TRANS-ASIA SHIPPING LINES VS.

CA
Respondent Atty. Renato Arroyo, a public attorney, bought a ticket from herein petitioner for the voyage of M/V Asia
Thailand vessel to Cagayan de ro City from Cebu City on !ovember "#, "$$".
At around %&'( in the evening of !ovember "#, "$$", respondent boarded the M/V Asia Thailand vessel during )hich
he noticed that some repairs )ere being undertaken on the engine of the vessel. The vessel departed at around ""&((
in the evening )ith only one *"+ engine running.
After an hour of slo) voyage, the vessel stopped near ,a)it -sland and dropped its anchor thereat. After half an hour
of stillness, some passengers demanded that they should be allo)ed to return to Cebu City for they )ere no longer
)illing to continue their voyage to Cagayan de ro City. The captain acceded to their re.uest and thus the vessel
headed back to Cebu City.
-n Cebu City, plaintiff together )ith the other passengers )ho re.uested to be brought back to Cebu City, )ere allo)ed
to disembark. Thereafter, the vessel proceeded to Cagayan de ro City. /etitioner, the ne0t day, boarded the M/V Asia
1apan for its voyage to Cagayan de ro City, like)ise a vessel of defendant.
n account of this failure of defendant to transport him to the place of destination on !ovember "#, "$$", respondent
Arroyo filed before the trial court 2an action for damage arising from bad faith, breach of contract and from tort,3
against petitioner.
The trial court ruled only for breach of contract.
The CA reversed and set aside said decision on appeal.
ISSUE:
4hether or not the petitioner Trans5Asia )as negligent6
HELD:
7es.
8efore commencing the contracted voyage, the petitioner undertook some repairs on the cylinder head of one of the
vessel9s engines. 8ut even before it could finish these repairs, it allo)ed the vessel to leave the port of origin on only
one functioning engine, instead of t)o. Moreover, even the lone functioning engine )as not in perfect condition as
sometime after it had run its course, it conked out. This caused the vessel to stop and remain adrift at sea, thus in
order to prevent the ship from capsi:ing, it had to drop anchor. /lainly, the vessel )as unsea)orthy even before the
voyage began. ;or a vessel to be sea)orthy, it must be ade.uately e.uipped for the voyage and manned )ith a
sufficient number of competent officers and cre).<#"= The failure of a common carrier to maintain in sea)orthy
condition its vessel involved in a contract of carriage is a clear breach of is duty prescribed in Article ">%% of the Civil
Code.
DELSAN TRANSPORT vs. CA
FACTS
Calte0 engaged into a contract of affreightment )ith the petitioner, ?elsan Transport @ines, -nc.*?elsan+, for a period of
one year )hereby the said common carrier agreed to transport Calte09s industrial fuel oil from the 8atangas58ataan
Refinery to different parts of the country. Ander the contract, petitioner took on board its vessel, MT Maysun,
#,#>>.'"B kiloliters of industrial fuel oil of Calte0 to be delivered to the Calte0 il Terminal in Camboanga City. The
shipment )as insured )ith private respondent, American Dome Assurance Corporation *American Dome+
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The vessel sank in the early morning of August "%, "$EF near /anay Gulf in the Visayas taking )ith it the entire cargo
of fuel oil.
Hubse.uently, American Dome paid Calte0 the sum of /hp %,($F,F'%.%> representing the insured value of the cargo.
I0ercising its right to subrogation under Article ##(> of the !e) Civil Code, the American Dome demanded the
?elsan the same amount it paid to Calte0.
?ue to its failure to collect from ?elsan despite prior demand, American Dome filed a complaint )ith the RTC of
Makati for collection of a sum of money.
The trial court dismissed the complaint against ?elsan. -t ruled that the vessel, MT Maysun, )as sea)orthy and that
the incident )as caused by une0pected inclement )eather condition or force majeure, thus e0empting the common
carrier from liability for the loss of its cargo.
The CA reversed. -t gave credence to the )eather report issued by /AGAHA )hich stated that the )aves )ere only .>
to # meters in height in the vicinity of the /anay Gulf at the day the ship sank, in contrast to the claim of the cre) of
the ship that the )aves )ere #( feet high.
?elsan contends the follo)ing
?elsan theori:ed that )hen the American Dome paid Calte0 the value of its lost cargo, the act of American Dome is
e.uivalent to a tacit recognition that the ill5fated vessel )as sea)orthyJ other)ise, American Dome )as not legally
liable to Calte0 due to the latter9s breach of implied )arranty under the marine insurance policy that the vessel )as
sea)orthy.
?elsan avers that although chief officer had merely a #nd officer9s license, he )as .ualified to act as the vessel9s chief
officer. -n fact, all the cre) and officers of MTT Maysun )ere e0onerated in the administrative investigation.
