SECOND DIVISION

[G.R. No. z. October 8, 1998]

EVERETT STEAMSHIP CORPORATION, petitioner, vs. COURT OF APPEAS !"# HERNAN$E%
TRA$ING CO. INC., respondents.
$ E C I S I O N
MARTINE%, J.&
Petitioner Everett Steamship Corporation, through this petition for review, seeks the reversal of the
decision
!"
of the Court of #ppeals, dated $une !%, !&&', in C#()*+* No* %,-.&/, which affirmed the decision
of the +egional 0rial Court of 1alookan Cit2, 3ranch !,4, in Civil Case No* C(!''/,, finding petitioner lia5le
to private respondent 6ernande7 0rading Co*, Inc* for the value of the lost cargo*
Private respondent imported three crates of 5us spare parts marked as 8#+CO C9No* !,, 8#+CO
C9No* !/ and 8#+CO C9No* !%, from its supplier, 8aruman 0rading Compan2, :td* ;8aruman 0rading<, a
foreign corporation 5ased in Ina7awa, #ichi, $apan* 0he crates were shipped from Nago2a, $apan to 8anila
on 5oard =#DE:>#EVE+E00E,? a vessel owned 52 petitioner@s principal, Everett Orient :ines* 0he said
crates were covered 52 3ill of :ading No* N)O'/8N*
Apon arrival at the port of 8anila, it was discovered that the crate marked 8#+CO C9No* !% was
missing* 0his was confirmed and admitted 52 petitioner in its letter of $anuar2 !/, !&&, addressed to private
respondent, which thereafter made a formal claim upon petitioner for the value of the lost cargo amounting
to One 8illion >ive 6undred >ift2 0wo 0housand >ive 6undred ;B!,'',,'..*..< Ben, the amount shown in
an Invoice No* 808(&%!, dated Novem5er !%, !&&!* 6owever, petitioner offered to pa2 onl2 One 6undred
0housand ;B!..,...*..< Ben, the maCimum amount stipulated under Clause !- of the covering 5ill of lading
which limits the lia5ilit2 of petitioner*
Private respondent reDected the offer and thereafter instituted a suit for collection docketed as Civil
Case No* C(!''/,, against petitioner 5efore the +egional 0rial Court of Caloocan Cit2, 3ranch !,4*
#t the pre(trial conference, 5oth parties manifested that the2 have no testimonial evidence to offer and
agreed instead to file their respective memoranda*
On $ul2 !4, !&&/, the trial court rendered Dudgment
,"
in favor of private respondent, ordering petitioner
to pa2E ;a< B!,'',,'..*..F ;5< B,.,...*.. or its peso eGuivalent representing the actual value of the lost
cargo and the material and packaging costF ;c< !.H of the total amount as an award for and as contingent
attorne2@s feesF and ;d< to pa2 the cost of the suit* 0he trial court ruledE
=Considering defendant@s categorical admission of loss and its failure to overcome the presumption of
negligence and fault, the Court conclusivel2 finds defendant lia5le to the plaintiff* 0he neCt point of
inGuir2 the Court wants to resolve is the eCtent of the lia5ilit2 of the defendant* #s stated earlier,
plaintiff contends that defendant should 5e held lia5le for the whole value for the loss of the goods in
the amount of B!,'',,'..*.. 5ecause the terms appearing at the 5ack of the 5ill of lading was so
written in fine prints and that the same was not signed 52 plaintiff or shipper thus, the2 are not 5ound
52 the clause stated in paragraph !- of the 5ill of lading* On the other hand, defendant merel2
admitted that it lost the shipment 5ut shall 5e lia5le onl2 up to the amount of B!..,...*..*
=0he Court su5scri5es to the provisions of #rticle !I'. of the New Civil Code (
Art. 1750* J# contract fiCing the sum that ma2 5e recovered 52 the owner or shipper for the loss,
destruction or deterioration of the goods is valid, if it is reasona5le and Dust under the
circumstances, and has 5een fairl2 and freel2 agreed upon*@
=It is reGuired, however, that the contract must 5e reasona5le and Dust under the circumstances and
has 5een fairl2 and freel2 agreed upon* 0he reGuirements provided in #rt* !I'. of the New Civil Code
must 5e complied with 5efore a common carrier can claim a limitation of its pecuniar2 lia5ilit2 in case
of loss, destruction or deterioration of the goods it has undertaken to transport*
=In the case at 5ar, the Court is of the view that the reGuirements of said article have not 5een
met* 0he fact that those conditions are printed at the 5ack of the 5ill of lading in letters so small that
the2 are hard to read would not warrant the presumption that the plaintiff or its supplier was aware of
these conditions such that he had =fairl2 and freel2 agreed? to these conditions* It can not 5e said that
the plaintiff had actuall2 entered into a contract with the defendant, em5od2ing the conditions as
printed at the 5ack of the 5ill of lading that was issued 52 the defendant to plaintiff*?
On appeal, the Court of #ppeals deleted the award of attorne2@s fees 5ut affirmed the trial court@s
findings with the additional o5servation that private respondent can not 5e 5ound 52 the terms and
conditions of the 5ill of lading 5ecause it was not priv2 to the contract of carriage* It saidE
=#s to the amount of lia5ilit2, no evidence appears on record to show that the appellee ;6ernande7
0rading Co*< consented to the terms of the 3ill of :ading* 0he shipper named in the 3ill of :ading is
8aruman 0rading Co*, :td* whom the appellant ;Everett Steamship Corp*< contracted with for the
transportation of the lost goods*
=Even assuming arguendo that the shipper 8aruman 0rading Co*, :td* accepted the terms of the 5ill
of lading when it delivered the cargo to the appellant, still it does not necessaril2 follow that appellee
6ernande7 0rading Compan2 as consignee is 5ound there52 considering that the latter was never
priv2 to the shipping contract*
C C C C C C C C C
=Never having entered into a contract with the appellant, appellee should therefore not 5e 5ound 52
an2 of the terms and conditions in the 5ill of lading*
=6ence, it follows that the appellee ma2 recover the full value of the shipment lost, the 5asis of which
is not the 5reach of contract as appellee was never a priv2 to the an2 contract with the appellant, 5ut
is 5ased on #rticle !I/' of the New Civil Code, there 5eing no evidence to prove satisfactoril2 that the
appellant has overcome the presumption of negligence provided for in the law*?
Petitioner now comes to us arguing that the Court of #ppeals erred ;!< in ruling that the consent of the
consignee to the terms and conditions of the 5ill of lading is necessar2 to make such stipulations 5inding
upon itF ;,< in holding that the carrier@s limited package lia5ilit2 as stipulated in the 5ill of lading does not
appl2 in the instant caseF and ;/< in allowing private respondent to full2 recover the full alleged value of its
lost cargo*
Ke shall first resolve the validit2 of the limited lia5ilit2 clause in the 5ill of lading*
# stipulation in the 5ill of lading limiting the common carrier@s lia5ilit2 for loss or destruction of a cargo
to a certain sum, unless the shipper or owner declares a greater value, is sanctioned 52 law, particularl2
#rticles !I%& and !I'. of the Civil Code which provideE
=#+0* !I%&* # stipulation that the common carrier@s lia5ilit2 is limited to the value of the goods
appearing in the 5ill of lading, unless the shipper or owner declares a greater value, is 5inding*?
=#+0* !I'.* # contract fiCing the sum that ma2 5e recovered 52 the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasona5le and Dust under the circumstances,
and has 5een freel2 and fairl2 agreed upon*?
Such limited(lia5ilit2 clause has also 5een consistentl2 upheld 52 this Court in a num5er of cases*
/"
0hus, in Sea Land Service, Inc. vs Intermediate Appellate Court
%"
, we ruledE
!
=It seems clear that even if said section % ;'< of the Carriage of )oods 52 Sea #ct did not eCist, the validit2
and 5inding effect of the lia5ilit2 limitation clause in the 5ill of lading here are nevertheless full2 sustaina5le
on the 5asis alone of the cited Civil Code Provisions* 0hat said stipulation is Dust and reasona5le is argua5le
from the fact that it echoes #rt* !I'. itself in providing a limit to lia5ilit2 onl2 if a greater value is not declared
for the shipment in the 5ill of lading* 0o hold otherwise would amount to Guestioning the Dustness and
fairness of the law itself, and this the private respondent does not pretend to do* 3ut over and a5ove that
consideration, the Dust and reasona5le character of such stipulation is implicit in it giving the shipper or
owner the option of avoiding accrual of lia5ilit2 limitation 52 the simple and surel2 far from onerous eCpedient
of declaring the nature and value of the shipment in the 5ill of lading**?
Pursuant to the afore(Guoted provisions of law, it is reGuired that the stipulation limiting the common
carrier@s lia5ilit2 for loss must 5e =reasona5le and Dust under the circumstances, and has 5een freel2 and
fairl2 agreed upon*?
0he 5ill of lading su5Dect of the present controvers2 specificall2 provides, among othersE
=!-* #ll claims for which the carrier ma2 5e lia5le shall 5e adDusted and settled on the 5asis of the
shipper@s net invoice cost plus freight and insurance premiums, if paid, and in no event shall the
carrier 5e lia5le for an2 loss of possi5le profits or an2 conseGuential loss*
=0he carrier shall not 5e lia5le for an2 loss of or an2 damage to or in an2 connection with, goods in an
amount eCceeding One 6undred 0housand Ben in $apanese Currenc2 ;B!..,...*..< or its eGuivalent
in an2 other currenc2 per package or customar2 freight unit ;whichever is least< unless the value of
