G.R. No.
L-9671 August 23, 1957 everything he could to avoid the same but that notwithstanding his efforts, he was not
CESAR L. ISAAC, plaintiff-appellant,
vs.
A. L. AMMEN TRANSPORTATION CO., INC., defendant-appellee.
Angel S. Gamboa for appellant.
Manuel O. Chan for appellee.
BAUTISTA ANGELO, J.:
A. L. Ammen Transportation Co., Inc., hereinafter referred to as defendant, is a
corporation engaged in the business of transporting passengers by land for
compensation in the Bicol provinces and one of the lines it operates is the one
connecting Legaspi City, Albay with Naga City, Camarines Sur. One of the buses which
defendant was operating is Bus No. 31. On May 31, 1951, plaintiff boarded said bus as
a passenger paying the required fare from Ligao, Albay bound for Pili, Camarines Sur,
but before reaching his destination, the bus collided with a motor vehicle of the pick-up
type coming from the opposite direction, as a result of which plaintiff's left arm was
completely severed and the severed portion fell inside the bus. Plaintiff was rushed to a
hospital in Iriga, Camarines Sur where he was given blood transfusion to save his life.
After four days, he was transferred to another hospital in Tabaco, Albay, where he
under went treatment for three months. He was moved later to the Orthopedic Hospital
where he was operated on and stayed there for another two months. For these services,
he incurred expenses amounting to P623.40, excluding medical fees which were paid by
defendant.
As an aftermath, plaintiff brought this action against defendants for damages alleging
that the collision which resulted in the loss of his left arm was mainly due to the gross
incompetence and recklessness of the driver of the bus operated by defendant and that
defendant incurred in culpa contractual arising from its non-compliance with its
obligation to transport plaintiff safely to his, destination. Plaintiff prays for judgment
against defendant as follows: (1) P5,000 as expenses for his medical treatment, and
P3,000 as the cost of an artificial arm, or a total of P8,000; (2) P6,000 representing loss
of earning; (3) P75,000 for diminution of his earning capacity; (4) P50,000 as moral
damages; and (5) P10,000 as attorneys' fees and costs of suit.
Defendant set up as special defense that the injury suffered by plaintiff was due entirely
to the fault or negligence of the driver of the pick-up car which collided with the bus
driven by its driver and to the contributory negligence of plaintiff himself. Defendant
further claims that the accident which resulted in the injury of plaintiff is one which
defendant could not foresee or, though foreseen, was inevitable.
The after trial found that the collision occurred due to the negligence of the driver of the
pick-up car and not to that of the driver of the bus it appearing that the latter did
able to avoid it. As a consequence, the court dismissed complaint, with costs against
plaintiff. This is an appeal from said decision.
It appears that plaintiff boarded a bus of defendant as paying passenger from Ligao,
Albay, bound for Pili, Camarines Sur, but before reaching his destination, the bus
collided with a pick-up car which was coming from the opposite direction and, as a,
result, his left arm was completely severed and fell inside the back part of the bus.
Having this background in view, and considering that plaintiff chose to hold defendant
liable on its contractual obligation to carry him safely to his place of destination, it
becomes important to determine the nature and extent of the liability of a common
carrier to a passenger in the light of the law applicable in this jurisdiction.
In this connection, appellant invokes the rule that, "when an action is based on a
contract of carriage, as in this case, all that is necessary to sustain recovery is proof of
the existence of the contract of the breach thereof by act or omission", and in support
thereof, he cites several Philippine cases.1 With the ruling in mind, appellant seems to
imply that once the contract of carriage is established and there is proof that the same
was broken by failure of the carrier to transport the passenger safely to his destination,
the liability of the former attaches. On the other hand, appellee claims that is a wrong
presentation of the rule. It claims that the decisions of this Court in the cases cited do
not warrant the construction sought to be placed upon, them by appellant for a mere
perusal thereof would show that the liability of the carrier was predicated not upon mere
breach of its contract of carriage but upon the finding that its negligence was found to
be the direct or proximate cause of the injury complained of. Thus, appellee contends
that "if there is no negligence on the part of the common carrier but that the accident
resulting in injuries is due to causes which are inevitable and which could not have been
avoided or anticipated notwithstanding the exercise of that high degree of care and skill
which the carrier is bound to exercise for the safety of his passengers", neither the
common carrier nor the driver is liable therefor.
We believe that the law concerning the liability of a common carrier has now suffered a
substantial modification in view of the innovations introduced by the new Civil Code.
These innovations are the ones embodied in Articles 1733, 1755 and 1756 in so far as
the relation between a common carrier and its passengers is concerned, which, for ready
reference, we quote hereunder:
ART. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extra ordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by
them according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
 extraordinary diligence for the safety of the passengers is further set forth in
articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed in articles 1733 and
1755.
The Code Commission, in justifying this extraordinary diligence required of a common
carrier, says the following:
A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost deligence of very cautions persons,
with due regard for all circumstances. This extraordinary diligence required of
common carriers is calculated to protect the passengers from the tragic
mishaps that frequently occur in connection with rapid modern transportation.
This high standard of care is imperatively demanded by the precariousness of
human life and by the consideration that every person must in every way be
safeguarded against all injury. (Report of the Code Commission, pp. 35-36)"
(Padilla, Civil Code of the Philippines, Vol. IV, 1956 ed., p. 197).
From the above legal provisions, we can make the following restatement of the
principles governing the liability of a common carrier: (1) the liability of a carrier is
contractual and arises upon breach of its obligation. There is breach if it fails to exert
extraordinary diligence according to all circumstances of each case; (2) a carrier is
obliged to carry its passenger with the utmost diligence of a very cautious person,
having due regard for all the circumstances; (3) a carrier is presumed to be at fault or to
have acted negligently in case of death of, or injury to, passengers, it being its duty to
prove that it exercised extraordinary diligence; and (4) the carrier is not an insurer
against all risks of travel.
The question that now arises is: Has defendant observed extraordinary diligence or the
utmost diligence of every cautious person, having due regard for all circumstances, in
avoiding the collision which resulted in the injury caused to the plaintiff?
After examining the evidence in connection with how the collision occurred, the lower
court made the following finding:
Hemos examinado muy detenidamente las pruebas presentadas en la vista,
principalmente, las declaraciones que hemos acotado arriba, y hernos Ilegado a
la conclusion de que el demandado ha hecho, todo cuanto estuviere de su parte
para evitar el accidente, pero sin embargo, no ha podido evitarlo.
EI hecho de que el demandado, antes del choque, tuvo que hacer pasar su truck
encima de los montones de grava que estaban depositados en la orilla del
camino, sin que haya ido mas alla, por el grave riesgo que corrian las vidas de
sus pasajeros, es prueba concluyente de lo que tenemos dicho, a saber: — que
el cuanto esuba de su parte, para evitar el accidente, sin que haya
podidoevitardo, por estar fuera de su control.
The evidence would appear to support the above finding. Thus, it appears that Bus No.
31, immediately prior to the collision, was running at a moderate speed because it had
just stopped at the school zone of Matacong, Polangui, Albay. The pick-up car was at
full speed and was running outside of its proper lane. The driver of the bus, upon seeing
the manner in which the pick-up was then running, swerved the bus to the very extreme
right of the road until its front and rear wheels have gone over the pile of stones or
gravel situated on the rampart of the road. Said driver could not move the bus farther
right and run over a greater portion of the pile, the peak of which was about 3 feet high,
without endangering the safety of his passengers. And notwithstanding all these efforts,
the rear left side of the bus was hit by the pick-up car.
Of course, this finding is disputed by appellant who cannot see eye to eye with the
evidence for the appellee and insists that the collision took place because the driver of
the bus was going at a fast speed. He contends that, having seen that a car was coming
from the opposite direction at a distance which allows the use of moderate care and
prudence to avoid an accident, and knowing that on the side of the road along which he
was going there was a pile of gravel, the driver of the bus should have stopped and
waited for the vehicle from the opposite direction to pass, and should have proceeded
only after the other vehicle had passed. In other words, according to appellant, the act of
the driver of the bus in squeezing his way through of the bus in squeezing his way
through between the oncoming pick-up and the pile of gravel under the circumstances
was considered negligent.
But this matter is one of credibility and evaluation of the evidence. This is evidence.
This is the function of the trial court. The trial court has already spoken on this matter as
we have pointed out above. This is also a matter of appreciation of the situation on the
part of the driver. While the position taken by appellant appeals more to the sense of
caution that one should observe in a given situation to avoid an accident or mishap, such
however can not always be expected from one who is placed suddenly in a predicament
where he is not given enough time to take the course of action as he should under
ordinary circumstances. One who is placed in such a predicament cannot exercise such
coolness or accuracy of judgment as is required of him under ordinary circumstances
and he cannot therefore be expected to observe the same judgment, care and precaution
as in the latter. For this reason, authorities abound where failure to observe the same
degree of care that as ordinary prudent man would exercise under ordinary
circumstances when confronted with a sadden emergency was held to be warranted and
a justification to exempt the carrier from liability. Thus, it was held that "where a
carrier's employee is confronted with a sudden emergency, the fact that he is obliged to
act quickly and without a chance for deliberation must be taken into account, and he is
held to the some degree of care that he would otherwise be required to exercise in the
absence of such emergency but must exercise only such care as any ordinary prudent
person would exercise under like circumstances and conditions, and the failure on his
part to exercise the best judgement the case renders possible does not establish lack of
care and skill on his part which renders the company, liable. . . . (13 C. J. S., 1412; 10
C. J.,970). Considering all the circumstances, we are persuaded to conclude that the
driver of the bus has done what a prudent man could have done to avoid the collision
and in our opinion this relieves appellee from legibility under our law.

A circumstances which miliates against the stand of appellant is the fact borne out by
the evidence that when he boarded the bus in question, he seated himself on the left side
thereof resting his left arm on the window sill but with his left elbow outside the
window, this being his position in the bus when the collision took place. It is for this
reason that the collision resulted in the severance of said left arm from the body of
appellant thus doing him a great damage. It is therefore apparent that appellant is guilty
of contributory negligence. Had he not placed his left arm on the window sill with a
portion thereof protruding outside, perhaps the injury would have been avoided as is the
case with the other passenger. It is to be noted that appellant was the only victim of the
collision.

It is true that such contributory negligence cannot relieve appellee of its liability but will
only entitle it to a reduction of the amount of damage caused (Article 1762, new Civil
Code), but this is a circumstance which further militates against the position taken by
appellant in this case.

It is the prevailing rule that it is negligence per se for a passenger on a railroad

voluntarily or inadvertently to protrude his arm, hand, elbow, or any other part
of his body through the window of a moving car beyond the outer edge of the
window or outer surface of the car, so as to come in contact with objects or
obstacles near the track, and that no recovery can be had for an injury which
but for such negligence would not have been sustained. (10 C. J. 1139)

Plaintiff, (passenger) while riding on an interurban car, to flick the ashes, from
his cigar, thrust his hand over the guard rail a sufficient distance beyond the
side line of the car to bring it in contact with the trunk of a tree standing beside
the track; the force of the blow breaking his wrist. Held, that he was guilty of
contributory negligence as a matter of law. (Malakia vs. Rhode Island Co., 89
A., 337.)

Wherefore, the decision appealed from is affirmed, with cost against appellant.
G.R. No. L-28014-15 May 29, 1970
SPOUSES MARCELO LANDINGIN and RACQUEL BOCASAS, plaintiffs-
appellees,
vs.
PANGASINAN TRANSPORTATION CO. and MARCELO OLIGAN, defendants-
appellants.
SPOUSES PEDRO GARCIA and EUFRACIA LANDINGIN, plaintiffs-appellees,
vs.
PANGASINAN TRANSPORTATION CO. and MARCELO OLIGAN, defendants-
appellants.
Gabriel A. Zabala for plaintiffs-appellees.
Vicente M. Erfe Law Office for defendants-appellants.
VILLAMOR, J.:
Direct appeal on a question of law from the portion of the judgment of the Court of First
Instance of Manila ordering the defendants Pangasinan Transportation Co.
(PANTRANCO) and Marcelo Oligan to pay the plaintiffs in Civil Case No. D-1468
(L-28014) the sum of P6,500.00, and the plaintiffs in Civil Case No. 1470 (L-28015)
the sum of P3,500.00.
The complaints in said Civil Cases Nos. D-1468 and D-1470 were filed by the spouses
Marcelo Landingin and Racquel Bocasas, and the spouses Pedro Garcia and Eufracia
Landingin, respectively, for damages allegedly suffered by them in connection with the
death of their respective daughter, Leonila Landingin and Estrella Garcia, due to the
alleged negligence of the defendants and/or breach of contract of carriage. In their
complaints, plaintiffs averred, among others, that in the morning of April 20, 1963, their
above-mentioned daughters were among the passengers in the bus driven by defendant
Marcelo Oligan and owned and operated by defendant PANTRANCO on an excursion
trip from Dagupan City to Baguio City and back, that the bus was open on one side and
enclosed on the other, in gross violation of the rules of the Public Service Commission;
that defendant PANTRANCO acted with negligence, fraud and bad faith in pretending
to have previously secured a special permit for the trip when in truth it had not done so;
that upon reaching an uphill point at Camp 8, Kennon Road, Baguio City, on the
onward trip, defendant driver, through utter lack of foresight, experience and driving
knowledge, caused the bus to stall and stop for a few moments; that through the said
defendant's fault and mishandling, the motor ceased to function, causing the bus to slide
back unchecked; that when the said defendant suddenly swerved and steered the bus
toward the mountainside, Leonila and Estrella, together with several other passengers,
were thrown out of the bus through its open side unto the road, suffering serious injuries
as a result of which Leonila and Estrella died at the hospital and the same day; and that
in connection with the incident, defendant driver had been charged with and convicted
of multiple homicide and multiple slight physical injuries on account of the death of
Leonila and Estrella and of the injuries suffered by four others, although it may be said,
by way of parenthesis, that this case is now pending appeal in a higher court. The
plaintiffs prayed for awards of moral, actual and exemplary damages in the total sum of
P40,000.00 in Civil Case No. D-1468, and in the total sum of P25,000.00 in Civil Case
No. D-1470 as well as attorney's fees in the amounts of P5,000.00 and P4,000.00,
respectively.
Defendants filed a joint answer to each of the two complaints alleging, among others,
that at the time of the accident, defendant driver was driving the bus at, the slow speed
of about 10 kilometers per hour; that while the said defendant was steering his bus
toward the mountainside after hearing a sound coming from under the rear end of the
bus, Leonila and Estrella recklessly, and in disobedience to his shouted warnings and
advice, jumped out of the bus causing their heads to hit the road or pavement; that the
bus was then being driven with extraordinary care, prudence and diligence; that
defendant PANTRANCO observed the care and diligence of a good father of a family
to prevent the accident as well as in the selection and supervision of its employees,
particularly of defendant driver; and that the decision convicting the said defendant was
not yet final, the same having been appealed to the Court of Appeals where it was still
pending.
By agreement of the parties, the two cases were tried jointly. On October 17, 1966, the
court a quo rendered its decision therein in which it made the following findings; that
upon reaching the fatal spot at Camp 8, a sudden snapping or breaking of metal below
the floor of the bus was heard, and the bus abruptly stopped, rolling back a few
moments later; that as a result, some of the passengers jumped out of the bus, while
others stepped down; that defendant driver maneuvered the bus safely to and against the
side of the mountain where its rear end was made to rest, ensuring the safety of the
many passengers still inside the bus; that while defendant driver as steering the bus
towards the mountainside, he advised the passengers not to jump, but to remain seated;
that Leonila and Estrella were not thrown out of the bus, but that they panicked and
jumped out; that the malfunctioning of the motor resulted from the breakage of the
cross-joint; that there was no negligence on the part of either of the defendants; that
only the day before, the said cross-joint was duly inspected and found to be in order;
and that defendant PANTRANCO had exercised the requisite care in the selection and
supervision of its employees, including the defendant driver. The court concluded that
"the accident was caused by a fortuitous event or an act of God brought about by some
extra-ordinary circumstances independent of the will of the Pantranco or its
employees."
One would wonder why in the face of such factual findings and conclusion of the trial
court, the defendants, instead of the plaintiffs, should come to this Court on appeal. The
answer lies in the dispositive portion of the decision, to wit:
 IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court hereby
renders judgment: (a) Absolving the defendants from any liability on account
of negligence on their part and therefore dismissing the complaints in these
two cases; (b) However, as stated above, the Court hereby orders the defendant
Pantranco to pay to the plaintiffs spouses Marcelo Tandingin and Racquel
Bocasas in Civil Case No. D-1468 the amount of P6,500.00; and the amount of
P3,500.00 to the spouses Pedro Garcia and Eufracia Landingin in Civil Case
No. D-1470, not in payment of liability because of any negligence on the part
of the defendants but as an expression of sympathy and goodwill. (Emphasis
supplied.)
As to what impelled the court below to include item (b) in the dispositive portion of its
decision, can be gathered from the penultimate paragraph of the decision, which reads:
However, there is evidence to the effect that an offer of P8,500.00 in the
instant cases without any admission of fault or negligence had been made by
the defendant Pantranco and that actually in Civil Case No. D-1469 for the
death of Pacita Descalso, the other deceased passenger of the bus in question,
the heirs of the decease received P3,000.00 in addition to hospital and medical
bills and the coffin of the deceased for the dismissal of the said case without
Pantranco accepting liability. There was as a matter of fact during the pre-trial
of these two cases a continuing offer of settlement on the part of the defendant
Pantranco without accepting any liability for such damages, and the Court
understood that the Pantranco would be willing still to pay said amounts even
if these cases were to be tried on the merits. It is well-known that the defendant
Pantranco is zealous in the preservation of its public relations. In the spirit
therefore of the offer of the defendant Pantranco aforesaid, to assuage the
feelings of the herein plaintiffs an award of P6,500.00 for the spouses Marcelo
Landingin and Racquel Bocasas in Civil Case No. D-1468 whose daughter
Leonila was, when she died, a third-year Commerce student at the Far Eastern
University, and P3,500.00 for the spouses Pedro Garcia and Eufracia
Landingin in Civil Case No. D-1470 whose daughter Estrella was in the fourth
year High at the Dagupan Colleges when she died, is hereby made in their
favor. This award is in addition to what Pantranco might have spent to help the
parents of both deceased after the accident.
Defendants-appellants complain that having found them to be absolutely free from fault
or negligence, and having in fact dismissed the complaints against them, the court
should not have ordered them to assume any pecuniary liability. There would be merit
in his argument but for the fact that defendant-appellant PANTRANCO was guilty of
breach of contract of carriage. It will be noted that in each of the two complaints it is
averred that two buses including the one in which the two deceased girls were riding,
were hired to transport the excursionist passengers from Dagupan City to Baguio City,
and return, and that the said two passengers did not reach destination safely.
As a common carrier, defendant-appellant PANTRANCO was duty bound to carry its
passengers "safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the circumstances."
(Article 1755, Civil Code.) Did defendant-appellant PANTRANCO measure up to the
degree of care and foresight required it under the circumstances? We think not. The
court below found that the cross-joint of the bus in which the deceased were riding
broke, which caused the malfunctioning of the motor, which in turn resulted in panic
among some of the passengers. This is a finding of fact which this Court may not
disturb. We are of the opinion, however, that the lower court's conclusion drawn from
that fact, i.e., that "the accident was caused by a fortuitous event or an act of God
brought about by some extraordinary circumstances independent of the will of the
Pantranco or its employees," is in large measure conjectural and speculative, and was
arrived at without due regard to all the circumstances, as required by Article 1755.
In Lasam vs. Smith (45 Phil. 660), this Court held that an accident caused by defects in
the automobile is not a caso fortuito. The rationale of the carrier's liability is the fact
that "the passenger has neither the choice nor control over the carrier in the selection
and use of the equipment and appliances in use by the carrier." (Necesito, et al. vs.
Paras, et al., 104 Phil. 75.)
When a passenger dies or is injured, the presumption is that the common carrier is at
fault or that it acted negligently (Article 1756). This presumption is only rebutted by
proof on the carrier's part that it observed the "extraordinary diligence" required in
Article 1733 and the "utmost diligence of very cautious persons" required in Article
1755 (Article 1756). In the instant case it appears that the court below considered the
presumption rebutted on the strength of defendants-appellants' evidence that only the
day before the incident, the crossjoint in question was duly inspected and found to be in
order. It does not appear, however, that the carrier gave due regard for all the
circumstances in connection with the said inspection. The bus in which the deceased
were riding was heavily laden with passengers, and it would be traversing mountainous,
circuitous and ascending roads. Thus the entire bus, including its mechanical parts,
would naturally be taxed more heavily than it would be under ordinary circumstances.
The mere fact that the bus was inspected only recently and found to be in order would
not exempt the carrier from liability unless it is shown that the particular circumstances
under which the bus would travel were also considered.
In the premises, it was error for the trial court to dismiss the complaints. The awards
made by the court should be considered in the concept of damages for breach of
contracts of carriage.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from is
modified as indicated above, and defendant-appellant PANTRANCO is ordered to pay
to plaintiffs-appellees the amounts stated in the judgment appealed from, as damages
for breach of contracts, with interest thereon at the legal rate from the date of the filing
of the complaints. Costs against defendant-appellant PANTRANCO.
G.R. No. L-10605 June 30, 1958 but "bubbled and cellulous", a condition that could not be known or ascertained by the
carrier despite the fact that regular thirty-day inspections were made of the steering
PRECILLANO NECESITO, ETC., plaintiff-appellant, knuckle, since the steel exterior was smooth and shiny to the depth of 3/16 of an inch all
vs. around; that the knuckles are designed and manufactured for heavy duty and may last
NATIVIDAD PARAS, ET AL., defendants-appellees. up to ten years; that the knuckle of bus No. 199 that broke on January 28, 1954, was last
inspected on January 5, 1954, and was due to be inspected again on February 5th.
Hence, the trial court, holding that the accident was exclusively due to fortuitous event,
x---------------------------------------------------------x
dismissed both actions. Plaintiffs appealed directly to this Court in view of the amount
in controversy.
G.R. No. L-10606 June 30, 1958
We are inclined to agree with the trial court that it is not likely that bus No. 199 of the
GERMAN NECESITO, ET AL., plaintiffs-appellants, Philippine Rabbit Lines was driven over the deeply rutted road leading to the bridge at a
vs. speed of 50 miles per hour, as testified for the plaintiffs. Such conduct on the part of the
NATIVIDAD PARAS, ET AL., defendants-appellees. driver would have provoked instant and vehement protest on the part of the passengers
because of the attendant discomfort, and there is no trace of any such complaint in the
Tomas Besa and Federico Agrava for appellants. records. We are thus forced to assume that the proximate cause of the accident was the
Jose W. Diokno for appellees. reduced strength of the steering knuckle of the vehicle caused by defects in casting it.
While appellants hint that the broken knuckle exhibited in court was not the real fitting
REYES, J. B. L., J.: attached to the truck at the time of the accident, the records they registered no objection
on that ground at the trial below. The issue is thus reduced to the question whether or
These cases involve ex contractu against the owners and operators of the common not the carrier is liable for the manufacturing defect of the steering knuckle, and
carrier known as Philippine Rabbit Bus Lines, filed by one passenger, and the heirs of whether the evidence discloses that in regard thereto the carrier exercised the diligence
another, who injured as a result of the fall into a river of the vehicle in which they were required by law (Art. 1755, new Civil Code).
riding.
ART. 1755. A common carrier is bound to carry the passengers safely as far as
In the morning of January 28, 1964, Severina Garces and her one-year old son, human care and foresight can provide, using the utmost diligence of very
Precillano Necesito, carrying vegetables, boarded passenger auto truck or bus No. 199 cautious persons, with a due regard for the all the circumstances.
of the Philippine Rabbit Bus Lines at Agno, Pangasinan. The passenger truck, driven by
Francisco Bandonell, then proceeded on its regular run from Agno to Manila. After It is clear that the carrier is not an insurer of the passengers' safety. His liability rests
passing Mangatarem, Pangasinan truck No. 199 entered a wooden bridge, but the front upon negligence, his failure to exercise the "utmost" degree of diligence that the law
wheels swerved to the right; the driver lost control, and after wrecking the bridge's requires, and by Art. 1756, in case of a passenger's death or injury the carrier bears the
wooden rails, the truck fell on its right side into a creek where water was breast deep. burden of satisfying the court that he has duly discharged the duty of prudence required.
The mother, Severina Garces, was drowned; the son, Precillano Necesito, was injured, In the American law, where the carrier is held to the same degree of diligence as under
suffering abrasions and fracture of the left femur. He was brought to the Provincial the new Civil Code, the rule on the liability of carriers for defects of equipment is thus
Hospital at Dagupan, where the fracture was set but with fragments one centimeter out expressed: "The preponderance of authority is in favor of the doctrine that a passenger
of line. The money, wrist watch and cargo of vegetables were lost. is entitled to recover damages from a carrier for an injury resulting from a defect in an
appliance purchased from a manufacturer, whenever it appears that the defect would
Two actions for damages and attorney's fees totalling over P85,000 having been filed in have been discovered by the carrier if it had exercised the degree of care which under
the Court of First Instance of Tarlac (Cases Nos. 908 and 909) against the carrier, the the circumstances was incumbent upon it, with regard to inspection and application of
latter pleaded that the accident was due to "engine or mechanical trouble" independent the necessary tests. For the purposes of this doctrine, the manufacturer is considered as
or beyond the control of the defendants or of the driver Bandonell. being in law the agent or servant of the carrier, as far as regards the work of
constructing the appliance. According to this theory, the good repute of the
manufacturer will not relieve the carrier from liability" (10 Am. Jur. 205, s, 1324; see
After joint trial, the Court of First Instance found that the bus was proceeding slowly
also Pennsylvania R. Co. vs. Roy, 102 U. S. 451; 20 L. Ed. 141; Southern R. Co. vs.
due to the bad condition of the road; that the accident was caused by the fracture of the
Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed Note, 29 ALR 788; Ann. Cas. 1916E
right steering knuckle, which was defective in that its center or core was not compact
929).
The rationale of the carrier's liability is the fact that the passenger has neither choice nor
control over the carrier in the selection and use of the equipment and appliances in use
by the carrier. Having no privity whatever with the manufacturer or vendor of the
defective equipment, the passenger has no remedy against him, while the carrier usually
has. It is but logical, therefore, that the carrier, while not in insurer of the safety of his
passengers, should nevertheless be held to answer for the flaws of his equipment if such
flaws were at all discoverable. Thus Hannen, J., in Francis vs. Cockrell, LR 5 Q. B.
184, said:
In the ordinary course of things, the passenger does not know whether the
carrier has himself manufactured the means of carriage, or contracted with
someone else for its manufacture. If the carrier has contracted with someone
else the passenger does not usually know who that person is, and in no case has
he any share in the selection. The liability of the manufacturer must depend on
the terms of the contract between him and the carrier, of which the passenger
has no knowledge, and over which he can have no control, while the carrier
can introduce what stipulations and take what securities he may think proper.
For injury resulting to the carrier himself by the manufacturer's want of care,
the carrier has a remedy against the manufacturer; but the passenger has no
remedy against the manufacturer for damage arising from a mere breach of
contract with the carrier . . . . Unless, therefore, the presumed intention of the
parties be that the passenger should, in the event of his being injured by the
breach of the manufacturer's contract, of which he has no knowledge, be
without remedy, the only way in which effect can be given to a different
intention is by supposing that the carrier is to be responsible to the passenger,
and to look for his indemnity to the person whom he selected and whose
breach of contract has caused the mischief. (29 ALR 789)
And in the leading case of Morgan vs. Chesapeake & O. R. Co. 15 LRA (NS) 790, 16
Ann. Cas. 608, the Court, in holding the carrier responsible for damages caused by the
fracture of a car axle, due to a "sand hole" in the course of moulding the axle, made the
following observations.
The carrier, in consideration of certain well-known and highly valuable rights
granted to it by the public, undertakes certain duties toward the public, among
them being to provide itself with suitable and safe cars and vehicles in which
carry the traveling public. There is no such duty on the manufacturer of the
cars. There is no reciprocal legal relation between him and the public in this
respect. When the carrier elects to have another build its cars, it ought not to be
absolved by that facts from its duty to the public to furnish safe cars. The
carrier cannot lessen its responsibility by shifting its undertaking to another's
shoulders. Its duty to furnish safe cars is side by side with its duty to furnish
safe track, and to operate them in a safe manner. None of its duties in these
respects can be sublet so as to relieve it from the full measure primarily
exacted of it by law. The carrier selects the manufacturer of its cars, if it does
not itself construct them, precisely as it does those who grade its road, and lay
its tracks, and operate its trains. That it does not exercise control over the
former is because it elects to place that matter in the hands of the
manufacturer, instead of retaining the supervising control itself. The
manufacturer should be deemed the agent of the carrier as respects its duty to
select the material out of which its cars and locomotive are built, as well as in
inspecting each step of their construction. If there be tests known to the crafts
of car builders, or iron moulders, by which such defects might be discovered
before the part was incorporated into the car, then the failure of the
manufacturer to make the test will be deemed a failure by the carrier to make
it. This is not a vicarious responsibility. It extends, as the necessity of this
business demands, the rule of respondeat superior to a situation which falls
clearly within its scope and spirit. Where an injury is inflicted upon a
passenger by the breaking or wrecking of a part of the train on which he is
riding, it is presumably the result of negligence at some point by the carrier. As
stated by Judge Story, in Story on Bailments, sec. 601a: "When the injury or
damage happens to the passenger by the breaking down or overturning of the
coach, or by any other accident occurring on the ground, the presumption
prima facie is that it occurred by the negligence of the coachmen, and onus
probandi is on the proprietors of the coach to establish that there has been no
negligence whatever, and that the damage or injury has been occasioned by
inevitable casualty, or by some cause which human care and foresight could
not prevent; for the law will, in tenderness to human life and limb, hold the
proprietors liable for the slightest negligence, and will compel them to repel by
satisfactory proofs every imputation thereof." When the passenger has proved
his injury as the result of a breakage in the car or the wrecking of the train on
which he was being carried, whether the defect was in the particular car in
which he was riding or not, the burden is then cast upon the carrier to show
that it was due to a cause or causes which the exercise of the utmost human
skill and foresight could not prevent. And the carrier in this connection must
show, if the accident was due to a latent defect in the material or construction
of the car, that not only could it not have discovered the defect by the exercise
of such care, but that the builders could not by the exercise of the same care
have discovered the defect or foreseen the result. This rule applies the same
whether the defective car belonged to the carrier or not.
In the case now before us, the record is to the effect that the only test applied to the
steering knuckle in question was a purely visual inspection every thirty days, to see if
any cracks developed. It nowhere appears that either the manufacturer or the carrier at
any time tested the steering knuckle to ascertain whether its strength was up to standard,
or that it had no hidden flaws would impair that strength. And yet the carrier must have
been aware of the critical importance of the knuckle's resistance; that its failure or
breakage would result in loss of balance and steering control of the bus, with disastrous
effects upon the passengers. No argument is required to establish that a visual
inspection could not directly determine whether the resistance of this critically
important part was not impaired. Nor has it been shown that the weakening of the
knuckle was impossible to detect by any known test; on the contrary, there is testimony
that it could be detected. We are satisfied that the periodical visual inspection of the
steering knuckle as practiced by the carrier's agents did not measure up to the required
legal standard of "utmost diligence of very cautious persons" — "as far as human care
and foresight can provide", and therefore that the knuckle's failure can not be
considered a fortuitous event that exempts the carrier from responsibility (Lasam vs.
Smith, 45 Phil. 657; Son vs. Cebu Autobus Co., 94 Phil., 892.)
It may be impracticable, as appellee argues, to require of carriers to test the strength of
each and every part of its vehicles before each trip; but we are of the opinion that a due
regard for the carrier's 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 safe of the passengers.
As to the damages suffered by the plaintiffs, we agree with appellee that no allowance
may be made for moral damages, since under Article 2220 of the new Civil Code, in
case of suits for breach of contract, moral damages are recoverable only where the
defendant acted fraudulently or in bad faith, and there is none in the case before us. As
to exemplary damages, the carrier has not acted in a "wanton, fraudulent, reckless,
oppressive or malevolent manner" to warrant their award. Hence, we believe that for the
minor Precillano Necesito (G. R. No. L-10605), an indemnity of P5,000 would be
adequate for the abrasions and fracture of the femur, including medical and
hospitalization expenses, there being no evidence that there would be any permanent
impairment of his faculties or bodily functions, beyond the lack of anatomical
symmetry. As for the death of Severina Garces (G. R. No. L-10606) who was 33 years
old, with seven minor children when she died, her heirs are obviously entitled to
indemnity not only for the incidental loses of property (cash, wrist watch and
merchandise) worth P394 that she carried at the time of the accident and for the burial
expenses of P490, but also for the loss of her earnings (shown to average P120 a month)
and for the deprivation of her protection, guidance and company. In our judgment, an
award of P15,000 would be adequate (cf Alcantara vs. Surro, 49 Off. Gaz. 2769; 93
Phil., 472).
The low income of the plaintiffs-appellants makes an award for attorney's fees just and
equitable (Civil Code, Art. 2208, par. 11). Considering that he two cases filed were tried
jointly, a fee of P3,500 would be reasonable.
In view of the foregoing, the decision appealed from is reversed, and the defendants-
appellees are sentenced to indemnify the plaintiffs-appellants in the following amounts:
P5,000 to Precillano Necesito, and P15,000 to the heirs of the deceased Severina
Garces, plus P3,500 by way of attorney's fees and litigation expenses. Costs against
defendants-appellees. So ordered.
Paras, C. J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, and Endencia,
JJ., concur.
Felix, J., concurs in the result.
RESOLUTION
September 11, 1958
REYES, J. B. L., J.:
Defendants-appellees have Submitted a motion asking this Court to reconsider its
decision of June 30, 1958, and that the same be modified with respect to (1) its holding
the carrier liable for the breakage of the steering knuckle that caused the autobus No.
199 to overturn, whereby the passengers riding in it were injured; (2) the damages
awarded, that appellees argue to be excessive; and (3) the award of attorneys' fees.
(1) The rule prevailing in this jurisdiction as established in previous decisions of this
Court, cited in our main opinion, is that a carrier is liable to its passengers for damages
caused by mechanical defects of the conveyance. As early as 1924, in Lasam vs. Smith,
45 Phil. 659 this Court ruled:
As far as the record shows, the accident was caused either by defects in the
automobile or else through the negligence of its driver. That is not caso
fortuito.
And in Son vs. Cebu Autobus Company, 94 Phil., 892, this Court held a common carrier
liable in damages to passenger for injuries cause by an accident due to the breakage of a
faulty drag-link spring.
It can be seen that while the courts of the United States are at variance on the question
of a carrier's liability for latent mechanical defects, the rule in this jurisdiction has been
consistent in holding the carrier responsible. This Court has quoted from American and
English decisions, not because it felt bound to follow the same, but merely in approval
of the rationale of the rule as expressed therein, since the previous Philippine cases did
not enlarge on the ideas underlying the doctrine established thereby.
The new evidence sought to be introduced do not warrant the grant of a new trial, since
the proposed proof available when the original trial was held. Said evidence is not
newly discovered.
(2) With regard to the indemnity awarded to the child Precilliano Necesito, the injuries
suffered by him are incapable of accurate pecuniary estimation, particularly because the
full effect of the injury is not ascertainable immediately. This uncertainty, however,
does not preclude the right to an indemnity, since the injury is patent and not denied
(Civil Code, Art. 2224). The reasons behind this award are expounded by the Code
Commission in its report:
There are cases where from the nature of the case, definite proof of pecuniary
loss cannot be offered, although the court is convinced that there has been such
loss. For instance, injury to one's commercial credit or to the goodwill of a
business firm is often hard to show with certainty in terms of money. Should
damages be denied for that reason? The judge should be empowered to
calculate moderate damages in such cases, rather than that the plaintiff should
suffer, without redress, from the defendant's wrongful act." (Report of the
Code Commission, p. 75)
In awarding to the heirs of the deceased Severina Garces an indemnity for the loss of
her "guidance, protection and company," although it is but moral damage, the Court
took into account that the case of a passenger who dies in the course of an accident, due
to the carrier's negligence constitutes an exception to the general rule. While, as pointed
out in the main decision, under Article 2220 of the new Civil Code there can be no
recovery of moral damages for a breach of contract in the absence of fraud malice or
bad faith, the case of a violation of the contract of carriage leading to a passenger's
death escapes this general rule, in view of Article 1764 in connection with Article 2206,
No. 3 of the new Civil Code.
(3) In the Cachero case this Court disallowed attorneys' fees to the injured plaintiff
because the litigation arose out of his exaggerated and unreasonable deeds for an
indemnity that was out of proportion with the compensatory damages to which he was
solely entitled. But in the present case, plaintiffs' original claims can not be deemed a
priori wholly unreasonable, since they had a right to indemnity for moral damages
besides compensatory ones, and moral damages are not determined by set and
invariable bounds.
Neither does the fact that the contract between the passengers and their counsel was on
a contingent basis affect the former's right to counsel fees. As pointed out for
appellants, the Court's award is an party and not to counsel. A litigant who
improvidently stipulate higher counsel fees than those to which he is lawfully entitled,
does not for that reason earn the right to a larger indemnity; but, by parity of reasoning,
he should not be deprived of counsel fees if by law he is entitled to recover them.
We find no reason to alter the main decision heretofore rendered. Ultimately, the
position taken by this Court is that a common carrier's contract is not to be regarded as a
game of chance wherein the passenger stakes his limb and life against the carrier's
property and profits.
Wherefore, the motion for reconsideration is hereby denied. So ordered.

ART. 1764. Damages in cases comprised in this Section shall be awarded in

accordance with Title XVIII of this Book, concerning Damages. Article 2206
shall also apply to the death of a passenger caused by the breach of contract by
a comman carrier. ART. 2206. . . .

(3) The spouse, legitimate and eligimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the
death of the deceased.

Being a special rule limited to cases of fatal injuries, these articles prevail over the
general rule of Art. 2220. Special provisions control general ones (Lichauco & Co. vs.
Apostol, 44 Phil. 138; Sancio vs. Lizarraga, 55 Phil. 601).

