17. G.R. No. 80256 October 2, 1992 BANKERS & MANUFACTURERS ASSURANCE CORP., petitioner, vs COURT OS APPEALS, F. E.

ZUELLIG & CO., INC. and E. RAZON, INC., respondents. MELO, J.: After the Court of Appeals in CA-G.R. CV No. 08226 (July 8, 1987, Kapunan, Puno (P), Marigomen, JJ.) affirmed the dismissal by Branch XVI of the Regional Trial Court of Manila of petitioner's complaint for recovery of the amount it had paid its insured concerning the loss of a portion of a shipment, petitioner has interposed the instant petition for review on certiorari. Petitioner presents the following bare operative facts: 108 cases of copper tubings were imported by Ali Trading Company. The tubings were insured by petitioner and arrived in Manila on board and vessel S/S "Oriental Ambassador" on November 4, 1978, and turned over the private respondent E. Razon, the Manila arrastre operator upon discharge at the waterfront. The carrying vessel is represented in the Philippines by its agent, the other private respondent, F. E. Zuellig and Co., Inc., Upon inspection by the importer, the shipment was allegedly found to have sustained loses by way of theft and pilferage for which petitioner, as insurer, compensated the importer in the amount of P31,014.00. Petitioner, in subrogation of the importer-consignee and on the basis of what it asserts had been already established that a portion of that shipment was lost through theft and pilferage forthwith concludes that theburden of proof of proving a case of non-liability shifted to private respondents, one of whom, the carrier, being obligated to exercise extraordinary diligence in the transport and care of the shipment. The implication of petitioner's statement is that private respondents have not shown why they are not liable. The premises of the argument of petitioner may be well-taken but the conclusions are not borne out or supported by the record. It must be underscored that the shipment involved in the case at bar was "containerized". The goods under this arrangement are stuffed, packed, and loaded by the shipper at a place of his choice, usually his own warehouse,in the absence of the carrier. The container is sealed by the shipper and thereafter picked up by the carrier. Consequently, the recital of the bill of lading for goods thus transported ordinarily would declare "Said to Contain", "Shipper's Load and Count", "Full Container Load", and the amount or quantity of goods in the container in a particular package is only prima facie evidence of the amount or quantity which may be overthrown by parol evidence. A shipment under this arrangement is not inspected or inventoried by the carrier whose duty is only to transport and deliver the containers in the same condition as when the carrier received and accepted the containers for transport. In the case at bar, the copper tubings were placed in three containers. Upon arrival in Manila on November 4, 1978, the shipment was discharged in apparent good order and condition and from the pier's docking apron, the containers were shifted to the container yard of Pier 3 for safekeeping. Three weeks later, one of the container vans, said to contain 19 cases of the cargo, was "stripped" in the presence of petitioner's surveyors, and three cases were found to be in bad order. The 19 cases of the van stripped were then kept inside Warehouse No. 3 of Pier 3 pending delivery. It should be stressed at this point, that the three cases found in bad order are not the cases for which the claim below was presented, for although the three cases appeared to be in bad order, the contents remained good and intact. The two other container vans were not moved from the container yard and they were not stripped. On December 8, 1978, the cargo was released to the care of the consignee's authorized customs broker, the RGS

Customs Brokerage. The broker, accepting the shipment without exception as to bad order, caused the delivery of the vans to the consignee's warehouse in Makati. It was at that place, when the contents of the two containers were removed and inspected, that petitioner's surveyors reported, that checked against the packing list, the shipment in Container No. OOLU2552969 was short of seven cases ( see p. 18, Rollo). Under the prevailing circumstances, it is therefore, not surprising why the Court of Appeals in sustaining the trial court, simply quoted the latter, thus: It must be also considered that the subject container was not stripped of its content at the pier zone. The two unstripped containers (together with the 19 cases removed from the stripped third container) were delivered to, and received by, the customs broker for the consignee without any exception or notation of bad order of shortlanding (Exhs. 1, 2 and 3 Vessel). If there was any suspicion or indication of irregularity or theft or pilferage, plaintiff or consignee's representatives should have noted the same on the gate passes or insisted that some form of protest form part of the documents concerning the shipment. Yet, no such step was taken. The shipment appears to have been delivered to the customs broker in good order and condition and complete save for the three cases noted as being apparently in bad order. Consider further that the stripping of the subject container was done at the consignee's warehouse where, according to plaintiff's surveyor, the loss of the seven cases was discovered. The evidence is not settled as whether the defendants' representative were notified of, and were present at, the unsealing and opening of the container in the bodega. Nor is the evidence clear how much time elapsed between the release of the shipment from the pier and the stripping of the containers at consignee bodega. All these fail to discount the possibility that the loss in question could have taken place after the container had left the pier. (pp. 2021, Rollo) Verily, if any of the vans found in bad condition, or if any inspection of the goods was to be done in order to determine the condition thereof, the same should have been done at the pierside, the pier warehouse, or at any time and place while the vans were under the care and custody of the carrier or of the arrastre operator. Unfortunately for petitioner, even as one of the three vans was inspected and stripped, the two other vans and the contents of the owner previously stripped were accepted without exception as to any supposed bad order or condition by petitioner's own broker. To all appearances, therefore, the shipment was accepted by petitioner in good order. It logically follows that the case at bar presents no occasion for the necessity of discussing the diligence required of a carrier or of the theory of prima facie liability of the carrier, for from all indications, the shipment did not suffer loss or damage while it was under the care of the carrier, or of the arrastre operator, it must be added. WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals AFFIRMED, with costs against petitioner. SO ORDERED.

18. JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC. (G.R. No. 52159, December 22, 1989) FACTS: Petitioner Pilapil, on board respondents bus was hit above his eye by a stone hurled by an unidentified

bystander. Respondents personnel lost no time in bringing him to a hospital, but eventually petitioner partially lost his left eyes vision and sustained a permanent scar. Thus, Petitioner lodged an action for recovery of damages before the Court of First Instance of Camarines Sur which the latter granted. On appeal, the Court of Appeals reversed said decision. ISSUE: Whether or not common carriers assume risks to passengers such as the stoning in this case? HELD: In consideration of the right granted to it by the public to engage in the business of transporting passengers and goods, a common carrier does not give its consent to become an insurer of any and all risks to passengers and goods. It merely undertakes to perform certain duties to the public as the law imposes, and holds itself liable for any breach thereof. xxx While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligenceagainst them, it does not, however, make the carrier an insurer of the absolute safety of its passengers. xxx Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger does not accord the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the carrier's employees to prevent the tort from being committed when the same could have been foreseen and prevented by them. Further, under the same provision, it is to be noted that when the violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a good father of a family. 19. FORTUITOUS EVENT: EXEMPTION FROM LIABILITY FORTUNE EXPRESS, INC. VS. COURT OF APPEALS 305 SCRA 14 Facts: A bus of Fortune Express, Inc. (FEI) figured in an accident with a jeepney which resulted in the death of

several passengers including two Maranaos. It was found out that a Maranao owns said jeepney and certain Maranaos were planning to take revenge by burning some of FEIs buses. The operations manager of FEI was advised to take precautionary measures but just the same, three armed Maranaos were able to seize a bus of FEI and set it on fire. Issue: Whether the seizure of the bus was a fortuitous event which Fortune Express, Inc could not be held liable. Held: A fortuitous event is an occurrence which could not be foreseen or which though foreseen, is inevitable. This factor of unforeseen-ability is lacking in this case for despite the report that the Maranaos were planning to burn FEIs buses, nothing was really done by FEI to protect the safety of the passengers. 20. Gacal vs. Philippine Airlines (183 SCRA 189, G.R. No. 55300 March 16, 1990) Facts: Plaintiffs Franklin Gacal, his wife and three others were passengers of PAL plane at Davao Airport for a flight to Manila, not knowing that the flight, were Commander Zapata with other members of Moro National Liberation Front. They were armed with grenades and pistols. After take off, the members of MNLF announced a hijacking and directed the pilot to fly directly to Libya, later to Sabah. They were, however, forced to land in Zamboanga airport for refueling, because the plane did not have enough fuel to make direct flight to Sabah. When the plane began to taxi at the runaway of Zamboanga airport, it was met by two armored cars of the military. An armored car subsequently bumped the stairs leading inside the plane. That commenced the battle between the military and the hijackers, which led ultimately to the liberation of the planes surviving crew and passengers with the final score of ten passengers and three hijackers dead. Issue: Whether or not hijacking is a case fortuito or force majeure, which would exempt an aircraft from liability for, damages to its passengers and personal belongings that were lost during the incident? Held: In order to constitute a caso fortuito that would exempt from liability underArt 1174 of the civil code, it is necessary that the following elements must occur: (a) the cause of the breach of obligation must be independent of human will; (b) the event must be unforeseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. Applying the above guidelines, the failure to transport the petitioners safely from Davao to Manila was due to the skyjacking incident staged buy the MNLF without connection to the private respondent, hence, independent of will of PAL or its passengers. The events rendered it impossible for PAL to perform its obligation in a normal manner and it cannot be faulted for negligence on the duty performed by the military. The existence of force majeure has been established thus exempting PAL from payment of damages.

