regard for all the circumstances/' (Article 1755, Civil Code.)
Same; Same; Same; Accident caused by defects of motor vehicle.ln Lasam vs. Smith, 45 Phil. 660,
this Supreme Court held that an accident caused by defects in the automobile is not a caso fortuito.
The rationale of the carrier's liability is the fact that "the passenger has neither the choice nor control
over the carrier in the selection and use of the equipment and appliances in use by the carrier.
Same; Same; Presumption of negligence of common carrier; How rebutted.When a passenger dies
or is injured, the presumption is that the common carrier is at fault or that it acted negligently, This
presumption is only rebutted by proof on the carrier's part that it observed the "extraordinary diligence"
required in Article 1733 and the "utmost diligence of very cautious persons" required in Article 1755,
DIRECT APPEAL from a judgment of the Court of First Instance of Pangasinan. Domingo, J.
Gabriel A. Zabala for plaintiffs-appellees.
Vicente M. Erfe Law Office for defendants-appellants.
VlLLAMOR, J.:
Direct appeal on a question of law from the portion of the judgment of the Court of First Instance of
Manila ordering the defendants Pangasinan Transportation Co. (PANTRANCO) and Marcelo Oligan to
pay the plaintiffs in Civil Case No. D-1468 (L-28014) the sum of P6,500.00, and the plaintiffs in Civil
Case No. 1470 (L-28015) the sum of P3,500.00.
The complaints in said Civil Cases Nos, D-1468 and D1470 were filed by the spouses Marcelo Landingin
and and Racquel Bocasas, and the spouses Pedro Garcia and Eufracia Landingin, respectively, for
damages allegedly suffered by them in connection with the death of their respective daughter, Leonila
Landingin and Estrella Garcia, due to the alleged negligence of the defendants and/ or breach of
contract of carriage. In their complaints, plaintiffs averred, among others, that in the morning of April
20, 1963, their above-mentioned daughters were among the passengers in the bus driven by defendant
Marcelo Oligan and owned and operated by defendant PANTRANCO on an excursion trip from Dagupan
City to Baguio City and back, that the bus was open on one side and enclosed on the other, in gross
violation of the rules of the Public Service Commission: that defendant PANTRANCO acted with
negligence, fraud and bad faith in pretending to have previously secured a special permit for the trip
when in truth it had not done so; that upon reaching an uphill point at Camp 8, Kennon Road, Baguio
City, on the onward trip, defendant driver, through utter lack of foresight, experience and driving
knowledge, caused the bus to stall and stop for a few moments; that through the said defendant's fault
and mishandling, the motor ceased to function, causing the bus to slide back unchecked; that when
the said defendant suddenly swerved and steered the bus toward the mountainside, Leonila and
Estrella, together with several other passengers, were thrown out of the bus through its open side unto
the road, suffering serious injuries as a result of which Leonila and Estrella died at the hospital on the
same day; and that in connection with the incident, defendant driver had been charged with and
convicted of multiple homicide and multiple slight physical injuries on account of the 'death of Leonila
and Estrella and of the injuries suffered by four others, although it may be said, by way of parenthesis,
that this case is now pending appeal in a higher court The plaintiffs prayed for awards of moral, actual
and exemplary damages in the total sum of P40,000.00 in Civil Case No. D-1468, and in the total sum
of P25,000.00 in Civil Case No. D-1470 as well as attorney's fees in the amounts of P5,000.00 and
P4,000.00, respectively.
Defendants filed a joint answer to each of the two complaints alleging, among others, that at the time
of the accident, defendant driver was driving the bus at the slow speed of about 10 kilometers per
hour; that while the said defendant was steering his bus toward the mountainside after hearing a sound
coming from under the rear end of the bus, Leonila and Estrella recklessly, and in disobedience to his
shouted warnings and advice, jumped out of the bus causing their heads to hit the road or pavement;
that the bus was then being driven with extraordinary care, prudence. and diligence; that defendant
PANTRANCO observed the care and diligence of a good father of a family to prevent the accident as
well as in the selection and supervision of its employees, particularly of defendant driver; and that the
decision convicting the said defendant was not yet final, the same having been appealed to the Court
of Appeals where it was still pending.
By agreement of the parties, the two cases were tried jointly. On October 17, 1966, the court a quo
rendered its decision therein in which it made the following findings; that upon reaching the fatal spot
at Camp 8, a sudden snapping or breaking of metal below the floor of the bus was heard, and the bus
abruptly stopped, rolling back a few moments later; that as a result, some of the passengers jumped
out of the bus, while others stepped down; that defendant driver maneuvered the bus safely to and
against the side of the mountain where its rear end was made to rest, ensuring the safety of the many
passengers still inside the bus; that while defendant driver was steering the bus towards the
mountainside, he advised the passengers not to jump, but to remain seated; that Leonila and Estrella
were not thrown out of the bus, but that they panicked and jumped out; that the malfunctioning of the
motor resulted from the breakage of the crossjoint; that there was no negligence on the part of either
of the defendants; that only the day before, the said crossjoint was duly inspected and found to be in
order; and that defendant PANTRANCO had exercised the requisite care in the selection and supervision
of its employees, including the defendant driver. The court concluded that "the accident was caused by
a fortuitous. event or an act of God 'brought about by some extra-ordinary circumstances independent
of the will of the Pantranco or its employees."
One would wonder why in the face of such factual findings and conclusion of the trial court, the
defendants, instead of the plaintiffs, should come to this Court on appeal. The answer lies in the
dispositive portion of the decision, to wit;
"IN VIEW OF THE FOREGOING CONSIDERATIONS. the Court hereby .renders judgment: (a) Absolving
the defendants from any liability on account of negligence on their part and therefore . dismissing the
complaints in these two cases: (b) However, as stated above, the Court hereby orders the defendant
Pantranco to pay to the plaintiffs spouses Marcelo Landingin and Racquel Bocasas in Civil Case No. D-
1468 the amount of P6,500.00; and the amount of P3,500.00 to the spouses Pedro Garcia and Eufracia
Landingin in Civil Case No. D-1470. not in payment of liability because of any negligence on the part of
the defendants but as an expression of sympathy and goodwill" (Italics supplied.)
As to what impelled the court below to include item (b) in the dispositive portion of its decision, can be
gathered from the penultimate paragraph of the decision, which reads:
"However, there is evidence to the effect that an offer of P8,500.00 in the instant cases without any
admission of fault or negligence had been made by the defendant Pantranco and that actually in Civil
Case No. D-1469 for the death of Pacita Descalso, the other deceased passenger of the bus in question,
the heirs of the deceased received P3,000.00 in addition to hospital and medical bills and the coffin of
the deceased for the dismissal of the said case without Pantranco accepting liability. There was as a
matter of fact during the pre-trial of these two cases a continuing offer of settlement on the part of the
defendant Pantranco without accepting any liability for such damages, -and the Court understood that
the Pantranco would be willing still to pay said amounts even if these cases were to be tried on the
merits. It is well-known that the defendant Pantranco is zealous in the preservation of its public
relations. In the spirit therefore of the offer of the defendant Pantranco aforesaid, to assuage the
feelings of the herein plaintiffs an award of P6,500.00 for the spouses Marcelo Landingin and Racquel
Bocasas in Civil Case No. D-1468 whose daughter Leonila was, when she died, a third-year Commerce
student at the Far Eastern University, and P3,500.00 for the spouses Pedro Garcia and Eufracia
Landingin in Civil Case No. D-1470 whose daughter Estrella was in the fourth year High at the Dagupan
Colleges when she died, is hereby made in their favor. This award is in addition to what Pantranco
might have spent to help the parents of both deceased after the accident"
Defendants-appellants complain that having found them to be absolutely free from fault or negligence,
and having in fact dismissed the complaints against them. the court should not have ordered them to
assume any pecuniary liability. There would be merit in his argument but for the fact that defendant-
appellant PANTRANCO was guilty of breach of contract of carriage, It will be noted that in each of the
two complaints it is averred that two buses, including the one in which the two deceased girls were
riding, were hired to transport the excursionist passengers from Dagupan City to Baguio City, and
return, and that the said two passengers did not reach destination safely.
As a common carrier, defendant-appellant PANTRANCO was duty bound to carry its passengers "safely
with a due regard for all the circumstances." (Article 1755, Civil Code.) Did defendant-appellant
PANTRANCO measure up to the degree of care and foresight required it under the circumstances? We
think not. The court below found that the cross-joint of the bus in which the deceased were riding
broke, which caused the malfunctioning of the motor, which in turn resulted in panic among some of
the passengers. This is a finding of fact which this Court may not disturb. We are of the opinion,
however, that the lower court's conclusion drawn from that fact, i.e., that "the accident was caused by
a fortuitous event or an act of God brought about by some extraordinary circumstances independent
of the will of the Pantranco or its employees," is in large measure conjectural and speculative, and was
arrived at without due regard to all the circumstances, as required by Article 1755. In Lasam vs, Smith
(45 Phil. 660), this Court held that an accident caused by defects in the automobile is not a caso fortuito.
The rationale of the carrier's liability is the fact that "the passenger has neither the choice nor control
over the carrier in the selection and use of the equipment and appliances in use by the carrier."
(Necesito, et al. vs. Paras, at al., 104 Phil. 75.)
When a passenger dies or is injured, the presumption is that the common carrier is at fault or that it
acted negligently (Article 1756). This presumption is only rebutted by proof on the carrier's part that it
observed the "extraordinary diligence" required in Article 1733 and the "utmost diligence of very
cautious persons" required in Article 1755 (Article 1756). In the instant case it appears that the court
below considered the presumption rebutted on the strength of defendants-appellants' evidence that
only the day before the incident, the cross-joint in question was duly inspected and found to be in
order. It does not appear, however, that the carrier gave due regard for all the circumstances in
connection with the said inspection. The bus in which the deceased were riding was heavily laden with
passengers, and it would be traversing mountainous,. circuitous and ascending roads. Thus the entire
bus, including its mechanical parts, would naturally be taxed more heavily than it would be under
ordinary circumstances. The mere fact that the bus was inspected only recently and found to be in
order would not exempt the carrier from liability unless it is shown that the particular circumstances
under which the bus would travel were also considered.
In the premises, it was error for the trial court to dismiss the complaints. The awards made by the court
should be considered in the concept of damages for breach of contracts of carriage.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from is modified as indicated
above, and defendant-appellant PANTRANCO is ordered to pay to plaintiffs-appellees the amounts
stated in the judgment appealed from, as damages for breach of contracts, with interest thereon at the
legal rate from the date of the filing of the complaints. Costs against against defendant-appellant
PANTRANCO.
Concepcion, CJ., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee and Barredo, JJ.,
concur.
Castro, J., is on official leave.
Notes.(a) Basis of carrier's liability for injury or death.Under the new Civil Code, the liability of a
carrier with respect to passengers transported is contractual and arises upon breach of its obligation to
carry them "safely as far as human care and foresight can provide." There is breach of this obligation
if it fails to exert extraordinary diligence according to all the circumstances of the case in exercise of
the utmost diligence of a very cautious person (Isaac vs. Ammen Transportation Co., L-9671, Aug. 23,
1957), The liability arising from such breach is not dependent upon establishing negligence or "culpa
aquiliana", in the ordinary sense, against the carrier, nor is it in any way tied to conviction of the carrier
or one of Its employees of a criminal offense in connection with the occurrence. It is an entirely distinct
type or theory of liability, enforcement of which may proceed regardless of pending criminal
prosecutions (Parker vs. Panlilio, L-4961, March 5, 1952; San Pedro Bus Line vs. Navarro, L-6291; Son
vs. Cebu Autobus Co., L-6155, April 30, 1954; Medina vs. Crescencia, L-8194, July 11, 1956; Dionisio
vs. Alvendia, L-10567, Nov. 26, 1957).
(b) Fortuitous event.For examples of caso fortuito, see Rakes vs. Atlantic, Gulf & Pacific Co., 7 Phil.
359; Crame Sy Panco vs. Gonzaga, 10 Phil. 646; Roman Catholic Bishop of Jaro vs. De La Pea, 26 Phil.
144; Novo & Co. vs. Ainsworth, 26 Phil. 433; University of Santo Tomas vs. Descals, 38 Phil. 267;
Lizares vs. Hernaez, 40 Phil. 981.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-10605 June 30, 1958
PRECILLANO NECESITO, ETC., plaintiff-appellant,