It thus appears that under the new Civil Code, in case of accident due to a carrier's
negligence, the heirs of a deceased passenger may recover moral damages, even though
a passenger who is injured, but manages to survive, is not entitled to them. There is,
therefore, no conflict between our main decision in the instant case and that of Cachero
vs. Manila Yellow Taxi Cab Co., 101 Phil., 523, where the passenger suffered injuries,
but did not lose his life.
FIRST DIVISION
[G.R. No. L-46558 : July 31, 1981.]
PHILIPPINE AIR LINES, INC., Petitioner, vs. THE COURT OF APPEALS and
JESUS V. SAMSON, Respondents.
DECISION
GUERRERO, J.:
This is a petition for review on Certiorari of the decision of the Court of Appeals 1
dated April 18, 1977, affirming with modification the decision of the Court of First
Instance of Albay in Civil Case No. 1279, entitled “Jesus V. Samson, plaintiff, vs.
Philippine Air Lines, Inc., defendant,” for damages.
The dispositive portion of the trial court’s decision reads:
“WHEREFORE, for all the foregoing considerations, judgment is hereby rendered in
favor of the plaintiff and against the defendant ordering the defendant to pay the
plaintiff, the following sums: P1988,000.00 as unearned income or damages;
P50,000.00 for moral damages; P20,000.00 as attorney’s fees and P5,000.00 as
expenses of litigation, or a total of P273,000.00. Costs against the defendant.”
The appellate court modified the above decision, to wit:
“However, Plaintiff-Appellee, who has been deprived of his job since 1954, is
entitled to the legal rate of interest on the P198,000.00 unearned income from
the filing of the complaint cranad(Sec. 8, Rule 51, Rules of Court).
WHEREFORE, with the modification indicated above, the judgment appealed
from is affirmed, with costs against defendant-appellant.”
The complaint filed on July 1, 1954 by plaintiff Jesus V. Samson, private respondent
herein, averred that on January 8, 1951, he flew as co-pilot on a regular flight from
Manila to Legaspi with stops at Daet, Camarines Norte and Pili, Camarines Sur, with
Captain Delfin Bustamante as commanding pilot of a C-47 plane belonging to
defendant Philippine Air Lines, Inc., now the herein petitioner; that on attempting to
land the plane at Daet airport, Captain Delfin Bustamante due to his very slow reaction
and poor judgment overshot the airfield and as a result, notwithstanding the diligent
efforts of the plaintiff co-pilot to avert an accident, the airplane crashlanded beyond the
runway; that the jolt caused the head of the plaintiff to hit and break through the thick
front windshield of the airplane causing him severe brain concussion, wounds and
abrasions on the forehead with intense pain and suffering cranad(par. 6,
complaint).:onad
The complaint further alleged that instead of giving plaintiff expert and proper medical
treatment called for by the nature and severity of his injuries, defendant simply referred
him to a company physician, a general medical practitioner, who limited the treatment
to the exterior injuries without examining the severe brain concussion of
plaintiff cranad(par. 7, complaint); that several days after the accident, defendant
Philippine Air Lines called back the plaintiff to active duty as co-pilot, and inspite of
the latter’s repeated request for expert medical assistance, defendant had not given him
anycranad(par. 8, complaint); that as a consequence of the brain injury sustained by
plaintiff from the crash, he had been having periodic dizzy spells and had been suffering
from general debility and nervousness cranad(par. 9, complaint); that defendant airline
company instead of submitting the plaintiff to expert medical treatment, discharged the
latter from its employ on December 21, 1953 on grounds of physical disability, thereby
causing plaintiff not only to lose his job but to become physically unfit to continue as
aviator due to defendant’s negligence in not giving him the proper medical
attentioncranad(pars. 10-11, complaint). Plaintiff prayed for damages in the amount of
P180,000.00 representing his unearned income, P50,000.00 as moral damages,
P20,000.00 as attorney’s fees and P5,000.00 as expenses, or a total of P255,000.00.
In its answer filed on July 28, 1954, defendant PAL denied the substantial averments in
the complaint, alleging among others, that the accident was due solely and exclusively
to inevitable unforeseen circumstances whereby plaintiff sustained only superficial
wounds and minor injuries which were promptly treated by defendant’s medical
personnel cranad(par. 5, answer); that plaintiff did not sustain brain injury or cerebral
concussion from the accident since he passed the annual physical and medical
examination given thereafter on April 24, 1951; that the headaches and dizziness
experienced by plaintiff were due to emotional disturbance over his inability to pass the
required up-grading or promotional course given by defendant company cranad(par. 6,
answer), and that, as confirmed by an expert neuro-surgeon, plaintiff was suffering-
from neurosis and in view of this unfitness and disqualification from continuing as a
pilot, defendant had to terminate plaintiff’s employment cranad(pars. 7, 9, answer).
Further, defendant alleged that by the very nature of its business as a common carrier, it
is bound to employ only pilots who are proficient and in good mental, emotional and
physical condition; that the pilot, Captain Delfin Bustamante, was a competent and
proficient pilot, and although he was already afflicted with a tumor of the nasopharynx
even before the accident of January 8, 1951, the Civil Aeronautics Administration, in
passing upon the fitness of pilots, gave Capt. Bustamante a waiver of physical standards
to enable him to retain his first class airman certificate since the affliction had not in the
least affected his proficiency cranad(pars. 16-17, answer). By way of counterclaim,
defendant prayed for P10,000.00 as expenses for the litigation.
On March 25, 1958, defendant filed a Motion to Dismiss on the ground that the
complaint is essentially a Workmen’s Compensation claim, stating a cause of action not
cognizable within the general jurisdiction of the court. The Motion to Dismiss was
denied in the order of April 14, 1958. After the reception of evidence, the trial court
rendered on January 15, 1973 the decision, the dispositive portion of which has been
earlier cited.
The defendant Philippine Air Lines, Inc. appealed the decision to the Court of Appeals
as being contrary to law and unsupported by the evidence. It raised as errors of the trial
court cranad(a) the holding that the damages allegedly suffered by plaintiff are
attributable to the accident of January 8, 1951 which was due to the negligence of
defendant in having allowed Capt. Delfin Bustamante to continue flying despite his
alleged slow reaction and poor judgment; cranad(b) the finding that defendant was
negligent in not having given plaintiff proper and adequate expert medical treatment
and assistance for the injuries allegedly sustained in the accident of January 8, 1951;
andcranad(c) in ordering defendant to pay actual or compensatory damages, moral
damages and attorney’s fees to the plaintiff.
On April 18, 1977, the Court of Appeals rendered its decision affirming the judgment of
the lower court but modified the award of damages by imposing legal rate of interest on
the P198,000.00 unearned income from the filing of the complaint, citing Sec. 8, Rule
51 of the Rules of Court.
Its motion for reconsideration of the above judgment having been denied, Philippine Air
Lines, Inc. filed this instant petition for Certiorari on the ground that the decision is not
in accord with law or with the applicable jurisprudence, aside from its being replete
with findings in the nature of speculation, surmises and conjectures not borne out by the
evidence on record thereby resulting to misapprehension of facts and amounting to a
grave abuse of discretion cranad(p. 7, Petition).
Petitioner raises the fundamental question in the case at bar as follows: Is there a causal
connection between the injuries suffered by private respondent during the accident on 8
Continuing, the respondent Court of Appeals further held:
January 1951 and the subsequent “periodic dizzy spells, headache and general debility”
of which private respondent complained every now and then, on the one hand, and such
“periodic dizzy spells, headache and general debility” allegedly caused by the accident
and private respondent’s eventual discharge from employment, on the other? PAL
submits that respondent court’s award of damages to private respondent is anchored on
findings in the nature of speculations, surmises and conjectures and not borne out by the
evidence on record, thereby resulting in a misapprehension of facts and amounting to a
grave abuse of discretion.
Petitioner’s submission is without merit.
As found by the respondent court, the following are the essential facts of the case:
“It appears that plaintiff, a licensee aviator, was employed by defendant a few
years prior to January 8, 1951 as a regular co-pilot on a guaranteed basic salary
of P750.00 a month. He was assigned to and/or paired with pilot Delfin
Bustamante.
Sometime in December 1950, he complained to defendant through its
authorized official about the slow reaction and poor judgment of pilot Delfin
Bustamante. Notwithstanding said complaint, defendant allowed the pilot to
continue flying.
On January 8, 1951, the two manned the regular afternoon flight of defendant’s
plane from Manila to Legaspi, with stops at Daet, Camarines Norte, and Pili,
Camarines Sur. Upon making a landing at Daet, the pilot, with his slow
reaction and poor judgment, overshot the airfield and, as a result of and
notwithstanding diligent efforts of plaintiff to avert an accident, the airplane
crash-landed beyond the runway into a mangrove. The jolt and impact caused
plaintiff to hit his head upon the front windshield of the plane thereby causing
his brain concussions and wounds on the forehead, with concomittant intense
pain.
Plaintiff was not given proper medical attention and treatment demanded by
the nature and severity of his injuries. Defendant merely referred him to its
clinic attended by general practitioners on his external injuries. His brain injury
was never examined, much less treated. On top of that negligence, defendant
recalled plaintiff to active duty as a co-pilot, completely ignoring his plea for
expert medical assistance.
Suffering periodic dizzy spells, headache and general debility, plaintiff every
now and then complained to defendant. To make matters worst for plaintiff,
defendant discharged him from his employment on December 21, 1953. In
consequence, plaintiff has been beset with additional worries, basically
financial. He is now a liability instead of a provider, of his family.
On July 1, 1954, plaintiff filed a complaint for damages. Defendant vainly
sought to dismiss the complaint after filing an answer. Then, the judgment and
this appeal.”
“There is no question about the employment of plaintiff by defendant, his age
and salary, the overshooting by pilot Bustamante of the airfield and
crashlanding in a mangrove, his hitting his head on the front windshield of the
plane, his intermittent dizzy spells, headache and general debility for which he
was discharged from his employment on December 21, 1953. As the lower
court aptly stated:
‘From the evidence adduced by the parties, the Court finds the
following facts to be uncontroverted: That the plaintiff Jesus V.
Samson, on January 8, 1951 and a few years prior thereto, December
21, 1953, was a duly licensed pilot employed as a regular co-pilot of
the defendant with assignment in its domestic air service in the
Philippines; that on January 8, 1951, the defendant’s airplane met an
accident in crashlanding at the Daet Airport, Camarines Norte by
overshooting the runway and reaching the mangroves at the edge of
the landing strip; that the jolt caused plaintiff’s head to hit the front
windshield of the airplane causing him to suffer wounds and abrasion
on the forehead; that the defendant, instead of giving the plaintiff
expert and proper medical treatment called for by the nature and
severity of the injuries of the plaintiff, simply referred him to the
clinic of the defendant’s physicians who are only general medical
practitioners and not brain specialists; that the defendant’s physicians
limited their treatment to the exterior injuries on the forehead of the
plaintiff and made no examination of the severe concussion of the
 brain of the plaintiff; that the Medical Director and Flight Surgeon of
the defendant were not able to definitely determine the cause of the
complaint of the plaintiff as to the periodic attack of dizziness, spells
and headache; that due to this laxity of the defendant’s physician and
the continuous suffering of the ailment of the plaintiff complained of,
he demanded for expert medical assistance for his brain injury and to
send him to the United States, which demand was turned down and in
effect denied by the defendant; that instead the defendant referred the
plaintiff to a neurologist, Dr. Victor Reyes; that from the time that
said accident occurred on January 21, 1953, he was ordered grounded
on several occasions because of his complaint of dizzy spells and
headache; that instead of submitting the plaintiff to expert medical
treatment as demanded by him and denied by the defendant, he was
discharged from its employment on December 21, 1953 on the ground
of physical disability, and that the plaintiff, at the time when the
defendant’s plane met the accident, up to the time he was discharged,
was regularly employed as a co-pilot and receiving a basic salary of
P750.00 a month plus extra pay for flying time, and bonuses
amounting to P300.00 a month.’
Even defendant-appellant itself admits as not controverted the following facts
which generally admit what have been stated above as not controverted.
“In the case at bar, the following facts are not the subject of controversy:
‘(1) First, that from July 1950 to 21 December 1953, plaintiff was
employed with defendant company as a first officer or co-pilot and
served in that capacity in defendant’s domestic services.
(2) Second, that on January 1951, plaintiff did fly on defendant’s PI-C
94, as first officer or co-pilot, with the late Capt. Delfin Bustamante
in command as pilot; that while making a landing at the Daet airport
on that date, PI-C 94 did meet an accident as stated above.
(3) Third, that at or about the time of the discharge from defendant
company, plaintiff had complained of “spells of dizziness,”
“headaches” and “nervousness”, by reason of which he was grounded
from flight duty. In short, that at that time, or approximately from
November 1953 up to the date of his discharge on 21 December 1953,
plaintiff was actually physically unfit to discharge his duties as pilot.
(4) Fourth, that plaintiff’s unfitness for flight duty was properly
established after a thorough medical examination by competent
medical experts.’cralaw cranad(pp. 11-12, appellant’s brief)
hence, there can hardly be an issue, factual, legal or medical.”
Taking exception from “the rest of the essential facts of the case as found by the
respondent court” PAL claims said facts are not fully borne out by the evidence on
record and insists that the injuries suffered by private respondent during the accident on
January 8, 1951 were superficial in nature; that the “periodic spells, headache, and
general debility” complaint of every now and then by private respondent subsequent to
the Jan. 8, 1951 incident were due to emotional disturbances and that no negligence can
be attributed to Capt. Delfin Bustamante much less to PAL for the occurrence on
January 8, 1951, hence PAL cannot be held liable for damages.
Petitioner claims absence of any causal connection between private respondent’s
superficial injuries and his alleged subsequent “periodic spells, headache and general
debility,” pointing out that these subsequent ailments were found by competent
physician, including an expert neuro-surgeon, to be due to emotional disturbances
insights the conclusions of Dr. Trajano V. Bernardo that respondent’s complaints were
“psychosomatic symptoms” on the basis of declarations made by respondent himself,
which conclusions are supported by similar diagnosis made by Drs. Damaceno J. Ago
and Villaraza stating that respondent Samson was suffering from neurosis as well as the
report of Dr. Victor Reyes, a neurological specialist, indicating that the symptoms were
probably, most probably due to psychogenic factors and have no organic basis.
In claiming that there is no factual basis for the finding of the respondent court that the
crash-landing caused respondent’s “brain concussion . cra ., with concomittant intense
pain, for on the contrary, testimonial evidence establish the superficiality of the injuries
sustained by respondent during the accident of January 8, 1951,” petitioner quotes
portions of the testimony of Dr. Manuel S. Sayas, who declared that he removed the
band-aid on the forehead of respondent and that he found out after removal that the
latter had two contussed superficial wounds over the supra orbiter regions or just above
the eyes measuring one centimeter long and one millimeter deep. He examined and
found his blood pressure normal, no discharges from the nose and ears. Dr. Trajano V.
Bernardo also testified that when he examined respondent Samson three days after the
accident, the wound was already healed and found nothing wrong with his ears, nose
and throat so that he was declared fit for duty after the sixth day.
Petitioner goes further. It contends that there is no causal connection between
respondent’s superficial injuries sustained during the accident on January 8, 1951 and
plaintiff’s discharge from employment with PAL on December 21, 1953. According to
PAL, it was the repeated recurrence of respondent’s neurasthenic
symptoms cranad(dizzy spells, headache, nervousness) which prompted PAL’s Flight
Surgeon, Dr. Bernardo, to recommend that plaintiff be grounded permanently as
respondent was “psychologically unfit to resume his duties as pilot.” PAL concludes
that respondent’s eventual discharge from employment with PAL was effected for
absolutely valid reasons, and only after he was thoroughly examined and found unfit to
carry out his responsibilities and duties as a pilot.:onad
We agree with the respondent court in finding that the dizzy spells, headache and
general debility of private respondent Samson was an after-effect of the crash-landing
and We find that such holding is supported by substantial evidence, which We quote
from the court’s decision, to wit:
“Defendant would imply that plaintiff suffered only superficial wounds which
were treated and not brain injury. It would, by the opinion of its company
doctors, Dr. Bernardo and Dr. Reyes, attribute the dizzy spells and headache to
organic or as phychosomatic, neurasthenic or psychogenic, which we find
outlandishly exaggerated.
That plaintiff’s condition as psychosomatic rather than organic in nature is
allegedly confirmed by the fact that on six cranad(6) separate occasions after
the accident he passed the required CAA physical examination for airman’s
certificate. cranad(Exhs. 78, 79, 80, 81, 83 and 92). We noticed, however, that
there were other similar physical examinations conducted by the CAA on the
person of plaintiff the report on which were not presented in evidence.
Obviously, only those which suited defendants cause were hand-picked and
offered in evidence.
We hesitate to accept the opinion of the defendant’s two physicians,
considering that Dr. Bernardo admittedly referred to Dr. Reyes because he
could not determine the cause of the dizzy spells and headache and the latter
admitted that ‘it is extremely hard to be certain of the cause of his dizzy
spells,’ and suggested a possibility that it ‘was due to postraumatic syndrome,
evidently due to the injuries suffered by the plaintiff in hitting the forehead
against the windshield of the plane during the accident.’ Judgment are not
based on possibilities.
The admitted difficulty of defendant’s doctors in determining the cause of the
dizzy spells and headache cannot be a sound basis for finding against the
plaintiff and in favor of defendant. Whatever it might be, the fact is that such
dizzy spells, headache and general debility was an after-effect of the crash-
landing. Be it brain injury or psychosomatic, neurasthenic or psychogenic,
there is no gainsaying the fact that it was caused by the crash-landing. As an
effect of the cause, not fabricated or concocted, plaintiff has to be indemnified.
The fact is that such effect caused his discharge.
We are prone to believe the testimony of the plaintiff’s doctors.
Dr. Morales, a surgeon, found that blood was coming from plaintiff’s ears and
nose. He testified that plaintiff was suffering from cerebral concussion as a
result of traumatic injury to the brain caused by his head hitting on the
windshield of the plane during the crash-landing cranad(Exhibit “G”).
Dr. Conrado Aramil, a neurologist and psychiatrist with experience in two
hospitals abroad, found abnormality reflected by the electroencephalogram
examination in the frontal area on both sides of plaintiff’s
head cranad(Exhibits “K”, “K-1”).
The opinion of these two specialist renders unnecessary that of plaintiff’s wife
who is a physician in her own right and because of her relation to the plaintiff,
her testimony and opinion may not be discussed here, although her testimony
is crystallized by the opinions of Dr. Ador Dionisio, Dr. Marquez, Dr. Jose O.
Chan, Dr. Yambao and Dr. Sandico.
Even the doctors presented by defendant admit vital facts about plaintiff’s
brain injury. Dr. Bernardo admits that due to the incident, the plaintiff
continuously complained of his fainting spells, dizziness and headache
everytime he flew as a co-pilot and everytime he went to defendant’s clinic no
less than 25 timescranad(Exhibits “15” to “36”), that he complained of the
same to Dr. Reyes; that he promised to help send plaintiff to the United States
for expert medical assistance provided that whatever finding thereat should not
be attributed to the crash-landing incident to which plaintiff did not agree and
that plaintiff was completely ignored by the defendant in his plea for expert
medical assistance. They admitted that they could not determine definitely the
cause of the fainting spells, dizziness and headache, which justifies the demand
for expert medical assistance.”
We also find the imputation of gross negligence by respondent court to PAL for having
allowed Capt. Delfin Bustamante to fly on that fateful day of the accident on January 8,
1951 to be correct, and We affirm the same, duly supported as it is by substantial
evidence, clearly established and cited in the decision of said court which states as
follows:
“The pilot was sick. He admittedly had tumor of the
nasopharynx cranad(nose). He is now in the Great Beyond. The spot is very
near the brain and the eyes. Tumor on the spot will affect the sinus, the
breathing, the eyes which are very near it. No one will certify the fitness to fly
a plane of one suffering from the disease.
“. cra . The fact First Pilot Bustamante has a long standing tumor of the
Nasopharynx for which reason he was grounded since November 1947 is
admitted in the letter cranad(Exh. 69-A) of Dr. Bernardo to the Medical
Director of the CAA requesting waiver of physical standards. The request for
waiver of physical standards is itself a positive proof that the physical
condition of Capt. Bustamante is short of the standard set by the CAA. The
Deputy Administrator of the CAA granted the request relying on the
representation and recommendation made by Dr. Bernardo cranad(See Exh.
69). We noted, however, that the request cranad(Exh. 69-A) says that ‘it is
believed that his continuing to fly as a co-pilot does not involve any
hazard.’cralaw cranad(Italics supplied). Flying as a First Officer entails a very
different responsibility than flying as a mere co-pilot. Defendant requested the
CAA to allow Capt. Bustamante to fly merely as a co-pilot and it is safe to
conclude that the CAA approved the request thus allowing Bustamante to fly
only as a co-pilot. For having allowed Bustamante to fly as a First Officer on
January 8, 1951, defendant is guilty of gross negligence and therefore should
be made liable for the resulting accident.
As established by the evidence, the pilot used to get treatments from Dr. Sycangco. He
used to complain of pain in the face more particularly in the nose which caused him to
have sleepless nights. Plaintiff’s observation of the pilot was reported to the Chief Pilot
who did nothing about it. Captain Carbonel of the defendant corroborated plaintiff of
this matter. The complaint against the slow reaction of the pilot at least proved the
observation. The observation could be disregarded. The fact that the complaint was not
in writing does not detract anything from the seriousness thereof, considering that a This Court is not impressed by, much less can We accept petitioner’s invocation to
miscalculation would not only cause the death of the crew but also of the passengers. calibrate once again the evidence testified to in detail and plucked from the voluminous
transcript to support petitioner’s own conclusion. It is not the task of this Court to
One month prior to the crash-landing, when the pilot was preparing to land in Daet,
discharge the functions of a trier of facts much less to enter into a calibration of the
plaintiff warned him that they were not in the vicinity of Daet but above the town of
evidence, notwithstanding petitioner’s wail that the judgment of the respondent court is
Ligao. The plane hit outside the airstrip. In another instance, the pilot would hit the
based entirely on speculations, surmises and conjectures. We are convinced that
Mayon Volcano had not plaintiff warned him. These more than prove what plaintiff had
respondent court’s judgment is supported by strong, clear and substantial
complained of. Disregard thereof by defendant is condemnable.
evidence.:onad
To bolster the claim that Capt. Bustamante has not suffered from any kind of sickness
Petitioner is a common carrier engaged in the business of carrying or transporting
which hampered his flying ability, appellant contends that for at least one or more years
passengers or goods or both, by land, water, or air, for compensation, offering their
following the accident of January 8, 1951, Capt. Bustamante continued to fly for
services to the public, as defined in Art. 1732, New Civil Code. The law is clear in
defendant company as a pilot, and did so with great skill and proficiency, and without
requiring a common carrier to exercise the highest degree of care in the discharge of its
any further accident or mishap, citing tsn. pp. 756-765, January 20, 1965. We have
duty and business of carriage and transportation under Arts. 1733, 1755 and 1756 of the
painstakingly perused the records, particularly the transcript of stenographic notes cited,
New Civil Code. These Articles provide:
but found nothing therein to substantiate appellant’s contention. Instead, We discovered
that the citation covers the testimony of Dr. Bernardo on the physical condition of Art. 1733. Common carriers, from the nature of their business and for reasons of public
Bustamante and nothing about his skills or proficiency to fly nor on the mishaps or policy, are bound to observe extraordinary diligence in the vigilance over the goods and
accidents, matters which are beyond Dr. Bernardo’s competence anyway. for the safety of the passengers transported by them, according to all the circumstances
of each case.
Assuming that the pilot was not sick or that the tumor did not affect the pilot in
managing the plane, the evidence shows that the overshooting of the runway and crash- Such extraordinary diligence in the vigilance over the goods is further expressed in
landing at the mangrove was caused by the pilot for which acts the defendant must Articles 1734, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the
answer for damages caused thereby. And for this negligence of defendant’s employee, it safety of the passengers is further set forth in articles 1755 and 1756.
is liable cranad(Joaquin vs. Aniceto, 12 SCRA 308). At least, the law presumes the
Art. 1755. A common carrier is bound to carry the passenger safely as far as human care
employer negligent imposing upon it the burden of proving that it exercised the
and foresight can provide, using the utmost diligence of very cautious persons, with a
diligence of a good father of a family in the supervision of its employees.
due regard for all the circumstances.
Defendant would want to tie plaintiff to the report he signed about the crash-landing.
Art. 1756. In case of death of or injuries to passengers, common carriers are presumed
The report was prepared by his pilot and because the latter pleaded that he had a family
to have been at fault or to have acted negligently, unless they prove that they observed
too and would have nowhere to go if he lost his job, plaintiff’s compassion would not
extraordinary diligence as prescribed in Articles 1733 and 1755.
upturn the truth about the crash-landing. We are for the truth not logic of any
argumentation. The duty to exercise the utmost diligence on the part of common carriers is for the
safety of passengers as well as for the members of the crew or the complement
At any rate, it is incorrect to say that the Accident Report cranad(Exh. 12 & 12-A),
operating the carrier, the airplane in the case at bar. And this must be so for any
signed by plaintiff, exculpated Capt. Bustamante from any fault. We observed that the
omission, lapse or neglect thereof will certainly result to the damage, prejudice, nay
Report does not categorically state that Capt. Bustamante was not at fault. It merely
injuries and even death to all aboard the plane, passengers and crew members alike.
relates in chronological sequence what Capt. Bustamante and plaintiff did from the
take-off from Manila to the landing in Daet which resulted in an accident. On the Now to the damages. The Court of Appeals affirmed the award of damages made by the
contrary, we may infer the negligence of Bustamante from the following portion of the trial court, stating that “the damages awarded plaintiff by the lower court are in
Report, to wit: accordance with the facts, law and jurisprudence.” The court further observed that
“defendant-appellant is still fortunate, considering that the unearned income was
“. cra . I felt his brakes strong but as we neared the intersection of the NE-SW
reckoned with only up to 1968 and not up to the present as plaintiff-appellee is still
runway, the brakes were not as strong and I glanced at the system pressure
living. Whatever mathematical error defendant-appellant could show by abstract
which indicated 900 lbs. per sq. m.”
argumentation, the same must be compensated by such deficiency of the damages
It was during the above precise instance that Capt. Bustamante lost his bearing and awarded to plaintiff-appellee.”
disposition. Had he maintained the pressure on the brakes the plane would not have
As awarded by the trial court, private respondent was entitled to P198,000.00 as
overshot the runway. Verily, Bustamante displayed slow reaction and poor
unearned income or compensatory damages; P50,000.00 for moral damages,
judgment.cranad(CA decision, pp. 8-12).
P20,000.00 as attorney’s fees and P5,000.00 as expenses of litigation, or a total of
P273,000.00.
The trial court arrived at the sum of P198,000.00 as unearned income or damages by
considering that respondent Samson “could have continued to work as airline pilot for
fifteen more years, he being only 38 years at the time the services were terminated by
the defendant cranad(PAL) and he would have earned P120,000.00 from 1954 to 1963
or a period of ten cranad(10) years at the rate of one thousand per
month cranad(P750.00 basic salary plus P300.00 extra pay for extra flying time and
bonuses; and considering further that in 1964 the basic pay of defendant’s pilot was
increased to P12,000.00 annually, the plaintiff could have earned from 1964 to 1968 the
sum of P60,000.00 in the form of salaries and another P18,000.00 as bonuses and extra
pay for extra flying time at the same rate of P300 a month, or a grand total of
P198,000.00 for the entire period. This claim of the plaintiff for loss or impairment of
earning capacity is based on the provision of Article 2205 of the New Civil Code of the
Philippines which provides that “damages may be recovered for loss or impairment of
earning capacity in cases of temporary or permanent personal injury.” This provision of
law has been construed and interpreted in the case of Aureliano Ropato, et al. vs. La
Mallorca General Partnership, 56 O.G., 7812, which rules that law allows the recovery
of damages for loss or impairment of earning capacity in cases of temporary or
permanent personal injury.” chanroblesvirtualawlibrary(Decision, CFI, pp. 98-99,
Record on Appeal)
The respondent appellate court modified the above award by ordering payment of legal
interest on the P198,000.00 unearned income from the filing of the claim, citing Sec. 8,
Rule 51 of the Rules of Court.
Petitioner assails the award of the total sum of P198,000.00 as unearned income up to
1968 as being tenuous because firstly, the trial court’s finding affirmed by the
respondent court is allegedly based on pure speculation and conjecture and secondly,
the award of P300.00 a month as extra pay for extra flying time from 1954 to 1968 is
likewise speculative. PAL likewise rejects the award of moral damages in the amount of
P50,000.00 on the ground that private respondent’s action before the trial court does not
fall under any of the cases enumerated in the law cranad(Art. 2219 of the New Civil
Code) for which moral damages are recoverable and that although private respondent’s
action gives the appearance that it is covered under quasi-delict as provided in Art. 21
of the New Civil Code, the definition of quasi-delict in Art. 2176 of the New Civil Code
expressly excludes cases where there is a pre-existing contractual relation between the
parties, as in the case under consideration, where an employer-employee relationship
existed between PAL and private respondent. It is further argued that private
respondent’s action cannot be deemed to be covered by Art. 21, inasmuch as there is no
evidence on record to show that PAL “wilfully cause(d) loss or injury to cranad(private
respondent) in a manner that is contrary to morals, good customs or public policy
. cra .” Nor can private respondent’s action be considered “analogous” to either of the
foregoing, for the reasons are obvious that it is
not.” chanroblesvirtualawlibrary(Memorandum of petitioner, pp. 418-421, Records)
Having affirmed the gross negligence of PAL in allowing Capt. Delfin Bustamante to
fly the plane to Daet on January 8, 1951 whose slow reaction and poor judgment was
the cause of the crash-landing of the plane which resulted in private respondent Samson
hitting his head against the windshield and causing him injuries for which reason PAL
terminated his services and employment as pilot after refusing to provide him with the
necessary medical treatment of respondent’s periodic spells, headache and general
debility produced from said injuries, We must necessarily affirm likewise the award of
damages or compensation under the provisions of Art. 1711 and Art. 1712 of the New
Civil Code which provide:
Art. 1711. Owners of enterprises and other employers are obliged to pay compensation
for the death or injuries to their laborers, workmen, mechanics or other employees, even
though the event may have been purely accidental or entirely due to a fortuitous cause,
if the death or personal injury arose out of and in the course of the employment. The
employer is also liable for compensation if the employee contracts any illness or disease
caused by such employment or as the result of the nature of the employment. If the
mishap was due to the employee’s own notorious negligence, or voluntary act, or
drunkenness, the employer shall not be liable for compensation. When the employee’s
lack of due care contributed to his death or injury, the compensation shall be equitably
reduced.
Art. 1712. If the death or injury is due to the negligence of a fellow-worker, the latter
and the employer shall be solidarily liable for compensation. If a fellow-worker’s
intentional or malicious act is the only cause of the death or injury, the employer shall
not be answerable, unless it should be shown that the latter did not exercise due
diligence in the selection or supervision of the plaintiffs fellow-worker.
The grant of compensatory damages to the private respondent made by the trial court
and affirmed by the appellate court by computing his basic salary per annum at P750.00
a month as basic salary and P300.00 a month for extra pay for extra flying time
including bonus given in December every year is justified. The correct computation
however should be P750 plus P300 x 12 months = P12,600 per annum x 10 years =
P126,000.00 cranad(not P120,000.00 as computed by the court a quo). The further grant
of increase in the basic pay of the pilots to P12,000 annually for 1964 to 1968 totalling
P60,000.00 and another P18,000.00 as bonuses and extra pay for extra flying time at the
same rate of P300.00 a month totals P78,000.00. Adding P126,000.00 cranad(1964 to
1968 compensation) makes a grand total of P204,000.00 cranad(not P198,000.00 as
originally computed).
As to the grant of moral damages in the sum of P50,000.00 We also approve the same.
We have noted and considered the holding of the appellate court in the matter of bad
faith on the part of PAL, stated hereunder, this wise:
“None of the essential facts material to the determination of the case have been
seriously assailed: the overshooting of runway and crash-landing into the
mangroves; the hitting of plaintiff’s head to the front windshield of the plane;
the oozing of blood out of his ears, nose and mouth; the intermittent dizzy
spells, headaches and general debility thereafter for which he was discharged
from his employment; the condition of not to attribute the cause of the ailment
 to the crash-landing imposed in bad faith for a demanded special medical with the filing of the complaint in the lower court. We affirm the ruling of the
service abroad; and the resultant brain injury which defendant’s doctors could respondent court which reads:
not understand nor diagnose.”
“Lastly, the defendant-appellant claims that the legal rate of interest on the
xxx unearned compensation should be computed from the date of the judgment in
the lower court, not from the filing of the complaint, citing a case where the
“The act of defendant-appellant in unjustly refusing plaintiff-appellee’s
issue raised in the Supreme Court was limited to when the judgment was
demand for special medical service abroad for the reason that plaintiff-
rendered in the lower court or in the appellate court, which does not mean that
appellee’s deteriorating physical condition was not due to the accident violates
it should not be computed from the filing of the complaint.
the provisions of Article 19 of the Civil Code on human relations “to act with
justice, give everyone his due, and observe honesty and good Articles 1169, 2209 and 2212 of the Civil Code govern when interest shall be
faith.” chanroblesvirtualawlibrary(CA Resolution, pp. 151-152, Records) computed. Thereunder interest begins to accrue upon demand, extrajudicial or
judicial. A complaint is a judicial demand cranad(Cabarroguis vs. Vicente, 107
We reject the theory of petitioner that private respondent is not entitled to moral
Phil. 340). Under Article 2212 of the Civil Code, interest due shall earn legal
damages. Under the facts found by the trial court and affirmed by the appellate court
interest from the time it is judicially demanded, although the obligation may be
and under the law and jurisprudence cited and applied, the grant of moral damages in
silent upon this point.” chanroblesvirtualawlibrary(CA Resolution, pp. 153-
the amount of P50,000.00 is proper and justified.
154, Records).
The fact that private respondent suffered physical injuries in the head when the plane
The correct amount of compensatory damages upon which legal interest shall accrue
crash-landed due to the negligence of Capt. Bustamante is undeniable. The negligence
from the filing of the complaint is P204,000.00 as herein computed and not
of the latter is clearly a quasi-delict and therefore Article 2219, cranad(2) New Civil
P198,000.00.
Code is applicable, justifying the recovery of moral damages.
WHEREFORE, in view of all the foregoing, the judgment of the appellate court is
Even from the standpoint of the petitioner that there is an employer-employee
hereby affirmed with slight modification in that the correct amount of compensatory
relationship between it and private respondent arising from the contract of employment,
damages is P204,000.00. With costs against petitioner.
private respondent is still entitled to moral damages in view of the finding of bad faith
or malice by the appellate court, which finding We hereby affirm, applying the SO ORDERED.
provisions of Art. 2220, New Civil Code which provides that willful injury to property
may be a legal ground for awarding moral damages if the court should find that, under
the circumstances, such damages are justly due. The same rule applies to breaches of
contract where the defendant acted fraudulently or in bad faith.
The justification in the award of moral damages under Art. 19 of the New Civil Code on
Human Relations which requires that every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith, as applied by respondent court is also well-taken and
We hereby give Our affirmance thereto.
With respect to the award of attorney’s fees in the sum of P20,000.00 the same is
likewise correct. As pointed out in the decision of the Court of Appeals, “the plaintiff is
entitled to attorney’s fees because he was forced to litigate in order to enforce his valid
claim cranad(Ganaban vs. Bayle, 30 SCRA 365; De la Cruz vs. De la Cruz, 22 SCRA
33; and many others); defendant acted in bad faith in refusing plaintiff’s valid
claim cranad(Filipino Pipe Foundry Corporation vs. Central Bank, 23 SCRA 1044); and
plaintiff was dismissed and was forced to go to court to vindicate his
right cranad(Nadura vs. Benguet Consolidated, Inc., 5 SCRA 879).”
We also agree with the modification made by the appellate court in ordering payment of
legal interest from the date judicial demand was made by Pilot Samson against PAL
G.R. No. 113578 July 14, 1995 At around 2:00 P.M. of October 24, 1988, said vessel capsized, throwing
plaintiff-appellee Tito and Jennifer Anne, along with hundreds of passengers,
SULPICIO LINES, INC., Petitioner, into the tumultuous sea.
vs.
The Honorable COURT OF APPEALS and TITO DURAN TABUQUILDE and Tito tried to keep himself and his daughter afloat but to no avail as the waves
ANGELINA DE PAZ TABUQUILDE, respondents. got stronger and he was subsequently separated from his daughter despite his
efforts.

He found himself on Almagro Island in Samar the next day at round (sic)
QUIASON, J.: 11:00 A.M. and immediately searched for his daughter among the survivors in
the island, but the search proved fruitless.
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
of the decision of the Court of Appeals in CA-G.R. CV In the meantime, Angelina tried to seek the assistance of the Sulpicio Lines in
No. 32864, which affirmed the decision of the Regional Trial Court, Branch 85, Quezon Manila to no avail, the latter refusing to entertain her and hundreds of relatives
City in Civil Case No. Q-89-3048. of the other passengers who waited long hours outside the Manila Office.
Angelina spent sleepless nights worrying about her husband Tito and daughter
I Jennifer Anne in view of the refusal of Sulpicio Lines to release a verification
of the sinking of the ship.
The Court of Appeals found:
On October 26, 1988, Tito and other survivors in the Almagro Island were
fetched and were brought to Tacloban Medical Center for treatment.
On October 23, 1988, plaintiff Tito Duran Tabuquilde (hereinafter, "Tito") and
his three-year old daughter Jennifer Anne boarded the M/V Dona Marilyn at
On October 31, 1988, Tito reported the loss of his daughter, was informed that
North Harbor, Manila, bringing with them several pieces of luggage.
the corpse of a child with his daughter's description had been found.
Subsequently, Tito wrote a letter to his wife, reporting the sad fact that Jennifer
In the morning of October 24, 1988, the M/V Dona Marilyn, while in transit, Anne was dead. Angelina suffered from shock and severe grief upon receipt of
encountered inclement weather which caused huge waves due to Typhoon the news.
Unsang.
On November 3, 1988, the coffin bearing the corpse of Jennifer Anne was
Notwithstanding the fact that Storm Signal No. 2 had been raised by the PAG- buried in Tanauan, Leyte.
ASA authorities over Leyte as early as 5:30 P.M. of October 23, 1988 and
which signal was raised to Signal No. 3 by 10 P.M. of the same day, the ship
On November 24, 1988, a claim for damages was filed by Tito with the
captain ordered the vessel to proceed to Tacloban when prudence dictated that
defendant Sulpicio Lines in connection with the death of the plaintiff-
he should have taken it to the nearest port for shelter, thus violating his duty to
appellee's daughter and the loss of Tito's belongings worth P27,580.00.
exercise extraordinary diligence in the carrying of passengers safely to their
(Appellees' Brief, pp. 2-4) ( Rollo, pp. 52-54).
destination.

At about the same time, plaintiff-appellee Angelina Tabuquilde (hereinafter,
"Angelina") mother of Jennifer Anne, contacted the Sulpicio Office to verify
radio reports that the vessel M/V Dona Marilyn was missing. Employees of
said Sulpicio Lines assured her that the ship was merely "hiding" thereby
assuaging her anxiety.
On January 3, 1991, the trial court rendered a decision in Civil Case No. Q-89-3048 in
favor of the plaintiffs Tito Duran Tabuquilde and Angelina de Paz Tabuquilde (private
respondents herein) and against defendant Sulpicio Lines, Inc. (petitioner herein)
ordering defendant to pay P27,580.00 as actual damages, P30,000.00 for the death of
Jennifer Tabuquilde, P100,000.00 as moral damages, P50,000.00 as exemplary
damages, and P50,000.00 as attorney's fees, and costs.
Petitioner appealed to the Court of Appeals which affirmed the decision of the trial
court. Petitioner then filed a motion for reconsideration which was denied. Hence, this
petition.
II
Generally, the findings of fact of the trial court are entitled to great weight and not
disturbed except for cogent reasons (Gatmaitan v. Court of Appeals, 200 SCRA 37
[1991]). One of the accepted reasons is when the findings of fact are not supported by
the evidence (Sandoval Shipyard, Inc. v. Clave, 94 SCRA 472 [1979]). Corollary to this
is the rule that actual or compensatory damages, to be recovered, must be proved;
otherwise, if the proof is flimsy, no damages will be awarded (Dichoso v. Court of
Appeals, 192 SCRA 169 [1990]).
In the case at bench, the trial court merely mentioned the fact of the loss and the value
of the contents of the pieces of baggage without stating the evidence on which it based
its findings. There is no showing that the value of the contents of the lost pieces of
baggage was based on the bill of lading or was previously declared by respondent Tito
D. Tabuquilde before he boarded the ship. Hence, there can be no basis to award actual
damages in the amount of P27,850.00.
The Court of Appeals was correct in confirming the award of damages for the death of
the daughter of private respondents, a passenger on board the stricken vessel of
petitioner. It is true that under Article 2206 of the Civil Code of the Philippines, only
deaths caused by a crime as quasi delict are entitled to actual and compensatory
damages without the need of proof of the said damages. Said Article provides:
The amount of damages for death caused by a crime or quasi delict shall be at
least Three Thousand Pesos, even though there may have been mitigating
circumstances. . . .
Deducing alone from said provision, one can conclude that damages arising
from culpa contractual are not compensable without proof of special damages sustained
by the heirs of the victim.
However, the Civil Code, in Article 1764 thereof, expressly makes Article 2206
applicable "to the death of a passenger caused by the breach of contract by a common
carrier." Accordingly, a common carrier is liable for actual or compensatory damages
under Article 2206 in relation to Article 1764 of the Civil Code for deaths of its
passengers caused by the breach of the contract of transportation.
The trial court awarded an indemnity of P30,000.00 for the death of the daughter of
private respondents. The award of damages under Article 2206 has been increased to
P50,000.00 (People v. Flores, 237 SCRA 653 [1994]).
With respect to the award of moral damages, the general rule is that said damages are
not recoverable in culpa contractual except when the presence of bad faith was proven
(Trans World Air Lines v. Court of Appeals, 165 SCRA 143 [1988]). However, in
breach of contract of carriage, moral damages may be recovered when it results in the
death of a passenger (Philippine Rabbit Bus Lines, Inc. v. Esguerra, 117 SCRA 741
[1982]; Vasquez v. Court of Appeals, 138 SCRA 553 [1985]).
With respect to the award of exemplary damages, Article 2232 of the Civil Code of the
Philippines gives the Court the discretion to grant said damages in breach of contract
when the defendant acted in a wanton, fraudulent and reckless manner (Air France v.
Carrascoso, 18 SCRA 155 [1966]).
Furthermore, in the case of Mecenas v. Court of Appeals, 180 SCRA 83 (1989), we
ruled that:
. . . . The Court will take judicial notice of the dreadful regularity with which
grievous maritime disasters occur in our waters with massive loss of life. The
bulk of our population is too poor to afford domestic air transportation. So it is
that notwithstanding the frequent sinking of passenger in our waters, crowds of
people continue to travel by sea. This Court is prepared to use the instruments
given to it by the law for securing the ends of law and public policy. One of
those instruments is the institution of exemplary damages; one of those ends,
of special importance in an archipelagic state like the Philippines, is the safe
and reliable carriage of people and goods by sea. . . . (at p. 100).
A common carrier is obliged to transport its passengers to their destinations with the
utmost diligence of a very cautious person (Laguna Tayabas Bus Co. v. Tiongson, 16
SCRA 940 [1966]). The trial court found that petitioner failed to exercise the
extraordinary diligence required of a common carrier, which resulted in the sinking of
the M/V Dona Marilyn.
The trial court correctly concluded that the sinking of M/V Dona Marilyn was due to
gross negligence, thus:
. . . [i]t is undisputed that Typhoon Unsang entered the Philippine Area of
Responsibility on October 21, 1988. The rain in Metro Manila started after
lunch of October 23, 1988, and at about 5:00 p.m. Public Storm Signal No. 1
was hoisted over Metro Manila, Signal No. 2 in Leyte and Signal No. 3 in
Samar. But at 10:00 o'clock (sic) in the morning of October 23, 1988, Public
Storm Signal No. 1 was already hoisted over the province of Leyte, which is
the destination of M/V Dona Marilyn. This was raised to Signal No. 2 at 4:00
p.m. and Signal No. 3 at 10:00 p.m. on the same date. The following day,
October 24, 1988, at 4:00 a.m. and 10:00 a.m., Storm Signal No. 3 remained
hoisted in Leyte. At 4 p.m. on October 24, 1988, Storm Signal No. 3 remained
hoisted in Leyte but was reduced to Storm Signal No. 2 (Exh. G). Signal No. 1
 has maximum winds at 60 kph within 36 hours; Signal No. 2 has maximum SO ORDERED.
winds of from 60 kph to 100 kph within a period of 24 hours; and Signal No. 3
has maximum winds of 100 kph and above within a period of 12 hours.

Warnings of the storm signal are issued by PAG-ASA thru DZZA, Office of
Civil Defense, Philippine Navy, Coast Guard, Radio Stations, and other
offices, every six (6) hours as soon as a cyclone enters the Philippine Area of
Responsibility.

At 10:30 a.m. on October 24, 1988, the vessel was estimated to be between
Mindoro and Masbate, and the center of the typhoon then was around 130
degrees longitude with maximum winds of 65 kph (Exh. G-3), with a "radius
of rough to phenomenal sea at that time of 450 kms. North and 350 kms.
elsewhere; 350 kms. North center and all throughout the rest" (p. 12, TSN,
Lumalda, Feb. 19, 1990).

xxx xxx xxx

In the same manner, (referring to the negligence of the crew of the ship that
sank in Vasquez v. Court of Appeals, 138 SCRA 553 [1985]) the crew of the
vessel M/V Dona Marilyn took a calculated risk when it proceeded despite the
typhoon brewing somewhere in the general direction to which the vessel was
going. The crew assumed a greater risk when, instead of dropping anchor in or
at the periphery of the Port of Calapan, or returning to the port of Manila
which is nearer, proceeded on its voyage on the assumption that it will be able
to beat and race with the typhoon and reach its destination before it (Unsang)
passes ( Rollo, pp. 45-47).

The award of attorney's fees by the trial court to respondents is also assailed by
petitioner, citing Mirasol v. De la Cruz, 84 SCRA 337 (1978). In this case, the
petitioner filed before the Municipal Court an action for forcible entry against the
private respondent. The said court dismissed the complaint. On appeal, the Court of
First Instance of Camarines Sur sustained the decision of the lower court, dismissed the
appeal and awarded attorney's fees in the sum of not less than P500.00 in favor of
private respondent. Upon appeal to us, we deleted the award of attorney's fees because
the text of the appealed decision was bereft of any findings of fact and law to justify
such an award. Moreover, there was no proof, other than the bare allegation of
harassment that the adverse party had acted in bad faith. The aforementioned decision is
inapposite to the instant case where the decision clearly mentions the facts and the law
upon which the award of attorney's fees were based.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the

MODIFICATION that the award of P27,580.00 as actual damages for the loss of the
contents of the pieces of baggage is deleted and that the award of P30,000.00 under
Article 2206 in relation Article 1764 is increased to P50,000.00.
[G.R. No. 118664. August 7, 1998]
JAPAN AIRLINES, petitioner, vs. THE COURT OF APPEALS ENRIQUE
AGANA, MARIA ANGELA NINA AGANA, ADALIA B. FRANCISCO
and JOSE MIRANDA, respondents.
DECISION
ROMERO, J.:
Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL)
seeking the reversal of the decision of the Court of Appeals,[1] which affirmed with
modification the award of damages made by the trial court in favor of herein private
respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco and Jose
Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001
in San Francisco, California bound for Manila. Likewise, on the same day private
respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco left Los
Angeles, California for Manila via JAL flight No. JL 061. As an incentive for travelling
on the said airline, both flights were to make an overnight stopover at Narita, Japan, at
the airlines expense, thereafter proceeding to Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted
at Hotel Nikko Narita for the night. The next day, private respondents, on the final leg
of their journey, went to the airport to take their flight to Manila.However, due to the
Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino International
Airport (NAIA), rendering it inaccessible to airline traffic.Hence, private respondents
trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked all the
Manila-bound passengers on flight No. 741 due to depart on June 16, 1991 and also
paid for the hotel expenses for their unexpected overnight stay. On June 16, 1991, much
to the dismay of the private respondents, their long anticipated flight to Manila was
again cancelled due to NAIAs indefinite closure. At this point, JAL informed the
private respondents that it would no longer defray their hotel and accommodation
expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private
respondents were forced to pay for their accommodations and meal expenses from their
personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita ended on
June 22, 1991 when they arrived in Manila on board JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on July 25, 1991,
commenced an action for damages against JAL before the Regional Trial Court of
Quezon City, Branch 104.[2] To support their claim, private respondents asserted that
JAL failed to live up to its duty to provide care and comfort to its stranded passengers
when it refused to pay for their hotel and accommodation expenses from June 16 to 21,
1991 at Narita, Japan. In other words, they insisted that JAL was obligated to shoulder
their expenses as long as they were still stranded in Narita. On the other hand, JAL
denied this allegation and averred that airline passengers have no vested right to these
amenities in case a flight is cancelled due to force majeure.
On June 18, 1992, the trial court rendered its judgment in favor of private
respondents holding JAL liable for damages, viz.:
WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan
Airlines to pay the plaintiffs Enrique Agana, Adalia B. Francisco and Maria Angela
Nina Agana the sum of One million Two Hundred forty-six Thousand Nine Hundred
Thirty-Six Pesos (P1,246,936.00) and Jose Miranda the sum of Three Hundred Twenty
Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual, moral and
exemplary damages and pay attorneys fees in the amount of Two Hundred Thousand
Pesos (P200,000.00), and to pay the costs of suit.
Undaunted, JAL appealed the decision before the Court of Appeals, which,
however, with the exception of lowering the damages awarded affirmed the trial courts
finding,[3] thus:
Thus, the award of moral damages should be as it is hereby reduced to P200,000.00 for
each of the plaintiffs, the exemplary damages to P300,000.00 and the attorneys fees
to P100,000.00 plus the costs.
WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby
AFFIRMED in all other respects.
JAL filed a motion for reconsideration which proved futile and unavailing. [4]
Failing in its bid to reconsider the decision, JAL has now filed this instant petition.
The issue to be resolved is whether JAL, as a common carrier has the obligation to
shoulder the hotel and meal expenses of its stranded passengers until they have reached
their final destination, even if the delay were caused by force majeure.
To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL
from proceeding to Manila on schedule. Likewise, private respondents concede that
such event can be considered as force majeure since their delayed arrival in Manila was
not imputable to JAL.[5]
However, private respondents contend that while JAL cannot be held responsible
for the delayed arrival in Manila, it was nevertheless liable for their living expenses
during their unexpected stay in Narita since airlines have the obligation to ensure the
comfort and convenience of its passengers. While we sympathize with the private
respondents plight, we are unable to accept this contention.
 We are not unmindful of the fact that in a plethora of cases we have consistently
ruled that a contract to transport passengers is quite different in kind and degree from
any other contractual relation. It is safe to conclude that it is arelationship imbued with
public interest. Failure on the part of the common carrier to live up to the exacting
standards of care and diligence renders it liable for any damages that may be sustained
by its passengers. However, this is not to say that common carriers are absolutely
responsible for all injuries or damages even if the same were caused by a fortuitous
event. To rule otherwise would render the defense of force majeure, as an exception
from any liability, illusory and ineffective.
Accordingly, there is no question that when a party is unable to fulfill his
obligation because of force majeure, the general rule is that he cannot be held liable for
damages for non-performance.[6] Corollarily, when JAL was prevented from resuming
its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever losses or
damages in the form of hotel and meal expenses the stranded passengers incurred,
cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of
respondents for their unexpected overnight stay on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land was an exasperating
experience for the private respondents. To be sure, they underwent distress and anxiety
during their unanticipated stay in Narita, but their predicament was not due to the fault
or negligence of JAL but the closure of NAIA to international flights. Indeed, to hold
JAL, in the absence of bad faith or negligence, liable for the amenities of its stranded
passengers by reason of a fortuitous event is too much of a burden to assume.
Furthermore, it has been held that airline passengers must take such risks incident
to the mode of travel.[7] In this regard, adverse weather conditions or extreme climatic
changes are some of the perils involved in air travel, the consequences of which the
passenger must assume or expect. After all, common carriers are not the insurer of all
risks.[8]
Paradoxically, the Court of Appeals, despite the presence of force majeure, still
ruled against JAL relying in our decision in PAL v. Court of Appeals,[9] thus:
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting
standard required by law. Undisputably, PALs diversion of its flight due to inclement
weather was a fortuitous event. Nonetheless, such occurrence did not terminate PALs
contract with its passengers. Being in the business of air carriage and the sole one to
operate in the country, PAL is deemed equipped to deal with situations as in the case at
bar. What we said in one case once again must be stressed, i.e., the relation of carrier
and passenger continues until the latter has been landed at the port of destination and
has left the carriers premises. Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and safety of its
stranded passengers until they have reached their final destination. On this score, PAL
grossly failed considering the then ongoing battle between government forces and
Muslim rebels in Cotabato City and the fact that the private respondent was a stranger
to the place.
The reliance is misplaced. The factual background of the PAL case is different
from the instant petition. In that case there was indeed a fortuitous event resulting in the
diversion of the PAL flight. However, the unforeseen diversion was worsened when
private respondents (passenger) was left at the airport and could not even hitch a ride in
a Ford Fiera loaded with PAL personnel,[10] not to mention the apparent apathy of the
PAL station manager as to the predicament of the stranded passengers. [11] In light of
these circumstances, we held that if the fortuitous event was accompanied by neglect
and malfeasance by the carriers employees, an action for damages against the carrier is
permissible.Unfortunately, for private respondents, none of these conditions are present
in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL from any
liability. It must be noted that private respondents bought tickets from the United States
with Manila as their final destination. While JAL was no longer required to defray
private respondents living expenses during their stay in Narita on account of the
fortuitous event, JAL had the duty to make the necessary arrangements to transport
private respondents on the first available connecting flight to Manila. Petitioner JAL
reneged on its obligation to look after the comfort and convenience of its passengers
when it declassified private respondents from transit passengers to new passengers as a
result of which private respondents were obliged to make the necessary arrangements
themselves for the next flight to Manila. Private respondents were placed on the
waiting list from June 20 to June 24. To assure themselves of a seat on an
available flight, they were compelled to stay in the airport the whole day of June 22,
1991 and it was only at 8:00 p.m. of the aforesaid date that they were advised that they
could be accommodated in said flight which flew at about 9:00 a.m. the next day.
We are not oblivious to the fact that the cancellation of JAL flights to Manila from
June 15 to June 21, 1991 caused considerable disruption in passenger booking and
reservation. In fact, it would be unreasonable to expect, considering NAIAs closure, that
JAL flight operations would be normal on the days affected. Nevertheless, this does not
excuse JAL from its obligation to make the necessary arrangements to transport private
respondents on its first available flight to Manila. After all, it had a contract to transport
private respondents from the United States to Manila as their final destination.
Consequently, the award of nominal damages is in order. Nominal damages are
adjudicated in order that a right of a plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized and not for the purpose of indemnifying
any loss suffered by him.[12] The court may award nominal damages in every obligation
arising from any source enumerated in Article 1157, or in every case where any
property right has been invaded.[13]
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals
dated December 22, 1993 is hereby MODIFIED. The award of actual, moral and
exemplary damages is hereby DELETED. Petitioner JAL is ordered to pay each of the
private respondents nominal damages in the sum of P100,000.00 each including
attorneys fees of P50,000.00 plus costs.
SO ORDERED.
G.R. No. L-29462 March 7, 1929
IGNACIO DEL PRADO, plaintiff-appellee,
vs.
MANILA ELECTRIC CO., defendant-appellant.
Ross, Lawrence and Selph and Antonio T. Carrascoso, jr., for appellant.
Vicente Sotto for appellee.
STREET, J.:
This action was instituted in the Court of First Instance of Manila by Ignacio del Prado
to recover damages in the amount of P50,000 for personal injuries alleged to have been
caused by the negligence of te defendant, the Manila Electric Company, in the operation
of one of its street cars in the City of Manila. Upon hearing the cause the trial court
awarded to the plaintiff the sum of P10,000, as damages, with costs of suit, and the
defendant appealed.
The appellant, the Manila Electric Company, is engaged in operating street cars in the
City for the conveyance of passengers; and on the morning of November 18, 1925, one
Teodorico Florenciano, as appellant's motorman, was in charge of car No. 74 running
from east to west on R. Hidalgo Street, the scene of the accident being at a point near
the intersection of said street and Mendoza Street. After the car had stopped at its
appointed place for taking on and letting off passengers, just east of the intersection, it
resumed its course at a moderate speed under the guidance of the motorman. The car
had proceeded only a short distance, however, when the plaintiff, Ignacio del Prado, ran
across the street to catch the car, his approach being made from the left. The car was of
the kind having entrance and exist at either end, and the movement of the plaintiff was
so timed that he arrived at the front entrance of the car at the moment when the car was
passing.
The testimony of the plaintiff and of Ciriaco Guevara, one of his witnesses, tends to
shows that the plaintiff, upon approaching the car, raised his hand as an indication to the
motorman of his desire to board the car, in response to which the motorman eased up a
little, without stopping. Upon this the plaintiff seized, with his hand, the front
perpendicular handspot, at the same time placing his left foot upon the platform.
However, before the plaintiff's position had become secure, and even before his raised
right foot had reached the flatform, the motorman applied the power, with the result that
the car gave a slight lurch forward. This sudden impulse to the car caused the plaintiff's
foot to slip, and his hand was jerked loose from the handpost, He therefore fell to the
ground, and his right foot was caught and crushed by the moving car. The next day the
member had to be amputated in the hospital. The witness, Ciriaco Guevara, also stated
that, as the plaintiff started to board the car, he grasped the handpost on either side with
both right and left hand. The latter statement may possibly be incorrect as regards the
use of his right hand by the plaintiff, but we are of the opinion that the finding of the
trial court to the effect that the motorman slowed up slightly as the plaintiff was
boarding the car that the plaintiff's fall was due in part at lease to a sudden forward
movement at the moment when the plaintiff put his foot on the platform is supported by
the evidence and ought not to be disturbed by us.
The motorman stated at the trial that he did not see the plaintiff attempting to board the
car; that he did not accelerate the speed of the car as claimed by the plaintiff's
witnesses; and that he in fact knew nothing of the incident until after the plaintiff had
been hurt and some one called to him to stop. We are not convinced of the complete
candor of this statement, for we are unable to see how a motorman operating this car
could have failed to see a person boarding the car under the circumstances revealed in
this case. It must be remembered that the front handpost which, as all witness agree,
was grasped by the plaintiff in attempting to board the car, was immediately on the left
side of the motorman.
With respect to the legal aspects of the case we may observe at the outset that there is
no obligation on the part of a street railway company to stop its cars to let on intending
passengers at other points than those appointed for stoppage. In fact it would be
impossible to operate a system of street cars if a company engage in this business were
required to stop any and everywhere to take on people who were too indolent, or who
imagine themselves to be in too great a hurry, to go to the proper places for boarding the
cars. Nevertheless, although the motorman of this car was not bound to stop to let the
plaintiff on, it was his duty to do act that would have the effect of increasing the
plaintiff's peril while he was attempting to board the car. The premature acceleration of
the car was, in our opinion, a breach of this duty.
The relation between a carrier of passengers for hire and its patrons is of a contractual
nature; and in failure on the part of the carrier to use due care in carrying its passengers
safely is a breach of duty (culpa contructual) under articles 1101, 1103 and 1104 of the
Civil Code. Furthermore, the duty that the carrier of passengers owes to its patrons
extends to persons boarding the cars as well as to those alighting therefrom. The case of
Cangco vs. Manila Railroad Co. (38 Phil., 768), supplies an instance of the violation of
this duty with respect to a passenger who was getting off of a train. In that case the
plaintiff stepped off of a moving train, while it was slowing down in a station, and at the
time when it was too dark for him to see clearly where he was putting his feet. The
employees of the company had carelessly left watermelons on the platform at the place
where the plaintiff alighted, with the result that his feet slipped and he fell under the car,
where his right arm badly injured. This court held that the railroad company was liable
for breach positive duty (culpa contractual), and the plaintiff was awarded damages in
the amount of P2,500 for the loss of his arm. In the opinion in that case the distinction is
clearly drawn between a liability for negligence arising from breach of contructual duty
and that arising articles 1902 and 1903 of the Civil Code (culpa aquiliana).
The distiction between these two sorts of negligence is important in this jurisdiction, for
the reason that where liability arises from a mere tort (culpa aquiliana), not involving a
breach of positive obligation, an employer, or master, may exculpate himself, under the
last paragraph of article 1903 of the Civil Code, by providing that he had exercised due
degligence to prevent the damage; whereas this defense is not available if the liability of
the master arises from a breach of contrauctual duty (culpa contractual). In the case
bfore us the company pleaded as a special defense that it had used all the deligence of a
good father of a family to prevent the damage suffered by the plaintiff; and to establish
this contention the company introduced testimony showing that due care had been used
in training and instructing the motorman in charge of this car in his art. But this proof is
irrelevant in view of the fact that the liability involved was derived from a breach of
obligation under article 1101 of the Civil Code and related provisions. (Manila Railroad
Co. vs. Compana Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875, 887; De
Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706, 710.)
damages that ought to be awarded for the loss of limb, and more particularly Rakes vs.
Atlantic, Gulf and Pacific Co. (7 Phil., 359); Cangco vs. Manila Railroad Co. (38 Phil.,
768); and Borromeo vs. Manila Electric Railroad and Light Co. (44 Phil., 165), and in
view of all the circumstances connected with the case, we are of the opinion that the
plaintiff will be adequately compensated by an award of P2,500.
It being understood, therefore, that the appealed judgment is modified by reducing the
recovery to the sum of P2,500, the judgment, as thus modified, is affirmed. So ordered,
with costs against the appellant.
Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.