ISSUES
4/! the payment made by American Dome to Calte0 for the insured value of the lost cargo amounted to an admission
that the vessel )as sea)orthy, thus precluding any action for recovery against the petitioner. NO
4/! the non5presentation of the marine insurance policy bars the complaint for recovery of sum of money for lack of
cause of action. NO
RULING
;irst -ssue&
The payment made by American Dome for the insured value of the lost cargo operates as )aiver of its right to enforce
the term of the implied )arranty against Calte0 under the marine insurance policy. Do)ever, the same cannot be
validly interpreted as an automatic admission of the vessel9s sea)orthiness by American Dome as to foreclose
recourse against ?elsan for any liability under its contractual obligation as a common carrier. The fact of payment
grants American Dome subrogatory right )hich enables it to e0ercise legal remedies that )ould other)ise be available
to Calte0 as o)ner of the lost cargo against ?elsan, the common carrier.
;rom the nature of their business and for reasons of public policy, common carriers are bound to observe
e0traordinary diligence in the vigilance over the goods and for the safety of passengers transported by them,
according to all the circumstances of each case. -n the event of loss, destruction or deterioration of the insured goods,
common carriers shall be responsible unless the same is brought about, among others, by flood, storm, earth.uake,
lightning or other natural disaster or calamity. -n all other cases, if the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted negligently, unless they prove they observed
e0traordinary diligence.
-n order to escape liability for the loss of its cargo of industrial fuel oil belonging to Calte0, ?elsan attributes the sinking
of MT Maysun to fortuitous event or force majeure. Although the testimony of the captain and chief mate that there
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)ere strong )inds and )aves #( feet high )as effectively rebutted and belied by the )eather report of /AGAHA.
Thus, as the CA correctly ruled, ?elsan9s vessel, MT Maysun, sank )ith its entire cargo for the reason that it )as not
sea)orthy. There )as no s.uall or bad )eather or e0tremely poor sea condition in the vicinity )here the said vessel
sank.
Additionally, the e0oneration of MT Maysun9s officers and cre) merely concern their respective administrative
liabilities. -t does not in any )ay operate to absolve ?elsan the common carrier from its civil liability arising from its
failure to observe e0traordinary diligence in the vigilance over the goods it )as transporting and for the negligent acts
or omissions of its employees, the determination of )hich properly belongs to the courts. -n the case at bar, ?elsan is
liable for the insured value of the lost cargo of industrial fuel oil belonging to Calte0 for its failure to rebut the
presumption of fault or negligence as common carrier occasioned by the une0plained sinking of its vessel, MT
Maysun, )hile in transit.
Hecond -ssue&
-t is the vie) of the HC that the presentation in evidence of the marine insurance policy is not indispensable in this
case before the insurer may recover from the common carrier the insured value of the lost cargo in the e0ercise of its
subrogatory right. The subrogation receipt, by itself, is sufficient to establish not only the relationship of American
Dome as insurer and Calte0, as the assured shipper of the lost cargo of industrial fuel oil, but also the amount paid to
settle the insurance claim. The right of subrogation accrues simply upon payment by the insurance company of the
insurance claim.
BELGIAN CHARTERING VS PHILIPPINE FIRST ASSURANCE
;ACTH&
5 CMC Trading A.G. shipped on board the M/V Anangel Hky at Damburg, Germany #B# coils of various /rime Cold
Rolled Hteel sheets for transportation to Manila consigned to the /hilippine Hteel Trading Corporation.
5 n 1uly #E, "$$(, M/V Anangel Hky arrived at the port of Manila and, )ithin the subse.uent days, discharged the
subKect cargo. ;our *B+ coils )ere found to be in bad order.
5 ;inding the four *B+ coils in their damaged state to be unfit for the intended purpose, the consignee /hilippine Hteel
Trading Corporation declared the same as total loss.
5 /hilippine ;irst -nsurance paid the claim of /hilippine Hteel and )as thus subrogated.
5 /hilippine ;irst then instituted a complaint for recovery of the amount paid to the consignee as insured.
5 8elgian claims that the damage and/or loss )as due to pre5shipment damage, to the inherent nature, vice or defect
of the goods, or to perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or
omission of the shipper of the goods or their representatives. 8elgian further argued that their liability, if there be any,
should not e0ceed the limitations of liability provided for in the bill of lading and other pertinent la)s. ;inally, 8elgian
averred that, in any event, they e0ercised due diligence and foresight re.uired by la) to prevent any damage/loss to
said shipment.
5 The RTC dismissed the complaint.
5 The CA reversed and ruled that 8elgian )ere liable for the loss or the damage of the goods shipped, because they
had failed to overcome the presumption of negligence imposed on common carriers. As to the e0tent of 8elgian9s
liability, the CA held that the package limitation under CGHA )as not applicable, because the )ords L@/C !o.
$(/(#BB>L indicated that a higher valuation of the cargo had been declared by the shipper.
ISSUES:
5 4hether the notice of loss )as timely filed. *8elgian claims that pursuant to Hection ', paragraph F of CGHA,
respondent should have filed its !otice of @oss )ithin three days from delivery. They assert that the cargo )as
discharged on 1uly '", "$$(, but that respondent filed its !otice of Claim only on Heptember "E, "$$(.+
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4hether the package limitation of liability under CGHA is applicable. *8elgian contends that assuming that they are
liable their liability should be limited to AHM%(( per package as provided in the 8ill of @ading and by Hection B*%+of
CGH
HELD:
5 !. Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their
destination constitutes a prima facie case of fault or negligence against the carrier.