vs.
NATIVIDAD PARAS, ET AL., defendants-appellees.
x---------------------------------------------------------x
G.R. No. L-10606 June 30, 1958
GERMAN NECESITO, ET AL., plaintiffs-appellants,

vs.
NATIVIDAD PARAS, ET AL., defendants-appellees.
REYES, J. B. L., J.:
These cases involve ex contractu against the owners and operators of the common carrier known as
Philippine Rabbit Bus Lines, filed by one passenger, and the heirs of another, who injured as a result
of the fall into a river of the vehicle in which they were riding.
In the morning of January 28, 1964, Severina Garces and her one-year old son, Precillano Necesito,
carrying vegetables, boarded passenger auto truck or bus No. 199 of the Philippine Rabbit Bus Lines at
Agno, Pangasinan. The passenger truck, driven by Francisco Bandonell, then proceeded on its regular
run from Agno to Manila. After passing Mangatarem, Pangasinan truck No. 199 entered a wooden
bridge, but the front wheels swerved to the right; the driver lost control, and after wrecking the bridge's
wooden rails, the truck fell on its right side into a creek where water was breast deep. The mother,
Severina Garces, was drowned; the son, Precillano Necesito, was injured, suffering abrasions and
fracture of the left femur. He was brought to the Provincial Hospital at Dagupan, where the fracture
was set but with fragments one centimeter out of line. The money, wrist watch and cargo of vegetables
were lost.
Two actions for damages and attorney's fees totalling over P85,000 having been filed in the Court of
First Instance of Tarlac (Cases Nos. 908 and 909) against the carrier, the latter pleaded that the accident
was due to "engine or mechanical trouble" independent or beyond the control of the defendants or of
the driver Bandonell.
After joint trial, the Court of First Instance found that the bus was proceeding slowly due to the bad
condition of the road; that the accident was caused by the fracture of the right steering knuckle, which
was defective in that its center or core was not compact but "bubbled and cellulous", a condition that
could not be known or ascertained by the carrier despite the fact that regular thirty-day inspections
were made of the steering knuckle, since the steel exterior was smooth and shiny to the depth of 3/16
of an inch all around; that the knuckles are designed and manufactured for heavy duty and may last
up to ten years; that the knuckle of bus No. 199 that broke on January 28, 1954, was last inspected
on January 5, 1954, and was due to be inspected again on February 5th. Hence, the trial court, holding
that the accident was exclusively due to fortuitous event, dismissed both actions. Plaintiffs appealed
directly to this Court in view of the amount in controversy.
We are inclined to agree with the trial court that it is not likely that bus No. 199 of the Philippine Rabbit
Lines was driven over the deeply rutted road leading to the bridge at a speed of 50 miles per hour, as
testified for the plaintiffs. Such conduct on the part of the driver would have provoked instant and
vehement protest on the part of the passengers because of the attendant discomfort, and there is no
trace of any such complaint in the records. We are thus forced to assume that the proximate cause of
the accident was the reduced strength of the steering knuckle of the vehicle caused by defects in
casting it. While appellants hint that the broken knuckle exhibited in court was not the real fitting
attached to the truck at the time of the accident, the records they registered no objection on that
ground at the trial below. The issue is thus reduced to the question whether or not the carrier is liable
for the manufacturing defect of the steering knuckle, and whether the evidence discloses that in regard
thereto the carrier exercised the diligence required by law (Art. 1755, new Civil Code).
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with a due regard for the all the
circumstances.
It is clear that the carrier is not an insurer of the passengers' safety. His liability rests upon negligence,
his failure to exercise the "utmost" degree of diligence that the law requires, and by Art. 1756, in case
of a passenger's death or injury the carrier bears the burden of satisfying the court that he has duly
discharged the duty of prudence required. In the American law, where the carrier is held to the same
degree of diligence as under the new Civil Code, the rule on the liability of carriers for defects of
equipment is thus expressed: "The preponderance of authority is in favor of the doctrine that a
passenger is entitled to recover damages from a carrier for an injury resulting from a defect in an
appliance purchased from a manufacturer, whenever it appears that the defect would have been
discovered by the carrier if it had exercised the degree of care which under the circumstances was
incumbent upon it, with regard to inspection and application of the necessary tests. For the purposes
of this doctrine, the manufacturer is considered as being in law the agent or servant of the carrier, as
far as regards the work of constructing the appliance. According to this theory, the good repute of the
manufacturer will not relieve the carrier from liability" (10 Am. Jur. 205, s, 1324; see also Pennsylvania
R. Co. vs. Roy, 102 U. S. 451; 20 L. Ed. 141; Southern R. Co. vs. Hussey, 74 ALR 1172; 42 Fed. 2d 70;
and Ed Note, 29 ALR 788; Ann. Cas. 1916E 929).
The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over
the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no
privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no
remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not
in insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his
equipment if such flaws were at all discoverable. Thus Hannen, J., in Francis vs. Cockrell, LR 5 Q. B.
184, said:
In the ordinary course of things, the passenger does not know whether the carrier has himself
manufactured the means of carriage, or contracted with someone else for its manufacture. If the carrier
has contracted with someone else the passenger does not usually know who that person is, and in no
case has he any share in the selection. The liability of the manufacturer must depend on the terms of
the contract between him and the carrier, of which the passenger has no knowledge, and over which
he can have no control, while the carrier can introduce what stipulations and take what securities he
may think proper. For injury resulting to the carrier himself by the manufacturer's want of care, the
carrier has a remedy against the manufacturer; but the passenger has no remedy against the
manufacturer for damage arising from a mere breach of contract with the carrier . . . . Unless, therefore,
the presumed intention of the parties be that the passenger should, in the event of his being injured
by the breach of the manufacturer's contract, of which he has no knowledge, be without remedy, the
only way in which effect can be given to a different intention is by supposing that the carrier is to be
responsible to the passenger, and to look for his indemnity to the person whom he selected and whose
breach of contract has caused the mischief. (29 ALR 789)
And in the leading case of Morgan vs. Chesapeake & O. R. Co. 15 LRA (NS) 790, 16 Ann. Cas. 608, the
Court, in holding the carrier responsible for damages caused by the fracture of a car axle, due to a
"sand hole" in the course of moulding the axle, made the following observations.
The carrier, in consideration of certain well-known and highly valuable rights granted to it by the public,
undertakes certain duties toward the public, among them being to provide itself with suitable and safe
cars and vehicles in which carry the traveling public. There is no such duty on the manufacturer of the
cars. There is no reciprocal legal relation between him and the public in this respect. When the carrier
elects to have another build its cars, it ought not to be absolved by that facts from its duty to the public
to furnish safe cars. The carrier cannot lessen its responsibility by shifting its undertaking to another's
shoulders. Its duty to furnish safe cars is side by side with its duty to furnish safe track, and to operate
them in a safe manner. None of its duties in these respects can be sublet so as to relieve it from the
full measure primarily exacted of it by law. The carrier selects the manufacturer of its cars, if it does
not itself construct them, precisely as it does those who grade its road, and lay its tracks, and operate
its trains. That it does not exercise control over the former is because it elects to place that matter in
the hands of the manufacturer, instead of retaining the supervising control itself. The manufacturer
should be deemed the agent of the carrier as respects its duty to select the material out of which its
cars and locomotive are built, as well as in inspecting each step of their construction. If there be tests
known to the crafts of car builders, or iron moulders, by which such defects might be discovered before
the part was incorporated into the car, then the failure of the manufacturer to make the test will be
deemed a failure by the carrier to make it. This is not a vicarious responsibility. It extends, as the
necessity of this business demands, the rule of respondeat superior to a situation which falls clearly
within its scope and spirit. Where an injury is inflicted upon a passenger by the breaking or wrecking
of a part of the train on which he is riding, it is presumably the result of negligence at some point by
the carrier. As stated by Judge Story, in Story on Bailments, sec. 601a: "When the injury or damage
happens to the passenger by the breaking down or overturning of the coach, or by any other accident
occurring on the ground, the presumption prima facie is that it occurred by the negligence of the
coachmen, and onus probandi is on the proprietors of the coach to establish that there has been no
negligence whatever, and that the damage or injury has been occasioned by inevitable casualty, or by
some cause which human care and foresight could not prevent; for the law will, in tenderness to human
life and limb, hold the proprietors liable for the slightest negligence, and will compel them to repel by
satisfactory proofs every imputation thereof." When the passenger has proved his injury as the result
of a breakage in the car or the wrecking of the train on which he was being carried, whether the defect
was in the particular car in which he was riding or not, the burden is then cast upon the carrier to show
that it was due to a cause or causes which the exercise of the utmost human skill and foresight could
not prevent. And the carrier in this connection must show, if the accident was due to a latent defect in
the material or construction of the car, that not only could it not have discovered the defect by the
exercise of such care, but that the builders could not by the exercise of the same care have discovered
the defect or foreseen the result. This rule applies the same whether the defective car belonged to the
carrier or not.
In the case now before us, the record is to the effect that the only test applied to the steering knuckle
in question was a purely visual inspection every thirty days, to see if any cracks developed. It nowhere
appears that either the manufacturer or the carrier at any time tested the steering knuckle to ascertain
whether its strength was up to standard, or that it had no hidden flaws would impair that strength. And
yet the carrier must have been aware of the critical importance of the knuckle's resistance; that its
failure or breakage would result in loss of balance and steering control of the bus, with disastrous
effects upon the passengers. No argument is required to establish that a visual inspection could not
directly determine whether the resistance of this critically important part was not impaired. Nor has it
been shown that the weakening of the knuckle was impossible to detect by any known test; on the
contrary, there is testimony that it could be detected. We are satisfied that the periodical visual
inspection of the steering knuckle as practiced by the carrier's agents did not measure up to the required
legal standard of "utmost diligence of very cautious persons" "as far as human care and foresight
can provide", and therefore that the knuckle's failure can not be considered a fortuitous event that
exempts the carrier from responsibility (Lasam vs. Smith, 45 Phil. 657; Son vs. Cebu Autobus Co., 94
Phil., 892.)
It may be impracticable, as appellee argues, to require of carriers to test the strength of each and every
part of its vehicles before each trip; but we are of the opinion that a due regard for the carrier's
and strength of those vehicle portions the failure of which may endanger the safe of the passengers.
As to the damages suffered by the plaintiffs, we agree with appellee that no allowance may be made
for moral damages, since under Article 2220 of the new Civil Code, in case of suits for breach of
contract, moral damages are recoverable only where the defendant acted fraudulently or in bad faith,
and there is none in the case before us. As to exemplary damages, the carrier has not acted in a
"wanton, fraudulent, reckless, oppressive or malevolent manner" to warrant their award. Hence, we
believe that for the minor Precillano Necesito (G. R. No. L-10605), an indemnity of P5,000 would be
adequate for the abrasions and fracture of the femur, including medical and hospitalization expenses,
there being no evidence that there would be any permanent impairment of his faculties or bodily