the goods higher than this amount is declared in writing 52 the shipper 5efore receipt of the goods 52
the carrier and inserted in the 3ill of :ading and eCtra freight is paid as reGuired*? ;Emphasis supplied<
0he a5ove stipulations are, to our mind, reasona5le and Dust* In the 5ill of lading, the carrier made it
clear that its lia5ilit2 would onl2 5e up to One 6undred 0housand ;B!..,...*..< Ben* 6owever, the shipper,
8aruman 0rading, '!# t'e o(t)o" to #ec*!re ! ')+'er ,!*-!t)o" ). t'e ,!*-e o. )t/ c!r+o 0!/ ')+'er
t'!" t'e *)1)te# *)!b)*)t2 o. t'e c!rr)er. Co"/)#er)"+ t'!t t'e /')((er #)# "ot #ec*!re ! ')+'er
,!*-!t)o", )t '!# )t/e*. to b*!1e .or "ot co1(*2)"+ 0)t' t'e /t)(-*!t)o"/.
0he trial court@s ratiocination that private respondent could not have =fairl2 and freel2? agreed to the
limited lia5ilit2 clause in the 5ill of lading 5ecause the said conditions were printed in small letters does not
make the 5ill of lading invalid*
Ke ruled in PAL, Inc. vs. Court of Appeals
'"
that the =Durisprudence on the matter reveals the
consistent holding of the court that contracts of adhesion are not invalid per se and that it has on numerous
occasions upheld the 5inding effect thereof*? #lso, in Philippine American eneral Insurance Co., Inc.
vs. S!eet Lines , Inc.
4"
this Court , speaking through the learned $ustice >loren7 D* +egalado, heldE
=C C C Ong Yiu vs. Court of Appeals, et.al., instructs us that Jcontracts of adhesion wherein one part2
imposes a read2(made form of contract on the other C C C are contracts not entirel2 prohi5ited* 0he
one who adheres to the contract is in realit2 free to reDect it entirel2F if he adheres he gives his
consent*@ In the present case, not even an allegation of ignorance of a part2 eCcuses non(compliance
with the contractual stipulations since the responsi5ilit2 for ensuring full comprehension of the
provisions of a contract of carriage devolves not on the carrier 5ut on the owner, shipper, or consignee
as the case ma2 5e*? ;Emphasis supplied<
It was further eCplained in "n# $iu vs Court of Appeals
I"
that stipulations in contracts of adhesion
are valid and 5inding*
=Khile it ma2 5e true that petitioner had not signed the plane ticket C C, he is nevertheless 5ound 52
the provisions thereof* JSuch provisions have 5een held to 5e a part of the contract of carriage, and
valid and 5inding upon the passenger regardless of the latter@s lack of knowledge or assent to the
regulation*@ It is what is known as a contract of Jadhesion,@ in regards which it has 5een said that
contracts of adhesion wherein one part2 imposes a read2(made form of contract on the other, as the
plane ticket in the case at 5ar, are contracts not entirel2 prohi5ited* 0he one who adheres to the
contract is in realit2 free to reDect it entirel2F if he adheres, he gives his consent* C C C , a contract
limiting lia5ilit2 upon an agreed valuation does not offend against the polic2 of the law for5idding one
from contracting against his own negligence*? ;Emphasis supplied<
)reater vigilance, however, is reGuired of the courts when dealing with contracts of adhesion in that
the said contracts must 5e carefull2 scrutini7ed =in order to shield the unwar2 ;or weaker part2< from
deceptive schemes contained in read2(made covenants,?
-"
such as the 5ill of lading in Guestion* 0he
stringent reGuirement which the courts are enDoined to o5serve is in recognition of #rticle ,% of the Civil
Code which mandates that =;i<n all contractual, propert2 or other relations, 0'e" o"e o. t'e (!rt)e/ )/ !t !
#)/!#,!"t!+e o" !cco-"t o. ')/ 1or!* #e(e"#e"ce, )+"or!"ce, )"#)+e"ce, 1e"t!* 0e!3"e//, te"#er
!+e or ot'er '!"#)c!(, the courts must 5e vigilant for his protection*?
0he shipper, 8aruman 0rading, we assume, has 5een eCtensivel2 engaged in the trading 5usiness* It
can not 5e said to 5e ignorant of the 5usiness transactions it entered into involving the shipment of its goods
to its customers* 0he shipper could not have known, or should know the stipulations in the 5ill of lading and
there it should have declared a higher valuation of the goods shipped* 8oreover, 8aruman 0rading has not
5een heard to complain that it has 5een deceived or rushed into agreeing to ship the cargo in petitioner@s
vessel* In fact, it was not even impleaded in this case*
0he neCt issue to 5e resolved is whether or not private respondent, as consignee, who is not a
signator2 to the 5ill of lading is 5ound 52 the stipulations thereof*
#gain, in Sea%Land Service, Inc. vs. Intermediate Appellate Court ;supra<, we held that even if the
consignee was not a signator2 to the contract of carriage 5etween the shipper and the carrier, the consignee
can still 5e 5ound 52 the contract* Speaking through 8r* Chief $ustice Narvasa, we ruledE
=0o 5egin with, there is no Guestion of the right, in principle, of a consignee in a 5ill of lading to recover
from the carrier or shipper for loss of, or damage to goods 5eing transported under said 5ill, !*t'o-+'
t'!t #oc-1e"t 1!2 '!,e bee"4 !/ )" (r!ct)ce )t o.te"t)1e/ )/4#r!0" -( o"*2 b2 t'e consi#nor
and the carrier 0)t'o-t t'e )"ter,e"t)o" o. t'e co"/)+"ee* C C C*
J C C C the r)+'t o. ! (!rt2 )" t'e /!1e /)t-!t)o" !/ re/(o"#e"t 'ere, to reco,er .or *o// o. !
/')(1e"t co"/)+"e# to ')1 -"#er ! b)** o. *!#)"+ #r!0" -( o"*2 b2 !"# bet0ee" t'e /')((er
!"# t'e c!rr)er, /(r)"+/ .ro1 e)t'er ! re*!t)o" o. !+e"c2 t'!t 1!2 e5)/t bet0ee" ')1 !"# t'e
/')((er or co"/)+"or, or ')/ /t!t-/ !/ /tr!"+er )" 0'o/e .!,or /o1e /t)(-*!t)o" )/ 1!#e )" /!)#
co"tr!ct, !"# 0'o beco1e/ ! (!rt2 t'ereto 0'e" 'e #e1!"#/ .-*.)**1e"t o. t'!t /t)(-*!t)o", )"
t')/ c!/e t'e #e*),er2 o. t'e +oo#/ or c!r+o /')((e#. I" "e)t'er c!(!c)t2 c!" 'e !//ert
(er/o"!**2, )" b!r to !"2 (ro,)/)o" o. t'e b)** o. *!#)"+, t'e !**e+e# c)rc-1/t!"ce t'!t .!)r !"#
.ree !+ree1e"t to /-c' (ro,)/)o" 0!/ ,)t)!te# b2 )t/ be)"+ )" /-c' .)"e (r)"t !/ to be '!r#*2
re!#!b*e* Parentheticall2, it ma2 5e o5served that in one comparativel2 recent case ;PhoeniC
#ssurance Compan2 vs* 8acondra2 L Co*, Inc*, 4% SC+# !'< where this Court found that ! /)1)*!r
(!c3!+e *)1)t!t)o" c*!-/e 0!/ 6(r)"te# )" t'e /1!**e/t t2(e o" t'e b!c3 o. t'e b)** o. *!#)"+,7 )t
"o"et'e*e// r-*e# t'!t t'e co"/)+"ee 0!/ bo-"# t'ereb2 o" t'e /tre"+t' o. !-t'or)t2 'o*#)"+
t'!t /-c' (ro,)/)o"/ o" *)!b)*)t2 *)1)t!t)o" !re !/ 1-c' ! (!rt o. ! b)** o. *!#)"+ !/ t'o-+'
('2/)c!**2 )" )t !"# !/ t'o-+' (*!ce# t'ere)" b2 !+ree1e"t o. t'e (!rt)e/.
0here can, therefore, 5e no dou5t or eGuivocation a5out the validit2 and enforcea5ilit2 of freel2(
agreed(upon stipulations in a contract of carriage or 5ill of lading limiting the lia5ilit2 of the carrier to an
agreed valuation -"*e// t'e /')((er #ec*!re/ ! ')+'er ,!*-e !"# )"/ert/ )t )"to /!)# co"tr!ct or
b)*** 0his proposition, moreover, rests upon an almost uniform weight of authorit2*? ;Anderscoring
supplied<
Khen private respondent formall2 claimed reim5ursement for the missing goods from petitioner and
su5seGuentl2 filed a case against the latter 5ased on the ver2 same 5ill of lading, it ;private respondent<
accepted the provisions of the contract and there52 made itself a part2 thereto, or at least has come to court
to enforce it*
&"
0hus, private respondent cannot now reDect or disregard the carrier@s limited lia5ilit2 stipulation
,
in the 5ill of lading* In other words, private respondent is 5ound 52 the whole stipulations in the 5ill of lading
and must respect the same*
Private respondent, however, insists that the carrier should 5e lia5le for the full value of the lost cargo
in the amount of B!,'',,'..*.., considering that the shipper, 8aruman 0rading, had Mfull2 declared the
shipment C C C, the contents of each crate, the dimensions, weight and ,!*-e of the contents,M
!."
as shown in
the commercial Invoice No* 808(&%!*
0his claim was denied 52 petitioner, contending that it did not know of the contents, Guantit2 and value
of Mthe shipment which consisted of three pre(packed crates descri5ed in 3ill of :ading No* N)O('/8N
merel2 as J/ C#SES SP#+E P#+0S*@?
!!"
0he 5ill of lading in Guestion confirms petitioner@s contention* 0o defeat the carrier@s limited lia5ilit2,
the aforecited Clause !- of the 5ill of lading reGuires that the shipper should have #ec*!re# )" 0r)t)"+ !
')+'er ,!*-!t)o" of its goods 5efore receipt thereof 52 the carrier and )"/ert t'e /!)# #ec*!r!t)o" )" t'e
b)** o. *!#)"+, with the eCtra freight paid* 0hese reGuirements in the 5ill of lading were never complied with
52 the shipper, hence, the lia5ilit2 of the carrier under the limited lia5ilit2 clause stands* 0he commercial
Invoice No* 808(&%! does not in itself sufficientl2 and convincingl2 show that petitioner has knowledge of
the value of the cargo as contended 52 private respondent* No other evidence was proffered 52 private
respondent to support is contention* 0hus, we are convinced that petitioner should 5e lia5le for the .-**
,!*-e of the lost cargo*
In fine, the lia5ilit2 of petitioner for the loss of the cargo is limited to One 6undred 0housand
;B!..,...*..< Ben, pursuant to Clause !- of the 5ill of lading*
8HEREFORE, the decision of the Court of #ppeals dated $une !%, !&&' in C*#*()*+* CV No*
%,-./ is here52 +EVE+SED and SE0 #SIDE*
SO OR$ERE$.
Regalado, ;#cting Chief $ustice<, Melo, Puno, and Mendoza, JJ., concur*
NNN