21. MARANAN VS PEREZ 20 SCRA 412 FACTS: Rogelio Corachea, a passenger in a taxicab owned and operated by Pascual Perez, was stabbed and killed by the driver, Simeon Valenzuela. Valenzuela was found guilty for homicide by the Court of First Instance and was sentenced to suffer Imprisonment and to indemnify the heirs of the deceased in the sum of P6000. While pending appeal, mother of deceased filed an action in the Court of First Instance of Batangas to recover damages from Perez and Valenzuela. Defendant Perez 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. Defendant-appellant relied solely on the ruling enunciated in Gillaco vs. Manila Railroad Co. that the carrier is under no absolute liability for assaults of its employees upon the passengers. ISSUE: Was the contention of the defendant valid? RULING: No. The attendant facts and controlling law of that case and the one at bar were very different. In the Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty employee. 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 willful 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. The Civil Code provisions on the subject of Common Carriers are new and were taken from Anglo-American Law. The basis of the carrier's liability for assaults on passengers committed by its drivers rested either on the doctrine of respondent superior or the principle that it was the carrier's implied duty to transport the passenger safely. Under the second view, upheld by the majority and also by the later cases, it was enough that the assault happens within the course of the employee's duty. It was 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 was absolute in the sense that it practically secured the passengers from assaults committed by its own employees. 22. G.R. No. L-8034 November 18, 1955 CORNELIA A. DE GILLACO, ET AL., plaintiffs-appellees, vs. MANILA RAILROAD COMPANY, defendant-appellant. First Assistant Corporate Counsel Federico C. Alikpala and Attorney Higino R. Francisco for appellant. Restituto Luna for appellees. REYES, J.B.L., J.: The Manila Railroad Company has appealed from a judgment of the Court of First Instance of Laguna sentencing it to pay P4,000 damages to the appellees herein, the widow and children of the late Tomas Gillaco, shot by an employee of the Company in April, 1946. The judgment was rendered upon the following stipulation of facts: That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas Gillaco, husband of the plaintiff, was a passenger in the early morning train of the Manila Railroad Company from Calamba, Laguna to Manila; That when the train reached the Paco Railroad station, Emilio Devesa, a train guard of the Manila Railroad Company assigned in the Manila-San Fernando, La Union Line, happened to be in said station waiting for the same train which would take him to Tutuban Station, where he was going to report for duty; That Emilio Devesa had a long standing personal grudge against Tomas Gillaco, same dating back during the Japanese occupation; That because of this personal grudge, Devesa shot Gillaco with the carbine furnished to him by the Manila Railroad Company for his use as such train guard, upon seeing him inside the train coach; That Tomas Gillaco died as a result of the would which he sustained from the shot fired by Devesa. It is also undisputed that Devesa was convicted with homicide by final judgment of the Court of Appeals. Appellant's contention is that, on the foregoing facts, no liability attaches to it as employer of the killer, Emilio Devesa; that it is not responsible subsidiary ex delicto, under Art. 103 of the Revised Penal Code, because the crime was not committed while the slayer was in the actual performance of his ordinary duties and service;

nor is it responsible ex contractu, since the complaint did not aver sufficient facts to establish such liability, and no negligence on appellant's party was shown. The Court below held the Railroad company responsible on the ground that a contract of transportation implies protection of the passengers against acts of personal violence by the agents or employees of the carrier. There can be no quarrel with the principle that a passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the contract of transportation obligates the carrier to transport a passenger safely to his destination. But under the law of the case, this responsibility extends only to those that the carrier could foresee or avoid through the exercise of the degree of car and diligence required of it. Discussing the basis of a carrier's liability under the old Civil Code of 1889 (which was in force in 1946, when Gillaco was shot) this Court said in Lasam vs. Smith (45 Phil., 657): In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the defendant's liability, if any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual liability has been so ably and exhaustively discussed in various other cases that nothing further need here be said upon that subject. (See Cangco vs. Manila Railroad Co., 38 Phil., 768; Manila Railroad vs. Compaia Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706). It is sufficient to reiterate that the source of the defendant's legal liability is the contract of carriage; that by entering into that contract he bound himself to carry the plaintiff safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows: "No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability." The act of guard Devesa in shooting passenger Gillaco (because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely unforeseeable by the Manila Railroad Co. The latter had no means to ascertain or anticipate that the two would meet, nor could it reasonably foresee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. The shooting in question was therefore "caso fortuito" within the definition of article 105 of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of appellant's contract of safe carriage with the late Tomas Gillaco was excused thereby. No doubt that a common carrier is held to a very high degree of care and diligence in the protection of its passengers; but, considering the vast and complex activities of modern rail transportation, to require of appellant that it should guard against all possible misunderstanding between each and every one of its employees and every passenger that might chance to ride in its conveyances at any time, strikes us as demanding diligence beyond what human care and foresight can provide. The lower Court and the appellees both relied on the American authorities that particularly hold carriers to be insurers of the safety of their passengers against willful assault and intentional ill treatment on the part of their servants, it being immaterial that the act should be one of private retribution on the part of the servant, impelled by personal malice toward the passenger (10 Am. Jur. 108; Ed. Note to Gassenheimer vs. Wester R. Co. 40 LRA (NS), p. 999, et seq.) But as can be inferred from the previous jurisprudence of this Court , the Civil Code of 1889 did not impose such absolute liability (Lasam vs. Smith, supra). The liability of a carrier as an

insurer was not recognized in this jurisdiction (Government vs. Inchausti & Co., 40 Phil., 219; Oriental Comm. Co. vs. Naviera Filipina, 38 Off. Gaz., 1020). Another very important consideration that must be borne in mind is that, 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 passenger 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 cannot be deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier. We agree with the position taken by the Supreme Court of Texas in a similar case, where it held: The only good reason for making the carrier responsible for the misconduct of the servant perpetrated in his own interest, and not in that of his employer, or otherwise within the scope of his employment, is that the servant is clothed with the delegated authority, and charge with the duty by the carrier, to execute his undertaking with the passenger. And it cannot be said, we think, that there is any such delegation to the employees at a station with reference to passenger embarking at another or traveling on the train. Of course, we are speaking only of the principle which holds a carrier responsible for wrong done to passenger by servants acting in their own interest, and not in that of the employer. That principle is not the ordinary rule, respondent superior, by which the employer is held responsible only for act or omissions of the employee in the scope of his employment; but the only reason in our opinion for a broader liability arises from the fact that the servant, in mistreating the passenger wholly for some private purpose of his own, in the very act, violates the contractual obligation of the employer for the performance of which he has put the employee in his place. The reason does not exist where the employee who committed the assault was never in a position in which it became his duty to his employer to represent him in discharging any duty of the latter toward the passenger. The proposition that the carrier clothes every employee engaged in the transportation business with the comprehensive duty of protecting every passenger with whom he may in any way come in contact, and hereby makes himself liable for every assault commited by such servant, without regard to the inquiry whether or not the passenger has come within the sphere of duty of that servant as indicated by the employment, is regarded as not only not sustained by the authorities, but as being unsound and oppressive both to the employer and the employee. (Houston & T. C. R. Co. vs. Bush, 32 LRA (NS), p. 1205.) Wherefore, the judgment appealed from is reversed and the complaint ordered dismissed, without cost. So ordered.

23. Bachelor Express v. CA Facts Bus No. 800 was owned by Bachelor Express, Inc. (Bachelor) and driven by Cresencio Rivera The bus came from Davao on its way to Cagayan de Oro City. En route, the bus picked up a passenger. A few minutes later, a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers. When the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found lying down the road. Beter was dead due to head injuries while Rauraut was suffering from severe injuries, which caused

her death later. The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut filed a complaint for "sum of money" against Bachelor, its alleged owner Samson Yasay, and Rivera. In their answer, the petitioners denied liability for the death of Beter and Rautraut, alleging the following: 1) that the driver was able to transport his passengers safely to their respective places of destination except Beter and Rautraut who jumped off the bus without the knowledge and consent; 2that Bachelor exercised due diligence in the choice of its employees to avoid as much as possible accidents; 3) said stampede was very much beyond the control of the defendants; and 4) petitioners were not parties to the incident complained of as it was an act of a third party who is not in any way connected with the defendants and of which the latter have no control and supervision RTC: dismissed case; CA: reversed Petitioners maintain that they were not negligent since: 1) the commotion was triggered by the act of the passenger who ran amuck and stabbed another passenger of the bus; 2) that presumably out of fear and moved by that human instinct of self-preservation Beter and Rautraut jumped off the bus while the bus was still running resulting in their untimely death; 3) that they should not be liable for the acts of third person over whom they have no control or supervision Issue: W/N Bachelor is liable (since accident was NOT force majeure)? Yes, Petition Dismissed Held: 1) There is no doubt that Bachelor is a common carrier. Hence, it is 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. In the case at bar, Beter and Rautraut were passengers of a bus belonging to petitioner Bachelor Express, Inc. and, while passengers of the bus, suffered injuries which caused their death. Article 1756 provides that Bachelor Express, Inc. is presumed to have acted negligently, unless it can prove that it had observed extraordinary diligence in accordance with Articles 1733 and 1755. 2) Bachelor denies liability by contending that the death of the said passengers was caused by a third person who was beyond its control and supervision. In order to overcome the presumption of fault or negligence under the law, Bachelor must prove that the vehicular incident resulting in the death of passengers Beter and Rautraut was caused by force majeure over which the common carrier did not have any control. The elements of FM are: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor.

However, to be absolved from liability, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. ITCAB: Facts show that Bachelor was unable to disprove negligence since: 1) the bus driver did not immediately stop the bus at the height of the commotion; 2) the bus was speeding from a full stop ; 3) the victims fell from the bus door when it was opened or gave way while the bus was still running; 4) the conductor panicked and blew his whistle after people had already fallen off the bus; and 5) the bus was not properly equipped with doors in accordance with law, it is clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing common carriers. Finally, the mere fact that common carriers are not insurers of their passengers does not hold water since it is obligated to observe extraordinary diligence in transporting safely the passengers to their destinations (as held in Batangas Laguna Tayabas Co. v IAC) 24. Williams vs Yatco

25. PAL vs CA

26. G.R. No. 118664. August 7, 1998] JAPAN AIRLINES, petitioner, vs. THE COURT OF APPEALS ENRIQUE AGANA, MARIA ANGELA NINA AGANA, ADALIA B. FRANCISCO and JOSE MIRANDA, respondents. DECISION ROMERO, J.: Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking the reversal of the [1] 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 [2] 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 [3] 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. [4] 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 [5] 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 [6] 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. [7] 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 [8] the insurer of all risks. Paradoxically, the Court of Appeals, despite the presence of force majeure, still ruled against JAL relying in [9] 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 (p assenger) was left at the airport and could [10] not even hitch a ride in a Ford Fiera loaded with PAL personnel, not to mention the apparent apathy of the [11] 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 [12] 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 [13] 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.