5 -n this case, 8elgian failed to rebut the prima facie presumption of negligence. ;irst, as stated in the 8ill of @ading,
8elgian received the subKect shipment in good order and condition in Germany. Hecond, prior to the unloading of the
cargo, an -nspection Report prepared and signed by representatives of both parties sho)ed the steel bands broken,
the metal envelopes rust5stained and heavily buckled, and the contents thereof e0posed and rusty. Third, 8ad rder
Tally Hheet issued by 1ardine ?avies Transport Hervices stated that the four coils )ere in bad order and condition.
!ormally, a re.uest for a bad order survey is made in case there is an apparent or a presumed loss or damage.;ourth,
the Certificate of Analysis stated that, based on the sample submitted and tested, the steel sheets found in bad order
)ere )et )ith fresh )ater. ;ifth, 8elgian 55 in a letteraddressed to the /hilippine Hteel 55admitted that they )ere a)are
of the condition of the four coils found in bad order and condition.
5 7IH. ;irst, the provision of CGHA provides that the notice of claim need not be given if the state of the goods, at
the time of their receipt, has been the subKect of a Koint inspection or survey. Dere, prior to unloading the cargo, an
-nspection Report as to the condition of the goods )as prepared and signed by representatives of both parties.
Hecond, as stated in the same provision, a failure to file a notice of claim )ithin three days )ill not bar recovery if it is
nonetheless filed )ithin one year. This one5year prescriptive period also applies to the shipper, the consignee, the
insurer of the goods or any legal holder of the bill of lading.
5 A claim is not barred by prescription as long as the one5year period has not lapsed. -n the present case, the cargo
)as discharged on 1uly '", "$$(, )hile the Complaint%" )as filed by respondent on 1uly #%, "$$", )ithin the one5
year prescriptive period.
5 7IH. -n this case, there )as no stipulation in the 8ill of @ading limiting the carrierNs liability. !either did the shipper
declare a higher valuation of the goods to be shipped. This fact not)ithstanding, the insertion of the )ords L@/C !o.
$(/(#BB> cannot be the basis for 8elgian9s liability.
5 ;irst, a notation in the 8ill of @ading )hich indicated the amount of the @etter of Credit obtained by the shipper for
the importation of steel sheets did not effect a declaration of the value of the goods as re.uired by the bill. That
notation )as made only for the convenience of the shipper and the bank processing the @etter of Credit.
5 Hecond, a bill of lading is separate from the ther @etter of Credit arrangements. Thus, 8elgian9s liability should be
computed based on AHM%(( per package and not on the per metric ton price declared in the @etter of Credit
SOUTHERN LINES, INC., petitione,
vs.
COURT OF APPEALS !n" CIT# OF ILOILO, espon"ents.
This is a petition to revie) on certiorari the decision of the Court of Appeals in CA5G.R. !o. "%%>$5R affirming that of
the Court of ;irst -nstance of -loilo )hich sentenced petitioner Houthern @ines, -nc. to pay respondent City of -loilo the
amount of /B,$'".B".
Hometime in "$BE, the City of -loilo re.uisitioned for rice from the !ational Rice and Corn Corporation *hereafter
referred to as !AR-C+ in Manila. n August #B of the same year, !AR-C, pursuant to the order, shipped ",>#F sacks
of rice consigned to the City of -loilo on board the HH LGeneral 4rightL belonging to the Houthern @ines, -nc. Iach
sack of rice )eighed >% kilos and the entire shipment as indicated in the bill of lading had a total )eight of "#$,B%(
kilos. According to the bill of lading, the cost of the shipment )as /F',""%.%( itemi:ed and computed as follo)s& .
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Anit /rice per bag /'F.#% /F#,%F>.%(
Dandling at /(."' per bag ##B.'E
Trucking at /#.%( per bag '#'.F#
T o t a l . . . . . .. . . . . F',""%.%(
n Heptember ', "$BE, the City of -loilo received the shipment and paid the amount of /F',""%.%(. Do)ever, it )as
noted that the foot of the bill of lading that the City of -loilo NReceived the above mentioned merchandise apparently in
same condition as )hen shipped, save as noted belo)& actually received "FE% sacks )ith a gross )eight of ""F,"'"
kilos upon actual )eighing. Total shortage ascertained "','"$ kilos.L The shortage )as e.uivalent to B" sacks of rice
)ith a net )eight of "','"$ kilos, the proportionate value of )hich )as /F,BEF.'%.
n ;ebruary "B, "$%" the City of -loilo filed a complaint in the Court of ;irst -nstance of -loilo against !AR-C and the
Houthern @ines, -nc. for the recovery of the amount of /F,BEF.'% representing the value of the shortage of the
shipment of rice. After trial, the lo)er court absolved !AR-C from the complaint, but sentenced the Houthern @ines,
-nc. to pay the amount of /B,$'".B" )hich is the difference bet)een the sum of /F,BEF.'% and /",%%B.$B
representing the latterNs counterclaim for handling and freight.
The Houthern @ines, -nc. appealed to the Court of Appeals )hich affirmed the Kudgment of the trial court. Dence, this
petition for revie).