functions, beyond the lack of anatomical symmetry. As for the death of Severina Garces (G. R. No. L-
10606) who was 33 years old, with seven minor children when she died, her heirs are obviously entitled
to indemnity not only for the incidental loses of property (cash, wrist watch and merchandise) worth
P394 that she carried at the time of the accident and for the burial expenses of P490, but also for the
loss of her earnings (shown to average P120 a month) and for the deprivation of her protection,
guidance and company. In our judgment, an award of P15,000 would be adequate (cf Alcantara vs.
Surro, 49 Off. Gaz. 2769; 93 Phil., 472).
The low income of the plaintiffs-appellants makes an award for attorney's fees just and equitable (Civil
Code, Art. 2208, par. 11). Considering that he two cases filed were tried jointly, a fee of P3,500 would
be reasonable.
In view of the foregoing, the decision appealed from is reversed, and the defendants-appellees are
sentenced to indemnify the plaintiffs-appellants in the following amounts: P5,000 to Precillano Necesito,
and P15,000 to the heirs of the deceased Severina Garces, plus P3,500 by way of attorney's fees and
litigation expenses. Costs against defendants-appellees. So ordered.
Paras, C. J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, and Endencia, JJ., concur.
Felix, J., concurs in the result.
RESOLUTION
September 11, 1958
REYES, J. B. L., J.:
Defendants-appellees have Submitted a motion asking this Court to reconsider its decision of June 30,
1958, and that the same be modified with respect to (1) its holding the carrier liable for the breakage
of the steering knuckle that caused the autobus No. 199 to overturn, whereby the passengers riding in
it were injured; (2) the damages awarded, that appellees argue to be excessive; and (3) the award of
attorneys' fees.
(1) The rule prevailing in this jurisdiction as established in previous decisions of this Court, cited in our
main opinion, is that a carrier is liable to its passengers for damages caused by mechanical defects of
the conveyance. As early as 1924, in Lasam vs. Smith, 45 Phil. 659 this Court ruled:
As far as the record shows, the accident was caused either by defects in the automobile or else through
the negligence of its driver. That is not caso fortuito.
And in Son vs. Cebu Autobus Company, 94 Phil., 892, this Court held a common carrier liable in
damages to passenger for injuries cause by an accident due to the breakage of a faulty drag-link spring.
It can be seen that while the courts of the United States are at variance on the question of a carrier's
liability for latent mechanical defects, the rule in this jurisdiction has been consistent in holding the
carrier responsible. This Court has quoted from American and English decisions, not because it felt
bound to follow the same, but merely in approval of the rationale of the rule as expressed therein, since
the previous Philippine cases did not enlarge on the ideas underlying the doctrine established thereby.
The new evidence sought to be introduced do not warrant the grant of a new trial, since the proposed
proof available when the original trial was held. Said evidence is not newly discovered.
(2) With regard to the indemnity awarded to the child Precilliano Necesito, the injuries suffered by him
are incapable of accurate pecuniary estimation, particularly because the full effect of the injury is not
ascertainable immediately. This uncertainty, however, does not preclude the right to an indemnity,
since the injury is patent and not denied (Civil Code, Art. 2224). The reasons behind this award are
expounded by the Code Commission in its report:
There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered,
although the court is convinced that there has been such loss. For instance, injury to one's commercial
credit or to the goodwill of a business firm is often hard to show with certainty in terms of money.
Should damages be denied for that reason? The judge should be empowered to calculate moderate
damages in such cases, rather than that the plaintiff should suffer, without redress, from the
defendant's wrongful act." (Report of the Code Commission, p. 75)
In awarding to the heirs of the deceased Severina Garces an indemnity for the loss of her "guidance,
protection and company," although it is but moral damage, the Court took into account that the case
of a passenger who dies in the course of an accident, due to the carrier's negligence constitutes an
exception to the general rule. While, as pointed out in the main decision, under Article 2220 of the new
Civil Code there can be no recovery of moral damages for a breach of contract in the absence of fraud
malice or bad faith, the case of a violation of the contract of carriage leading to a passenger's death
escapes this general rule, in view of Article 1764 in connection with Article 2206, No. 3 of the new Civil
Code.
ART. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII
of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by
the breach of contract by a comman carrier. ART. 2206. . . .
(3) The spouse, legitimate and eligimate descendants and ascendants of the deceased may demand
moral damages for mental anguish by reason of the death of the deceased.
Being a special rule limited to cases of fatal injuries, these articles prevail over the general rule of Art.
2220. Special provisions control general ones (Lichauco & Co. vs. Apostol, 44 Phil. 138; Sancio vs.
Lizarraga, 55 Phil. 601).
It thus appears that under the new Civil Code, in case of accident due to a carrier's negligence, the
heirs of a deceased passenger may recover moral damages, even though a passenger who is injured,
but manages to survive, is not entitled to them. There is, therefore, no conflict between our main
decision in the instant case and that of Cachero vs. Manila Yellow Taxi Cab Co., 101 Phil., 523, where
the passenger suffered injuries, but did not lose his life.
(3) In the Cachero case this Court disallowed attorneys' fees to the injured plaintiff because the litigation
arose out of his exaggerated and unreasonable deeds for an indemnity that was out of proportion with
the compensatory damages to which he was solely entitled. But in the present case, plaintiffs' original
claims can not be deemed a priori wholly unreasonable, since they had a right to indemnity for moral
damages besides compensatory ones, and moral damages are not determined by set and invariable
bounds.
Neither does the fact that the contract between the passengers and their counsel was on a contingent
basis affect the former's right to counsel fees. As pointed out for appellants, the Court's award is an
party and not to counsel. A litigant who improvidently stipulate higher counsel fees than those to which
he is lawfully entitled, does not for that reason earn the right to a larger indemnity; but, by parity of
reasoning, he should not be deprived of counsel fees if by law he is entitled to recover them.
We find no reason to alter the main decision heretofore rendered. Ultimately, the position taken by this
Court is that a common carrier's contract is not to be regarded as a game of chance wherein the
passenger stakes his limb and life against the carrier's property and profits.
Wherefore, the motion for reconsideration is hereby denied. So ordered.
o0o
ALFREDO MALLARI, SR. and ALFREDO MALLARI, JR., petitioners, vs. COURT OF APPEALS
and BULLETIN PUBLISHING CORPORATION, respondents
G.R. No. 128607. January 31, 2000
Civil Law; Negligence; Common Carriers; Rule is settled that a driver abandoning his proper lane for
the purpose of overtaking another vehicle in an ordinary situation has the duty to see to it that the road
is clear and not to proceed if he cannot do so in safety.The rule is settled that a driver abandoning
his proper lane for the purpose of overtaking another vehicle in an ordinary situation has the duty to
see to it that the road is clear and not to proceed if he cannot do so in safety. When a motor vehicle is
approaching or rounding a curve, there is special necessity for keeping to the right side of the road and
the driver does not have the right to drive on the left hand side relying upon having time to turn to the
right if a car approaching from the opposite direction comes into view.
Same; Same; Same; Under Article 2185 of the Civil Code, unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was
violating a traffic regulation.In the instant case, by his own admission, petitioner Mallari, Jr. already
saw that the BULLETIN delivery van was coming from the opposite direction and failing to consider the
speed thereof since it was still dark at 5:00 oclock in the morning mindlessly occupied the left lane and
overtook two (2) vehicles in front of it at a curve in the highway. Clearly, the proximate cause of the
collision resulting in the death of Israel Reyes, a passenger of the jeepney, was the sole negligence of
the driver of the passenger jeepney, petitioner Alfredo Mallari, Jr., who recklessly operated and drove
his jeepney in a lane where overtaking was not allowed by traffic rules. Under Art. 2185 of the Civil
Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap he was violating a traffic regulation. As found by the
appellate court, petitioners failed to present satisfactory evidence to overcome this legal presumption.
Same; Same; Same; Liability of the common carrier does not cease upon proof that it exercised all the
diligence of a good father of a family in the selection of its employees.The negligence and
recklessness of the driver of the passenger jeepney is binding against petitioner Mallari, Sr., who
admittedly was the owner of the passenger jeepney engaged as a common carrier, considering the fact
that in an action based on contract of carriage, the court need not make an express finding of fault or
negligence on the part of the carrier in order to hold it responsible for the payment of damages sought
by the passenger. Under Art. 1755 of the Civil Code, a common carrier is bound to carry the passengers
safely as far as human care and foresight can provide using the utmost diligence of very cautious
persons with due regard for all the circumstances. Moreover, under Art. 1756 of the Civil Code, in case
of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of
the same Code, it is liable for the death of or injuries to passengers through the negligence or willful
acts of the formers employees. This liability of the common carrier does not cease upon proof that it
exercised all the diligence of a good father of a family in the selection of its employees. Clearly, by the
contract of carriage, the carrier jeepney owned by Mallari, Sr. assumed the express obligation to
transport the passengers to their destination safely and to observe extraordinary diligence with due
regard for all the circumstances, and any injury or death that might be suffered by its passengers is
right away attributable to the fault or negligence of the carrier.
Public Attorneys Office for petitioners.
Siguion Reyna, Montecillo & Ongsiako, Estanislao L. Cesa, Jr. and Tanjuatco, Sta. Maria, Tanjuatco
for private respondent.
BELLOSILLO, J.:
ALFREDO MALLARI, SR. and ALFREDO MALLARI, JR. in this petition for review on certiorari seek to set
aside the Decision of the Court of Appeals which reversed the court a quo and adjudged petitioners to
be liable for damages due to negligence as a common carrier resulting in the death of a passenger.
On 14 October 1987, at about 5:00 oclock in the morning, the passenger jeepney driven by petitioner
Alfredo Mallari, Jr. and owned by his co-petitioner Alfredo Mallari, Sr. collided with the delivery van of
respondent Bulletin Publishing Corp. (BULLETIN, for brevity) along the National Highway in Barangay
San Pablo, Dinalupihan, Bataan. Petitioner Mallari, Jr. testified that he went to the left lane of the
highway and overtook a Fiera which had stopped on the right lane. Before he passed by the Fiera, he
saw the van of respondent BULLETIN coming from the opposite direction. It was driven by one Felix
Angeles. The sketch of the accident showed that the collision occurred after Mallari, Jr. overtook the
Fiera while negotiating a curve in the highway. The points of collision were the left rear portion of the
passenger jeepney and the left front side of the delivery van of BULLETIN. The two (2) right wheels of
the delivery van were on the right shoulder of the road and pieces of debris from the accident were
found scattered along the shoulder of the road up to a certain portion of the lane travelled by the
passenger jeepney. The impact caused the jeepney to turn around and fall on its left side resulting in
injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity of his
injuries.
On 16 December 1987 Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages
with the Regional Trial Court of Olongapo City against Alfredo Mallari, Sr. and Alfredo Mallari, Jr., and
also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance Company. The
complaint alleged that the collision which resulted in the death of Israel Reyes was caused by the fault
and negligence of both drivers of the passenger jeepney and the Bulletin Isuzu delivery van. The
complaint also prayed that the defendants be ordered jointly and severally to pay plaintiff
P1,006,777.40 in compensatory damages, P40,000.00 for hospital and medical expenses, P18,270.00
for burial expenses plus such amounts as may be fixed by the trial court for exemplary damages and
attorneys fees.
The trial court found that the proximate cause of the collision was the negligence of Felix Angeles,
driver of the Bulletin delivery van, considering the fact that the left front portion of the delivery truck
