ASSIGNMENT IN TRANSPORTATION LAW

Read and Digest the following for recitation next meeting.

1. Pedro De Guzman vs. Court of Appeals, G. R. No. L-47822, 22 December 1988

2. Philippine American General Insurance Company vs. Pks
Shipping Company, G.R. No. 149038, 9 April 2003
3. Spouses Perena vs Spouses Nicolas, GR No. 157917, August 29, 2012
4. Unsworth Transport International (Phils.) vs. Court of Appeals ,G.R. No. 166250,
26 July 2010
5. Loadmasters Customs Services, Inc. vs. Glodel Brokerage Corporation, GR No.
179446, January 10, 2011
6. Westwind Shipping Corporation vs. UCPB General Insurance Co., GR no.
2002289, November 25, 2013
7. Unknown Owner Of The Vessel M/V China Joy vs. Asian Terminals Inc. G.R. No.
195661, 11 March 2015
8. R Transport Corporation vs. Pante, GR No. 162104, September 15, 2009
9. Asian Terminals, Inc vs. Simon Enterprises, Inc. GR No. 177116, February 27, 2013
10. Equitable Leasing Corporation vs. Lucita Suyom et al., G.R. No. 143360, 5 September
2002
11. William Tiu, doing business under the name and style of D Rough Riders, vs. Pedro
A. Arriesgado, G.R. No. 138060, 1 September 2004
12. Spouses Cesar & Suthira Zalamea vs. Court of Appeals, G.R. No. 104235 November
18, 1993
13. Cathay Pacific Airways, Ltd., vs. Spouses Daniel Vazquez And Maria Luisa Madrigal
Vazquez, G.R. No. 150843, March 14, 2003
14. Heirs of Josemaria Ochoa vs. G&S Transport Corporation, March 19, 2011 as
affirmed in the July 16, 2012 decision
15. Victory Liner, Inc. vs. Rosalito Gammad, G.R. No. 159636, November 25, 2004
16. Antonia Maranan vs. Pascual Perez, et al, G.R. No. L-22272, June 26, 1967
17. Jose Pilapil vs. Hon. Court of Appeals, G.R. No. 52159, 22 December 1989
18. Alberta Yobido vs. Court of Appeals, G.R. No. 113003, 17 October 1997
De Guzman v. CA
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings
those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip
to Pangasinan, respondent would load his vehicle with cargo which various merchants
wanted delivered, charging fee lower than the commercial rates. Sometime in November
1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750
cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150
boxes were delivered to petitioner because the truck carrying the boxes was hijacked
along the way. Petitioner commenced an action claiming the value of the lost
merchandise. Petitioner argues that respondent, being a common carrier, is bound to
exercise extraordinary diligence, which it failed to do. Private respondent denied that he
was a common carrier, and so he could not be held liable for force majeure. The trial
court ruled against the respondent, but such was reversed by the Court of Appeals.
Issues:
(1) Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the goods
Held:
(1) Article 1732 makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as an
ancillary activity. Article 1732 also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services to the "general public," i.e.,
the general community or population, and one who offers services or solicits business
only from a narrow segment of the general population. It appears to the Court that
private respondent is properly characterized as a common carrier even though he merely
"back-hauled" goods for other merchants from Manila to Pangasinan, although such
backhauling was done on a periodic or occasional rather than regular or scheduled
manner, and even though private respondent's principal occupation was not the carriage
of goods for others. There is no dispute that private respondent charged his customers a
fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here. A certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible for the
loss, destruction or deterioration of the goods which they carry, "unless the same is due
to any of the following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private
respondent. We believe and so hold that the limits of the duty of extraordinary diligence
in the vigilance over the goods carried are reached where the goods are lost as a result
of a robbery which is attended by "grave or irresistible threat, violence or force." we hold
that the occurrence of the loss must reasonably be regarded as quite beyond the control
of the common carrier and properly regarded as a fortuitous event. It is necessary to
recall that even common carriers are not made absolute insurers against all risks of travel
and of transport of goods, and are not held liable for acts or events which cannot be
foreseen or are inevitable, provided that they shall have complied with the rigorous
standard of extraordinary diligence

G.R. No. 149038 April 9, 2003

Lessons Applicable: Charter Party (Transportation)

FACTS:
 Davao Union Marketing Corporation (DUMC) contracted the services of PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of 75,000 bags of cement
worth P3,375,000.
DUMC insured the goods for its full value with Philippine American General Insurance
Company (Philamgen).
The goods were loaded aboard the dumb barge Limar I belonging to PKS Shipping.
December 22, 1988 9 pm: While Limar I was being towed by PKS tugboat MT Iron
Eagle, the barge sank a couple of miles off the coast of Dumagasa Point, in
Zamboanga del Sur, bringing down with it the entire cargo of 75,000 bags of cement.
DUMC filed a formal claim with Philamgen for the full amount of the
insurance. Philamgen promptly made payment; it then sought reimbursement from
PKS Shipping of the sum paid to DUMC but the shipping company refused to pay so
Philamgen to file suit against PKS Shipping
RTC: dismissed the complaint - fortuitous event
CA:Affirmed - not a common carrier but a casual occupation
ISSUE: W/N PKS Shipping is NOT liable since it was NOT a common carrier