T$e on%& '(estion to )e "ete*ine" in t$is petition is +$et$e o not t$e "e,en"!nt--!ie, t$e $eein
petitione, is %i!)%e ,o t$e %oss o s$ot!.e o, t$e i-e s$ippe".
Article 'F" of the Code of Commerce provides& .
ART. 'F". O The merchandise shall be transported at the risk and venture of the shipper, if the contrary has not been
e0pressly stipulated.
As a conse.uence, all the losses and deteriorations )hich the goods may suffer during the transportation by reason of
fortuitous event, force maKeure, or the inherent nature and defect of the goods, shall be for the account and risk of the
shipper."P)phQ".RSt
/roof of these accidents is incumbent upon the carrier.
Article 'F# of the same Code provides& .
ART. 'F#. O !evertheless, the carrier shall be liable for the losses and damages resulting from the causes mentioned
in the preceding article if it is proved, as against him, that they arose through his negligence or by reason of his having
failed to take the precautions )hich usage his establisbed among careful persons, unless the shipper has committed
fraud in the bill of lading, representing the goods to be of a kind or .uality different from )hat they really )ere.
-f, not)ithstanding the precautions referred to in this article, the goods transported run the risk of being lost, on
account of their nature or by reason of unavoidable accident, there being no time for their o)ners to dispose of them,
the carrier may proceed to sell them, placing them for this purpose at the disposal of the Kudicial authority or of the
officials designated by special provisions.
Ander the provisions of Article 'F", the defendant5carrier in order to free itself from liability, )as only obliged to prove
that the damages suffered by the goods )ere Lby virtue of the nature or defect of the articles.L Ander the provisions of
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Article 'F#, the plaintiff, in order to hold the defendant liable, )as obliged to prove that the damages to the goods by
virtue of their nature, occurred on account of its negligence or because the defendant did not take the precaution
adopted by careful persons. *Government v. 7nchausti T Co., B( /hil. #"$, ##'+.
/etitioner claims e0emption from liability by contending that the shortage in the shipment of rice )as due to such
factors as the shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time it
received the same and the negligence of the agents of respondent City of -loilo in receiving the shipment. The
contention is untenable, for, if the fact of improper packing is kno)n to the carrier or his servants, or apparent upon
ordinary observation, but it accepts the goods not)ithstanding such condition, it is not relieved of liability for loss or
inKury resulting thereform. *$ Am 1ur. EF$.+ ;urthermore, according to the Court of Appeals, Lappellant *petitioner+ itself
frankly admitted that the strings that tied the bags of rice )ere brokenJ some bags )ere )ith holes and plenty of rice
)ere spilled inside the hull of the boat, and that the personnel of the boat collected no less than #F sacks of rice )hich
they had distributed among themselves.L This finding, )hich is binding upon this Court, sho)s that the shortage
resulted from the negligence of petitioner.
-nvoking the provisions of Article 'FF of the Code of Commerce and those of the bill of lading, petitioner further
contends that respondent is precluded from filing an action for damages on account of its failure to present a claim
)ithin #B hours from receipt of the shipment. -t also cites the cases of Government v. 7nchausti T Co., #B /hil. '"%
and Triton -nsurance Co. v. 1ose, '' /hil. "$B, ruling to the effect that the re.uirement that the claim for damages
must be made )ithin #B hours from delivery is a condition precedent to the accrual of the right of action to recover
damages. These t)o cases above5cited are not applicable to the case at bar. -n the first cited case, the plaintiff never
presented any claim at all before filing the action. -n the second case, there )as payment of the transportation
charges )hich precludes the presentation of any claim against the carrier. *Hee Article 'FF, Code of Commerce.+ -t is
significant to note that in the American case of Doye v. /ennsylvania Railroad Co., "' Ann. Case. B"B, it has been
said& .
... L-t has been held that a stipulation in the contract of shipment re.uiring the o)ner of the goods to present a notice
of his claim to the carrier )ithin a specified time after the goods have arrived at their destination is in the nature of a
condition precedent to the o)nerNs right to enforce a recovery, that he must sho) in the first instance that be has
complied )ith the condition, or that the circumstances )ere such that to have complied )ith it )ould have re.uired
him to do an unreasonable thing. The )eight of authority, ho)ever, sustains the vie) that such a stipulation is more in
the nature of a limitation upon the o)nerNs right to recovery, and that the burden of proof is accordingly on the carrier
to sho) that the limitation )as reasonable and in proper form or )ithin the time stated.L *Dutchinson on Carrier, 'd
ed., par. BB+ Imphasis supplied.
-n the case at bar, the record sho)s that petitioner failed to plead this defense in its ans)er to respondentNs complaint
and, therefore, the same is deemed )aived *Hection "(, Rule $, Rules of Court+, and cannot be raised for the first time
at the trial or on appeal. *Ma0ilom v. Tabotabo, $ /hil. '$(.+ Moreover, as the Court of Appeals has said& .
... the records reveal that the appellee *respondent+ filed the present action, )ithin a reasonable time after the short
delivery in the shipment of the rice )as made. -t should be recalled that the present action is one for the refund of the
amount paid in e0cess, and not for damages or the recovery of the shortageJ for admittedly the appellee *respondent+
had paid the entire value of the ">#F sacks of rice, subKect to subse.uent adKustment, as to shortages or losses. The
bill of lading does not at all limit the time for filing an action for the refund of money paid in e0cess.