SECON$ $IVISION


MOF COMPAN9, INC., G.R. No. 1:;8;;
Petitioner,
PresentE

C#+PIO,
N
J., Chairperson,
( versus ( :EON#+DO(DE C#S0+O,
NN
3+ION,
DE: C#S0I::O, and
#3#D, JJ.
SHIN 9ANG <RO=ERAGE
CORPORATION, PromulgatedE
+espondent* Decem5er !-, ,..&
C ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( C
$E CASTIO, J.&

The necessity of proving lies ith the person ho sues.

0he refusal of the consignee named in the 5ill of lading to pa2 the freightage on the claim that it is not priv2 to
the contract of affreightment propelled the shipper to sue for collection of mone2, stressing that its sole evidence, the 5ill of
lading, suffices to prove that the consignee is 5ound to pa2* Petitioner now comes to us 52 wa2 of Petition for +eview
on Certiorari
!"
under +ule %' pra2ing for the reversal of the Court of #ppealsO ;C#< Dudgment that dismissed its action for
sum of mone2 for insufficienc2 of evidence*

&actual Antecedents

On Octo5er ,', ,..!, 6alla 0rading Co*, a compan2 5ased in 1orea, shipped to 8anila secondhand cars
and other articles on 5oard the vessel 6anDin 3usan .,/-K* 0he 5ill of lading covering the shipment, i.e., 3ill of :ading
No* 6$SCPASI!%!4-/./,
,"
which was prepared 52 the carrier 6anDin Shipping Co*, :td* ;6anDin<, named respondent
Shin Bang 3rokerage Corp* ;Shin Bang< as the consignee and indicated that pa2ment was on a =>reight Collect?
5asis, i.e., that the consignee9receiver of the goods would 5e the one to pa2 for the freight and other charges in the total
amount of P'I,4%4*..*
/"

0he shipment arrived in 8anila on Octo5er ,&, ,..!* 0hereafter, petitioner 8O> Compan2, Inc* ;8O><,
6anDin@s eCclusive general agent in the Philippines, repeatedl2 demanded the pa2ment of ocean freight, documentation
fee and terminal handling charges from Shin Bang* 0he latter, however, failed and refused to pa2 contending that it did
not cause the importation of the goods, that it is onl2 the Consolidator of the said shipment, that the ultimate consignee did
not endorse in its favor the original 5ill of lading and that the 5ill of lading was prepared without its consent*
0hus, on 8arch !&, ,../, 8O> filed a case for sum of mone2 5efore
the 8etropolitan 0rial Court of Pasa2 Cit2 ;8e0C Pasa2< which was docketed as Civil Case No* ,.4(./ and raffled to
3ranch %-* 8O> alleged that Shin Bang, a regular client, caused the importation and shipment of the goods and assured
it that ocean freight and other charges would 5e paid upon arrival of the goods in 8anila* Bet, after 6anDinOs compliance,
Shin Bang unDustl2 5reached its o5ligation to pa2* 8O> argued that Shin Bang, as the named consignee in the 5ill of
lading, entered itself as a part2 to the contract and 5ound itself to the =>reight Collect? arrangement* 8O> thus pra2ed for
the pa2ment of P'I,4%4*.. representing ocean freight, documentation fee and terminal handling charges as well as
damages and attorne2@s fees*
Claiming that it is merel2 a consolidator9forwarder and that 3ill of :ading No* 6$SCPASI!%!4-/./ was not
endorsed to it 52 the ultimate consignee, Shin Bang denied an2 involvement in shipping the goods or in promising to
shoulder the freightage* It asserted that it never authori7ed 6alla 0rading Co* to ship the articles or to have its name
included in the 5ill of lading* Shin Bang also alleged that 8O> failed to present supporting documents to prove that it was
Shin Bang that caused the importation or the one that assured pa2ment of the shipping charges upon arrival of the goods
in 8anila*

'ulin# of the (etropolitan )rial Court

On $une !4, ,..%, the 8e0C of Pasa2 Cit2, 3ranch %- rendered its Decision
%"
in favor of 8O>* It ruled that Shin
Bang cannot disclaim 5eing a part2 to the contract of affreightment 5ecauseE

/
C C C it would appear that defendant has 5usiness transactions with plaintiff* 0his is evident from
defendant@s letters dated .& 8a2 ,.., and !/ 8a2 ,.., ;EChi5its =!? and =,?, defendant@s Position Paper<
where it reGuested for the release of refund of container deposits C C C* In" the mind of the Court, 52 analog2,
a written contract need not 5e necessar2F a mutual understanding would suffice"* >urther, plaintiff would have
not included the name of the defendant in the 5ill of lading, had there 5een no prior agreement to that effect*

In sum, plaintiff has sufficientl2 proved its cause of action against the defendant and the latter is
o5liged to honor its agreement with plaintiff despite the a5sence of a written contract*
'"

0he dispositive portion of the 8e0C Decision readsE

K6E+E>O+E, premises considered, Dudgment is here52 rendered in favor of plaintiff and against
the defendant, ordering the latter to pa2 plaintiff as followsE

!* P'I,4%4*.. plus legal interest from the date of demand until full2 paid,
,* P!.,...*.. as and for attorne2@s fees and
/* the cost of suit*

SO O+DE+ED*
4"



'ulin# of the 'e#ional )rial Court

0he +egional 0rial Court ;+0C< of Pasa2 Cit2, 3ranch !.- affirmed in toto the Decision of the 8e0C* It held
thatE

8O> and Shin Bang entered into a contract of affreightment which 3lack@s :aw Dictionar2 defined as
a contract with the ship owner to hire his ship or part of it, for the carriage of goods and generall2 take the form
either of a charter part2 or a 5ill of lading*

0he 5ill of lading contains" the information em5odied in the contract*

#rticle 4', of the Code of Commerce provides that the charter part2 must 5e in writingF however,
#rticle 4'/ sa2sE =If the cargo should 5e received without charter part2 having 5een signed, the contract shall
5e understood as eCecuted in accordance with what appears in the 5ill of lading, the sole evidence of title with
regard to the cargo for determining the rights and o5ligations of the ship agent, of the captain and of the
charterer?* 0hus, the Supreme Court opined in the 8arket Developers, Inc* ;8#DE< vs* 6onora5le
Intermediate #ppellate Court and )audioso A2, )*+* No* I%&I-, Septem5er -, !&-&, this kind of contract ma2
5e oral* In another case, Compania 8aritima vs* Insurance Compan2 of North #merica, !, SC+# ,!/ the
contract of affreightment 52 telephone was recogni7ed where the oral agreement was later confirmed 52 a
formal 5ooking*

C C C C

Defendant is lia5le to pa2 the sum of P'I,4%4*.., with interest until full2 paid, attorne2@s fees
of P!.,...*.. and" cost of suit*

Considering all the foregoing, this Court affirms in toto the decision of the Court a !uo*

SO O+DE+ED*
I"


'ulin# of the Court of Appeals

Seeing the matter in a different light, the C# dismissed 8O>@s complaint and refused to award an2 form of
damages or attorne2@s fees* It opined that 8O> failed to su5stantiate its claim that Shin Bang had a hand in the
importation of the articles to the Philippines or that it gave its consent to 5e a consignee of the su5Dect goods* In its 8arch
,,, ,..4 Decision,
-"
the C# saidE

0his Court is persuaded that eCcept" for the 3ill of :ading, respondent has not presented an2 other
evidence to 5olster its claim that petitioner has entered into" an agreement of affreightment with respondent,
5e it ver5al or written* It is noted that the 3ill of :ading was prepared 52 6anDin Shipping, not the
petitioner* 6anDin is the principal while respondent is the former@s agent* ;p* %/, rollo<

0he conclusion of the court a Guo, which was upheld 52 the +0C Pasa2 Cit2, 3ranch !.- CCC is
purel2 speculative and conDectural* # court cannot rel2 on speculations, conDectures or guesswork, 5ut must
depend upon competent proof and on the 5asis of the 5est evidence o5taina5le under the
circumstances* :itigation cannot 5e properl2 resolved 52 suppositions, deductions or even presumptions, with
no 5asis in evidence, for the truth must have to 5e determined 52 the hard rules of admissi5ilit2 and proof
;:agon vs* 6ooven Comalco Industries, Inc* /%& SC+# /4/<*
%

Khile it is true that a 5ill of lading serves two ;,< functionsE first, it is a receipt for the goods shippedF
second, it is a contract 52 which three parties, namel2, the shipper, the carrier and the consignee who
undertake specific responsi5ilities and assume stipulated o5ligations ;3elgian Overseas Chartering and
Shipping N*V* vs* Phil* >irst Insurance Co*, Inc*, /-/ SC+# ,/<, C C C if the same is not accepted, it is as if one
part2 does not accept the contract* Said the Supreme CourtE

=# 5ill of lading delivered and accepted constitutes the contract of carriage," even
though not signed, 5ecause the acceptance of a paper containing the terms of a proposed contract
generall2 constitutes an acceptance of the contract and of all its terms and conditions of which the
acceptor has actual or constructive notice? ;1eng 6ua Paper Products Co*, Inc* vs* C#, ,-4 SC+#
,'I<*

In the present case, petitioner did not onl2 refuse to" accept the 5ill of lading, 5ut it likewise
disowned" the shipment C C C* Neither did it" authori7e 6alla 0rading Compan2 or an2one to ship or eCport
the same on its 5ehalf*

It is settled that a contract is upheld as long as there is proof of consent, su5Dect matter and cause
;Sta* Clara 6omeowner@s #ssociation vs* )aston, /I% SC+# /&4<* In the case at 5ar, there is not even an2
iota of evidence to show that petitioner had given its consent*

=6e who alleges a fact has the 5urden of proving it and a mere allegation is not
evidence? ;:uCuria 6omes Inc* vs* C#, /., SC+# /!'<*

0he %.(footer van contains goods of su5stantial value* It is highl2 impro5a5le for petitioner not to
pa2 the charges, which is ver2 minimal compared with the value of the goods, in order that it could work on the
release thereof*

>or failure to su5stantiate its claim 52 preponderance of evidence, respondent has not esta5lished
its case against petitioner*
&"

Petitioners filed a motion for reconsideration 5ut it was denied in a +esolution
!."
dated 8a2 ,', ,..4* 6ence,
this petition for review on certiorari*

Petitioner*s Ar#uments

In assailing the C#@s Decision, 8O> argues that the factual findings of 5oth the 8e0C and +0C are entitled to
great weight and respect and should have 5ound the C#* It stresses that the appellate court has no Dustifia5le reason to
distur5 the lower courts@ Dudgments 5ecause their conclusions are well(supported 52 the evidence on record*

8O> further argues that the C# erred in la5eling the findings of the lower courts as purel2 Jspeculative and
conDectural@* #ccording to 8O>, the 5ill of lading, which eCpressl2 stated Shin Bang as the consignee, is the 5est
evidence of the latter@s actual participation in the transportation of the goods* Such document, validl2 entered, stands as
the law among the shipper, carrier and the consignee, who are all 5ound 52 the terms stated therein* 3esides, a
carrier@s valid claim after it fulfilled its o5ligation cannot Dust 5e reDected 52 the named consignee upon a simple denial that it
ever consented to 5e a part2 in a contract of affreightment, or that it ever participated in the preparation of the 5ill of
lading* #s against Shin Bang@s 5are denials, the 5ill of lading is the sufficient preponderance of evidence reGuired to prove
8O>@s claim* 8O> maintains that Shin Bang was the one that supplied all the details in the 5ill of lading and acGuiesced
to 5e named consignee of the shipment on a J>reight Collect@ 5asis*

:astl2, 8O> claims that even if Shin Bang never gave its consent, it cannot avoid its o5ligation to pa2, 5ecause
it never o5Dected to 5eing named as the consignee in the 5ill of lading and that it onl2 protested when the shipment arrived
in the Philippines, presuma5l2 due to a 5otched transaction 5etween it and 6alla 0rading Co* >urthermore, Shin Bang@s
letters asking for the refund of container deposits highlight the fact that it was aware of the shipment and that it undertook
preparations for the intended release of the shipment*

'espondent*s Ar#uments

Echoing the C# decision, Shin Bang insists that 8O> has no evidence to prove that it consented to take part in
the contract of affreightment* Shin Bang argues that 8O> misera5l2 failed to present an2 evidence to prove that it was
the one that made preparations for the su5Dect shipment, or that it is an Jactual shipping practice@ that
forwarders9consolidators as consignees are the ones that provide carriers details and information on the 5ills of lading*

Shin Bang contends that a 5ill of lading is essentiall2 a contract 5etween the shipper and the carrier and
ordinaril2, the shipper is the one lia5le for the freight charges* # consignee, on the other hand, is initiall2 a stranger to the
5ill of lading and can 5e lia5le onl2 when the 5ill of lading specifies that the charges are to 5e paid 52 the consignee* 0his
lia5ilit2 arises from either a< the contract of agenc2 5etween the shipper9consignor and the consigneeF or 5< the
consignee@s availment of the stipulation pour autrui drawn up 52 and 5etween the shipper9 consignor and carrier upon the
consignee@s demand that the goods 5e delivered to it* Shin Bang contends that the fact that its name was mentioned as
the consignee of the cargoes did not make it automaticall2 lia5le for the freightage 5ecause it never 5enefited from the
shipment* It never claimed or accepted the goods, it was not the shipper@s agent, it was not aware of its designation as
consignee and the original 5ill of lading was never endorsed to it*

I//-e

0he issue for resolution is whether a consignee, who is not a signator2 to the 5ill of lading, is 5ound 52 the
stipulations thereof* Corollaril2, whether respondent who was not an agent of the shipper and who did not make an2
'
demand for the fulfillment of the stipulations of the 5ill of lading drawn in its favor is lia5le to pa2 the corresponding freight
and handling charges*

O-r R-*)"+

Since the C# and the trial courts arrived at different conclusions, we are constrained to depart from the general
rule that onl2 errors of law ma2 5e raised in a Petition for +eview onCertiorari under +ule %' of the +ules of Court and will
review the evidence presented*
!!"