HELD: NO. Petition is DENIED

Article 1732. Common carriers are persons, corporations, firms or associations engaged
in the business of carrying or transporting passengers or goods or both, by land, water,
or air for compensation, offering their services to the public
Complementary is Section 13, paragraph (b), of the Public Service Act

public service" to be
"x x x every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any
common carrier, railroad, street railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat, or steamship, or
steamship line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice
refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water
supply and power petroleum, sewerage system, wire or wireless communication systems,
wire or wireless broadcasting stations and other similar public services
So understood, the concept of `common carrier under Article 1732 may be seen to
coincide neatly with the notion of `public service, under the Public Service Act
distinction between:
common or public carrier
private or special carrier - character of the business, such that if the undertaking is an
isolated transaction , not a part of the business or occupation, and the carrier does
not hold itself out to carry the goods for the general public or to a limited clientele,
although involving the carriage of goods for a fee
EX: charter party which includes both the vessel and its crew, such as in a bareboat or
demise, where the charterer obtains the use and service of all or some part of a ship
for a period of time or a voyage or voyages and gets the control of the vessel and its
crew.
The regularity of its activities in this area indicates more than just a casual activity on
its part
The appellate court ruled, gathered from the testimonies and sworn marine protests
of the respective vessel masters ofLimar I and MT Iron Eagle, that there was no way
by which the barges or the tugboats crew could have prevented the sinking of Limar
I. The vessel was suddenly tossed by waves of extraordinary height of 6 to 8 feet and
buffeted by strong winds of 1.5 knots resulting in the entry of water into the barges
hatches. The official Certificate of Inspection of the barge issued by the Philippine
Coastguard and the Coastwise Load Line Certificate would attest to the seaworthiness
of Limar I and should strengthen the factual findings of the appellate court.
Findings of fact of the Court of Appeals generally conclude this Court; none of the
recognized exceptions from the rule - (1) when the factual findings of the Court of
Appeals and the trial court are contradictory; (2) when the conclusion is a finding
grounded entirely on speculation, surmises, or conjectures; (3) when the inference
 made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd,
or impossible; (4) when there is a grave abuse of discretion in the appreciation of
facts; (5) when the appellate court, in making its findings, went beyond the issues of
the case and such findings are contrary to the admissions of both appellant and
appellee; (6) when the judgment of the Court of Appeals is premised on a
misapprehension of facts; (7) when the Court of Appeals failed to notice certain
relevant facts which, if properly considered, would justify a different conclusion; (8)
when the findings of fact are themselves conflicting; (9) when the findings of fact are
conclusions without citation of the specific evidence on which they are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on record would
appear to be clearly extant in this instance.

Spouses Perena vs Spouses Nicolas

In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Perea to
transport their (Zarates) son, Aaron Zarate, to and from school. The Pereas were
owners of a van being used for private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro,
while the children were on board including Aaron, decided to take a short cut in order to
avoid traffic. The usual short cut was a railroad crossing of the Philippine National
Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was
up which means it was okay to cross. He then tried to overtake a bus. However, there
was in fact an oncoming train but Alfaro no longer saw the train as his view was already
blocked by the bus he was trying to overtake. The bus was able to cross unscathed but
the vans rear end was hit. During the collision, Aaron, was thrown off the van. His body
hit the railroad tracks and his head was severed. He was only 15 years old.
It turns out that Alfaro was not able to hear the train honking from 50 meters away
before the collision because the vans stereo was playing loudly.
The Zarates sued PNR and the Pereas (Alfaro became at-large). Their cause of action
against PNR was based on quasi-delict. Their cause of action against the Pereas was
based on breach of contract of common carriage.
In their defense, the Pereas invoked that as private carriers they were not negligent in
selecting Alfaro as their driver as they made sure that he had a drivers license and that
he was not involved in any accident prior to his being hired. In short, they observed the
diligence of a good father in selecting their employee.
PNR also disclaimed liability as they insist that the railroad crossing they placed there was
not meant for railroad crossing (really, thats their defense!).
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the
decision of the RTC and the CA, they awarded damages in favor of the Zarates for the
loss of earning capacity of their dead son.
The Pereas appealed. They argued that the award was improper as Aaron was merely a
high school student, hence, the award of such damages was merely speculative. They
cited the case of People vs Teehankee where the Supreme Court did not award damages
for the loss of earning capacity despite the fact that the victim there was enrolled in a
pilot school.
ISSUES: Whether or not the defense of due diligence of a good father by the Pereas is
untenable. Whether or not the award of damages for loss of income is proper.