4DIRI;RI, the decision of the Court of Appeals is hereby affirmed in all respects and the petition for certiorari
denied.
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4ith costs against the petitioner.
ABOITI/ SHIPPING CORPORATION vs. COURT OF APPEALS, LUCILA C. VIANA, SPS. ANTONIO VIANA !n"
GORGONIA VIANA, !n" PIONEER STEVEDORING CORPORATION
FACTS:
Anacleto Viana boarded the vessel M/V Antonia, o)ned by Aboiti: Hhipping Corporation, at the port at Han 1ose,
ccidental Mindoro, bound for Manila. After said vessel had landed, the /ioneer Htevedoring Corporation took over
the e0clusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement bet)een
/ioneer and petitioner Aboiti:.
The crane o)ned by /ioneer )as placed alongside the vessel and one *"+ hour after the passengers of said vessel
had disembarked, it started operation by unloading the cargoes from said vessel. 4hile the crane )as being operated,
Anacleto Viana )ho had already disembarked from said vessel obviously remembering that some of his cargoes )ere
still loaded in the vessel, )ent back to the vessel, and it )as )hile he )as pointing to the cre) of the said vessel to the
place )here his cargoes )ere loaded that the crane hit him, pinning him bet)een the side of the vessel and the crane.
De )as thereafter brought to the hospital )here he later e0pired three *'+ days thereafter.
/rivate respondents Vianas filed a complaint for damages against petitioner for breach of contract of carriage. Aboiti:
denied responsibility contending that at the time of the accident, the vessel )as completely under the control of
respondent /ioneer Htevedoring Corporation as the e0clusive stevedoring contractor of Aboiti:, )hich handled the
unloading of cargoes from the vessel of Aboiti:.
ISSUE:
4hether or not Aboiti: is negligent and is thus liable for the death.
HELD&
7es.
0 0 0 <T=he victim Anacleto Viana guilty of contributory negligence, but it )as the negligence of Aboiti: in prematurely
turning over the vessel to the arrastre operator for the unloading of cargoes )hich )as the direct, immediate and
pro0imate cause of the victimNs death.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel o)nerNs dock or premises. "" nce created, the relationship )ill not ordinarily
terminate until the passenger has, after reaching his destination, safely alighted from the carrierNs conveyance or had
a reasonable opportunity to leave the carrierNs premises. All persons )ho remain on the premises a reasonable time
after leaving the conveyance are to be deemed passengers, and )hat is a reasonable time or a reasonable delay
)ithin this rule is to be determined from all the circumstances, and includes a reasonable time to see after his
baggage and prepare for his departure. "# The carrier5passenger relationship is not terminated merely by the fact that
the person transported has been carried to his destination if, for e0ample, such person remains in the carrierNs
premises to claim his baggage.
-t is apparent from the foregoing that )hat prompted the Court to rule as it did in said case is the fact of the
passengerNs reasonable presence )ithin the carrierNs premises. That reasonableness of time should be made to
depend on the attending circumstances of the case, such as the kind of common carrier, the nature of its business, the
customs of the place, and so forth, and therefore precludes a consideration of the time element per se )ithout taking
into account such other factors. -t is thus of no moment )hether in the cited case of @a Mallorca there )as no
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appreciable interregnum for the passenger therein to leave the carrierNs premises )hereas in the case at bar, an
interval of one *"+ hour had elapsed before the victim met the accident. The primary factor to be considered is the
e0istence of a reasonable cause as )ill Kustify the presence of the victim on or near the petitionerNs vessel. 4e believe
there e0ists such a Kustifiable cause.
-t is of common kno)ledge that, by the very nature of petitionerNs business as a shipper, the passengers of vessels are
allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus. 4ith
respect to the bulk of cargoes and the number of passengers it can load, such vessels are capable of accommodating
a bigger volume of both as compared to the capacity of a regular commuter bus. Conse.uently, a ship passenger )ill
need at least an hour as is the usual practice, to disembark from the vessel and claim his baggage )hereas a bus
passenger can easily get off the bus and retrieve his luggage in a very short period of time. Verily, petitioner cannot
categorically claim, through the bare e0pedient of comparing the period of time entailed in getting the passengerNs
cargoes, that the ruling in @a Mallorca is inapplicable to the case at bar. n the contrary, if )e are to apply the doctrine
enunciated therein to the instant petition, )e cannot in reason doubt that the victim Anacleto Viana )as still a
passenger at the time of the incident. 4hen the accident occurred, the victim )as in the act of unloading his cargoes,
)hich he had every right to do, from petitionerNs vessel. As earlier stated, a carrier is duty bound not only to bring its
passengers safely to their destination but also to afford them a reasonable time to claim their baggage.