0he 5ill of lading is oftentimes drawn up 52 the shipper9consignor and the carrier without the intervention of the
consignee* 6owever, the latter can 5e 5ound 52 the stipulations of the 5ill of lading when a< there is a relation of agenc2
5etween the shipper or consignor and the consignee or 5< when the consignee demands fulfillment of the stipulation of the
5ill of lading which was drawn up in its favor*
!,"

In "eng #ua Paper Products Co., $nc. v. Court of Appeals,
!/"
we held that once the 5ill of lading is received 52
the consignee who does not o5Dect to an2 terms or stipulations contained therein, it constitutes as an acceptance of the
contract and of all of its terms and conditions, of which the acceptor has actual or constructive notice*

In Mendoza v. Philippine Air %ines, $nc.,
!%"
the consignee sued the carrier for damages 5ut nevertheless
claimed that he was never a part2 to the contract of transportation and was a complete stranger thereto* In
de5unking 8endo7a@s contention, we held thatE

C C C >irst, he insists that the articles of the Code of Commerce should 5e appliedF that he invokes the
provisions of said Code governing the o5ligations of a common carrier to make prompt deliver2 of goods given
to it under a contract of transportation* :ater, as alread2 said, he sa2s that he was never a part2 to the contract
of transportation and was a complete stranger to it, and that he is now suing on a tort or a violation of his rights
as a stranger ;culpa a!uiliana<* If he does not invoke the contract of carriage entered into with the defendant
compan2, then he would hardl2 have an2 leg to stand on* 6is right to prompt deliver2 of the can of film at
the Pili #ir Portstems and is derived from the contract of carriage under which contract, the P#: undertook to
carr2 the can of film safel2 and to deliver it to him promptl2* 0ake awa2 or ignore that contract and the
o5ligation to carr2 and to deliver and right to prompt deliver2 disappear* Common carriers are not o5ligated 52
law to carr2 and to deliver merchandise, and persons are not vested with the right to prompt deliver2, unless
such common carriers previousl2 assume the o5ligation* Said rights and o5ligations are created 52 a specific
contract entered into 52 the parties* I" t'e (re/e"t c!/e, t'e .)"#)"+/ o. t'e tr)!* co-rt 0')c' !/ !*re!#2
/t!te#, !re !cce(te# b2 t'e (!rt)e/ !"# 0')c' 0e 1-/t !cce(t !re to t'e e..ect t'!t t'e VN P)ct-re/
I"c. !"# >o/e Me"#oz! o" o"e /)#e, !"# t'e #e.e"#!"t co1(!"2 o" t'e ot'er, e"tere# )"to ! co"tr!ct
o. tr!"/(ort!t)o" ?(. ;9, Rec. o" A((e!*@. O"e )"ter(ret!t)o" o. /!)# .)"#)"+ )/ t'!t t'e VN P)ct-re/ I"c.
t'ro-+' (re,)o-/ !+ree1e"t 0)t' Me"#oz! !cte# !/ t'e *!tterA/ !+e"t. 8'e" 'e "e+ot)!te# 0)t' t'e
VN P)ct-re/ I"c. to re"t t'e .)*1 AH)1!*! "+ <)r'e"A !"# /'o0 )t #-r)"+ t'e N!+! to0" .)e/t!, 'e 1o/t
(rob!b*2 !-t'or)ze# !"# e"Bo)"e# t'e P)ct-re Co1(!"2 to /')( t'e .)*1 .or ')1 o" t'e PA o"
Se(te1ber 1:t'. A"ot'er )"ter(ret!t)o" )/ t'!t e,e" ). t'e VN P)ct-re/ I"c. !/ co"/)+"or o. )t/ o0"
)")t)!t),e, !"# !ct)"+ )"#e(e"#e"t*2 o. Me"#oz! .or t'e t)1e be)"+, 1!#e Me"#oz! !
co"/)+"ee. Me"#oz! 1!#e ')1/e*. ! (!rt2 to t'e co"tr!ct o. tr!"/(ort!)o" 0'e" 'e !((e!re# !t t'e
P)*) A)r Port !r1e# 0)t' t'e co(2 o. t'e A)r 8!2 <)** ?E5'. 1@ #e1!"#)"+ t'e #e*),er2 o. t'e /')(1e"t to
')1." 0he ver2 citation made 52 appellant in his memorandum supports this view* Speaking of the possi5ilit2 of
a conflict 5etween the order of the shipper on the one hand and the order of the consignee on the other, as
when the shipper orders the shipping compan2 to return or retain the goods shipped while the consignee
demands their deliver2, 8alagarriga in his 5ook Codigo de Comercio Comentado, Vol* !, p* %.., citing a
decision of the #rgentina Court of #ppeals on commercial matters, cited 52 0olentino in Vol* II of his 5ook
entitled OCommentaries and $urisprudence on the Commercial :aws of the PhilippinesO p* ,.&, sa2s that t'e
r)+'t o. t'e /')((er to co-"ter1!"# t'e /')(1e"t ter1)"!te/ 0'e" t'e co"/)+"ee or *e+)t)1!te 'o*#er
o. t'e b)** o. *!#)"+ !((e!r/ 0)t' /-c' b)** o. *!#)"+ be.ore t'e c!rr)er !"# 1!3e/ ')1/e*. ! (!rt2 to t'e
co"tr!ct. Pr)or to t'!t t)1e 'e )/ ! /tr!"+er to t'e co"tr!ct.

St)** !"ot'er ,)e0 o. t')/ ('!/e o. t'e c!/e )/ t'!t co"te1(*!te# )" Art. 1;C:, (!r!+r!(' ;, o.
t'e o*# C),)* Co#e ?"o0 Art. 1D11, /eco"# (!r!+r!('@ 0')c' re!#/ t'-/&

ES'o-*# t'e co"tr!ct co"t!)" !"2 /t)(-*!t)o" )" .!,or o. ! t')r# (er/o", 'e 1!2
#e1!"# )t/ .-*.)**1e"t (ro,)#e# 'e '!/ +),e" "ot)ce o. ')/ !cce(t!"ce to t'e (er/o" bo-"#
be.ore t'e /t)(-*!t)o" '!/ bee" re,o3e#.A

Here, t'e co"tr!ct o. c!rr)!+e bet0ee" t'e VN P)ct-re/ I"c. !"# t'e #e.e"#!"t c!rr)er
co"t!)"/ t'e /t)(-*!t)o"/ o. #e*),er2 to Me"#oz! !/ co"/)+"ee. H)/ #e1!"# .or t'e #e*),er2 o. t'e c!"
o. .)*1 to ')1 !t t'e P)*) A)r Port 1!2 be re+!r#e# !/ ! "ot)ce o. ')/ !cce(t!"ce o. t'e /t)(-*!t)o" o.
t'e #e*),er2 )" ')/ .!,or co"t!)"e# )" t'e co"tr!ct o. c!rr)!+e !"# #e*),er2. I" t')/ c!/e 'e !*/o 1!#e
')1/e*. ! (!rt2 to t'e co"tr!ct, or !t *e!/t '!/ co1e to co-rt to e".orce )t. H)/ c!-/e o. !ct)o" 1-/t
"ece//!r)*2 be .o-"#e# o" )t/ bre!c'.
!'"
;Emphasis Ours<

In sum, a consignee, although not a signator2 to the contract of carriage 5etween the shipper and the carrier,
5ecomes a part2 to the contract 52 reason of either a< the relationship of agenc2 5etween the consignee and the shipper9
consignorF 5< the uneGuivocal acceptance of the 5ill of lading delivered to the consignee, with full knowledge of its contents
or c< availment of the stipulation pour autrui, i.e., when the consignee, a third person, demands 5efore the carrier the
fulfillment of the stipulation made 52 the consignor9shipper in the consignee@s favor, specificall2 the deliver2 of the
goods9cargoes shipped*
!4"


In the instant case, Shin Bang consistentl2 denied in all of its pleadings that it authori7ed 6alla 0rading, Co* to
ship the goods on its 5ehalfF or that it got hold of the 5ill of lading covering the shipment or that it demanded the release of
the cargo* 3asic is the rule in evidence that the 5urden of proof lies upon him who asserts it, not upon him who denies,
since, 52 the nature of things, he who denies a fact cannot produce an2 proof of it*
!I"
0hus, 8O> has the 5urden to
controvert all these denials, it 5eing insistent that Shin Bang asserted itself as the consignee and the one that caused the
shipment of the goods to the Philippines*

In civil cases, the part2 having the 5urden of proof must esta5lish his case 52 preponderance of evidence,
!-"
which means evidence which is of greater weight, or more convincing than that which is offered in opposition to it*
!&"
6ere, 8O> failed to meet the reGuired Guantum of proof* Other than presenting the 5ill of lading, which, at most,
proves that the carrier acknowledged receipt of the su5Dect cargo from the shipper and that the consignee named is to
shoulder the freightage, 8O> has not adduced an2 other credi5le evidence to strengthen its cause of action* It did not
even present an2 witness in support of its allegation that it was Shin Bang which furnished all the details indicated in the 5ill
of lading and that Shin Bang consented to shoulder the shipment costs* 0here is also nothing in the records which would
4
indicate that Shin Bang was an agent of 6alla 0rading Co* or that it eCercised an2 act that would 5ind it as a named
consignee* 0hus, the C# correctl2 dismissed the suit for failure of petitioner to esta5lish its cause against respondent*

8HEREFORE, the petition is $ENIE$* 0he assailed Decision of the Court of #ppeals dated 8arch ,,,
,..4 dismissing petitioner@s complaint and the +esolution dated 8a2 ,', ,..4 den2ing the motion for reconsideration
are AFFIRME$*

SO OR$ERE$.
SECOND DIVISION
G.R. No. 9CC8; October :, 1991
$ANG8A TRANSPORTATION CO., INC. !"# THEO$ORE AR$I%A<A 2 MAEC$AN, petitioners,
vs*
COURT OF APPEAS, INOCENCIA CU$IAMAT, EMIIA CU$IAMAT <AN$O9, FERNAN$O
CU$AMAT, MARRIETA CU$IAMAT, NORMA CU$IAMAT, $ANTE CU$IAMAT, SAMUE CU$IAMAT
!"# IGA9A CU$IAMAT, !** He)r/ o. t'e *!te Pe#r)to C-#)!1!t re(re/e"te# b2 I"oce"c)!
C-#)!1!t, respondents.
&rancisco '. Reyes %a Office for petitioners.
Antonio C. de (uz)an for private respondents.