Another practical difference between liability for negligence arising under 1902 of the
Civil Code and liability arising from negligence in the performance of a positive duty,
under article 1101 and related provisions of the Civil Code, is that, in dealing with the
latter form of negligence, the court is given a discretion to mitigate liability according to
the circumstances of the case (art 1103). No such general discretion is given by the
Code in dealing with liability arising under article 1902; although possibly the same end
is reached by courts in dealing with the latter form of liability because of the latitude of
the considerations pertinent to cases arising under this article.

As to the contributory negligence of the plaintiff, we are of the opinion that it should be
treated, as in Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359), as a mitigating
circumstance under article 1103 of the Civil Code. It is obvious that the plaintiff's
negligence in attempting to board the moving car was not the proximate cause of the
injury. The direct and proximate cause of the injury was the act of appellant's motorman
in putting on the power prematurely. A person boarding a moving car must be taken to
assume the risk of injury from boarding the car under the conditions open to his view,
but he cannot fairly be held to assume the risk that the motorman, having the situation
in view, will increase his peril by accelerating the speed of the car before he is planted
safely on the platform. Again, the situation before us is one where the negligent act of
the company's servant succeeded the negligent act of the plaintiff, and the negligence of
the company must be considered the proximate cause of the injury. The rule here
applicable seems to be analogous to, if not identical with that which is sometimes
referred to as the doctrine of "the last clear chance." In accordance with this doctrine,
the contributory negligence of the party injured will not defeat the action if it be shown
that the defendant might, by the exercise of reasonable care and prudence, have avoided
the consequences of the negligence of the injured party (20 R. C. L., p. 139; Carr vs.
Interurban Ry. Co., 185 Iowa, 872; 171 N. W., 167). The negligence of the plaintiff
was, however, contributory to the accident and must be considered as a mitigating
circumstance.

With respect to the effect of this injury upon the plaintiff's earning power, we note that,
although he lost his foot, he is able to use an artificial member without great
inconvenience and his earning capacity has probably not been reduced by more than 30
per centum. In view of the precedents found in our decisions with respect to the
G.R. No. L-20761 July 27, 1966
LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET
AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents.
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No.
23267-R, holding it liable for quasi-delict and ordering it to pay to respondents Mariano
Beltran, et al., P6,000.00 for the death of his minor daughter Raquel Beltran, plus
P400.00 as actual damages.
The facts of the case as found by the Court of Appeals, briefly are:
On December 20, 1953, at about noontime, plaintiffs, husband and wife,
together with their minor daughters, namely, Milagros, 13 years old, Raquel,
about 4½ years old, and Fe, over 2 years old, boarded the Pambusco Bus No.
352, bearing plate TPU No. 757 (1953 Pampanga), owned and operated by the
defendant, at San Fernando, Pampanga, bound for Anao, Mexico, Pampanga.
At the time, they were carrying with them four pieces of baggages containing
their personal belonging. The conductor of the bus, who happened to be a half-
brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A, B, & C)
covering the full fares of the plaintiff and their eldest child, Milagros. No fare
was charged on Raquel and Fe, since both were below the height at which fare
is charged in accordance with the appellant's rules and regulations.
After about an hour's trip, the bus reached Anao whereat it stopped to allow the
passengers bound therefor, among whom were the plaintiffs and their children
to get off. With respect to the group of the plaintiffs, Mariano Beltran, then
carrying some of their baggages, was the first to get down the bus, followed by
his wife and his children. Mariano led his companions to a shaded spot on the
left pedestrians side of the road about four or five meters away from the
vehicle. Afterwards, he returned to the bus in controversy to get his
other bayong, which he had left behind, but in so doing, his daughter Raquel
followed him, unnoticed by her father. While said Mariano Beltran was on the
running board of the bus waiting for the conductor to hand him
his bayong which he left under one of its seats near the door, the bus, whose
motor was not shut off while unloading, suddenly started moving forward,
evidently to resume its trip, notwithstanding the fact that the conductor has not
given the driver the customary signal to start, since said conductor was still
attending to the baggage left behind by Mariano Beltran. Incidentally, when
the bus was again placed into a complete stop, it had travelled about ten meters
from the point where the plaintiffs had gotten off.
Sensing that the bus was again in motion, Mariano Beltran immediately
jumped from the running board without getting his bayong from the conductor.
He landed on the side of the road almost in front of the shaded place where he
left his wife and children. At that precise time, he saw people beginning to
gather around the body of a child lying prostrate on the ground, her skull
crushed, and without life. The child was none other than his daughter Raquel,
who was run over by the bus in which she rode earlier together with her
parents.
For the death of their said child, the plaintiffs commenced the present suit
against the defendant seeking to recover from the latter an aggregate amount of
P16,000 to cover moral damages and actual damages sustained as a result
thereof and attorney's fees. After trial on the merits, the court below rendered
the judgment in question.
On the basis of these facts, the trial court found defendant liable for breach of contract
of carriage and sentenced it to pay P3,000.00 for the death of the child and P400.00 as
compensatory damages representing burial expenses and costs.
On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach
of contract in the case, for the reason that when the child met her death, she was no
longer a passenger of the bus involved in the incident and, therefore, the contract of
carriage had already terminated. Although the Court of Appeals sustained this theory, it
nevertheless found the defendant-appellant guilty of quasi-delict and held the latter
liable for damages, for the negligence of its driver, in accordance with Article 2180 of
the Civil Code. And, the Court of Appeals did not only find the petitioner liable, but
increased the damages awarded the plaintiffs-appellees to P6,000.00, instead of
P3,000.00 granted by the trial court.
In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in
holding it liable for quasi-delict, considering that respondents complaint was one for
breach of contract, and (2) in raising the award of damages from P3,000.00 to
P6,000.00 although respondents did not appeal from the decision of the lower court.
Under the facts as found by the Court of Appeals, we have to sustain the judgement
holding petitioner liable for damages for the death of the child, Raquel Beltran. It may
be pointed out that although it is true that respondent Mariano Beltran, his wife, and
their children (including the deceased child) had alighted from the bus at a place
designated for disembarking or unloading of passengers, it was also established that the
father had to return to the vehicle (which was still at a stop) to get one of his bags
or bayong that was left under one of the seats of the bus. There can be no controversy
that as far as the father is concerned, when he returned to the bus for his bayongwhich
was not unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. For, the relation of carrier and passenger does not necessarily
cease where the latter, after alighting from the car, aids the carrier's servant or employee
in removing his baggage from the car.1 The issue to be determined here is whether as to
the child, who was already led by the father to a place about 5 meters away from the
bus, the liability of the carrier for her safety under the contract of carriage also
persisted.
It has been recognized as a rule that the relation of carrier and passenger does not cease
at the moment the passenger alights from the carrier's vehicle at a place selected by the
carrier at the point of destination, but continues until the passenger has had a reasonable
time or a reasonable opportunity to leave the carrier's premises. And, what is a
reasonable time or a reasonable delay within this rule is to be determined from all the
circumstances. Thus, a person who, after alighting from a train, walks along the station
platform is considered still a passenger.2 So also, where a passenger has alighted at his
destination and is proceeding by the usual way to leave the company's premises, but
before actually doing so is halted by the report that his brother, a fellow passenger, has
been shot, and he in good faith and without intent of engaging in the difficulty, returns
to relieve his brother, he is deemed reasonably and necessarily delayed and thus
continues to be a passenger entitled as such to the protection of the railroad and
company and its agents.3
In the present case, the father returned to the bus to get one of his baggages which was
not unloaded when they alighted from the bus. Raquel, the child that she was, must have
followed the father. However, although the father was still on the running board of the
bus awaiting for the conductor to hand him the bag or bayong, the bus started to run, so
that even he (the father) had to jump down from the moving vehicle. It was at this
instance that the child, who must be near the bus, was run over and killed. In the
circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost
diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be
observed by a common carrier in the discharge of its obligation to transport safely its
passengers. In the first place, the driver, although stopping the bus, nevertheless did not
put off the engine. Secondly, he started to run the bus even before the bus conductor
gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the
bus was not unreasonable and they are, therefore, to be considered still as passengers of
the carrier, entitled to the protection under their contract of carriage.
But even assuming arguendo that the contract of carriage has already terminated, herein
petitioner can be held liable for the negligence of its driver, as ruled by the Court of
Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint,
which reads —
That aside from the aforesaid breach of contract, the death of Raquel Beltran,
plaintiffs' daughter, was caused by the negligence and want of exercise of the
utmost diligence of a very cautious person on the part of the defendants and
their agent, necessary to transport plaintiffs and their daughter safely as far as
human care and foresight can provide in the operation of their vehicle.
is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict,
while incompatible with the other claim under the contract of carriage, is permissible
under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege
causes of action in the alternative, be they compatible with each other or not, to the end
that the real matter in controversy may be resolved and determined.4
The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was
predicated when it was alleged in the complaint that "the death of Raquel Beltran,
plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost
diligence of a very cautious person on the part of the defendants and their agent." This
allegation was also proved when it was established during the trial that the driver, even
before receiving the proper signal from the conductor, and while there were still persons
on the running board of the bus and near it, started to run off the vehicle. The
presentation of proof of the negligence of its employee gave rise to the presumption that
the defendant employer did not exercise the diligence of a good father of the family in
the selection and supervision of its employees. And this presumption, as the Court of
Appeals found, petitioner had failed to overcome. Consequently, petitioner must be
adjudged peculiarily liable for the death of the child Raquel Beltran.
The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of
Appeals, however, cannot be sustained. Generally, the appellate court can only pass
upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs
did not appeal from that portion of the judgment of the trial court awarding them on
P3,000.00 damages for the death of their daughter. Neither does it appear that, as
appellees in the Court of Appeals, plaintiffs have pointed out in their brief the
inadequacy of the award, or that the inclusion of the figure P3,000.00 was merely a
clerical error, in order that the matter may be treated as an exception to the general
rule.5Herein petitioner's contention, therefore, that the Court of Appeals committed
error in raising the amount of the award for damages is, evidently,
meritorious.1äwphï1.ñët
Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the
petitioner to pay to the respondents Mariano Beltran, et al., the sum of P3,000.00 for the
death of the child, Raquel Beltran, and the amount of P400.00 as actual damages. No
costs in this instance. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and
Castro, JJ., concur.
Makalintal, J., concurs in the result.
G.R. No. L-10126 October 22, 1957
SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA,
LUZVIMINDA, ELENITA, OSCAR and ALFREDO BATACLAN, represented by
their Natural guardian, SALUD VILLANUEVA VDA. DE BATACLAN, plaintiffs-
appellants,
vs.
MARIANO MEDINA, defendant-appellant.
Lope E. Adriano, Emmanuel Andamo and Jose R. Francisco for plaintiffs-appellants.
Fortunato Jose for defendant and appellant.
MONTEMAYOR, J.:
Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation,
operated by its owner defendant Mariano Medina under a certificate of public
convenience, left the town of Amadeo, Cavite, on its way to Pasay City, driven by its
regular chauffeur, Conrado Saylon. There were about eighteen passengers, including the
driver and conductor. Among the passengers were Juan Bataclan, seated beside and to
the right of the driver, Felipe Lara, sated to the right of Bataclan, another passenger
apparently from the Visayan Islands whom the witnesses just called Visaya, apparently
not knowing his name, seated in the left side of the driver, and a woman named Natalia
Villanueva, seated just behind the four last mentioned. At about 2:00 o'clock that same
morning, while the bus was running within the jurisdiction of Imus, Cavite, one of the
front tires burst and the vehicle began to zig-zag until it fell into a canal or ditch on the
right side of the road and turned turtle. Some of the passengers managed to leave the
bus the best way they could, others had to be helped or pulled out, while the three
passengers seated beside the driver, named Bataclan, Lara and the Visayan and the
woman behind them named Natalia Villanueva, could not get out of the overturned bus.
Some of the passengers, after they had clambered up to the road, heard groans and
moans from inside the bus, particularly, shouts for help from Bataclan and Lara, who
said they could not get out of the bus. There is nothing in the evidence to show whether
or not the passengers already free from the wreck, including the driver and the
conductor, made any attempt to pull out or extricate and rescue the four passengers
trapped inside the vehicle, but calls or shouts for help were made to the houses in the
neighborhood. After half an hour, came about ten men, one of them carrying a lighted
torch made of bamboo with a wick on one end, evidently fueled with petroleum. These
men presumably approach the overturned bus, and almost immediately, a fierce fire
started, burning and all but consuming the bus, including the four passengers trapped
inside it. It would appear that as the bus overturned, gasoline began to leak and escape
from the gasoline tank on the side of the chassis, spreading over and permeating the
body of the bus and the ground under and around it, and that the lighted torch brought
by one of the men who answered the call for help set it on fire.
That same day, the charred bodies of the four deemed passengers inside the bus were
removed and duly identified that of Juan Bataclan. By reason of his death, his widow,
Salud Villanueva, in her name and in behalf of her five minor children, brought the
present suit to recover from Mariano Medina compensatory, moral, and exemplary
damages and attorney's fees in the total amount of P87,150. After trial, the Court of
First Instance of Cavite awarded P1,000 to the plaintiffs plus P600 as attorney's fee,
plus P100, the value of the merchandise being carried by Bataclan to Pasay City for sale
and which was lost in the fire. The plaintiffs and the defendants appealed the decision to
the Court of Appeals, but the latter endorsed the appeal to us because of the value
involved in the claim in the complaint.
Our new Civil Code amply provides for the responsibility of common carrier to its
passengers and their goods. For purposes of reference, we are reproducing the pertinent
codal provisions:
ART. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extra
ordinary diligence for the safety of the passengers is further set forth in articles
1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed in articles 1733 and
1755
ART. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the former's employees,
although such employees may have acted beyond the scope of their authority
or in violation of the order of the common carriers.
This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employees.
ART. 1763. A common carrier responsible for injuries suffered by a passenger
on account of the willful 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.
We agree with the trial court that the case involves a breach of contract of transportation
for hire, the Medina Transportation having undertaken to carry Bataclan safely to his
destination, Pasay City. We also agree with the trial court that there was negligence on
the part of the defendant, through his agent, the driver Saylon. There is evidence to
show that at the time of the blow out, the bus was speeding, as testified to by one of the
passengers, and as shown by the fact that according to the testimony of the witnesses,
including that of the defense, from the point where one of the front tires burst up to the
canal where the bus overturned after zig-zaging, there was a distance of about 150
meters. The chauffeur, after the blow-out, must have applied the brakes in order to stop
the bus, but because of the velocity at which the bus must have been running, its
momentum carried it over a distance of 150 meters before it fell into the canal and
turned turtle.
There is no question that under the circumstances, the defendant carrier is liable. The
only question is to what degree. The trial court was of the opinion that the proximate
cause of the death of Bataclan was not the overturning of the bus, but rather, the fire
that burned the bus, including himself and his co-passengers who were unable to leave
it; that at the time the fire started, Bataclan, though he must have suffered physical
injuries, perhaps serious, was still alive, and so damages were awarded, not for his
death, but for the physical injuries suffered by him. We disagree. A satisfactory
definition of proximate cause is found in Volume 38, pages 695-696 of American
jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:
. . . 'that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result
would not have occurred.' And more comprehensively, 'the proximate legal
cause is that acting first and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and continuous chain
of events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury as a
natural and probable result of the cause which first acted, under such
circumstances that the person responsible for the first event should, as an
ordinary prudent and intelligent person, have reasonable ground to expect at
the moment of his act or default that an injury to some person might probably
result therefrom.
It may be that ordinarily, when a passenger bus overturns, and pins down a passenger,
merely causing him physical injuries, if through some event, unexpected and
extraordinary, the overturned bus is set on fire, say, by lightning, or if some
highwaymen after looting the vehicle sets it on fire, and the passenger is burned to
death, one might still contend that the proximate cause of his death was the fire and not
the overturning of the vehicle. But in the present case under the circumstances obtaining
in the same, we do not hesitate to hold that the proximate cause was the overturning of
the bus, this for the reason that when the vehicle turned not only on its side but
completely on its back, the leaking of the gasoline from the tank was not unnatural or
unexpected; that the coming of the men with a lighted torch was in response to the call
for help, made not only by the passengers, but most probably, by the driver and the
conductor themselves, and that because it was dark (about 2:30 in the morning), the
rescuers had to carry a light with them, and coming as they did from a rural area where
lanterns and flashlights were not available; and what was more natural than that said
rescuers should innocently approach the vehicle to extend the aid and effect the rescue
requested from them. In other words, the coming of the men with a torch was to be
expected and was a natural sequence of the overturning of the bus, the trapping of some
of its passengers and the call for outside help. What is more, the burning of the bus can
also in part be attributed to the negligence of the carrier, through is driver and its
conductor. According to the witness, the driver and the conductor were on the road
walking back and forth. They, or at least, the driver should and must have known that in
the position in which the overturned bus was, gasoline could and must have leaked from
the gasoline tank and soaked the area in and around the bus, this aside from the fact that
gasoline when spilled, specially over a large area, can be smelt and directed even from a
distance, and yet neither the driver nor the conductor would appear to have cautioned or
taken steps to warn the rescuers not to bring the lighted torch too near the bus. Said
negligence on the part of the agents of the carrier come under the codal provisions
above-reproduced, particularly, Articles 1733, 1759 and 1763.
As regard the damages to which plaintiffs are entitled, considering the earning capacity
of the deceased, as well as the other elements entering into a damage award, we are
satisfied that the amount of SIX THOUSAND (P6,000) PESOS would constitute
satisfactory compensation, this to include compensatory, moral, and other damages. We
also believe that plaintiffs are entitled to attorney's fees, and assessing the legal services
rendered by plaintiffs' attorneys not only in the trial court, but also in the course of the
appeal, and not losing sight of the able briefs prepared by them, the attorney's fees may
well be fixed at EIGHT HUNDRED (P800) PESOS for the loss of merchandise carried
by the deceased in the bus, is adequate and will not be disturbed.
There is one phase of this case which disturbs if it does not shock us. According to the
evidence, one of the passengers who, because of the injuries suffered by her, was
hospitalized, and while in the hospital, she was visited by the defendant Mariano
Medina, and in the course of his visit, she overheard him speaking to one of his bus
inspectors, telling said inspector to have the tires of the bus changed immediately
because they were already old, and that as a matter of fact, he had been telling the driver
to change the said tires, but that the driver did not follow his instructions. If this be true,
it goes to prove that the driver had not been diligent and had not taken the necessary
precautions to insure the safety of his passengers. Had he changed the tires, specially
those in front, with new ones, as he had been instructed to do, probably, despite his
speeding, as we have already stated, the blow out would not have occurred. All in all,
there is reason to believe that the driver operated and drove his vehicle negligently,
resulting in the death of four of his passengers, physical injuries to others, and the
complete loss and destruction of their goods, and yet the criminal case against him, on
motion of the fiscal and with his consent, was provisionally dismissed, because
according to the fiscal, the witnesses on whose testimony he was banking to support the
complaint, either failed or appear or were reluctant to testify. But the record of the case
before us shows the several witnesses, passengers, in that bus, willingly and
unhesitatingly testified in court to the effect of the said driver was negligent. In the
public interest the prosecution of said erring driver should be pursued, this, not only as a
matter of justice, but for the promotion of the safety of passengers on public utility
buses. Let a copy of this decision be furnished the Department of Justice and the
Provincial Fiscal of Cavite.

In view of the foregoing, with the modification that the damages awarded by the trial
court are increased from ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND
(P6,000) PESOS, and from SIX HUNDRED PESOS TO EIGHT HUNDRED (P800)
PESOS, for the death of Bataclan and for the attorney's fees, respectively, the decision
appealed is from hereby affirmed, with costs.
G.R. No. 84458 November 6, 1989
ABOITIZ SHIPPING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA,
SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER
STEVEDORING CORPORATION, respondents.
Herenio E. Martinez for petitioner.
M.R. Villaluz Law Office for private respondent.
REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of
the decision 1 of respondent Court of Appeals, dated July 29, 1988, the decretal portion
of which reads:
WHEREFORE, the judgment appealed from as modified by the order of
October 27, 1982, is hereby affirmed with the modification that appellant
Aboitiz Shipping is hereby ordered to pay plaintiff-appellees the amount of
P30,000.00 for the death of Anacleto Viana; actual damages of P9,800.00;
P150,000.00 for unearned income; P7,200.00 as support for deceased's parents;
P20,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the
costs.
The undisputed facts of the case, as found by the court a quo and adopted by respondent
court, are as follows: .
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the
vessel M/V Antonia, owned by defendant, at the port at San Jose, Occidental
Mindoro, bound for Manila, having purchased a ticket (No. 117392) in the sum
of P23.10 (Exh. 'B'). On May 12, 1975, said vessel arrived at Pier 4, North
Harbor, Manila, and the passengers therein disembarked, a gangplank having
been provided connecting the side of the vessel to the pier. Instead of using
said gangplank Anacleto Viana disembarked on the third deck which was on
the level with the pier. After said vessel had landed, the Pioneer Stevedoring
Corporation took over the exclusive control of the cargoes loaded on said
vessel pursuant to the Memorandum of Agreement dated July 26, 1975 (Exh.
'2') between the third party defendant Pioneer Stevedoring Corporation and
defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its crane
operator Alejo Figueroa was placed alongside the vessel and one (1) hour after
the passengers of said vessel had disembarked, it started operation by
unloading the cargoes from said vessel. While the crane was being operated,
Anacleto Viana who had already disembarked from said vessel obviously
remembering that some of his cargoes were still loaded in the vessel, went
back to the vessel, and it was while he was pointing to the crew of the said
vessel to the place where his cargoes were loaded that the crane hit him,
pinning him between the side of the vessel and the crane. He was thereafter
brought to the hospital where he later expired three (3) days thereafter, on May
15, 1975, the cause of his death according to the Death Certificate (Exh. "C")
being "hypostatic pneumonia secondary to traumatic fracture of the pubic bone
lacerating the urinary bladder" (See also Exh. "B"). For his hospitalization,
medical, burial and other miscellaneous expenses, Anacleto's wife, herein
plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to "E-5"). Anacleto
Viana who was only forty (40) years old when he met said fateful accident
(Exh. 'E') was in good health. His average annual income as a farmer or a farm
supervisor was 400 cavans of palay annually. His parents, herein plaintiffs
Antonio and Gorgonia Viana, prior to his death had been recipient of twenty
(20) cavans of palay as support or P120.00 monthly. Because of Anacleto's
death, plaintiffs suffered mental anguish and extreme worry or moral damages.
For the filing of the instant case, they had to hire a lawyer for an agreed fee of
ten thousand (P10,000.00) pesos. 2
Private respondents Vianas filed a complaint 3 for damages against petitioner
corporation (Aboitiz, for brevity) for breach of contract of carriage.
In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident,
the vessel was completely under the control of respondent Pioneer Stevedoring
Corporation (Pioneer, for short) as the exclusive stevedoring contractor of Aboitiz,
which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred
that since the crane operator was not an employee of Aboitiz, the latter cannot be held
liable under the fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against
Pioneer imputing liability thereto for Anacleto Viana's death as having been allegedly
caused by the negligence of the crane operator who was an employee of Pioneer under
its exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz had
no cause of action against Pioneer considering that Aboitiz is being sued by the Vianas
for breach of contract of carriage to which Pioneer is not a party; that Pioneer had
observed the diligence of a good father of a family both in the selection and supervision
of its employees as well as in the prevention of damage or injury to anyone including
the victim Anacleto Viana; that Anacleto Viana's gross negligence was the direct and
proximate cause of his death; and that the filing of the third-party complaint was
premature by reason of the pendency of the criminal case for homicide through reckless
imprudence filed against the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to pay
the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for
whatever amount the latter paid the Vianas. The dispositive portion of said decision
provides:
WHEREFORE, judgment is hereby rendered in favor of the plantiffs:
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the
sum of P12,000.00 for the death of Anacleto Viana P9,800.00 as actual
damages; P533,200.00 value of the 10,664 cavans of palay computed at P50.00
per cavan; P10,000.00 as attorney's fees; F 5,000.00, value of the 100 cavans
of palay as support for five (5) years for deceased (sic) parents, herein
plaintiffs Antonio and Gorgonia Viana computed at P50.00 per cavan;
P7,200.00 as support for deceased's parents computed at P120.00 a month for
five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as moral
damages, and costs; and
(2) ordering the third party defendant Pioneer Stevedoring Corporation to
reimburse defendant and third party plaintiff Aboitiz Shipping Corporation the
said amounts that it is ordered to pay to herein plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they
similarly raised the trial court's failure to declare that Anacleto Viana acted with gross
negligence despite the overwhelming evidence presented in support thereof. In addition,
Aboitiz alleged, in opposition to Pioneer's motion, that under the memorandum of
agreement the liability of Pioneer as contractor is automatic for any damages or losses
whatsoever occasioned by and arising from the operation of its arrastre and stevedoring
service.
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability for
failure of the Vianas and Aboitiz to preponderantly establish a case of negligence
against the crane operator which the court a quo ruled is never presumed, aside from the
fact that the memorandum of agreement supposedly refers only to Pioneer's liability in
case of loss or damage to goods handled by it but not in the case of personal injuries,
and, finally that Aboitiz cannot properly invoke the fellow-servant rule simply because
its liability stems from a breach of contract of carriage. The dispositive portion of said
order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant
Pioneer Stevedoring Corporation is concerned rendered in favor of the
plaintiffs-,:
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the
sum of P12,000.00 for the death of Anacleto Viana; P9,000.00 (sic) as actual
damages; P533,200.00 value of the 10,664 cavans of palay computed at P50.00
per cavan; P10,000.00 as attorney's fees; P5,000.00 value of the 100 cavans of
palay as support for five (5) years for deceased's parents, herein plaintiffs
Antonio and Gorgonia Viana,computed at P50.00 per cavan; P7,200.00 as
support for deceased's parents computed at P120.00 a month for five years
pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as moral damages,
and costs; and
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic)
any liability for the death of Anacleto Viana the passenger of M/V Antonia
owned by defendant third party plaintiff Aboitiz Shipping Corporation it
appearing that the negligence of its crane operator has not been established
therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to
respondent Court of Appeals which affirmed the findings of of the trial court except as
to the amount of damages awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
(A) In holding that the doctrine laid down by this honorable Court in La
Mallorca vs. Court of Appeals, et al. (17 SCRA 739, July 27, 1966) is
applicable to the case in the face of the undisputable fact that the factual
situation under the La Mallorca case is radically different from the facts
obtaining in this case;
(B) In holding petitioner liable for damages in the face of the finding of the
court a quo and confirmed by the Honorable respondent court of Appeals that
the deceased, Anacleto Viana was guilty of contributory negligence, which,
We respectfully submit contributory negligence was the proximate cause of his
death; specifically the honorable respondent Court of Appeals failed to apply
Art. 1762 of the New Civil Code;
(C) In the alternative assuming the holding of the Honorable respondent Court
of Appears that petitioner may be legally condemned to pay damages to the
private respondents we respectfully submit that it committed a reversible error
when it dismissed petitioner's third party complaint against private respondent
Pioneer Stevedoring Corporation instead of compelling the latter to reimburse
the petitioner for whatever damages it may be compelled to pay to the private
respondents Vianas. 9
At threshold, it is to be observed that both the trial court and respondent Court of
Appeals found the victim Anacleto Viana guilty of contributory negligence, but holding
that it was the negligence of Aboitiz in prematurely turning over the vessel to the
arrastre operator for the unloading of cargoes which was the direct, immediate and
proximate cause of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the time
Anacleto Viana disembarked from the vessel and that he was given more than ample
opportunity to unload his cargoes prior to the operation of the crane, his presence on the
vessel was no longer reasonable e and he consequently ceased to be a passenger.
Corollarily, it insists that the doctrine in La Mallorca vs. Court of Appeals, et al. 10 is
not applicable to the case at bar.
The rule is that the relation of carrier and passenger continues until the passenger has
been landed at the port of destination and has left the vessel owner's dock or
premises. 11 Once created, the relationship will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from the carrier's
conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be
deemed passengers, and what is a reasonable time or a reasonable delay within this rule
is to be determined from all the circumstances, and includes a reasonable time to see
after his baggage and prepare for his departure. 12 The carrier-passenger relationship is
not terminated merely by the fact that the person transported has been carried to his
destination if, for example, such person remains in the carrier's premises to claim his
baggage.13
It was in accordance with this rationale that the doctrine in the aforesaid case of La
Mallorca was enunciated, to wit:
It has been recognized as a rule that the relation of carrier and passenger does
not cease at the moment the passenger alights from the carrier's vehicle at a
place selected by the carrier at the point of destination, but continues until the
passenger has had a reasonable time or a reasonable opportunity to leave the
carrier's premises. And, what is a reasonable time or a reasonable delay within
this rule is to be determined from all the circumstances. Thus, a person who,
after alighting from a train, walks along the station platform is considered still
a passenger. So also, where a passenger has alighted at his destination and is
proceeding by the usual way to leave the company's premises, but before
actually doing so is halted by the report that his brother, a fellow passenger,
has been shot, and he in good faith and without intent of engaging in the
difficulty, returns to relieve his brother, he is deemed reasonably and
necessarily delayed and thus continues to be a passenger entitled as such to the
protection of the railroad company and its agents.
In the present case, the father returned to the bus to get one of his baggages
which was not unloaded when they alighted from the bus. Racquel, the child
that she was, must have followed the father. However, although the father was
still on the running board of the bus waiting for the conductor to hand him the
bag or bayong, the bus started to run, so that even he (the father) had to jump
down from the moving vehicle. It was at this instance that the child, who must
be near the bus, was run over and killed. In the circumstances, it cannot be
claimed that the carrier's agent had exercised the 'utmost diligence' of a 'very
cautious person' required by Article 1755 of the Civil Code to be observed by a
common carrier in the discharge of its obligation to transport safely its
passengers. ... The presence of said passengers near the bus was not
unreasonable and they are, therefore, to be considered still as passengers of the
carrier, entitled to the protection under their contract of carriage. 14
It is apparent from the foregoing that what prompted the Court to rule as it did in said
case is the fact of the passenger's reasonable presence within the carrier's premises. That
reasonableness of time should be made to depend on the attending circumstances of the
case, such as the kind of common carrier, the nature of its business, the customs of the
place, and so forth, and therefore precludes a consideration of the time element per
se without taking into account such other factors. It is thus of no moment whether in the
cited case of La Mallorca there was no appreciable interregnum for the passenger
therein to leave the carrier's premises whereas in the case at bar, an interval of one (1)
hour had elapsed before the victim met the accident. The primary factor to be
considered is the existence of a reasonable cause as will justify the presence of the
victim on or near the petitioner's vessel. We believe there exists such a justifiable cause.
It is of common knowledge that, by the very nature of petitioner's business as a shipper,
the passengers of vessels are allotted a longer period of time to disembark from the ship
than other common carriers such as a passenger bus. With respect to the bulk of cargoes
and the number of passengers it can load, such vessels are capable of accommodating a
bigger volume of both as compared to the capacity of a regular commuter bus.
Consequently, a ship passenger will need at least an hour as is the usual practice, to
disembark from the vessel and claim his baggage whereas a bus passenger can easily
get off the bus and retrieve his luggage in a very short period of time. Verily, petitioner
cannot categorically claim, through the bare expedient of comparing the period of time
entailed in getting the passenger's cargoes, that the ruling in La Mallorca is inapplicable
to the case at bar. On the contrary, if we are to apply the doctrine enunciated therein to
the instant petition, we cannot in reason doubt that the victim Anacleto Viana was still a
passenger at the time of the incident. When the accident occurred, the victim was in the
act of unloading his cargoes, which he had every right to do, from petitioner's vessel. As
earlier stated, a carrier is duty bound not only to bring its passengers safely to their
destination but also to afford them a reasonable time to claim their baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim had already
disembarked from the vessel. Petitioner failed to prove this. What is clear to us is that at
the time the victim was taking his cargoes, the vessel had already docked an hour
earlier. In consonance with common shipping procedure as to the minimum time of one
(1) hour allowed for the passengers to disembark, it may be presumed that the victim
had just gotten off the vessel when he went to retrieve his baggage. Yet, even if he had
already disembarked an hour earlier, his presence in petitioner's premises was not
without cause. The victim had to claim his baggage which was possible only one (1)
hour after the vessel arrived since it was admittedly standard procedure in the case of
petitioner's vessels that the unloading operations shall start only after that time.
Consequently, under the foregoing circumstances, the victim Anacleto Viana is still
deemed a passenger of said carrier at the time of his tragic death.
II. Under the law, common carriers are, from the nature of their business and for reasons
of public policy, bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them, according to all the
circumstances of each case. 15 More particularly, a common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the circumstances. 16 Thus,
where a passenger dies or is injured, the common carrier is presumed to have been at
fault or to have acted negligently. 17 This gives rise to an action for breach of contract of
carriage where all that is required of plaintiff is to prove the existence of the contract of
carriage and its non-performance by the carrier, that is, the failure of the carrier to carry
the passenger safely to his destination, 18which, in the instant case, necessarily includes
its failure to safeguard its passenger with extraordinary diligence while such relation
subsists.
The presumption is, therefore, established by law that in case of a passenger's death or
injury the operator of the vessel was at fault or negligent, having failed to exercise
extraordinary diligence, and it is incumbent upon it to rebut the same. This is in
consonance with the avowed policy of the State to afford full protection to the
passengers of common carriers which can be carried out only by imposing a stringent
statutory obligation upon the latter. Concomitantly, this Court has likewise adopted a
rigid posture in the application of the law by exacting the highest degree of care and
diligence from common carriers, bearing utmost in mind the welfare of the passengers
who often become hapless victims of indifferent and profit-oriented carriers. We cannot
in reason deny that petitioner failed to rebut the presumption against it. Under the facts
obtaining in the present case, it cannot be gainsaid that petitioner had inadequately
complied with the required degree of diligence to prevent the accident from happening.
As found by the Court of Appeals, the evidence does not show that there was a cordon
of drums around the perimeter of the crane, as claimed by petitioner. It also adverted to
the fact that the alleged presence of visible warning signs in the vicinity was disputable
and not indubitably established. Thus, we are not inclined to accept petitioner's
explanation that the victim and other passengers were sufficiently warned that merely
venturing into the area in question was fraught with serious peril. Definitely, even
assuming the existence of the supposed cordon of drums loosely placed around the
unloading area and the guard's admonitions against entry therein, these were at most
insufficient precautions which pale into insignificance if considered vis-a-vis the gravity
of the danger to which the deceased was exposed. There is no showing that petitioner
was extraordinarily diligent in requiring or seeing to it that said precautionary measures
were strictly and actually enforced to subserve their purpose of preventing entry into the
forbidden area. By no stretch of liberal evaluation can such perfunctory acts
approximate the "utmost diligence of very cautious persons" to be exercised "as far as
human care and foresight can provide" which is required by law of common carriers
with respect to their passengers.
While the victim was admittedly contributorily negligent, still petitioner's aforesaid
failure to exercise extraordinary diligence was the proximate and direct cause of,
because it could definitely have prevented, the former's death. Moreover, in paragraph
5.6 of its petition, at bar, 19 petitioner has expressly conceded the factual finding of
respondent Court of Appeals that petitioner did not present sufficient evidence in
support of its submission that the deceased Anacleto Viana was guilty of gross
negligence. Petitioner cannot now be heard to claim otherwise.
No excepting circumstance being present, we are likewise bound by respondent court's
declaration that there was no negligence on the part of Pioneer Stevedoring
Corporation, a confirmation of the trial court's finding to that effect, hence our
conformity to Pioneer's being absolved of any liability.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged
gross negligence of the victim, hence its present contention that the death of the
passenger was due to the negligence of the crane operator cannot be sustained both on
grounds, of estoppel and for lack of evidence on its present theory. Even in its answer
filed in the court below it readily alleged that Pioneer had taken the necessary
safeguards insofar as its unloading operations were concerned, a fact which appears to
have been accepted by the plaintiff therein by not impleading Pioneer as a defendant,
and likewise inceptively by Aboitiz by filing its third-party complaint only after ten (10)
months from the institution of the suit against it. Parenthetically, Pioneer is not within
the ambit of the rule on extraordinary diligence required of, and the corresponding
presumption of negligence foisted on, common carriers like Aboitiz. This, of course,
does not detract from what we have said that no negligence can be imputed to Pioneer
but, that on the contrary, the failure of Aboitiz to exercise extraordinary diligence for
the safety of its passenger is the rationale for our finding on its liability.
WHEREFORE, the petition is DENIED and the judgment appealed from is hereby
AFFIRMED in toto.
SO ORDERED.
G.R. No. L-82619 September 15, 1993
PHILIPPINE AIRLINES, INC., petitioner,
vs.
COURT OF APPEALS and PEDRO ZAPATOS, respondents.
Leighton R. Liazon for petitioner.
Balmes L. Ocampo for private respondent.
BELLOSILLO, J.:
This petition for review in certiorari seeks to annul and set aside the decision of the
then Intermediate Appellant Court,1 now Court of Appeals, dated 28 February 1985, in
AC-G.R. CV No. 69327 ("Pedro Zapatos v. Philippine Airlines, Inc.") affirming the
decision of the then Court of first Instance, now Regional Trial Court, declaring
Philippine Airlines, Inc., liable in damages for breach of contract.
On 25 November 1976, private respondent filed a complaint for damages for breach of
contract of carriage2 against Philippine Airlines, Inc. (PAL), before the then Court of
First Instance, now Regional Trial Court, of Misamis Occidental, at Ozamiz City.
According to him, on 2 August 1976, he was among the twenty-one (21) passengers of
PAL Flight 477 that took off from Cebu bound for Ozamiz City. The routing of this
flight was Cebu-Ozamiz-Cotabato. While on flight and just about fifteen (15) minutes
before landing at Ozamiz City, the pilot received a radio message that the airport was
closed due to heavy rains and inclement weather and that he should proceed to Cotabato
City instead.
Upon arrival at Cotabato City, the PAL Station Agent informed the passengers of their
options to return to Cebu on flight 560 of the same day and thence to Ozamiz City on 4
August 1975, or take the next flight to Cebu the following day, or remain at Cotabato
and take the next available flight to Ozamiz City on 5 August 1975. 3 The Station Agent
likewise informed them that Flight 560 bound for Manila would make a stop-over at
Cebu to bring some of the diverted passengers; that there were only six (6) seats
available as there were already confirmed passengers for Manila; and, that the basis for
priority would be the check-in sequence at Cebu.
Private respondent chose to return to Cebu but was not accommodated because he
checked-in as passenger No. 9 on Flight 477. He insisted on being given priority over
the confirmed passengers in the accommodation, but the Station Agent refused private
respondent's demand explaining that the latter's predicament was not due to PAL's own
doing but to be a force majeure.4
Private respondent tried to stop the departure of Flight 560 as his personal belongings,
including a package containing a camera which a certain Miwa from Japan asked him to
deliver to Mrs. Fe Obid of Gingoog City, were still on board. His plea fell on deaf ears.
PAL then issued to private respondent a free ticket to Iligan city, which the latter
received under protest.5 Private respondent was left at the airport and could not even
hitch a ride in the Ford Fiera loaded with PAL personnel. 6 PAL neither provided private
respondent with transportation from the airport to the city proper nor food and
accommodation for his stay in Cotabato City.
The following day, private respondent purchased a PAL ticket to Iligan City. He
informed PAL personnel that he would not use the free ticket because he was filing a
case against PAL.7 In Iligan City, private respondent hired a car from the airport to
Kolambugan, Lanao del Norte, reaching Ozamiz City by crossing the bay in a
launch.8 His personal effects including the camera, which were valued at P2,000.00
were no longer recovered.
On 13 January 1977, PAL filed its answer denying that it unjustifiably refused to
accommodate private respondent.9It alleged that there was simply no more seat for
private respondent on Flight 560 since there were only six (6) seats available and the
priority of accommodation on Flight 560 was based on the check-in sequence in Cebu;
that the first six (6) priority passengers on Flight 477 chose to take Flight 560; that its
Station Agent explained in a courteous and polite manner to all passengers the reason
for PAL's inability to transport all of them back to Cebu; that the stranded passengers
agreed to avail of the options and had their respective tickets exchanged for their
onward trips; that it was
only the private respondent who insisted on being given priority in the accommodation;
that pieces of checked-in baggage and had carried items of the Ozamiz City passengers
were removed from the aircraft; that the reason for their pilot's inability to land at
Ozamis City airport was because the runway was wet due to rains thus posing a threat to
the safety of both passengers and aircraft; and, that such reason of force majeure was a
valid justification for the pilot to bypass Ozamiz City and proceed directly to Cotabato
City.
On 4 June 1981, the trial court rendered its decision 10 the dispositive portion of which
states:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and
against the defendant Philippine AirLines, Inc. ordering the latter to pay:
(1) As actual damages, the sum of Two Hundred Pesos (P200.00) representing
plaintiff's expenses for transportation, food and accommodation during his
stranded stay at Cotabato City; the sum of Forty-Eight Pesos (P48.00)
representing his flight fare from Cotabato City to Iligan city; the sum of Five
Hundred Pesos (P500.00) representing plaintiff's transportation expenses from
Iligan City to Ozamiz City; and the sum of Five Thousand Pesos (P5,000.00)
as loss of business opportunities during his stranded stay in Cotabato City;
 (2) As moral damages, the sum of Fifty Thousand Pesos (P50,000.00) for
plaintiff's hurt feelings, serious anxiety, mental anguish and unkind and
discourteous treatment perpetrated by defendant's employees during his stay as
stranded passenger in Cotabato City;
(3) As exemplary damages, the sum of Ten Thousand Pesos (P10,000.00) to
set a precedent to the defendant airline that it shall provide means to give
comfort and convenience to stranded passengers;
(4) The sum of Three Thousand Pesos (P3,000.00) as attorney's fees;
(5) To pay the costs of this suit.
PAL appealed to the Court of Appeals which on 28 February 1985, finding no
reversible error, affirmed the judgment of the court a quo. 11
PAL then sought recourse to this Court by way of a petition for review
on certiorari 12 upon the following issues: (1) Can the Court of Appeals render a
decision finding petitioner (then defendant-appellant in the court below) negligent and,
consequently, liable for damages on a question of substance which was neither raised on
a question nor proved at the trial? (2) Can the Court of Appeals award actual and moral
damages contrary to the evidence and established jurisprudence? 13
An assiduous examination of the records yields no valid reason for reversal of the
judgment on appeal; only a modification of its disposition.
In its petition, PAL vigorously maintains that private respondent's principal cause of
action was its alleged denial of private respondent's demand for priority over the
confirmed passengers on Flight 560. Likewise, PAL points out that the complaint did
not impute to PAL neglect in failing to attend to the needs of the diverted passengers;
and, that the question of negligence was not and never put in issue by the pleadings or
proved at the trial.
Contrary to the above arguments, private respondent's amended complaint touched on
PAL's indifference and inattention to his predicament. The pertinent portion of the
amended complaint 14 reads:
10. That by virtue of the refusal of the defendant through its agent in Cotabato
to accommodate (sic) and allow the plaintiff to take and board the plane back
to Cebu, and by accomodating (sic) and allowing passengers from Cotabato for
Cebu in his stead and place, thus forcing the plaintiff against his will, to be left
and stranded in Cotabato, exposed to the peril and danger of muslim rebels
plundering at the time, the plaintiff, as a consequence, (have) suffered mental
anguish, mental torture, social humiliation, bismirched reputation and
wounded feeling, all amounting to a conservative amount of thirty thousand
(P30,000.00) Pesos.
To substantiate this aspect of apathy, private respondent testified 15
A I did not even notice that I was I think the last passenger or the last person
out of the PAL employees and army personnel that were left there. I did not
notice that when I was already outside of the building after our conversation.
Q What did you do next?
A I banished (sic) because it seems that there was a war not far from the
airport. The sound of guns and the soldiers were plenty.
Q After that what did you do?
A I tried to look for a transportation that could bring me down to the City of
Cotabato.
Q Were you able to go there?
A I was at about 7:00 o'clock in the evening more or less and it was a private
jeep that I boarded. I was even questioned why I and who am (sic) I then. Then
I explained my side that I am (sic) stranded passenger. Then they brought me
downtown at Cotabato.
Q During your conversation with the Manager were you not offered any
vehicle or transportation to Cotabato airport downtown?
A In fact I told him (Manager) now I am by-passed passenger here which is
not my destination what can you offer me. Then they answered, "it is not my
fault. Let us forget that."
Q In other words when the Manager told you that offer was there a vehicle
ready?
A Not yet. Not long after that the Ford Fiera loaded with PAL personnel was
passing by going to the City of Cotabato and I stopped it to take me a ride
because there was no more available transportation but I was not
accommodated.
Significantly, PAL did not seem to mind the introduction of evidence which focused on
its alleged negligence in caring for its stranded passengers. Well-settled is the rule in
evidence that the protest or objection against the admission of evidence should be
presented at the time the evidence is offered, and that the proper time to make protest or
objection to the admissibility of evidence is when the question is presented to the
witness or at the time the answer thereto is given. 16 There being no objection, such
evidence becomes property of the case and all the parties are amenable to any favorable
or unfavorable effects resulting from the evidence. 17
PAL instead attempted to rebut the aforequoted testimony. In the process, it failed to
substantiate its counter allegation for want of concrete proof 18 —
Atty. Rubin O. Rivera — PAL's counsel:
Q You said PAL refused to help you when you were in Cotabato, is that right?
Private respondent:
A Yes.
Q Did you ask them to help you regarding any offer of transportation or of any
other matter asked of them?
A Yes, he (PAL PERSONNEL) said what is? It is not our fault.
Q Are you not aware that one fellow passenger even claimed that he was given
Hotel accommodation because they have no money?
xxx xxx xxx
A No, sir, that was never offered to me. I said, I tried to stop them but they
were already riding that PAL pick-up jeep, and I was not accommodated.
Having joined in the issue over the alleged lack of care it exhibited towards its
passengers, PAL cannot now turn around and feign surprise at the outcome of the case.
When issues not raised by the pleadings are tried by express or implied consent of the
parties, they shall be treated in all respects as if they had been raised in the pleadings. 19
With regard to the award of damages affirmed by the appellate court, PAL argues that
the same is unfounded. It asserts that it should not be charged with the task of looking
after the passengers' comfort and convenience because the diversion of the flight was
due to a fortuitous event, and that if made liable, an added burden is given to PAL
which is over and beyond its duties under the contract of carriage. It submits that
granting arguendo that negligence exists, PAL cannot be liable in damages in the
absence of fraud or bad faith; that private respondent failed to apprise PAL of the nature
of his trip and possible business losses; and, that private respondent himself is to be
blamed for unreasonably refusing to use the free ticket which PAL issued.
The contract of air carriage is a peculiar one. Being imbued with public interest, the law
requires common carriers to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances. 20 In Air France v. Carrascoso, 21 we held that —
A contract to transport passengers is quite different in kind and degree from
any other contractual relation. And this, because of the relation which an air
carrier sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation attended with a public
duty . . . . ( emphasis supplied).
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting
standard required by law. Undisputably, PAL's diversion of its flight due to inclement
weather was a fortuitous event. Nonetheless, such occurrence did not terminate PAL's
contract with its passengers. Being in the business of air carriage and the sole one to
operate in the country, PAL is deemed equipped to deal with situations as in the case at
bar. What we said in one case once again must be stressed, i.e., the relation of carrier
and passenger continues until the latter has been landed at the port of destination and
has left the carrier's premises. 22 Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and safety of its
stranded passengers until they have reached their final destination. On this score, PAL
grossly failed considering the then ongoing battle between government forces and
Muslim rebels in Cotabato City and the fact that the private respondent was a stranger
to the place. As the appellate court correctly ruled —
While the failure of plaintiff in the first instance to reach his destination at
Ozamis City in accordance with the contract of carriage was due to the closure
of the airport on account of rain and inclement weather which was radioed to
defendant 15 minutes before landing, it has not been disputed by defendant
airline that Ozamis City has no all-weather airport and has to cancel its flight
to Ozamis City or by-pass it in the event of inclement weather. Knowing this
fact, it becomes the duty of defendant to provide all means of comfort and
convenience to its passengers when they would have to be left in a strange
place in case of such by-passing. The steps taken by defendant airline company
towards this end has not been put in evidence, especially for those 7 others
who were not accommodated in the return trip to Cebu, only 6 of the 21 having
been so accommodated. It appears that plaintiff had to leave on the next flight
2 days later. If the cause of non-fulfillment of the contract is due to a fortuitous
event, it has to be the sole and only cause (Art. 1755 CC., Art. 1733 C.C.)
Since part of the failure to comply with the obligation of common carrier to
deliver its passengers safely to their destination lay in the defendant's failure to
provide comfort and convenience to its stranded passengers using extra-
ordinary diligence, the cause of non-fulfillment is not solely and exclusively
due to fortuitous event, but due to something which defendant airline could
have prevented, defendant becomes liable to plaintiff. 23
While we find PAL remiss in its duty of extending utmost care to private respondent
while being stranded in Cotabato City, there is no sufficient basis to conclude that PAL
failed to inform him about his non-accommodation on Flight 560, or that it was
inattentive to his queries relative thereto.
On 3 August 1975, the Station Agent reported to his Branch Manager in Cotabato City
that —
3. Of the fifteen stranded passengers two pax elected to take F478 on August
05, three pax opted to take F442 August 03. The remaining ten (10) including
subject requested that they be instead accommodated (sic) on F446 CBO-IGN
the following day where they intended to take the surface transportation to
OZC. Mr. Pedro Zapatos had by then been very vocal and boiceterous (sic) at
the counter and we tactfully managed to steer him inside the Station Agent's
office. Mr. Pedro Zapatos then adamantly insisted that all the diverted
passengers should have been given priority over the originating passengers of
F560 whether confirmed or otherwise. We explained our policies and after
awhile he seemed pacified and thereafter took his ticket (in-lieued (sic) to
CBO-IGN, COCON basis), at the counter in the presence of five other
passengers who were waiting for their tickets too. The rest of the diverted pax
had left earlier after being assured their tickets will be ready the following
day. 24
Aforesaid Report being an entry in the course of business is prima facie evidence of the
facts therein stated. Private respondent, apart from his testimony, did not offer any
controverting evidence. If indeed PAL omitted to give information about the options
available to its diverted passengers, it would have been deluged with complaints. But,
only private respondent complained —
Atty. Rivera (for PAL)
Q I understand from you Mr. Zapatos that at the time you were waiting at
Cotabato Airport for the decision of PAL, you were not informed of the
decision until after the airplane left is that correct?
A Yes.
COURT:
Q What do you mean by "yes"? You meant you were not informed?
A Yes, I was not informed of their decision, that they will only accommodate
few passengers.
Q Aside from you there were many other stranded passengers?
A I believed, yes.
Q And you want us to believe that PAL did not explain (to) any of these
passengers about the decision regarding those who will board the aircraft back
to Cebu?
A No, Sir.
Q Despite these facts Mr. Zapatos did any of the other passengers complained
(sic) regarding that incident?
xxx xxx xxx
A There were plenty of argument and I was one of those talking about my
case.
Q Did you hear anybody complained (sic) that he has not been informed of the
decision before the plane left for Cebu?
A No. 25
Admittedly, private respondent's insistence on being given priority in accommodation
was unreasonable considering the fortuitous event and that there was a sequence to be
observed in the booking, i.e., in the order the passengers checked-in at their port of
origin. His intransigence in fact was the main cause for his having to stay at the airport
longer than was necessary.
Atty. Rivera:
Q And, you were saying that despite the fact that according to your testimony
there were at least 16 passengers who were stranded there in Cotabato airport
according to your testimony, and later you said that there were no other people
left there at that time, is that correct?
A Yes, I did not see anyone there around. I think I was the only civilian who
was left there.
Q Why is it that it took you long time to leave that place?
A Because I was arguing with the PAL personnel. 26
Anent the plaint that PAL employees were disrespectful and inattentive toward private
respondent, the records are bereft of evidence to support the same. Thus, the ruling of
respondent Court of Appeals in this regard is without basis. 27 On the contrary, private
respondent was attended to not only by the personnel of PAL but also by its
Manager." 28

In the light of these findings, we find the award of moral damages of Fifty Thousand
Pesos (P50,000.00) unreasonably excessive; hence, we reduce the same to Ten
Thousand Pesos (P10,000.00). Conformably herewith, the award of exemplary damages
is also reduced to five Thousand Pesos (5,000.00). Moral damages are not intended to
enrich the private respondent. They are awarded only to enable the injured party to
obtain means, diversion or amusements that will serve to alleviate the moral suffering
he has undergone by reason of the defendant's culpable action. 29

With regard to the award of actual damages in the amount of P5,000.00 representing
private respondent's alleged business losses occasioned by his stay at Cotabato City, we
find the same unwarranted. Private respondent's testimony that he had a scheduled
business "transaction of shark liver oil supposedly to have been consummated on
August 3, 1975 in the morning" and that "since (private respondent) was out for nearly
two weeks I missed to buy about 10 barrels of shark liver oil," 30 are purely speculative.
Actual or compensatory damages cannot be presumed but must be duly proved with
reasonable degree of certainty. A court cannot rely on speculation, conjecture or
guesswork as to the fact and amount of damages, but must depend upon competent
proof that they have suffered and on evidence of the actual amount thereof. 31

WHEREFORE the decision appealed from is AFFIRMED with modification however

that the award of moral damages of Fifty Thousand Pesos (P50,000.00) is reduced to
Ten Thousand Pesos (P10,000.00) while the exemplary damages of Ten Thousand
Pesos (P10,000.00) is also reduced to Five Thousand Pesos (P5,000.00). The award of
actual damages in the amount Five Thousand Pesos (P5,000.00) representing business
losses occasioned by private respondent's being stranded in Cotabato City is deleted.