HELD: Yes, in both issues.

Defense of Due Diligence of a Good Father
This defense is not tenable in this case. The Pereas are common carriers. They are not
merely private carriers. (Prior to this case, the status of private transport for school
services or school buses is not well settled as to whether or not they are private or
common carriers but they were generally regarded as private carriers). Private
transport for schools are common carriers. The Pereas, as the operators of a school bus
service were: (a) engaged in transporting passengers generally as a business, not just as a
casual occupation; (b) undertaking to carry passengers over established roads by the
method by which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientle, the Pereas operated as a common carrier
because they held themselves out as a ready transportation indiscriminately to the
students of a particular school living within or near where they operated the service and
for a fee.
Being a common carrier, what is required of the Pereas is not mere diligence of a good
father. What is specifically required from them by law is extraordinary diligence a fact
which they failed to prove in court. Verily, their obligation as common carriers did not
cease upon their exercise of diligently choosing Alfaro as their employee.
(It is recommended that you read the full text, the Supreme Court made an elaborate
and extensive definition of common and private carriers as well as their distinctions.)
Award of Damages for Aarons loss of earning capacity despite he being a high school
student at the time of his death
The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of
normal health and was an able-bodied person. Further, the basis of the computation of
his earning capacity was not on what he would have become. It was based on the
current minimum wage. The minimum wage was validly used because with his
circumstances at the time of his death, it is most certain that had he lived, he would at
least be a minimum wage earner by the time he starts working. This is not being
speculative at all.
The Teehankee case was different because in that case, the reason why no damages
were awarded for loss of earning capacity was that the defendants there were already
assuming that the victim would indeed become a pilot hence, that made the
assumption speculative. But in the case of Aaron, there was no speculation as to what he
might be but whatever hell become, it is certain that he will at the least be earning
minimum wage.

LOADMASTERS CUSTOMS SERVICES, INC., vs. GLODEL BROKERAGE CORPORATION and

R&B INSURANCE CORPORATION, / G.R. No. 179446 / January 10, 2011

FACTS: The case is a petition for review on certiorari under Rule 45 of the Revised Rules
of Court assailing the August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R.
CV No. 82822.
 On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in
favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes
against All Risks. On August 28, 2001, the cargoes were shipped on board the vessel
"Richard Rey" from Isabela, Leyte, to Pier 10, North Harbor, Manila. They arrived on the
same date.
Columbia engaged the services of Glodel for the release and withdrawal of the
cargoes from the pier and the subsequent delivery to its warehouses/plants. Glodel, in
turn, engaged the services of Loadmasters for the use of its delivery trucks to transport
the cargoes to Columbias warehouses/plants in Bulacan and Valenzuela City.
The goods were loaded on board twelve (12) trucks owned by Loadmasters,
driven by its employed drivers and accompanied by its employed truck helpers. Of the six
(6) trucks route to Balagtas, Bulacan, only five (5) reached the destination. One (1) truck,
loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo.
Later on, the said truck, was recovered but without the copper cathodes. Because
of this incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the
amount ofP1,903,335.39. After the investigation, R&B Insurance paid Columbia the
amount ofP1,896,789.62 as insurance indemnity.
R&B Insurance, thereafter, filed a complaint for damages against both
Loadmasters and Glodel before the Regional Trial Court, Branch 14, Manila (RTC), It
sought reimbursement of the amount it had paid to Columbia for the loss of the subject
cargo. It claimed that it had been subrogated "to the right of the consignee to recover
from the party/parties who may be held legally liable for the loss."
On November 19, 2003, the RTC rendered a decision holding Glodel liable for
damages for the loss of the subject cargo and dismissing Loadmasters counterclaim for
damages and attorneys fees against R&B Insurance.
Both R&B Insurance and Glodel appealed the RTC decision to the CA.
On August 24, 2007, the CA rendered that the appellee is an agent of appellant
Glodel, whatever liability the latter owes to appellant R&B Insurance Corporation as
insurance indemnity must likewise be the amount it shall be paid by appellee
Loadmasters. Hence, Loadmasters filed the present petition for review on certiorari.
ISSUE:
Whether or not Loadmasters and Glodel are common carriers to determine their liability
for the loss of the subject cargo.