REGAA$O, J.+p
On 8a2 !/, !&-', private respondents filed a complaint 1 for damages against petitioners for the death of
Pedrito Cudiamat as a result of a vehicular accident which occurred on 8arch ,', !&-' at 8arivic, Sapid,
8anka2an, 3enguet* #mong others, it was alleged that on said date, while petitioner 0heodore 8* :ardi7a5al
was driving a passenger 5us 5elonging to petitioner corporation in a reckless and imprudent manner and
without due regard to traffic rules and regulations and safet2 to persons and propert2, it ran over its
passenger, Pedrito Cudiamat* 6owever, instead of 5ringing Pedrito immediatel2 to the nearest hospital, the
said driver, in utter 5ad faith and without regard to the welfare of the victim, first 5rought his other
passengers and cargo to their respective destinations 5efore 5anging said victim to the :epanto 6ospital
where he eCpired*
On the other hand, petitioners alleged that the2 had o5served and continued to o5serve the eCtraordinar2
diligence reGuired in the operation of the transportation compan2 and the supervision of the emplo2ees,
even as the2 add that the2 are not a5solute insurers of the safet2 of the pu5lic at large* >urther, it was
alleged that it was the victimOs own carelessness and negligence which gave rise to the su5Dect incident,
hence the2 pra2ed for the dismissal of the complaint plus an award of damages in their favor 52 wa2 of a
counterclaim*
On $ul2 ,&, !&--, the trial court rendered a decision, effectivel2 in favor of petitioners, with this decretal
portionE
IN VIEK O> #:: 06E >O+E)OIN), Dudgment is here52 pronounced that
Pedrito Cudiamat was negligent, which negligence was the proCimate cause
of his death* Nonetheless, defendants in eGuit2, are here52 ordered to pa2 the
heirs of Pedrito Cudiamat the sum of P!.,...*.. which approCimates the
amount defendants initiall2 offered said heirs for the amica5le settlement of
the case* No costs*
SO O+DE+ED* ;
Not satisfied therewith, private respondents appealed to the Court of #ppeals which, in a decision D in C#(
)*+* CV No* !&'.% promulgated on #ugust !%, !&&., set aside the decision of the lower court, and ordered
petitioners to pa2 private respondentsE
!* 0he sum of 0hirt2 0housand ;P/.,...*..< Pesos 52 wa2 of indemnit2 for
death of the victim Pedrito CudiamatF
,* 0he sum of 0went2 0housand ;P,.,...*..< 52 wa2 of moral damagesF
/* 0he sum of 0wo 6undred Eight2 Eight 0housand ;P,--,...*..< Pesos as
actual and compensator2 damagesF
%* 0he costs of this suit* F
PetitionersO motion for reconsideration was denied 52 the Court of #ppeals in its resolution dated Octo5er %,
!&&., C hence this petition with the central issue herein 5eing whether respondent court erred in reversing
the decision of the trial court and in finding petitioners negligent and lia5le for the damages claimed*
It is an esta5lished principle that the factual findings of the Court of #ppeals as a rule are final and ma2 not
5e reviewed 52 this Court on appeal* 6owever, this is su5Dect to settled eCceptions, one of which is when the
findings of the appellate court are contrar2 to those of the trial court, in which case a reeCamination of the
facts and evidence ma2 5e undertaken* G
In the case at 5ar, the trial court and the Court of #ppeal have discordant positions as to who 5etween the
petitioners an the victim is guilt2 of negligence* Perforce, we have had to conduct an evaluation of the
evidence in this case for the prope cali5ration of their conflicting factual findings and legal conclusions*
0he lower court, in declaring that the victim was negligent, made the following findingsE
0his Court is satisfied that Pedrito Cudiamat was negligent in tr2ing to 5oard a
moving vehicle, especiall2 with one of his hands holding an um5rella* #nd,
without having given the driver or the conductor an2 indication that he wishes
to 5oard the 5us* 3ut defendants can also 5e found wanting of the necessar2
diligence* In this connection, it is safe to assume that when the deceased
Cudiamat attempted to 5oard defendantsO 5us, the vehicleOs door was open
instead of 5eing closed* 0his should 5e so, for it is hard to 5elieve that one
would even attempt to 5oard a vehicle ;i<n motion if the door of said vehicle is
closed* 6ere lies the defendantOs lack of diligence* Ander such circumstances,
eGuit2 demands that there must 5e something given to the heirs of the victim
to assuage their feelings* 0his, also considering that initiall2, defendant
common carrier had made overtures to amica5l2 settle the case* It did offer a
certain monetar2 consideration to the victimOs heirs* :
6owever, respondent court, in arriving at a different opinion, declares thatE
>rom the testimon2 of appelleesOown witness in the person of Vitaliano
Safarita, it is evident that the su5Dect 5us was at full stop when the victim
Pedrito Cudiamat 5oarded the same as it was precisel2 on this instance
where a certain 8iss #5enoDa alighted from the 5us* 8oreover, contrar2 to the
assertion of the appellees, the victim did indicate his intention to 5oard the
5us as can 5e seen from the testimon2 of the said witness when he declared
that Pedrito Cudiamat was no longer walking and made a sign to 5oard the
I
5us when the latter was still at a distance from him* It was at the instance
when Pedrito Cudiamat was closing his um5rella at the platform of the 5us
when the latter made a sudden Derk movement ;as< the driver commenced to
accelerate the 5us*
Evidentl2, the incident took place due to the gross negligence of the appellee(
driver in prematurel2 stepping on the accelerator and in not waiting for the
passenger to first secure his seat especiall2 so when we take into account
that the platform of the 5us was at the time slipper2 and wet 5ecause of a
dri77le* 0he defendants(appellees utterl2 failed to o5serve their dut2 and
o5ligation as common carrier to the end that the2 should o5serve eCtra(
ordinar2 diligence in the vigilance over the goods and for the safet2 of the
passengers transported 52 them according to the circumstances of each case
;#rticle !I//, New Civil Code<* 8
#fter a careful review of the evidence on record, we find no reason to distur5 the a5ove holding of the Court
of #ppeals* Its aforesaid findings are supported 52 the testimon2 of petitionersO own witnesses* One of them,
Virginia #5alos, testified on cross(eCamination as followsE
P It is not a fact 8adam witness, that at 5unkhouse '%,
that is 5efore the place of the incident, there is a
crossingQ
# 0he wa2 going to the mines 5ut it is not 5eing pass;ed<
52 the 5us*
P #nd the incident happened 5efore 5unkhouse '4, is
that not correctQ
# $t happened *eteen +, and +- *un.houses* 9
0he 5us conductor, 8artin #nglog, also declaredE
P Khen 2ou arrived at :epanto on 8arch ,', !&-', will
2ou please inform this 6onora5le Court if there was anv
unusual incident that occurredQ
# Khen we delivered a 5aggage at 8arivic 5ecause a
person alighted there *eteen /un.house +- and +,.
P Khat happened when 2ou delivered this passenger at
this particular place in :epantoQ
# 0hen e reached the place, a passenger alighted and
$ signalled )y driver. 0hen e stopped e ent out
*ecause $ sa an u)*rella a*out a split second and $
signalled again the driver, so the driver stopped and e
ent don and e sa Pedrito Cudia)at as.ing for help
*ecause he as lying don*
P 6ow far awa2 was this certain person, Pedrito
Cudiamat, when 2ou saw him l2ing down R from the 5us
how far was heQ
# It is a5out two to three meters*
P On hat direction of the *us as he found a*out three
)eters fro) the *us, as it at the front or at the *ac.1
# At the *ac., sir* 1H ;Emphasis supplied*<
0he foregoing testimonies show that the place of the accident and the place where one of the passengers
alighted were 5oth 5etween 3unkhouses '/ and '%, hence the finding of the Court of #ppeals that the 5us
was at full stop when the victim 5oarded the same is correct* 0he2 further confirm the conclusion that the
victim fell from the platform of the 5us when it suddenl2 accelerated forward and was run over 52 the rear
right tires of the vehicle, as shown 52 the ph2sical evidence on where he was thereafter found in relation to
the 5us when it stopped* Ander such circumstances, it cannot 5e said that the deceased was guilt2 of
negligence*
0he contention of petitioners that the driver and the conductor had no knowledge that the victim would ride
on the 5us, since the latter had supposedl2 not manifested his intention to 5oard the same, does not merit
consideration* Khen the 5us is not in motion there is no necessit2 for a person who wants to ride the same
to signal his intention to 5oard* # pu5lic utilit2 5us, once it stops, is in effect making a continuous offer to 5us
riders* 6ence, it 5ecomes the dut2 of the driver and the conductor, ever2 time the 5us stops, to do no act
that would have the effect of increasing the peril to a passenger while he was attempting to 5oard the same*
0he premature acceleration of the 5us in this case was a 5reach of such dut2* 11
It is the dut2 of common carriers of passengers, including common carriers 52 railroad train, streetcar, or
motor5us, to stop their conve2ances a reasona5le length of time in order to afford passengers an
opportunit2 to 5oard and enter, and the2 are lia5le for inDuries suffered 52 5oarding passengers resulting
from the sudden starting up or Derking of their conve2ances while the2 are doing so* 1;
>urther, even assuming that the 5us was moving, the act of the victim in 5oarding the same cannot 5e
considered negligent under the circumstances* #s clearl2 eCplained in the testimon2 of the aforestated
witness for petitioners, Virginia #5alos, the 5us had MDust startedM and Mwas still in slow motionM at the point
where the victim had 5oarded and was on its platform* 1D
It is not negligence per se, or as a matter of law, for one attempt to 5oard a train or streetcar which is moving
slowl2* 1F #n ordinaril2 prudent person would have made the attempt 5oard the moving conve2ance under
the same or similar circumstances* 0he fact that passengers 5oard and alight from slowl2 moving vehicle is
a matter of common eCperience 5oth the driver and conductor in this case could not have 5een unaware of
such an ordinar2 practice*
0he victim herein, 52 stepping and standing on the platform of the 5us, is alread2 considered a passenger
and is entitled all the rights and protection pertaining to such a contractual relation* 6ence, it has 5een held
that the dut2 which the carrier passengers owes to its patrons eCtends to persons 5oarding cars as well as to
those alighting therefrom* 1C
Common carriers, from the nature of their 5usiness and reasons of pu5lic polic2, are 5ound to o5serve
eCtraordina diligence for the safet2 of the passengers transported 52 the according to all the circumstances
of each case* 1G # common carrier is 5ound to carr2 the passengers safel2 as far as human care and
foresight can provide, using the utmost diligence ver2 cautious persons, with a due regard for all the
circumstances* 1:
It has also 5een repeatedl2 held that in an action 5ased on a contract of carriage, the court need not make
an eCpress finding of fault or negligence on the part of the carrier in order to hold it responsi5le to pa2 the
damages sought 52 the passenger* 32 contract of carriage, the carrier assumes the eCpress o5ligation to
transport the passenger to his destination safel2 and o5serve eCtraordinar2 diligence with a due regard for
all the circumstances, and an2 inDur2 that might 5e suffered 52 the passenger is right awa2 attri5uta5le to the
fault or negligence of the carrier* 0his is an eCception to the general rule that negligence must 5e proved,
and it is therefore incum5ent upon the carrier to prove that it has eCercised eCtraordinar2 diligence as
prescri5ed in #rticles !I// and !I'' of the Civil Code* 18
-
8oreover, the circumstances under which the driver and the conductor failed to 5ring the gravel2 inDured
victim immediatel2 to the hospital for medical treatment is a patent and incontroverti5le proof of their
negligence* It defies understanding and can even 5e stigmati7ed as callous indifference* 0he evidence
shows that after the accident the 5us could have forthwith turned at 3unk '4 and thence to the hospital, 5ut
its driver instead opted to first proceed to 3unk I. to allow a passenger to alight and to deliver a refrigerator,
despite the serious condition of the victim* 0he vacuous reason given 52 petitioners that it was the wife of
the deceased who caused the dela2 was tersel2 and correctl2 confuted 52 respondent courtE
*** 0he pretension of the appellees that the dela2 was due to the fact that the2
had to wait for a5out twent2 minutes for Inocencia Cudiamat to get dressed
deserves scant consideration* It is rather scandalous and deplora5le for a wife
whose hus5and is at the verge of d2ing to have the luCur2 of dressing herself
up for a5out twent2 minutes 5efore attending to help her distressed and
helpless hus5and* 19
>urther, it cannot 5e said that the main intention of petitioner :ardi7a5al in going to 3unk I. was to inform
the victimOs famil2 of the mishap, since it was not said 5us driver nor the conductor 5ut the companion of the
victim who informed his famil2 thereof* ;H In fact, it was onl2 after the refrigerator was unloaded that one of
the passengers thought of sending some5od2 to the house of the victim, as shown 52 the testimon2 of
Virginia #5alos again, to witE
P Kh2, what happened to 2our refrigerator at that
particular timeQ
# I asked them to 5ring it down 5ecause that is the
nearest place to our house and when I went down and
asked some5od2 to 5ring down the refrigerator, I also
asked some5od2 to call the famil2 of 8r* Cudiamat*
COA+0E
P Kh2 did 2ou ask some5od2 to call the famil2 of 8r*
CudiamatQ
# 3ecause 8r* Cudiamat met an accident, so I ask
some5od2 to call for the famil2 of 8r* Cudiamat*
P 3ut no5od2 ask;ed< 2ou to call for the famil2 of 8r*
CudiamatQ
# No sir* ;1
Kith respect to the award of damages, an oversight was, however, committed 52 respondent Court of
#ppeals in computing the actual damages 5ased on the gross income of the victim* 0he rule is that the
amount recovera5le 52 the heirs of a victim of a tort is not the loss of the entire earnings, 5ut rather the loss
of that portion of the earnings which the 5eneficiar2 would have received* In other words, onl2 net earnings,
not gross earnings, are to 5e considered, that is, the total of the earnings less eCpenses necessar2 in the
creation of such earnings or income and minus living and other incidental eCpenses* ;;
Ke are of the opinion that the deducti5le living and other eCpense of the deceased ma2 fairl2 and
reasona5l2 5e fiCed at P'..*.. a month or P4,...*.. a 2ear* In adDudicating the actual or compensator2
damages, respondent court found that the deceased was %- 2ears old, in good health with a remaining
productive life eCpectanc2 of !, 2ears, and then earning P,%,...*.. a 2ear* Asing the gross annual income
as the 5asis, and multipl2ing the same 52 !, 2ears, it accordingl2 awarded P,--,...* #ppl2ing the
aforestated rule on computation 5ased on the net earnings, said award must 5e, as it here52 is, rectified and
reduced to P,!4,...*..* 6owever, in accordance with prevailing Durisprudence, the death indemnit2 is
here52 increased to P'.,...*..* ;D
K6E+E>O+E, su5Dect to the a5ove modifications, the challenged Dudgment and resolution of respondent
Court of #ppeals are here52 #>>I+8ED in all other respects*
SO O+DE+ED*
Melencio2#errera 3Chairperson4, Paras, Padilla and 'ar)iento, JJ., concur.
G.R. No. 11FHG1 A-+-/t D, 199F
=OREAN AIRINES CO., T$., petitioner,
vs*
COURT OF APPEAS !"# >UANITO C. APU%, respondents*
G.R. No. 11D8F; A-+-/t D, 199F
>UANITO C. APU%, petitioner,
vs*
COURT OF APPEAS !"# =OREAN AIRINES CO., T$., respondents*
M.A. Aguinaldo and Associates for "orean Airlines Co., %td.
Ca)acho and Associates for Juanito %apuz.