SO ORDERED.
G.R. No. 85691 July 31, 1990
BACHELOR EXPRESS, INCORPORATED, and CRESENCIO
RIVERA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (Sixth Division), RICARDO BETER,
SERGIA BETER, TEOFILO RAUTRAUT and ZOETERA
RAUTRAUT, respondents.
Aquino W. Gambe for petitioners.
Tranquilino O. Calo, Jr. for private respondents.
GUTIERREZ, JR., J.:
This is a petition for review of the decision of the Court of Appeals which reversed and
set aside the order of the Regional Trial Court, Branch I, Butuan City dismissing the
private respondents' complaint for collection of "a sum of money" and finding the
petitioners solidarily liable for damages in the total amount of One Hundred Twenty
Thousand Pesos (P120,000.00). The petitioners also question the appellate court's
resolution denying a motion for reconsideration.
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and driven by
Cresencio Rivera was the situs of a stampede which resulted in the death of passengers
Ornominio Beter and Narcisa Rautraut.
The evidence shows that the bus came from Davao City on its way to Cagayan de Oro
City passing Butuan City; that while at Tabon-Tabon, Butuan City, the bus picked up a
passenger; that about fifteen (15) minutes later, a passenger at the rear portion suddenly
stabbed a PC soldier which caused commotion and panic among the passengers; that
when the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found
lying down the road, the former already dead as a result of head injuries and the latter
also suffering from severe injuries which caused her death later. The passenger assailant
alighted from the bus and ran toward the bushes but was killed by the police.
Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents
herein (Ricardo Beter and Sergia Beter are the parents of Ornominio while Teofilo
Rautraut and Zoetera [should be Zotera] Rautraut are the parents of Narcisa) filed a
complaint for "sum of money" against Bachelor Express, Inc. its alleged owner Samson
Yasay and the driver Rivera.
In their answer, the petitioners denied liability for the death of Ornominio Beter and
Narcisa Rautraut. They alleged that ... the driver was able to transport his passengers
safely to their respective places of destination except Ornominio Beter and Narcisa
Rautraut who jumped off the bus without the knowledge and consent, much less, the
fault of the driver and conductor and the defendants in this case; the defendant
corporation had exercised due diligence in the choice of its employees to avoid as much
as possible accidents; the incident on August 1, 1980 was not a traffic accident or
vehicular accident; it was an incident or event very much beyond the control of the
defendants; defendants were not parties to the incident complained of as it was an act of
a third party who is not in any way connected with the defendants and of which the
latter have no control and supervision; ..." (Rollo, pp. 112-113).i•t•c-aüsl
After due trial, the trial court issued an order dated August 8, 1985 dismissing the
complaint.
Upon appeal however, the trial court's decision was reversed and set aside. The
dispositive portion of the decision of the Court of Appeals states:
WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE
and a new one entered finding the appellees jointly and solidarily liable to pay
the plaintiffs-appellants the following amounts:
1) To the heirs of Ornominio Beter, the amount of Seventy Five Thousand
Pesos (P75,000.00) in loss of earnings and support, moral damages, straight
death indemnity and attorney's fees; and,
2) To the heirs of Narcisa Rautraut, the amount of Forty Five Thousand Pesos
(P45,000.00) for straight death indemnity, moral damages and attorney's fees.
Costs against appellees. (Rollo, pp. 71-72)
The petitioners now pose the following questions
What was the proximate cause of the whole incident? Why were the
passengers on board the bus panicked (sic) and why were they shoving one
another? Why did Narcisa Rautraut and Ornominio Beter jump off from the
running bus?
The petitioners opine that answers to these questions are material to arrive at "a fair, just
and equitable judgment." (Rollo, p. 5) They claim that the assailed decision is based on
a misapprehension of facts and its conclusion is grounded on speculation, surmises or
conjectures.
As regards the proximate cause of the death of Ornominio Beter and Narcisa Rautraut,
the petitioners maintain that it was the act of the passenger who ran amuck and stabbed
another passenger of the bus. They contend that the stabbing incident triggered off the
commotion and panic among the passengers who pushed one another and
that presumably out of fear and moved by that human instinct of self-preservation Beter
and Rautraut jumped off the bus while the bus was still running resulting in their
untimely death." (Rollo, p. 6) Under these circumstances, the petitioners asseverate that
they were not negligent in the performance of their duties and that the incident was
completely and absolutely attributable to a third person, the passenger who ran amuck,
for without his criminal act, Beter and Rautraut could not have been subjected to fear
and shock which compelled them to jump off the running bus. They argue that they
should not be made liable for damages arising from acts of third persons over whom
they have no control or supervision.
Furthermore, the petitioners maintain that the driver of the bus, before, during and after
the incident was driving cautiously giving due regard to traffic rules, laws and
regulations. The petitioners also argue that they are not insurers of their passengers as
ruled by the trial court.
The liability, if any, of the petitioners is anchored on culpa contractual or breach of
contract of carriage. The applicable provisions of law under the New Civil Code are as
follows:
ART. 1732. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both
by land, water, or air, for compensation, offering their services to the public.
ART. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
xxx xxx xxx
ART. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed in Articles 1733 and
1755.
There is no question that Bachelor Express, Inc. is a common carrier. Hence, from the
nature of its business and for reasons of public policy Bachelor Express, Inc. is bound to
carry its passengers safely as far as human care and foresight can provide using the
utmost diligence of very cautious persons, with a due regard for all the circumstances.
In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus
belonging to petitioner Bachelor Express, Inc. and, while passengers of the bus, suffered
injuries which caused their death. Consequently, pursuant to Article 1756 of the Civil
Code, petitioner Bachelor Express, Inc. is presumed to have acted negligently unless it
can prove that it had observed extraordinary diligence in accordance with Articles 1733
and 1755 of the New Civil Code.
Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on its posture
that the death of the said passengers was caused by a third person who was beyond its
control and supervision. In effect, the petitioner, in order to overcome the presumption
of fault or negligence under the law, states that the vehicular incident resulting in the
death of passengers Beter and Rautraut was caused by force majeure or caso
fortuito over which the common carrier did not have any control.
Article 1174 of the present Civil Code states:
Except in cases expressly specified by law, or when it is otherwise declared by
stipulations, or when the nature of the obligation requires the assumption of
risk, no person shall be responsible for those events which could not be
foreseen, or which though foreseen, were inevitable.
The above-mentioned provision was substantially copied from Article 1105 of the old
Civil Code which states"
No one shall be liable for events which could not be foreseen or which, even if
foreseen, were inevitable, with the exception of the cases in which the law
expressly provides otherwise and those in which the obligation itself imposes
liability.
In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined "events" which cannot
be foreseen and which, having been foreseen, are inevitable in the following manner:
... The Spanish authorities regard the language employed as an effort to define
the term 'caso fortuito' and hold that the two expressions are synonymous.
(Manresa Comentarios al Codigo Civil Español, vol. 8, pp. 88 et seq.;
Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.)
The antecedent to Article 1105 is found in Law II, Title 33, Partida 7, which
defines caso fortuito as 'occasion que acaese por aventura de que non se puede
ante ver. E son estos, derrivamientos de casas e fuego que enciende a so ora, e
quebrantamiento de navio, fuerca de ladrones' (An event that takes place by
incident and could not have been foreseen. Examples of this are destruction of
houses, unexpected fire, shipwreck, violence of robbers ...)
Escriche defines caso fortuito as an unexpected event or act of God which
could neither be foreseen nor resisted, such as floods, torrents, shipwrecks,
conflagrations, lightning, compulsion, insurrections, destruction of buildings
by unforeseen accidents and other occurrences of a similar nature.
 In discussing and analyzing the term caso fortuito the Enciclopedia Juridica
Española says: 'In a legal sense and, consequently, also in relation to contracts,
a caso fortuito presents the following essential characteristics: (1) The cause of
the unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will. (2) It must
be impossible to foresee the event which constitutes the caso fortuito, or if it
can be foreseen, it must be impossible to avoid. (3) The occurrence must be
such as to render it impossible for the debtor to fulfill his obligation in a
normal manner. And (4) the obligor (debtor) must be free from any
participation in the aggravation of the injury resulting to the creditor. (5)
Enciclopedia Juridica Española, 309)
As will be seen, these authorities agree that some extraordinary circumstance
independent of the will of the obligor or of his employees, is an essential
element of a caso fortuito. ...
The running amuck of the passenger was the proximate cause of the incident as it
triggered off a commotion and panic among the passengers such that the passengers
started running to the sole exit shoving each other resulting in the falling off the bus by
passengers Beter and Rautraut causing them fatal injuries. The sudden act of the
passenger who stabbed another passenger in the bus is within the context of force
majeure.
However, in order that a common carrier may be absolved from liability in case of force
majeure, it is not enough that the accident was caused by force majeure. The common
carrier must still prove that it was not negligent in causing the injuries resulting from
such accident. Thus, as early as 1912, we ruled:
From all the foregoing, it is concluded that the defendant is not liable for the
loss and damage of the goods shipped on the lorcha Pilar by the Chinaman,
Ong Bien Sip, inasmuch as such loss and damage were the result of a
fortuitous event or force majeure, and there was no negligence or lack of care
and diligence on the part of the defendant company or its agents. (Tan Chiong
Sian v. Inchausti & Co., 22 Phil. 152 [1912]; Emphasis supplied).
This principle was reiterated in a more recent case, Batangas Laguna Tayabas Co. v.
Intermediate Appellate Court(167 SCRA 379 [1988]), wherein we ruled:
... [F]or their defense of force majeure or act of God to prosper the accident
must be due to natural causes and exclusively without human intervention.
(Emphasis supplied)
Therefore, the next question to be determined is whether or not the petitioner's common
carrier observed extraordinary diligence to safeguard the lives of its passengers.
In this regard the trial court and the appellate court arrived at conflicting factual
findings.
The trial court found the following facts:
The parties presented conflicting evidence as to how the two deceased Narcisa
Rautruat and Ornominio Beter met their deaths.
However, from the evidence adduced by the plaintiffs, the Court could not see
why the two deceased could have fallen off the bus when their own witnesses
testified that when the commotion ensued inside the bus, the passengers
pushed and shoved each other towards the door apparently in order to get off
from the bus through the door. But the passengers also could not pass through
the door because according to the evidence the door was locked.
On the other hand, the Court is inclined to give credence to the evidence
adduced by the defendants that when the commotion ensued inside the bus, the
two deceased panicked and, in state of shock and fear, they jumped off from
the bus by passing through the window.
It is the prevailing rule and settled jurisprudence that transportation companies
are not insurers of their passengers. The evidence on record does not show that
defendants' personnel were negligent in their duties. The defendants' personnel
have every right to accept passengers absent any manifestation of violence or
drunkenness. If and when such passengers harm other passengers without the
knowledge of the transportation company's personnel, the latter should not be
faulted. (Rollo, pp. 46-47)
A thorough examination of the records, however, show that there are material facts
ignored by the trial court which were discussed by the appellate court to arrive at a
different conclusion. These circumstances show that the petitioner common carrier was
negligent in the provision of safety precautions so that its passengers may be
transported safely to their destinations. The appellate court states:
A critical eye must be accorded the lower court's conclusions of fact in its
tersely written ratio decidendi. The lower court concluded that the door of the
bus was closed; secondly, the passengers, specifically the two deceased,
jumped out of the window. The lower court therefore concluded that the
defendant common carrier is not liable for the death of the said passengers
which it implicitly attributed to the unforeseen acts of the unidentified
passenger who went amuck.
There is nothing in the record to support the conclusion that the solitary door
of the bus was locked as to prevent the passengers from passing through.
Leonila Cullano, testifying for the defense, clearly stated that the conductor
opened the door when the passengers were shouting that the bus stop while be infused by bias and fraught with inconsistencies, if not notably unreliable
they were in a state of panic. Sergia Beter categorically stated that she actually for lack of veracity. On direct examination, he testified:
saw her son fall from the bus as the door was forced open by the force of the
onrushing passengers. xxx xxx xxx

Pedro Collango, on the other hand, testified that he shut the door after the last Q So what happened to the passengers inside your bus?
passenger had boarded the bus. But he had quite conveniently neglected to say
that when the passengers had panicked, he himself panicked and had gone to A Some of the passengers jumped out of the window.
open the door. Portions of the testimony of Leonila Cullano, quoted below, are
illuminating:
COURT:
xxx xxx xxx
Q While the bus was in motion?
Q When you said the conductor opened the door, the door at the front or rear
portion of the bus? A Yes, your Honor, but the speed was slow because we have just picked up a
passenger.
A Front door.
Atty. Gambe:
Q And these two persons whom you said alighted, where did they pass, the
fron(t) door or rear door? Q You said that at the time of the incident the bus was running slow because
you have just picked up a passenger. Can you estimate what was your speed at
that time?
A Front door.
Atty. Calo:
xxx xxx xxx
No basis, your Honor, he is neither a driver nor a conductor.
(Tsn., p. 4, Aug. 8, 1984)
COURT:
xxx xxx xxx
Let the witness answer. Estimate only, the conductor experienced.
Q What happened after there was a commotion at the rear portion of the bus?
Witness:
A When the commotion occurred, I stood up and I noticed that there was a
passenger who was sounded (sic). The conductor panicked because the
passengers were shouting 'stop, stop'. The conductor opened the bus.' Not less than 30 to 40 miles.

(Tsn. p. 3, August 8, 1984). COURT:

Accordingly, there is no reason to believe that the deceased passengers jumped Kilometers or miles?
from the window when it was entirely possible for them to have alighted
through the door. The lower court's reliance on the testimony of Pedro A Miles.
Collango, as the conductor and employee of the common carrier, is unjustified,
in the light of the clear testimony of Leonila Cullano as the sole uninterested Atty. Gambe:
eyewitness of the entire episode. Instead we find Pedro Collango's testimony to
 Q That is only your estimate by your experience?
A Yes, sir, estimate.
(Tsn., pp. 4-5, Oct. 17, 1983).
At such speed of not less than 30 to 40 miles ..., or about 48 to 65 kilometers
per hour, the speed of the bus could scarcely be considered slow considering
that according to Collango himself, the bus had just come from a full stop after
picking a passenger (Tsn, p. 4, Id.) and that the bus was still on its second or
third gear (Tsn., p. 12, Id.).
In the light of the foregoing, the negligence of the common carrier, through its
employees, consisted of the lack of extraordinary diligence required of
common carriers, in exercising vigilance and utmost care of the safety of its
passengers, exemplified by the driver's belated stop and the reckless opening of
the doors of the bus while the same was travelling at an appreciably fast speed.
At the same time, the common carrier itself acknowledged, through its
administrative officer, Benjamin Granada, that the bus was commissioned to
travel and take on passengers and the public at large, while equipped with only
a solitary door for a bus its size and loading capacity, in contravention of rules
and regulations provided for under the Land Transportation and Traffic Code
(RA 4136 as amended.) (Rollo, pp. 23-26)
Considering the factual findings of the Court of Appeals-the bus driver did not
immediately stop the bus at the height of the commotion; the bus was speeding from a
full stop; the victims fell from the bus door when it was opened or gave way while the
bus was still running; the conductor panicked and blew his whistle after people had
already fallen off the bus; and the bus was not properly equipped with doors in
accordance with law-it is clear that the petitioners have failed to overcome the
presumption of fault and negligence found in the law governing common carriers.
The petitioners' argument that the petitioners "are not insurers of their passengers"
deserves no merit in view of the failure of the petitioners to prove that the deaths of the
two passengers were exclusively due to force majeure and not to the failure of the
petitioners to observe extraordinary diligence in transporting safely the passengers to
their destinations as warranted by law. (See Batangas Laguna Tayabas Co. v.
Intermediate Appellate Court, supra).
The petitioners also contend that the private respondents failed to show to the court that
they are the parents of Ornominio Beter and Narcisa Rautraut respectively and therefore
have no legal personality to sue the petitioners. This argument deserves scant
consideration. We find this argument a belated attempt on the part of the petitioners to
avoid liability for the deaths of Beter and Rautraut. The private respondents were
Identified as the parents of the victims by witnesses during the trial and the trial court
recognized them as such. The trial court dismissed the complaint solely on the ground
that the petitioners were not negligent.
Finally, the amount of damages awarded to the heirs of Beter and Rautraut by the
appellate court is supported by the evidence. The appellate court stated:
Ornominio Beter was 32 years of age at the time of his death, single, in good
health and rendering support and service to his mother. As far as Narcisa
Rautraut is concerned, the only evidence adduced is to the effect that at her
death, she was 23 years of age, in good health and without visible means of
support.
In accordance with Art. 1764 in conjunction with Art. 2206 of the Civil Code,
and established jurisprudence, several factors may be considered in
determining the award of damages, namely: 1) life expectancy (considering the
state of health of the deceased and the mortality tables are deemed conclusive)
and loss of earning capacity; (2) pecuniary loss, loss of support and service;
and (3) moral and mental suffering (Alcantara, et al. v. Surro, et al., 93 Phil.
470).
In the case of People v. Daniel (No. L-66551, April 25, 1985, 136 SCRA 92, at
page 104), the High Tribunal, reiterating the rule in Villa Rey Transit, Inc. v.
Court of Appeals (31 SCRA 511), stated that the amount of loss of earring
capacity is based mainly on two factors, namely, (1) the number of years on
the basis of which the damages shall be computed; and (2) the rate at which the
losses sustained by the heirs should be fixed.
As the formula adopted in the case of Davila v. Philippine Air Lines, 49 SCRA
497, at the age of 30 one's normal life expectancy is 33-1/3 years based on the
American Expectancy Table of Mortality (2/3 x 80-32).i•t•c-aüsl By taking
into account the pace and nature of the life of a carpenter, it is reasonable to
make allowances for these circumstances and reduce the life expectancy of the
deceased Ornominio Beter to 25 years (People v. Daniel, supra). To fix the
rate of losses it must be noted that Art. 2206 refers to gross earnings less
necessary living expenses of the deceased, in other words, only net earnings
are to be considered (People v. Daniel, supra; Villa Rey Transit, Inc. v. Court
of Appeals, supra).
Applying the foregoing rules with respect to Ornominio Beter, it is both just
and reasonable, considering his social standing and position, to fix the
deductible, living and incidental expenses at the sum of Four Hundred Pesos
(P400.00) a month, or Four Thousand Eight Hundred Pesos (P4,800.00)
annually. As to his income, considering the irregular nature of the work of a
daily wage carpenter which is seasonal, it is safe to assume that he shall have
work for twenty (20) days a month at Twenty Five Pesos (P150,000.00) for
 twenty five years. Deducting therefrom his necessary expenses, his heirs would
be entitled to Thirty Thousand Pesos (P30,000.00) representing loss of support
and service (P150,000.00 less P120,000.00). In addition, his heirs are entitled
to Thirty Thousand Pesos (P30,000.00) as straight death indemnity pursuant to
Article 2206 (People v. Daniel, supra). For damages for their moral and mental
anguish, his heirs are entitled to the reasonable sum of P10,000.00 as an
exception to the general rule against moral damages in case of breach of
contract rule Art. 2200 (Necesito v. Paras, 104 Phil. 75). As attorney's fees,
Beter's heirs are entitled to P5,000.00. All in all, the plaintiff-appellants
Ricardo and Sergia Beter as heirs of their son Ornominio are entitled to an
indemnity of Seventy Five Thousand Pesos (P75,000.00).

In the case of Narcisa Rautraut, her heirs are entitled to a straight death
indemnity of Thirty Thousand Pesos (P30,000.00), to moral damages in the
amount of Ten Thousand Pesos (P10,000.00) and Five Thousand Pesos
(P5,000.00) as attorney's fees, or a total of Forty Five Thousand Pesos
(P45,000.00) as total indemnity for her death in the absence of any evidence
that she had visible means of support. (Rollo, pp. 30-31)

WHEREFORE, the instant petition is DISMISSED. The questioned decision dated May
19, 1988 and the resolution dated August 1, 1988 of the Court of Appeals are
AFFIRMED.

SO ORDERED.
[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.
DECISION
ROMERO, J.:
In this petition for review on certiorari of the decision of the Court of Appeals, the
issue is whether or not the explosion of a newly installed tire of a passenger vehicle is a
fortuitous event that exempts the carrier from liability for the death of a passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children
named Ardee and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus
bound for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the
left front tire of the bus exploded. The bus fell into a ravine around three (3) feet from
the road and struck a tree. The incident resulted in the death of 28-year-old Tito
Tumboy and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage, damages
and attorneys fees was filed by Leny and her children against Alberta Yobido, the
owner of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of
Davao City. When the defendants therein filed their answer to the complaint, they
raised the affirmative defense of caso fortuito. They also filed a third-party complaint
against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed
an answer with compulsory counterclaim. At the pre-trial conference, the parties agreed
to a stipulation of facts.[1]
Upon a finding that the third party defendant was not liable under the insurance
contract, the lower court dismissed the third party complaint. No amicable settlement
having been arrived at by the parties, trial on the merits ensued.
The plaintiffs asserted that violation of the contract of carriage between them and
the defendants was brought about by the drivers failure to exercise the diligence
required of the carrier in transporting passengers safely to their place of
destination. According to Leny Tumboy, the bus left Mangagoy at 3:00 oclock in the
afternoon. The winding road it traversed was not cemented and was wet due to the rain;
it was rough with crushed rocks. The bus which was full of passengers had cargoes on
top. Since it was running fast, she cautioned the driver to slow down but he merely
stared at her through the mirror. At around 3:30 p.m., in Trento, she heard something
explode and immediately, the bus fell into a ravine.
For their part, the defendants tried to establish that the accident was due to a
fortuitous event. Abundio Salce, who was the bus conductor when the incident
happened, testified that the 42-seater bus was not full as there were only 32 passengers,
such that he himself managed to get a seat. He added that the bus was running at a
speed of 60 to 50 and that it was going slow because of the zigzag road. He affirmed
that the left front tire that exploded was a brand new tire that he mounted on the bus on
April 21, 1988 or only five (5) days before the incident. The Yobido Liner secretary,
Minerva Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20,
1988 and she was present when it was mounted on the bus by Salce. She stated that all
driver applicants in Yobido Liner underwent actual driving tests before they were
employed. Defendant Cresencio Yobido underwent such test and submitted his
professional drivers license and clearances from the barangay, the fiscal and the police.
On August 29, 1991, the lower court rendered a decision[2] dismissing the action
for lack of merit. On the issue of whether or not the tire blowout was a caso fortuito, it
found that the falling of the bus to the cliff was a result of no other outside factor than
the tire blow-out. It held that the ruling in the La Mallorca and Pampanga Bus Co. v.
De Jesus[3] that a tire blowout is a mechanical defect of the conveyance or a fault in its
equipment which was easily discoverable if the bus had been subjected to a more
thorough or rigid check-up before it took to the road that morning is inapplicable to this
case. It reasoned out that in said case, it was found that the blowout was caused by the
established fact that the inner tube of the left front tire was pressed between the inner
circle of the left wheel and the rim which had slipped out of the wheel. In this case,
however, the cause of the explosion remains a mystery until at present. As such, the
court added, the tire blowout was a caso fortuito which is completely an extraordinary
circumstance independent of the will of the defendants who should be relieved of
whatever liability the plaintiffs may have suffered by reason of the explosion pursuant
to Article 1174[4] of the Civil Code.
Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the
lower court the following errors: (a) finding that the tire blowout was a caso fortuito;
(b) failing to hold that the defendants did not exercise utmost and/or extraordinary
diligence required of carriers under Article 1755 of the Civil Code, and (c) deciding the
case contrary to the ruling in Juntilla v. Fontanar,[5] and Necesito v. Paras.[6]
On August 23, 1993, the Court of Appeals rendered the Decision [7] reversing that
of the lower court. It held that:
To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the
blow-out, if due to a factory defect, improper mounting, excessive tire pressure, is not
an unavoidable event. On the other hand, there may have been adverse conditions on the
road that were unforeseeable and/or inevitable, which could make the blow-out a caso
fortuito. The fact that the cause of the blow-out was not known does not relieve the
carrier of liability. Owing to the statutory presumption of negligence against the carrier
and its obligation to exercise the utmost diligence of very cautious persons to carry the
passenger safely as far as human care and foresight can provide, it is the burden of the
defendants to prove that the cause of the blow-out was a fortuitous event. It is not
incumbent upon the plaintiff to prove that the cause of the blow-out is not caso-fortuito.
Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge
defendants burden. As enunciated in Necesito vs. Paras, the passenger has neither
choice nor control over the carrier in the selection and use of its equipment, and the
good repute of the manufacturer will not necessarily relieve the carrier from liability.
Moreover, there is evidence that the bus was moving fast, and the road was wet and
rough. The driver could have explained that the blow-out that precipitated the accident
that caused the death of Toto Tumboy could not have been prevented even if he had
exercised due care to avoid the same, but he was not presented as witness.
The Court of Appeals thus disposed of the appeal as follows:
WHEREFORE, the judgment of the court a quo is set aside and another one entered
ordering defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito
Tumboy, P30,000.00 in moral damages, and P7,000.00 for funeral and burial expenses.
SO ORDERED.
The defendants filed a motion for reconsideration of said decision which was
denied on November 4, 1993 by the Court of Appeals. Hence, the instant petition
asserting the position that the tire blowout that caused the death of Tito Tumboy was
a caso fortuito. Petitioners claim further that the Court of Appeals, in ruling contrary to
that of the lower court, misapprehended facts and, therefore, its findings of fact cannot
be considered final which shall bind this Court. Hence, they pray that this Court review
the facts of the case.
The Court did re-examine the facts and evidence in this case because of the
inapplicability of the established principle that the factual findings of the Court of
Appeals are final and may not be reviewed on appeal by this Court. This general
principle is subject to exceptions such as the one present in this case, namely, that the
lower court and the Court of Appeals arrived at diverse factual findings. [8]However,
upon such re-examination, we found no reason to overturn the findings and conclusions
of the Court of Appeals.
As a rule, when a passenger boards a common carrier, he takes the risks incidental
to the mode of travel he has taken. After all, a carrier is not an insurer of the safety of its
passengers and is not bound absolutely and at all events to carry them safely and
without injury.[9] However, when a passenger is injured or dies while travelling, the law
presumes that the common carrier is negligent. Thus, the Civil Code provides:
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.
Article 1755 provides that (a) common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances. Accordingly, in culpa
contractual, once a passenger dies or is injured, the carrier is presumed to have been at
fault or to have acted negligently. This disputable presumption may only be overcome
by evidence that the carrier had observed extraordinary diligence as prescribed by
Articles 1733,[10] 1755 and 1756 of the Civil Code or that the death or injury of the
passenger was due to a fortuitous event.[11] Consequently, the court need not make an
express finding of fault or negligence on the part of the carrier to hold it responsible for
damages sought by the passenger.[12]
In view of the foregoing, petitioners contention that they should be exempt from
liability because the tire blowout was no more than a fortuitous event that could not
have been foreseen, must fail. A fortuitous event is possessed of the following
characteristics: (a) the cause of the unforeseen and unexpected occurrence, or the failure
of the debtor to comply with his obligations, must be independent of human will; (b) it
must be impossible to foresee the event which constitutes the caso fortuito, or if it can
be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render
it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the
obligor must be free from any participation in the aggravation of the injury resulting to
the creditor.[13] 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.[14]
Under the circumstances of this case, the explosion of the new tire may not be
considered a fortuitous event. There are human factors involved in the situation. The
fact that the tire was new did not imply that it was entirely free from manufacturing
defects or that it was properly mounted on the vehicle. Neither may the fact that the tire
bought and used in the vehicle is of a brand name noted for quality, resulting in the
conclusion that it could not explode within five days use. Be that as it may, it is settled
that an accident caused either by defects in the automobile or through the negligence of
its driver is not a caso fortuito that would exempt the carrier from liability for
damages.[15]
Moreover, a common carrier may not be absolved from liability in case of force
majeure or fortuitous event alone. The common carrier must still prove that it
was not negligent in causing the death or injury resulting from an accident. [16]This Court
has had occasion to state:
While it may be true that the tire that blew-up was still good because the grooves of the
tire were still visible, this fact alone does not make the explosion of the tire a fortuitous
event. No evidence was presented to show that the accident was due to adverse road
conditions or that precautions were taken by the jeepney driver to compensate for any
conditions liable to cause accidents. The sudden blowing-up, therefore, could have been
caused by too much air pressure injected into the tire coupled by the fact that the
jeepney was overloaded and speeding at the time of the accident. [17]
 It is interesting to note that petitioners proved through the bus conductor, Salce,
that the bus was running at 60-50 kilometers per hour only or within the prescribed
lawful speed limit. However, they failed to rebut the testimony of Leny Tumboy that the
bus was running so fast that she cautioned the driver to slow down. These contradictory
facts must, therefore, be resolved in favor of liability in view of the presumption of
negligence of the carrier in the law. Coupled with this is the established condition of the
road rough, winding and wet due to the rain. It was incumbent upon the defense to
establish that it took precautionary measures considering partially dangerous condition
of the road. As stated above, proof that the tire was new and of good quality is not
sufficient proof that it was notnegligent. Petitioners should have shown that it undertook
extraordinary diligence in the care of its carrier, such as conducting daily routinary
check-ups of the vehicles parts. As the late Justice J.B.L. Reyes said:

It may be impracticable, as appellee argues, to require of carriers to test the strength of

each and every part of its vehicles before each trip; but we are of the opinion that a due
regard for the carriers obligations toward the traveling public demands adequate
periodical tests to determine the condition and strength of those vehicle portions the
failure of which may endanger the safety of the passengers. [18]

Having failed to discharge its duty to overthrow the presumption of negligence

with clear and convincing evidence, petitioners are hereby held liable for
damages. Article 1764[19] in relation to Article 2206[20] of the Civil Code prescribes the
amount of at least three thousand pesos as damages for the death of a passenger. Under
prevailing jurisprudence, the award of damages under Article 2206 has been increased
to fifty thousand pesos (P50,000.00).[21]
Moral damages are generally not recoverable in culpa contractual except when
bad faith had been proven. However, the same damages may be recovered when breach
of contract of carriage results in the death of a passenger, [22] as in this case. Exemplary
damages, awarded by way of example or correction for the public good when moral
damages are awarded,[23] may likewise be recovered in contractual obligations if the
defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent
manner.[24] Because petitioners failed to exercise the extraordinary diligence required of
a common carrier, which resulted in the death of Tito Tumboy, it is deemed to have
acted recklessly.[25] As such, private respondents shall be entitled to exemplary
damages.
WHEREFORE, the Decision of the Court of Appeals is
hereby AFFIRMEDsubject to the modification that petitioners shall, in addition to the
monetary awards therein, be liable for the award of exemplary damages in the amount
of P20,000.00. Costs against petitioners.
SO ORDERED.
G.R. No. L-8034 November 18, 1955
CORNELIA A. DE GILLACO, ET AL., plaintiffs-appellees,
vs.
MANILA RAILROAD COMPANY, defendant-appellant.
First Assistant Corporate Counsel Federico C. Alikpala and Attorney Higino R.
Francisco for appellant.
Restituto Luna for appellees.
REYES, J.B.L., J.:
The Manila Railroad Company has appealed from a judgment of the Court of First
Instance of Laguna sentencing it to pay P4,000 damages to the appellees herein, the
widow and children of the late Tomas Gillaco, shot by an employee of the Company in
April, 1946.
The judgment was rendered upon the following stipulation of facts:
That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas
Gillaco, husband of the plaintiff, was a passenger in the early morning train of
the Manila Railroad Company from Calamba, Laguna to Manila;
That when the train reached the Paco Railroad station, Emilio Devesa, a train
guard of the Manila Railroad Company assigned in the Manila-San Fernando,
La Union Line, happened to be in said station waiting for the same train which
would take him to Tutuban Station, where he was going to report for duty;
That Emilio Devesa had a long standing personal grudge against Tomas
Gillaco, same dating back during the Japanese occupation;
That because of this personal grudge, Devesa shot Gillaco with the carbine
furnished to him by the Manila Railroad Company for his use as such train
guard, upon seeing him inside the train coach;
That Tomas Gillaco died as a result of the would which he sustained from the
shot fired by Devesa.
It is also undisputed that Devesa was convicted with homicide by final judgment of the
Court of Appeals.
Appellant's contention is that, on the foregoing facts, no liability attaches to it as
employer of the killer, Emilio Devesa; that it is not responsible subsidiary ex
delicto, under Art. 103 of the Revised Penal Code, because the crime was not
committed while the slayer was in the actual performance of his ordinary duties and
service; nor is it responsible ex contractu, since the complaint did not aver sufficient
facts to establish such liability, and no negligence on appellant's party was shown. The
Court below held the Railroad company responsible on the ground that a contract of
transportation implies protection of the passengers against acts of personal violence by
the agents or employees of the carrier.
There can be no quarrel with the principle that a passenger is entitled to protection from
personal violence by the carrier or its agents or employees, since the contract of
transportation obligates the carrier to transport a passenger safely to his destination. But
under the law of the case, this responsibility extends only to those that the carrier could
foresee or avoid through the exercise of the degree of car and diligence required of it.
Discussing the basis of a carrier's liability under the old Civil Code of 1889 (which was
in force in 1946, when Gillaco was shot) this Court said in Lasam vs. Smith (45 Phil.,
657):
In our opinion, the conclusions of the court below are entirely correct. That
upon the facts stated the defendant's liability, if any, is contractual, is well
settled by previous decisions of the court, beginning with the case of
Rakes vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction
between extra-contractual liability and contractual liability has been so ably
and exhaustively discussed in various other cases that nothing further need
here be said upon that subject. (See Cangco vs. Manila Railroad Co., 38 Phil.,
768; Manila Railroad vs. Compañia Transatlantica and Atlantic, Gulf & Pacific
Co., 38 Phil., 875; De Guia vs. Manila Electric Railroad & Light Co., 40 Phil.,
706). It is sufficient to reiterate that the source of the defendant's legal liability
is the contract of carriage; that by entering into that contract he bound himself
to carry the plaintiff safely and securely to their destination; and that having
failed to do so he is liable in damages unless he shows that the failure to fulfill
his obligation was due to causes mentioned in article 1105 of the Civil Code,
which reads as follows:
"No one shall be liable for events which could not be foreseen or which, even
if foreseen, were inevitable, with the exception of the cases in which the law
expressly provides otherwise and those in which the obligation itself imposes
such liability."
The act of guard Devesa in shooting passenger Gillaco (because of a personal grudge
nurtured against the latter since the Japanese occupation) was entirely unforeseeable by
the Manila Railroad Co. The latter had no means to ascertain or anticipate that the two
would meet, nor could it reasonably foresee every personal rancor that might exist
between each one of its many employees and any one of the thousands of eventual
passengers riding in its trains. The shooting in question was therefore "caso
fortuito" within the definition of article 105 of the old Civil Code, being both
unforeseeable and inevitable under the given circumstances; and pursuant to established by servants acting in their own interest, and not in that of the employer. That
doctrine, the resulting breach of appellant's contract of safe carriage with the late Tomas principle is not the ordinary rule,respondent superior, by which the employer
Gillaco was excused thereby. is held responsible only for act or omissions of the employee in the scope of
his employment; but the only reason in our opinion for a broader liability
No doubt that a common carrier is held to a very high degree of care and diligence in arises from the fact that the servant, in mistreating the passenger wholly for
the protection of its passengers; but, considering the vast and complex activities of some private purpose of his own, in the very act, violates the contractual
modern rail transportation, to require of appellant that it should guard against all obligation of the employer for the performance of which he has put the
possible misunderstanding between each and every one of its employees and every employee in his place. The reason does not exist where the employee who
passenger that might chance to ride in its conveyances at any time, strikes us as committed the assault was never in a position in which it became his duty to
demanding diligence beyond what human care and foresight can provide. his employer to represent him in discharging any duty of the latter toward the
passenger. The proposition that the carrier clothes every employee engaged in
the transportation business with the comprehensive duty of protecting every
The lower Court and the appellees both relied on the American authorities that
passenger with whom he may in any way come in contact, and hereby makes
particularly hold carriers to be insurers of the safety of their passengers against willful
assault and intentional ill treatment on the part of their servants, it being immaterial that himself liable for every assault commited by such servant, without regard to
the act should be one of private retribution on the part of the servant, impelled by the inquiry whether or not the passenger has come within the sphere of duty of
that servant as indicated by the employment, is regarded as not only not
personal malice toward the passenger (10 Am. Jur. 108; Ed. Note to
sustained by the authorities, but as being unsound and oppressive both to the
Gassenheimer vs. Wester R. Co. 40 LRA (NS), p. 999, et seq.) But as can be inferred
employer and the employee. (Houston & T. C. R. Co. vs. Bush, 32 LRA (NS),
from the previous jurisprudence of this Court , the Civil Code of 1889 did not impose
p. 1205.)
such absolute liability (Lasam vs. Smith, supra). The liability of a carrier as an insurer
was not recognized in this jurisdiction (Government vs. Inchausti & Co., 40 Phil., 219;
Oriental Comm. Co. vs. Naviera Filipina, 38 Off. Gaz., 1020). Wherefore, the judgment appealed from is reversed and the complaint ordered
dismissed, without cost. So ordered.
Another very important consideration that must be borne in mind is that, when the
crime took place, the guard Devesa had no duties to discharge in connection with the
transportation of the deceased from Calamba to Manila. The stipulation of facts is clear
that when Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San
Fernando (La Union) trains, and he was at Paco Station awaiting transportation to
Tutuban, the starting point of the train that he was engaged to guard. In fact, his tour of
duty was to start at 9:00 a.m., two hours after the commission of the crime. Devesa was
therefore under no obligation to safeguard the passenger of the Calamba-Manila train,
where the deceased was riding; and the killing of Gillaco was not done in line of duty.
The position of Devesa at the time was that of another would be passenger, a stranger
also awaiting transportation, and not that of an employee assigned to discharge any of
the duties that the Railroad had assumed by its contract with the deceased. As a result,
Devesa's assault cannot be deemed in law a breach of Gillaco's contract of
transportation by a servant or employee of the carrier. We agree with the position taken
by the Supreme Court of Texas in a similar case, where it held:

The only good reason for making the carrier responsible for the misconduct of
the servant perpetrated in his own interest, and not in that of his employer, or
otherwise within the scope of his employment, is that the servant is clothed
with the delegated authority, and charge with the duty by the carrier, to execute
his undertaking with the passenger. And it cannot be said, we think, that there
is any such delegation to the employees at a station with reference to passenger
embarking at another or traveling on the train. Of course, we are speaking only
of the principle which holds a carrier responsible for wrong done to passenger
G.R. No. L-22272 June 26, 1967
ANTONIA MARANAN, plaintiff-appellant,
vs.
PASCUAL PEREZ, ET AL., defendants.
PASCUAL PEREZ, defendant appellant.
Pedro Panganiban for plaintiff-appellant.
Magno T. Bueser for defendant-appellant.
BENGZON, J.P., J.:
Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and
operated by Pascual Perez when he was stabbed and killed by the driver, Simeon
Valenzuela.
Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas.
Found guilty, he was sentenced to suffer imprisonment and to indemnify the heirs of the
deceased in the sum of P6,000. Appeal from said conviction was taken to the Court of
Appeals.1äwphï1.ñët
On December 6 1961, while appeal was pending in the Court of Appeals, Antonia
Maranan, Rogelio's mother, filed an action in the Court of First Instance of Batangas to
recover damages from Perez and Valenzuela for the death of her son. Defendants
asserted that the deceased was killed in self-defense, since he first assaulted the driver
by stabbing him from behind. Defendant Perez further claimed that the death was a caso
fortuito for which the carrier was not liable.
The court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages
against defendant Perez. The claim against defendant Valenzuela was dismissed. From
this ruling, both plaintiff and defendant Perez appealed to this Court, the former asking
for more damages and the latter insisting on non-liability. Subsequently, the Court of
Appeals affirmed the judgment of conviction earlier mentioned, during the pendency of
the herein appeal, and on May 19, 1964, final judgment was entered therein. (Rollo, p.
33).
Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad
Co., 97 Phil. 884, that the carrier is under no absolute liability for assaults of its
employees upon the passengers. The attendant facts and controlling law of that case and
the one at bar are very different however. In the Gillaco case, the passenger was killed
outside the scope and the course of duty of the guilty employee. As this Court there
found:
x x x when the crime took place, the guard Devesa had no duties to discharge
in connection with the transportation of the deceased from Calamba to Manila.
The stipulation of facts is clear that when Devesa shot and killed Gillaco,
Devesa was assigned to guard the Manila-San Fernando (La Union) trains, and
he was at Paco Station awaiting transportation to Tutuban, the starting point of
the train that he was engaged to guard. In fact, his tour of duty was to start at
9:00 two hours after the commission of the crime. Devesa was therefore under
no obligation to safeguard the passengers of the Calamba-Manila train, where
the deceased was riding; and the killing of Gillaco was not done in line of
duty. The position of Devesa at the time was that of another would be
passenger, a stranger also awaiting transportation, and not that of an employee
assigned to discharge any of the duties that the Railroad had assumed by its
contract with the deceased. As a result, Devesa's assault can not be deemed in
law a breach of Gillaco's contract of transportation by a servant or employee of
the carrier. . . . (Emphasis supplied)
Now here, the killing was perpetrated by the driver of the very cab transporting the
passenger, in whose hands the carrier had entrusted the duty of executing the contract of
carriage. In other words, unlike the Gillaco case, the killing of the passenger here took
place in the course of duty of the guilty employee and when the employee was acting
within the scope of his duties.
Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889
which, unlike the present Civil Code, did not impose upon common carriers absolute
liability for the safety of passengers against wilful assaults or negligent acts committed
by their employees. The death of the passenger in the Gillaco case was truly a fortuitous
event which exempted the carrier from liability. It is true that Art. 1105 of the old Civil
Code on fortuitous events has been substantially reproduced in Art. 1174 of the Civil
Code of the Philippines but both articles clearly remove from their exempting effect the
case where the law expressly provides for liability in spite of the occurrence of force
majeure. And herein significantly lies the statutory difference between the old and
present Civil Codes, in the backdrop of the factual situation before Us, which further
accounts for a different result in the Gillaco case. Unlike the old Civil Code, the new
Civil Code of the Philippines expressly makes the common carrier liable for intentional
assaults committed by its employees upon its passengers, by the wording of Art. 1759
which categorically states that
Common carriers are liable for the death of or injuries to passengers through
the negligence or willful acts of the former's employees, although such
employees may have acted beyond the scope of their authority or in violation
of the orders of the common carriers.
The Civil Code provisions on the subject of Common Carriers 1 are new and were taken
from Anglo-American Law.2There, the basis of the carrier's liability for assaults on
passengers committed by its drivers rests either on (1) the doctrine of respondeat
superior or (2) the principle that it is the carrier's implied duty to transport the passenger
safely.3
Under the first, which is the minority view, the carrier is liable only when the act of the mental anguish they suffered. A claim therefor, having been properly made, it becomes
employee is within the scope of his authority and duty. It is not sufficient that the act be the court's duty to award moral damages.9 Plaintiff demands P5,000 as moral damages;
within the course of employment only.4 however, in the circumstances, We consider P3,000 moral damages, in addition to the
P6,000 damages afore-stated, as sufficient. Interest upon such damages are also due to
Under the second view, upheld by the majority and also by the later cases, it is enough plaintiff-appellant. 10
that the assault happens within the course of the employee's duty. It is no defense for the
carrier that the act was done in excess of authority or in disobedience of the carrier's Wherefore, with the modification increasing the award of actual damages in plaintiff's
orders.5 The carrier's liability here is absolute in the sense that it practically secures the favor to P6,000, plus P3,000.00 moral damages, with legal interest on both from the
passengers from assaults committed by its own employees.6 filing of the complaint on December 6, 1961 until the whole amount is paid, the
judgment appealed from is affirmed in all other respects. No costs. So ordered.
As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows
the rule based on the second view. At least three very cogent reasons underlie this rule. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez and Castro, JJ.,
As explained in Texas Midland R.R. v. Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, concur.
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.

Accordingly, it is the carrier's strict obligation to select its drivers and similar
employees with due regard not only to their technical competence and physical ability,
but also, no less important, to their total personality, including their patterns of
behavior, moral fibers, and social attitude.

Applying this stringent norm to the facts in this case, therefore, the lower court rightly
adjudged the defendant carrier liable pursuant to Art. 1759 of the Civil Code. The
dismissal of the claim against the defendant driver was also correct. Plaintiff's action
was predicated on breach of contract of carriage7 and the cab driver was not a party
thereto. His civil liability is covered in the criminal case wherein he was convicted by
final judgment.