RULING:

The petition is PARTIALLY GRANTED. Judgment is rendered declaring petitioner

Loadmasters Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly
and severally liable to respondent
Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting passenger or goods, or
both by land, water or air for compensation, offering their services to the public.
Loadmasters is a common carrier because it is engaged in the business of transporting
goods by land, through its trucking service. It is a common carrier as distinguished from
a private carrier wherein the carriage is generally undertaken by special agreement and it
does not hold itself out to carry goods for the general public. Glodel is also considered a
common carrier within the context of Article 1732. For as stated and well provided in the
case of Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., a customs
broker is also regarded as a common carrier, the transportation of goods being an
integral part of its business.
Loadmasters and Glodel, being both common carriers, are mandated from the nature of
their business and for reasons of public policy, to observe the extraordinary diligence in
the vigilance over the goods transported by them according to all the circumstances of
such case, as required by Article 1733 of the Civil Code. When the Court speaks of
extraordinary diligence, it is that extreme measure of care and caution which persons of
unusual prudence and circumspection observe for securing and preserving their own
property or rights. With respect to the time frame of this extraordinary responsibility, the
Civil Code provides that the exercise of extraordinary diligence lasts from the time the
goods are unconditionally placed in the possession of, and received by, the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to
the consignee, or to the person who has a right to receive them.
The Court is of the view that both Loadmasters and Glodel are jointly and severally liable
to R & B Insurance for the loss of the subject cargo. Loadmasters claim that it was never
privy to the contract entered into by Glodel with the consignee Columbia or R&B
Insurance as subrogee, is not a valid defense.
For under ART. 2180. The obligation imposed by Article 2176 is demandable not only for
ones own acts or omissions, but also for those of persons for whom one is responsible.
xxxx
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.
It is not disputed that the subject cargo was lost while in the custody of Loadmasters
whose employees (truck driver and helper) were instrumental in the hijacking or robbery
of the shipment. As employer, Loadmasters should be made answerable for the damages
caused by its employees who acted within the scope of their assigned task of delivering
the goods safely to the warehouse.
Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to
ensure that Loadmasters would fully comply with the undertaking to safely transport the
subject cargo to the designated destination. Glodel should, therefore, be held liable with
Loadmasters. Its defense of force majeure is unavailing.
For the consequence, Glodel has no one to blame but itself. The Court cannot come to
its aid on equitable grounds. "Equity, which has been aptly described as a justice outside
legality, is applied only in the absence of, and never against, statutory law or judicial
rules of procedure." The Court cannot be a lawyer and take the cudgels for a party who
has been at fault or negligent.

Asian Terminals, Inc., Petitioner vs. Simon Enterprises, Inc., Respondent GR. No. 177116
FEB 27, 2013
Facts
Simon Enterprise Inc. (Simon) has entered into contract with Contiquincybunge Export
Company (Contiquincybunge) as its consignee of the shipped Soybean Meal. On
October 25, 1995 and on November 25, 1995 Contiquincybunge has made a shipment
through M/V Sea Dream and M/V Tern respectively at the Port of Darrow, Louisiana,
U.S.A. For the first shipment, Contiquincybunge made a shipment of 6,825.144 metric
tons of U.S. Soybean Meal which when the M/V Sea Dream arrived at the Port of Manila
the bulk of soybean meal was received by the Asian Terminals, Inc. (ATI), for shipment to
Simon. However, when it reached its receiver Simon, it was already short by 18.556 metric
tons. For the second shipment, Contiquincybunge made shipment, through M/V Tern, of
3,300.000 metric tons of U.S. Soybean Meal in Bulk for delivery to Simon at the Port of
Manila. The shipment was received by ATI again for delivery to Simon. However, the
shipped cargos were found lacking 199.863 metric tons.
Simon has filed an action for damages against the unknown owner of the vessels M/V
Sea Dream and M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and petitioner
ATI alleging that it suffered the losses through the fault or negligence of the said
defendants. The case of the unknown owner of the vessel M/V Sea Dream has been
settled in release and quitclaim and therefore has been stricken out of the case, leaving
M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and petitioner ATIs case
remaining. The RTC has ruled that the defendants be solidarily liable for the damages
incurred by Simon.
Unsatisfied with the RTC ruling, the owner of the M/V Tern, and Inter-Asia Marine
Transport, Inc. appealed to CA on the issue whether RTC has erred in finding that they
did not exercise extraordinary diligence in the handling of the goods. On the other hand,
the petitioner ATI has also appealed to CA on the issue that the RTC, the court-a-quo,
committed serious and reversible error in holding ATI solidarily liable with co-defendant
appellant Inter-Asia Marine Transport, Inc. contrary to the evidence presented.The CA
ruled that the RTC ruling be assailed with some modifications on the basis that M/V Tern
and Inter-Asia Marine Transport, Inc. have failed to establish that they exercised
extraordinary diligence in transporting the goods or exercised due diligence to forestall
or lessen the loss as provided in Article 1742 of the Civil Code. And on ATIs RTC ruling, it
was assailed as well on the basis that the stevedore of the M/V Tern has witnessed that
during the dischargement of the cargo, there has been spillage done by the stevedores
of ATI which is an evidence that ATI has been negligible in handling the goods.
ATI filed a motion for reconsideration at CA but was denied. It then filed a petition for
certiorari with the sole issue of whether the appellate court erred in affirming the
decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for
the shortage incurred in the shipment of the goods to respondent.
The issue involves questions of facts which cannot be entertained by SC for it is not a
trier of facts under rule 45 of the 1997 rules of civil procedure. However, the said rule 45
is not ironclad and has certain exceptions. The issue raised by ATI was merited to be
entertained by SC under the rule 4, when the judgment is based on a misapprehension
of facts.
Issue
Whether the appellate court erred in affirming the decision of the trial court holding
petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the
shipment of the goods to respondent.
Ruling
The petition for review on certiorari was granted to ATI. The SC agreed to ATIs claim that
the CA erred in affirming the decision of the trial court holding petitioner ATI solidarily
liable with its co-defendants for the shortage incurred in the shipment of the goods to
respondent. The CA misapprehended the following facts:
First, petitioner ATI is correct in arguing that the respondent failed to prove that the
subject shipment suffered actual shortage, as there was no competent evidence to prove
that it actually weighed 3,300 metric tons at the port of origin.
Second, as correctly asserted by petitioner ATI, the shortage, if any, may have been due
to the inherent nature of the subject shipment or its packaging since the subject cargo
was shipped in bulk and had a moisture content of 12.5%.
Third, SC agreed with the petitioner ATI that respondent has not proven any negligence
on the part of the former.
******
I just remembered the time I do six case digests for labor relations which was just
announced a day before the submission date. I wasnt able to finish the whole case, I was
lacking digests of 2 cases. I have slept at 4:00am and had to wake up at 6:00. I had to
travel to school with a cup of coffee in my hand and a semi-awake consciousness. When
I entered our room, everyone was like me, with eye bugs and still has the energy to rant
about how we did not manage to finish it all and how we managed to come to class with
3 hours of sleep or no sleep at all.