CRU%, J.+
Sometime in !&-., $uanito C* :apu7, an automotive electrician, was contracted for emplo2ment in $eddah,
Saudi #ra5ia, for a period of one 2ear through Pan Pacific Overseas +ecruiting Services, Inc* :apu7 was
supposed to leave on Novem5er -, !&-., via 1orean #irlines* Initiall2, he was Mwait(listed,M which meant that
he could onl2 5e accommodated if an2 of the confirmed passengers failed to show up at the airport 5efore
departure* Khen two of such passengers did not appear, :apu7 and another person 52 the name of Perico
were given the two unclaimed seats*
#ccording to :apu7, he was allowed to check in with one suitcase and one shoulder 5ag at the check(in
counter of 1#:* 6e passed through the customs and immigration sections for routine check(up and was
cleared for departure as Passenger No* !'I of 1#: >light No* 1E &./* 0ogether with the other passengers,
he rode in the shuttle 5us and proceeded to the ramp of the 1#: aircraft for 5oarding* 6owever, when he
was at the third or fourth rung of the stairs, a 1#: officer pointed to him and shouted MDownS DownSM 6e was
thus 5arred from taking the flight* Khen he later asked for another 5ooking, his ticket was canceled 52 1#:*
ConseGuentl2, he was una5le to report for his work in Saudi #ra5ia within the stipulated ,(week period and
so lost his emplo2ment*
1#:, on the other hand, alleged that on Novem5er -, !&-., Pan Pacific +ecruiting Services Inc* coordinated
with 1#: for the departure of /. contract workers, of whom onl2 ,! were confirmed and & were wait(listed
passengers* 0he agent of Pan Pacific, $immie $oseph, after 5eing informed that there was a possi5ilit2 of
having one or two seats 5ecoming availa5le, gave priorit2 to Perico, who was one of the supervisors of the
hiring compan2 in Saudi #ra5ia* 0he other seat was won through lotter2 52 :apu7* 6owever, onl2 one seat
5ecame availa5le and so, pursuant to the earlier agreement that Perico was to 5e given priorit2, he alone
was allowed to 5oard*
#fter trial, the +egional 0rial Court of 8anila, 3ranch /.,
1
adDudged 1#: lia5le for damages, disposing as
followsE
&
K6E+E>O+E, in view of the foregoing consideration, Dudgment is here52 rendered
sentencing the defendant 1orean #ir :ines to pa2 plaintiff $uanito C* :apu7 the
followingE
!* 0he amount of 0KO 6AND+ED SEVEN0B(0KO 06OAS#ND ONE 6AND+ED
SIT0B ;P,I,,!4.*..< PESOS as actual9compensator2 damages, with legal interest
thereon from the date of the filing of the complaint until full2 paid*
,* 0he sum of 0KEN0B(>IVE 06OAS#ND ;P,',...*..< PESOS as and for attorne2Os
feesF and
/* 0he costs of suit*
0he case is here52 dismissed with respect to defendant Pan Pacific Overseas
+ecruiting Services, Inc*
0he counterclaims and cross(claim of defendant 1orean #ir :ines Co*, :td* are likewise
dismissed*
On appeal, this decision was modified 52 the Court of #ppeals ; as followsE
K6E+E>O+E, in view of all the foregoing, the appealed Dudgment is here52
#>>I+8ED with the following modificationsE the amount of actual damages
and compensator2 damages is reduced to P4.,...*.. and defendant(
appellant is here52 ordered to pa2 plaintiff(appellant the sum of One 6undred
0housand Pesos ;P!..,...*..< 52 wa2 of moral and eCemplar2 damages, at
4H interest per annum from the date of the filing of the Complaint until full2
paid*
1#: and :apu7 filed their respective motions for reconsideration, which were 5oth denied for lack of merit*
6ence, the present petitions for review which have 5een consolidated 5ecause of the identit2 of the parties
and the similarit2 of the issues*
In )* +* No* !!%.4!, 1#: assails the decision of the appellate court on the following groundsE
!* 0hat the Court of #ppeals erred in concluding that petitioner committed a
5reach of contract of carriage notwithstanding lack of proper, competent and
sufficient evidence of the eCistence of such contract*
,* 0hat the Court of #ppeals erred in not according the proper evidentiar2
weight to some evidence presented and the fact that private respondent did
not have an2 5oarding pass to prove that he was allowed to 5oard and to
prove that his airline ticket was confirmed*
/* 0hat the Court of #ppeals erred in concluding that the stand52 passenger
status of private respondent :apu7 was changed to a confirmed status when
his name was entered into the passenger manifest*
%* 0hat the Court of #ppeals a5used its discretion in awarding moral and
eCemplar2 damages in the amount of P!..,...*.. in favor of private
respondent notwithstanding its lack of 5asis and private respondent did not
state such amount in his complaint nor had private respondent proven the
said damages*
'* 0hat the Court of #ppeals erred in dismissing the counterclaims*
4* 0hat the Court of #ppeals erred in dismissing the counterclaim of petitioner
against Pan Pacific*
I* 0hat the Court of #ppeals erred in ruling that the 4H per annum legal
interest on the Dudgment shall 5e computed from the filing of the complaint*
In )* +* No* !!/-%,, :apu7 seeksE ;a< the setting aside of the decision of the Court of #ppeals insofar as it
modifies the award of damagesF 5< actual and compensator2 damages in the sum eGuivalent to ' 2earsO loss
of earnings 5ased on the petitionerOs monthl2 salar2 of !,4.. Saudi rials at the current conversion rate plus
the cost of 5aggage and personal 5elongings worth P,,... and the service fee of P/,... paid to the
recruiting agenc2, all with legal interest from the filing of the complaint until full2 paidF c< moral damages of
not less than P! million and eCemplar2 damages of not less than P'..,...*.., 5oth with interest at 4H per
annum from the filing of the complaintF and d< attorne2Os fees in the sum eGuivalent to /.H of the award of
damages*
It is evident that the issues raised in these petitions relate mainl2 to the correctness of the factual findings of
the Court of #ppeals and the award of damages* 0he Court has consistentl2 affirmed that the findings of fact
of the Court of #ppeals and the other lower courts are as a rule 5inding upon it, su5Dect to certain
eCceptions* #s nothing in the record indicates an2 of such eCceptions, the factual conclusions of the
appellate court must 5e affirmed*
0he status of :apu7 as stand52 passenger was changed to that of a confirmed passenger when his name
was entered in the passenger manifest of 1#: for its >light No* 1E &./* 6is clearance through immigration
and customs clearl2 shows that he had indeed 5een confirmed as a passenger of 1#: in that flight* 1#:
thus committed a 5reach of the contract of carriage 5etween them when it failed to 5ring :apu7 to his
destination*
0his Court has held that a contract to transport passengers is different in kind and degree from an2 other
contractual relation*
D
0he 5usiness of the carrier is mainl2 with the traveling pu5lic* It invites people to avail
themselves of the comforts and advantages it offers* 0he contract of air carriage generates a relation
attended with a pu5lic dut2* Passengers have the right to 5e treated 52 the carrierOs emplo2ees with
kindness, respect, courtes2 and due consideration* 0he2 are entitled to 5e protected against personal
misconduct, inDurious language, indignities and a5uses from such emplo2ees*
F
So it is that an2 discourteous
conduct on the part of these emplo2ees toward a passenger gives the latter an action for damages against
the carrier*
0he 5reach of contract was aggravated in this case when, instead of courteousl2 informing :apu7 of his
5eing a Mwait(listedM passenger, a 1#: officer rudel2 shouted MDownS DownSM while pointing at him, thus
causing him em5arrassment and pu5lic humiliation*
1#: argues that Mthe evidence of confirmation of a chance passenger status is not through the entr2 of the
name of a chance passenger in the passenger manifest nor the clearance from the Commission on
Immigration and Deportation, 5ecause the2 are merel2 means of facilitating the 5oarding of a chance
passenger in case his status is confirmed*M Ke are not persuaded*
0he evidence presented 52 :apu7 shows that he had indeed checked in at the departure counter, passed
through customs and immigration, 5oarded the shuttle 5us and proceeded to the ramp of 1#:Os aircraft* In
fact, his 5aggage had alread2 5een loaded in 1#:Os aircraft, to 5e flown with him to $eddah* 0he contract of
carriage 5etween him and 1#: had alread2 5een perfected when he was summaril2 and insolentl2
prevented from 5oarding the aircraft*
1#:Os allegation that the respondent court a5used its discretion in awarding moral and eCemplar2 damages
is also not tena5le*
0he Court of #ppeals granted moral and eCemplar2 damages 5ecauseE
!.
0he findings of the court a !uo that the defendant(appellant has committed
5reach of contract of carriage in 5ad faith and in wanton, disregard of plaintiff(
appellantOs rights as passenger laid the 5asis and Dustification of an award for
moral damages*
C C C C
In the instant case, we find that defendant(appellant 1orean #ir :ines acted in
a wanton, fraudulent, reckless, oppressive or malevolent manner when it
M5umped offM plaintiff(appellant on Novem5er -, !&-., and in addition treated
him rudel2 and arrogantl2 as a Mpata2 gutom na contract worker fighting
1orean #ir :ines,M which clearl2 shows malice and 5ad faith, thus entitling
plaintiff(appellant to moral damages*
C C C C
Considering that the plaintiff(appellantOs entitlement to moral damages has
5een full2 esta5lished 52 oral and documentar2 evidence, eCemplar2
damages ma2 5e awarded* In fact, eCemplar2 damages ma2 5e awarded,
even though not so eCpressl2 pleaded in the complaint ;1apoe vs* 8asa, !/%
SC+# ,/!<* 32 the same token, to provide an eCample for the pu5lic good, an