LA 0ALLORCA V. COURT OF APPEALS 123 SCRA 3456
F!-ts: /laintiffs husband and )ife, together )ith their minor children, boarded a @a Mallorca bus. Apon arrival at their
destination, plaintiffs and their children alighted from the bus and the father led them to a shaded spot about % meters
from the vehicle. The father returned to the bus to get a piece of baggage )hich )as not unloaded. De )as follo)ed
by her daughter Ra.uel. 4hile the father )as still on the running board a)aiting for the conductor to give his baggage,
the bus started to run so that the father had to Kump. Ra.uel, )ho )as near the bus, )as run over and killed.
@o)er court rendered Kudgment for the plaintiff )hich )as affirmed by CA, holding @a Mallorca liable for .uasi5delict
and ordering it to pay /F,((( plus /B((. @a Mallorco contended that )hen the child )as killed, she )as no longer a
passenger and therefore the contract of carriage terminated.
-ssue& 4hether or not the contractual obligation bet)een the parties ceases the moment the passenger alighted form
the vehicle.
Deld& n the .uestion )hether the liability of the carrier, as to the child )ho )as already led a place % meters from the
bus under the contract of carrier, still persists, )e rule in the affirmative. -t is a recogni:ed rules that the relation
bet)een carrier and passengers does not cease at the moment the passenger alights from the carrier9s premises, to
be determined from the circumstances. -n this case, there )as no utmost diligence. ;irstly, the driver, although
stopping the bus, did not put off the engine. Hecondly, he started to run the bus even before the bus conductor gave
him the signal and )hile the latter )as unloading cargo. Dere, the presence of said passenger near the bus )as not
unreasonable and the duration of responsibility still e0ists. Averment of .uasi5delict is permissible under the Rules of
Court, although incompatible )ith the contract of carriage. The Rules of Court allo)s the plaintiffs to allege causes of
action in the alternative, be they compatible )ith each other or not *Hec. #, Rule "+. Iven assuming arguendo that the
contract of carriage has already terminated, herein petitioner can be held liable for the negligence of its driver
pursuant to Art. #"E( of !CC. ?ecision M?-;-I?. nly .uestion raised in the briefs can be passed upon, and as
plaintiffs did not appeals the a)ard of /',(((.(( the increase by the CA of the a)ard to /F,(((.(( cannot be
sustained.
FORTUNE E7PRESS VS. CA 1GR 225389, 2: 0ARCH 25556
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F!-ts: ;ortune I0press -nc. is a bus company in northern Mindanao. n "E !ovember "$E$, ;ortune
I0press9 bus figured in an accident )ith a Keepney in ,aus)agan, @anao del !orte, resulting in the death of several
passengers of the Keepney, including t)o Maranaos. Crisanto Generalao, a volunteer field agent of the Constabulary
Regional Hecurity Anit *U+, conducted an investigation of the accident. De found that the o)ner of the Keepney )as a
Maranao residing in ?elabayan, @anao del !orte and that certain Maranaos )ere planning to take revenge on
;ortune I0press by burning some of its buses. Generalao rendered a report on his findings to Hgt. Reynaldo 8astasa
of the /hilippine Constabulary Regional Dead.uarters at Cagayan de ro.
Apon the instruction of Hgt. 8astasa he )ent to see ?iosdado 8ravo, operations manager of petitioner, at its main
office in Cagayan de ro City. 8ravo assured him that the necessary precautions to insure the safety of lives and
property )ould be taken. At about F&B% p.m. on ## !ovember "$E$, ' armed Maranaos )ho pretended to be
passengers, sei:ed a bus of ;ortune I0press at @inamon, @anao del !orte )hile on its )ay to -ligan City. Among the
passengers of the bus )as Atty. Talib Caorong. The leader of the Maranaos, identified as one 8ashier Mananggolo,
ordered the driver, Godofredo Cabatuan, to stop the bus on the side of the high)ay. Mananggolo then shot Cabatuan
on the arm, )hich caused him to slump on the steering )heel. Then one of the companions of Mananggolo started
pouring gasoline inside the bus, as the other held the passengers at bay )ith a handgun. Mananggolo then ordered
the passengers to get off the bus. The passengers, including Atty. Caorong, stepped out of the bus and )ent behind
the bushes in a field some distance from the high)ay. Do)ever, Atty. Caorong returned to the bus to retrieve
something from the overhead rack. At that time, one of the armed men )as pouring gasoline on the head of the driver.
Cabatuan, )ho had meantime regained consciousness, heard Atty. Caorong pleading )ith the armed men to spare
the driver as he )as innocent of any )rong doing and )as only trying to make a living. The armed men )ere,
ho)ever, adamant as they repeated their )arning that they )ere going to burn the bus along )ith its driver.
?uring this e0change bet)een Atty. Caorong and the assailants, Cabatuan climbed out of the left )indo) of the bus
and cra)led to the canal on the opposite side of the high)ay. De heard shots from inside the bus. @arry de la Cru:,
one of the passengers, sa) that Atty. Caorong )as hit. Then the bus )as set on fire. Home of the passengers )ere
able to pull Atty. Caorong out of the burning bus and rush him to the Mercy Community Dospital in -ligan City, but he
died )hile undergoing operation.