Equitable Leasing Corp. Vs. Lucita Suyom, Marissa Enano, Myrna Tamayo and Felix
Oldean
G.R. No. 143360 | September 5, 2002 | Panganiban, J.| Registered Owner Rule
FACTS:
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house
cumstore of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila.A portion of the
house was destroyed.Pinned to death under the engine of the tractor were Respondent
Myrna Tamayos son, Reniel Tamayo, and Respondent Felix Oledans daughter, Felmarie
Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two
sons of Respondent Lucita Suyom. Tutor was charged with and later convicted of reckless
imprudence resulting in multiple homicide and multiple physical injuries in Criminal Case
No. 296094-SA, Metropolitan Trial Court of Manila, Branch 12. Upon verification with the
Land Transportation Office, respondents were furnished a copy of Official Receipt No.
62204139 and Certificate of Registration No. 08262797, showing that the registered
owner of the tractor was Equitable Leasing Corporation/leased to Edwin Lim.On April 15,
1995, respondents filed against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable
Leasing Corporation (Equitable) a Complaint for damages docketed as Civil Case No. 95-
73522 in the RTC of Manila, Branch 14. The trial court, upon motion of plaintiffs counsel,
issued an Order dropping Raul Tutor, Ecatine and Edwin Lim from the Complaint,
because they could not be located and served with summonses. On the other hand, in its
Answer with Counterclaim, petitioner alleged that the vehicle had already been sold to
Ecatine and that the former was no longer in possession and control thereof at the time
of the incident.It also claimed that Tutor was an employee, not of Equitable, but of
Ecatine. After trial on the merits, the RTC rendered its Decision ordering petitioner to
pay actual and moral
damages and attorneys fees to respondents.
It held that since the Deed of Sale between petitioner and Ecatine had not been
registered with the Land Transportation Office (LTO), the legal owner was still Equitable.
Thus, petitioner was liable to respondents. Upon Appeal to the CA. The court held that
petitioner was still to be legally deemed the owner/operator of the tractor, even if that
vehicle had been the subject of a Deed of Sale in favour of Ecatine. It cited that the
Certificate of Registration on file with the LTO still remained in petitioners name. In order
that a transfer of ownership of a motor vehicle can bind third persons, it must be duly
recorded in the LTO. It also upheld the claim for moral damages considering Tutor to be
an agent of the registered owner.
ISSUE:
Whether or not Petitioner is liable for the accident despite a valid deed of sale in favour
of Ecatine.
RULING:
We hold petitioner liable for the deaths and the injuries complained of, because it was
the registered owner of the tractor at the time of the accident on July 17, 1994. The Court
has consistently ruled that,regardless of sales made of a motor vehicle, the registered
owner is the lawful operator insofar as the public and third persons are concerned;
consequently, it is directly and primarily responsible for the consequences of its
operation. In contemplation of law, the owner/operator of record is the employer of the
driver, the actual operator and employer being considered as merely its agent. The same
principle applies even if the registered owner of any vehicle does not use it for public
service. Since Equitable remained the registered owner of the tractor, it could not escape
primary liability for the deaths and the injuries arising from the negligence of the driver.
We must stress that the failure of Equitable and/or Ecatine to register the sale with the
LTO should not prejudice respondents, who have the legal right to rely on the legal
principle that the registered vehicle owner is liable for the damages caused by the
negligence of the driver.Petitioner cannot hide behind its allegation that Tutor was the
employee of Ecatine.This will effectively prevent respondents from recovering their losses
on the basis of the inaction or fault of petitioner in failing to register the sale.The non-
registration is the fault of petitioner, which should thus face the legal consequences

thereof.