driven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven by Alfredo
Mallari, Jr. Hence, the trial court ordered BULLETIN and Felix Angeles to pay jointly and severally
Claudia G. Reyes, widow of the deceased victim, the sums of P42,106.93 for medical expenses;
P8,600.00 for funeral and burial expenses; P1,006,777.40 for loss of earning capacity; P50,000.00 for
moral damages and P10,000.00 for attorneys fees. The trial court also ordered N.V. Netherlands
Insurance Company to indemnify Claudia G. Reyes P12,000.00 as death indemnity and P2,500.00 for
funeral expenses which when paid should be deducted from the liabilities of respondent BULLETIN and
its driver Felix Angeles to the plaintiff. It also dismissed the complaint against the other defendants
Alfredo Mallari, Sr. and Alfredo Mallari, Jr.
On appeal the Court of Appeals modified the decision of the trial court and found no negligence on the
part of Angeles and consequently of his employer, respondent BULLETIN. Instead, the appellate court
ruled that the collision was caused by the sole negligence of petitioner Alfredo Mallari, Jr. who admitted
that immediately before the collision and after he rounded a curve on the highway, he overtook a Fiera
which had stopped on his lane and that he had seen the van driven by Angeles before overtaking the
Fiera. The Court of Appeals ordered petitioners Mallari, Jr. and Mallari, Sr. to compensate Claudia G.
Reyes P1,006,777.50 for loss of earning capacity, P50,000.00 as indemnity for death and P10,000.00
for attorneys fees. It absolved from any liability respondent BULLETIN, Felix Angeles and N.V.
Netherlands Insurance Company. Hence this petition.
Petitioners contend that there is no evidence to show that petitioner Mallari, Jr. overtook a vehicle at a
curve on the road at the time of the accident and that the testimony of Angeles on the overtaking made
by Mallari, Jr. was not credible and unreliable. Petitioner also submits that the trial court was in a better
position than the Court of Appeals to assess the evidence and observe the witnesses as well as
determine their credibility; hence, its finding that the proximate cause of the collision was the
negligence of respondent Angeles, driver of the delivery van owned by respondent BULLETIN, should
be given more weight and consideration.
We cannot sustain petitioners. Contrary to their allegation that there was no evidence whatsoever that
petitioner Mallari, Jr. overtook a vehicle at a curve on the road at the time of or before the accident,
the same petitioner himself testified that such fact indeed did occur
Q: And what was that accident all about?
A: Well, what happened, sir, is that at about that time 5:00 oclock in that morning of October 14 while
I was negotiating on the highway at San Pablo, Dinalupihan, Bataan, I was then following a blue Ford
Fierra and my distance behind was about twenty (20) feet and then I passed that blue Ford Fierra. I
overtook and when I was almost on the right lane of the highway towards Olongapo City there was an
oncoming delivery van of the Bulletin Publishing Corporation which bumped the left rear portion of the
jeepney which I was driving and as a result of which the jeepney x x x turned around and fell on its
left side and as a result of which some of my passengers including me were injured, sir x x x x
Q: Before you overtook the Ford Fierra jeepney did you look x x x whether there was any vehicle
coming towards you?
A: Yes, sir.
Q: Did you see the Bulletin van or the Press van coming towards you?
A: Yes, sir.
Q: At the moment the Ford Fierra x x x stop(ped) and in overtaking the Fierra, did you not have an
option to stop and not to overtake the Ford Fierra?
A: Well, at the time when the Ford Fierra stopped in front of me I slowed down with the intention of
applying the brake, however, when I saw the oncoming vehicle which is the Press van is very far x x x
which is 100 feet distance, x x x it is sufficient to overtake the Ford Fierra so I overt(ook) it x x x x
Q: You said that you took into consideration the speed of the oncoming Press van but you also could
not estimate the speed of the press van because it was dark at that time, which of these statements
are true?
A: What I wanted to say, I took into consideration the speed of the oncoming vehicle, the Press van,
although at the moment I could not estimate the speed of the oncoming vehicle x x x x
The Court of Appeals correctly found, based on the sketch and spot report of the police authorities
which were not disputed by petitioners, that the collision occurred immediately after petitioner Mallari,
Jr. overtook a vehicle in front of it while traversing a curve on the highway. This act of overtaking was
in clear violation of Sec. 41, pars, (a) and (b), of RA 4136 as amended, otherwise known as The Land
Transportation and Traffic Code which provides:
Sec. 41. Restrictions on overtaking and passing.(a) The driver of a vehicle shall not drive to the left
side of the center line of a highway in overtaking or passing another vehicle proceeding in the same
direction, unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance
ahead to permit such overtaking or passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction
when approaching the crest of a grade, nor upon a curve in the highway, where the drivers view along
the highway is obstructed within a distance of five hundred feet ahead except on a highway having two
or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or
pass another vehicle: Provided That on a highway, within a business or residential district, having two
or more lanes for movement of traffic in one direction, the driver of a vehicle may overtake or pass
another vehicle on the right.
The rule is settled that a driver abandoning his proper lane for the purpose of overtaking another
vehicle in an ordinary situation has the duty to see to it that the road is clear and not to proceed if he
cannot do so in safety. When a motor vehicle is approaching or rounding a curve, there is special
necessity for keeping to the right side of the road and the driver does not have the right to drive on
the left hand side relying upon having time to turn to the right if a car approaching from the opposite
direction comes into view.
In the instant case, by his own admission, petitioner Mallari, Jr. already saw that the BULLETIN delivery
van was coming from the opposite direction and failing to consider the speed thereof since it was still
dark at 5:00 oclock in the morning mindlessly occupied the left lane and overtook two (2) vehicles in
front of it at a curve in the highway. Clearly, the proximate cause of the collision resulting in the death
of Israel Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger
jeepney, petitioner Alfredo Mallari, Jr., who recklessly operated and drove his jeepney in a lane where
overtaking was not allowed by traffic rules. Under Art. 2185 of the Civil Code, unless there is proof to
the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of
the mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to
present satisfactory evidence to overcome this legal presumption.
The negligence and recklessness of the driver of the passenger jeepney is binding against petitioner
Mallari, Sr., who admittedly was the owner of the passenger jeepney engaged as a common carrier,
considering the fact that in an action based on contract of carriage, the court need not make an express
finding of fault or negligence on the part of the carrier in order to hold it responsible for the payment
of damages sought by the passenger. Under Art. 1755 of the Civil Code, a common carrier is bound to
carry the passengers safely as far as human care and foresight can provide using the utmost diligence
of very cautious persons with due regard for all the circumstances. Moreover, under Art. 1756 of the
Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at
fault or to have acted negligently, unless it proves that it observed extraordinary diligence. Further,
pursuant to Art. 1759 of the same Code, it is liable for the death of or injuries to passengers through
the negligence or willful acts of the formers employees. This liability of the common carrier does not
cease upon proof that it exercised all the diligence of a good father of a family in the selection of its
employees. Clearly, by the contract of carriage, the carrier jeepney owned by Mallari, Sr. assumed the
express obligation to transport the passengers to their destination safely and to observe extraordinary
diligence with due regard for all the circumstances, and any injury or death that might be suffered by
its passengers is right away attributable to the fault or negligence of the carrier.
The monetary award ordered by the appellate court to be paid by petitioners to the widow of the
deceased passenger Israel M. Reyes of P1,006,777.50 for loss of earning capacity, P50,000.00 as civil
indemnity for death, and P10,000.00 for attorneys fees, all of which were not disputed by petitioners,
is a factual matter binding and conclusive upon this Court.
WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals dated 20 September
1995 reversing the decision of the trial court being in accord with law and evidence is AFFIRMED.
Consequently, petitioners are ordered jointly and severally to pay Claudia G. Reyes P1,006,777.50 for
loss of earning capacity, P50,000.00 as civil indemnity for death, and P10,000.00 for attorneys fees.
Costs against petitioners.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.
Petition denied, judgment affirmed.
Note.Extraordinary diligence requires common carriers to render service with the greatest skill and
foresight. (Tabacalera Ins. Co. vs. North Front Shipping Services, Inc., 272 SCRA 527 [1997])
R TRANSPORT CORPORATION, represented by its owner/President RIZALINA LAMZON,
petitioner, vs. EDUARDO PANTE, respondent
G.R. No. 162104. September 15, 2009
Civil Law; Common Carriers; Common carriers, like petitioner bus company, from the nature of their
business and for reasons of public policy, are bound to observe extraordinary diligence for the safety
of the passengers transported by them, according to all the circumstances of each case.Under the
Civil Code, common carriers, like petitioner bus company, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence for the safety of the passengers
transported by them, according to all the circumstances of each case. They are bound to carry the
passengers safely as far as human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.
Same; Same; Common carriers are liable for the death or injury to passengers through the negligence
or willful acts of the formers employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.Article 1756 of the Civil Code
states that [i]n case of death of or injuries to passengers, common carriers are presumed to have
as prescribed by Articles 1733 and 1755. Further, Article 1759 of the Civil Code provides that
[c]ommon carriers are liable for the death or injury to passengers through the negligence or willful
acts of the formers employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers. This liability of the common carriers does
not cease upon proof that they exercised all the diligence of a good father of a family in the selection
and supervision of their employees.
Due Process; There is no denial of due process where a party was given an opportunity to be heard.
In Silverio, Sr. v. Court of Appeals (304 SCRA 541 [1999]), the Court held that petitioner therein was
not denied due process when the records of the case showed that he was amply given the opportunity
to present his evidence, which he, however, waived. There is no denial of due process where a party
was given an opportunity to be heard.
Damages; As cited by the Court of Appeals in its Decision, Jarco Marketing Corporation v. Court of
Appeals (378 Phil. 991; 321 SCRA 375 [1999]) awarded actual damages for hospitalization expenses
that was evidenced by a statement of account issued by the Makati Medical Center.As cited by the
Court of Appeals in its Decision, Jarco Marketing Corporation v. Court of Appeals (321 SCRA 375 [1999])
awarded actual damages for hospitalization expenses that was evidenced by a statement of account
issued by the Makati Medical Center. Hence, the statement of account is admissible evidence of hospital
expenses incurred by respondent. Petitioner also contends that the award of moral damages is not
proper, because it is not recoverable in actions for damages predicated on breach of the contract of
transportation under Articles 2219 and 2220 of the Civil Code.
Same; The Court of Appeals correctly sustained the award of moral damages, citing Spouses Ong v.
Court of Appeals (361 Phil. 338; 301 SCRA 387 [1999]), which awarded moral damages to paying
passengers, who suffered physical injuries on board a bus that figured in an accident.The Court of
Appeals correctly sustained the award of moral damages, citing Spouses Ong v. Court of Appeals (301
SCRA 387 [1999]), which awarded moral damages to paying passengers, who suffered physical injuries
on board a bus that figured in an accident. Spouses Ong held that a person is entitled to the integrity
of his body and if that integrity is violated, damages are due and assessable. Thus, the usual practice
is to award moral damages for physical injuries sustained. In Spouses Ong, the Court awarded moral
damages in the amount of P50,000.00 to a passenger who was deemed to have suffered mental anguish
and anxiety because her right arm could not function in a normal manner. Another passenger, who