In connection with the award of damages, the court a quo granted only P3,000 to
plaintiff-appellant. This is the minimum compensatory damages amount recoverable
under Art. 1764 in connection with Art. 2206 of the Civil Code when a breach of
contract results in the passenger's death. As has been the policy followed by this Court,
this minimal award should be increased to P6,000. As to other alleged actual damages,
the lower court's finding that plaintiff's evidence thereon was not convincing, 8 should
not be disturbed. Still, Arts. 2206 and 1764 award moral damages in addition to
compensatory damages, to the parents of the passenger killed to compensate for the
G.R. No. 52159 December 22, 1989
JOSE PILAPIL, petitioner,
vs.
HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY,
INC., respondents.
Martin Badong, Jr. for petitioner.
Eufronio K. Maristela for private respondent.
PADILLA, J.:
This is a petition to review on certiorari the decision* rendered by the Court of Appeals
dated 19 October 1979 in CA-G.R. No. 57354-R entitled "Jose Pilapil, plaintiff-appellee
versus Alatco Transportation Co., Inc., defendant-appellant," which reversed and set
aside the judgment of the Court of First Instance of Camarines Sur in Civil Case No.
7230 ordering respondent transportation company to pay to petitioner damages in the
total sum of sixteen thousand three hundred pesos (P 16,300.00).
The record discloses the following facts:
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-defendant's bus
bearing No. 409 at San Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M.
While said bus No. 409 was in due course negotiating the distance between Iriga City
and Naga City, upon reaching the vicinity of the cemetery of the Municipality of Baao,
Camarines Sur, on the way to Naga City, an unidentified man, a bystander along said
national highway, hurled a stone at the left side of the bus, which hit petitioner above
his left eye. Private respondent's personnel lost no time in bringing the petitioner to the
provincial hospital in Naga City where he was confined and treated.
Considering that the sight of his left eye was impaired, petitioner was taken to Dr.
Malabanan of Iriga City where he was treated for another week. Since there was no
improvement in his left eye's vision, petitioner went to V. Luna Hospital, Quezon City
where he was treated by Dr. Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and sustained a permanent scar
above the left eye.
Thereupon, petitioner instituted before the Court of First Instance of Camarines Sur,
Branch I an action for recovery of damages sustained as a result of the stone-throwing
incident. After trial, the court a quo rendered judgment with the following dispositive
part:
Wherefore, judgment is hereby entered:
1. Ordering defendant transportation company to pay
plaintiff Jose Pilapil the sum of P 10,000.00, Philippine
Currency, representing actual and material damages for
causing a permanent scar on the face and injuring the eye-
sight of the plaintiff;
2. Ordering further defendant transportation company to pay
the sum of P 5,000.00, Philippine Currency, to the plaintiff
as moral and exemplary damages;
3. Ordering furthermore, defendant transportation company
to reimburse plaintiff the sum of P 300.00 for his medical
expenses and attorney's fees in the sum of P 1,000.00,
Philippine Currency; and
4. To pay the costs.
SO ORDERED 1
From the judgment, private respondent appealed to the Court of Appeals where the
appeal was docketed as CA-G.R. No. 57354R. On 19 October 1979, the Court of
Appeals, in a Special Division of Five, rendered judgment reversing and setting aside
the judgment of the court a quo.
Hence the present petition.
In seeking a reversal of the decision of the Court of Appeals, petitioner contends that
said court has decided the issue not in accord with law. Specifically, petitioner argues
that the nature of the business of a transportation company requires the assumption of
certain risks, and the stoning of the bus by a stranger resulting in injury to petitioner-
passenger is one such risk from which the common carrier may not exempt itself from
liability.
We do not agree.
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.
Under Article 1733 of the Civil Code, common carriers are required to observe
extraordinary diligence for the safety of the passenger transported by them, according to
all the circumstances of each case. The requirement of extraordinary diligence imposed
upon common carriers is restated in Article 1755: "A common carrier is bound to carry
the passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances." Further,
in case of death of or injuries to passengers, the law presumes said common carriers to
be at fault or to have acted negligently. 2
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. 3
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and
precaution in the carriage of passengers by common carriers to only such as human care
and foresight can provide. what constitutes compliance with said duty is adjudged with
due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the
part of the common carrier when its passenger is injured, merely relieves the latter, for
the time being, from introducing evidence to fasten the negligence on the former,
because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised
extraordinary diligence as required by law in the performance of its contractual
obligation, or that the injury suffered by the passenger was solely due to a fortuitous
event. 4
In fine, we can only infer from the law the intention of the Code Commission and
Congress to curb the recklessness of drivers and operators of common carriers in the
conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation
company makes it an insurer of the passenger's safety, but that its liability for personal
injuries sustained by its passenger rests upon its negligence, its failure to exercise the
degree of diligence that the law requires. 5
Petitioner contends that respondent common carrier failed to rebut the presumption of
negligence against it by proof on its part that it exercised extraordinary diligence for the
safety of its passengers.
We do not agree.
First, as stated earlier, the presumption of fault or negligence against the carrier is only
a disputable presumption. It gives in where contrary facts are established proving either
that the carrier had exercised the degree of diligence required by law or the injury
suffered by the passenger was due to a fortuitous event. Where, as in the instant case,
the injury sustained by the petitioner was in no way due to any defect in the means of
transport or in the method of transporting or to the negligent or willful acts of private
respondent's employees, and therefore involving no issue of negligence in its duty to
provide safe and suitable cars as well as competent employees, with the injury arising
wholly from causes created by strangers over which the carrier had no control or even
knowledge or could not have prevented, the presumption is rebutted and the carrier is
not and ought not to be held liable. To rule otherwise would make the common carrier
the insurer of the absolute safety of its passengers which is not the intention of the
lawmakers.
Second, while as a general rule, common carriers are bound to exercise extraordinary
diligence in the safe transport of their passengers, it would seem that this is not the
standard by which its liability is to be determined when intervening acts of strangers is
to be determined directly cause the injury, while the contract of carriage Article 1763
governs:
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.
Petitioner has charged respondent carrier of negligence on the ground that the injury
complained of could have been prevented by the common carrier if something like
mesh-work grills had covered the windows of its bus.
We do not agree.
Although the suggested precaution could have prevented the injury complained of, the
rule of ordinary care and prudence is not so exacting as to require one charged with its
exercise to take doubtful or unreasonable precautions to guard against unlawful acts of
strangers. The carrier is not charged with the duty of providing or maintaining vehicles
as to absolutely prevent any and all injuries to passengers. Where the carrier uses cars of
the most approved type, in general use by others engaged in the same occupation, and
exercises a high degree of care in maintaining them in suitable condition, the carrier
cannot be charged with negligence in this respect. 6
Finally, petitioner contends that it is to the greater interest of the State if a carrier were
made liable for such stone-throwing incidents rather than have the bus riding public lose
confidence in the transportation system.

Sad to say, we are not in a position to so hold; such a policy would be better left to the
consideration of Congress which is empowered to enact laws to protect the public from
the increasing risks and dangers of lawlessness in society.

WHEREFORE, the judgment appealed from is hereby AFFIRMED.

SO ORDERED.
G.R. No. L-11037 December 29, 1960
EDGARDO CARIAGA, ET AL., plaintiffs-appellants,
vs.
LAGUNA TAYABAS BUS COMPANY, defendant-appellant.
MANILA RAILROAD COMPANY, defendant-appellee.
Ozaeta, Lichauco and Picazo for defendant and appellant.
E.A. Fernandez and L.H. Fernandez for plaintiffs and appellants.
Gov't. Corp. Counsel A. Padilla and Atty. F.A. Umali for appellee.
DIZON, J.:
At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas Bus
Co. — hereinafter referred to as the LTB — driven by Alfredo Moncada, left its station
at Azcarraga St., Manila, for Lilio, Laguna, with Edgardo Cariaga, a fourth-year
medical student of the University of Santo Tomas, as one of its passengers. At about
3:00 p.m., as the bus reached that part of the poblacion of Bay, Laguna, where the
national highway crossed a railroad track, it bumped against the engine of a train then
passing by with such terrific force that the first six wheels of the latter were derailed,
the engine and the front part of the body of the bus was wrecked, the driver of the bus
died instantly, while many of its passengers, Edgardo among them, were severely
injured. Edgardo was first confined at the San Pablo City Hospital from 5:00 p.m., June
18, 1952, to 8:25 a.m., June 20 of the same year when he was taken to the De los Santos
Clinic, Quezon City. He left that clinic on October 14 to be transferred to the University
of Santo Tomas Hospital where he stayed up to November 15. On this last date he was
taken back to the De los Santos Clinic where he stayed until January 15, 1953. He was
unconscious during the first 35 days after the accident; at the De los Santos Clinic Dr.
Gustilo removed the fractured bones which lacerated the right frontal lobe of his brain
and at the University of Santo Tomas Hospital Dr. Gustilo performed another operation
to cover a big hole on the right frontal part of the head with a tantalum plate.
The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous
expenses incurred from June 18, 1952 to April, 1953. From January 15, 1953 up to
April of the same year Edgardo stayed in a private house in Quezon, City, the LTB
having agreed to give him a subsistence allowance of P10.00 daily during his
convalescence, having spent in this connection the total sum of P775.30 in addition to
the amount already referred to.
On April 24, 1953 the present action was filed to recover for Edgardo Cariaga, from the
LTB and the MRR Co., and total sum of P312,000.00 as actual, compensatory, moral
and exemplary damages, and for his parents, the sum of P18,00.00 in the same
concepts. The LTB disclaimed liability claiming that the accident was due to the
negligence of its co-defendant, the Manila Railroad Company, for not providing a
crossing bar at the point where the national highway crossed the railway track, and for
this reason filed the corresponding cross-claim against the latter company to recover the
total sum of P18,194.75 representing the expenses paid to Edgardo Cariaga. The Manila
Railroad Company, in turn, denied liability upon the complaint and cross-claim alleging
that it was the reckless negligence of the bus driver that caused the accident.
The lower court held that it was the negligence of the bus driver that caused the accident
and, as a result, rendered judgment sentencing the LTB to pay Edgardo Cariaga the sum
of P10,490.00 as compensatory damages, with interest at the legal rate from the filing of
the complaint, and dismissing the cross-claim against the Manila Railroad Company.
From this decision the Cariagas and the LTB appealed.
The Cariagas claim that the trial court erred: in awarding only P10,490.00 as
compensatory damages to Edgardo; in not awarding them actual and moral damages,
and in not sentencing appellant LTB to pay attorney's fees.
On the other hand, the LTB's principal contention in this appeal is that the trial court
should have held that the collision was due to the fault of both the locomotive driver
and the bus driver and erred, as a consequence, in not holding the Manila Railroad
Company liable upon the cross-claim filed against it.
We shall first dispose of the appeal of the bus company. Its first contention is that the
driver of the train locomotive, like the bus driver, violated the law, first, in sounding the
whistle only when the collision was about to take place instead of at a distance at least
300 meters from the crossing, and second, in not ringing the locomotive bell at all. Both
contentions are without merits.
After considering the evidence presented by both parties the lower court expressly
found:
. . . While the train was approximately 300 meters from the crossing, the
engineer sounded two long and two short whistles and upon reaching a point
about 100 meters from the highway, he sounded a long whistle which lasted up
to the time the train was about to cross it. The bus proceeded on its way
without slackening its speed and it bumped against the train engine, causing
the first six wheels of the latter to be derailed.
xxx xxx xxx
. . . that the train whistle had been sounded several times before it reached the
crossing. All witnesses for the plaintiffs and the defendants are uniform in
stating that they heard the train whistle sometime before the impact and
considering that some of them were in the bus at the time, the driver thereof
must have heard it because he was seated on the left front part of the bus and it
was his duty and concern to observe such fact in connection with the safe
 operation of the vehicle. The other L.T.B. bus which arrived ahead at the
crossing, heeded the warning by stopping and allowing the train to pass and so
nothing happened to said vehicle. On the other hand, the driver of the bus No.
133 totally ignored the whistle and noise produced by the approaching train
and instead he tried to make the bus pass the crossing before the train by not
stopping a few meters from the railway track and in proceeding ahead.
The above findings of the lower court are predicated mainly upon the testimony of
Gregorio Ilusondo, a witness for the Manila Railroad Company. Notwithstanding the
efforts exerted by the LTB to assail his credibility, we do not find in the record any fact
or circumstance sufficient to discredit his testimony. We have, therefore, no other
alternative but to accept the findings of the trial court to the effect, firstly, that the
whistle of locomotive was sounded four times — two long and two short — "as the
train was approximately 300 meters from the crossing"; secondly, that another LTB bus
which arrived at the crossing ahead of the one where Edgardo Cariaga was a passenger,
paid heed to the warning and stopped before the "crossing", while — as the LTB itself
now admits (Brief p. 5) — the driver of the bus in question totally disregarded the
warning.
But to charge the MRR Co. with contributory negligence, the LTB claims that the
engineer of the locomotive failed to ring the bell altogether, in violation of the section
91 of Article 1459, incorporated in the charter of the said MRR Co. This contention —
as is obvious — is the very foundation of the cross-claim interposed by the LTB against
its
co-defendant. The former, therefore, had the burden of proving it affirmatively because
a violation of law is never presumed. The record discloses that this burden has not been
satisfactorily discharged.
The Cariagas, as appellants, claim that the award of P10,000.00 compensatory damages
to Eduardo is inadequate considering the nature and the after effects of the physical
injuries suffered by him. After a careful consideration of the evidence on this point we
find their contentions to be well-founded.
From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of
the injuries suffered by Edgardo, his right forehead was fractured necessitating the
removal of practically all of the right frontal lobe of his brain. From the testimony of
Dr. Jose A. Fernandez, a psychiatrist, it may be gathered that, because of the physical
injuries suffered by Edgardo, his mentality has been so reduced that he can no longer
finish his studies as a medical student; that he has become completely misfit for any
kind of work; that he can hardly walk around without someone helping him, and has to
use a brace on his left leg and feet.
Upon the whole evidence on the matter, the lower court found that the removal of the
right frontal lobe of the brain of Edgardo reduced his intelligence by about 50%; that
due to the replacement of the right frontal bone of his head with a tantalum plate
Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or
dented it would cause his death."
The impression one gathers from this evidence is that, as a result of the physical injuries
suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid,
both physically and mentally.
Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the
obligor, guilty of a breach of contract but who acted in good faith, is liable shall be
those that are the natural and probable consequences of the breach and which the parties
had forseen or could have reasonably forseen at the time the obligation was constituted,
provided such damages, according to Art. 2199 of the same Code, have been duly
proved. Upon this premise it claims that only the actual damages suffered by Edgardo
Cariaga consisting of medical, hospital and other expenses in the total sum of
P17,719.75 are within this category. We are of the opinion, however, that the income
which Edgardo Cariaga could earn if he should finish the medical course and pass the
corresponding board examinations must be deemed to be within the same category
because they could have reasonably been foreseen by the parties at the time he boarded
the bus No. 133 owned and operated by the LTB. At that time he was already a fourth-
year student in medicine in a reputable university. While his scholastic may not be first
rate (Exhibits 4, 4-A to 4-C), it is, nevertheless, sufficient to justify the assumption that
he could have passed the board test in due time. As regards the income that he could
possibly earn as a medical practitioner, it appears that, according to Dr. Amado Doria, a
witness for the LTB, the amount of P300.00 could easily be expected as the minimum
monthly income of Edgardo had he finished his studies.
Upon consideration of all the facts mentioned heretofore this Court is of the opinion,
and so holds, that the compensatory damages awarded to Edgardo Cariaga should be
increased to P25,000.00.
Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial
court, the pertinent portion of its decision reading as follows:
Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the
Civil Code enumerates the instances when moral damages may be covered and
the case under consideration does not fall under any one of them. The present
action cannot come under paragraph 2 of said article because it is not one of
the quasi-delict and cannot be considered as such because of the pre-existing
contractual relation between the Laguna Tayabas Bus Company and Edgardo
Cariaga. Neither could defendant Laguna Tayabas Bus Company be held liable
to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil
Code on account of breach of its contract of carriage because said defendant
did not act fraudulently or in bad faith in connection therewith. Defendant
Laguna Tayabas Bus Company had exercised due diligence in the selection
and supervision of its employees like the drivers of its buses in connection
 with the discharge of their duties and so it must be considered an obligor in
good faith.
The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees,
because this case does not fall under any of the instances enumerated in Article
2208 of the Civil Code.
We agree with the trial court and, to the reason given above, we add those given by this
Court in Cachero vs. Manila Yellow Taxicab Co., Inc.(101 Phil., 523, 530, 533):
A mere perusal of plaintiff's complaint will show that this action against the
defendant is predicated on an alleged breach of contract of carriage, i.e., the
failure of the defendants to bring him "safely and without mishaps" to his
destination, and it is to be noted that the chauffeur of defendant's taxicab that
plaintiff used when he received the injuries involved herein, Gregorio Mira,
has not even made a party defendant to this case.
Considering, therefore, the nature of plaintiff's action in this case, is he entitled
to compensation for moral damages? Article 2219 of the Civil Code says the
following:
Art. 2219. Moral damages may be recovered in the following and analogous
cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and
35.
xxx xxx xxx
Of course enumerated in the just quoted Article 2219 only the first two may
have any bearing on the case at bar. We find, however, with regard to the first
that the defendant herein has not committed in connection with this case any
"criminal offense resulting in physical injuries". The one that committed the
offense against the plaintiff is Gregorio Mira, and that is why he has been
already prosecuted and punished therefor. Altho (a) owners and managers of
an establishment and enterprise are responsible for damages caused by their
employees in the service of the branches in which the latter are employed or on
the occasion of their functions; (b) employers are likewise liable for damages
caused by their employees and household helpers acting within the scope of
their assigned task (Article 218 of the Civil Code); and (c) employers and
corporations engaged in any kind of industry are subsidiary civilly liable for
felonies committed by their employees in the discharge of their duties (Art.
103, Revised Penal Code), plaintiff herein does not maintain this action under
the provisions of any of the articles of the codes just mentioned and against all
the persons who might be liable for the damages caused, but as a result of an
admitted breach of contract of carriage and against the defendant employer
alone. We, therefore, hold that the case at bar does not come within the
exception of paragraph 1, Article 2219 of the Civil Code.
The present complaint is not based either on a "quasi-delict causing physical
injuries" (Art. 2219, par. 2 of the Civil Code). From the report of the Code
Commission on the new Civil Code. We copy the following:
A question of nomenclature confronted the Commission. After a careful
deliberation, it was agreed to use the term "quasi-delict" for those
obligations which do not arise from law, contracts, quasi-contracts, or
criminal offenses. They are known in Spanish legal treaties as "culpa
aquiliana", "culpa-extra-contractual" or "cuasi-delitos". The phrase "culpa-
extra-contractual" or its translation "extra-contractual-fault" was eliminated
because it did not exclude quasi-contractual or penal obligations. "Aquilian
fault" might have been selected, but it was thought inadvisable to refer to so
ancient a law as the "Lex Aquilia". So "quasi-delict" was chosen, which more
nearly corresponds to the Roman Law classification of the obligations and is in
harmony with the nature of this kind of liability.
The Commission also thought of the possibility of adopting the word "tort"
from Anglo-American law. But "tort" under that system is much broader than
the Spanish-Philippine concept of obligations arising from non-contractual
negligence. "Tort" in Anglo-American jurisprudence includes not only
 negligence, but also intentional criminal act, such as assault and battery, false Wherefore, modified as above indicated, the appealed judgement is hereby affirmed in
imprisonment and deceit. In the general plan of the Philippine legal system, all other respects, with costs against appellant LTB.
intentional and malicious acts are governed by the Penal Code, although
certain exceptions are made in the Project. (Report of the Code Commission,
pp. 161-162).

In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the
distinction between obligation derived from negligence and obligation as a
result of a breach of contract. Thus, we said:

It is important to note that the foundation of the legal liability of the defendant
is the contract of carriage, and that the obligation to respond for the damage
which plaintiff has suffered arises, if at all, from the breach of that contract by
reason of the failure of defendant to exercise due care in its performance. That
is to say, its liability is direct and immediate, differing essentially in the legal
viewpoint from the presumptive responsibility for the negligence of its
servants, imposed by Article 1903 of the Civil Code (Art. 2180 of the new),
which can be rebutted by proof of the exercise of due care in their selection of
supervision. Article 1903 is not applicable to obligations arising EX
CONTRACTU, but only to extra-contractual obligations — or to use the
technical form of expression, that article relates only to CULPA AQUILIANA'
and not to CULPA CONTRACTUAL.lawphil.net

The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46
Off. Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and
others, wherein moral damages were awarded to the plaintiffs, are not
applicable to the case at bar because said decision were rendered before the
effectivity of the new Civil Code (August 30, 1950) and for the further reason
that the complaints filed therein were based on different causes of action.

In view of the foregoing the sum of P2,000 was awarded as moral damages by
the trial court has to be eliminated, for under the law it is not a compensation
awardable in a case like the one at bar.

What has been said heretofore relative to the moral damages claimed by Edgardo
Cariaga obviously applies with greater force to a similar claim (4th assignment of error)
made by his parents.

The claim made by said spouses for actual and compensatory damages is likewise
without merits. As held by the trial court, in so far as the LTB is concerned, the present
action is based upon a breach of contract of carriage to which said spouses were not a
party, and neither can they premise their claim upon the negligence or quasi-delict of
the LTB for the simple reason that they were not themselves injured as a result of the
collision between the LTB bus and train owned by the Manila Railroad Company.
G.R. No. L-25499 February 18, 1970
VILLA REY TRANSIT, INC., petitioner,
vs.
THE COURT OF APPEALS, TRINIDAD A. QUINTOS, PRIMA A. QUINTOS,
AND JULITA A. QUINTOS, respondents.
Laurea and Pison for petitioner.
Bonifacio M. Abad, Jr. for respondents.
CONCEPCION, C.J.:
Petitioner, Villa Rey Transit, Inc., seeks the review by certiorari of a decision of the
Court of Appeals affirming that of the Court of First Instance of Pangasinan. The basic
facts are set forth in said decision of the Court of Appeals, from which We quote:
At about 1:30 in the morning of March 17, 1960, an Izuzu First Class
passenger bus owned and operated by the defendant, bearing Plate No. TPU-
14871-Bulacan and driven by Laureano Casim, left Lingayen, Pangasinan, for
Manila. Among its paying passengers was the deceased, Policronio Quintos, Jr.
who sat on the first seat, second row, right side of the bus. At about 4:55
o'clock a.m. when the vehicle was nearing the northern approach of the
Sadsaran Bridge on the national highway in barrio Sto. Domingo, municipality
of Minalin, Pampanga, it frontally hit the rear side of a bullcart filled with hay.
As a result the end of a bamboo pole placed on top of the hayload and tied to
the cart to hold it in place, hit the right side of the windshield of the bus. The
protruding end of the bamboo pole, about 8 feet long from the rear of the
bullcart, penetrated through the glass windshield and landed on the face of
Policronio Quintos, Jr. who, because of the impact, fell from his seat and was
sprawled on the floor. The pole landed on his left eye and the bone of the left
side of his face was fractured. He suffered other multiple wounds and was
rendered unconscious due, among other causes to severe cerebral concussion.
A La Mallorca passenger bus going in the opposite direction towards San
Fernando, Pampanga, reached the scene of the mishap and it was stopped by
Patrolman Felino Bacani of the municipal police force of Minalin who, in the
meantime, had gone to the scene to investigate. Patrolman Bacani placed
Policronio Quintos, Jr. and three other injured men who rode on the bullcart
aboard the La Mallorca bus and brought them to the provincial hospital of
Pampanga at San Fernando for medical assistance. Notwithstanding such
assistance, Policronio Quintos, Jr. died at 3:15 p.m. on the same day, March
17, 1960, due to traumatic shock due to cerebral injuries.
The private respondents, Trinidad, Prima and Julita, all surnamed Quintos, are the
sisters and only surviving heirs of Policronio Quintos Jr., who died single, leaving no
descendants nor ascendants. Said respondents herein brought this action against herein
petitioner, Villa Rey Transit, Inc., as owner and operator of said passenger bus, bearing
Plate No. TPU-14871-Bulacan, for breach of the contract of carriage between said
petitioner and the deceased Policronio Quintos, Jr., to recover the aggregate sum of
P63,750.00 as damages, including attorney's fees. Said petitioner — defendant in the
court of first instance — contended that the mishap was due to a fortuitous event, but
this pretense was rejected by the trial court and the Court of Appeals, both of which
found that the accident and the death of Policronio had been due to the negligence of the
bus driver, for whom petitioner was liable under its contract of carriage with the
deceased. In the language of His Honor, the trial Judge:
The mishap was not the result of any unforeseeable fortuitous event or
emergency but was the direct result of the negligence of the driver of the
defendant. The defendant must, therefore, respond for damages resulting from
its breach of contract for carriage. As the complaint alleged a total damage of
only P63,750.00 although as elsewhere shown in this decision the damages for
wake and burial expenses, loss of income, death of the victim, and attorneys
fee reach the aggregate of P79,615.95, this Court finds it just that said damages
be assessed at total of only P63,750.00 as prayed for in plaintiffs' amended
complaint.
The despositive part of the decision of the trial Court reads:
WHEREFORE, judgment is hereby rendered ordering the defendant to pay to
the plaintiffs the amount of P63,750.00 as damages for breach of contract of
carriage resulting from the death of Policronio Quintos, Jr.
which, as above indicated, was affirmed by the Court of Appeals. Hence, the present
petition for review on certiorari, filed by Villa Rey Transit, Inc.
The only issue raised in this appeal is the amount of damages recoverable by private
respondents herein. The determination of such amount depends, mainly upon two (2)
factors, namely: (1) the number of years on the basis of which the damages shall be
computed and (2) the rate at which the losses sustained by said respondents should be
fixed.
The first factor was based by the trial court — the view of which was concurred in by
the Court of Appeals — upon the life expectancy of Policronio Quintos, Jr., which was
placed at 33-1/3 years — he being over 29 years of age (or around 30 years for purposes
of computation) at the time of his demise — by applying the formula (2/3 x [80-301 =
life expectancy) adopted in the American Expectancy Table of Mortality or the actuarial
of Combined Experience Table of Mortality. Upon the other hand, petitioner maintains
that the lower courts had erred in adopting said formula and in not acting in accordance
with Alcantara v. Surro1 in which the damages were computed on a four (4) year basis,
despite the fact that the victim therein was 39 years old, at the time of his death, and had
a life expectancy of 28.90 years.
The case cited is not, however, controlling in the one at bar. In the Alcantara
case, none of the parties had questioned the propriety of the four-year basis adopted by
the trial court in making its award of damages. Both parties appealed, but only as
regards the amount thereof. The plaintiffs assailed the non-inclusion, in its computation,
of the bonus that the corporation, which was the victim's employer, had awarded to
deserving officers and employees, based upon the profits earned less than two (2)
months before the accident that resulted in his death. The defendants, in turn, objected
to the sum awarded for the fourth year, which was treble that of the previous years,
based upon the increases given, in that fourth year, to other employees of the same
corporation. Neither this objection nor said claim for inclusion of the bonus was
sustained by this Court. Accordingly, the same had not thereby laid down any rule on
the length of time to be used in the computation of damages. On the contrary, it
declared:
The determination of the indemnity to be awarded to the heirs of a deceased
person has therefore no fixed basis. Much is left to the discretion of the court
considering the moral and material damages involved, and so it has been said
that "(t)here can be no exact or uniform rule for measuring the value of a
human life and the measure of damages cannot be arrived at by precise
mathematical calculation, but the amount recoverable depends on the
particular facts and circumstances of each case. The life expectancy of the
deceased or of the beneficiary, whichever is shorter, is an important factor.' (25
C.J.S. 1241.) Other factors that are usually considered are: (1) pecuniary loss
to plaintiff or beneficiary (25 C.J.S. 1243-1250) ; (2) loss of support (25 C.J.S.,
1250-1251); (3) loss of service (25 C.J.S. 1251-1254); (4) loss of society (25
C.J.S. 1254-1255); (5) mental suffering of beneficiaries (25 C.J.S., 1258-1259)
; and (6) medical and funeral expenses (26 C.J.S., 1254-1260)."2
Thus, life expectancy is, not only relevant, but, also, an important element in fixing the
amount recoverable by private respondents herein. Although it is not the sole element
determinative of said amount, no cogent reason has been given to warrant its disregard
and the adoption, in the case at bar, of a purely arbitrary standard, such as a four-year
rule. In short, the Court of Appeals has not erred in basing the computation of
petitioner's liability upon the life expectancy of Policronio Quintos, Jr.
With respect to the rate at which the damages shall be computed, petitioner impugns the
decision appealed from upon the ground that the damages awarded therein will have to
be paid now, whereas most of those sought to be indemnified will be suffered years
later. This argument is basically true, and this is, perhaps, one of the reasons why the
Alcantara case points out the absence of a "fixed basis" for the ascertainment of the
damages recoverable in litigations like the one at bar. Just the same, the force of the said
argument of petitioner herein is offset by the fact that, although payment of the award in
the case at bar will have to take place upon the finality of the decision therein, the
liability of petitioner herein had been fixed at the rate only of P2,184.00 a year, which is
the annual salary of Policronio Quintos, Jr. at the time of his death, as a young "training
assistant" in the Bacnotan Cement Industries, Inc. In other words, unlike the Alcantara
case, on which petitioner relies, the lower courts did not consider, in the present case,
Policronio's potentiality and capacity to increase his future income. Indeed, upon the
conclusion of his training period, he was supposed to have a better job and be promoted
from time to time, and, hence, to earn more, if not — considering the growing
importance of trade, commerce and industry and the concomitant rise in the income
level of officers and employees
therein — much more.
At this juncture, it should be noted, also, that We are mainly concerned with the
determination of the losses or damages sustained by the private respondents, as
dependents and intestate heirs of the deceased, and that said damages consist, not of the
full amount of his earnings, but of the support, they received or would have received
from him had he not died in consequence of the negligence of petitioner's agent. In
fixing the amount of that support, We must reckon with the "necessary expenses of his
own living", which should be deducted from his earnings. Thus, it has been consistently
held that earning capacity, as an element of damages to one's estate for his death by
wrongful act is necessarily his net earning capacity or his capacity to acquire money,
"less the necessary expense for his own living.3 Stated otherwise, the amount
recoverable is not loss of the entire earning, but rather the loss of that portion of the
earnings which the beneficiary would have received.4 In other words, only net earnings,
not gross earning, are to be considered 5 that is, the total of the earnings less expenses
necessary in the creation of such earnings or income 6 and less living and other
incidental expenses.7
All things considered, We are of the opinion that it is fair and reasonable to fix the
deductible living and other expenses of the deceased at the sum of P1,184.00 a year, or
about P100.00 a month, and that, consequently, the loss sustained by his sisters may be
roughly estimated at P1,000.00 a year or P33,333.33 for the 33-1/3 years of his life
expectancy. To this sum of P33,333.33, the following should be added: (a) P12,000.00,
pursuant to Arts. 104 and 107 of the Revised Penal Code, in relation to Article 2206 of
our Civil Code, as construed and applied by this Court;8 (b) P1,727.95, actually spent by
private respondents for medical and burial expenses; and (c) attorney's fee, which was
fixed by the trial court, at P500.00, but which, in view of the appeal taken by petitioner
herein, first to the Court of Appeals and later to this Supreme Court, should be
increased to P2,500.00. In other words, the amount adjudged in the decision appealed
from should be reduced to the aggregate sum of P49,561.28, with interest thereon, at the
legal rate, from December 29, 1961, date of the promulgation of the decision of the trial
court.
Thus modified, said decision and that of the Court of Appeals are hereby affirmed, in all
other respects, with costs against petitioner, Villa Rey Transit, Inc. It is so ordered.
G.R. No. L-54470 May 8, 1990
PHILIPPINE AIRLINES, INC., petitioner,
vs.
HON. COURT OF APPEALS and NATIVIDAD VDA. DE PADILLA, substituted
by her legal heirs, namely: AUGUSTO A. PADILLA, ALBERTO A. PADILLA,
CRESENCIO R. ABES (representing the deceased Isabel Padilla Abes) MIGUEL
A. PADILLA and RAMON A. PADILLA, respondents.
Siguion Reyna, Montecillo & Ongsiako for petitioner.
Ambrosio Padilla, Mempin & Reyes Law Offices for private respondents.
GRIÑO-AQUINO, J.:
The only legal issue raised by the petitioner in this thirty-year-old case is whether the
indemnity for the death of private respondent's son, the late Nicanor A. Padilla should
be computed on the basis of his life expectancy, as the trial court and the Court of
Appeals did, rather than the life expectancy of private respondent, his only legal heir, as
the petitioner contends.
On November 23, 1960, at 5:30 P.M., Starlight Flight No. 26 of the Philippine Air
Lines (hereafter PAL) took off from the Manduriao Airport in Iloilo, on its way to
Manila, with 33 persons on board, including the plane's complement. The plane did not
reach its destination but crashed on Mt. Baco, Mindoro, one hour and fifteen minutes
after takeoff .The plane was Identified as PI-C133, a DC-3 type aircraft manufactured in
1942 and acquired by PAL in 1948. It had flown almost 18,000 hours at the time of its
illfated flight. It had been certified as airworthy by the Civil Aeronautics
Administration.
Among the fatalities was Nicanor Padilla who was a passenger on the star crossed
flight. He was 29 years old, single. His mother, Natividad A. Vda. de Padilla, was his
only legal heir.
As a result of her son's death, Mrs. Padilla filed a complaint (which was amended twice)
against PAL, demanding payment of P600,000 as actual and compensatory damages,
plus exemplary damages and P60,000 as attorney's fees.
In its answer, PAL denied that the accident was caused by its negligence or that of any
of the plane's flight crew, and that, moreover, the damages sought were excessive and
speculative.
On November 23, 1964, the trial court issued a pre-trial order requiring the parties to
file on or before January 30, 1965 a stipulation of facts, or a negative manifestation in
case they failed to submit a stipulation.
On June 8, 1965, the parties submitted a partial stipulation of facts providing as follows:
1.
Plaintiff is the widow of the late Alberto R. Padilla Filipino, of legal age, and a
resident of and with postal address at No. 970 (formerly No. 247) Gral. Solano
St., San Miguel, Manila, while defendant Philippine Air Lines, Inc. is a
corporation duly organized, registered and existing under and by virtue of the
laws of the Philippines, engaged, as a common carrier in the business of
carrying or transporting by air passengers and goods, offering its services to
the public as such for compensation, with offices at Makati Bldg., Makati,
Rizal.
2.
Nicanor A. Padilla was born on January 10, 1931. He was a son by lawful
marriage of plaintiff and Alberto R. Padilla, who died on September 2, 1948.
3.
Nicanor A. Padilla finished the elementary grades in 1943, high school in
1947, graduated the Reserve Officer's Course (Infantry Basic Course) Armed
Forces of the Philippines in 1949, and graduated with the degree of Bachelor
of Literature in 1951 and the degree of Bachelor of Laws in 1954, all in Ateneo
de Manila.
4.
He was admitted by the Supreme Court of the Philippines to practice law on
January 28, 1955, and from January 1958, to the time of his death on
November 23, 1960, he was associated with the law offices of Senator
Ambrosio Padilla, brother of his father, Alberto R. Padilla.
5.
At the time of his death, he was the President and General Manager of the
Padilla Shipping Co., Inc. He was also Vice-President and Treasurer of the
Allied Overseas Trading Co., Inc.
6.
He was a member of the Board of Directors of the Junior Chamber of 11.
Commerce (Jaycees) International and Chairman of its Committee on
Governmental Affairs for the term 1960-1961. This Committee on Other facts on which the parties cannot agree will be subject to proof at the
Governmental Affairs published a pamphlet entitled "Good Government is our trial. (pp. 34-39, Record on Appeal; p. 11 7, Rollo.)
Business," for which the deceased was named "Jaycee of the Month of January
1960."
On January 15, 1966, the parties submitted another partial stipulation of facts:

7. 1.

Nicanor A. Padilla, while travelling and being transported and flown as a paid
passenger on one [of] defendant's aircraft, a DC-3 with registry No. PI-C133,
on "Star Light Flight" No. 26 bound for Manila from the City of Iloilo on
November 23, 1960, was killed when said plane crashed in the area of Mount
Baco, Oriental Mindoro
8.
Nicanor A. Padilla died single, leaving as his nearest of kin and sole heiress to
his estate his mother the plaintiff herein with whom he was residing at the time
of his death at 970 Gral. Solano St., Manila.
9.
The aircraft (PI-C133) that crashed on Mt. Baco, Oriental Mindoro on
November 23, 1960, was a twin-engine passenger plane of the Philippine Air
Lines of the DC-3 type. It was manufactured by Douglas Aircraft Corporation
of the United States for the U.S. Army and was purchased from the latter by
the Commercial Air lines, Inc., on September 25, 1946. The defendant
Philippine Air Lines acquired the plane from the Commercial Air Lines, Inc.,
on October 15, 1948. The aircraft was registered by Philippine Air Lines with
the Civil Aeronautics Administration as PI-C142 on May 10, 1949. On
October 15, 1953, PI-C142 met with a non-fatal accident at Piat, Tuguegarao,
Cagayan. PAL requested the Civil Aeronautics Administration for a change in
the identification mark. Said request was granted and the registration number
was changed from PI-C142 to PI-C133 on July 29, 1954. As [ofl November
22, 1960, the day before the fatal crash on Mt. Baco, PI-C133 had a total flying
time of 17,996:33 hours.
10.
PI-C133 was issued a certificate of airworthiness by the Civil Aeronautics
Administration on September 13, 1960 which was to expire on September 12,
1961; a copy of which is attached hereto as Exhibit "I" and made a part of this
stipulation.
That in the book written by Salvador B. Salvosa, M.S. University of Michigan
and member of the Actuarial Society of the Philippine, entitled; "Filipino
Experience Mortality Table," the complete life expectancy of Filipinos appear
on page 3 thereof, a photostat of which is attached hereto as Exhibit "A."
2.
That in said Exhibit "A", the columns under the heading "Age x," refers to the
age of the individual, and the columns "oe x" refers to the corresponding
number of years the individuals expected to live. Thus, under the column "Age
x," a person aged 29, the corresponding life expectancy of said person under
column "oex" is "42.60" years; and under said column "Age x" a person aged
60, corresponding life expec tancy of said person under column 'oex' is "17.90"
years;
3.
That Salvador B. Salvosa's "Filipino Experience Mortality Table," including
the table of life expectancy are used by the Philippine International life
Insurance Co., the Sterling Life Insurance Co., the Cardinal Life Insurance
Co., and Star life Insurance Co., and that the same has been approved by the
Insurance Commissioner for the use of life insurance companies doing
business in the Philippines as shown by a certificate issued by said
Commissioner which is attached hereto as Exhibit "B";
4.
That the book of Nelson and Warren, Consulting Actuaries of St. Luis and
Kansas cities, Missouri, entitled: "Principal Mortality Tables", contains a table
of comparison of complete life expectancy based on principal mortality tables
used by life insurance companies, a photostat of which is likewise attached
hereto as Exhibits "C", "C-l", "C-2", and "C-3";
5.
 That of the life expectancy based on the different systems mentioned in said
Exhibits "C", "C-1", "C-2" and "C-3", the following are also used in the
Philippines for life insurance purposes: (a) the American Experience appearing
in Exhibit "B", 'fifth columns on both pages, the first column corresponding to
the age of the individual (pages 12 and 13 of the book); (b) the Standard
Industrial, appearing in the same Exhibit "B", "sixth column on both pages
(pages 12 and 13 of the book); and (c) the 1941 Commissioner Standard
Ordinary, or CSO 1941 for short, appearing in Exhibit "B-1", third column, on
both pages (pages 14 and 15 of the book).
6.
That the materiality and applicability [sic] of the life expectancy tables shown
in Exhibit A or Exhibits "C", "C-1", "C-2" and "C-3" are left to the judgment
of the Honorable Court. (pp. 39-42, Record on Appeal; p. 117, Rollo.)
On March 19, 1970, a third joint partial stipulation of facts was submitted by the parties
to the trial court which reads, thus:
JOINT FIRST PARTIAL STIPULATION OF FACTS
Plaintiff and defendant through their respective counsel, respectfully submit
the following partial stipulation of facts:
1. Defendant in November, 1960 and even before was authorized and rated to
repair aircrafts of U.S. and foreign registries and as such holds the following:
Description Exhibit
a) US FAA Air Agency 1
Certificate
b) US FAA Repair Station
Operations Specifications
(2 pages) PI- 2 and 2-A
c) CAA Rating Grant to operate
Repair Station with ratings on
[sic] (i) Aircraft Metal
propeller Hubs Overhaul Shop,
(ii) Aircraft Engine Overhaul Shop. 3
d) PI.-CAA Rating Grant to operate
a repair station with ratings on
(i) Aircraft of Composite Construction;
(ii) Aircraft of all Metal Construction;
(iii) Aircraft Instrument. 4
2. Defendant maintained and repaired aircrafts of the U.S. Air Force, U.S.
Navy and commercial carriers like PANAM Northwest Airways, KLM and
other foreign airlines.
3. Also in 1960 defendant was maintaining and following a CAA approved
system of aircraft maintenance control using worksheets and work card which
record the specific job on any particular aircraft. They are:
a) Preflight inspections consisting of the —
(i) Through Check: — the visual inspection of an aircraft prior to flight and
performed in stations where maintenance men are assigned.
(ii) Terminating Check: — the visual inspection of the aircraft performed in
stations were aircraft terminated a flight and where maintenance men are
assigned.
(iii) After Maintenance Check: — the visual inspection of an aircraft
preparatory to any flight following the completion of any check from Check
No. 1 to Cheek No. 6, to wit:
(a) Check No. 1 known as daily inspection check;
(b) Check No. 2 which is accomplished every 125 hours;
(c) Check No. 3 which is accomplished every 250 flying
hours;
 (d) Check No. 4 which is accomplished every 500 flying 112 work control cards; 11-(G)
hours;
g) Check No. 6-B consisting of 12, 12-A to
(e) Check No. 5 which is accomplished every 1,250 flying
hours; 114 work control cards; 12-(J)

(f) Check No. 6 which is a series broken down into 6- A, 6- h) Check No. 6-C consisting of 13, 13-A to
B, 6-C, 6-D, 6-E and 6-F;
117 work control cards 13-(I)
4. The Quality Control Division is the custodian of all worksheets for the
checks performed and under PI-CAA regulations, is required to keep the i) Check No. 6-D consisting of 14,14-A to
records for at least 90 days.
110 work control cards; 14-(E)
5. The forms used and accomplished for the various checks
were:
j) Check No. 6-E consisting of 15,15-A to
Description Exhibit
120 work control cards; 15-(E)
a) Preflight check sheet,
k) Check No. 6-F consisting of 16,16-A to
including DC-3C Daily
118 work control cards 16-(M)
Airplane and Engine
The parties reserve their right to agree to additional stipulation of facts and/or
to adduce evidence on other matters not covered by this stipulation.
Routine and Cleaning Routine; 5,6 & 6-A
All exhibits mentioned and identified are attached to this stipulation. (pp. 42-
b) Check No. 2, consisting of
46, Record on Appeal; p. 117, Rollo.)

37 work control cards; 7-A to 7-KK

c) Check No. 3 consisting of
49 work control cards; 8, 8-A to 8-XX
During the hearing on September 4, 1972, the parties stipulated that they were
reproducing the testimonial and documentary evidence presented in Civil Cases Nos.
5728 and 2790 of the Court of First Instance of Iloilo, arising out of the same accident.
Certified copy of said transcript of stenographic notes were then submitted to the trial
court.

d) Check No. 4 consisting of A fourth partial stipulation of facts was submitted by the parties, reading as follows:

a work control card; 9, 9-A to 9-F PARTIAL STIPULATION OF FACTS

e) Check No. 5 consisting of 00, 10-A to
9 work control cards; 10-H
f) Check No. 6-A consisting of 11, 11-A to
Plaintiff and defendant respectfully submit the following partial stipulation of
facts:
1. For the convenience and brevity of these proceedings, considering that
defendant's evidence on the basic issues of fortuitous event and extraordinary
diligence of the carrier consists of the witnesses and documents presented in
Civil Case No. 5720 of the Court of First Instance of Iloilo entitled "Pedro R.
Davila vs. Preciosa C. Tirol," now pending appeal before the Supreme Court in
G.R. No. L-28512, defendant has proposed to reproduce in this case the
testimonies of same witnesses and documentary evidence Identified and
marked in the course of the same proceedings, as reflected in the
corresponding transcript of stenographic notes, to wit:
Transcript of
Witnesses Stenographic Notes At Pages Exhibit
a Mario Rodriguez October 30, 1962 1 - 67 37
October 31, 1962 67 - 153 38
January 7, 1963 17 - 74 39
October 14, 1963 6 - 11 40
b. Pedro N. Mallari March 19, 1963 17 - 39)
c. Arturo Camatoy March 19, 1963 39 - 75) 41
d. Ponciano Saldaña March 19, 1963 75 - 88)
e. Melecio Joson March 20, 1963 91 - 161) 42
f. Alfredo Subesa March 20, 1963 162 - 166)
g. Eduardo Estrella October 14, 1963 11 - 27)
h. Vicente Sison October 14, 1963 27 - 74)
i. Felipe Paculaba October 15, 1963 4 - 15
j. Antonio Lopez October 15, 1963 15 - 25) 43
k. Isaac Lamela October 15, 1963 26 - 55)
l. Ramon Pedrosa December 19, 1963 6 - 83 44
m. Cesar Mijares December 20, 1963 15 - 89 45
n. Jaime Manzano February 6, 1964 3 - 15) 46
o. Offer of documen-
tary evidence February 6, 1964 18 - 76)
2. The transcript of stenographic notes are attached hereto and marked
as above set forth.
3. If aforenamed witnesses were called to testify in this case, they
would give the same testimony as shown in the afore-mentioned
transcript of stenographic notes on direct examination, cross-
examination and re-direct examination, as the case may be plaintiffs
counsel hereby adopting the manifestations, objections, cross and
recross examination by the plaintiff's counsels in Davila vs.
PAL, supra and so far as the joint hearings held on December 20,
1963 and February 6, 1964, also of plaintiff's counsels in Abeto, et al.
vs. PAL, Civil Case No. 5790, also of the Court of First Instance of
Iloilo.
4. All the documentary evidence marked in the course of the hearings
shown in the transcripts of stenographic notes attached hereto have
already been marked correspondingly before the Commissioner of
this Honorable Court on a hearing held on May 24, 1968 with the
same exhibit identification.
5. Defendant reserves its right to present evidence on the question of
damages.
6. Plaintiff reserves her right to present such further evidence as she
may deem proper in rebuttal. (pp. 47-50, Record on Appeal; p.
117, Rollo.)
In addition to the stipulations of facts, private respondent Padilla testified that her son,
Nicanor Padilla, prior to his death, was 29 years old, single, in good health, President
and General Manager of Padilla Shipping Company at Iloilo City, and a legal assistant
of the Padilla Law Office; that upon learning of the death of her son in the plane crash,
she suffered shock and mental anguish, because her son who was still single was living
with her; and that Nicanor had a life insurance of P20,000, the proceeds of which were
paid to his sister.
Eduardo Mate, manager of the Allied Overseas Trading Company, testified that the
deceased, Nicanor Padilla, was one of the incorporators of the company and also its
vice-president and treasurer, receiving a monthly salary of P455.
Isaac M. Reyes, auditor of the Padilla Shipping Company, declared that the deceased
was the President and General of the firm and received a salary of P1,500 monthly.
The trial court in its decision stated that on March 19, 1970, it was manifested in court
that "the parties agreed that they will abide with whatever decision the Supreme Court
may have in similar cases involving the same airplane crash accident then pending
before other courts pending decision in Supreme Court" (p. 51, Rec. on Appeal; p.
117, Rollo)
On August 31, 1973, the trial court promulgated a decision, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered ordering the defendant Philippine
Air Lines, Inc. to pay the plaintiff Natividad A. Vda. de Padilla the sum of
P477,000.00 as award for the expected income of the deceased Nicanor;
P10,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the
costs. (pp. 59-60, Record on Appeal; p. 117, Rollo.)
On Appeal to the Court of Appeals (CA-G.R. No. 56079-R) dated July 17, 1980, the
decision of the trial court was affirmed in toto.
As pointed out at the outset, the lone issue is whether or not the respondent court erred
in computing the awarded indemnity on the basis of the life expectancy of the late
Nicanor A. Padilla rather than on the life expectancy of private respondent, and thus
erred in awarding what appears to the petitioner as the excessive sum of P477,000 as
indemnity for loss of earnings.
Petitioner relies on "the principle of law generally recognized and applied by the courts
in the United States" that "the controlling element in determining loss of earnings
arising from death is, as established by authorities, the life expectancy of the deceased
or of the beneficiary, whichever is shorter (p. 19, Brief for the Defendant-Appellant; p.
119, Rollo).
However, resort to foreign jurisprudence would be proper only if no law or
jurisprudence is available locally to settle a controversy. Even in the absence of local
statute and case law, foreign jurisprudence is only persuasive.
For the settlement of the issue at hand, there are enough applicable local laws and
jurisprudence. Under Article 1764 and Article 2206(1) of the Civil Code, the award of
damages for death is computed on the basis of the life expectancy of the deceased, not
of his beneficiary. The articles provide:
Art. 1764. Damages in cases comprised in this Section shall be awarded in
accordance with Title XVIII of this Book, concerning Damages. Article 2206
shall also apply to the death of a passenger caused by the breach of contract by
a common carrier.
Art. 2206. The amount of damages for death caused by a crime or quasi- delict
shall be at least three thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity
of the deceased, and the indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be assessed and awarded by
the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the
time of his death; . . . (Emphasis supplied.)
In the case of Davila vs. PAL, 49 SCRA 497 which involved the same tragic plane
crash, this Court determined not only PALs liability for negligence or breach of
contract, but also the manner of computing the damages due the plaintiff therein which
it based on the life expectancy of the deceased, Pedro Davila, Jr. This Court held thus:
The deceased, Pedro Davila, Jr., was single and 30 years of age when he died.
At that age one's normal life expectancy is 33-1/3 years, according to the
formula (2/3 x [80-30]) adopted by this Court in the case of Villa Rey Transit,
Inc. vs. Court of Appeals on the basis of the American Expectancy Table of
Mortality or the Actuarial of Combined Experience Table of Mortality.
However, although the deceased was in relatively good health, his medical
history shows that he had complained of and been treated for such ailments as
backaches, chest pains and occasional feelings of tiredness. It is reasonable to
make an allowance for these circumstances and consider, for purposes of this
case, a reduction of his life expectancy to 25 years.
xxx xxx xxx
Considering the fact that the deceased was getting his income from three (3)
different sources, namely, from managing a radio station, from law practice
and from farming, the expenses incidental to the generation of such income
were necessarily more than if he had only one source. Together with his living
expenses, a deduction of P600.00 a month, or P7,200.00 a year, seems to Us
reasonable, leaving a net yearly income of P7,800.00. This amount, multiplied
by 25 years, or P195,000.00 is the amount which should be awarded to the
plaintiffs in this particular respect. (pp. 504-505, Rollo.)
The petitioner's recourse to our decision in Alcantara vs. Surro, 93 Phil. 472,
undermines instead of supporting its stand here, for the indemnity in that case was also
based on the life expectancy of the deceased and not of his beneficiaries.
The petitioner's contention that actual damages under Article 2206 of the Civil Code SO ORDERED.
must be proven by clear and satisfactory evidence is correct, but its perception that such
evidence was not presented in this case, is error.