SPOUSES ZALAMEA and LIANA ZALAMEA vs. CA and TRANSWORLD AIRLINES, INC.
G.R. No. 104235 November 18, 1993
FACTS:
Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and their daughter, Liana
purchased 3 airline tickets from the Manila agent of respondent TransWorld Airlines, Inc.
for a flight to New York to Los Angeles. The tickets of petitioners-spouses were
purchased at a discount of 75% while that of their daughter was a full fare ticket. All
three tickets represented confirmed reservations.
On the appointed date, however, petitioners checked in but were placed on the wait-list
because the number of passengers who had checked in before them had already taken
all the seats available on the flight. Out of the 42 names on the wait list, the first 22
names were eventually allowed to board the flight to Los Angeles, including petitioner
Cesar Zalamea. The two others were not able to fly. Those holding full-fare tickets were
given first priority among the wait-listed passengers. Mr. Zalamea, who was holding the
full-fare ticket of his daughter, was allowed to board the plane; while his wife and
daughter, who presented the discounted tickets were denied boarding.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be
accommodated because it was also fully booked. Thus, they were constrained to book in
another flight and purchased two tickets from American Airlines. Upon their arrival in the
Philippines, petitioners filed an action for damages based on breach of contract of air
carriage before the RTC- Makati. The lower court ruled in favor of petitioners . CA held
that moral damages are recoverable in a damage suit predicated upon a breach of
contract of carriage only where there is fraud or bad faith. Since it is a matter of record
that overbooking of flights is a common and accepted practice of airlines in the United
States and is specifically allowed under the Code of Federal Regulations by the Civil
Aeronautics Board, no fraud nor bad faith could be imputed on respondent TransWorld
Airlines. Thus petitioners raised the case on petition for review on certiorari.
ISSUE;
WON TWZ acted with bad faith and would entitle Zalameas to Moral and Examplary
damages.
RULING:
The U.S. law or regulation allegedly authorizing overbooking has never been proved.
Foreign laws do not prove themselves nor can the courts take judicial notice of them.
Like any other fact, they must be alleged and proved. Written law may be evidenced by
an official publication thereof or by a copy attested by the officer having the legal
custody of the record, or by his deputy, and accompanied with a certificate that such
officer has custody. The certificate may be made by a secretary of an embassy or
legation, consul general, consul, vice-consul, or consular agent or by any officer in the
foreign service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
service agent, in her deposition that the Code of Federal Regulations of the Civil
Aeronautics Board allows overbooking. No official publication of said code was
presented as evidence. Thus, respondent courts finding that overbooking is specifically
allowed by the US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
applicable to the case at bar in accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was issued should be applied by
the court where the passengers are residents and nationals of the forum and the ticket is
issued in such State by the defendant airline. Since the tickets were sold and issued in the
Philippines, the applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
the passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals, where passengers with confirmed bookings were refused carriage on the last
minute, this Court held that when an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises, and the passenger has
every right to expect that he would fly on that flight and on that date. If he does not,
then the carrier opens itself to a suit for breach of contract of carriage. Where an airline
had deliberately overbooked, it took the risk of having to deprive some passengers of
their seats in case all of them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said passenger is
entitled to an award of moral damages.
For a contract of carriage generates a relation attended with public duty a duty to
provide public service and convenience to its passengers which must be paramount to
self-interest or enrichment.
Respondent TWA is still guilty of bad faith in not informing its passengers beforehand
that it could breach the contract of carriage even if they have confirmed tickets if there
was overbooking. Respondent TWA should have incorporated stipulations on
overbooking on the tickets issued or to properly inform its passengers about these
policies so that the latter would be prepared for such eventuality or would have the
choice to ride with another airline.
Respondent TWA was also guilty of not informing its passengers of its alleged policy of
giving less priority to discounted tickets. Neither did it present any argument of
substance to show that petitioners were duly apprised of the overbooked condition of
the flight or that there is a hierarchy of boarding priorities in booking passengers. It is
evident that petitioners had the right to rely upon the assurance of respondent TWA,
thru its agent in Manila, then in New York, that their tickets represented confirmed seats
without any qualification. The failure of respondent TWA to so inform them when it could
easily have done so thereby enabling respondent to hold on to them as passengers up
to the last minute amounts to bad faith. Evidently, respondent TWA placed its self-
interest over the rights of petitioners under their contracts of carriage. Such conscious
disregard of petitioners rights makes respondent TWA liable for moral damages. To
deter breach of contracts by respondent TWA in similar fashion in the future, we adjudge
respondent TWA liable for exemplary damages, as well.
In the case of Alitalia Airways v. Court of Appeals, this Court explicitly held that a
passenger is entitled to be reimbursed for the cost of the tickets he had to buy for a
flight to another airline. Thus, instead of simply being refunded for the cost of the
unused TWA tickets, petitioners should be awarded the actual cost of their flight from
New York to Los Angeles.
WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court
of Appeals is hereby MODIFIED