award of eCemplar2 damages is also proper ;#rmovit vs* Court of
#ppeals, supra<*
On the other hand, :apu7Os claim that the award of P!..,...*.. as moral and eCemplar2 damages is
inadeGuate is not accepta5le either* 6is pra2er for moral damages of not less than P! million and eCemplar2
damages of not less than P'..,...*.. is over5lown*
0he well(entrenched principle is that moral damages depend upon the discretion of the court 5ased on the
circumstances of each case*
C
0his discretion is limited 52 the principle that the Mamount awarded should not
5e palpa5l2 and scandalousl2 eCcessiveM as to indicate that it was the result of preDudice or corruption on the
part of the trial court*
G
Damages are not intended to enrich the complainant at the eCpense of the defendant*
0he2 are awarded onl2 to alleviate the moral suffering that the inDured part2 had undergone 52 reason of the
defendantOs culpa5le action*
:
0here is no hard(and(fast rule in the determination of what would 5e a fair
amount of moral damages since each case must 5e governed 52 its own peculiar facts*
# review of the record of this case shows that the inDur2 suffered 52 :apu7 is not so serious or eCtensive as
to warrant an award of P!*' million* 0he assessment of P!..,... as moral and eCemplar2 damages in his
favor is, in our view, reasona5le and realistic*
:apu7 likewise claims that the respondent court could not rule upon the propriet2 of the award of actual
damages 5ecause it had not 5een assigned as an error 52 1#:* Not so* 0he rule is that onl2 errors
specificall2 assigned and properl2 argued in the 5rief will 5e considered eCcept errors affecting Durisdiction
over the su5Dect matter and plain as well as clerical errors*
8
3ut this is not without Gualification for, as the
Court held in 5da. de Javellana vs. Court of AppealsE
9
* * * 0"he Court is clothed with ample authorit2 to review matters, even if the2
are not assigned as errors in their appeal, if it finds that their consideration is
necessar2 in arriving at a Dust decision of the case*
# similar pronouncement was made in /a!uiran vs. Court of Appeals
1H
in this wiseE
Issues, though not specificall2 raised in the pleading in the appellate court,
ma2, in the interest of Dustice, 5e properl2 considered 52 said court in deciding
a case, if the2 are Guestions raised in the trial court and are matters of record
having some 5earing on the issue su5mitted which the parties failed to raise
or the lower court ignored*
0he Court of #ppeals was therefore Dustified in decreasing the award of actual damages even if the issue
was not assigned as an error 52 1#:* Consideration of this Guestion was necessar2 for the Dust and
complete resolution of the present case* >urthermore, there was enough evidence to warrant the reduction
of the original award, as the challenged decision correctl2 o5servedE
# perusal of the plaintiff(appellantOs contract of emplo2ment shows that the
effectivit2 of the contract is for onl2 one 2ear, renewa5le ever2 2ear for five
2ears* #lthough plaintiff(appellant intends to renew his contract, such renewal
will still 5e su5Dect to his foreign emplo2er* Plaintiff(appellant had not 2et
started working with his foreign emplo2er, hence, there can 5e no 5asis as to
whether his contract will 5e renewed 52 his foreign emplo2er or not* 0hus, the
damages representing the loss of earnings of plaintiff(appellant in the renewal
of the contract of emplo2ment is at most speculative* Damages ma2 not 5e
awarded on the 5asis of speculation or conDecture ;)achalian vs* Delim, ,./
SC+# !,4<* 6ence, defendant(appellantOs lia5ilit2 is limited to the one 2ear
contract onl2* Plaintiff(appellant is, therefore, entitled onl2 to his lost earnings
for one 2ear, i*e*, P4.,...*.., which is !9' of P/..,...*.., the total amount
of actual damages, representing lost earnings for five 2ears pra2ed for in the
Complaint*
Plaintiff(appellantOs contention that in computing his lost earnings, the current
rate of the Saudi +ial to the Philippine Peso at the time of pa2ment should 5e
used, is untena5le, considering that in his Complaint, plaintiff(appellant has
Guantified in Philippine Peso his lost earnings for five 2ears*
Ke disagree with the respondent court, however, on the date when the legal interest should commence to
run* 0he rule is that the legal interest of siC percent ;4H< on the amounts adDudged in favor of :apu7 should
resume from the time of the rendition of the trial courtOs decision instead of Novem5er ,-, !&-., the date of
the filing of the complaint*
On this matter, the Court has heldE
If suit were for pa2ment of a definite sum of mone2, the contention might 5e
tena5le* 6owever, if it is for damages, unliGuidated and not known until
definitel2 ascertained, assessed and determined 52 the courts after proof,
interest should 5e from the date of the decision* 11
C C C C
0he o5ligation to pa2 interest on a sum filed in a Dudgment eCists from the
date of the sentence, when so declaredF for until the net amount of the
de5torOs lia5ilit2 has 5een determined, he cannot he considered delinGuent in
the fulfillment of his o5ligation to pa2 the de5t with interest thereon*
1;
>inall2, we find that the respondent court did not err in sustaining the trial courtOs dismissal of 1#:Os
counterclaim against Pan Pacific Overseas +ecruiting Services Inc*, whose responsi5ilit2 ended with the
confirmation 52 1#: of :apu7 as its passenger in its >light No* &./*
0his is still another case of the maltreatment of our overseas contract workers, this time 52 the airline
supposed to 5ring the passenger to his foreign assignment* Our OCKOs sacrifice much in seeking
emplo2ment a5road, where the2 are deprived of the compan2 of their loved ones, the direct protection of our
laws, and the comfort of our own native culture and wa2 of life* 0his Court shall eCert ever2 effort to vindicate
their rights when the2 are a5used and shall accord them the commensurate reparation of their inDuries
consistent with their dignit2 and worth as mem5ers of the working class*
!!
K6E+E>O+E, the appealed Dudgment is #>>I+8ED, 5ut with the modification that the legal interest on the
damages awarded to private respondent should commence from the date of the decision of the trial court on
Novem5er !%, !&&.* 0he parties shall 5ear their own costs*
SO O+DE+ED*
G.R. No. 1FC8HF Febr-!r2 G, ;HHD
IGHT RAI TRANSIT AUTHORIT9 I RO$OFO ROMAN, petitioners,
vs*
MAR>ORIE NAVI$A$, He)r/ o. t'e !te NICANOR NAVI$A$ I PRU$ENT SECURIT9
AGENC9,respondents*
D E C I S I O N
VITUG, J.+
0he case 5efore the Court is an appeal from the decision and resolution of the Court of #ppeals,
promulgated on ,I #pril ,... and !. Octo5er ,..., respectivel2, in C#()*+* CV No* 4.I,., entitled
M8arDorie Navidad and 6eirs of the :ate Nicanor Navidad vs* +odolfo +oman, et* al*,M which has modified the
decision of !! #ugust !&&- of the +egional 0rial Court, 3ranch ,44, Pasig Cit2, eConerating Prudent
Securit2 #genc2 ;Prudent< from lia5ilit2 and finding :ight +ail 0ransit #uthorit2 ;:+0#< and +odolfo +oman
lia5le for damages on account of the death of Nicanor Navidad*
On !% Octo5er !&&/, a5out half an hour past seven o@clock in the evening, Nicanor Navidad, then drunk,
entered the EDS# :+0 station after purchasing a MtokenM ;representing pa2ment of the fare<* Khile Navidad
was standing on the platform near the :+0 tracks, $unelito Escartin, the securit2 guard assigned to the area
approached Navidad* # misunderstanding or an altercation 5etween the two apparentl2 ensued that led to a
fist fight* No evidence, however, was adduced to indicate how the fight started or who, 5etween the two,
delivered the first 5low or how Navidad later fell on the :+0 tracks* #t the eCact moment that Navidad fell, an
:+0 train, operated 52 petitioner +odolfo +oman, was coming in* Navidad was struck 52 the moving train,
and he was killed instantaneousl2*
On .- Decem5er !&&%, the widow of Nicanor, herein respondent 8arDorie Navidad, along with her children,
filed a complaint for damages against $unelito Escartin, +odolfo +oman, the :+0#, the 8etro 0ransit
Organi7ation, Inc* ;8etro 0ransit<, and Prudent for the death of her hus5and* :+0# and +oman filed a
counterclaim against Navidad and a cross(claim against Escartin and Prudent* Prudent, in its answer,
denied lia5ilit2 and averred that it had eCercised due diligence in the selection and supervision of its securit2
guards*
0he :+0# and +oman presented their evidence while Prudent and Escartin, instead of presenting evidence,
filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned
task* On !! #ugust !&&-, the trial court rendered its decisionF it adDudgedE
MK6E+E>O+E, Dudgment is here52 rendered in favor of the plaintiffs and against the defendants Prudent
Securit2 and $unelito Escartin ordering the latter to pa2 Dointl2 and severall2 the plaintiffs the followingE
Ma< !< #ctual damages of P%%,-/.*..F
,< Compensator2 damages of P%%/,',.*..F
/< Indemnit2 for the death of Nicanor Navidad in the sum of P'.,...*..F
M5< 8oral damages of P'.,...*..F
Mc< #ttorne2@s fees of P,.,...F
Md< Costs of suit*
M0he complaint against defendants :+0# and +odolfo +oman are dismissed for lack of merit*
M0he compulsor2 counterclaim of :+0# and +oman are likewise dismissed*M
!
Prudent appealed to the Court of #ppeals* On ,I #ugust ,..., the appellate court promulgated its now
assailed decision eConerating Prudent from an2 lia5ilit2 for the death of Nicanor Navidad and, instead,
holding the :+0# and +oman Dointl2 and severall2 lia5le thusl2E
MK6E+E>O+E, the assailed Dudgment is here52 8ODI>IED, 52 eConerating the appellants from an2 lia5ilit2