27. G.R. No. L-55347 October 4, 1985 PHILIPPINE NATIONAL RAILWAYS, petitioner, vs. THE HONORABLE COURT OF APPEALS and ROSARIO TUPANG, respondents. Arturo Samaniego for private respondent. ESCOLIN, J.: Invoking the principle of state immunity from suit, the Philippine National Railways, PNR for short, instituted this petition for review on certiorari to set aside the decision of the respondent Appellate Court which held petitioner PNR liable for damages for the death of Winifredo Tupang, a paying passenger who fell off a train operated by the petitioner. The pertinent facts are summarized by the respondent court as follows: The facts show that on September 10, 1972, at about 9:00 o'clock in the evening, Winifredo Tupang, husband of plaintiff Rosario Tupang, boarded 'Train No. 516 of appellant at Libmanan, Camarines Sur, as a paying passenger bound for Manila. Due to some mechanical defect, the train stopped at Sipocot, Camarines Sur, for repairs, taking some two hours before the train could resume its trip to Manila. Unfortunately, upon passing Iyam Bridge at Lucena, Quezon, Winifredo Tupang fell off the train resulting in his death.The train did not stop despite the alarm raised by the other passengers that somebody fell from the train. Instead, the train conductor Perfecto Abrazado, called the station agent at Candelaria, Quezon, and requested for verification of

the information. Police authorities of Lucena City were dispatched to the Iyam Bridge where they found the lifeless body of Winifredo Tupang. As shown by the autopsy report, Winifredo Tupang died of cardio-respiratory failure due to massive cerebral hemorrhage due to traumatic injury [Exhibits B and C, Folder of Exhibits],Tupang was later buried in the public cemetery of Lucena City by the local police authorities. [Rollo, pp. 91-92] Upon complaint filed by the deceased's widow, Rosario Tupang, the then Court of First Instance of Rizal, after trial, held the petitioner PNR liable for damages for breach of contract of carriage and ordered "to pay the plaintiff the sum of P12,000,00 for the death of Winifredo Tupang, plus P20,000.00 for loss of his earning 1 capacity and the further sum of P10,000.00 as moral damages, and P2,000.00 as attorney's fees, and costs. On appeal, the Appellate Court sustained the holding of the trial court that the PNR did not exercise the utmost diligence required by law of a common carrier. It further increased the amount adjudicated by the trial court by ordering PNR to pay the plaintiff an additional sum of P5,000.00 as exemplary damages. Moving for reconsideration of the above decision, the PNR raised for the first time, as a defense, the doctrine of state immunity from suit. It alleged that it is a mere agency of the Philippine government without distinct or separate personality of its own, and that its funds are governmental in character and, therefore, not subject to garnishment or execution. The motion was denied; the respondent court ruled that the ground advanced could not be raised for the first time on appeal. Hence, this petition for review. The petition is devoid of merit. The PNR was created under Rep. Act 4156, as amended. Section 4 of the said Act provides: The Philippine national Railways shall have the following powers: a. To do all such other things and to transact all such business directly or indirectly necessary, incidental or conducive to the attainment of the purpose of the corporation; and b. Generally, to exercise all powers of a corporation under the Corporation Law. Under the foregoing section, the PNR has all the powers, the characteristics and attributes of a corporation under the Corporation Law. There can be no question then that the PNR may sue and be sued and may be 2 subjected to court processes just like any other corporation. The petitioner's contention that the funds of the PNR are not subject to garnishment or execution hardly 3 raises a question of first impression. InPhilippine National Railways v. Union de Maquinistas, et al., then Justice Fernando, later Chief Justice, said. "The main issue posed in this certiorari proceeding, whether or not the funds of the Philippine National Railways, could be garnished or levied upon on execution was resolved in two recent decisions, thePhilippine National Bank v. Court of Industrial Relations [81 SCRA 314] and Philippine National Bank v. Hon. Judge Pabalan [83 SCRA 595]. This Court in both cases answered the question in the affirmative. There was no legal bar to garnishment or execution. The argument based on non-suability of a state allegedly because the funds are governmental in character was unavailing.So it must be again." In support of the above conclusion, Justice Fernando cited the Court's holding in Philippine National Bank v. Court of Industrial Relations, to wit: "The premise that the funds could be spoken of as public in character may be accepted in the sense that the People's Homesite and Housing Corporation was a government-owned entity. It does not follow though that they were exempt from garnishment. National Shipyard and Steel Corporation v. Court of Industrial Relations is squarely in point. As was explicitly stated in the opinion of then Justice, later Chief Justice, Concepcion: "The allegation to the effect that the funds of the NASSCO are public funds of the government, and that, as such, the same may not be garnished, attached or levied upon, is untenable for, as a government- owned and controlled corporation, the NASSCO has a personality of its own,

distinct and separate from that of the Government. It has-pursuant to Section 2 of Executive Order No. 356, dated October 23, 1950 * * *, pursuant to which the NASSCO has been established- 'all the powers of a 4 corporation under the Corporation Law * * *. 5 As far back as 1941, this Court in the case of Manila Hotel Employees Association v. Manila Hotel Co., laid down the rule that "when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation. [Bank of the U.S. v. Planters' Bank, 9 Waitch 904, 6 L. ed. 244]. By engaging in a particular business through the instrumentality of a corporation the government divests itself pro hac vice of its sovereign character, so as to render the corporation subject to the rules of law 6 governing private corporations. Of Similar import is the pronouncement in Prisco v. CIR,' that "when the government engages in business, it abdicates part of its sovereign prerogatives and descends to the level of a citizen, ... . " In fine, the petitioner PNR cannot legally set up the doctrine of non-suability as a bar to the plaintiff's suit for damages. The appellate court found, the petitioner does not deny, that the train boarded by the deceased Winifredo Tupang was so over-crowded that he and many other passengers had no choice but to sit on the open platforms between the coaches of the train. It is likewise undisputed that the train did not even slow down when it approached the Iyam Bridge which was under repair at the time, Neither did the train stop, despite 7 the alarm raised by other passengers that a person had fallen off the train at lyam Bridge. The petitioner has the obligation to transport its passengers to their destinations and to observe extraordinary diligence in doing so. Death or any injury suffered by any of its passengers gives rise to the presumption that it was negligent in the performance of its obligation under the contract of carriage. Thus, as correctly ruled by the respondent court, the petitioner failed to overthrow such presumption of negligence with clear and convincing evidence. 8 But while petitioner failed to exercise extraordinary diligence as required by law, it appears that the deceased was chargeable with contributory negligence. Since he opted to sit on the open platform between the coaches of the train, he should have held tightly and tenaciously on the upright metal bar found at the side of said platform to avoid falling off from the speeding train. Such contributory negligence, while not exempting the PNR from liability, nevertheless justified the deletion of the amount adjudicated as moral damages. By the same token, the award of exemplary damages must be set aside. Exemplary damages may be allowed only in 9 cases where the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. There being no evidence of fraud, malice or bad faith on the part of petitioner, the grant of exemplary damages should be discarded. WHEREFORE, the decision of the respondent appellate court is hereby modified by eliminating therefrom the amounts of P10,000.00 and P5,000.00 adjudicated as moral and exemplary damages, respectively. No costs. SO ORDERED. 28. ISAAC vs. AL AMMEN Trans FACTS:

The driver of the bus swerved the bus to the very extreme right of the road until its front and rear wheels have gone over the pile of stones or gravel situated on the rampart of the road. The bus could not bus farther right and run over a greater portion of the pile of gravel, the peak of which was about 3 feet high, without endangering the safety of his passengers. Despite efforts, the rear left side of the bus was hit by the pick-up car He was rushed to a hospital in Iriga, Camarines Sur where he was given blood transfusion to save his life After 4 days, he was transferred to another hospital in Tabaco, Albay, where he under went treatment for 3 months Later, he was moved to the Orthopedic Hospital where he was operated on and stayed for another 2 months. He incurred expenses of P623.40, excluding medical fees which were paid by A.L. Ammen Trans. Co. Trial Court: Dismissed the complaint - collision occurred due to the negligence of the driver of the pick-up car ISSUE: W/N if there is no negligence on the part of the common carrier but that the accident resulting in injuries is due to causes which are inevitable and which could not have been avoided or anticipated notwithstanding the exercise of that high degree of care and skill which the carrier is bound to exercise for the safety of his passengers neither the common carrier nor the driver is liable therefor HELD: YES. Appealed decision is AFFIRMED. ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extra ordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756 Ooom. ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755.

May 31, 1951: Cesar Isaac boarded Bus No. 31 from Ligao, Albay bound for Pili, Camarines Sur and seated himself on the left side resting his left arm on the window sill but with his left elbow outside the window Before reaching his destination, a pick-up car at full speed and was running outside of its proper lane came from the opposite direction

principles governing the liability of a common carrier: the liability of a carrier is contractual and arises upon breach of its obligation. There is breach if it fails to exert extraordinary diligence according to all circumstances of each case a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary diligence the carrier is not an insurer against all risks of travel

where a carrier's employee is confronted with a sudden emergency, the fact that he is obliged to act quickly and without a chance for deliberation must be taken into account, and he is held to the some degree of care that he would otherwise be required to exercise in the absence of such emergency but must exercise only such care as any ordinary prudent person would exercise under like circumstances and conditions, and the failure on his part to exercise the best judgment the case renders possible does not establish lack of care and skill on his part Considering all the circumstances, we are persuaded to conclude that the driver of the bus has done what a prudent man could have done to avoid the collision It is true that Isaac's contributory negligence cannot relieve A.L. Ammen of itsliability but will only entitle it to a reduction of the amount of damage caused (Article 1762, new Civil Code), but this is a circumstance which further militates against the position taken by Isaac

the right shoulder of the road to pick up passengers. Suddenly, an Isuzu cargo truck, owned by petitioner and driven by Gerosano, which was traveling in the same direction, hit the rear end portion of the Fiera where respondent Noe was standing. Due to the tremendous force, the cargo truck smashed respondent Noe against the Fiera crushing his legs and feet which made him fall to the ground. A passing vehicle brought him to the Silliman University Medical Center where his lower left leg was amputated. Police investigation reports showed that respondent Noe was one of the 11 passengers of the Fiera who suffered injuries; that when the Fiera stopped to pick up a passenger, the cargo truck bumped the rear left portion of the Fiera; that only one tire mark from the front right wheel of the cargo truck was seen on the road. A sketch of the accident was drawn by investigator Mateo Rubia showing the relative positions of the two vehicles, their distances from the shoulder of the road and the skid marks of the right front wheel of the truck measuring about 48 feet. On February 18, 1993, respondent Noe, through his guardian ad litem Arlie Bernardo, filed with the RTC of Dumaguete City a complaint3 for damages arising from quasi delict against petitioner as the registered owner of the cargo truck and his driver Gerosano. He alleged that the proximate cause of his injuries and suffering was the reckless imprudence of Gerosano and petitioners negligence in the selection of a reckless driver and for operating a vehicle that was not roadworthy. He prayed for actual damages, loss of income, moral and exemplary damages , attorneys fees, litigation expenses and costs of suit. Petitioner and his driver Gerosano filed their Answer4 denying the material allegations in the complaint. They, in turn, filed a third party complaint5 against respondents Bandoquillo and Quinquillera, as owner and driver respectively of the Fiera. They alleged that it was the reckless imprudence of respondent driver Quinquillera and his clear violation of the traffic rules and regulations which was the proximate cause of the accident and asked for indemnification for whatever damages they would be sentenced to pay. Respondents Bandoquillo and Quinquillera filed their Answer to the third party complaint asking for the dismissal of the third party complaint and for payment of attorneys fees. Driver Gerosano was charged criminally for reckless imprudence resulting to multiple physical injuries with damage to property before the Municipal Circuit Trial Court (MCTC) of Pamplona-Amlan and San Jose, Negros Oriental. On November 16, 1987, the MCTC rendered its decision6 finding him guilty of the crime charged and was sentenced to four months and one day to two years and four months and to pay the costs. On February 18, 1993, the RTC rendered its judgment in the civil case,7 the dispositive portion of which reads:

29. G.R. No. 144723

February 27, 2006

LARRY ESTACION, Petitioner, vs. NOE BERNARDO, thru and his guardian ad litem ARLIE BERNARDO, CECILIA BANDOQUILLO and GEMINIANO QUINQUILLERA, Respondents. DECISION AUSTRIA-MARTINEZ, J.: Before us is a petition for review on certiorari filed by Larry Estacion (petitioner) seeking to annul the Decision dated April 17, 20001 of the Court of Appeals (CA) in CA-GR CV No. 41447 which affirmed in toto the decision of the Regional Trial Court (RTC) of Dumaguete City, Branch 41, Negros Oriental, holding petitioner and his driver Bienvenido Gerosano (Gerosano) liable for damages for the injury sustained by Noe Bernardo (respondent Noe). Also assailed is the appellate court s Resolution dated August 16, 20002 denying petitioners motion for reconsideration. In the afternoon of October 16, 1982, respondent Noe was going home to Dumaguete from Cebu, via Bato and Tampi. At Tampi, he boarded a Ford Fiera passenger jeepney with plate no. NLD 720 driven by respondent Geminiano Quinquillera (Quinquillera), owned by respondent Cecilia Bandoquillo (Bandoquillo), and was seated on the extension seat placed at the center of the Fiera. From San Jose, an old woman wanted to ride, so respondent Noe offered his seat. Since the Fiera was already full, respondent Noe hung or stood on the left rear carrier of the vehicle. Somewhere along Barangay Sto. Nio, San Jose, Negros Oriental, between kilometers 13 and 14, the Fiera began to slow down and then stopped by

WHEREFORE, in view of the foregoing, judgment is hereby rendered, ordering defendants Gerosano and Estacion, to pay plaintiff, jointly or solidarily, the following:
1. P129,584.20 for actual damages in the form of medical and hospitalization expenses; 2. P50,000.00 for moral damages, consisting of mental anguish, moral shock, serious anxiety and wounded feelings; 3. P10,000.00 for attorneys fees; and 4. P5,000.00 for litigation expenses.

Petitioner submits the following issues for resolution:9 WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING THAT PETITIONER LARRY ESTACION EXERCISED THE DUE DILIGENCE OF A GOOD FATHER OF A FAMILY TO PREVENT DAMAGE DESPITE ABUNDANCE OF EVIDENCE TO THAT EFFECT; WHETHER THE COURT OF APPEALS ERRED IN NOT HOLDING THAT PETITIONER LARRY ESTACION EXERCISED DUE DILIGENCE IN THE SELECTION AND SUPERVISION OF HIS EMPLOYEE AND IN MAINTAINING HIS CARGO TRUCK ROADWORTHY AND IN GOOD OPERATING CONDITION; WHETHER THE COURT OF APPEALS ERRED IN EXONERATING RESPONDENTS CECILIA BANDOQUILLO AND GEMINIANO QUINQUILLERA. In his Memorandum, petitioner contends that he was able to establish that he observed the diligence of a good father of a family not only in the selection of his employees but also in maintaining his truck roadworthy and in good operating condition; that the CA erred in exonerating respondents Bandoquillo and Quinquillera, owner and driver, respectively of the Fiera from liability when their negligence was the proximate cause of respondent Noes injuries; that respondent Noes act of standing in the rear carrier of the Fiera is in itself negligence on his part which was aggravated by the fact that respondent Quinquillera overtook the cargo truck driven by Gerosano on the curve and suddenly cut into the latters lane; that due to the overloading of passengers, Gerosano was not able to see the brake lights of the Fiera when it suddenly stopped to pick up passengers; that overloading is in violation of the applicable traffic rules and regulations and Article 2185 is explicit when it provides that "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 any traffic regulation"; that since the Fiera driver was negligent, there arises a presumption that respondent Bandoquillo, as owner of the Fiera, is negligent in the selection and supervision of her employee; that assuming petitioner Estacion and his driver are not entirely blameless, the negligence of Quinquillera is sufficient basis why the respective liabilities should be delineated vis--vis their degree of negligence consistent with Article 217910 of the Civil Code. Respondent Noe filed his Memorandum alleging that the first and second issues raised are factual in nature which are beyond the ambit of a petition for review; that petitioner failed to overcome the presumption of negligence thus he is liable for the negligence of his driver Gerosano; and that the third issue is best addressed to respondents Bandoquillo and Quinquillera.

SO ORDERED.8 The trial court ruled that the negligence of Gerosano, petitioners driver, is the direct and proximate cause of the incident and of the injuries suffered by respondent Noe; that Gerosanos gross negligence and reckless imprudence had been confirmed by the Judgment in Criminal Case No. 463; that based on the findings of the police investigator, the faulty brakes caused the cargo truck to bump the Fiera; that the Traffic Accident Report showed that the tire mark of the cargo truck measuring 48 feet is visibly imprinted on the road where the incident took place indicating that the said vehicle was speeding fast; that the existence of one tire mark of the cargo truck proved that the said vehicle had a faulty brake, otherwise, it would have produced two tire marks on the road; and that the photographs taken right after the incident also showed who the guilty party was. The trial court did not give credence to the argument of petitioner and his driver that the truck was properly checked by a mechanic before it was dispatched for a trip. It found that petitioner is negligent in maintaining his vehicle in good condition to prevent any accident to happen; that petitioner is liable under Article 2180 of the Civil Code as employer of driver Gerosano for being negligent in the selection and supervision of his driver as well as for maintaining and operating a vehicle that was not roadworthy; and that petitioner and his driver are solidarily liable for all the natural and probable consequences of their negligent acts or omissions. The trial court dismissed the third party complaint filed by petitioner and his driver against respondents Bandoquillo and Quinquillera. Dissatisfied, only petitioner appealed to the CA. On April 17, 2000, the CA rendered the assailed decision which affirmed in toto the decision of the trial court. Petitioners motion for reconsideration was denied in a Resolution dated August 16, 2000. Hence, the herein petition for review.

Respondents Bandoquillo and Quinquillera failed to file their memorandum despite receipt of our Resolution requiring them to submit the same. We find it apropos to resolve first the third issue considering that the extent of the liability of petitioner and his driver is dependent on whether respondents Bandoquillo and Quinquillera are the ones negligent in the vehicular mishap that happened in the afternoon of October 16, 1982 where respondent Noe was injured, resulting in the amputation of his left leg. At the outset, the issue raised is factual in nature. Whether a person is negligent or not is a question of fact which we cannot pass upon in a petition for review on certiorari, as our jurisdiction is limited to reviewing errors of law.11 As a rule, factual findings of the trial court, affirmed by the CA, are final and conclusive and may not be reviewed on appeal. The established exceptions are: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when the findings are grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the CA is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the CA, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings of fact are conclusions without citation of specific evidence on which they are based; (8) when the CA manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and (9) when the findings of fact of the CA are premised on the absence of evidence and are contradicted by the evidence on record.12 On the basis of the records of this case, we find that there is cogent reason for us to review the factual findings of the lower courts to conform to the evidence on record and consider this case as an exception to the general rule. The trial court and the appellate court had made a finding of fact that the proximate cause of the injury sustained by respondent Noe was the negligent and careless driving of petitioners driver, Gerosano, who was driving at a fast speed with a faulty brake when the accident happened. We see no cogent reason to disturb the trial courts finding in giving more credence to the testimony of respondent Noe than the testimony of Gerosano, petitioners truck driver. The correctness of such finding is borne by the records. In his testimony, Gerosano said that he was driving the truck at a speed of about 40 kilometers per hour;13 that the Fiera was behind him but upon reaching the curve, i.e., after passing San Jose going to Dumaguete, the Fiera overtook him and blocked his way;14 that he was 10 meters from the Fiera prior to the impact15 when he applied the brakes16 and tried to evade the Fiera but he still hit it.17 We agree with the trial court and the appellate court when they found that the truck was running at a fast speed because if Gerosano was really driving at a speed of 40 kilometers

per hour and considering that the distance between the truck and the Fiera in front was about 10 meters, he had more than enough time to slacken his speed and apply his break to avoid hitting the Fiera. However, from the way the truck reacted to the application of the brakes, it showed that Gerosano was driving at a fast speed because the brakes skidded a lengthy 48 feet as shown in the sketch of police investigator Rubia of the tire marks visibly printed on the road. Moreover, the photographs taken after the incident and the testimony of Gerosano as to the extent of damage to the truck, i.e. the trucks windshield was broken and its hood was damaged after the impact,18 further support the finding of both courts that Gerosano was driving at a fast pace. The accident was further caused by the faulty brakes of the truck. Based on the sketch report, there was only one tire mark of the right tire of the cargo truck during the incident which, as testified to by police investigator Rubia, meant that the brakes of the truck were not aligned otherwise there would be two tire marks impressions on the road.19 Although petitioner contends that there are other factors to explain why only one skid mark was found at the place of the incident, such as the angle and edges of the road as well as the balance of the weight of the cargo laden in the truck, he failed to show that indeed those factors were present to prove his defense. Such claim cannot be given credence considering that investigator Rubia testified that the body of the truck was very much on the road, i.e., not over the shoulder of the road,20 and the road was straight.21 Indeed, it is the negligent act of petitioners driver of driving the cargo truck at a fast speed coupled with faulty brakes which was the proximate cause of respondent Noes injury. Petitioners claim that right after overtaking the cargo truck, the Fiera driver suddenly stopped to pick up three passengers from the side of the road; that the overloading of passengers prevented his truck driver from determining that the Fiera had pulled over to pick up passengers as the latters brakelights were obstructed by the passengers standing on the rear portion of the Fiera were not substantiated at all. Respondent Quinquillera, the driver of the Fiera, testified that the distance from the curve of the road when he stopped and picked up passengers was estimated to be about 80 to 90 feet.22 In fact, from the sketch drawn by investigator Rubia, it showed a distance of 145 feet from the curve of the road to the speed tire mark (which measured about 48 feet) visibly printed on the road to the Fiera. This means that the Fiera driver did not stop immediately after the curve as what petitioner claims. Moreover, Gerosano admitted that his truck was at a distance of 10 meters prior to the impact. The distance between the two vehicles was such that it would be impossible for Gerosano not to have seen that the Fiera had pulled over to pick up passengers. However, we agree with petitioner that respondent Noes act of standing on the rear carrier of the Fiera exposing himself to bodily injury is in itself negligence on his part. We find that the trial court and the CA erred when they failed to consider that respondent Noe was also