CATHAY PACIFIC AIRWAYS LTD., petitioner,

vs. SPOUSES DANIEL VASQUEZ and MARIA LUISA MADRIGAL VASQUEZ, respondents.
[G.R. No. 150843. March 14, 2003]
FACTS: In respondents return flight to Manila from Hongkong, they were deprived of
their original seats in Business Class with their companions because of overbooking.
Since respondents were privileged members, their seats were upgraded to First Class.
Respondents refused but eventually persuaded to accept it. Upon return to Manila, they
demanded that they be indemnified in the amount of P1million for the humiliation and
embarrassment caused by its employees. Petitioners Country Manager failed to
respond. Respondents instituted action for damages. The RTC ruled in favor of
respondents. The Court of Appeals affirmed the RTC decision with modification in the
award of damages.

ISSUE: Whether or not the petitioners (1) breached the contract of carriage, (2) acted with
fraud and (3) were liable for damages.

RULING: (1) YES. Although respondents have the priority of upgrading their seats, such
priority may be waived, as what respondents did. It should have not been imposed on
them over their vehement objection.
(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on
overbooking of flight as it is within 10% tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in the amount of P5,000.00.
Moral damages (Art.2220, NCC) and attorneys fees were set aside and deleted from the
Court of Appeals ruling.
G.R. No. L-22272 Maranan v. Perez Case

Facts of the Case:

The carrier was charged for damages due to the case where his former employee
executed homicide.

According the Civil code of the Philippines, made a point that the common carrier is
"liable for the damages done by his employees to their
passengers" by the wording of Art. 1759 which states that:

"Common carriers are liable for the death or of injuries to passengers through
negligence or willful acts of the former's employers, although
such employees may have acted beyond the scope of their authority or in violation
of the Common carriers."

Antonia Maranan, the mother of the victim filed an action in the court of First Instance
of Batangas to recover damages from Perez who is the carrier and Valenzuela, who is
the suspect found guilty of homicide for the death of Rogelio Corachea, her son. In
defense of Perez claimed that deceased was killed in self-defense because he was the
first who assaulted the driver. In addition to that, the defendant claimed that the death
was caso foruito which means Perez, the carrier is not liable for the damages done. In the
end, the lower court adjudged the defendant carrier liable pursuant to Article 1759 of the
Civil Code

Issues:
 Whether the carrier did not partake on the crime scene, is responsible for the
protection of the passengers?
Whether the carrier is not involve in that event, is responsible for the action of
his employees?
Whether it is not the fault of the carrier committing the crime, is liable due to
the fact that he hired the employee who
failed transporting the passenger to safety?
Whether it's the employee's fault, the carrier will bear the risk of wrongful acts
or negligence of the carrier's employees against
passengers?

Decisions:

The court's decision is yes, the carrier is liable for the damages due to Art. 1759 of the
Civil Code proves his guilt.
The three very least reasons to which the remaining issues are also 'yesy', explained
in Texas Midland R.R. v. Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, and Haver v. Central
Railroad Co., 43 LRA 84, 85: (1) the special undertaking of the carrier requires that it
furnish its passenger that full measure of protection afforded by the exercise of the high
degree of care prescribed by the law, inter alia from violence and insults at the hands of
strangers and other passengers, but above all, from the acts of the carrier's own servants
charged with the passenger's safety; (2) said liability of the carrier for the servant's
violation of duty to passengers, is the result of the formers confiding in the servant's
hands the performance of his contract to safely transport the passenger, delegating
therewith the duty of protecting the passenger with the utmost care prescribed by law;
and (3) as between the carrier and the passenger, the former must bear the risk of
wrongful acts or negligence of the carrier's employees against passengers, since it, and
not the passengers, has power to select and remove them.
JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC.
(G.R. No. 52159, December 22, 1989)

FACTS: Petitioner Pilapil, on board respondents bus was hit above his eye by a stone
hurled by an unidentified bystander. Respondents personnel lost no time in bringing him
to a hospital, but eventually petitioner partially lost his left eyes vision and sustained a
permanent scar.

Thus, Petitioner lodged an action for recovery of damages before the Court of First
Instance of Camarines Sur which the latter granted. On appeal, the Court of Appeals
reversed said decision.

ISSUE: Whether or not common carriers assume risks to passengers such as the stoning
in this case?