for the death of Nicanor Navidad, $r* Instead, appellees +odolfo +oman and the :ight +ail 0ransit #uthorit2
;:+0#< are held lia5le for his death and are here52 directed to pa2 Dointl2 and severall2 to the plaintiffs(
appellees, the following amountsE
a< P%%,-/.*.. as actual damagesF
5< P'.,...*.. as nominal damagesF
c< P'.,...*.. as moral damagesF
d< P'.,...*.. as indemnit2 for the death of the deceasedF and
e< P,.,...*.. as and for attorne2@s fees*M
,
0he appellate court ratiocinated that while the deceased might not have then as 2et 5oarded the train, a
contract of carriage theretofore had alread2 eCisted when the victim entered the place where passengers
were supposed to 5e after pa2ing the fare and getting the corresponding token therefor* In eCempting
Prudent from lia5ilit2, the court stressed that there was nothing to link the securit2 agenc2 to the death of
Navidad* It said that Navidad failed to show that Escartin inflicted fist 5lows upon the victim and the evidence
merel2 esta5lished the fact of death of Navidad 52 reason of his having 5een hit 52 the train owned and
managed 52 the :+0# and operated at the time 52 +oman* 0he appellate court faulted petitioners for their
failure to present eCpert evidence to esta5lish the fact that the application of emergenc2 5rakes could not
have stopped the train*
0he appellate court denied petitioners@ motion for reconsideration in its resolution of !. Octo5er ,...*
In their present recourse, petitioners recite alleged errors on the part of the appellate courtF vi7E
MI*
06E 6ONO+#3:E COA+0 O> #PPE#:S )+#VE:B E++ED 3B DIS+E)#+DIN) 06E >INDIN)S O>
>#C0S 3B 06E 0+I#: COA+0
MII*
06E 6ONO+#3:E COA+0 O> #PPE#:S )+#VE:B E++ED IN >INDIN) 06#0 PE0I0IONE+S #+E
:I#3:E >O+ 06E DE#06 O> NIC#NO+ N#VID#D, $+*
MIII*
06E 6ONO+#3:E COA+0 O> #PPE#:S )+#VE:B E++ED IN >INDIN) 06#0 +ODO:>O +O8#N IS
#N E8P:OBEE O> :+0#*M
/
Petitioners would contend that the appellate court ignored the evidence and the factual findings of the trial
court 52 holding them lia5le on the 5asis of a sweeping conclusion that the presumption of negligence on the
!,
part of a common carrier was not overcome* Petitioners would insist that Escartin@s assault upon Navidad,
which caused the latter to fall on the tracks, was an act of a stranger that could not have 5een foreseen or
prevented* 0he :+0# would add that the appellate court@s conclusion on the eCistence of an emplo2er(
emplo2ee relationship 5etween +oman and :+0# lacked 5asis 5ecause +oman himself had testified 5eing
an emplo2ee of 8etro 0ransit and not of the :+0#*
+espondents, supporting the decision of the appellate court, contended that a contract of carriage was
deemed created from the moment Navidad paid the fare at the :+0 station and entered the premises of the
latter, entitling Navidad to all the rights and protection under a contractual relation, and that the appellate
court had correctl2 held :+0# and +oman lia5le for the death of Navidad in failing to eCercise eCtraordinar2
diligence imposed upon a common carrier*
:aw and Durisprudence dictate that a common carrier, 5oth from the nature of its 5usiness and for reasons of
pu5lic polic2, is 5urdened with the dut2 of eCercising utmost diligence in ensuring the safet2 of
passengers*
%
0he Civil Code, governing the lia5ilit2 of a common carrier for death of or inDur2 to its
passengers, providesE
M#rticle !I''* # common carrier is 5ound to carr2 the passengers safel2 as far as human care and foresight
can provide, using the utmost diligence of ver2 cautious persons, with a due regard for all the circumstances*
M#rticle !I'4* In case of death of or inDuries to passengers, common carriers are presumed to have 5een at
fault or to have acted negligentl2, unless the2 prove that the2 o5served eCtraordinar2 diligence as prescri5ed
in articles !I// and !I''*M
M#rticle !I'&* Common carriers are lia5le for the death of or inDuries to passengers through the negligence or
willful acts of the former@s emplo2ees, although such emplo2ees ma2 have acted 5e2ond the scope of their
authorit2 or in violation of the orders of the common carriers*
M0his lia5ilit2 of the common carriers does not cease upon proof that the2 eCercised all the diligence of a
good father of a famil2 in the selection and supervision of their emplo2ees*M
M#rticle !I4/* # common carrier is responsi5le for inDuries suffered 52 a passenger on account of the willful
acts or negligence of other passengers or of strangers, if the common carrier@s emplo2ees through the
eCercise of the diligence of a good father of a famil2 could have prevented or stopped the act or omission*M
0he law reGuires common carriers to carr2 passengers safel2 using the utmost diligence of ver2 cautious
persons with due regard for all circumstances*
'
Such dut2 of a common carrier to provide safet2 to its
passengers so o5ligates it not onl2 during the course of the trip 5ut for so long as the passengers are within
its premises and where the2 ought to 5e in pursuance to the contract of carriage*
4
0he statutor2 provisions
render a common carrier lia5le for death of or inDur2 to passengers ;a< through the negligence or wilful acts
of its emplo2ees or 5< on account of wilful acts or negligence of other passengers or of strangers if the
common carrier@s emplo2ees through the eCercise of due diligence could have prevented or stopped the act
or omission*
I
In case of such death or inDur2, a carrier is presumed to have 5een at fault or 5een negligent,
and
-
52 simple proof of inDur2, the passenger is relieved of the dut2 to still esta5lish the fault or negligence of
the carrier or of its emplo2ees and the 5urden shifts upon the carrier to prove that the inDur2 is due to an
unforeseen event or to force maDeure*
&
In the a5sence of satisfactor2 eCplanation 52 the carrier on how the
accident occurred, which petitioners, according to the appellate court, have failed to show, the presumption
would 5e that it has 5een at fault,
!.
an eCception from the general rule that negligence must 5e proved*
!!
0he foundation of :+0#@s lia5ilit2 is the contract of carriage and its o5ligation to indemnif2 the victim arises
from the 5reach of that contract 52 reason of its failure to eCercise the high diligence reGuired of the common
carrier* In the discharge of its commitment to ensure the safet2 of passengers, a carrier ma2 choose to hire
its own emplo2ees or avail itself of the services of an outsider or an independent firm to undertake the task*
In either case, the common carrier is not relieved of its responsi5ilities under the contract of carriage*
Should Prudent 5e made likewise lia5leQ If at all, that lia5ilit2 could onl2 5e for tort under the provisions of
#rticle ,!I4
!,
and related provisions, in conDunction with #rticle ,!-.,
!/
of the Civil Code* 0he premise,
however, for the emplo2er@s lia5ilit2 is negligence or fault on the part of the emplo2ee* Once such fault is
esta5lished, the emplo2er can then 5e made lia5le on the 5asis of the presumption Duris tantum that the
emplo2er failed to eCercise diligentissimi patris families in the selection and supervision of its emplo2ees*
0he lia5ilit2 is primar2 and can onl2 5e negated 52 showing due diligence in the selection and supervision of
the emplo2ee, a factual matter that has not 5een shown* #5sent such a showing, one might ask further, how
then must the lia5ilit2 of the common carrier, on the one hand, and an independent contractor, on the other
hand, 5e descri5edQ It would 5e solidar2* # contractual o5ligation can 5e 5reached 52 tort and when the
same act or omission causes the inDur2, one resulting in culpa contractual and the other in culpa aGuiliana,
#rticle ,!&%
!%
of the Civil Code can well appl2*
!'
In fine, a lia5ilit2 for tort ma2 arise even under a contract,
where tort is that which 5reaches the contract*
!4
Stated differentl2, when an act which constitutes a 5reach of
contract would have itself constituted the source of a Guasi(delictual lia5ilit2 had no contract eCisted 5etween
the parties, the contract can 5e said to have 5een 5reached 52 tort, there52 allowing the rules on tort to
appl2*
!I
+egretta5l2 for :+0, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this
Court is concluded 52 the factual finding of the Court of #ppeals that Mthere is nothing to link ;Prudent< to the
death of Nicanor ;Navidad<, for the reason that the negligence of its emplo2ee, Escartin, has not 5een dul2
proven C C C*M 0his finding of the appellate court is not without su5stantial Dustification in our own review of
the records of the case*
0here 5eing, similarl2, no showing that petitioner +odolfo +oman himself is guilt2 of an2 culpa5le act or
omission, he must also 5e a5solved from lia5ilit2* Needless to sa2, the contractual tie 5etween the :+0 and
Navidad is not itself a Duridical relation 5etween the latter and +omanF thus, +oman can 5e made lia5le onl2
for his own fault or negligence*
0he award of nominal damages in addition to actual damages is untena5le* Nominal damages are
adDudicated in order that a right of the plaintiff, which has 5een violated or invaded 52 the defendant, ma2 5e
vindicated or recogni7ed, and not for the purpose of indemnif2ing the plaintiff for an2 loss suffered 52
him*
!-
It is an esta5lished rule that nominal damages cannot co(eCist with compensator2 damages*
!&
8HEREFORE, the assailed decision of the appellate court is #>>I+8ED with 8ODI>IC#0ION 5ut onl2 in
that ;a< the award of nominal damages is DE:E0ED and ;5< petitioner +odolfo +oman is a5solved from
lia5ilit2* No costs*
SO O+DE+ED*
Davide, $r*, C*$*, ;Chairman<, Bnares(Santiago, Carpio and #7cuna, $$*, concur*
!/