suffered injuries on his left chest, right knee, right arm and left eye, was awarded moral damages in
the amount of P30,000.00 for the mental anxiety and anguish he suffered from the accident.
Same; The award of exemplary damages is justified to serve as an example or as a correction for the
public good.Article 2232 of the Civil Code states that [i]n contracts and quasi-contracts, the court
may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner. In this case, respondents testimonial evidence showed that the bus driver, Johnny
Merdiquia, was driving the bus very fast in a reckless, negligent and imprudent manner; hence, the bus
hit a tree and a house along the highway in Baliuag, Bulacan. The award of exemplary damages is,
therefore, proper. The award of exemplary damages is justified to serve as an example or as a
correction for the public good.
Attorneys Fees; The award of legal fees is commensurate to the effort of respondents counsel, who
attended to the case in the trial court for seven years, and who finally helped secure redress for the
injury sustained by respondent after 14 years.The Court affirms the award of attorneys fees to
respondents counsel. The Court notes that respondent filed his Complaint for damages on March 14,
1995 as pauper-litigant. The award of legal fees by the trial court to respondents counsel was a
contingent fee of 25 percent of the total amount of damages, which shall constitute a lien on the total
amount awarded. The said award was affirmed by the Court of Appeals. Twenty-five percent of the
total damages is equivalent to P34,778.15. The award of legal fees is commensurate to the effort of
respondents counsel, who attended to the case in the trial court for seven years, and who finally helped
secure redress for the injury sustained by respondent after 14 years.
Evidence; The Court of Appeals correctly held that the medical certificate is admissible since petitioner
failed to object to the presentation of the evidence.The Court of Appeals correctly held that the
medical certificate is admissible since petitioner failed to object to the presentation of the evidence.
Gaspar V. Tagalo for petitioner.
PERALTA, J.:
This is a petition for review on certiorari of the Decision dated October 7, 2003 of the Court of Appeals
in CA-G.R. CV No. 76170, and its Resolution dated February 5, 2004, denying petitioners motion for
reconsideration. The Court of Appeals affirmed the Decision of the Regional Trial Court (RTC) of Gapan
City, Branch 35, dated January 26, 2002, holding petitioner liable to respondent for damages for
physical injuries sustained by respondent due to a vehicular accident.
The facts are as follows:
Petitioner R Transport Corporation, represented by its owner and president, Rizalina Lamzon, is a
common carrier engaged in operating a bus line transporting passengers to Gapan, Nueva Ecija from
Cubao, Quezon City and back.
At about 3:00 a.m. of January 27, 1995, respondent Eduardo Pante rode petitioners R. L. Bus Liner
with Plate Number CVW-635 and Body Number 94810 in Cubao, Quezon City bound for Gapan, Nueva
Ecija. Respondent paid the sum of P48.00 for his fare, and he was issued bus ticket number 555401.
While traveling along the Doa Remedios Trinidad Highway in Baliuag, Bulacan, the bus hit a tree and
a house due to the fast and reckless driving of the bus driver, Johnny Merdiquia. Respondent sustained
physical injuries as a result of the vehicular accident. He was brought by an unidentified employee of
petitioner to the Baliuag District Hospital, where respondent was diagnosed to have sustained a
laceration frontal area, with fracture of the right humerus, or the bone that extends from the shoulder
to the elbow of the right arm. Respondent underwent an operation for the fracture of the right humerus
per Certification dated February 17, 1995 issued by Dr. Virginia C. Cabling of the Baliuag District
Hospital.
The hospitals Statement of Account showed that respondents operation and confinement cost
P22,870.00. Respondent also spent P8,072.60 for his medication. He was informed that he had to
undergo a second operation after two years of rest. He was unemployed for almost a year after his first
operation because Goldilocks, where he worked as a production crew, refused to accept him with his
disability as he could not perform his usual job.
By way of initial assistance, petitioner gave respondents wife, Analiza P. Pante, the sum of P7,000.00,
which was spent for the stainless steel instrument used in his fractured arm.
After the first operation, respondent demanded from petitioner, through its manager, Michael Cando,
the full payment or reimbursement of his medical and hospitalization expenses, but petitioner refused
payment.
Four years later, respondent underwent a second operation. He spent P15,170.00 for medical and
hospitalization expenses.
On March 14, 1995, respondent filed a Complaint13 for damages against petitioner with the RTC of
Gapan City, Branch 35 (trial court) for the injuries he sustained as a result of the vehicular accident.
In its Answer, petitioner put up the defense that it had always exercised the diligence of a good father
of a family in the selection and supervision of its employees, and that the accident was a force majeure
for which it should not be held liable.
At the pre-trial on October 4, 1995, petitioner was declared in default, which was reconsidered by the
trial court on December 12, 1995 upon finding that petitioner had earlier filed a Motion to Transfer Date
of Hearing. Trial was first set on February 26, 1996, and from then on trial was postponed several times
on motion of petitioner.
Six years later, on October 24, 2001, respondents direct examination was concluded. His cross-
examination was reset to December 5, 2001 due to the absence of petitioner and its counsel. It was
again reset to January 23, 2002 upon petitioners motion. On January 23, 2002, petitioner, through its
new counsel, asked for another postponement on the ground that he was not ready. Hence, the cross-
examination of respondent was reset to March 13, 2002.
On March 13, 2002, petitioner was declared to have waived its right to cross-examine respondent due
to the absence of petitioner and its counsel, and respondent was allowed to offer his exhibits within
five days. Petitioners motion for reconsideration dated April 4, 2002 was denied on May 7, 2002.
In the hearing of June 19, 2002, petitioner was declared to have waived its right to present evidence
on motion of respondents counsel in view of the unexplained absence of petitioner and its counsel
despite prior notice. The case was declared submitted for decision.
On June 26, 2002, the trial court rendered a Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered finding the plaintiffs to be entitled
to damages and ordering defendants to [pay]:
1.) P39,112.60 as actual damages;
2.) P50,000.00 as moral damages;
3.) P50,000.00 as exemplary damages;
4.) Twenty-five percent (25%) of the total of which shall constitute a lien as contingent fee of plaintiffs
counsel.
So ordered.
The trial court held that the provisions of the Civil Code on common carriers govern this case. Article
1756 of the Civil Code states that [i]n case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed by Articles 1733 and 1755. The trial court ruled that since
petitioner failed to dispute said presumption despite the many opportunities given to it, such
presumption of negligence stands.
Petitioner appealed the decision of the trial court to the Court of Appeals.
In its Decision dated October 7, 2003, the Court of Appeals affirmed the decision of the trial court, the
dispositive portion of which reads:
WHEREFORE, for lack of merit, the appeal is DENIED and the Decision appealed from is AFFIRMED in
toto. With double costs against the appellant.
Petitioners motion for reconsideration was denied for lack of merit in the Resolution of the Court of
Appeals dated February 5, 2004.26
Hence, petitioner filed this petition raising the following issues:
THE HONORABLE COURT OF APPEALS, TENTH DIVISION GRAVELY ERRED IN NOT GIVING DUE
COURSE TO THE DEFENDANT-APPELLANTS MOTION FOR RECONSIDERATION OF THE DECISION
PROMULGATED ON OCTOBER 7, 2003, THEREBY DEPRIVING PETITIONERS FUNDAMENTAL RIGHT
TO DUE PROCESS.
II
THE HONORABLE COURT OF APPEALS, TENTH DIVISION FURTHER GRAVELY ERRED IN AFFIRMING
IN TOTO THE DECISION OF THE REGIONAL TRIAL COURT OF GAPAN CITY, BRANCH 35,
PARTICULARLY IN AWARDING DAMAGES TO THE RESPONDENT WITHOUT PRESENTING ANY
SUBSTANTIAL EVIDENCE.
III
THE HONORABLE COURT OF APPEALS, TENTH DIVISION, IN AFFIRMING IN TOTO THE DECISION OF
THE REGIONAL TRIAL COURT OF GAPAN CITY, BRANCH 35, HAS COMMITTED GRAVE AND
REVERSIBLE ERROR IN ITS FINDING OF FACTS AND APPLICATION OF [THE] LAW.
The main issue is whether or not petitioner is liable to respondent for damages.
The Court affirms the decision of the Court of Appeals that petitioner is liable for damages.
Under the Civil Code, common carriers, like petitioner bus company, from the nature of their business
and for reasons of public policy, are bound to observe extraordinary diligence for the safety of the
passengers transported by them, according to all the circumstances of each case. They are bound to
carry the passengers safely as far as human care and foresight can provide, using the utmost diligence
of very cautious persons, with due regard for all the circumstances.
Article 1756 of the Civil Code states that [i]n case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed by Articles 1733 and 1755.
Further, Article 1759 of the Civil Code provides that [c]ommon carriers are liable for the death or injury
to passengers through the negligence or willful acts of the formers employees, although such
employees may have acted beyond the scope of their authority or in violation of the orders of the
common carriers. This liability of the common carriers does not cease upon proof that they exercised
all the diligence of a good father of a family in the selection and supervision of their employees.
In this case, the testimonial evidence of respondent showed that petitioner, through its bus driver,
failed to observe extraordinary diligence, and was, therefore, negligent in transporting the passengers
of the bus safely to Gapan, Nueva Ecija on January 27, 1995, since the bus bumped a tree and a house,
and caused physical injuries to respondent. Article 1759 of the Civil Code explicitly states that the
common carrier is liable for the death or injury to passengers through the negligence or willful acts of
its employees, and that such liability does not cease upon proof that the common carrier exercised all
the diligence of a good father of a family in the selection and supervision of its employees. Hence, even
if petitioner was able to prove that it exercised the diligence of a good father of the family in the
selection and supervision of its bus driver, it is still liable to respondent for the physical injuries he
sustained due to the vehicular accident.
Petitioner cannot complain that it was denied due process when the trial court waived its right to
present evidence, because it only had itself to blame for its failure to attend the hearing scheduled for
reception of its evidence on June 19, 2002. The trial court stated, thus:
It is noteworthy to state that during the course of the proceeding of this case, defendant (petitioner)
and its counsel hardly appeared in court and only made innumerable motions to reset the hearings to
the point that this case x x x dragged [on] for seven years from its filing up to the time that it has been
submitted for decision. And for the unexplained absence of counsel for defendant in the hearing set
last June 19, 2002 despite repeated resetting, upon motion of the counsel for plaintiff (respondent),
Atty. Ireneo Romano, its right to present its evidence was considered waived.
In Silverio, Sr. v. Court of Appeals, the Court held that petitioner therein was not denied due process
when the records of the case showed that he was amply given the opportunity to present his evidence,
which he, however, waived. There is no denial of due process where a party was given an opportunity
to be heard.
Next, petitioner contends that the Court of Appeals erred in denying its motion for reconsideration of
the appellate courts Decision dated October 7, 2003.
The contention is unmeritorious.
The Court of Appeals has the discretion to deny petitioners motion for reconsideration since it found
that there was no cogent reason to warrant reconsideration of its Decision dated October 7, 2003.
According to the appellate court, it had already considered, if not squarely ruled upon, the arguments
raised in petitioners motion for reconsideration.77777
Moreover, petitioner contends that the Court of Appeals erred in affirming the decision of the trial court,
which awarded actual damages in the amount of P22,870.00 based on the statement of account issued
by the Baliuag District Hospital and not based on an official receipt. Petitioner argues that the statement
of account is not the best evidence.
The contention is without merit.
As cited by the Court of Appeals in its Decision, Jarco Marketing Corporation v. Court of Appeals36
awarded actual damages for hospitalization expenses that was evidenced by a statement of account
issued by the Makati Medical Center. Hence, the statement of account is admissible evidence of hospital
expenses incurred by respondent.
Petitioner also contends that the award of moral damages is not proper, because it is not recoverable
in actions for damages predicated on breach of the contract of transportation under Articles 2219 and
2220 of the Civil Code.7
The Court is not persuaded.