The witnesses Mate and Reyes, who were respectively the manager and auditor of
Allied Overseas Trading Company and Padilla Shipping Company, were competent to
testify on matters within their personal knowledge because of their positions, such as
the income and salary of the deceased, Nicanor A. Padilla (Sec. 30, Rule 130, Rules of
Court). As observed by the Court of Appeals, since they were cross-examined by
petitioner's counsel, any objections to their competence and the admissibility of their
testimonies, were deemed waived. The payrolls of the companies and the decedent's
income tax returns could, it is true, have constituted the best evidence of his salaries, but
there is no rule disqualifying competent officers of the corporation from testifying on
the compensation of the deceased as an officer of the same corporation, and in any
event, no timely objection was made to their testimonies.

Following the procedure used by the Supreme Court in the case of Davila vs. PAL, 49
SCRA 497, the trial court determined the victims gross annual income to be P23,100
based on his yearly salaries of P18,000 from the Padilla Shipping Company and P5,100
from the Allied Overseas Trading Corporation. Considering that he was single, the court
deducted P9,200 as yearly living expenses, resulting in a net income of P13,900 (not
P15,900 as erroneously stated in the decision). Since Nicanor Padilla was only 29 years
old and in good health, the trial court allowed him a life expectancy of 30 years.
Multiplying his annual net income of P13,900 by his life expectancy of 30 years, the
product is P417,000 (not P477,000) which is the amount of death indemnity due his
mother and only forced heir (p. 58, Record on Appeal; p. 117, Rollo).

While as a general rule, an appellee who has not appealed is not entitled to affirmative
relief other than the ones granted in the decision of the court below (Aparri vs. CA, 13
SCRA 611; Dy vs. Kuizon, 113 Phil. 592; Borromeo vs. Zaballero, 109 Phil. 332), we
nevertheless find merit in the private respondent's plea for relief for the long delay this
case has suffered on account of the petitioner's multiple appeals. Indeed, because of the
16 year delay in the disposition of this case, the private respondent herself has already
joined her son in the Great Beyond without being able to receive the indemnity she well
deserved. Considering how inflation has depleted the value of the judgment in her
favor, in the interest of justice, the petitioner should pay legal rate of interest on the
indemnity due her. The failure of the trial court to award such interest amounts to a
"plain error" which we may rectify on appeal although it was not specified in the
appellee's brief (Sec. 7, Rule 51, Rules of Court).

WHEREFORE, the petition is dismissed. The decision of the trial court is affirmed with
modification. The petitioner is ordered to pay the private respondent or her heirs death
indemnity in the sum of P417,000 (not P477,000), with legal rate of interest of 6% per
annum from the date of the judgment on August 31, 1973, until it is fully paid. Costs
against the petitioner.
[G.R. No. 159636. November 25, 2004]
VICTORY LINER, INC., petitioner, vs. ROSALITO GAMMAD, APRIL ROSSAN
P. GAMMAD, ROI ROZANO P. GAMMAD and DIANA FRANCES P.
GAMMAD, respondents.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review on certiorari is the April 11, 2003 decision[1]of
the Court of Appeals in CA-G.R. CV No. 63290 which affirmed with modification the
November 6, 1998 decision[2] of the Regional Trial Court of Tuguegarao, Cagayan,
Branch 5 finding petitioner Victory Liner, Inc. liable for breach of contract of carriage
in Civil Case No. 5023.
The facts as testified by respondent Rosalito Gammad show that on March 14,
1996, his wife Marie Grace Pagulayan-Gammad,[3] was on board an air-conditioned
Victory Liner bus bound for Tuguegarao, Cagayan from Manila. At about 3:00 a.m., the
bus while running at a high speed fell on a ravine somewhere in Barangay Baliling, Sta.
Fe, Nueva Vizcaya, which resulted in the death of Marie Grace and physical injuries to
other passengers.[4]
On May 14, 1996, respondent heirs of the deceased filed a complaint [5] for
damages arising from culpa contractual against petitioner. In its answer,[6] the petitioner
claimed that the incident was purely accidental and that it has always exercised
extraordinary diligence in its 50 years of operation.
After several re-settings,[7] pre-trial was set on April 10, 1997.[8] For failure to
appear on the said date, petitioner was declared as in default. [9] However, on petitioners
motion[10] to lift the order of default, the same was granted by the trial court. [11]
At the pre-trial on May 6, 1997, petitioner did not want to admit the proposed
stipulation that the deceased was a passenger of the Victory Liner Bus which fell on the
ravine and that she was issued Passenger Ticket No. 977785. Respondents, for their
part, did not accept petitioners proposal to pay P50,000.00. [12]
After respondent Rosalito Gammad completed his direct testimony, cross-
examination was scheduled for November 17, 1997 [13] but moved to December 8,
1997,[14] because the parties and the counsel failed to appear. On December 8, 1997,
counsel of petitioner was absent despite due notice and was deemed to have waived
right to cross-examine respondent Rosalito.[15]
Petitioners motion to reset the presentation of its evidence to March 25,
1998[16] was granted. However, on March 24, 1998, the counsel of petitioner sent the
court a telegram[17] requesting postponement but the telegram was received by the trial
court on March 25, 1998, after it had issued an order considering the case submitted for
decision for failure of petitioner and counsel to appear. [18]
On November 6, 1998, the trial court rendered its decision in favor of respondents,
the dispositive portion of which reads:
WHEREFORE, premises considered and in the interest of justice, judgment is hereby
rendered in favor of the plaintiffs and against the defendant Victory Liner, Incorporated,
ordering the latter to pay the following:
1. Actual Damages -------------------- P 122,000.00
2. Death Indemnity --------------------- 50,000.00
3. Exemplary and Moral Damages----- 400,000.00
4. Compensatory Damages ---------- 1,500,000.00
5. Attorneys Fees ------------ 10% of the total amount granted
6. Cost of the Suit.
SO ORDERED.[19]
On appeal by petitioner, the Court of Appeals affirmed the decision of the trial
court with modification as follows:
[T]he Decision dated 06 November 1998 is hereby MODIFIED to reflect that the
following are hereby adjudged in favor of plaintiffs-appellees:
1. Actual Damages in the amount of P88,270.00;
2. Compensatory Damages in the amount of P1,135,536,10;
3. Moral and Exemplary Damages in the amount of P400,000.00; and
4. Attorneys fees equivalent to 10% of the sum of the actual, compensatory,
moral, and exemplary damages herein adjudged.
The court a quos judgment of the cost of the suit against defendant-appellant is hereby
AFFIRMED.
SO ORDERED.[20]
Represented by a new counsel, petitioner on May 21, 2003 filed a motion for
reconsideration praying that the case be remanded to the trial court for cross-
examination of respondents witness and for the presentation of its evidence; or in the
alternative, dismiss the respondents complaint.[21] Invoking APEX Mining, Inc. v. Court
of Appeals,[22] petitioner argues, inter alia, that the decision of the trial court should be
set aside because the negligence of its former counsel, Atty. Antonio B. Paguirigan, in
failing to appear at the scheduled hearings and move for reconsideration of the orders
declaring petitioner to have waived the right to cross-examine respondents witness and
right to present evidence, deprived petitioner of its day in court.
On August 21, 2003, the Court of Appeals denied petitioners motion for
reconsideration.[23]
Hence, this petition for review principally based on the fact that the mistake or
gross negligence of its counsel deprived petitioner of due process of law. Petitioner also
argues that the trial courts award of damages were without basis and should be deleted.
The issues for resolution are: (1) whether petitioners counsel was guilty of gross
negligence; (2) whether petitioner should be held liable for breach of contract of
carriage; and (3) whether the award of damages was proper.
It is settled that the negligence of counsel binds the client. This is based on the rule
that any act performed by a counsel within the scope of his general or implied authority
is regarded as an act of his client. Consequently, the mistake or negligence of counsel
may result in the rendition of an unfavorable judgment against the client. However, the
application of the general rule to a given case should be looked into and adopted
according to the surrounding circumstances obtaining. Thus, exceptions to the foregoing
have been recognized by the court in cases where reckless or gross negligence of
counsel deprives the client of due process of law, or when its application will result in
outright deprivation of the clients liberty or property or where the interests of justice so
require, and accord relief to the client who suffered by reason of the lawyers gross or
palpable mistake or negligence.[24]
The exceptions, however, are not present in this case. The record shows that Atty.
Paguirigan filed an Answer and Pre-trial Brief for petitioner. Although initially declared
as in default, Atty. Paguirigan successfully moved for the setting aside of the order of
default. In fact, petitioner was represented by Atty. Paguirigan at the pre-trial who
proposed settlement for P50,000.00. Although Atty. Paguirigan failed to file motions
for reconsideration of the orders declaring petitioner to have waived the right to cross-
examine respondents witness and to present evidence, he nevertheless, filed a timely
appeal with the Court of Appeals assailing the decision of the trial court. Hence,
petitioners claim that it was denied due process lacks basis.
Petitioner too is not entirely blameless. Prior to the issuance of the order declaring
it as in default for not appearing at the pre-trial, three notices (dated October 23,
1996,[25] January 30, 1997,[26] and March 26, 1997,[27]) requiring attendance at the pre-
trial were sent and duly received by petitioner. However, it was only on April 27, 1997,
after the issuance of the April 10, 1997 order of default for failure to appear at the pre-
trial when petitioner, through its finance and administrative manager, executed a special
power of attorney[28] authorizing Atty. Paguirigan or any member of his law firm to
represent petitioner at the pre-trial. Petitioner is guilty, at the least, of contributory
negligence and fault cannot be imputed solely on previous counsel.
The case of APEX Mining, Inc., invoked by petitioner is not on all fours with the
case at bar. In APEX, the negligent counsel not only allowed the adverse decision
against his client to become final and executory, but deliberately misrepresented in the
progress report that the case was still pending with the Court of Appeals when the same
was dismissed 16 months ago.[29] These circumstances are absent in this case because
Atty. Paguirigan timely filed an appeal from the decision of the trial court with the
Court of Appeals.
In Gold Line Transit, Inc. v. Ramos,[30] the Court was similarly confronted with the
issue of whether or not the client should bear the adverse consequences of its counsels
negligence. In that case, Gold Line Transit, Inc. (Gold Line) and its lawyer failed to
appear at the pre-trial despite notice and was declared as in default. After the plaintiffs
presentation of evidence ex parte, the trial court rendered decision ordering Gold Line
to pay damages to the heirs of its deceased passenger. The decision became final and
executory because counsel of Gold Line did not file any appeal. Finding that Goldline
was not denied due process of law and is thus bound by the negligence of its lawyer, the
Court held as follows
This leads us to the question of whether the negligence of counsel was so gross and
reckless that petitioner was deprived of its right to due process of law. We do not
believe so. It cannot be denied that the requirements of due process were observed in
the instant case. Petitioner was never deprived of its day in court, as in fact it was
afforded every opportunity to be heard. Thus, it is of record that notices were sent to
petitioner and that its counsel was able to file a motion to dismiss the complaint, an
answer to the complaint, and even a pre-trial brief. What was irretrievably lost by
petitioner was its opportunity to participate in the trial of the case and to adduce
evidence in its behalf because of negligence.
In the application of the principle of due process, what is sought to be safeguarded
against is not the lack of previous notice but the denial of the opportunity to be heard.
The question is not whether petitioner succeeded in defending its rights and interests,
but simply, whether it had the opportunity to present its side of the controversy. Verily,
as petitioner retained the services of counsel of its choice, it should, as far as this suit is
concerned, bear the consequences of its choice of a faulty option. Its plea that it was
deprived of due process echoes on hollow ground and certainly cannot elicit approval
nor sympathy.
To cater to petitioners arguments and reinstate its petition for relief from judgment
would put a premium on the negligence of its former counsel and encourage the non-
termination of this case by reason thereof. This is one case where petitioner has to bear
the adverse consequences of its counsels act, for a client is bound by the action of his
counsel in the conduct of a case and he cannot thereafter be heard to complain that the
result might have been different had his counsel proceeded differently. The rationale for
the rule is easily discernible. If the negligence of counsel be admitted as a reason for
opening cases, there would never be an end to a suit so long as a new counsel could be
hired every time it is shown that the prior counsel had not been sufficiently diligent,
experienced or learned.[31]
Similarly, in Macalalag v. Ombudsman,[32] a Philippine Postal Corporation
employee charged with dishonesty was not able to file an answer and position paper. He
was found guilty solely on the basis of complainants evidence and was dismissed with
forfeiture of all benefits and disqualification from government service. Challenging the
decision of the Ombudsman, the employee contended that the gross negligence of his
counsel deprived him of due process of law. In debunking his contention, the Court said
Neither can he claim that he is not bound by his lawyers actions; it is only in case of
gross or palpable negligence of counsel when the courts can step in and accord relief to
a client who would have suffered thereby. If every perceived mistake, failure of
diligence, lack of experience or insufficient legal knowledge of the lawyer would be
admitted as a reason for the reopening of a case, there would be no end to controversy.
Fundamental to our judicial system is the principle that every litigation must come to an
end. It would be a clear mockery if it were otherwise. Access to the courts is
guaranteed, but there must be a limit to it.
Viewed vis--vis the foregoing jurisprudence, to sustain petitioners argument that it
was denied due process of law due to negligence of its counsel would set a dangerous
precedent. It would enable every party to render inutile any adverse order or decision
through the simple expedient of alleging gross negligence on the part of its counsel. The
Court will not countenance such a farce which contradicts long-settled doctrines of trial
and procedure.[33]
Anent the second issue, petitioner was correctly found liable for breach of contract
of carriage. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons,
with due regard to all the circumstances. In a contract of carriage, it is presumed that the
common carrier was at fault or was negligent when a passenger dies or is
injured. Unless the presumption is rebutted, the court need not even make an
express finding of fault or negligence on the part of the common carrier. This
statutory presumption may only be overcome by evidence that the carrier exercised
extraordinary diligence.[34]
In the instant case, there is no evidence to rebut the statutory presumption that the
proximate cause of Marie Graces death was the negligence of petitioner. Hence, the
courts below correctly ruled that petitioner was guilty of breach of contract of carriage.
Nevertheless, the award of damages should be modified.
Article 1764[35] in relation to Article 2206[36] of the Civil Code, holds the common
carrier in breach of its contract of carriage that results in the death of a passenger liable
to pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity,
and (3) moral damages.
In the present case, respondent heirs of the deceased are entitled to indemnity for
the death of Marie Grace which under current jurisprudence is fixed at P50,000.00.[37]
The award of compensatory damages for the loss of the deceaseds earning
capacity should be deleted for lack of basis. As a rule, documentary evidence should be
presented to substantiate the claim for damages for loss of earning capacity. By way of
exception, damages for loss of earning capacity may be awarded despite the absence of
documentary evidence when (1) the deceased is self-employed earning less than the
minimum wage under current labor laws, and judicial notice may be taken of the fact
that in the deceaseds line of work no documentary evidence is available; or (2) the
deceased is employed as a daily wage worker earning less than the minimum wage
under current labor laws.[38]
In People v. Oco,[39] the evidence presented by the prosecution to recover damages
for loss of earning capacity was the bare testimony of the deceaseds wife that her
husband was earning P8,000.00 monthly as a legal researcher of a private corporation.
Finding that the deceased was neither self-employed nor employed as a daily-wage
worker earning less than the minimum wage under the labor laws existing at the time of
his death, the Court held that testimonial evidence alone is insufficient to justify an
award for loss of earning capacity.
Likewise, in People v. Caraig,[40] damages for loss of earning capacity was not
awarded because the circumstances of the 3 deceased did not fall within the recognized
exceptions, and except for the testimony of their wives, no documentary proof about
their income was presented by the prosecution. Thus
The testimonial evidence shows that Placido Agustin, Roberto Raagas, and Melencio
Castro Jr. were not self-employed or employed as daily-wage workers earning less than
the minimum wage under the labor laws existing at the time of their death. Placido
Agustin was a Social Security System employee who received a monthly salary of
P5,000. Roberto Raagas was the President of Sinclair Security and Allied Services,
a family owned corporation, with a monthly compensation of P30,000. Melencio
Castro Jr. was a taxi driver of New Rocalex with an average daily earning of P500
or a monthly earning of P7,500. Clearly, these cases do not fall under the exceptions
where indemnity for loss of earning capacity can be given despite lack of documentary
evidence. Therefore, for lack of documentary proof, no indemnity for loss of earning
capacity can be given in these cases. (Emphasis supplied)
Here, the trial court and the Court of Appeals computed the award of
compensatory damages for loss of earning capacity only on the basis of the testimony of
respondent Rosalito that the deceased was 39 years of age and a Section Chief of the
Bureau of Internal Revenue, Tuguergarao District Office with a salary of P83,088.00
per annum when she died.[41] No other evidence was presented. The award is clearly
erroneous because the deceaseds earnings does not fall within the exceptions.
However, the fact of loss having been established, temperate damages in the
amount of P500,000.00 should be awarded to respondents. Under Article 2224 of the
Civil Code, temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary
loss has been suffered but its amount can not, from the nature of the case, be proved
with certainty.
In Pleno v. Court of Appeals,[42] the Court sustained the trial courts award of
P200,000.00 as temperate damages in lieu of actual damages for loss of earning
capacity because the income of the victim was not sufficiently proven, thus
The trial court based the amounts of damages awarded to the petitioner on the following
circumstances:
As to the loss or impairment of earning capacity, there is no doubt that Pleno is an
ent[re]preneur and the founder of his own corporation, the Mayon Ceramics
Corporation. It appears also that he is an industrious and resourceful person with several
projects in line, and were it not for the incident, might have pushed them through. On
the day of the incident, Pleno was driving homeward with geologist Longley after an
ocular inspection of the site of the Mayon Ceramics Corporation. His actual income
however has not been sufficiently established so that this Court cannot award actual
damages, but, an award of temperate or moderate damages may still be made on loss or
impairment of earning capacity. That Pleno sustained a permanent deformity due to a
shortened left leg and that he also suffers from double vision in his left eye is also
established. Because of this, he suffers from some inferiority complex and is no longer
active in business as well as in social life. In similar cases as in Borromeo v. Manila
Electric Railroad Co., 44 Phil 165; Coriage, et al. v. LTB Co., et al., L-11037, Dec. 29,
1960, and in Araneta, et al. v. Arreglado, et al., L-11394, Sept. 9, 1958, the proper
award of damages were given.
We rule that the lower courts awards of damages are more consonant with the factual
circumstances of the instant case. The trial courts findings of facts are clear and well-
developed. Each item of damages is adequately supported by evidence on record.
Article 2224 of the Civil Code was likewise applied in the recent cases of People
v. Singh[43] and People v. Almedilla,[44] to justify the award of temperate damages in lieu
of damages for loss of earning capacity which was not substantiated by the required
documentary proof.
Anent the award of moral damages, the same cannot be lumped with exemplary
damages because they are based on different jural foundations. [45]These damages are
different in nature and require separate determination. [46] In culpa contractual or breach
of contract, moral damages may be recovered when the defendant acted in bad faith or
was guilty of gross negligence (amounting to bad faith) or in wanton disregard
of contractual obligations and, as in this case, when the act of breach of contract itself
constitutes the tort that results in physical injuries. By special rule in Article 1764 in
relation to Article 2206 of the Civil Code, moral damages may also be awarded in case
the death of a passenger results from a breach of carriage. [47] On the other hand,
exemplary damages, which are awarded by way of example or correction for the public
good may be recovered in contractual obligations if the defendant acted in wanton,
fraudulent, reckless, oppressive, or malevolent manner. [48]
Respondents in the instant case should be awarded moral damages to compensate
for the grief caused by the death of the deceased resulting from the petitioners breach of
contract of carriage. Furthermore, the petitioner failed to prove that it exercised the
extraordinary diligence required for common carriers, it is presumed to have acted
recklessly.[49] Thus, the award of exemplary damages is proper. Under the
circumstances, we find it reasonable to award respondents the amount of P100,000.00
as moral damages and P100,000.00 as exemplary damages. These amounts are not
excessive.[50]
The actual damages awarded by the trial court reduced by the Court of Appeals
should be further reduced. In People v. Duban,[51] it was held that only substantiated and
proven expenses or those that appear to have been genuinely incurred in connection
with the death, wake or burial of the victim will be recognized. A list of expenses
(Exhibit J),[52] and the contract/receipt for the construction of the tomb (Exhibit F) [53] in
this case, cannot be considered competent proof and cannot replace the official receipts
necessary to justify the award. Hence, actual damages should be further reduced to
P78,160.00,[54] which was the amount supported by official receipts.
Pursuant to Article 2208[55] of the Civil Code, attorneys fees may also be
recovered in the case at bar where exemplary damages are awarded. The Court finds the
award of attorneys fees equivalent to 10% of the total amount adjudged against
petitioner reasonable.
Finally, in Eastern Shipping Lines, Inc. v. Court of Appeals,[56] it was held that
when an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts
or quasi-delicts is breached, the contravenor can be held liable for payment of interest in
the concept of actual and compensatory damages, subject to the following rules, to wit
1. When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall itself earn legal interest
from the time it is judicially demanded. In the absence of stipulation, the rate of
interest shall be 12% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, theinterest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be
so reasonably established at the time the demand is made, the interest shall begin to run
only from the date the judgment of the court is made (at which time the quantification
of damages may be deemed to have been reasonably ascertained). The actual base for
the computation of legal interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit. (Emphasis supplied).

In the instant case, petitioner should be held liable for payment of interest as
damages for breach of contract of carriage. Considering that the amounts payable by
petitioner has been determined with certainty only in the instant petition, the interest
due shall be computed upon the finality of this decision at the rate of 12% per annum
until satisfaction, per paragraph 3 of the aforecited rule. [57]
WHEREFORE, in view of all the foregoing, the petition is PARTIALLY
GRANTED. The April 11, 2003 decision of the Court of Appeals in CA-G.R. CV No.
63290, which modified the decision of the Regional Trial Court of Tuguegarao,
Cagayan in Civil Case No. 5023, is AFFIRMED with MODIFICATION. As modified,
petitioner Victory Liner, Inc., is ordered to pay respondents the following: (1)
P50,000.00 as indemnity for the death of Marie Grace Pagulayan-Gammad; (2)
P100,000.00 as moral damages; (3) P100,000.00 as exemplary damages; (4) P78,160.00
as actual damages; (5) P500,000.00 as temperate damages; (6) 10% of the total amount
as attorneys fees; and the costs of suit.
Furthermore, the total amount adjudged against petitioner shall earn interest at the
rate of 12% per annum computed from the finality of this decision until fully paid.
SO ORDERED.
G.R. No. L-21438 September 28, 1966
AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF
APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.
Bengzon Villegas and Zarraga for respondent R. Carrascoso.
SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael
Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages;
P393.20 representing the difference in fare between first class and tourist class for the
portion of the trip Bangkok-Rome, these various amounts with interest at the legal rate,
from the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees;
and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's
plane ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all
other respects", with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of
record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that
left Manila for Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent,
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane
ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled in
"first class", but at Bangkok, the Manager of the defendant airline forced
plaintiff to vacate the "first class" seat that he was occupying because, in the
words of the witness Ernesto G. Cuento, there was a "white man", who, the
Manager alleged, had a "better right" to the seat. When asked to vacate his
"first class" seat, the plaintiff, as was to be expected, refused, and told
defendant's Manager that his seat would be taken over his dead body; a
commotion ensued, and, according to said Ernesto G. Cuento, "many of the
Filipino passengers got nervous in the tourist class; when they found out that
Mr. Carrascoso was having a hot discussion with the white man [manager],
they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his
seat to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and
plaintiff reluctantly gave his "first class" seat in the plane.3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of
respondent Court of Appeals. Petitioner charges that respondent court failed to make
complete findings of fact on all the issues properly laid before it. We are asked to
consider facts favorable to petitioner, and then, to overturn the appellate court's
decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by
any court of record without expressing therein clearly and distinctly the facts and the
law on which it is based". 5 This is echoed in the statutory demand that a judgment
determining the merits of the case shall state "clearly and distinctly the facts and the law
on which it is based"; 6 and that "Every decision of the Court of Appeals shall contain
complete findings of fact on all issues properly raised before it". 7
A decision with absolutely nothing to support it is a nullity. It is open to direct
attack. 8 The law, however, solely insists that a decision state the "essential ultimate
facts" upon which the court's conclusion is drawn. 9 A court of justice is not hidebound
to write in its decision every bit and piece of evidence 10 presented by one party and the
other upon the issues raised. Neither is it to be burdened with the obligation "to specify
in the sentence the facts" which a party "considered as proved". 11 This is but a part of
the mental process from which the Court draws the essential ultimate facts. A decision
is not to be so clogged with details such that prolixity, if not confusion, may result. So
long as the decision of the Court of Appeals contains the necessary facts to warrant its
conclusions, it is no error for said court to withhold therefrom "any specific finding of
facts with respect to the evidence for the defense". Because as this Court well observed,
"There is no law that so requires". 12 Indeed, "the mere failure to specify (in the
decision) the contentions of the appellant and the reasons for refusing to believe them is
not sufficient to hold the same contrary to the requirements of the provisions of law and
the Constitution". It is in this setting that in Manigque, it was held that the mere fact that
the findings "were based entirely on the evidence for the prosecution without taking into
consideration or even mentioning the appellant's side in the controversy as shown by his
own testimony", would not vitiate the judgment. 13 If the court did not recite in the
decision the testimony of each witness for, or each item of evidence presented by, the
defeated party, it does not mean that the court has overlooked such testimony or such
item of evidence. 14 At any rate, the legal presumptions are that official duty has been
regularly performed, and that all the matters within an issue in a case were laid before
the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make, maybe defined as "the
written statement of the ultimate facts as found by the court ... and essential to support
the decision and judgment rendered thereon". 16They consist of the
court's "conclusions" with respect to the determinative facts in issue". 17 A question of
law, upon the other hand, has been declared as "one which does not call for an
examination of the probative value of the evidence presented by the parties." 18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a
judgment of the Court of Appeals. 19 That judgment is conclusive as to the facts. It is
not appropriately the business of this Court to alter the facts or to review the questions
of fact. 20
With these guideposts, we now face the problem of whether the findings of fact of the
Court of Appeals support its judgment.
3. Was Carrascoso entitled to the first class seat he claims?
It is conceded in all quarters that on March 28, 1958 he paid to and received from
petitioner a first class ticket. But petitioner asserts that said ticket did not represent the
true and complete intent and agreement of the parties; that said respondent knew that he
did not have confirmed reservations for first class on any specific flight, although he
had tourist class protection; that, accordingly, the issuance of a first class ticket was no
guarantee that he would have a first class ride, but that such would depend upon the
availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its brief
before the Court of Appeals under its third assignment of error, which reads: "The trial
court erred in finding that plaintiff had confirmed reservations for, and a right to, first
class seats on the "definite" segments of his journey, particularly that from Saigon to
Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class
ticket was no guarantee that the passenger to whom the same had been issued,
would be accommodated in the first-class compartment, for as in the case of
plaintiff he had yet to make arrangements upon arrival at every station for the
necessary first-class reservation. We are not impressed by such a reasoning.
We cannot understand how a reputable firm like defendant airplane company
could have the indiscretion to give out tickets it never meant to honor at all. It
received the corresponding amount in payment of first-class tickets and yet it
allowed the passenger to be at the mercy of its employees. It is more in
keeping with the ordinary course of business that the company should know
whether or riot the tickets it issues are to be honored or not. 22
Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's
contention, thus:
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no
question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-
2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's
testimony and testified as follows:
Q. In these tickets there are marks "O.K." From what you know, what does this
OK mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx xxx xxx
Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael
Altonaga that although plaintiff paid for, and was issued a "first class" airplane ticket,
the ticket was subject to confirmation in Hongkong. The court cannot give credit to the
testimony of said witnesses. Oral evidence cannot prevail over written evidence, and
plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said
witnesses, and clearly show that the plaintiff was issued, and paid for, a first class ticket
without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified
that the reservation for a "first class" accommodation for the plaintiff was confirmed.
The court cannot believe that after such confirmation defendant had a verbal
understanding with plaintiff that the "first class" ticket issued to him by defendant
would be subject to confirmation in Hongkong. 23
We have heretofore adverted to the fact that except for a slight difference of a few pesos
in the amount refunded on Carrascoso's ticket, the decision of the Court of First
Instance was affirmed by the Court of Appeals in all other respects. We hold the view
that such a judgment of affirmance has merged the judgment of the lower
court. 24Implicit in that affirmance is a determination by the Court of Appeals that the
proceeding in the Court of First Instance was free from prejudicial error and "all
questions raised by the assignments of error and all questions that might have been
raised are to be regarded as finally adjudicated against the appellant". So also, the
judgment affirmed "must be regarded as free from all error". 25 We reached this policy
construction because nothing in the decision of the Court of Appeals on this point
would suggest that its findings of fact are in any way at war with those of the trial court.
Nor was said affirmance by the Court of Appeals upon a ground or grounds different
from those which were made the basis of the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,
notwithstanding the fact that seat availability in specific flights is therein confirmed,
then an air passenger is placed in the hollow of the hands of an airline. What security
then can a passenger have? It will always be an easy matter for an airline aided by its
employees, to strike out the very stipulations in the ticket, and say that there was a
verbal agreement to the contrary. What if the passenger had a schedule to fulfill? We
have long learned that, as a rule, a written document speaks a uniform language; that
spoken word could be notoriously unreliable. If only to achieve stability in the relations
between passenger and air carrier, adherence to the ticket so issued is desirable. Such is
the case here. The lower courts refused to believe the oral evidence intended to defeat
the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are facts
upon which the Court of Appeals predicated the finding that respondent Carrascoso had
a first class ticket and was entitled to a first class seat at Bangkok, which is a stopover
in the Saigon to Beirut leg of the flight. 27 We perceive no "welter of distortions by the
Court of Appeals of petitioner's statement of its position", as charged by
petitioner. 28 Nor do we subscribe to petitioner's accusation that respondent Carrascoso
"surreptitiously took a first class seat to provoke an issue". 29And this because, as
petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to
confirm my seat and because from Saigon I was told again to see the Manager". 30 Why,
then, was he allowed to take a first class seat in the plane at Bangkok, if he had no seat?
Or, if another had a better right to the seat?
4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant
claim is that Carrascoso's action is planted upon breach of contract; that to authorize an
award for moral damages there must be an averment of fraud or bad faith; 31 and that the
decision of the Court of Appeals fails to make a finding of bad faith. The pivotal
allegations in the complaint bearing on this issue are:
3. That ... plaintiff entered into a contract of air carriage with the Philippine
Air Lines for a valuable consideration, the latter acting as general agents for
and in behalf of the defendant, under which said contract, plaintiff was entitled
to, as defendant agreed to furnish plaintiff, First Class passage on defendant's
plane during the entire duration of plaintiff's tour of Europe with Hongkong as
starting point up to and until plaintiff's return trip to Manila, ... .
4. That, during the first two legs of the trip from Hongkong to Saigon and from
Saigon to Bangkok, defendant furnished to the plaintiff First Class
accommodation but only after protestations, arguments and/or insistence were
made by the plaintiff with defendant's employees.
5. That finally, defendant failed to provide First Class passage, but instead
furnished plaintiff only Tourist Class accommodations from Bangkok to
Teheran and/or Casablanca, ... the plaintiff has been compelled by defendant's
employees to leave the First Class accommodation berths at Bangkok after he
was already seated.
6. That consequently, the plaintiff, desiring no repetition of the inconvenience
and embarrassments brought by defendant's breach of contract was forced to
take a Pan American World Airways plane on his return trip from Madrid to
Manila.32
xxx xxx xxx
2. That likewise, as a result of defendant's failure to furnish First Class accommodations
aforesaid, plaintiff suffered inconveniences, embarrassments, and humiliations, thereby
causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation,
and the like injury, resulting in moral damages in the amount of P30,000.00. 33
xxx xxx xxx
The foregoing, in our opinion, substantially aver: First, That there was a contract to
furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran
leg; Second, That said contract was breached when petitioner failed to furnish first class
transportation at Bangkok; and Third, that there was bad faith when petitioner's
employee compelled Carrascoso to leave his first class accommodation berth "after he
was already, seated" and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassments and humiliations, thereby causing him mental
anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral
damages. It is true that there is no specific mention of the term bad faith in the
complaint. But, the inference of bad faith is there, it may be drawn from the facts and
circumstances set forth therein. 34 The contract was averred to establish the relation
between the parties. But the stress of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel
placed petitioner on guard on what Carrascoso intended to prove: That while sitting in
the plane in Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat
to a white man; 35 and (b) evidence of bad faith in the fulfillment of the contract was
presented without objection on the part of the petitioner. It is, therefore, unnecessary to
inquire as to whether or not there is sufficient averment in the complaint to justify an
award for moral damages. Deficiency in the complaint, if any, was cured by the
evidence. An amendment thereof to conform to the evidence is not even required. 36 On
the question of bad faith, the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first class compartment of
the plane belonging to the defendant Air France while at Bangkok, and was
transferred to the tourist class not only without his consent but against his will,
has been sufficiently established by plaintiff in his testimony before the court,
corroborated by the corresponding entry made by the purser of the plane in his
notebook which notation reads as follows:
"First-class passenger was forced to go to the tourist class against his
will, and that the captain refused to intervene",
 and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-
passenger. The captain of the plane who was asked by the manager of
defendant company at Bangkok to intervene even refused to do so. It is
noteworthy that no one on behalf of defendant ever contradicted or denied this
evidence for the plaintiff. It could have been easy for defendant to present its
manager at Bangkok to testify at the trial of the case, or yet to secure his
disposition; but defendant did neither. 37
The Court of appeals further stated —
Neither is there evidence as to whether or not a prior reservation was made by
the white man. Hence, if the employees of the defendant at Bangkok sold a
first-class ticket to him when all the seats had already been taken, surely the
plaintiff should not have been picked out as the one to suffer the consequences
and to be subjected to the humiliation and indignity of being ejected from his
seat in the presence of others. Instead of explaining to the white man the
improvidence committed by defendant's employees, the manager adopted the
more drastic step of ousting the plaintiff who was then safely ensconsced in his
rightful seat. We are strengthened in our belief that this probably was what
happened there, by the testimony of defendant's witness Rafael Altonaga who,
when asked to explain the meaning of the letters "O.K." appearing on the
tickets of plaintiff, said "that the space is confirmed for first class. Likewise,
Zenaida Faustino, another witness for defendant, who was the chief of the
Reservation Office of defendant, testified as follows:
"Q How does the person in the ticket-issuing office know what
reservation the passenger has arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n., p.
247, June 19, 1959)
In this connection, we quote with approval what the trial Judge has said on this
point:
Why did the, using the words of witness Ernesto G. Cuento, "white
man" have a "better right" to the seat occupied by Mr. Carrascoso?
The record is silent. The defendant airline did not prove "any better",
nay, any right on the part of the "white man" to the "First class" seat
that the plaintiff was occupying and for which he paid and was issued
a corresponding "first class" ticket.
If there was a justified reason for the action of the defendant's
Manager in Bangkok, the defendant could have easily proven it by
having taken the testimony of the said Manager by deposition, but
defendant did not do so; the presumption is that evidence willfully
suppressed would be adverse if produced [Sec. 69, par (e), Rules of
Court]; and, under the circumstances, the Court is constrained to find,
as it does find, that the Manager of the defendant airline in Bangkok
not merely asked but threatened the plaintiff to throw him out of the
plane if he did not give up his "first class" seat because the said
Manager wanted to accommodate, using the words of the witness
Ernesto G. Cuento, the "white man".38
It is really correct to say that the Court of Appeals in the quoted portion first
transcribed did not use the term "bad faith". But can it be doubted that the
recital of facts therein points to bad faith? The manager not only prevented
Carrascoso from enjoying his right to a first class seat; worse, he imposed his
arbitrary will; he forcibly ejected him from his seat, made him suffer the
humiliation of having to go to the tourist class compartment - just to give way
to another passenger whose right thereto has not been established. Certainly,
this is bad faith. Unless, of course, bad faith has assumed a meaning different
from what is understood in law. For, "bad faith" contemplates a "state of mind
affirmatively operating with furtive design or with some motive of self-interest
or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express finding of bad
faith in the judgment of the Court of First Instance, thus:
The evidence shows that the defendant violated its contract of
transportation with plaintiff in bad faith, with the aggravating
circumstances that defendant's Manager in Bangkok went to the
extent of threatening the plaintiff in the presence of many passengers
to have him thrown out of the airplane to give the "first class" seat
that he was occupying to, again using the words of the witness
Ernesto G. Cuento, a "white man" whom he (defendant's Manager)
wished to accommodate, and the defendant has not proven that this
"white man" had any "better right" to occupy the "first class" seat that
the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to
him.40
5. The responsibility of an employer for the tortious act of its employees need not be
essayed. It is well settled in law. 41 For the willful malevolent act of petitioner's
manager, petitioner, his employer, must answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that
upon the provisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in kind and degree from any other
contractual relation. 43 And this, because of the relation which an air-carrier sustains
with the public. Its business is mainly with the travelling public. It invites people to
avail of the comforts and advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty. Neglect or malfeasance of the carrier's
employees, naturally, could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by
the carrier's employees with kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is, that any rule or discourteous conduct on the part
of employees towards a passenger gives the latter an action for damages against the
carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach
of contract and a tort, giving a right of action for its agent in the presence of third
persons to falsely notify her that the check was worthless and demand payment under
threat of ejection, though the language used was not insulting and she was not
ejected." 46 And this, because, although the relation of passenger and carrier is
"contractual both in origin and nature" nevertheless "the act that breaks the contract
may be also a tort". 47 And in another case, "Where a passenger on a railroad train,
when the conductor came to collect his fare tendered him the cash fare to a point where
the train was scheduled not to stop, and told him that as soon as the train reached such
point he would pay the cash fare from that point to destination, there was nothing in the
conduct of the passenger which justified the conductor in using insulting language to
him, as by calling him a lunatic," 48 and the Supreme Court of South Carolina there held
the carrier liable for the mental suffering of said passenger.1awphîl.nèt
Petitioner's contract with Carrascoso is one attended with public duty. The stress of
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a
violation of public duty by the petitioner air carrier — a case of quasi-delict. Damages
are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —
Q You mentioned about an attendant. Who is that attendant and purser?
A When we left already — that was already in the trip — I could not help it.
So one of the flight attendants approached me and requested from me my
ticket and I said, What for? and she said, "We will note that you transferred to
the tourist class". I said, "Nothing of that kind. That is tantamount to accepting
my transfer." And I also said, "You are not going to note anything there
because I am protesting to this transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable and you don't
have enough leg room, I stood up and I went to the pantry that was next to me
and the purser was there. He told me, "I have recorded the incident in my
notebook." He read it and translated it to me — because it was recorded in
French — "First class passenger was forced to go to the tourist class against
his will, and that the captain refused to intervene."
Mr. VALTE —
I move to strike out the last part of the testimony of the witness because the
best evidence would be the notes. Your Honor.
COURT —
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of Appeals that the purser made an entry
in his notebook reading "First class passenger was forced to go to the tourist class
against his will, and that the captain refused to intervene" is predicated upon evidence
[Carrascoso's testimony above] which is incompetent. We do not think so. The subject
of inquiry is not the entry, but the ouster incident. Testimony on the entry does not
come within the proscription of the best evidence rule. Such testimony is admissible. 49a
Besides, from a reading of the transcript just quoted, when the dialogue happened, the
impact of the startling occurrence was still fresh and continued to be felt. The
excitement had not as yet died down. Statements then, in this environment, are
admissible as part of the res gestae. 50 For, they grow "out of the nervous excitement
and mental and physical condition of the declarant". 51 The utterance of the purser
regarding his entry in the notebook was spontaneous, and related to the circumstances
of the ouster incident. Its trustworthiness has been guaranteed. 52 It thus escapes the
operation of the hearsay rule. It forms part of the res gestae.
At all events, the entry was made outside the Philippines. And, by an employee of
petitioner. It would have been an easy matter for petitioner to have contradicted
Carrascoso's testimony. If it were really true that no such entry was made, the
deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in

evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power
to grant exemplary damages — in contracts and quasi- contracts. The only condition is
that defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner." 53 The manner of ejectment of respondent Carrascoso from his
first class seat fits into this legal precept. And this, in addition to moral damages. 54