guilty of contributory negligence. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. 23 It has been established by the testimony of respondent Noe that he was with four or five other persons standing on the rear carrier of the Fiera since it was already full. Respondent Noes act of standing on the left rear carrier portion of the Fiera showed his lack of ordinary care and foresight that such act could cause him harm or put his life in danger. It has been held that "to hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body.24 Respondent Noes act of hanging on the Fiera is definitely dangerous to his life and limb. We likewise find merit in petitioners contention that respondent Quinquillera, the Fiera driver, was also negligent. There is merit to petitioners claim that there was overloading which is in violation of traffic rules and regulations. Respondent Noe himself had testified that he was standing at the rear portion of the Fiera because the Fiera was already full. Respondent Quinquillera should not have taken more passengers than what the Fiera can accommodate. If the Fiera was not overloaded, respondent Noe would not have been standing on the rear carrier and sustained such extent of injury. Furthermore, we find that respondent Quinquillera was negligent in allowing respondent Noe to stand on the Fieras rear portion. Section 32(c) of Article III of Republic Act No. 4136, otherwise known as "The Land Transportation and Traffic Code" provides: (c) Riding on running boards No driver shall allow any person to ride on running board, step board or mudguard of his motor vehicle for any purpose while the vehicle is in motion. Respondent Quinquilleras act of permitting respondent Noe to hang on the rear portion of the Fiera in such a dangerous position creates undue risk of harm to respondent Noe. Quinquillera failed to observe that degree of care, precaution and vigilance that the circumstances justly demand. Thus, respondent Noe suffered injury.25Since respondent Quinquillera is negligent, there arises a presumption of negligence on the part of his employer, respondent Bandoquillo, in supervising her employees properly. Such presumption was not rebutted at all by Bandoquillo. Thus, the CA erred in affirming the dismissal of the third party complaint filed by petitioner against respondents Quinquillera and Bandoquillo. Petitioner contends that he was able to establish that he exercised the due diligence of a good father of a family in the selection of his employees as well as in the maintenance of his cargo truck in good operating condition. He claims that in addition to looking at Gerosanos drivers license, he accompanied the latter in his first two trips, during which he ascertained

Gerosanos competence as a driver, petitioner being a driver himself; that the truck driven by Gerosano has never figured in any accident prior to the incident involved; that upon his acquisition of the cargo truck on March 16, 1982, only 7 months prior to the incident, the same was thoroughly checked up and reconditioned; and that he had in his employ a mechanic who conducted periodic check-ups of the engine and brake system of the cargo truck. We are not persuaded. Article 2180 of the Civil Code provides: 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. xxx 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. xxx 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. As the employer of Gerosano, petitioner is primarily and solidarily liable for the quasidelict committed by the former. Petitioner is presumed to be negligent in the selection and supervision of his employee by operation of law and may be relieved of responsibility for the negligent acts of his driver, who at the time was acting within the scope of his assigned task, only if he can show that he observed all the diligence of a good father of a family to prevent damage.26 In Yambao v. Zuniga,27 we have clarified the meaning of the diligence of a good father of a family, thus: The "diligence of a good father" referred to in the last paragraph of the aforecited statute means diligence in the selection and supervision of employees. Thus, when an employee, while performing his duties, causes damage to persons or property due to his own negligence, there arises the juris tantum presumption that the employer is negligent, either in the selection of the employee or in the supervision over him after the selection. For the employer to avoid the solidary liability for a tort committed by his employee, an

employer must rebut the presumption by presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises the care and diligence of a good father of a family. x x x Petitioners claim that she exercised due diligence in the selection and supervision of her driver, Venturina, deserves but scant consideration. Her allegation that before she hired Venturina she required him to submit his drivers license and clearances is worthless, in view of her failure to offer in evidence certified true copies of said license and clearances. Bare allegations, unsubstantiated by evidence, are not equivalent to proof under the rules of evidence. x x x In any case, assuming arguendo that Venturina did submit his license and clearances when he applied with petitioner in January 1992, the latter still fails the test of due diligence in the selection of her bus driver. Case law teaches that for an employer to have exercised the diligence of a good father of a family, he should not be satisfied with the applicants mere possession of a professional drivers license; he must also carefully examine the applicant for employment as to his qualifications, his experience and record of service. Petitioner failed to present convincing proof that she went to this extent of verifying Venturinas qualifications, safety record, and driving history. The presumption juris tantum that there was negligence in the selection of her bus driver, thus, remains unrebutted. Nor did petitioner show that she exercised due supervision over Venturina after his selection. For as pointed out by the Court of Appeals, petitioner did not present any proof that she drafted and implemented training programs and guidelines on road safety for her employees. In fact, the record is bare of any showing that petitioner required Venturina to attend periodic seminars on road safety and traffic efficiency.Hence, petitioner cannot claim exemption from any liability arising from the recklessness or negligence of Venturina. In sum, petitioners liability to private respondents for the negligent and imprudent acts of her driver, Venturina, under Article 2180 of the Civil Code is both manifest and clear. Petitioner, having failed to rebut the legal presumption of negligence in the selection and supervision of her driver, is responsible for damages, the basis of the liability being the relationship of pater familias or on the employers own negligence. x x x28 (Emphasis supplied) Petitioner failed to show that he examined driver Gerosano as to his qualifications, experience and service records. In fact, the testimony of driver Gerosano in his crossexamination showed the non-observance of these requirements. Gerosano testified that petitioner was his first employer in Dumaguete and that he was accepted by petitioner on the very day he applied for the job;29 that his drivers license was issued in Mindanao where he came from30 and that while petitioner asked him about his driving record in Mindanao, he

did not present any document of his driving record.31 Such admission clearly established that petitioner did not exercise due diligence in the selection of his driver Gerosano. Moreover, the fact that petitioners driver Gerosano was driving in an efficient manner when petitioner was with him in his first two trips would not conclusively establish that Gerosano was not at all reckless. It could not be considered as due diligence in the supervision of his driver to exempt petitioner from liability. In the supervision of his driver, petitioner must show that he had formulated training programs and guidelines on road safety for his driver which the records failed to show. We find that petitioner failed to rebut the presumption of negligence in the selection and supervision of his employees. Moreover, there was also no proof that he exercised diligence in maintaining his cargo truck roadworthy and in good operating condition. While petitioners mechanic driver testified that he made a routine check up on October 15, 1982, one day before the mishap happened, and found the truck operational, there was no record of such inspection. Turning now to the award of damages, since there was contributory negligence on the part of respondent Noe, petitioners liability should be mitigated in accordance with Article 2179 of the Civil Code which provides: When the plaintiffs own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendants lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. The underlying precept of the above article on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence.32 In Phoenix Construction, Inc., v. Intermediate Appellate Court,33 where we held that the legal and proximate cause of the accident and of Dionisios injuries was the wrongful and negligent manner in which the dump truck was parked but found Dionisio guilty of contributory negligence on the night of the accident, we allocated most of the damages on a 20-80 ratio. In said case, we required Dionisio to bear 20% of the damages awarded by the appellate court, except as to the award of exemplary damages, attorneys fees and costs. In the present case, taking into account the contributing negligence of respondent Noe, we likewise rule that the demands of substantial justice are satisfied by distributing the damages also on a 20-80 ratio excluding attorneys fees and litigation expenses.34 Consequently, 20% should be deducted from the actual and moral damages awarded by the trial court in favor of

respondent Noe, that is: 20% of P129,584.20 for actual damages isP25,916.84 and 20% of P50,000.00 for moral damages is P10,000.00. Thus, after deducting the same, the award for actual damages should be P103,667.36 and P40,000.00 for moral damages or 80% of the damages so awarded. Petitioner and respondents Bandoquillo and Quinquillera are jointly and severally liable for the 80% of the damages as well as attorneys fees and litigation expenses conformably with our pronouncement in Tiu v. Arriesgado35 where we held: 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. v. Court of Appeals: 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 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 inGutierrez v. 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."36 WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed Decision of the Court of Appeals dated April 17, 2000 as well as its Resolution dated August 16, 2000 are AFFIRMED with MODIFICATION to the effect that the dispositive portion of the Decision dated February 18, 1993 of the Regional Trial Court of Dumaguete City in Civil Case No. 8122, should read as follows: "WHEREFORE, in view of the foregoing, judgment is hereby rendered, ordering defendants Gerosano and Estacion, as well as third party defendants Bandoquillo and Quinquillera, to pay plaintiff, jointly and solidarily, the following:
1. P103,667.36 for actual damages in the form of medical and hospitalization expenses;

2. P40,000.00 for moral damages, consisting of mental anguish, moral shock, serious anxiety and wounded feelings; 3. P10,000.00 for attorneys fees; and 4. P5,000.00 for litigation expenses.
1avvphil.net

SO ORDERED." No pronouncement as to costs. SO ORDERED.