The Court of Appeals correctly sustained the award of moral damages, citing Spouses Ong v. Court of
Appeals, which awarded moral damages to paying passengers, who suffered physical injuries on board
a bus that figured in an accident. Spouses Ong held that a person is entitled to the integrity of his body
and if that integrity is violated, damages are due and assessable. Thus, the usual practice is to award
moral damages for physical injuries sustained. In Spouses Ong, the Court awarded moral damages in
the amount of P50,000.00 to a passenger who was deemed to have suffered mental anguish and
anxiety because her right arm could not function in a normal manner. Another passenger, who suffered
injuries on his left chest, right knee, right arm and left eye, was awarded moral damages in the amount
of P30,000.00 for the mental anxiety and anguish he suffered from the accident.
In this case, respondent sustained a laceration frontal area, with fracture of the right humerus due
to the vehicular accident. He underwent an operation for the fracture of the bone extending from the
shoulder to the elbow of his right arm. After a few years of rest, he had to undergo a second operation.
Respondent, therefore, suffered physical pain, mental anguish and anxiety as a result of the vehicular
accident. Hence, the award of moral damages in the amount of P50,000.00 is proper.
Petitioner likewise contends that the award of exemplary damages is improper, because it did not act
in a wanton, fraudulent, reckless, oppressive or malevolent manner.
The contention is without merit.
Article 2232 of the Civil Code states that [i]n contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner. In this case, respondents testimonial evidence showed that the bus driver, Johnny Merdiquia,
was driving the bus very fast in a reckless, negligent and imprudent manner; hence, the bus hit a tree
and a house along the highway in Baliuag, Bulacan. The award of exemplary damages is, therefore,
proper. The award of exemplary damages is justified to serve as an example or as a correction for the
public good.
Further, the Court affirms the award of attorneys fees to respondents counsel. The Court notes that
respondent filed his Complaint for damages on March 14, 1995 as pauper-litigant. The award of legal
fees by the trial court to respondents counsel was a contingent fee of 25 percent of the total amount
of damages, which shall constitute a lien on the total amount awarded. The said award was affirmed
by the Court of Appeals. Twenty-five percent of the total damages is equivalent to P34,778.15. The
award of legal fees is commensurate to the effort of respondents counsel, who attended to the case
in the trial court for seven years, and who finally helped secure redress for the injury sustained by
respondent after 14 years.
Lastly, petitioner contends that the medical certificate presented in evidence is without probative value
since respondent failed to present as witness Dr. Virginia Cabling to affirm the content of said medical
certificate.
The contention lacks merit. The Court of Appeals correctly held that the medical certificate is admissible
since petitioner failed to object to the presentation of the evidence.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 76170,
dated October 7, 2003, and its Resolution dated February 5, 2004, are hereby AFFIRMED. Petitioner R
Transport Corporation is ordered to pay respondent Eduardo Pante P39,112.60 as actual damages;
P50,000.00 as moral damages; and P50,000.00 as exemplary damages. Twenty-five percent (25%) of
the total amount shall constitute a lien as contingent fee of respondents counsel.
Costs against petitioner.
_______________
ANTONIA MARANAN, plaintiff-appellant, vs. PASCUAL PEREZ, ET AL., defendants.
PASCUAL PEREZ, defendant-appellant.
No. L-22272. June 276, 1967
Common Carriers; Liability for intentional assaults committed by its employees on passengers;
Difference between old and New Civil Code provisions.Unlike the old Civil Code, the New Civil Code
expressly makes the common carrier liable for intentional assaults committed by its employees upon its
passengers (Art. 1759). This rule was adopted from Anglo-American law, where the majority view, as
distinguished from the minority view based on respondeat superior, is that the carrier is liable as long
as the assault occurs within the course of the performance of the employee's duty. It is no defense for
the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The
carrier's liability is absolute in the sense that it practically secures the passengers from assaults
committed by its own employees.
Same; Reasons for carrier's liability for intentional assaults upon passengers.The special undertaking
of the carrier requires that it furnish its passengers that full measure of protection afforded by the
exercise of the high degree of care prescribed by law, inter alia, from violence and insults at the hands
of strangers and other passengers, but above all from the acts of the carrier's own servants charged
with the passenger's safety. The performance of that undertaking is confided by the carrier to its
employees. As between the carrier and the passenger, the former must bear the risk of wrongful acts
of the former's employees against passengers, since the carrier, not the passengers, has the power to
select and remove them,
Same; Carrier is liable to the heir of a passenger killed by its driver.Where a passenger in a taxicab
was killed by the driver, the cab owner is liable to the heir of the deceased passenger for damages on
the basis of breach of the contract of carriage. The driver is not liable to the heir because the driver
was not a party to the contract of carriage. His civil liability is covered by the judgment of conviction in
the criminal case. The case is different from Gillaco vs. Manila Railroad Company, 97 Phil, 884,
Same; Damages; Carrier's liability for passenger's death.The minimum amount of compensatory
damages, which a common carrier should pay for the intentional killing of a passenger committed by
its driver while transporting the passenger, is P6,000. Moral damages may also be awarded. Interest is
due on said damages.
APPEAL from a judgment of the Court of First Instance of Batangas. Relona, J.
Pedro Panganiban for defendant-appellant.
Magno T. Bueser for plaintiff-appellant.
BENGZON, J.P., J.:
Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual
Perez when he was stabbed and killed by the driver, Simeon Valenzuela.
Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas. Found guilty, he
was sentenced to suffer imprisonment and to indemnify the heirs of the deceased in the sum of P6,000.
Appeal f rom said conviction was taken to the Court of Appeals.
On December 6, 1961, while appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's
mother, filed an action in the Court of First Instance of Batangas to recover damages from Perez and
Valenzuela for the death of her son. Defendants asserted that the deceased was killed in self-defense,
since he first assaulted the driver by stabbing him from behind. Defendant Perez further claimed that
the death was a caso fortuito for which the carrier was not liable.
The court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages against
defendant Perez. The claim against defendant Valenzuela was dismissed. From this ruling, both plaintiff
and defendant Perez appealed to this Court, the former asking for more damages and the latter insisting
on non-liability. Subsequently, the Court of Appeals affirmed the judgment of conviction earlier
mentioned, during the pendency of the herein appeal, and on May 19, 1964, final judgment was entered
therein. (Rollo, p. 33).
Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884,
that the carrier is under no absolute liability for assaults of its employees upon the passengers. The
attendant facts and controlling law of that case and the one at bar are very different however. In the
Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty employee.
As this Court there found:
"x x x when the crime took place, the guard Devesa had no duties to discharge in connection with the
transportation of the deceased from Calamba to Manila. The stipulation of facts is clear that when
Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union)
trains, and he was at Paco Station awaiting transportation to Tutuban, the starting point of the train
that he was engaged to guard. In fact, his tour of duty was to start at 9:00 a.m., two hours after the
commission of the crime. Devesa was therefore under no obligation to safeguard the passengers of the
Calamba-Manila, train, where the deceased was riding; and the killing of Gillaco was not done in line
of duty. The position of Devesa at the time was that of another would be passenger, a stranger also
awaiting transportation, and not that of an employee assigned to discharge any of the duties that the
Railroad had assumed by its contract with the deceased. As a result, Devesa's assault can not be
deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier.
x x x" (Italics supplied)
Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose
hands the carrier had entrusted the duty of executing the contract of carriage. In other words, unlike
the Gillaco case, the killing of the passenger here took place in the course of duty of the guilty employee
and when the employee was acting within the scope of his duties.
Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the
present Civil Code, did not impose upon common carriers absolute liability for the safety of passengers
against wilful assaults or negligent acts committed by their employees. The death of the passenger in
the Gillaco case was truly a fortuitous event which exempted the carrier from liability. It is true that
Art. 1105 of the old Civil Code on fortuitous events has been substantially reproduced in Art. 1174 of
the Civil Code of the Philippines but both articles clearly remove from their exempting effect the case
where the law expressly provides for liability in spite of the occurrence of force majeure. And herein
significantly lies the statutory difference between the old and present Civil Codes, in the backdrop of
the factual situation before Us, which further accounts for a different result in the Gillaco case. Unlike
the old Civil Code, the new Civil Code of the Philippines expressly makes the common carrier liable for
intentional assaults committed by its employees upon its passengers, by the wording of Art. 1759 which
categorically states that
"Common carriers are liable for the death of or injuries to passengers through the negligence or willful
acts of the former's employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers."
The Civil Code provisions on the subject of Common Carriers1 are new and were taken from Anglo-
American Law. There, the basis of the carrier's liability for assaults on passengers committed by its
drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's
implied duty to transport the passenger safely.
Under the first, which is the minority view, the carrier is liable only when the act of the employee is
within the scope of his authority and duty. It is not sufficient that the act be within the course of
employment only.
Under the second view, upheld by the majority and also by the later cases, it is enough that the assault
happens within the course of the employee's duty. It is no defense for the carrier that the act was done
in excess of authority or in disobedience of the carrier's orders. The carrier's liability here is absolute in
the sense that it practically secures the passengers from assaults committed by its own employees.
As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows the rule based on
the second view. At least three very cogent reasons underlie this rule. As explained in Texas Midland
R.R. v, Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, and Haver v. Central Railroad Co,, 43 LRA 84,
85: (1) the special undertaking of the carrier' requires that it furnish its passenger that full measure of
protection afforded by the exercise of the high degree of care prescribed by the law, inter alia from
violence and insults at the hands of strangers and other passengers, but above all, from the acts of the