HELD: In consideration of the right granted to it by the public to engage in the business
of transporting passengers and goods, a common carrier does not give its consent to
become an insurer of any and all risks to passengers and goods. It merely undertakes to
perform certain duties to the public as the law imposes, and holds itself liable for any
breach thereof.
While the law requires the highest degree of diligence from common carriers in the safe
transport of their passengers and creates a presumption of negligence against them, it
does not, however, make the carrier an insurer of the absolute safety of its passengers.
Article 1763. A common carrier is responsible for injuries suffered by a passenger on
account of the wilful acts or negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission.
Clearly under the above provision, a tort committed by a stranger which causes injury to
a passenger does not accord the latter a cause of action against the carrier. The
negligence for which a common carrier is held responsible is the negligent omission by
the carrier's employees to prevent the tort from being committed when the same could
have been foreseen and prevented by them. Further, under the same provision, it is to be
noted that when the violation of the contract is due to the willful acts of strangers, as in
the instant case, the degree of care essential to be exercised by the common carrier for
the protection of its passenger is only that of a good father of a family.
YOBIDO v CA [G.R. No. 113003. October 17, 1997.] ALBERTA YOBIDO and CRESENCIO
YOBIDO, petitioners, vs. COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY and
JASMIN TUMBOY, respondents.

FACTS:
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children, Ardee and
Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido bus bound for Davao City.
Along Picop road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus
suddenly exploded. The bus fell into a ravine around three (3) feet from the road and
struck a tree which resulted in the death of Tito Tumboy and physical injuries to other
passengers. Thereafter, a complaint for breach of contract of carriage, damages and
attorney's fees was filed by Leny and her children against Alberta Yobido, the owner of
the bus, and Cresencio Yobido, its driver in the Regional Trial Court of Davao City.

Defenses:
Abundio Salce, who was the bus conductor when the incident happened, testified that 1.
the 42-seater bus was not full as there were only 32 passengers, such that he himself
managed to get a seat;
2. the bus was running at a speed of "60 to 50" and that it was going slow because of the
zigzag road.
3. the left front tire that exploded was a "brand new tire" that he mounted on the bus on
April 21, 1988 or only five (5) days before the incident.

DECISION:
(1) Trial Court: dismissing the action for lack of merit
(2) Court of Appeals: rendered a decision reversing that of the lower court

ISSUE: Whether the tire blow-out is a fortuitous event

RULING: No.
A fortuitous event is possessed of the following characteristics:
(a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor
to comply with his obligations must be independent of human will;
(b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it
can be foreseen, it must be impossible to avoid;
(c) the occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and
(d) the obligor must be free from any participation in the aggravation of the injury
resulting to the creditor.

As Article 1174 provides, no person shall be responsible for a fortuitous event which
could not be foreseen, or which, though foreseen was inevitable. In other words, there
must be an entire exclusion of human agency from the cause of injury or loss.

There is no reason to overturn the findings and conclusions of the Court of Appeals.
Petitioners' contention that they are exempted from liability because the tire blowout was
a fortuitous event that could not have been foreseen, must fail. It is settled that an
accident caused either by defects in the automobile or through the negligence of its
driver is not a caso fortuito that would exempt the carrier from liability for damages.
Accordingly, the challenged decision is affirmed subject to modification that petitioners
shall additionally pay herein, respondents P20,000.00 as exemplary damages.
The explosion of the new tire may not be considered a fortuitous event. There are human
factors involved in the situation. The fact that the tire was new did not imply that it was
entirely free from manufacturing defects or that it was properly mounted on the vehicle.
Neither may the fact that the tire bought and used in the vehicle is of a brand name
noted for quality, resulting in the conclusion that it could not explode within five days'
use. Be that as it may, it is settled that an accident caused either by defects in the
automobile or through the negligence of its driver is not a caso fortuito that would
exempt the carrier from liability for damages.

It was incumbent upon the defense to establish that it took precautionary measures
considering partially dangerous condition of the road. As stated above, proof that the
tire was new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of its
carrier such as conducting daily routinary check-ups of the vehicle's parts. As the late
Justice J.B.L. Reyes said: "It may be impracticable, as appellee argues, to require of
carriers to test the strength of each and every part of its vehicles before each trip, but we
are of the opinion that a due regard for the carrier's obligations toward the traveling
public demands adequate periodical tests to determine the condition and strength of
those vehicle portions the failure of which may endanger the safety of the passengers."
It is interesting to note that petitioners proved through the bus conductor, Salce, that the
bus was running at "60-50" kilometers per hour only within the prescribed lawful speed
limit. However, they failed to rebut the testimony of Leny Tumboy that the bus was
running so fast that she cautioned the driver to slow down. These contradictory facts
must, therefore, be resolved in favor of liability in view of the presumption of negligence
of the carrier in the law.