30. Villoria vs. Continental Airlines In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a travel agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel agent, Margaret Mager, advised the couple that they cannot travel by train because it is fully booked; that they must purchase plane tickets for Continental Airlines; that if they wont purchase plane tickets; theyll never reach their destination in time. The couple believed Magers representations and so they purchased two plane tickets worth $800.00. Later however, the spouses found out that the train trip isnt fully booked and so they purchased train tickets and went to their destination by train instead. Then they called up Mager to request for a refund for the plane tickets. Mager referred the couple to Continental Airlines. As the couple are now in the Philippines, they filed their request with Continental Airlines office in Ayala. The spouses Viloria alleged that Mager misled them into believing that the only way to travel was by plane and so they were fooled into buying expensive tickets. Continental Airlines refused to refund the amount of the ticket and so the spouses sued the airline company. In its defense, Continental Airlines claimed that the ticket sold to them by Mager is nonrefundable; that, if any, they are not bound by the misrepresentations of Mager because theres no agency existing between Continental Airlines and Mager. The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed the ruling of the RTC. ISSUE: Whether or not a contract of agency exists between Continental Airlines and Mager. HELD: Yes. All the elements of agency are present, to wit: i. there is consent, express or implied of the parties to establish the relationship;

ii. iii. iv.

the object is the execution of a juridical act in relation to a third person; the agent acts as a representative and not for himself, and the agent acts within the scope of his authority.

of earning capacity even if the deceased passenger may only be an unemployed high school student at the time of the accident. The Case By petition for review on certiorari, Spouses Teodoro and Nanette Perefia (Perefias) appeal the adverse decision promulgated on November 13, 2002, by which the Court of Appeals (CA) affirmed with modification the decision rendered on December 3, 1999 by the Regional Trial Court (RTC), Branch 260, in Paraaque City that had decreed them jointly and severally liable with Philippine National Railways (PNR), their co-defendant, to Spouses Nicolas and Teresita Zarate (Zarates) for the death of their 15-year old son, Aaron John L. Zarate (Aaron), then a high school student of Don Bosco Technical Institute (Don Bosco). Antecedents The Pereas were engaged in the business of transporting students from their respective residences in Paraaque City to Don Bosco in Pasong Tamo, Makati City, and back. In their business, the Pereas used a KIA Ceres Van (van) with Plate No. PYA 896, which had the capacity to transport 14 students at a time, two of whom would be seated in the front beside the driver, and the others in the rear, with six students on either side. They employed Clemente Alfaro (Alfaro) as driver of the van. In June 1996, the Zarates contracted the Pereas to transport Aaron to and from Don Bosco. On August 22, 1996, as on previous school days, the van picked Aaron up around 6:00 a.m. from the Zarates residence. Aaron took his place on the left side of the van near the rear door. The van, with its air-conditioning unit turned on and the stereo playing loudly, ultimately carried all the 14 student riders on their way to Don Bosco. Considering that the students were due at Don Bosco by 7:15 a.m., and that they were already running late because of the heavy vehicular traffic on the South Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by traversing the narrow path underneath the Magallanes Interchange that was then commonly used by Makati-bound vehicles as a short cut into Makati. At the time, the narrow path was marked by piles of construction materials and parked passenger jeepneys, and the railroad crossing in the narrow path had no railroad warning signs, or watchmen, or other responsible persons manning the crossing. In fact, the bamboo barandilla was up, leaving the railroad crossing open to traversing motorists. At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), operated by Jhonny Alano (Alano), was in the vicinity of the Magallanes Interchange travelling northbound. As the train neared the railroad crossing, Alfaro drove the van eastward across the railroad tracks, closely tailing a large passenger bus. His view of the

The first and second elements are present as Continental Airlines does not deny that it concluded an agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would enter into contracts of carriage with third persons on the airlines behalf. The third element is also present as it is undisputed that Holiday Travel merely acted in a representative capacity and it is Continental Airlines 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 Continental Airlines has not made any allegation that Holiday Travel exceeded the authority that was granted to it. Continental Airlines also never questioned the validity of the transaction between Mager and the spouses. Continental Airlines is therefore in estoppels. Continental Airlines cannot be allowed 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 Continental Airlines 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.

31. G.R. No. 157917

August 29, 2012

SPOUSES TEODORO1 and NANETTE PERENA, Petitioners, vs. SPOUSES TERESITA PHILIPPINE NICOLAS and L. ZARATE, NATIONAL RAILWAYS, and the COURT OF APPEALS Respondents. DECISION BERSAMIN, J.: The operator of a. school bus service is a common carrier in the eyes of the law. He is bound to observe extraordinary diligence in the conduct of his business. He is presumed to be negligent when death occurs to a passenger. His liability may include indemnity for loss

oncoming train was blocked because he overtook the passenger bus on its left side. The train blew its horn to warn motorists of its approach. When the train was about 50 meters away from the passenger bus and the van, Alano applied the ordinary brakes of the train. He applied the emergency brakes only when he saw that a collision was imminent. The passenger bus successfully crossed the railroad tracks, but the van driven by Alfaro did not. The train hit the rear end of the van, and the impact threw nine of the 12 students in the rear, including Aaron, out of the van. Aaron landed in the path of the train, which dragged his body and severed his head, instantaneously killing him. Alano fled the scene on board the train, and did not wait for the police investigator to arrive. Devastated by the early and unexpected death of Aaron, the Zarates commenced this action for damages against Alfaro, the Pereas, PNR and Alano. The Pereas and PNR filed their respective answers, with cross-claims against each other, but Alfaro could not be served with summons.
At the pre-trial, the parties stipulated on the facts and issues, viz: A. FACTS: (1) That spouses Zarate were the legitimate parents of Aaron John L. Zarate; (2) Spouses Zarate engaged the services of spouses Perea for the adequate and safe transportation carriage of the former spouses' son from their residence in Paraaque to his school at the Don Bosco Technical Institute in Makati City; (3) During the effectivity of the contract of carriage and in the implementation thereof, Aaron, the minor son of spouses Zarate died in connection with a vehicular/train collision which occurred while Aaron was riding the contracted carrier Kia Ceres van of spouses Perea, then driven and operated by the latter's employee/authorized driver Clemente Alfaro, which van collided with the train of PNR, at around 6:45 A.M. of August 22, 1996, within the vicinity of the Magallanes Interchange in Makati City, Metro Manila, Philippines; (4) At the time of the vehicular/train collision, the subject site of the vehicular/train collision was a railroad crossing used by motorists for crossing the railroad tracks; (5) During the said time of the vehicular/train collision, there were no appropriate and safety warning signs and railings at the site commonly used for railroad crossing; B. ISSUES

(6) At the material time, countless number of Makati bound public utility and private vehicles used on a daily basis the site of the collision as an alternative route and short-cut to Makati; (7) The train driver or operator left the scene of the incident on board the commuter train involved without waiting for the police investigator; (8) The site commonly used for railroad crossing by motorists was not in fact intended by the railroad operator for railroad crossing at the time of the vehicular collision; (9) PNR received the demand letter of the spouses Zarate; (10) PNR refused to acknowledge any liability for the vehicular/train collision; (11) The eventual closure of the railroad crossing alleged by PNR was an internal arrangement between the former and its project contractor; and (12) The site of the vehicular/train collision was within the vicinity or less than 100 meters from the Magallanes station of PNR.

(1) Whether or not defendant-driver of the van is, in the performance of his functions, liable for negligence constituting the proximate cause of the vehicular collision, which resulted in the death of plaintiff spouses' son; (2) Whether or not the defendant spouses Perea being the employer of defendant Alfaro are liable for any negligence which may be attributed to defendant Alfaro; (3) Whether or not defendant Philippine National Railways being the operator of the railroad system is liable for negligence in failing to provide adequate safety warning signs and railings in the area commonly used by motorists for railroad crossings, constituting the proximate cause of the vehicular collision which resulted in the death of the plaintiff spouses' son; (4) Whether or not defendant spouses Perea are liable for breach of the contract of carriage with plaintiff-spouses in failing to provide adequate and safe transportation for the latter's son;

(5) Whether or not defendants spouses are liable for actual, moral damages, exemplary damages, and attorney's fees; (6) Whether or not defendants spouses Teodorico and Nanette Perea observed the diligence of employers and school bus operators; (7) Whether or not defendant-spouses are civilly liable for the accidental death of Aaron John Zarate; (8) Whether or not defendant PNR was grossly negligent in operating the commuter train involved in the accident, in allowing or tolerating the motoring public to cross, and its failure to install safety devices or equipment at the site of the accident for the protection of the public; (9) Whether or not defendant PNR should be made to reimburse defendant spouses for any and whatever amount the latter may be held answerable or which they may be ordered to pay in favor of plaintiffs by reason of the action; (10) Whether or not defendant PNR should pay plaintiffs directly and fully on the amounts claimed by the latter in their Complaint by reason of its gross negligence; (11) Whether or not defendant PNR is liable to defendants spouses for actual, moral and exemplary damages and attorney's fees.2

On December 3, 1999, the RTC rendered its decision,3 disposing: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering them to jointly and severally pay the plaintiffs as follows: (1) (for) the death of Aaron- Php50,000.00; (2) Actual damages in the amount of Php100,000.00; (3) For the loss of earning capacity- Php2,109,071.00; (4) Moral damages in the amount of Php4,000,000.00; (5) Exemplary damages in the amount of Php1,000,000.00; (6) Attorneys fees in the amount of Php200,000.00; and (7) Cost of suit. SO ORDERED.

The Zarates claim against the Pereas was upon breach of the contract of carriage for the safe transport of Aaron; but that against PNR was based on quasi-delict under Article 2176, Civil Code. In their defense, the Pereas adduced evidence to show that they had exercised the diligence of a good father of the family in the selection and supervision of Alfaro, by making sure that Alfaro had been issued a drivers license and had not been involved in any vehicular accident prior to the collision; that their own son had taken the van daily; and that Teodoro Perea had sometimes accompanied Alfaro in the vans trips transporting the students to school. For its part, PNR tended to show that the proximate cause of the collision had been the reckless crossing of the van whose driver had not first stopped, looked and listened; and that the narrow path traversed by the van had not been intended to be a railroad crossing for motorists. Ruling of the RTC

On June 29, 2000, the RTC denied the Pereas motion for reconsideration,4 reiterating that the cooperative gross negligence of the Pereas and PNR had caused the collision that led to the death of Aaron; and that the damages awarded to the Zarates were not excessive, but based on the established circumstances. The CAs Ruling
Both the Pereas and PNR appealed (C.A.-G.R. CV No. 68916). PNR assigned the following errors, to wit:5 The Court a quo erred in: 1. In finding the defendant-appellant Philippine National Railways jointly and severally liable together with defendant-appellants spouses Teodorico and Nanette Perea and defendant-appellant Clemente Alfaro to pay plaintiffsappellees for the death of Aaron Zarate and damages.