carrier's own servants charged with the passenger's safety; (2) said liability of the carrier for the
servant's violation of duty to passengers, is the result of the former's confiding in the servant's hands
the performance of his contract to safely transport the passenger, delegating therewith the duty of
protecting the passenger with the utmost care prescribed by law; and (3) as between the carrier and
the passenger, the former must bear the risk of wrongful acts or negligence of the carrier's employees
against passengers, since it, and not the passengers, has power to select and remove them.
Accordingly, it is the carrier's strict obligation to select its drivers and similar employees with due regard
not only to their technical competence and physical ability, but also, no less important, to their total
personality, including their patterns of behavior, moral fibers, and social attitude.
Applying this stringent norm to the facts in this case, therefore, the lower court rightly. adjudged the
defendant carrier liable pursuant to Art. 1759 of the Civil Code. The dismissal of the claim against the
defendant driver was also correct. Plaintiff's action was predicated on breach of contract of carriage
and the cab driver was not a party thereto. His civil liability is covered in the criminal case wherein he
was convicted by final judgment.
In connection with the award of damages. the court a quo granted only P3,000 to plaintiff-appellant.
This is the minimum compensatory damages amount recoverable under Art. 1764 in connection with
Art. 2206 of the Civil Code when a breach of contract results in the passenger's death. As has been the
policy followed by this Court, this minimal award should be increased to P6,000. As to other alleged
actual damages, the lower court's f inding that plaintiff's evidence thereon was not convincing, should
not be disturbed. Still, Arts. 2206 and 1764 award moral damages in addition to compensatory
damages, to the parents of the passenger killed to compensate for the mental anguish they suffered.
A claim therefor, having been properly made, it becomes the court's duty to award moral damages.
Plaintiff demands P5,000 as moral damages; however, in the circumstances, We consider P3,000 moral
damages, in addition to the P6,000 damages afore-stated, as sufficient. Interest upon such damages
are also due to plaintiff-appellant.
Wherefore, with the modification increasing the award of actual damages in plaintiff's favor to P6,000,
plus P3,000 moral damages, with legal interest on both from the filing of the complaint on December
6, 1961 until the whole amount is paid, the judgment appealed from is affirmed in all other respects.
No costs. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.
Judgment modified.
____________
MANILA RAILROAD COMPANY, petitioner, vs. MACARIA BALLESTEROS, TLMOTEO
CAMAYO, JOSE REYES and JULIAN MAIMBAN, JR., respondents
No. L-19161. April 29, 1966
Appeals; Courts can not be compelled to approve a frivolous appeal.Where the appeal is frivolous
and interposed only for purpose of delay, the appellate court may deny a petition for mandamus to
compel the trial court to approve and certify the appeal (De la Cruz vs. Blanco, 73 Phil. 596; Paner vs.
Yatco, 87 Phil. 271).
Common carriers; Liability for injuries suffered by passengers on account of willful acts or negligence
of strangers. A common carrier is liable for injuries suffered by its passengers due to the wilful acts
or negligence of other passengers or of strangers, if the common carriers employees, through the
exercise of the diligence of a good father of a family, could have prevented or stopped the act or
omission (Art. 1763, New Civil Code).
Motor Vehicle Law.A common carrier is liable for damages arising from the negligence of its driver in
allowing another person to drive his vehicle (Sec. 48[b], Motor Vehicle Law).
Compromise; Effect of negotiations for compromise.Negotiations between the common carrier and
the injured passengers for the settlement of the latters claims may indicate that the carrier is really
liable for damages, especially considering that its counsel advised that a reasonable settlement be
made.
ORIGINAL ACTION in the Supreme Court. Mandamus.
Govt Corp. Counsel S. M. Gopengco & Atty. R. G. Fernando, for petitioner.
George G. Arbolario, for respondents.
MAKALINTAL, J.:
In civil case No. 45968 of the Court of First Instance of Manila (Macaria Ballesteros, Timoteo Camayo,
Jose Reyes and Julian Maimban, Jr. vs. Manila Railroad Company) the defendant was adjudged to pay
damages in the following amounts: P2,400 to Macaria Ballesteros; P4,000 to Timoteo Camayo; P3,000
to Jose Reyes; and P2,000, plus P1,000 as attorneys fees, to Julian Maimban, Jr.
The defendant appealed from the judgment, but upon motion by the plaintiffs, the trial court, by order
dated October 14, 1961, dismissed the appeal on the ground that it was manifestly and palpably
frivolous and interposed ostensibly to delay the settlement of the just and reasonable claims of the
herein plaintiffs, which have been pending since 1958. The defendant moved to reconsider, and upon
denial of its motion instituted in this Court the instant petition for mandamus to set aside the order of
dismissal and to order respondent court to give due course to the appeal.
In filing the petition directly with this Court, petitioner evidently intended to raise only questions of law
in the appeal contemplated, since under Rule 41, section 15, when erroneously a motion to dismiss
an appeal is granted or a record on appeal is disallowed by the trial court, a proper petition for
mandamus may be filed in the appellate court; and under section 17(6) of the Judiciary Act this Court
may review on appeal only questions of law in civil cases decided by inferior courts unless the value in
controversy exceeds P200,000.
The fact that an appeal is frivolous and interposed only for purposes of delay has been recognized as
a valid ground to deny issuance of the writ of mandamus to compel the trial court to approve and
certify the appeal. In De la Cruz vs. Blanco and Quevedo, 73 Phil. 596, We held:
And where as in the instant case, the dismissal has been ordered by the trial court, it would not be
disturbed in the Appellate Court if the latter finds the appeal to have been interposed ostensibly for
delay. It has been held that a frivolous appeal is one presenting no justiciable question or one so readily
cognizable as devoid of merit on the face of the record that there is little, if any, prospect that it can
over succeed. The instant case is one such instance in which the appeal is evidently without merit,
taken manifestly for delay.
And in Paner vs. Yatco, 87 Phil. 271, We denied the writ prayed for and held that while strictly and
legally speaking the petition may be granted, we may, before acting thereon, inquire into the facts
involved in order to determine whether once the writ is granted and the case is brought up here on
appeal the appellant has any chance, even possibility, of having the basic decision of the trial court set
aside or modified; for if the appellant has not that prospect or likelihood then the granting of the writ
and the consequent appeal would be futile and would mean only a waste of time to the parties and to
this Court.
The material facts, as found by respondent court in its decision, are as follows: Private respondents
here, plaintiffs below, were passengers on petitioners bus, the driver of which was Jose Anastacio. In
Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got off to replace a defective spark plug.
While he was thus engaged, one Dionisio Abello, an auditor assigned to defendant company by the
General Auditing Office, took the wheel and told the driver to sit somewhere else. With Abello driving,
the bus proceeded on its way, from time to time stopping to pick up passengers. Anastacio tried twice
to take the wheel back but Abello would not relinquish it.
Then, in the language of the trial court, while the bus was negotiating between Km. posts 328 and
329 (in Isabela) a freight truck x x x driven by Marcial Nocum x x x bound for Manila, was also
negotiating the same place; when these two vehicles were about to meet at the bend of the road
Marcial Nocum, in trying to evade several holes on the right lane, where his truck was running, swerved
his truck towards the middle part of the road and in so doing, the left front fender and left side of the
freight truck smashed the left side of the bus resulting in extensive damages to the body of the bus
and injuries to seventeen of its passengers, x x x including the plaintiffs herein.
In rejecting petitioners contention that the negligence of Marcial Nocum could not be imputed to it and
relieved it from liability, the trial court found that Dionisio Abello was likewise reckless when he was
driving the bus at the rate of from 40 to 50 kilometers per hour on a bumpy road at the moment of the
collision.
Another defense put up by petitioner is that since Abello was not its employee it should not be held
responsible for his acts. This defense was correctly overruled by the trial court, considering the
provisions of Article 1763 of the Civil Code and section 48(b) of the Motor Vehicle Law, which
respectively provide as follows:
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful
acts or negligence of other passengers or of strangers, if the common carriers employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.
Sec. 48(b). No professional chauffeur shall permit any unlicensed person to drive the motor vehicle
under his control, or permit a person, sitting beside him or in any other part of the car, to interfere with
him in the operation of the motor vehicle, by allowing said person to take hold of the steering wheel,
or in any other manner take part in the manipulation or control of the car.
It appears further, and so the trial court found, that there were negotiations between the parties to
compromise the case, as a result of which respondents herein, plaintiffs below, considerably reduced
their claims to the amounts subsequently awarded in the judgment; that petitioner had in fact settled
the claims of the other passengers who were also injured in the same accident and even the claim for
damages filed in another action by the owner of the freight truck; and that the Government Corporate
Counsel himself, who represents herein petitioner, rendered two separate opinions (Op. No. 86, May
13, 1960; and Op. No. 99, series of 1961) wherein, after analyzing the facts and the law applicable, he
reached the conclusion that the acts of the bus personnel, particularly in allowing Mr. Abello to drive
despite two occasions when the bus stopped and the regular driver could have taken over, constitute
reckless imprudence and wanton injurious conduct on the part of the MRR employees. On the basis of
those opinions the Government Corporate Counsel advised petitioner that the offer of the claimants
was reasonable and should be accepted. His advice, however, was not favorably acted upon, petitioner
obviously preferring to litigate.
The issues proposed to be taken up on appeal, as set forth in the petition, are whether or not Dionisio
Abello acted with reckless negligence while driving petitioners bus at the time of the accident, and
whether or not petitioner may be held liable on account of such negligence, considering that he was
not its employee. These are no longer justiciable questions which would justify our issuing the
peremptory writ prayed for. The first is a question of fact on which the affirmative finding of respondent
court is not reviewable by Us; and the second is one as to which there can be no possible doubt in view
of the provisions of the Civil Code and of the Motor Vehicle Law hereinbefore cited. There would be no
point in giving the appeal due course.
The writ prayed for is denied, with costs against petitioner.
Chief Justice Bengzon and Justices Bautista Angelo, Concepcion, J.B.L. Reyes, Barrera, Dizon,
Regala, J.P. Bengzon and Sanchez, concur.
Petition denied.
Notes.As to frivolous appeal, see Ferinion vs. Sta. Romana, L-25521, Feb. 28, 1966, ante, and notes
thereunder. As to liability of common carrier for willful acts of a stranger, see Gillaco vs. Manila Railroad
Company, 97 Phil. 884.
________________