/aulie Caorong, the )ido) of Atty. Caorong, and their minor children 7asser ,ing, Rose Deinni, and /rince
Ale0ander brought a suit for breach of contract of carriage in the Regional Trial Court of -ligan City *8ranch
V-+. -n its decision, dated #E ?ecember "$$(, the trial court dismissed the complaint, and the corresponding
counterclaimJ )ithout costs.
n appeal, ho)ever, and on #$ 1uly "$$B, the Court of Appeals reversed the decision of the trial court, and rendered
another one ordering ;ortune I0press to pay the Caorongs *"+ /','$$,FB$.#( as death indemnityJ *#+ /%(,(((.(( and
/%((.(( per appearance as attorney9s feesJ and costs against ;ortune I0press. Dence, the appeal by petition for
revie) on certiorari.
The Hupreme Court affirmed the decision of the Court of Appeals )ith modification that ;ortune I0press is ordered to
pay /aulie, 7asser ,ing, Rose Deinni, and /rince Ale0ander Caorong *"+ death indemnity in the amount of
/%(,(((.((J *#+ actual damages in the amount of /'(,(((.((J *'+ moral damages in the amount of /"((,(((.((J *B+
e0emplary damages in the amount of /"((,(((.((J *%+ attorney9s fees in the amount of /%(,(((.((J *F+ compensation
for loss of earning capacity in the amount of /#,"#",B(B.$(J and *>+ costs of suits
". Article ">F' !CCJ Common carrier liable for inKuries suffered by passenger on account of
)illful acts of other passenger
Article ">F' of the Civil Code provides that a common carrier is responsible for inKuries suffered by a
passenger on account of the )ilful acts of other passengers, if the employees of the common carrier could have
prevented the act through the e0ercise of the diligence of a good father of a family.
#. ;ortune I0press negligentJ !o precautions )as undertaken
Derein, it is clear that because of the negligence of ;ortune I0press9 employees, the sei:ure of the bus
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by Mananggolo and his men )as made possible. ?espite )arning by the /hilippine Constabulary at Cagayan de ro
that the Maranaos )ere planning to take revenge on ;ortune I0press by burning some of its buses and the assurance
of petitioner9s operation manager, ?iosdado 8ravo, that the necessary precautions )ould be taken, ;ortune I0press
did nothing to protect the safety of its passengers. Dad ;ortune I0press and its employees been vigilant they )ould
not have failed to see that the malefactors had a large .uantity of gasoline )ith them. Ander the circumstances,
simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their
baggages, preferably )ith non5intrusive gadgets such as metal detectors, before allo)ing them on board could have
been employed )ithout violating the passenger9s constitutional rights. As the Court intimated in Gacal v. /hilippine Air
@ines, -nc., a common carrier can be held liable for failing to prevent a hiKacking by frisking passengers and inspecting
their baggages.
'. Article "">B of the Civil Code *;ortuitous event defined+J 7obido vs. CA, )hen unforeseen event
considered a force maKeureArticle "">B of the Civil Code defines a fortuitous event as an occurrence )hich could not
be foreseen or )hich though foreseen, is inevitable. -n 7obido v. Court of Appeals, the Court held that to be considered
as force maKeure, it is necessary that& *"+ the cause of the breach of the obligation must be independent of the human
)illJ *#+ the event must be either unforeseeable or unavoidableJ *'+ the occurrence must be such as to tender it
impossible for the debtor to fulfill the obligation in a normal mannerJ and *B+ the obligor must be free of participation in,
or aggravation of, the inKury to the creditor. The absence of any of the re.uisites mentioned above )ould prevent the
obligor from being e0cused from liability.
B. Vas.ue: vs. CAJ Common carrier liable for failure to take necessary precautions
-n Vas.ue: v. Court of Appeals, it )as held that the common carrier )as liable for its failure to take
the necessary precautions against an approaching typhoon, of )hich it )as )arned, resulting in the loss of the lives of
several passengers. The event )as foreseeable, and, thus, the second re.uisite mentioned above )as not fulfilled.
This ruling applies by analogy to the present case. Derein, despite the report of /C agent Generalao that the
Maranaos )ere going to attack its buses, ;ortune I0press took no steps to safeguard the lives and properties of its
passengers. The sei:ure of the bus of ;ortune I0press )as foreseeable and, therefore, )as not a fortuitous event
)hich )ould e0empt ;ortune I0press from liability.
%. Article ">%% !CCArticle ">%% of the Civil Code provides that 2a common carrier is bound to carry the passengers as
far as human care and foresight can provide, using the utmost diligence of very cautious persons, )ith due regard for
all the circumstances.3
F. /ilapil vs. CA and ?e Gu:man vs. CA do not apply
-n /ilapil v. Court of Appeals, it )as held that a common carrier is not liable for failing to install
)indo) grills on its buses to protect passengers from inKuries caused by rocks hurled at the bus by la)less elements.
n the other hand, in ?e Gu:man v. Court of Appeals, it )as ruled that a common carrier is not responsible for goods
lost as a result of a robbery )hich is attended by grave or irresistible threat, violence, or force. -t is clear that the
cases of /ilapil and ?e Gu:man do not apply to the present case. -n /ilapil and ?e Gu:man, the respondents therein
)ere not negligent in failing to take special precautions against threats to the
safety of passengers )hich could not be foreseen, such as tortious or criminal acts of third persons. Derein, this
factor of unforeseeability *the second re.uisite for an event to be considered force maKeure+ is lacking, i.e.
despite the report of /C agent Generalao that the Maranaos )ere planning to burn some of petitioner9s buses
and the assurance of ;ortune I0press9 operations manager *?iosdado 8ravo+ that the necessary precautions
)ould be taken, nothing )as really done by ;ortune I0press to protect the safety of passengers.