2. In giving full faith and merit to the oral testimonies of plaintiffs-appellees witnesses despite overwhelming documentary evidence on record, supporting the case of defendants-appellants Philippine National Railways. The Pereas ascribed the following errors to the RTC, namely: The trial court erred in finding defendants-appellants jointly and severally liable for actual, moral and exemplary damages and attorneys fees with the other defendants. The trial court erred in dismissing the cross-claim of the appellants Pereas against the Philippine National Railways and in not holding the latter and its train driver primarily responsible for the incident. The trial court erred in awarding excessive damages and attorneys fees. The trial court erred in awarding damages in the form of deceaseds loss of earning capacity in the absence of sufficient basis for such an award.

be P 110,716.65, inclusive of the thirteenth month pay. Multiplying this annual salary by Aarons life expectancy of 39.3 years, his gross income would aggregate to P 4,351,164.30, from which his estimated expenses in the sum of P 2,189,664.30 was deducted to finally arrive at P 2,161,500.00 as net income. Due to Aarons computed net income turning out to be higher than the amount claimed by the Zarates, only P 2,109,071.00, the amount expressly prayed for by them, was granted. On April 4, 2003, the CA denied the Pereas motion for reconsideration.8 Issues In this appeal, the Pereas list the following as the errors committed by the CA, to wit:
I. The lower court erred when it upheld the trial courts decision holding the petitioners jointly and severally liable to pay damages with Philippine National Railways and dismissing their crossclaim against the latter. II. The lower court erred in affirming the trial courts decision awarding damages for loss of earning capacity of a minor who was only a high school student at the time of his death in the absence of sufficient basis for such an award. III. The lower court erred in not reducing further the amount of damages awarded, assuming petitioners are liable at all. Ruling The petition has no merit.

On November 13, 2002, the CA promulgated its decision, affirming the findings of the RTC, but limited the moral damages to P 2,500,000.00; and deleted the attorneys fees because the RTC did not state the factual and legal bases, to wit:6
WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court, Branch 260 of Paraaque City is AFFIRMED with the modification that the award of Actual Damages is reduced to P 59,502.76; Moral Damages is reduced to P 2,500,000.00; and the award for Attorneys Fees is Deleted. SO ORDERED.

The CA upheld the award for the loss of Aarons earning capacity, taking cognizance of the ruling in Cariaga v. Laguna Tayabas Bus Company and Manila Railroad Company,7 wherein the Court gave the heirs of Cariaga a sum representing the loss of the deceaseds earning capacity despite Cariaga being only a medical student at the time of the fatal incident. Applying the formula adopted in the American Expectancy Table of Mortality: 2/3 x (80 - age at the time of death) = life expectancy the CA determined the life expectancy of Aaron to be 39.3 years upon reckoning his life expectancy from age of 21 (the age when he would have graduated from college and started working for his own livelihood) instead of 15 years (his age when he died). Considering that the nature of his work and his salary at the time of Aarons death were unknown, it used the prevailing minimum wage of P 280.00/day to compute Aarons gross annual salary to

1. Were the Pereas and PNR jointly and severally liable for damages? The Zarates brought this action for recovery of damages against both the Pereas and the PNR, basing their claim against the Pereas on breach of contract of carriage and against the PNR on quasi-delict. The RTC found the Pereas and the PNR negligent. The CA affirmed the findings.
We concur with the CA.

To start with, the Pereas defense was that they exercised the diligence of a good father of the family in the selection and supervision of Alfaro, the van driver, by seeing to it that Alfaro had a drivers license and that he had not been involved in any vehicular accident prior to the fatal collision with the train; that they even had their own son travel to and from school on a daily basis; and that Teodoro Perea himself sometimes accompanied Alfaro in transporting the passengers to and from school. The RTC gave scant consideration to such defense by regarding such defense as inappropriate in an action for breach of contract of carriage. We find no adequate cause to differ from the conclusions of the lower courts that the Pereas operated as a common carrier; and that their standard of care was extraordinary diligence, not the ordinary diligence of a good father of a family. Although in this jurisdiction the operator of a school bus service has been usually regarded as a private carrier,9primarily because he only caters to some specific or privileged individuals, and his operation is neither open to the indefinite public nor for public use, the exact nature of the operation of a school bus service has not been finally settled. This is the occasion to lay the matter to rest. A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to another, gratuitously or for hire. The carrier is classified either as a private/special carrier or as a common/public carrier.10 A private carrier is one who, without making the activity a vocation, or without holding himself or itself out to the public as ready to act for all who may desire his or its services, undertakes, by special agreement in a particular instance only, to transport goods or persons from one place to another either gratuitously or for hire.11The provisions on ordinary contracts of the Civil Code govern the contract of private carriage.The diligence required of a private carrier is only ordinary, that is, the diligence of a good father of the family. In contrast, a common carrier is a person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering such services to the public.12Contracts of common carriage are governed by the provisions on common carriers of the Civil Code, the Public Service Act,13 and other special laws relating to transportation. A common carrier is required to observe extraordinary diligence, and is presumed to be at fault or to have acted negligently in case of the loss of the effects of passengers, or the death or injuries to passengers.14 In relation to common carriers, the Court defined public use in the following terms in United States v. Tan Piaco,15 viz:
"Public use" is the same as "use by the public". The essential feature of the public use is not confined to privileged individuals, but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character. In determining whether a use is public, we

must look not only to the character of the business to be done, but also to the proposed mode of doing it. If the use is merely optional with the owners, or the public benefit is merely incidental, it is not a public use, authorizing the exercise of the jurisdiction of the public utility commission. There must be, in general, a right which the law compels the owner to give to the general public. It is not enough that the general prosperity of the public is promoted. Public use is not synonymous with public interest. The true criterion by which to judge the character of the use is whether the public may enjoy it by right or only by permission.

In De Guzman v. Court of Appeals,16 the Court noted that Article 1732 of the Civil Code avoided any distinction between a person or an enterprise offering transportation on a regular or an isolated basis; and has not distinguished a carrier offering his services to the general public, that is, the general community or population, from one offering his services only to a narrow segment of the general population. Nonetheless, the concept of a common carrier embodied in Article 1732 of the Civil Code coincides neatly with the notion of public service under the Public Service Act, which supplements the law on common carriers found in the Civil Code. Public service, according to Section 13, paragraph (b) of the Public Service Act, includes:
x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientle, whether permanent or occasional, and done for the general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and other similar public services. x x x.17

Given the breadth of the aforequoted characterization of a common carrier, the Court has considered as common carriers pipeline operators,18 custom brokers and warehousemen,19 and barge operators20 even if they had limited clientle. As all the foregoing indicate, the true test for a common carrier is not the quantity or extent of the business actually transacted, or the number and character of the conveyances used in the activity, but whether the undertaking is a part of the activity engaged in by the carrier that he has held out to the general public as his business or occupation. If the undertaking is a single transaction, not a part of the general business or occupation engaged in, as advertised and held out to the general public, the individual or the entity rendering such service is a private, not a common, carrier. The question must be determined by the character of the business actually carried on by the carrier, not by any secret intention or

mental reservation it may entertain or assert when charged with the duties and obligations that the law imposes.21 Applying these considerations to the case before us, there is no question that the Pereas as the operators of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited clientle, the Pereas operated as a common carrier because they held themselves out as a ready transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee. The common carriers standard of care and vigilance as to the safety of the passengers is defined by law. Given the nature of the business and for reasons of public policy, the common carrier is bound "to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case."22 Article 1755 of the Civil Code specifies that the common carrier should "carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances." To successfully fend off liability in an action upon the death or injury to a passenger, the common carrier must prove his or its observance of that extraordinary diligence; otherwise, the legal presumption that he or it was at fault or acted negligently would stand.23 No device, whether by stipulation, posting of notices, statements on tickets, or otherwise, may dispense with or lessen the responsibility of the common carrier as defined under Article 1755 of the Civil Code. 24 And, secondly, the Pereas have not presented any compelling defense or reason by which the Court might now reverse the CAs findings on their liability. On the contrary, an examination of the records shows that the evidence fully supported the findings of the CA. As earlier stated, the Pereas, acting as a common carrier, were already presumed to be negligent at the time of the accident because death had occurred to their passenger.25 The presumption of negligence, being a presumption of law, laid the burden of evidence on their shoulders to establish that they had not been negligent.26 It was the law no less that required them to prove their observance of extraordinary diligence in seeing to the safe and secure carriage of the passengers to their destination. Until they did so in a credible manner, they stood to be held legally responsible for the death of Aaron and thus to be held liable for all the natural consequences of such death. There is no question that the Pereas did not overturn the presumption of their negligence by credible evidence. Their defense of having observed the diligence of a good father of a family in the selection and supervision of their driver was not legally sufficient. According to

Article 1759 of the Civil Code, their liability as a common carrier did not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employee. This was the reason why the RTC treated this defense of the Pereas as inappropriate in this action for breach of contract of carriage. The Pereas were liable for the death of Aaron despite the fact that their driver might have acted beyond the scope of his authority or even in violation of the orders of the common carrier.27 In this connection, the records showed their drivers actual negligence. There was a showing, to begin with, that their driver traversed the railroad tracks at a point at which the PNR did not permit motorists going into the Makati area to cross the railroad tracks. Although that point had been used by motorists as a shortcut into the Makati area, that fact alone did not excuse their driver into taking that route. On the other hand, with his familiarity with that shortcut, their driver was fully aware of the risks to his passengers but he still disregarded the risks. Compounding his lack of care was that loud music was playing inside the air-conditioned van at the time of the accident. The loudness most probably reduced his ability to hear the warning horns of the oncoming train to allow him to correctly appreciate the lurking dangers on the railroad tracks. Also, he sought to overtake a passenger bus on the left side as both vehicles traversed the railroad tracks. In so doing, he lost his view of the train that was then coming from the opposite side of the passenger bus, leading him to miscalculate his chances of beating the bus in their race, and of getting clear of the train. As a result, the bus avoided a collision with the train but the van got slammed at its rear, causing the fatality. Lastly, he did not slow down or go to a full stop before traversing the railroad tracks despite knowing that his slackening of speed and going to a full stop were in observance of the right of way at railroad tracks as defined by the traffic laws and regulations.28 He thereby violated a specific traffic regulation on right of way, by virtue of which he was immediately presumed to be negligent.29 The omissions of care on the part of the van driver constituted negligence,30 which, according to Layugan v. Intermediate Appellate Court,31 is "the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do,32 or as Judge Cooley defines it, (t)he failure to observe for the protection of the interests of another person, that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury."33
The test by which to determine the existence of negligence in a particular case has been aptly stated in the leading case of Picart v. Smith,34 thuswise: The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then