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LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, vs.

G.R. No. 145804. February 6, 2003

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Office of the Government Corporate Counsel for petitioners.

a) 1) Actual damages of P44,830.00;

The compulsory counterclaim of LRTA and Roman are likewise dismissed.

a) P44,830.00 as actual damages;

Judgment affirmed with modification.

G.R. No. 174364. July 30, 2009

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Quisumbing, Torres for petitioner.

D.S. Catapang, Jr. Law Office for respondent.

12MAR LV NYC/LAGUARDIA 0935 NORTHWEST

No end./7 days adv. Purchase

2. P800,000.00 as moral damages;

3. P100,000.00 as exemplary damages;

4. P200,000.00 as and for attorneys fees; and

SO ORDERED. (Underscoring supplied)

A. No end, means non endorsable, sir.

A. That is right, sir.

Q. Based on the restriction, there is no such restriction?

A. Yes, sir. (Underscoring supplied)

The award of moral and exemplary damages to respondent is thus justified.

G.R. No. 118664. August 7, 1998

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Quisumbing, Torres & Evangelista for petitioner.

Enrique, Agana & Associates for private respondents.

Narvasa (C.J., Chairman), Kapunan and Purisima, JJ., concur.

G.R. No. 111127. July 26, 1996

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Maria del Valle for petitioners.

Eduardo Claudio II for private respondents.

Accordingly, it gave judgment for private respondents holding:

1) P93,657.11 as compensatory and actual damages;

1) P93,657.11 as actual damages;

I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.

1) P93,657.11 as actual damages;

Regalado (Chairman), Romero, Puno and Torres, Jr., JJ., concur.

Judgment affirmed with modification.

Note.Responsibility arising from negligence in the performance of every kind of obligation is

G.R. No. 186312. June 29, 2010

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Fortun, Narvasa & Salazar for petitioners.

Sycip, Salazar, Hernandez & Gatmaitan for respondent.

The petition is impressed with merit.

Petitioners correctly rely on De Guzman v. Court of Appeals in characterizing respondent as a common

The Civil Code defines common carriers in the following terms:

Life expectancy is determined in accordance with the formula:

2 / 3 x [80 age of deceased at the time of death]

Life expectancy = 2/3 x [80 - age of deceased at the time of death]

2/3 x [80 - 28]

Net Earning Capacity = life expectancy x (gross annual income -

reasonable and necessary living expenses).

Net Earning Capacity = P8,316,000

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on

Brion, Bersamin, Abad** and Villarama, Jr., JJ., concur.

Judgment reversed and set aside.