>. ?eceased not guilty of contributory negligence, let alone recklessness
Derein, Atty. Caorong did not act recklessly. The intended targets of the violence )ere ;ortune
I0press and its employees, not its passengers. The assailant9s motive )as to retaliate for the loss of life of t)o
Maranaos as a result of the collision bet)een ;ortune I0press9 bus and the Keepney in )hich the t)o
Maranaos )ere riding. Mananggolo, the leader of the group )hich had hiKacked the bus, ordered the
passengers to get off the bus as they intended to burn it and its driver. The armed men actually allo)ed Atty.
Caorong to retrieve something from the bus. 4hat apparently angered them )as his attempt to help the driver
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of the bus by pleading for his life. De )as playing the role of the good Hamaritan. Certainly, this act cannot be
considered an act of negligence, let alone recklessness.
E. ;ortune I0press liable for damages *-ndemnity for death+J Article ">FB in relation to Article
##(F !CC
Article ">FB of the Civil Code, in relation to Article ##(F thereof, provides for the payment of
indemnity for the death of passengers caused by the breach of contract of carriage by a common carrier.
-nitially fi0ed in Article ##(F at /',(((.((, the amount of the said indemnity for death has through the years
been gradually increased in vie) of the declining value of the peso. -t is presently fi0ed at /%(,(((.((. The
Caorongs are entitled to this amount.
$. ;ortune I0press liable for damages *Actual damages+J Article #"$$ !CC
Article #"$$ of the Civil Code provides that 2e0cept as provided by la) or by stipulation, one is
entitled to an ade.uate compensation only for such pecuniary loss suffered by him as he has duly proved.3
The trial court found that the Caorongs spent /'(,(((.(( for the )ake and burial of Atty. Caorong. Hince
;ortune I0press does not .uestion said finding of the trial court, it is liable to the Caorongs in the said amount
as actual damages.
"(. ;ortune I0press liable for damages *Moral damages+J Article ##(F !CC
Ander Article ##(F of the Civil Code, the 2spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the
deceased.3 The trial court found that /aulie Caorong suffered pain from the death of her husband and )orry
on ho) to provide support for their minor children, 7asser ,ing, Rose Deinni, and /rince Ale0ander. ;ortune
I0press like)ise does not .uestion said finding of the trial court. Thus, in accordance )ith recent decisions of
the Court, the Court hold that ;ortune I0press is liable to the Caorongs in the amount of /"((,(((.(( as
moral damages for the death of Atty. Caorong.
"". ;ortune I0press liable for damages *I0emplary damages+J Article ##'# !CC
Article ##'# of the Civil Code provides that 2in contracts and .uasi5contracts, the court may a)ard
e0emplary damages if the defendant acted in a )anton, fraudulent, reckless, oppressive, or malevolent
manner.3 Derein, ;ortune I0press acted in a )anton and reckless manner. ?espite )arning that the Maranaos
)ere planning to take revenge against ;ortune I0press by burning some of its buses, and contrary to the
assurance made by its operations manager that the necessary precautions )ould be taken, ;ortune I0press and
its employees did nothing to protect the safety of passengers. Ander the circumstances, the Court deems it
reasonable to a)ard private respondents e0emplary damages in the amount of /"((,(((.((.
"#. ;ortune I0press liable for damages *Attorney9s fees+J Article ##(E !CC /ursuant to Article ##(E, attorney9s fees
may be recovered )hen e0emplary damages are a)arded. n
he recent case of Hulpicio @ines, -nc. v. Court of Appeals, the Court held an a)ard of /%(,(((.(( as
attorney9s fees to be reasonable. Dence, the Caorongs are entitled to attorney9s fees in that amount.
"'. ;ortune I0press liable for damages *Compensation for loss of earning capacity+J Article ">FB in
relation to Article ##(F !CC
Article ">FB of the Civil Code, in relation to Article ##(F thereof, provides that in addition to the
ndemnity for death arising from the breach of contract of carriage by a common carrier, the 2defendant shall
be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of
he latter.3
"B. ;ormula for computing net earning capacity
@ife e0pectancy is e.uivalent to t)o thirds *#/'+ multiplied by the difference of E( and the age of the
deceased. Derein, Hince Atty. Caorong )as '> years old at the time of his death, he had a life e0pectancy of
#E #/' more years. Dis proKected gross annual income, computed based on his monthly salary of /"",'E%.((
#' as a la)yer in the ?epartment of Agrarian Reform at the time of his death, )as /"BE,((%.((. Allo)ing for
necessary living e0penses of %(V of his proKected gross annual income, his total earning capacity amounts to
/#,"#",B(B.$(. Dence, ;ortune I0press is liable to the Caorongs in the said amount as compensation for loss
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of earning capacity.
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