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

the same complaint as defendants against whom the Zarates had the right to relief, whether jointly, severally, or in the alternative, in respect to or arising out of the accident, and questions of fact and of law were common as to the Zarates.36 Although the basis of the right to relief of the Zarates (i.e., breach of contract of carriage) against the Pereas was distinct from the basis of the Zarates right to relief against the PNR (i.e., quasi-delict under Article 2176, Civil Code), they nonetheless could be held jointly and severally liable by virtue of their respective negligence combining to cause the death of Aaron. As to the PNR, the RTC rightly found the PNR also guilty of negligence despite the school van of the Pereas traversing the railroad tracks at a point not dedicated by the PNR as a railroad crossing for pedestrians and motorists, because the PNR did not ensure the safety of others through the placing of crossbars, signal lights, warning signs, and other permanent safety barriers to prevent vehicles or pedestrians from crossing there. The RTC observed that the fact that a crossing guard had been assigned to man that point from 7 a.m. to 5 p.m. was a good indicium that the PNR was aware of the risks to others as well as the need to control the vehicular and other traffic there. Verily, the Pereas and the PNR were joint tortfeasors. 2. Was the indemnity for loss of Aarons earning capacity proper? The RTC awarded indemnity for loss of Aarons earning capacity. Although agreeing with the RTC on the liability, the CA modified the amount. Both lower courts took into consideration that Aaron, while only a high school student, had been enrolled in one of the reputable schools in the Philippines and that he had been a normal and able-bodied child prior to his death. The basis for the computation of Aarons earning capacity was not what he would have become or what he would have wanted to be if not for his untimely death, but the minimum wage in effect at the time of his death. Moreover, the RTCs computation of Aarons life expectancy rate was not reckoned from his age of 15 years at the time of his death, but on 21 years, his age when he would have graduated from college. We find the considerations taken into account by the lower courts to be reasonable and fully warranted. Yet, the Pereas submit that the indemnity for loss of earning capacity was speculative and unfounded. They cited People v. Teehankee, Jr.,37 where the Court deleted the indemnity for victim Jussi Leinos loss of earning capacity as a pilot for being speculative due to his having graduated from high school at the International School in Manila only two years before the shooting, and was at the time of the shooting only enrolled in the first semester at the Manila Aero Club to pursue his ambition to become a professional pilot. That meant, according to the Court, that he was for all intents and purposes only a high school graduate.
1wphi 1

Pursuant to the Picart v. Smith test of negligence, the Pereas driver was entirely negligent when he traversed the railroad tracks at a point not allowed for a motorists crossing despite being fully aware of the grave harm to be thereby caused to his passengers; and when he disregarded the foresight of harm to his passengers by overtaking the bus on the left side as to leave himself blind to the approach of the oncoming train that he knew was on the opposite side of the bus. Unrelenting, the Pereas cite Phil. National Railways v. Intermediate Appellate Court,35 where the Court held the PNR solely liable for the damages caused to a passenger bus and its passengers when its train hit the rear end of the bus that was then traversing the railroad crossing. But the circumstances of that case and this one share no similarities. In Philippine National Railways v. Intermediate Appellate Court, no evidence of contributory negligence was adduced against the owner of the bus. Instead, it was the owner of the bus who proved the exercise of extraordinary diligence by preponderant evidence. Also, the records are replete with the showing of negligence on the part of both the Pereas and the PNR. Another distinction is that the passenger bus in Philippine National Railways v. Intermediate Appellate Court was traversing the dedicated railroad crossing when it was hit by the train, but the Pereas school van traversed the railroad tracks at a point not intended for that purpose. At any rate, the lower courts correctly held both the Pereas and the PNR "jointly and severally" liable for damages arising from the death of Aaron. They had been impleaded in

We reject the Pereas submission.

First of all, a careful perusal of the Teehankee, Jr. case shows that the situation there of Jussi Leino was not akin to that of Aaron here. The CA and the RTC were not speculating that Aaron would be some highly-paid professional, like a pilot (or, for that matter, an engineer, a physician, or a lawyer). Instead, the computation of Aarons earning capacity was premised on him being a lowly minimum wage earner despite his being then enrolled at a prestigious high school like Don Bosco in Makati, a fact that would have likely ensured his success in his later years in life and at work. And, secondly, the fact that Aaron was then without a history of earnings should not be taken against his parents and in favor of the defendants whose negligence not only cost Aaron his life and his right to work and earn money, but also deprived his parents of their right to his presence and his services as well. Our law itself states that the loss of the earning capacity of the deceased shall be the liability of the guilty party in favor of the heirs of the deceased, and shall in every case be assessed and awarded by the court "unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death."38Accordingly, we emphatically hold in favor of the indemnification for Aarons loss of earning capacity despite him having been unemployed, because compensation of this nature is awarded not for loss of time or earnings but for loss of the deceaseds power or ability to earn money.39 This favorable treatment of the Zarates claim is not unprecedented. In Cariaga v. Laguna Tayabas Bus Company and Manila Railroad Company,40 fourth-year medical student Edgardo Carriagas earning capacity, although he survived the accident but his injuries rendered him permanently incapacitated, was computed to be that of the physician that he dreamed to become. The Court considered his scholastic record sufficient to justify the assumption that he could have finished the medical course and would have passed the medical board examinations in due time, and that he could have possibly earned a modest income as a medical practitioner. Also, in People v. Sanchez,41 the Court opined that murder and rape victim Eileen Sarmienta and murder victim Allan Gomez could have easily landed good-paying jobs had they graduated in due time, and that their jobs would probably pay them high monthly salaries from P 10,000.00 to P 15,000.00 upon their graduation. Their earning capacities were computed at rates higher than the minimum wage at the time of their deaths due to their being already senior agriculture students of the University of the Philippines in Los Baos, the countrys leading educational institution in agriculture. 3. Were the amounts of damages excessive? The Pereas plead for the reduction of the moral and exemplary damages awarded to the Zarates in the respective amounts of P 2,500,000.00 and P 1,000,000.00 on the ground that such amounts were excessive.

The plea is unwarranted.

The moral damages of P 2,500,000.00 were really just and reasonable under the established circumstances of this case because they were intended by the law to assuage the Zarates deep mental anguish over their sons unexpected and violent death, and their moral shock over the senseless accident. That amount would not be too much, considering that it would help the Zarates obtain the means, diversions or amusements that would alleviate their suffering for the loss of their child. At any rate, reducing the amount as excessive might prove to be an injustice, given the passage of a long time from when their mental anguish was inflicted on them on August 22, 1996. Anent the P 1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only to render effective the desired example for the public good. As a common carrier, the Pereas needed to be vigorously reminded to observe their duty to exercise extraordinary diligence to prevent a similarly senseless accident from happening again. Only by an award of exemplary damages in that amount would suffice to instill in them and others similarly situated like them the ever-present need for greater and constant vigilance in the conduct of a business imbued with public interest. WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision promulgated on November 13, 2002; and ORDER the petitioners to pay the costs of suit. SO ORDERED.

32. sealoader vs. grand cement manufacturing

Doctrine:
Contributory Negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection

Facts: Sealoader executed a Time Charter Party Aggrement with Joyce Launch for the chartering of MT Viper in order to tow its unpropelled barges for a minimum of 15 days.

Sealoder entered into a contract with Grand Cement for the loading of cement clinkers and the delivery thereof to Manila. On March 31, 1994, Sealoders barge arrived at the wharf of Grand Cement tugged by MT Viper. It was not immediately loaded as the employees of Grand Cement were loaded another vessel.

Issue:
Who should be liable for damage sustained by the wharf of Grand Cement?

Ruling:
Sealoader is liable for its negligence. First because it was not equipped with a radio or a navigational facility and it failed to monitor the prevailing weather conditions. Second, it cannot pass the responsibility of casting off the mooring lines because the people at the wharf could not just cast off the mooring lines without any instructions from the crew of the vessel. It should have taken the initiative to cast off the mooring lines early on.

On April 4, typhoon Bising struck Cebu area. The barge was still docked at the wharf of Grand Cement. As it became stronger, MT Viper tried to tow the barge away but it was unsuccessful because the towing line connecting the vessels snapped since the mooring lines were not cast off, which is the ultimate cause. Hence, the barge rammed the wharf causing significantdamage.

Grand Cement filed a complaint for damages (P2.4M) since Sealoader ignored its demands. They allege that Sealoader was negligent when it ignored its employees advice to move the vessels after it had received weather updates. Sealoader filed a motion to dismiss on the ground that Joyce Launch is the one liable since it was the owner of MT Viper, whos employees were manning the vessel. Sealoader filed a cross-claim against Joyce Launch. Joyce maintains that the damages were due to force majeure and faulted Grand Cements employees for abandoning the wharf leaving them helpless and for not warning them early on.

With regard to Grand Cements contributory negligence, the court found that it was not guilty thereof. It had timely informed the barge of the impending typhoon and directed the vessels to move to a safer place. Sealoader had the responsibility to inform itself of the prevailing weather conditions in the areas where its vessel was to sail. It cannot merely rely on other vessels for weather updates and warnings on approaching storms. For to do so would be to gamble with the safety of its own vessel, putting the lives of its crew under the mercy of the sea, as well as running the rick of causing damage to property of third parties for which it would necessarily be liable.

Upon testimonies, the RTC rendered judgment in favor of Grand Cement holding the two companies liable since there was complete disregard of the storm signal, the captain of the vessel was not present and the vessel was not equipped with a radio or any navigational facility, which is mandatory. Joyce launch did not appeal.

On appeal, the CA affirmed the decision but on MR, it partly reversed its decision finding Grand Cement to be guilty of contributory negligence since it was found that it was still loading the other vessel at the last minute just before the storm hit, hence Sealodersvessel did not move. Damages were reduced to 50%. Hence, petition for review to SC.