9. The right to attorney's fees is fully established. The grant of exemplary damages
justifies a similar judgment for attorneys' fees. The least that can be said is that the
courts below felt that it is but just and equitable that attorneys' fees be given. 55 We do
not intend to break faith with the tradition that discretion well exercised — as it was
here — should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the
Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of
exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts
is primarily with the trial court. 56 The Court of Appeals did not interfere with the same.
The dictates of good sense suggest that we give our imprimatur thereto. Because, the
facts and circumstances point to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from
reversible error. We accordingly vote to affirm the same. Costs against petitioner. So
ordered.
G.R. No. L-22415 March 30, 1966
FERNANDO LOPEZ, ET AL., plaintiffs-appellants,
vs.
PAN AMERICAN WORLD AIRWAYS, defendant-appellant.
Ross, Selph and Carrascoso for the defendant-appellant.
Vicente J. Francisco for the plaintiffs-appellants.
BENGZON, J.P., J.:
Plaintiffs and defendant appeal from a decision of the Court of First Instance of Rizal.
Since the value in controversy exceeds P200,000 the appeals were taken directly to this
Court upon all questions involved (Sec. 17, par. 3[5], Judiciary Act).
Stated briefly the facts not in dispute are as follows: Reservations for first class
accommodations in Flight No. 2 of Pan American World Airways — hereinafter
otherwise called PAN-AM — from Tokyo to San Francisco on May 24, 1960 were
made with
PAN-AM on March 29, 1960, by "Your Travel Guide" agency, specifically, by Delfin
Faustino, for then Senator Fernando Lopez, his wife Maria J. Lopez, his son-in-law
Alfredo Montelibano, Jr., and his daughter, Mrs. Alfredo Montelibano, Jr., (Milagros
Lopez Montelibano). PAN-AM's San Francisco head office confirmed the reservations
on March 31, 1960.
First class tickets for the abovementioned flight were subsequently issued by
PAN-AM on May 21 and 23, 1960, in favor of Senator Lopez and his party. The total
fare of P9,444 for all of them was fully paid before the tickets were issued.
As scheduled Senator Lopez and party left Manila by Northwest Airlines on May 24,
1960, arriving in Tokyo at 5:30 P.M. of that day. As soon as they arrived Senator Lopez
requested Minister Busuego of the Philippine Embassy to contact PAN-AM's Tokyo
office regarding their first class accommodations for that evening's flight. For the given
reason that the first class seats therein were all booked up, however, PAN-AM's Tokyo
office informed Minister Busuego that PAN-AM could not accommodate Senator
Lopez and party in that trip as first class passengers. Senator Lopez thereupon gave
their first class tickets to Minister Busuego for him to show the same to PAN-AM's
Tokyo office, but the latter firmly reiterated that there was no accommodation for them
in the first class, stating that they could not go in that flight unless they took the tourist
class therein.
Due to pressing engagements awaiting Senator Lopez and his wife, in the United States
— he had to attend a business conference in San Francisco the next day and she had to
undergo a medical check-up in Mayo Clinic, Rochester, Minnesota, on May 28, 1960
and needed three days rest before that in San Francisco — Senator Lopez and party
were constrained to take PAN-AM's flight from Tokyo to San Francisco as tourist
passengers. Senator Lopez however made it clear, as indicated in his letter to PAN-
AM's Tokyo office on that date (Exh. A), that they did so "under protest" and without
prejudice to further action against the airline.1äwphï1.ñët
Suit for damages was thereafter filed by Senator Lopez and party against PAN-AM on
June 2, 1960 in the Court of First Instance of Rizal. Alleging breach of contracts in bad
faith by defendant, plaintiffs asked for P500,000 actual and moral damages, P100,000
exemplary damages, P25,000 attorney's fees plus costs. PAN-AM filed its answer on
June 22, 1960, asserting that its failure to provide first class accommodations to
plaintiffs was due to honest error of its employees. It also interposed a counterclaim for
attorney's fees of P25,000.
Subsequently, further pleadings were filed, thus: plaintiffs' answer to the counterclaim,
on July 25, 1960; plaintiffs' reply attached to motion for its admittance, on December 2,
1961; defendant's supplemental answer, on March 8, 1962; plaintiffs' reply to
supplemental answer, on March 10, 1962; and defendant's amended supplemental
answer, on July 10, 1962.
After trial — which took twenty-two (22) days ranging from November 25, 1960 to
January 5, 1963 — the Court of First Instance rendered its decision on November 13,
1963, the dispositive portion stating:
In view of the foregoing considerations, judgment is hereby rendered in favor
of the plaintiffs and against the defendant, which is accordingly ordered to pay
the plaintiffs the following: (a) P100,000.00 as moral damages; (b) P20,000.00
as exemplary damages; (c) P25,000.00 as attorney's fees, and the costs of this
action.
So ordered.
Plaintiffs, however, on November 21, 1963, moved for reconsideration of said
judgment, asking that moral damages be increased to P400,000 and that six per cent
(6%) interest per annum on the amount of the award be granted. And defendant opposed
the same. Acting thereon the trial court issued an order on December 14, 1963,
reconsidering the dispositive part of its decision to read as follows:
In view of the foregoing considerations, judgment is hereby rendered in favor
of the plaintiffs and against the defendant, which is accordingly ordered to pay
the plaintiffs the following: (a) P150,000.00 as moral damages; (b) P25,000.00
as exemplary damages; with legal interest on both from the date of the filing of
the complaint until paid; and (c) P25,000.00 as attorney's fees; and the costs of
this action.
So ordered.
It is from said judgment, as thus reconsidered, that both parties have appealed.
Defendant, as stated, has from the start admitted that it breached its contracts with
plaintiffs to provide them with first class accommodations in its Tokyo-San Francisco
flight of May 24, 1960. In its appeal, however, it takes issue with the finding of the
court a quo that it acted in bad faith in the branch of said contracts. Plaintiffs, on the
other hand, raise questions on the amount of damages awarded in their favor, seeking
that the same be increased to a total of P650,000.
Anent the issue of bad faith the records show the respective contentions of the parties as
follows.
According to plaintiffs, defendant acted in bad faith because it deliberately refused to
comply with its contract to provide first class accommodations to plaintiffs, out of racial
prejudice against Orientals. And in support of its contention that what was done to
plaintiffs is an oftrepeated practice of defendant, evidence was adduced relating to two
previous instances of alleged racial discrimination by defendant against Filipinos in
favor of "white" passengers. Said previous occasions are what allegedly happened to (1)
Benito Jalbuena and (2) Cenon S. Cervantes and his wife.
And from plaintiffs' evidence this is what allegedly happened; Jalbuena bought a first
class ticket from PAN-AM on April 13, 1960; he confirmed it on April 15, 1960 as to
the Tokyo-Hongkong flight of April 20, 1960; PAN-AM similarly confirmed it on April
20, 1960. At the airport he and another Oriental — Mr. Tung — were asked to step
aside while other passengers - including "white" passengers — boarded PAN-AM's
plane. Then PAN-AM officials told them that one of them had to stay behind. Since Mr.
Tung was going all the way to London, Jalbuena was chosen to be left behind. PAN-
AM's officials could only explain by saying there was "some mistake". Jalbuena
thereafter wrote PAN-AM to protest the incident (Exh. B).
As to Cenon S. Cervantes it would appear that in Flight No. 6 of PAN-AM on
September 29, 1958 from Bangkok to Hongkong, he and his wife had to take tourist
class, although they had first class tickets, which they had previously confirmed,
because their seats in first class were given to "passengers from London."
Against the foregoing, however, defendant's evidence would seek to establish its theory
of honest mistake, thus:
The first class reservations of Senator Lopez and party were made on March 29, 1960
together with those of four members of the Rufino family, for a total of eight (8) seats,
as shown in their joint reservation card (Exh. 1). Subsequently on March 30, 1960, two
other Rufinos secured reservations and were given a separate reservation card (Exh. 2).
A new reservation card consisting of two pages (Exhs. 3 and 4) was then made for the
original of eight passengers, namely, Senator Lopez and party and four members of the
Rufino family, the first page (Exh. 3) referring to 2 Lopezes, 2 Montelibanos and 1
Rufino and the second page (Exh. 4) referring to 3 Rufinos. On April 18, 1960 "Your
Travel Guide" agency cancelled the reservations of the Rufinos. A telex message was
thereupon sent on that date to PAN-AM's head office at San Francisco by Mariano
Herranz, PAN-AM's reservations employee at its office in Escolta, Manila. (Annex A-
Acker's to Exh. 6.) In said message, however, Herranz mistakenly cancelled all the seats
that had been reserved, that is, including those of Senator Lopez and party.
The next day — April 1960 — Herranz discovered his mistake, upon seeing the
reservation card newly prepared by his co-employee Pedro Asensi for Sen. Lopez and
party to the exclusion of the Rufinos (Exh. 5). It was then that Herranz sent another
telex wire to the San Francisco head office, stating his error and asking for the
reinstatement of the four (4) first class seats reserved for Senator Lopez and party
(Annex A-Velasco's to Exh. 6). San Francisco head office replied on April 22, 1960 that
Senator Lopez and party are waitlisted and that said office is unable to reinstate them
(Annex B-Velasco's to Exh. 6).
Since the flight involved was still more than a month away and confident that
reinstatement would be made, Herranz forgot the matter and told no one about it except
his co-employee, either Armando Davila or Pedro Asensi or both of them (Tsn., 123-
124, 127, Nov. 17, 1961).
Subsequently, on April 27, 1960, Armando Davila, PAN-AM's reservations employee
working in the same Escolta office as Herranz, phoned PAN-AM's ticket sellers at its
other office in the Manila Hotel, and confirmed the reservations of Senator Lopez and
party.
PAN-AM's reservations supervisor Alberto Jose, discovered Herranz's mistake after
"Your Travel Guide" phone on May 18, 1960 to state that Senator Lopez and party were
going to depart as scheduled. Accordingly, Jose sent a telex wire on that date to PAN-
AM's head office at San Francisco to report the error and asked said office to continue
holding the reservations of Senator Lopez and party (Annex B-Acker's to Exh. 6). Said
message was reiterated by Jose in his telex wire of May 19, 1960 (Annex C-Acker's to
Exh. 6). San Francisco head office replied on May 19, 1960 that it regrets being unable
to confirm Senator Lopez and party for the reason that the flight was solidly booked
(Exh. 7). Jose sent a third telex wire on May 20, 1960 addressed to PAN-AM's offices
at San Francisco, New York (Idlewild Airport), Tokyo and Hongkong, asking all-out
assistance towards restoring the cancelled spaces and for report of cancellations at their
end (Annex D-Acker's to Exh. 6). San Francisco head office reiterated on May 20, 1960
that it could not reinstate the spaces and referred Jose to the Tokyo and Hongkong
offices (Exh. 8). Also on May 20, the Tokyo office of PAN-AM wired Jose stating it
will do everything possible (Exh. 9).
Expecting that some cancellations of bookings would be made before the flight time,
Jose decided to withhold from Senator Lopez and party, or their agent, the information
that their reservations had been cancelled.
Armando Davila having previously confirmed Senator Lopez and party's first class
reservations to PAN-AM's ticket sellers at its Manila Hotel office, the latter sold and
issued in their favor the corresponding first class tickets on the 21st and 23rd of May,
1960.
From the foregoing evidence of defendant it is in effect admitted that defendant —
through its agents — first cancelled plaintiffs, reservations by mistake and
thereafter deliberately and intentionally withheld from plaintiffs or their travel agent the
fact of said cancellation, letting them go on believing that their first class reservations
stood valid and confirmed. In so misleading plaintiffs into purchasing first class tickets
in the conviction that they had confirmed reservations for the same, when in fact they
had none, defendant wilfully and knowingly placed itself into the position of having to
breach its a foresaid contracts with plaintiffs should there be no last-minute cancellation
by other passengers before flight time, as it turned out in this case. Such actuation of
defendant may indeed have been prompted by nothing more than the promotion of its
self-interest in holding on to Senator Lopez and party as passengers in its flight and
foreclosing on their chances to seek the services of other airlines that may have been
able to afford them first class accommodations. All the time, in legal contemplation
such conduct already amounts to action in bad faith. For bad faith means a breach of a
known duty through some motive of interest or ill-will (Spiegel vs. Beacon
Participations, 8 NE 2d 895, 907). As stated in Kamm v. Flink, 113 N.J.L. 582, 175 A.
62, 99 A.L.R. 1, 7: "Self-enrichment or fraternal interest, and not personal ill-will, may
well have been the motive; but it is malice nevertheless."
As of May 18, 1960 defendant's reservations supervisor, Alberto Jose knew that
plaintiffs' reservations had been cancelled. As of May 20 he knew that the San
Francisco head office stated with finality that it could not reinstate plaintiffs' cancelled
reservations. And yet said reservations supervisor made the "decision" — to use his
own, word — to withhold the information from the plaintiffs. Said Alberto Jose in his
testimony:
Q Why did you not notify them?
A Well, you see, sir, in my fifteen (15) years of service with the air lines
business my experience is that even if the flights are solidly booked months in
advance, usually the flight departs with plenty of empty seats both on the first
class and tourist class. This is due to late cancellation of passengers, or because
passengers do not show up in the airport, and it was our hope others come in
from another flight and, therefore, are delayed and, therefore, missed their
connections. This experience of mine, coupled with that wire from Tokyo that
they would do everything possible prompted me to withhold the information,
but unfortunately, instead of the first class seat that I was hoping for and which
I anticipated only the tourists class was open on which Senator and Mrs.
Lopez, Mr. and Mrs. Montelibano were accommodated. Well, I fully realize
now the gravity of my decision in not advising Senator and Mrs. Lopez, Mr.
and Mrs. Montelibano nor their agents about the erroneous cancellation and for
which I would like them to know that I am very sorry.
xxx xxx xxx
Q So it was not your duty to notify Sen. Lopez and parties that their
reservations had been cancelled since May 18, 1960?
A As I said before it was my duty. It was my duty but as I said again with
respect to that duty I have the power to make a decision or use my discretion
and judgment whether I should go ahead and tell the passenger about the
cancellation. (Tsn., pp. 17-19, 28-29, March 15, 1962.)
At the time plaintiffs bought their tickets, defendant, therefore, in breach of its known
duty, made plaintiffs believe that their reservation had not been cancelled. An additional
indication of this is the fact that upon the face of the two tickets of record, namely, the
ticket issued to Alfredo Montelibano, Jr. on May 21, 1960 (Exh. 22) and that issued to
Mrs. Alfredo Montelibano, Jr., on May 23, 1960 (Exh. 23), the reservation status is
stated as "OK". Such willful-non-disclosure of the cancellation or pretense that the
reservations for plaintiffs stood — and not simply the erroneous cancellation itself — is
the factor to which is attributable the breach of the resulting contracts. And, as above-
stated, in this respect defendant clearly acted in bad faith.
As if to further emphasize its bad faith on the matter, defendant subsequently promoted
the employee who cancelled plaintiffs' reservations and told them nothing about it. The
record shows that said employee — Mariano Herranz — was not subjected to
investigation and suspension by defendant but instead was given a reward in the form of
an increase of salary in June of the following year (Tsn., 86-88, Nov. 20, 1961).
At any rate, granting all the mistakes advanced by the defendant, there would at least be
negligence so gross and reckless as to amount to malice or bad faith (Fores vs. Miranda,
L-12163, March 4, 1959; Necesito v. Paras, L-10605-06, June 30, 1958). Firstly,
notwithstanding the entries in the reservation cards (Exhs. 1 & 3) that the reservations
cancelled are those of the Rufinos only, Herranz made the mistake, after reading said
entries, of sending a wire cancelling all the reservations, including those of Senator
Lopez and party (Tsn., pp. 108-109, Nov. 17, 1961). Secondly, after sending a wire to
San Francisco head office on April 19, 1960 stating his error and asking for
reinstatement, Herranz simply forgot about the matter. Notwithstanding the reply of San
Francisco head Office on April 22, 1960 that it cannot reinstate Senator Lopez and party
(Annex B-Velasco's to Exh. 6), it was assumed and taken for granted that reinstatement
would be made. Thirdly, Armando Davila confirmed plaintiff's reservations in a phone
call on April 27, 1960 to defendant's ticket sellers, when at the time it appeared in
plaintiffs' reservation card (Exh. 5) that they were only waitlisted passengers. Fourthly,
defendant's ticket sellers issued plaintiffs' tickets on May 21 and 23, 1960, without first
checking their reservations just before issuing said tickets. And, finally, no one among
defendant's agents notified Senator Lopez and party that their reservations had been
cancelled, a precaution that could have averted their entering with defendant into
contracts that the latter had already placed beyond its power to perform.
Accordingly, there being a clear admission in defendant's evidence of facts amounting
to a bad faith on its part in regard to the breach of its contracts with plaintiffs, it
becomes unnecessary to further discuss the evidence adduced by plaintiffs to establish
defendant's bad faith. For what is admitted in the course of the trial does not need to be
proved (Sec. 2, Rule 129, Rules of Court).
Addressing ourselves now to the question of damages, it is well to state at the outset
those rules and principles. First, moral damages are recoverable in breach of contracts
where the defendant acted fraudulently or in bad faith (Art. 2220, New Civil Code).
Second, in addition to moral damages, exemplary or corrective damages may be
imposed by way of example or correction for the public good, in breach of contract
where the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner (Articles 2229, 2232, New Civil Code). And, third, a written contract for an
attorney's services shall control the amount to be paid therefor unless found by the court
to be unconscionable or unreasonable (Sec. 24, Rule 138, Rules of Court).
First, then, as to moral damages. As a proximate result of defendant's breach in bad
faith of its contracts with plaintiffs, the latter suffered social humiliation, wounded
feelings, serious anxiety and mental anguish. For plaintiffs were travelling with first
class tickets issued by defendant and yet they were given only the tourist class. At stop-
overs, they were expected to be among the first-class passengers by those awaiting to
welcome them, only to be found among the tourist passengers. It may not be
humiliating to travel as tourist passengers; it is humiliating to be compelled to travel as
such, contrary to what is rightfully to be expected from the contractual undertaking.
Senator Lopez was then Senate President Pro Tempore. International carriers like
defendant know the prestige of such an office. For the Senate is not only the Upper
Chamber of the Philippine Congress, but the nation's treaty-ratifying body. It may also
be mentioned that in his aforesaid office Senator Lopez was in a position to preside in
impeachment cases should the Senate sit as Impeachment Tribunal. And he was former
Vice-President of the Philippines. Senator Lopez was going to the United States to
attend a private business conference of the Binalbagan-Isabela Sugar Company; but his
aforesaid rank and position were by no means left behind, and in fact he had a second
engagement awaiting him in the United States: a banquet tendered by Filipino friends in
his honor as Senate President Pro Tempore (Tsn., pp. 14-15, Nov. 25, 1960). For the
moral damages sustained by him, therefore, an award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and therefore his
humiliation. In addition she suffered physical discomfort during the 13-hour trip,(5
hours from Tokyo to Honolulu and 8 hours from Honolulu to San Francisco). Although
Senator Lopez stated that "she was quite well" (Tsn., p. 22, Nov. 25, 1960) — he
obviously meant relatively well, since the rest of his statement is that two months
before, she was attackedby severe flu and lost 10 pounds of weight and that she was
advised by Dr. Sison to go to the United States as soon as possible for medical check-up
and relaxation, (Ibid). In fact, Senator Lopez stated, as shown a few pages after in the
transcript of his testimony, that Mrs. Lopez was sick when she left the Philippines:
A. Well, my wife really felt very bad during the entire trip from Tokyo to San
Francisco. In the first place, she was sick when we left the Philippines, and
then with that discomfort which she [experienced] or suffered during that
evening, it was her worst experience. I myself, who was not sick, could not
sleep because of the discomfort. (Tsn., pp. 27-28, Nov. 25, 1960).
It is not hard to see that in her condition then a physical discomfort sustained for
thirteen hours may well be considered a physical suffering. And even without regard to
the noise and trepidation inside the plane — which defendant contends, upon the
strengh of expert testimony, to be practically the same in first class and tourist class —
the fact that the seating spaces in the tourist class are quite narrower than in first class,
there beingsix seats to a row in the former as against four to a row in the latter, and that
in tourist class there is very little space for reclining in view of the closer distance
between rows (Tsn., p. 24, Nov. 25, 1960), will suffice to show that the aforesaid
passenger indeed experienced physical suffering during the trip. Added to this, of
course, was the painfull thought that she was deprived by defendant — after having
paid for and expected the same — of the most suitable, place for her, the first class,
where evidently the best of everything would have been given her, the best seat, service,
food and treatment. Such difference in comfort between first class and tourist class is
too obvious to be recounted, is in fact the reason for the former's existence, and is
recognized by the airline in charging a higher fare for it and by the passengers in paying
said higher rate Accordingly, considering the totality of her suffering and humiliation,
an award to Mrs. Maria J. Lopez of P50,000.00 for moral damages will be reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of the
family of Senator Lopez. They formed part of the Senator's party as shown also by the
reservation cards of PAN-AM. As such they likewise shared his prestige and
humiliation. Although defendant contends that a few weeks before the flight they had
asked their reservations to be charged from first class to tourist class — which did not
materialize due to alleged full booking in the tourist class — the same does not mean
they suffered no shared in having to take tourist class during the flight. For by that time
they had already been made to pay for first class seats and therefore to expect first class
accommodations. As stated, it is one thing to take the tourist class by free choice; a far
different thing to be compelled to take it notwithstanding having paid for first class
seats. Plaintiffs-appellants now ask P37,500.00 each for the two but we note that in their
motion for reconsideration filed in the court a quo, they were satisfied with P25,000.00
each for said persons. (Record on Appeal, p. 102). For their social humiliation,
therefore, the award to them of P25,000.00 each is reasonable.
The rationale behind exemplary or corrective damages is, as the name implies, to damages are fully paid; (4) P50,000.00 as attorney's fees; and (5) the costs.
provide an example or correction for public good. Defendant having breached its Counterclaim dismissed.So ordered.
contracts in bad faith, the court, as stated earlier, may award exemplary damages in
addition to moral damages (Articles 2229, 2232, New Civil Code).

In view of its nature, it should be imposed in such an amount as to sufficiently and

effectively deter similar breach of contracts in the future by defendant or other airlines.
In this light, we find it just to award P75,000.00 as exemplary or corrective damages.

Now, as to attorney's fees, the record shows a written contract of services executed on
June 1, 1960 (Exh. F) whereunder plaintiffs-appellants engaged the services of their
counsel — Atty. Vicente J. Francisco — and agreedto pay the sum of P25,000.00 as
attorney's fees upon the termination of the case in the Court of First Instance, and an
additional sum of P25,000.00 in the event the case is appealed to the Supreme Court. As
said earlier, a written contract for attorney's services shall control the amount to be paid
therefor unless found by the court to be unconscionable or unreasonable. A
consideration of the subject matter of the present controversy, of the professional
standing of the attorney for plaintiffs-appellants, and of the extent of the service
rendered by him, shows that said amount provided for in the written agreement is
reasonable. Said lawyer — whose prominence in the legal profession is well known —
studied the case, prepared and filed the complaint, conferred with witnesses, analyzed
documentary evidence, personally appeared at the trial of the case in twenty-two days,
during a period of three years, prepared four sets of cross-interrogatories for deposition
taking, prepared several memoranda and the motion for reconsideration, filed a joint
record on appeal with defendant, filed a brief for plaintiffs as appellants consisting of 45
printed pages and a brief for plaintiffs as appellees consisting of 265 printed pages. And
we are further convinced of its reasonableness because defendant's counsel likewise
valued at P50,000.00 the proper compensation for his services rendered to defendant in
the trial court and on appeal.

In concluding, let it be stressed that the amount of damages awarded in this appeal has
been determined by adequately considering the official, political, social, and financial
standing of the offended parties on one hand, and the business and financial position of
the offender on the other (Domingding v. Ng, 55 O.G. 10). And further considering the
present rate of exchange and the terms at which the amount of damages awarded would
approximately be in U.S. dollars, this Court is all the more of the view that said award is
proper and reasonable.

Wherefore, the judgment appealed from is hereby modified so as to award in favor of

plaintiffs and against defendant, the following: (1) P200,000.00 as moral damages,
divided among plaintiffs, thus: P100,000.00 for Senate President Pro
Tempore Fernando Lopez; P50,000.00 for his wife Maria J. Lopez; P25,000.00 for his
son-in-law Alfredo Montelibano, Jr.; and P25,000.00 for his daughter Mrs. Alfredo
Montelibano, Jr.; (2) P75,000.00 as exemplary or corrective damages; (3) interest at the
legal rate of 6% per annum on the moral and exemplary damages aforestated, from
December 14, 1963, the date of the amended decision of the court a quo, until said
G.R. No. L-28773 June 30, 1975 THE LOWER COURT ERRED IN CONDEMNING DEFENDANT
TO PAY THE PLAINTIFF THE AMOUNT OF P100,000.00 AS
FRANCISCO ORTIGAS, JR., plaintiff-appellant-appellee, MORAL DAMAGES, P30,000.00 AS EXEMPLARY OR
vs. CORRECTIVE DAMAGES, WITH INTEREST ON BOTH SUMS
LUFTHANSA GERMAN AIRLINES, defendant-appellant-appellee. AT THE LEGAL RATE FROM THE COMMENCEMENT OF THIS
SUIT UNTIL FULLY PAID, P20,000.00 AS ATTORNEY'S FEES,
AND COSTS. (Pp. 12-13, p. 118, Record.)
Baizas, Alberto and Associates for appellant Lufthansa German Airlines.

Pelaez, Jalandoni and Jamir for appellant Francisco Ortigas, Jr.
BARREDO, J.:
Direct appeals of both parties plaintiff, Francisco Ortigas, and defendant Lufthansa
German Airlines, from the decision of the Court of First Instance of Manila, Branch X,
"condemning the defendant to pay plaintiff the amount of P100,000 as moral damages,
P30,000 as exemplary or corrective damages, with interest on both sums at the legal rate
from the commencement of this suit until fully paid, P20,000 as attorney's fees and the
costs" for the former's failure to "comply with its obligation to give first class
accommodation to (the latter) a (Filipino) passenger holding a first class ticket,"
aggravated by the giving of the space instead to a Belgian and the improper conduct of
its agents in dealing with him during the occasion of such discriminatory violation of its
contract of carriage.
Defendant buttresses its appeal on the following:
On the other hand, plaintiff's sole ground for his appeal is that "the trial court erred in
ordering Lufthansa to pay Ortigas only P100,000 as moral damages, P20,000 as
exemplary or corrective damages, and P20,000 as attorney's fees." (Plaintiff-Appellant's
Brief, p. a.) Thus, apart from the contention of defendant that it has been denied its full
day in court, the only issue raised by both appellants relate to the amount of the
damages awarded by the trial court, plaintiff claiming it is less than he is entitled to and
the defendant insisting on the opposite.
Lufthansa maintains it has not had its full day in court because the trial court abruptly
ended the trial by denying its last motion for postponement notwithstanding it was well
founded and forthwith ordering the striking out of the testimony of its absent witness
whose cross-examination had not been finished and then declaring the case submitted
for decision. In this connection, the record reveals the following facts:
Plaintiff's complaint was filed with the court below on December 24, 1963 and after
issues were joined, a pre-trial was held, the parties submitted a partial stipulation of
facts and thereafter went to trial, the last day of which was on September 28, 1966. As
to what happened in between, a detailed account is made in the brief of Ortigas as
plaintiff-appellee as follows:

ASSIGNMENT OF ERRORS ... Thereafter the case was set for hearing twenty four (24) times, or on April 27, 1964,
July 9, 1964, August 20, 1964, October 1, 1964, November 11, 1964, December 22,
I 1964, February 3, 1965, March 18, 1965, May 5, 1965, June 11, 1965, July 22, 1965,
August 26, 1965 and September 8, 1965, September 22, 1965, November 3, 1965,
THE LOWER COURT ACTED WITH GRAVE ABUSE OF November 24, 1965, December 17, 1965, December 29, 1965, January 14, 1966,
DISCRETION IN DENYING THE DEFENDANT'S URGENT February 2, 1966, April 19, 1966, April 20, 1966, July 5, 6 and 7, 1966, August 25,
MOTION FOR POSTPONEMENT DATED SEPTEMBER 24, 1966. 1966 and September 28, 1966.

II One (1) hearing, or that of August 25, 1966, was cancelled because the trial
judge, Hon. Jose L. Moya, was then sick. Other postponements were as
follows:
THE LOWER COURT CONSEQUENTLY ERRED IN ORDERING
THE STRIKING FROM THE RECORDS THE TESTIMONY OF
WITNESS IVO LAZZARI AND IN DEEMING THE CASE Postponements at instance of
SUBMITTED FOR DECISION ON THE EVIDENCE OF THE plaintiff
PLAINTIFF ALONE.

III
Three (3) settings were cancelled upon motion of plaintiff on grounds that
defendant's counsel (Atty. Crispin Baizas) himself must have found sufficient,
for he gave his conformity thereto. These were the hearings set for:
July 9, 1964 — postponed upon plaintiff's motion, dated June 27, 1964, or 12
days before the hearing, on the ground that he had to attend an important
business matter in Mindanao, which was so urgent that "for plaintiff to even
make a flying trip to Manila for the scheduled hearing might jeopardize and
render to naught a project to which plaintiff has already expended considerable
time, money and effort" (RA— pp. 28-29. Note: All reference herein will be to
plaintiff's Record on Appeal).
August 26, 1965 — postpone upon plaintiff's motion, dated August 23, 1965,
for the reason that he was in London for business reasons and could not return
to the Philippines on time for the hearing. This motion is not reproduced in any
Record on Appeal but is admitted.
July 5-7, 1966 — 18 days before the dates set for the hearing, counsel for
plaintiff filed a motion, dated June 17, 1966, for Postponement on the ground
that Atty. Rodegelio M. Jalandoni, who had been personally handling this case
was then in Washington, D.C. on business and would not be back until the
middle part of August, 1966. Considering that the trial of the case was far
advanced, it would be difficult for another lawyer to substitute for Atty.
Jalandoni. Defendant's counsel agreed to the motion (RA — pp. 50-51).
Postponement at instance of
both parties
Four (4) settings, or those of August 20, 1964, October 1, 1964, November 11,
1964 and December 22, 1964, were cancelled upon the joint motion of the
parties on the ground that negotiations for the possible settlement of this case
were pending (RA — pp. 31-34).
While both attorneys for plaintiff and defendant signed the joint motions for
postponement, the initiative to have the hearings cancelled actually came from
defendant's counsel who claimed that he needed time to consult with his client.
Plaintiff welcomed the possibility of compromise and acceded to join the
requests for postponement but became impatient at and suspicious of the
attempt to delay so that in the motion to postpone the December 22, 1964
hearing, plaintiff insisted on the insertion of the phrase "be postponed for the
last time" (RA — p. 34).1äwphï1.ñët These took place after the pre-trial but
before plaintiff had started presenting his evidence.
Postponement at instance of
defendant
Of the remaining 16 settings, at least TEN (10) were postponed or could not
proceed except for a few minutes because either Atty. Crispin Baizas, counsel
for defendant, was not available or needed time to prepare or had to attend a
meeting somewhere else, or, as in the case of September 28, 1966, defendants
witnesses wanted to avoid the inconvenience of coming to the Philippines. The
situation became such that on two (2) occasions the court a quo warned the
defendant and/or its counsel that it was postponing the trial "for the last time"
and "definitely for the last time." Thus:
February 3, 1965 — On this date, although plaintiff was ready to present his
evidence and the Court to hear the parties, Atty. Baizas asked for
postponement for the reason that he had to be somewhere else. The
undersigned graciously obliged by not objecting, albeit the motion was made
without warning and in open court.
March 18, 1965 — Once again the hearing scheduled for this date was
postponed on motion of Atty. Baizas in open court. The undersigned did not
object because, as far as he can now recall, the excuse given was that opposite
counsel had another appointment.
June 11, 1965 — The Court was free the whole morning of this day and
plaintiff actually took the witness stand. After plaintiff was through with his
direct testimony, Atty. Zaida R. Alberto, who appeared for the defendant,
asked that the cross-examination be postponed for the next hearing, on the
ground that Atty. Baizas knew more of the defense. The following appears of
record:
"ATTY. ALBERTO:
If Your Honor please, may I request to allow the cross examination at
the next hearing.
COURT:
You can handle the cross examination now.
ATTY. ALBERTO:
The defense are more in the knowledge of Atty.
Baizas.
COURT:
 If you postpone the cross-examination we will forget the testimony
and will be spending much time referring to his testimony, so you
better cross-examine him while his testimony is still fresh.
ATTY. ALBERTO:
May I ask for a reconsideration, Your Honor, anyway it is past 11:00
o'clock I do not think there will be enough time.
COURT:
We still have one hour.
ATTY. ALBERTO:
I ask for a reconsideration, Your Honor.
COURT:
On motion of the defendant's counsel, the continuation of the trial is
postponed to July 22, 1965, at 8:30 a.m. The parties were notified in
open court of this new assignment." (t.s.n. pp. 43-44, June 11, 1965)
Notwithstanding there was an hour left, which was precious considering the
crowded calendar of the Court, and Judge Moya wanted to hear the cross-
examination because plaintiff's testimony was fresh, the Court pleased counsel
for the defendant and postponed the hearing to July 22, 1965.
September 22, 1965 — At this hearing the undersigned requested that Dr.
Isidro Pertiera be permitted to take the witness stand. He is a heart specialist
and it was difficult to bring him to court because of his many patients. His
direct testimony did not take long, after which Atty. Baizas asked for
postponement, for the reason that he did not expect Dr. Pertiera to testify and,
since the subject of the testimony was important and technical, he needed time
to be able to cross-examine. The undersigned, understanding the predicament
of Atty. Baizas, did not offer any objection.
November 3, 1965 — This scheduled hearing was postponed upon motion
dated October 7, 1965, of Atty. Baizas on the ground that he was leaving on a
business trip abroad. The undersigned again did not object.
November 24, 1965 — It will be recalled that the hearing of September 22,
1965, supra, was postponed to enable Atty. Baizas to prepare for his cross-
examination of Dr. Pertiera. On this date, November 24, 1965, Atty. Baizas
cross-examined briefly the doctor, but announced:
"ATTY. BAIZAS:
May I announce, your Honor, that after I cross-examine the Doctor I
will ask for a postponement of my cross examination of Atty. Ortigas
because I will have to attend a meeting of the PAL Board of Directors
this morning. My cross examination will not be very long." (t.s.n., pp.
34, November 24, 1965)
The PAL Board of Directors' meeting was certainly not more important than
the occupation of the Court, and it was still early, but counsel was insistent.
The Court was beginning to be perturbed by the dilatory motions; yet it
granted counsel's requested postponement but "for the last time." Thus:
"ATTY. BAIZAS:
That is all. May I make that request, Your Honor,
that it is simply that I have to be present at the
meeting. I wish to finish my cross examination on
Atty. Ortigas but it is merely that the meeting is
held for today at 10:00 o'clock and I would like to
ask for a postponement to continue the cross
examination.
COURT:
I will grant this for the last time. On motion of Atty.
Baizas, the continuation of the hearing is postponed
for the last time to December 17, 1965, at 8:30 a.m.,
by agreement between him and Atty. Jalandoni."
(t.s.n., p. 17, November 24, 1965)
December 17, 1965 — Although at the hearing of November 24, 1965 trial
was postponed for the last time to December 17, 1965, the Court's warning did
not seem to register because on December 7, 1965 defendant's counsel filed
another motion for postponement alleging that he had received a telegram to
the effect that the meeting of the Legal Committee of IATA that he was
attending, originally scheduled for December 10-15, had been deferred and
would begin on December 13 and as it was for 5 days, it would not be possible
for him to return for the December 17 hearing; hence, he requested that said
hearing be reset for December 27 and 29. In his undated motion filed on
December 7,1965 counsel averred that:
 "There is no intention whatever to delay the case but because
of the circumstances above-stated, undersigned counsel is
constrained to ask, for the last time, for the cancellation of
the hearing on December 17 and for its resetting on such
dates as may be convenient to this Honorable Court,
preferably December 27 and 29." (RA — p. 41)
The undersigned opposed said motion and alleged:
"That this case has been pending since December 24, 1963,
or almost two years now, and trial thereof has been
repeatedly suspended and/or postponed;
That at the hearing of November 24, 1965, this Honorable
Court precisely postponed continuation of the trial thereof
for the last time to December 17, a date which was fixed by
agreement of the parties;
That when counsel for defendant left, as alleged, on
December 6, 1965 he did so with full knowledge of the
intransferable character of the trial set for December 17;
That defendant can well be represented by Atty. Baizas'
associate, Atty. Alberto, who, as a matter of fact, handled
this case when trial started on June 11, 1965 and has been
actively collaborating with Atty. Baizas since then;
That when plaintiff testified on direct examination on June
11, 1965 said Atty. Alberto appeared for defendant and that
plaintiff is now merely due for further cross-examination."
(RA — p. 43)
In spite of said opposition, the Trial Court once more granted defendant's
request but was more categorical this time with its admonition against further
postponements and used the word "definitely" in its order which read:
"ORDER
For the reasons stated in the defendant's motion for
postponement and in view of the fact that it seeks a
deferment of the hearing for only a few days, the
continuation of the trial is postponed definitely for the last
time to December 29, 1965, at 8:30 a.m.
"SO ORDERED.
"Manila, Philippines, December 11, 1965. SE L.
MOYA
Judge"(RA — p. 46)
March 10, 1966 — The hearing on this date lasted for only a few minutes, with
the undersigned offering the documentary evidence for the plaintiff.
Thereupon, defendant's counsel again asked for postponement so he could go
over said evidence. Since he had no witnesses to present, the Court once more
postponed the trial to April 19, 1966 without any objection on the part of the
undersigned.
April 19, 1966 — The hearing for this day was cancelled upon motion of
defendant's counsel (RA — p. 49) on his representation that defendant's
witness Ivo Lazzari had arrived from Italy at midnight of April 18, 1.966 and
was not in a condition to take the witness stand. The Court again
accommodatingly transferred the hearing to the following day, April 20, 1966,
although it had other cases scheduled for that date and the case at bar was not
among them, just so Lazzari's trip would not be useless. The undersigned
likewise did not oppose the transfer of hearing. (Pp. 2-13 — Brief, p. 132 —
Record.)
Defendant does not seriously deny these facts. Seemingly, the controversy between the
parties revolves around defendant's motion for postponement of the hearing set for
September 28, 1966 which was denied by the trial court. It is this denial that is the
subject of the first above-quoted alleged errors assigned by Lufthansa in its brief as
defendant-appellant.
At the time this incident of postponement arose, plaintiff had already closed his
evidence, and so it was the turn of the defendant to prove its defenses. The starting date
for this was April 19, 1966, but, upon motion of defendant's counsel, it was deferred to
the next day, April 20, 1966, on which date defendant's first witness, Ivo Lazzari, took
the witness stand. His testimony, however, was not finished in the morning and
afternoon of that day nor during the whole day of April 22, 1966. Atty. Rodegelio M.
Jalandoni was still cross-examining him when the hearing was continued "to the first
available date in the calendar". Eventually, the next continuation of the trial was set at
first for July 5, 6 and 7, 1966, but upon motion of plaintiff's counsel, it was reset for
August 25, 1966, on which date, in spite of the presence of Lazzari who came from
Rome purposely for the trial together with another expected witness, Severino Caselli,
and still another witness, C.H. Dehio, who came from Hongkong, no trial could be held
because of the absence of the judge. Hence, another date, September 28, 1966 was fixed
with notice to the parties received by them respectively the month previous.
On September 24, 1966, defendant's counsel filed a motion for postponement thus:
 COMES NOW the defendant by undersigned counsel and to this
Honorable Court respectfully states:
1
The above-entitled case is set for hearing on September 28, 1966 at
8:30 o'clock in the morning.
2
The witnesses who are scheduled to testify for the defendant at said
hearing are to come from Rome, Italy;
3 hearing, and this case having been pending since December, 1963, the motion
Word has been received from the defendant that said witn will not be
able to come for the hearing aforementioned.
WHEREFORE, it is respectfully prayed that the hearing of this case
scheduled for September 28 be postponed to some other date most
convenient to this Honorable Court, preferably on any of the
following dates: October 21, 17; Novembers, 3, 8, 9 or 11, 1966.
... . (Page 53, Record on Appeal, p. 29, Rec.)
On September 27, 1966, plaintiff's counsel filed the following opposition to the above
motion:
COMES NOW plaintiff, through undersigned counsel and, in opposition to
defendant's urgent motion for postponement, dated September 24, 1966, to this
Honorable Court respectfully states:
That this case has been pending since December, 1963;
That defendant's aforesaid motion does not give any valid reason for
postponing the hearing, since it does not state why defendant's witnesses
cannot come to Manila on the scheduled dates of continuation of trial;
That the convenience and motive of defendant and its witnesses in not exerting
every effort to testify are not the concern of the plaintiff, and more so of this
Honorable Court, and that the speedy and proper administration of justice
dictates that the hearing proceed irrespective of defendant's obvious disregard
of the need thereofl;
That defendant's attitude is aggravated by the fact that, being an airline
company, it has all facilities to have its employees available as witnesses at
any time it desires.
WHEREFORE, it is respectfully prayed that defendant's aforesaid motion for
postponement be denied.
... . (Pp. 55-56, id.)
In view of this opposition, on the same day, His Honor issued an order of denial:
No reason whatsoever having been alleged or shown why the defendant's
witnesses will not be able to come from Rome to Manila on the day of the
for postponement is denied. (Pp. 56-57, id.)
On the day set for the hearing, September 28, 1966, Atty. Zaida Ruby S. Alberto
appeared for defendant and verbally moved for reconsideration of the foregoing order of
denial. She argued that:
Actually, it is not intended to delay the termination of this case. As a matter of
fact, on August 15, 1966, the date set for the hearing of this case, we were
ready with the presentation of our evidence as our two witnesses from Rome
were here. But unfortunately, Your Honor was indisposed, so the hearing was
postponed to this date. I really do not know why our witness failed to come.
However, I intend to make an inquiry about the matter so that I could file the
corresponding explanation for their failure to appear in Court today. May I,
therefore, reiterate my motion for reconsideration, with the reservation that I
be allowed to file my explanation for the failure of these two witnesses coming
from Rome to appear for today's hearing. (Page 2, t.s.n., Sept. 28/66.)
But as counsel could not give the exact reason why defendant's witness scheduled to
testify were absent, the trial court denied the motion; ruling that "no ground has been
alleged in support thereof." (p. 6, t.s.n., September 28, 1966.)
This order was immediately followed by a motion of plaintiff's counsel for the striking
out of the entire testimony of the witness, Ivo Lazzari, upon the ground that counsel had
not yet finished his cross-examination of him and his absence was unexplained. No
objection appears to have been made to such motion, albeit counsel for defendant tried
to point out that Atty. Jalandoni had already finished his cross-examination of the
witness. After verifying from the records that such was not the case, His Honor issued
the following order:
The witness Ivo Lazzari not having appeared at the hearing set for today, for
which reason his cross-examination cannot be continued, on motion of the
 plaintiff's counsel, his testimony is striken from the record, and this case is
deemed submitted for decision on the evidence already presented. (Pp. 57-58,
Rec. on Ap., id.)
Thus the trial ended and parties were allowed to submit their respective memoranda.
On October 19, 1966, however, defendant's counsel filed the following motion for
reconsideration:
MOTION FOR RECONSIDERATION .
COMES NOW defendant by undersigned counsel this Honorable
Court moving for a reconsideration of the orders dated September 27
and September 28, 1966, respectively, respectfully states:
1 If inconvenience were the only reason for the witnesses' failure to
On September 26, 1966 a motion for postponement of the hearing on
September 28, 1966 was filed by undersigned counsel for the reason
that word had just been received from the defendant that the witnesses
who were scheduled to testify at the said hearing and who were to
come from Rome, Italy, would not be able to come to the Philippines
for said hearing. This motion was denied in the order of September
27, 1966;
2 was not caused by mere inconvenience;
No reason could be stated in the aforesaid motion for postponement
because at the time it was prepared, counsel for defendant did not
really know the specific reasons for the inability of said witnesses to
come. A simple telex message had been sent by the Far East Manager
of the defendant company to defendant's representatives in Manila
advising the latter that the witnesses in question could not come.
Copy of said telex message is attached to and made part of this
motion for reconsideration as Annex "I";
3 employees had to assume some of the duties of those employees who
For this reason on September 28, 1966, when the case was called,
counsel for the defendant reiterated the motion for postponement and
requested this Honorable Court for time to submit an explanation on
the failure of defendant's witnesses to come as a letter elaborating on
the matter would surely follow the telex' message. This request was
however denied by the Honorable Court and upon motion of
plaintiff's counsel, another order was issued striking out from the
record the testimony of defendant's only witness so far, Ivo Lazzari,
whose cross-examination was to be continued that date, for the latter's
failure to appear at the hearing, and deeming the case submitted for
decision;
4
It is alleged by opposing counsel that the witnesses did not come for
the hearing of September 28, 1966 because it was inconvenient for
them and for defendant. This accusation is absolutely without basis
and malicious;
5
come, then they would not also have come previously because it was
just as inconvenient for them then. It will be recalled that Ivo Lazzari
had been here in April 1966 when he was presented on direct
examination and partly on cross-examination. On August 25, 1966,
the case was also scheduled for hearing. All of defendant's witnesses
came here from Rome, Italy for said hearing. Even Mr. C. H. Dehio
was also here to testify. Unfortunately, the Presiding (Judge) of this
Honorable Court was indisposed on that particular morning and so the
hearing on said date was cancelled. We mention this only to show that
the failure of the witnesses to come for the hearing on September 28
6
Defendant had and had no intention to delay the proceedings
whatsoever. The witnesses in question could not come because of
certain circumstances that rendered their coming over virtually
impossible. Both witnesses, Ivo Lazzari and Saverino Casilli are
employees of defendant company at the Rome office. The air traffic
in Rome has been particularly heavy this season. Some of the
personnel of the Lufthansa Rome office were on leave and these two
were on leave, aside from performing their own regular duties, If they
were to leave their posts to come for the hearing on September 28,
there would be grave disruption to the public service and for this
reason they were not able to come. These facts are contained in a
letter dated September 29, 1966 written to undersigned counsel by C.
H. Dehio, IATA Agency Manager, Far East and Australasia,
Lufthansa German Air Lines, copy of which is attached to and made
 part of this motion for reconsideration as Annex "2";. The envelope in
which said letter contained is likewise attached to and made part of
this motion as Annex "2-A";
7
Witness Ivo Lazzari had first shed his testimony on direct
examination and on September 28, 1966, opposing counsel was to
continue cross-examination of said witness. The other witness
Saverino Casilli was to be presented after Ivo Lazzari would have
finished testifying. Both witnesses are material for the defense and no
other person could testify on the facts that are the subject of their
testimony. The inability of said witnesses to come for the hearing on
September 28 was not due to any fault or neglect on the part of
defendant who in fact had exerted every effort to have them come, but
because of the supervening circumstances above-described, their
coming over could not have been possible without seriously
disrupting public service;
8
There is no question that the granting or denial of a motion for
postponement rests upon the sound discretion of the court. We submit
however that under the circumstances, the ends of justice would have
been better served by granting the motion on question. The reason for
defendant's motion for postponement is valid and meritorious, and the
grant of a postponement based on such ground would not have
adversely affected the substantial rights of plaintiffs.
"Continuances and postponements of trial are part and parcel
of our judicial system of justice, and where no substantial
rights are affected and the intention to delay is not manifest,
it is sound judicial discretion to allow them. (Rexwell vs.
Canlas, No. L-16746, Dec. 30, 1961)
"There is even authority for the view that the right to a
speedy trial is not violated by granting a continuance on the
ground of absence of material witness. (People vs. Romero,
G.R. No. L-4517-20, May 25, 1953)
The lower court erred in denying a motion for postponement
filed by defense to await arrival of a material witness."
(People vs. Narsolis, et al. G.R. No. L-2764, March 24,
1950)
"A miscarriage of justice may result from the accidental or
excusable absence of a material witness, where presence can
be secured by the grant of a reasonable continuance." (Luna
vs. Arcenas, 34 Phil. 80, 98-99)
8
Defendant has a valid and meritorious defense, and if given
opportunity to present its side of the case, it would certainly diminish,
if not altogether disprove plaintiffs claim.
... court litigations are primarily for the search of truth. ... A
trial by which both parties are given the chance to adduce
truth is the best way to find out such truth. A denial of this
chance would be too technical. The dispensation of justice
and the vindication of grievances should not be barred by
technicalities." (Ronquillo vs. Marasigan, L-11621, May 21,
1962; Santiago vs. Joaquin, L-15237, May 31, 1963,
emphasis ours.)
"Judicial experience dictates that it is better that cases are
tried on the merits even with a little delay than that
substantial rights of a party litigant be sacrificed on the altar
of technicality." (Uy vs. Demetillo, CA-G.R. No. 32665-R,
Jan. 14, 1964.)
9
An affidavit of merit by Clarita C. de la Riva, Manager, Rocha &
Cua., Inc., General Sales Agents, Lufthansa German Airlines is
likewise attached to and made an integral part of this motion for
reconsideration as Annex "3";
10
The order dated September 27, denying defendant's motion for
postponement and the order of September 28, 1966 striking off from
the records the testimony on direct examination of the witness Ivo
Lazzari and holding the case submitted for decision on the evidence
presented would unduly prejudice defendant's stand, and would
amount to a denial of due process to defendant.
"The paramount interests of justice demand such reasonable
allowances as would prevent, without doing an injustice to
the opposing party, the loss by a litigant of his chance to duly
 present his side of the case before the court. With a view of
avoiding a possible miscarriage of justice, the exercise of the
court's discretion ought to lean, in a reasonable degree
toward bringing about a presentation of evidence on both
sides. ..." (Gerona vs. Calada, CA-G.R. No. 23955-R March
30, 1963, Tormes vs. Balzado, CA-G.R. No. 32019-R, April
17, 1964.)
WHEREFORE, it is respectfully prayed that the orders of the
Honorable Court dated September 27, and September 28, 1966,
respectively, be reconsidered and set aside; that the testimony of
defendant's witness Ivo Lazzari be allowed to remain on record and
that a date be set for the continuation of defendant's evidence.
Manila, Philippines, October 19, 1966.
to which, plaintiff's counsel filed the following opposition:
COMES NOW plaintiff, through undersigned counsel, and, in opposition to
defendant's motion for reconsideration, dated October 19, 1966, to this
Honorable Court respectfully states that:
1. This is in effect the second motion for reconsideration that defendant has
filed against the order of September 27, 1966 denying its motion for
postponement of the hearing of September 28. The first motion for
reconsideration was made in open court by Atty. Zaida S. Alberto and denied
on the same date.
2. Defendant now claims that it did not intend to delay the trial of this case and
seeks to justify the failure of its witnesses, Ivo Lazzari and Saverino Casilli, to
appear on September 28 on the ground that:

VERIFICATION "... The air traffic in Rome has been particularly heavy this season. Some of
the personnel of the Lufthansa Rome office were on leave and these two
I, CRISPIN D. BAIZAS, after having been sworn according to law, employees had to assume some of the duties of these employees who were on
depose and say: leave, aside from performing their own regular duties. If they were to leave
their posts to come for the hearing on September 28, there would be grave
I am the counsel for the defendant in the above-entitled case; disruption to the public service and for this reason they were not able to come.
..." (p. 3, Defendant's Motion for Reconsideration.)
I have prepared the foregoing motion for reconsideration and all the
allegations contained therein are true and correct of my own 3. Note that the above alleged facts are contained in a mere letter that was
knowledge and to the best of my information and belief. written by a certain Mr. C.H. Dehio, an employee of defendant in Hongkong,
to its counsel on September 29, 1966, or one day after the hearing of
September 28, when presumably defendant's aforesaid employee had already
s/t/ CRISPIN D. BAIZAS
been informed that this Honorable Court had denied the postponement and
considered this case as submitted for decision. Defendant is an airline company
SUBSCRIBED AND SWORN TO BEFORE ME this 19th day of and has all the telex facilities to communicate in a matter of minutes with its
October. 1966 in the City of Manila, affiant exhibiting to me his Res. various agencies. The ground for failure to appear, to wit, supposed pressure of
Cert. No. A- 5892423 issued on January 28, 1966 at Makati, Rizal. work of said employees, is as easy to conceive and gratuitously state as to flick
one's fingers. We wish to call attention to the significant fact that the statement
s/ (Illigible) of Mr. Dehio in his letter is not under oath. Incorporating said statement in the
NOTARY PUBLIC body of the motion for reconsideration that is sworn to by counsel merely `to
Until December 31, 1967 the best of his information and belief, or in an affidavit of Mrs. Clarita C. de la
Riva (Annex 3) who was only referring to hearsay information derived from
Doc. No. 1377 Mr. Dehio's aforesaid letter, is insufficient verification of the motion for
Page No. 77 reconsideration under Section 6, Rule 7 of the Rules of Court. Even Mr. Dehio
Book No. III had he executed the affidavit himself, would have been disqualified to swear to
Series of 1966. the facts because he is stationed in Hongkong. So that, when defendant's
counsel and Mrs. de la Riva verified the motion on "information and belief"
(Pages 58-67, Record on Appeal, id.) derived from Mr. Dehio's letter, their statements were hearsay thrice removed.
4. But assuming said facts to be true, did this justify the failure of defendant's
witnesses to appear at the scheduled hearing or constitute a valid excuse for
defendant's inability to present evidence. We respectfully submit that they do
not. The September 28 hearing was set as early as August 25, 1966, or more
than one (1) month previous, to suit the schedules not only of this Honorable
Court but of the parties as well. Surely, it was incumbent on defendant, if it has
deference to this Honorable Court and our administration of justice to see to it
that its witnesses, particularly Ivo Lazzari who was on the witness stand and
due for cross-examination, would be available, rather than granting leave to its
other employees and burdening the two needed witnesses with additional
work. Defendant is not a neophyte in the airline business.
Assuming arguendo that it is true that the volume of air traffic in Europe was
high in "September and early October", it should have foreseen the situation
and taken appropriate measures to assure compliance with its obligation to this
Honorable Court. The witnesses are defendant's employees and subject to its
exclusive control. Instead, defendant allegedly rendered itself short handed by
granting leave to its other employees, and now comes to court with a lame
excuse requesting that it be extricated from a predicament that it has
deliberatedly brought upon itself. For the execuse that with the workload for
Mr. Lazzari and Mr. Casilli becoming heavier than usual "it would seriously
disrupt our service to the travelling public if, during this time, they were to
leave their jobs for several days" (Please see Mr. Dehio's letter, Annex "2") is
lame, by any standard. The local newspapers are constantly carrying news
articles of how large and expanded is the Lufthansa as an airline outfit. Surely,
of its hundred (if not thousands) of available employees, two like Lazzari and
Casilli could have been dispensed from their work temporarily to defend the
company against the just grievance asserted by an injured passenger before a
court of justice. At the most, defendant was after the promotion of its own
interest in holding the two employees to their jobs, and is not avoiding "grave
disruption to the public service" as counsel exaggerates Mr. Dehio's expression
"seriously disrupt our service to the travelling public" two distinct ideas, the
latter signifying self-interest as distinguished from public necessity. This
Honorable Court can take judicial notice that there are many other airlines-
operating in the same areas as doe, Lufthansa and competing with it.
5. As we explained at the September 28 hearing, the truth of the matter is that,
contrary to the unverified representations of defendant, the reason for the non-
attendance of defendant's witnesses was to avoid the inconvenience of coming
to the Philippines to testify. In other words, after Ivo Lazzari and Saverino
Casilli were unable to testify last August 25, 1966, defendant thought of
avoiding having said witnesses come again to Manila. We say this because
sometime on September 20, 1966, Atty. Leonardo P. Valmonte (an assistant
attorney of plaintiff who is helping in this case) had a telephone conversation
with defendant's counsel, Atty. Zaida S. Alberto in connection with the
former's request for a copy of a certain exhibit, and in the course of their
conversation Atty. Alberto informed Atty. Valmonte that the trial scheduled
for September 28, 1966 would not proceed because they were intending "to
secure the permission of the court to take the testimonies of their witnesses by
way of deposition". In short, even before the receipt of the alleged telex
(Annex "1" of Motion) by defendant's counsel on September 22, 1966, said
counsel announcing that the trial could not proceed because they were going to
resort to depositions of their witnesses in Rome, rather than have said
witnesses come to Manila. The decision to take depositions having been made
on or before September 20, it was an easy matter to have Lufthansa's
Hongkong office send the telex of September 22 stating that they would be
unable to provide witnesses on September 28. No reason was given why
witnesses could not be provided 6 or 7 days thence. If in truth there was
unexpected increase in air traffic, surely 6 or 7 days were more than sufficient
to make the necessary arrangements so that the work of Lazzari and Casilli
could be taken over temporarily just so these witnesses could appear before
this Honorable Court at the appointed date. Attached hereto as Annex "A" is
the affidavit of Atty. Leonardo P. Valmonte on his aforesaid conversation with
Atty. Alberto.
6. At the hearing on September 28, when we made reference to the above-
referred to conversation between Attys. Valmonte and Alberto, the latter did
not deny that she had in truth spoken to Atty. Valmonte in the tenor above
related. As a matter of fact, she admitted that defendant was intending to take
the depositions of its witnesses in Rome.
7. When this honorable Court denied the motion for postponement on
September 28, 1966, it did so in the exercise of its sound judicial discretion,
for no valid reason was given why the witnesses could not appear, whereas this
case had been pending for about three (3) years and had been postponed
several times with repeated warnings on defendant that said postponements
were for the last time. And now, in its motion for reconsideration, defendant
has failed to effectively allege the ground for the failure of said witnesses to
come, and even if said ground be admitted as true for argument's sake, it
merely showed "inofficiousness, lack of resourcefulness and diligence, if not
total indifference" on the part of defendant to protect in court its interests and
to prevent needless delays in the discharge of judicial business.
"Postponement not based on valid reasons. — Where a party seeks
postponement of the hearing of this case for reasons caused by his own
inofficiousness, lack of resourcefulness and diligence if not total indifference
to his own interests or to the interests of those he represents, thereby resulting
in his failure to present his own evidence, the court would not extend to him its
mantle of protection. If it was he who created the situation that brought about
the resulting adverse consequences, he cannot plead for his day in court nor
claim that he was so denied of it." (De Leon vs. People's Homesite and
Housing Corporation, CA-G.R. No. 31169-R, Aug. 31,1963.)
8. In the case of Hap Hong Hardware Co. vs. Philippine Company, GR. No. L-
16773 (May 23, 1961), the Supreme Court, in sustaining the trial court's denial
of a motion for postponement and on the ground that the defendant's witnesses,
officers of the company, had not come because it was the beginning of the
milling season in the municipality of San Jose, Mindoro Occidental and their
presence in the Central was very, necessary, held that the trial court was
perfectly justified in denying said motion for postponement because the reason
adduced was "not unavoidable and one that could not have been foreseen."
Said the Supreme Court:
"The reason adduced in support of the motion for postponement is not
unavoidable and one that could not have been foreseen. Defendant
ought to have known long before the date of trial that the milling
season would start when the trial of the case would be held. The
motion should have been presented long in advance of the hearing, so
that the court could have taken steps to postpone the trial without
inconvenience to the adverse party. As it is, however, the motion was
presented on the day of the trial. Knowing as it should have known
that postponements lie in the court's discretion and there being no
apparent reason why the defendant could not have presented the
motion earlier, thus avoiding inconvenience to the adverse party, the
appellant cannot claim that the trial court erred in denying
postponement. Under all the circumstances we hold that the Court
was perfectly justified in denying the motion for postponement."
In the case at bar, the same unjustified excuse is adduced — that the witnesses,
who are employees (not even officers) of defendant, had work to do, albeit
date of trial was set one month previous.
9. The cases cited by defendant are not in point, the facts involved therein
being very different from those attending the case at bar. For example, in the
cited case of Lino Luna vs. Arcenas, 34 Phil. 93, the trial judge declined to
grant a continuance of a few hours to give counsel an opportunity to secure the
presence of the defendant. The Supreme Court held that considering that it did
not appear that defendant was indulging in dilatory tactics, the denial of the
motion for short Postponement was improper. Again, in the case of People vs.
Romero, G.R. No. L-4517, May 25, 1953, the prosecution witnesses, although
subpoenaed, failed to appear; whereupon the fiscal asked that they be ordered
arrested and that in the meantime the trial be postponed. The Supreme Court
likewise held that the denial of the postponement was improper. These fact
situations, however, as can immediately be seen are completely different from
that of Lufthansa whose non-presentation of its employees-witnesses was
motivated by the desire to avoid inconvenience to them, hence its frustrated
plan to have their depositions taken in Rome.
10. Complaints regarding delays in the disposition of court cases are prevalent
and have recently found expression not only in executive pronouncements but
in judicial admonitions. The unclogging of court dockets remains a pressing
problem to the despair of litigants. As the Court of Appeals put it:
"The records reveals that the trial of the case was postponed five
times at the instance of appellants themselves, and for this reason the
trial was delayed for more than one year and three months. In granting
these several postponements, the trial judge was over liberal already,
and to have allowed another postponement would have been to
jeopardize plaintiff's interest. Obviously courts cannot unduly protect
the interests of one party to the detriment of the other. Already, there
are complaints regarding delays in the disposition of court cases. The
unclogging of our court dockets still remains a pressing problem in
the despair of many a litigant. However to eliminate, at least
minimize, these delays is as much our concern and any act of trial
courts conducive towards this purposeful end will be encouraged by
appellate court's." (Rosario vs. De Leon, CA-G.R. No. 6495-R, April
25, 1941; 40 O.G. 752.)
11. Prejudice will be occasioned plaintiff if defendant's belated motion for
reconsideration is granted. Notwithstanding defendant's counsel's receipt of
Mr. Dehio's letter, dated September 25, 1966, a few days after said date,
defendant delayed the filing of its motion for reconsideration until after about
three (3) weeks later. In the meantime, it knew as of September 28 that this
Honorable Court had striken out the testimony of Ivo Lazzari, considered the
case submitted for decision on the evidence on record, and given plaintiff's
counsel 7 days to present his memorandum. Plaintiff and his counsel exerted
all efforts and worked overtime just so to be able to submit his memorandum
within the short period allowed. Said memorandum was finished on time, and
has been served on defendant's counsel and submitted to Court. In other words,
defendant purposely waited until the submission of plaintiffs memorandum
before presenting its motion for reconsideration based on alleged information
received three (3) weeks previous. To grant defendant's instant motion for
reconsideration would place plaintiff at a great disadvantage, because
defendant is now fully aware of every facet of plaintiff's cause and can simply
tailor its defenses and evidence in refutation thereof.
12. Defendant claims that plaintiff is taking undue advantage of a technicality
and it should not be deprived of its day in court on this ground. Suffice it to
state that it is never technical to invoke one's rights, and that while the Rules of
Court should be liberally construed, their strict observance has been considered
indispensable to the prevention of needless delays and the orderly and speedy
discharge of judicial business. Thus:
 "Although the Rules of Court should be liberally construed, however
their strict observance which have been considered indispensable to
the prevention of needless delays and to the orderly and speedy
discharge of judicial business, is as imperative necessity. Thus, the
rules prescribing the time within which certain act must be done, or
certain proceedings taken, are considered absolutely indispensable to
the prevention of needless delays and to the orderly and speedy
discharge of judicial business, is as imperative necessity. Thus, the
rules prescribing the time within which certain act must be done, or
certain proceedings taken, are considered absolutely indispensable to
the prevention of needless delays and to the orderly and speedy
discharge of judicial business and therefore must be strictly complied
with." (Alvero vs. De la Rosa, 76 Phil. 428, cited in Francisco on
Civil Procedure, Vol. 1, P. 89)
"Rules of Courts, promulgated by authority of law, have the force and
effect of law; and rules of court prescribing the time within which
certain acts must be done, or certain proceedings taken are considered
absolutely indispensable to the prevention of needless delays and to
the orderly and speedy discharge of judicial business. "Conlu vs.
Court of Appeals, et al., G.R. No. L-14027, January 29, 1960,
citing Shioji vs. Harvey, 43 Phil. 333; Alvero vs. De la Rosa, et al., 42
Off. Gaz., p. 316, (Supra.)
WHEREFORE, it is respectfully prayed that defendant's motion for
reconsideration, dated October 19, 1966, be denied.
Manila, October 31, 1966. (Pages 74-88, Record on Appeal, id.)
By way of reply to the above opposition, defendant's counsel alleged:
Defendant could have from the beginning taken depositions in Rome, but so as
to avoid any inconvenience to plaintiff and that the court may see and hear the
witnesses testify to better determine the credibility of their testimony defendant
had been bringing the witnesses here. As a matter of fact, defendant even
without leave of court may take the depositions of its witness by merely giving
the Court notice of its intention to do so.
"After answer has been filed no leave at court is required as a
prerequisite to taking depositions ... (Marzo vs. Moore McCormick
Line, Inc. 8 Feb. Rules of Service, p. 560; cited in Moran Comments
on Rules of Court Vol. II, p. 18)
"After issue is joined, depositions may be taken without leave of
court. (Lyons vs. Bronx Towing Line, Inc., 1 Fed. Service p. 341)
"After answer is served, depositions may be taken as of course and
application should not be made to the court for leave. (Schultz vs.
State Mutual Life Assurance Company, 1 Fed. Rules of Service, p.
340, US Dist. Ct. Dist. of Oregon, Oct. 14, 1938)
"The statements made by Atty. Valmonte are false and malicious. An affidavit
executed by Atty. Zaida Ruby Alberto is attached to and made part of this
Reply as Annex "1". (Pages 92-93, Record on Appeal, id.)
On October 24, 1966, the trial court resolved the incident in a brief order holding that
"(f)or the reasons stated in the plaintiff's opposition to the motion for reconsideration, it
is denied."
In its appeal, defendant reiterates insistently its position that the denial of its motion for
postponement as well as the order striking out the testimony of Ivo Lazzari were issued
in grave abuse of discretion and should be set aside. Before going any further, however,
it may be mentioned that since defendant has not assigned as error, although it discusses
in its brief, the denial of its last motion for reconsideration, plaintiff contends that such
failure constitutes a bar to any further consideration of the merits of the arguments of
defendant relative to the main denial-of-postponement and striking-out orders. To be
sure, there is technical plausibility in such pose of plaintiff, but considering the
importance of the other matters involved in this case, it would serve the interests of
justice more if We passed on the merits of the substantial issues in this controversy.
After all, "this Court is clothed with ample authority to review matters, even if they are
not assigned as errors in the appeal, if it finds that their consideration is necessary in
arriving at a just decision of the case." (Saura Import & Export Co., Inc. vs. Philippine
International Surety Co., Inc., L-15184, May 31, 1963, 8 SCRA 143.) And considering
the inter-relation between the omitted assignment of error and those actually assigned
and discussed by defendant's counsel, We can apply here the ruling in Hernandez vs.
Andal, 78 Phil. 196, to the effect that "an unassigned error closely related to an error
properly assigned or upon which the determination of the question raised by the error
properly assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as an error." (at pp. 209-210.)
Now, with respect to defendant's first assignment of error, We feel that the rather
extended recital We have made above of the incidents and proceedings related to the
trial court's order denying defendant's motion for postponement of the hearing set for
September 28, 1966 is self-revealing. It argues against the charge that His Honor's order
of denial was improper and unjustified.
The case had been pending for about three years and had actually suffered during that
period even more than the usually permissible number of continuances, quite often to
suit the convenience of defendant's counsel. Notice of the September 28, 1966 schedule
had been served on counsel the month previous. It must be assumed that due
preparations and arrangements were to be made since the receipt of that notice to insure
the presence in Manila for the expected witnesses on the date set. Under the
circumstances, the excuse given by defendant that the witnesses could not leave their
respective stations and places of work to attend the trial is plainly unacceptable. There
was enough time and opportunity for defendant to have made the corresponding
adjustments in the assignments of its personnel so as to enable its witnesses to be in
court. The trouble is that defendant relied on the assumption that the court could be
made to wait until the volume and other conditions of its business would permit it to
comply with the schedule of the court. For an airline company engaged in international
transportation and presumably having all the facilities to have any of its employees
available practically anywhere in the world at a moment's notice, if it only took due care
to do this, defendant's attitude cannot be countenanced.
What is more, the motion of September 24, 1966 gave no reason at all why defendant's
witnesses supposed to come from Rome would be unable to be at the trial. Even as late
as the day of the hearing, September 28, 1966, the court could not be told the reason for
such inability. All that counsel could say was that she "intend(ed) to inquire and file the
explanation" later. This was not as it should have been, for the telex advising the Manila
office that the witnesses would not be available was received on September 22nd yet,
and certainly there was enough time to investigate and find out the reason for such
unavailability. And as no justifiable reason could be advanced in support of the verbal
motion for reconsideration. We cannot say that His Honor acted improperly when he
denied the same.
We reiterate, the case had been pending for more than three years, with so many
postponements, and the least that defendant should have done to merit favorable action
on the part of the trial judge was to be ready with an explanation of its inability to
proceed with the trial, giving the detailed and good reasons therefor. As it is, there was
actually no basis at all for the exercise of discretion on the part of the trial judge in a
manner favorable to it. Trials may be postponed because of the absence of evidence
only when such absence is justified. Mere absence is not a justification in itself. Section
4 of Rule 22 is sufficiently clear on this point. It provides that "A motion to postpone a
trial on the ground of absence of evidence can be granted only upon affidavit showing
the materiality of evidence expected to be obtained, and that due diligence has been
used to procure it." This means that it must be shown to the court that due diligence had
been exercised in either securing the presence of the evidence (witnesses) or preventing
the absence thereof.
There is, of course, defendant's motion for reconsideration of October 19, 1966 praying
for the setting aside of the court's order of denial as well as the other order striking out
the testimony of witness Lazzari. But, as already noted, the only excuse given in said
motion is that:
... The witnesses in question could not come because of certain circumstances
that rendered their coming over virtually impossible. Both witnesses, Ivo
Lazzari and Saverino Casilli are employees of defendant company at the Rome
office. The air traffic in Rome has been particularly heavy this season. Some of
the personnel of the Lufthansa Rome office were on leave and these two
employees had to assume some of the duties of those employees who were on
leave aside from performing their own regular duties. If they were to leave
their posts to come for the hearing on September 28, there would be grave
disruption to the public service and for this reason they were not able to come.
... (Page 47, Rec. on Ap., p. 32, Record.)
Indeed, even if such reason were given earlier on September 24, 1966 the court would
have been as well justified in denying the requested postponement. We cannot see any
reason why, despite its having knowledge of the date of the hearing about a month
before, defendant did not see to it that its expected witnesses were not assigned to do
duty on the day they were supposed to appear in court. We cannot believe Lufthansa
could be so undermanned that such a simple adjustment of its personnel had to be
"impossible."
Moreover, the Rome based witnesses were not the only possible witnesses of defendant.
To begin with, Mr. C.H. Dehio, the IATA Agency Manager, Far East and Australasia,
Lufthansa German Air Lines, who, according to the record, had already attended
previous hearings as a prospective witness could have been made to go to court. There
is nothing in the record to show that he was also rendered incapable of doing so. Then
there could still be local witnesses, it is no excuse that presenting other witnesses would
have disrupted the presentation of defendant's case, for parties may be allowed to
maintain their own way of presenting their evidence only where this can be done
without injury to the expeditious disposition of the case and the best interests of the
administration of justice.
Coming now to the second assigned error regarding the striking out of the unfinished
testimony of Lazarri, the Court is also of the opinion and so holds that the trial court's
action cannot be categorized as arbitrary or oppressive or as amounting to a grave abuse
of discretion. To be sure, this second order was but a logical consequence of the
previous order denying defendant's motion for postponement. With such denial, the next
thing in order was to declare the presentation of evidence of the defendant terminated.
Accordingly, it was necessary to determine what evidence could be considered to be for
the defendant. And so when counsel for plaintiff asked the court to strike out the
testimony so far given by Lazarri, there was practically no alternative for the court but
to grant the same. Indeed, defendant's counsel could not and did not offer any objection
thereto.
Oral testimony may be taken into account only when it is complete, that is, if the
witness has been wholly cross-examined by the adverse party or the right to cross-
examine is lost wholly or in part thru the fault of such adverse party. But when cross-
examination is not and cannot be done or completed due to causes attributable to the
party offering the witness, the uncompleted testimony is thereby rendered incompetent.
The right of a party to cross-examine the witnesses of his adversary is invaluable as it is
inviolable in civil cases, no less than the right of the accused in criminal cases. The
express recognition of such right of the accused in the Constitution does not render the
right thereto of parties in civil cases less constitutionally based, for it is an indispensable
part of the due process guaranteed by the fundamental law. Subject to appropriate
supervision by the judge in order to avoid unnecessary delays on account of its being
unduly protracted and to needed injunctions protective of the right of the witness
against self-incrimination and oppressive and unwarranted harrassment and
embarrassment, a party is absolutely entitled to a full cross-examination as prescribed in
Section 8 of Rule 132 thus: "Upon the termination of the direct examination, the witness
may be cross-examined by the adverse party as to any matters stated in the direct
examination, or connected therewith, with sufficient fullness and freedom to test his
accuracy and truthfulness and freedom from interest or bias, or the reverse, and to elicit
all important facts bearing upon the issue." Until such cross-examination has been
finished, the testimony of the witness cannot be considered as complete and may not,
therefore, be allowed to form part of the evidence to be considered by the court in
deciding the case.
In the case at bar, however, We have opted not to rely exclusively on the foregoing
considerations. In order to satisfy Ourselves as to whether or not defendant stands to be
irreparably prejudiced by the impugned action of the trial court relative to the testimony
of Lazzari, We have just the same gone over the transcript thereof. After considering the
same, however, We are of the impression that even his direct testimony, without taking
into account anymore his answers to the cross-examination questions of counsel for
plaintiff, cannot be of much weight in establishing the defenses in defendant's answer.
But it would seem more appropriate to elaborate on this point when We come to the
discussion of the mutual accusation of the parties that the trial court erred in the portion
of its discretion awarding damages to plaintiff.
The last issue submitted for Our resolution relates to the award of damages made by the
trial court in favor of Ortigas against Lufthansa in the amounts aforestated, as to which,
as already noted at the outset, both parties have appealed taking opposite positions. In
this respect, the appealed decision made the following findings and discussion of the
material facts:
In October, 1963, the Sharp Travel Service, the travel department of C. F.
Sharp, Inc., the majority interest-in-which is held by Rocha y Cia., Inc.,
General Agents of the defendant, Lufthansa German Airlines issued to the
plaintiff First Class Pan American Ticket No. 026492147076 to 81 which
would take him from Manila, the place of departure, to Hongkong, various
cities in the United States, Europe, Asia, the Far East, and then back to Manila,
the place of destination. Ortigas' ticket for all these different legs of his journey
was first class.
He left Manila October 12, 1963, as scheduled. In New York, he decided to
leave out some cities, included in his original itinerary, to be in Hongkong on
the 19th day of November, 1963, for several appointments he had there. He
went to the Trans World Airlines and had his Pan American ticket changed
with First Class TWA Ticket No. 115-460-451- 878 to 881. His TWA ticket
was also first class for the entire trip from New York to several European
cities, including Rome, and thence to the Far East, with Manila also as the
place of destination.
Ortigas arrived in due course in Rome. To be sure he could fly first class to
Hongkong on November 18, 1963, for his appointments there the next day,
Ortigas repaired to the office of the Alitalia on Saturday, November 16, 1963,
to book passage. The man at the counter of the Alitalia office told him it had
no flight on Monday but the Lufthansa had. The man thereupon called up the
office of the Lufthansa and, after talking to an employee thereof, told Ortigas
that the Lufthansa had no first class, but only economy, seats available on its
Monday flight.
Ortigas answered that he was not willing to take an economy seat and
requested the employee to call up other airlines. Then the phone rang. The
employee answered and afterwards informed Ortigas that the Lufthansa had a
first class seat available for its Monday flight. Ortigas immediately asked him
to get the seat and to see to it that his ticket be confirmed and validated for the
flight and a first class seat. The man thereafter asked for Ortigas' passport and
other travel papers and attached a validating sticker (Exhibit "D-1") on flight
coupon No. 4 (Exhibit "B") which corresponded to the Rome-Hongkong leg of
his TWA Ticket No. 115-460-461-878 The sticker recites:
Flight Res.
Carrier No. Date Time Status
LH 646 18 Nov. 12:35 P.M. O.K.
Wishing to be doubly sure, Ortigas again requested the Alitalia employee to
call back the Lufthansa office to recheck whether his ticket was really
confirmed and validated. The man did so, after which he told Ortigas that his
ticket had been checked, validated, and confirmed as shown by the word
"O.K." on the sticker. The same employee later wrote on the cover of the
plaintiff's ticket "10.15 Terminal-36, via Gioliti" (Exhibits "C" and "C-1") and
told him to be in the air terminal on Monday, November 18, at 10:00 A.M.
The following Monday, Ortigas checked out of his hotel and took a taxi to the
terminal, arriving there about 9:30 A.M. He unloaded his baggage and
proceeded to the counter in charge of the Lufthansa passengers. The lady at the
counter told him the Lufthansa had no space for him that day. Ortigas
requested her to check with her main office, which she did by calling it up.
After calling, she apologized and said the plaintiff's ticket was in order and
would be confirmed and validated. On her request, Ortigas had his luggage
weighed and was given the free luggage allowance of a first class passenger.
He was furthermore asked to pay 800 liras for bus fare and 700 liras as
embarkation tax. Then Ortigas, along with other passengers, one of whom was
Amado Castro of the Development Bank of the Philippines, boarded a bus for
the airport.
At the airport, the plaintiff handed over his ticket to the man behind the
Lufthansa counter, who told him everything was all right. At that juncture, the
plaintiff heard his name called. He inquired if he was being called from an
employee of the Lufthansa and, on receiving an affirmative answer, said he
was Ortigas. The employee asked for his passport and other papers and, after
examining his passport, where his Filipino nationality appears, said he could
not board the plane that day because his seat would be given to a Belgian.
Ortigas asked the man why he was doing that to him when his ticket was
confirmed and validated first class. The Lufthansa employee replied he was
sorry but Ortigas could not leave.
Fearing he would have a recurrence of his heart ailment, Ortigas took a
nitroglycerin pill which his doctor advised him to take on occasions of stress.
The plaintiff then told the Lufthansa man to bring the Belgian over so that his
papers may be examined to determine whether he had a preferred right to
Ortigas' seat but the Lufthansa employee turned down the request, raised his
voice, and said if the plaintiff desired, he could take an economy seat and he
would be allowed a refund. Ortigas retorted he was not interested in a refund
and what he wanted was to travel first class in accordance with his ticket.
This argument occurred in the presence of the other passengers, one of whom
was Amado Castro, and the plaintiff felt embarrassed and humiliated because
the Lufthansa employee was shouting at him and treating him the way he did.
Ortigas made another request, namely, that the employee call other airlines to
inquire if they had flights to Hongkong that day but he once more turned down
the plea and insisted that Ortigas travel economy, with the promise that he will
be transferred to first class in Cairo and onward to Hongkong.
After promising to, the man went inside a room and, after a while, came out
and assured the plaintiff he would travel first class from Cairo to Hongkong
because he sent a communication that it should be done. He then jotted down
some letters on Ortigas' ticket. The plaintiff replied he was not satisfied with
the arrangement but was constrained to agree to it because he had to be in
Hongkong the next day, his luggage was in all probability already inside the
plane, he was not certain he could still secure a hotel reservation, the manager
of the hotel where he stayed having told him it would be hard for him to get
another reservation once he checks out, and he was assured he would be given
first class passage from Cairo onward.
Upon arrival in Cairo, the plaintiff requested the Lufthansa agent to transfer
him to first class but the agent said he could not and that he did not receive any
communication from Rome to that effect. Ortigas also requested the man to
find out if there were other airlines having planes leaving that day but his
request was likewise denied. The man, however, promised that at Dharham,
Ortigas will be transferred to first class. Ortigas had no alternative but to
continue traveling as before but he did so again under protest.
At Dharham, the plaintiff once more requested a transfer to first class but was
also told by the Lufthansa agent that he had not received any communication
about the change and the request could not be granted. The plaintiff had to
travel perforce economy from Dharham. In Calcutta, Ortigas once again
requested a transfer or that he be assisted in booking passage on other planes
but was also refused. It was only in Bangkok when the chief steward asked
him if he wanted to move over to first class but having been already
embarrassed and humiliated and the trip to Hongkong being only three hours,
he said he would not as a sign of protest.
In Hongkong, Ortigas protested against the treatment given him but was told
by the Lufthansa office he had to file his protest in Manila, it being the point of
destination. He did so by means of a letter, dated November 25, 1963 (Exhibit
"F"), followed by another letter, dated December 20, 1963 (Exhibit "C"), and
not having received any definite answer, he brought this suit.
Although Ortigas' ticket for the flight from Rome to Hongkong was validated
and confirmed by the Alitalia, its act bound and obligated the Lufthansa. The
Alitalia and Lufthansa are members of the International Air Transport
Association (IATA). It is admitted that as such member, the Alitalia can issue
tickets for other members of the association like the Lufthansa, Pan American
World Airways, and others. Par. 10, Order of April 29, 1964, and Exhibit "H",
certification of the manager of the Alitalia. Aside from being members of the
IATA, the Alitalia and Lufthansa are pool partners and conduct a joint service
with interchangeable flights for the European-Far East-and Australia sectors.
Par. 11, Order of April 29, 1964. Under the pool agreement (Exhibit "DD")
they undertake to adhere to the appropriate IATA regulations and to take
measures to provide district sales offices with every possibility for close
cooperation in the promotion of the pool services covered by the agreement,
including "reservation and booking". They furthermore, in effect confirm in
the agreement that tickets of one, other than free and reduced tickets, may be
validated by the other.
Finally, Manuel Otayza, general manager of Filital, Inc., which is the general
agent of the Alitalia in the Philippines, testified that space reservation through
telephone calls between airlines is permitted by IATA's, "Manual of Traffic
Conference Resolutions" and that telephone calls for reservation by one airline
to another is in fact accepted procedure in accordance with the official airline
guide of the Air Traffic Conference and International Air Transport
Association (Exhibit "W").
The placing by the Alitalia of a sticker on the plaintiff's ticket obligated the
Lufthansa to give him a first class seat on its flight from Rome to Hongkong
on November 18, 1963. The same witness, Manuel Otayza, testified that the
placing of a validating sticker on a ticket is standard airline procedure; that a
sticker changes are status of a reservation; that consequently while Ortigas'
ticket was "open", that is, it had no reservation for a particular flight between
Rome and Hongkong, the moment a validating sticker was placed thereon,
stating the flight number of the airline, the day and hour of departure, with the
letters "O-K", his ticket was changed from an "open" to a "confirmed" or
"validated" ticket; and that the sticker on Ortigas' ticket meant that first class
space was confirmed for him on Lufthansa flight 646 to Hongkong on
November 18, 1963, at 12:35 P.M.
Aside from Otayza's testimony, it is admitted that in the stipulation of facts
that "the letters "O.K." (Exhibit D-2) appearing on the "Res. Status" box of the
sticker (Exhibit D-1) attached to Flight Coupon No. 4 of TWA Ticket No. 015-
410:451-880 (Exhibit "D") means space confirmed, per IATA Resolution 275,
page 4, Issue 2, a photostatic copy of which is attached hereto as Exhibit "O";
that validate means to stamp or write on the passenger ticket an indication that
the passenger ticket has been officially issued by the carrier; that "the placing
of a sticker on a flight coupon is a revalidation thereof for the flight mentioned
in said sticker and is an alteration effected on said coupon, in accordance with
the procedure laid down in IATA Resolution 275d, Page 1, Issue 1, a
photostatic copy of which is attached thereto as Exhibit "S";. and that "prior
endorsement was not necessary for Alitalia to revalidate TWA Ticket No. 115-
410-880 Exhibit "D" because Alitalia is the carrier originally designated in the
"Via carrier" box of said ticket, in accordance with IATA Resolution No. 279,
photostatic copy of which is attached hereto as Exhibit 'T'."
There was, therefore, a valid and binding contract between Lufthansa and the
plaintiff to transport him as a first class passenger from Rome to Hongkong on
November 18, 1963, and this agreement the defendant violated by compelling
the plaintiff to travel as an economy passenger. It cannot be said the breach
was the result of an honest mistake or excusable negligence. There is evidence
the defendant acted with `bad faith and in wilful disregard of the plaintiffs
rights.
Ortigas' ticket was confirmed on the early morning of November 16, 1963,
more than 48 hours before his departure on the afternoon of November 18.
There was, therefore, ample time to send a telex message from Rome to the
defendant's main office in Frankfurt, which is only about 2-1/2 flying hours
away, to reserve a first class seat for the plaintiff.
At the terminal on Via Gioliti, he was again told that he had a first class seat,
his luggage was checked in divesting him of control thereof, and transported to
the airport some 37 kilometers distant. He was in this manner deprived of the
opportunity of availing himself of the facilities of other airlines and compelled
to take the Lufthansa flight even against his will.
In the airport, although he, was found entitled to fly first class, he was told
after his Filipino passport was seen, that his seat would be given to a Belgian,
without any reason or explanation whatsoever. His simple request that the
Belgian's ticket be produced and examined to see who had a better right to a
first class seat was turned down. So was his equally simple request that other
airlines be called to find out if any of them could accept him as a first class
passenger to Hongkong that day. He was deceived into boarding the Lufthansa
plane at Rome by falsely assuring him he will be transferred to first class at
Cairo, the next stop in the flight. The same false and deceptive promise was
given him at Dharham and Calcutta.
Indubitable proof of the defendant's bad faith is found in the fact that while its
employee was assuring the plaintiff he would be transferred to first class in
Cairo, he was at the same time writing on his ticket the following notation:
"TRVLDY/c ROME HEG ROME ST", which means "Travelled economy
class Rome to Hongkong St", thereby barring Ortigas from asserting any right
to demand first class accommodation. The defendant's employee, therefore,
knew all along the plaintiff would not travel first class, and yet he deliberately
made him believe he would be transferred to first class from Cairo to
Hongkong.
From the circumstances, it is clear that the defendant not only breached its duty
to the plaintiff but also did not want to release him as a passenger and wished
to hold on to him even if it would cause him inconvenience and
embarrassment. (Pages 97-109, Record on Appeal.) .
Disputing the foregoing conclusions, Lufthansa claims firstly that the Alitalia employee
who validated and confirmed Ortigas' reservation must have made a mistake because
actually, he was informed by the Lufthansa Rome office that Ortigas could only be
waitlisted. Assuming, however, there was such an error, it has been indisputably proven
that under the so-called pool arrangement among different airline companies pursuant to
the International Air Transport Association (IATA) agreement of which Alitalia and
Lufthansa are signatories, both companies are constituted thereby as agents of each
other in the issuing of tickets and other matters pertaining to their relations with those
who would need their services, and since there can be no question that on its face, the
annotations made by Alitalia on the ticket here in dispute cannot have any (other
meaning than that the reservation of Ortigas for the Rome — Hongkong flight was
validated and confirmed, Lufthansa's disclaimer is unavailing. Besides, it appears that
when Ortigas checked in at the airport, the Lufthansa lady employee thereat told him,
after making the proper verification, that the reservation was correct. What is more, in
the unconcluded testimony of Ivo Lazzari, the striking out of which is questioned by
Lufthansa, he admitted that it was a fact that the said reservation of plaintiff for first
class was confirmed, albeit he qualified that this was done already in the morning of
November 18th, the day of the flight, almost at the last hour. What seems to have
happened was that somehow the first class accommodations for that flight were
overboard and Lufthansa tried to solve the problem by downgrading Ortigas to the
economy class in favor of a Belgian, as Ortigas was told by the Lufthansa employee
who paged him over the public address system for the purpose just as he was about to
go to the departure area, with his luggage already checked and his overweight fees duly
paid, so much so that they were already loaded in the plane. Verily, such treatment
given to plaintiff was completely wrong and absolutely unjustifiable. Nobody, much
less a common carrier who is under constant special obligation to give utmost
consideration to the convenience of its customers, may be permitted to relieve itself
from any difficulty situation created by its own lack of diligence in the conduct of its
affairs in a manner prejudicial to such customers. It is Our considered view that when it
comes to contracts of common carriage, inattention and lack of care on the part of the
carrier resulting in the failure of the passenger to be accommodated in the class
contracted for amounts to bad faith or fraud which entitles the passenger to the award of
moral damages in accordance with Article 2220 of the Civil Code. But in the instant
case, the breach appears to be of graver nature, since the preference given to the Belgian
passenger over plaintiff was done willfully and in wanton disregard of plaintiff's rights
and his dignity as a human being and as a Filipino, who may not be discriminated
against with impunity.
Lufthansa contends, however, that there could not have been any possible
discrimination by reason of race against Ortigas because from his appearance, said
plaintiff can easily be taken for a European or white more than his own witness Amado
Castro and besides, there were other orientals in the same flight on that occasion. It is
argued that any such policy would be self-defeating, since it would certainly be
damaging to its own business. Again, this ratiocination cannot carry the day for
Lufthansa, for what appears from the evidence in this case is not really a case of a
general policy of discriminating against orientals or non-whites, but a specific act of
Lufthansa employee at the airport of giving preference to a Belgian after examining
Ortigas passport wherein his Filipino nationality is noted. Indeed, the fact that despite
plaintiffs protestations and demand that he be shown how it could happen that
somebody else, particularly that Belgian, should be given his place when his reservation
was validated and confirmed and actually, he had already checked in and his baggage
was already in the plane, nothing was done to satisfy him, merely infused bad faith into
the breach of contract already committed of depriving plaintiff of his reserved
accommodation. In other words, from the legal standpoint, such preference given to a
European surely aggravated the damage or injury suffered by plaintiff, but the very act
alone of deliberately downgrading him despite his confirmed reservation for first class
accommodation is sufficient ground for relief. And considering that there are already
recorded cases in this Court wherein Filipinos have been similarly discriminated against
by foreign airline company employees in the treatment of passengers this new instance
can easily be believed and correspondingly dealt with in fixing and assessing the
liability of herein defendant.
As found by the court below what worsened the situation of Ortigas was that Lufthansa
succeeded in keeping him as its passenger by assuring him that he would be given first
class accommodation at Cairo, the next station, the proper arrangements therefor having
been made already, when in truth such was not the case. Thus, instead of complying
with the request of Ortigas that other airlines be contacted to find out it they had first
class space for him, the Lufthansa employee who had indifferently told him about his
downgrading paid very little attention if ever to said request. And to keep him from
giving the business to another company, he was made to believe that he would be given
first class accommodation at Cairo. Although molested and embarrassed to the point
that he had to take nitroglycerine pills to ward off a possible heart attack, Ortigas hardly
had any choice, since his luggage was already in the plane. To his disappointment,
when the plane reached Cairo, he was told by the Lufthansa office there that no word at
all had been received from Rome and they had no space for him in first class. Worse,
similar false representations were made to him at Dharham and Calcutta. It was only at
Bangkok where for the first time, Ortigas was at last informed that he could have a first
class seat in that leg of the flight, from Bangkok to Hongkong. This Ortigas rejected, if
only to make patent his displeasure and indignation at being so inconsiderately treated
in the earlier part of his journey.
Lufthansa insists in its brief that it could have proven that there was no such
"entrapment of a captive passenger" had it been allowed the postponement it sought of
the September 28, 1966 hearing. It is argued that there could have been no way by
which its Rome office could have assured Ortigas about what he would be given in
Cairo, the flight being fully booked as it was without any assurance of any first class
seat being vacated by then. We are not impressed. In view of the insistence of plaintiff
that he be given the first class accommodation he had contracted and paid for, the least
that the, Rome office should have done was to communicate with Cairo and strongly
urge that all possible effort be made to comply with his well grounded request. As it
happened, however, the Cairo office informed Ortigas when he arrived there that they
had not received any word at all from Rome. On the contrary, as pointed out by the trial
court, contrary to the verbal assurance given Ortigas, the Lufthansa employee made
annotations on his ticket that he was travelling economy class from Rome to Hongkong.
If, as contended by Lufthansa, Ortigas was duly advised to make arrangements for
transfer to first class as soon as he arrived at each station on the way, why was such
notation made that he was travelling up to Hongkong in economy class? All these only
go to show that any evidence of defendant tending to disprove the testimony of Ortigas
would in any event have been inconclusive or unreliable.
Likewise, Lufthansa maintains that it could have proven that Ortigas did not take
offense at being downgraded, as in fact, according to Lufthansa, he was in jovial mood
throughout the trip enjoying his conversation and exchange of amenities with his
seatmate, who by strange coincidence happened to be the Manager of Lufthansa
German Airlines for the district of Australia and New Zealand holding said position
since 1962.1 Moreover, it is argued, the economy class accommodations are not much
different from first class and Ortigas was not delayed in his trip. We cannot see the
point. A passenger contracts for first class accommodations for many reasons peculiar
to himself and pays a higher price therefor, and it is certainly not for the airplane to say
later, after it deprives him of his space in order to favor another passenger, that
economy class is anyway just as good as first class. That Ortigas was rightfully
indignant is not difficult to imagine. No person in his normal senses and possessed of
human dignity would have been unperturbed and unruffled by the treatment he had
received. More, he was under express admonition of his doctor taking care of his ailing
coronary condition to travel only in first class. Indeed, that he complained and made
himself emphatically clear while still in Rome is sufficiently substantiated in the record,
as it was more or less admitted by defendant's witness Lazzari when he testified that he
heard about plaintiff's complaint that same day, November 18, 1963.
In the light of all the foregoing, there can be no doubt as to the right of Ortigas to
damages, both moral and exemplary. Precedents We have consistently adhered to so
dictate. Beginning with Cuenca,2 wherein the Court rejected the theory that an air
carrier is liable only in the event of death or injury suffered by a passenger, because,
according to the Court, to so hold would be tantamount to declaring the carrier "exempt
from any liability for damages in the event of its absolute refusal, in bad faith, to
comply with a contract of carriage, which is absurd", We have uniformly upheld the
right of a passenger to damages in all cases wherein, after having contracted and paid
for first class accommodations duly confirmed and validated, he is transferred over his
objection to economy, class, which he has to take in order to be able to arrive at his
destination on his scheduled time.
In the case of Nicolas L. Cuenca, then Commissioner of Public Highways of the
Philippines, he boarded a Northwest plane in Manila with a first class ticket to Tokyo,
but upon arrival at Okinawa, an agent of the company rudely compelled him, over his
protest, to move over to the tourist class, which he had to do, so he could reach the
international conference he was attending on time. Under these facts, the Court held that
the P20,000 awarded by the lower court to Cuenca "may well be considered as nominal
and also as exemplary, the Court of Appeals having modified the trial court's
designation thereof as moral, saying it should have been nominal.
In Lopez3 , Honorable Fernando Lopez, then an incumbent senator and former Vice
President of the Philippines, together with his wife and his daughter and son-in-law,
made first class reservations with the Pan American World Airways in its Tokyo-San
Francisco flight. The reservation having been confirmed, first class tickets were
subsequently issued in their favor. Mistakenly, however, defendant's agent cancelled
said reservation, but expecting some cancellations before the flight scheduled about a
month later, the reservations supervisor decided to withhold the information from them,
with the result that upon arrival in Tokyo, the Lopezes discovered they had no first class
accommodations and were thus compelled to take the tourist class, just so the senator
could be on time for his pressing engagements in the United States. In the light of these
facts, the Court held there was a breach of the contract of carriage and viewed as the
element of bad faith entitling the plaintiffs to moral damages for such contractual
breach, the failure of the agents of the defendant to inform the plaintiffs on time that
their reservation for first class had long before been cancelled by mistake. According to
the Court, such omission placed plaintiffs in a predicament that enabled the company to
keep the plaintiffs as their passengers in the tourist class, thereby retaining the business
and promoting the company's self-interest at the expense of, embarrassment, discomfort
and humiliation on the part of the plaintiffs.
In Air France vs. Carrascoso4 plaintiff Mr. Rafael Carrascoso, a civil engineer who was
going to Lourdes, France, as a member of a religious group of pilgrims was issued by
the Philippine Air Lines, as agent of the defendant Air France, a ticket for first class
round trip from Manila to Rome. From Manila, Carrascoso travelled first class, as per
said ticket, but at Bangkok, the Manager of the defendant airline forced him to vacate
the first class seat because there was a white man who allegedly had a better right
thereto, without, however, showing him the basis for such preference. Upon these
factual premises, the Court held:
It is really correct to say that the Court of Appeals in the quoted portion first
transcribed did not use the term `bad faith'. But can it be doubted that the
recital of facts therein points to bad faith? The manager not only prevented
Carrascoso from enjoying his right to a first class seat, worse, he imposed his
arbitrary will; he forcibly ejected him from his seat, made him suffer the
humiliation of having to go to the tourist class compartment — just to give
way to another passenger whose right thereto has not been established.
Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning
different from what is understood in law. For, bad faith, contemplates a "state
of mind affirmatively operating with furtive design or with some motive of
self-interest or ill will or for ulterior purpose." (Words & Phrases, Perm. Ed.,
Vol. 5, p. 13, citing Warfield Natural Gas Co. vs. Allen, 59 S.W. (2d) 534,
538.)
And if the foregoing were not yet sufficient, there is the express finding of bad
faith in the judgment of the Court of First Instance, thus:
"The evidence shows that defendant violated its contract of
transportation with plaintiff in bad faith, with the aggravating
circumstances that defendant's Manager in Bangkok went to the
extent of threatening the plaintiff in the presence of many passengers
to have him thrown out of the airplane to give the "first class" seat
that he was occupying to, again using the words of the witness
Ernesto G. Cuento, a "white man" whom he (defendant's Manager)
wished to accommodate, and the defendant has not proven that this
"white man" had any "better right" to occupy the "first class" seat that
the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to him."
(R.A., p. 74; emphasis supplied.) (at pp. 166-167.)
These precedents, as may be seen, apply four-square to herein plaintiffs case.
Defendant's liability for willful and wanton breach of its contract of carriage with
plaintiff is, therefore, indubitable.
Coming now to the amount that should be awarded by way of damages to the plaintiff,
it is also the teaching of the cases aforecited that defendant is liable not only for moral
but also for exemplary damages. As earlier stated, the court below fixed the
compensation for moral damages at P100,000 and the exemplary at P30,000. The Court
believes that these amounts are not enough.
According to the lower court:
Although the plaintiff has not held any elective public office, he has however,
a distinguished record as a private citizen, a lawyer, businessman, a civic and
religious leader, a member of numerous government boards and organizations
as well as of local and international bodies, and is the recipient of awards and
citations for outstanding services and achievements.
He was, and still is, moreover suffering from a heart ailment and has been
advised by his physician to travel first class because it is more relaxing and
comfortable. His position as chairman of the boards of directors of the
corporation he represented also required that he travel in that manner. He was,
furthermore, carrying a special passport issued by the Philippine Government
to represent it and business corporations abroad.
His sickness and the need for him to travel in the most comfortable manner
possible were made known to the defendant's employee, but he paid no heed to
them. Instead, he engaged Ortigas in a heated discussion, summarily brushed
off his protests and pleas, humiliated him, and tricked him into boarding his
employer's plane, endangering thereby his health and obliging him to take
medicine to forestall an attack.
There is, finally, evidence that he was discriminated against because of his
nationality for he was told to yield his first class seat to a Belgian only after his
passport was examined and his Filipino citizenship must have been noted. .
Under the circumstances and measured by the criterion, jurisprudence has
followed, the compensation the plaintiff should be entitled to receive must be
fixed at P100,000.00 as moral damages, P30,000.00 as exemplary damages or
corrective damages, and P20,000.00 as attorney's fees. (Pp. 111-113, Record
on Appeal.)
We have reviewed the evidence and We are convinced there is more than ample basis
for these findings. But under the circumstances revealed in the record, it is Our
considered opinion that the award of moral damages should be increased to P150,000.
We cannot go along with defendant's pose that in Cuenca the amount awarded was only
P20,000, for the very obvious reason that in that case what was involved was only one
leg of the flight contracted for, namely, that from Okinawa to Tokyo, whereas in the
case not at bar, the offense was repeated four times, at Rome, Cairo, Dharham and
Calcutta, with apparent cold indifference of defendant's agents to plaintiff's plight.
Besides, it appears that Cuenca did not appeal from the trial court's decision fixing said
amount, hence there was no occasion for the Supreme Court to award more. This was
also what happened in the Carrascoso case, where the plaintiff did not complain against
the award of only P25,000-moral-and P10,000-exemplary damages made by the trial
court. It was Air France who claimed that these were even excessive. Verily, however,
such, discriminatory acts of the defendants in those cases which were not only violative
of their contractual obligations but also offensive to human dignity and national or
racial pride constitute about the most justifiable ground for the award of moral damages,
for the resulting injury therefrom cannot but cause immense mental anguish,
besmirched reputation, wounded feelings, moral shock and social humiliation. (See
Article 2217 of the Civil Code.) We reiterate, they are to be considered as infecting with
bad faith the breach of contract committed, under Article 2220 of the same Code.
(Lopez vs. Pan Am., supra.)
Lufthansa suggests that compared to the P100,000 awarded to Vice President Lopez in
the case aforementioned, the P100,000 given by the trial court to Ortigas are "grossly
excessive". It does not appear to Us to be so. As pointed out by His Honor, "although
plaintiff has not held any elective public office, he has, however, a distinguished record
as a private citizen, a lawyer, businessman, a civic and religious leader, a member of
numerous boards and organizations as well as local and international bodies, and is the
recipient of awards and citations for outstanding services and achievements." Indeed,
under the proven facts in the record, We cannot regard plaintiff in any inferior position
vis-a-vis Vice President Lopez in the highest circles of Philippine society and in the
business and religious world, not to speak of his standing in government officialdom.
Beside there is again the disparity between then Lopez case and this one that here the
offense, which, as in Cuenca, is aggravated by the Lufthansa employee at Rome having
falsely noted on the ticket that Ortigas was travelling in economy from Rome to
Hongkong,5 was repeated four times in the same trip, namely in Rome, Cairo, Dharham
and Calcutta. More importantly, unlike in the case of Lopez, Ortigas was suffering from
a weak heart and under doctor's advice to travel only in first class, hence, his being
compelled to stay in economy or tourist class during the major part of his trip, must
have given him added apprehensive feelings about his safety. And, moreover, it is to
benoted that in the Lopez case, which was decided in 1966, aside from taking into
account the personal circumstances of the plaintiff, the Court considered "the present
rate of exchange and the terms at which amount of damages awarded would
approximately be in U.S. dollars", hence, We may not justifiably do differently here..
Furthermore, it may not be amiss to mention here that in Zulueta vs. Pan American
Airways Inc., 43 SCRA 397, the Court awarded the plaintiffs: Zulueta, the husband, his
wife and a minor daughter, a total of P775,000 as damages consisting of P500,000 as
moral, P200,000 as exemplary and P75,000 as attorney's fees, apart from actual
damages. In that case, the Zulueta's were coming home to Manila from Honolulu in a
Pan-American plane. At Wake, however, where the plane arrived at 4:00 o'clock in the
morning, Zulueta could not be found at flight time because, without letting anyone
know, not even his wife or daughter, he had relieved himself, according to him, at the
beach behind the terminal. When at last, he was found, the Pan-Am employee who first
met him while walking back from the beach remonstrated him thus: "What in the hell
do you think you are! Get on that plane." This angered Zulueta who engaged the said
employee in an exchange of angry words. In the meanwhile, the pilot who had been
tipped by a "man from the State Department", also a passenger in that flight, that there
might be a bomb in the plane and expressed apprehension for the safety of the flight
unless Zulueta could be found, ordered the unloading of the bags of the Zuluetas, and
when three of the four of them had already been unloaded, he ordered Zulueta to open
them, but the latter refused. Another exchange of angry words followed, in the course of
which, according to Zulueta's evidence, the pilot went to the extent of referring to him
and his family as "those monkeys". Ultimately, the plane left without Zulueta, albeit his
wife and daughter were on board, because the captain refused to allow Zulueta to board
until after his bags were opened and inspected, which Zulueta refused entirely to do.
Although, said decision is not yet final, because of the pendency of a second motion for
reconsideration the Court has not yet resolved, the Court has already allowed the partial
execution of the judgment, thus enabling Zuluetas to collect already one-half of the
amount or over P335,000, which amount, according to the concurring and dissenting
opinion there of the writer of the instant decision could be the least that should anyway
be allowed. Of course, the Court did not itemize the award but granted the same to the
family as a whole, but it is evident that in the final distribution, Zulueta would get for
himself from at least P150,000 to not more than P200,00. 6
We hold that the foregoing considerations justify the increase of the award of moral
damages from P100,000 to P150,000.
serve the convenience and comfort of the passengers. When any disregard of such laws
is committed, the Supreme Court, as the interpreter of such laws, must exact the
commensurate liability which they contemplate.
"Exemplary damages are required by public policy, for wanton acts must be repressed.
They are an antidote so that the poison of wickedness may not run through the body
politic." (Report of Code Commission, pp. 75-76) by authority of the decided cases
aforediscussed,7 acts of similar nature as those herein involved fall within the category
of those justifying the imposition of exemplary damages pursuant to the codal concept
just stated.
The rationale behind exemplary or corrective damages is, as the name implies, to
provide an example or correction for public good. ... In view of its nature, it should be
imposed in such an amount as to sufficiently and effectively deter similar breach of
contracts by defendant or other airlines." (Lopez v. Pan-American World
Airways, supra; see also Rotea vs. Halili, 109 Phil. 495; People vs. Medroso, Jr., G.R.
No. L-37633, Jan. 31, 1975, 62 SCRA 245; Cotabato Timberland Co. Inc. vs. Plaridel
Lumber Co., Inc., 13 SCRA 235) Thus, all relevant matters considered, P100,000 of
exemplary damages, which practically amounts only to not more than $15,000 U.S.
under the present rate of exchange, would serve the ends for which the liability has been
conceived.
WHEREFORE, the judgment appealed from is modified by raising the award of moral
and exemplary damages to plaintiff Ortigas to P150,000.00 and P100,000.00,
respectively. In all other respects, including as to the payment of interests on the said
amounts, the same is affirmed.

Finally, We have the dispute regarding the amount of exemplary damages awarded. In
this respect, it is Our considered opinion that defendant should Pay P100,000 instead of
the P30,000 awarded by the trial court. The record of this case taken together with what
are revealed in the other similar cases decided by this Court, those aforediscussed,
convinces Us that defendant, as an airline, should be made to pay an amount that can
really serve as a deterrent against a seeming pattern of indifference and unconcern, and
what is worse, of discrimination for racial reasons, discernible in the treatment of air
passengers. This is not the first case, and unless the proper sanctions are applied, it does
not appear it is going to be the last yet, of instances wherein Filipino passengers having
validated and confirmed tickets for first class would be shoved to the economy class,
over their valid objections and without any regard at all to their feelings and
convenience, only to favor other passengers presumed by the airlines to be of superior
race, hence, deserving preference. It is high time everyone concerned were made to
realize that the laws of the Philippines do not permit any act of discrimination against
its citizens, specially when this accompanies a clear breach of contractual obligations of
common carriers whose business is affected with public interest and must be directed to
[G.R. No. 150843. March 14, 2003]
CATHAY PACIFIC AIRWAYS, LTD., petitioner, vs. SPOUSES DANIEL
VAZQUEZ and MARIA LUISA MADRIGAL VAZQUEZ, respondents.
DECISION
DAVIDE, JR., C.J.:
Is an involuntary upgrading of an airline passengers accommodation from one
class to a more superior class at no extra cost a breach of contract of carriage that would
entitle the passenger to an award of damages? This is a novel question that has to be
resolved in this case.
The facts in this case, as found by the Court of Appeals and adopted by petitioner
Cathay Pacific Airways, Ltd., (hereinafter Cathay) are as follows:
Cathay is a common carrier engaged in the business of transporting passengers and
goods by air. Among the many routes it services is the Manila-Hongkong-Manila
course. As part of its marketing strategy, Cathay accords its frequent flyers membership
in its Marco Polo Club. The members enjoy several privileges, such as priority
for upgrading of booking without any extra charge whenever an opportunity
arises. Thus, a frequent flyer booked in the Business Class has priority for upgrading to
First Class if the Business Class Section is fully booked.
Respondents-spouses Dr. Daniel Earnshaw Vazquez and Maria Luisa Madrigal
Vazquez are frequent flyers of Cathay and are Gold Card members of its Marco Polo
Club. On 24 September 1996, the Vazquezes, together with their maid and two friends
Pacita Cruz and Josefina Vergel de Dios, went to Hongkong for pleasure and business.
For their return flight to Manila on 28 September 1996, they were booked on
Cathays Flight CX-905, with departure time at 9:20 p.m. Two hours before their time of
departure, the Vazquezes and their companions checked in their luggage at Cathays
check-in counter at Kai Tak Airport and were given their respective boarding passes, to
wit, Business Class boarding passes for the Vazquezes and their two friends, and
Economy Class for their maid. They then proceeded to the Business Class passenger
lounge.
When boarding time was announced, the Vazquezes and their two friends went to
Departure Gate No. 28, which was designated for Business Class passengers. Dr.
Vazquez presented his boarding pass to the ground stewardess, who in turn inserted it
into an electronic machine reader or computer at the gate. The ground stewardess was
assisted by a ground attendant by the name of Clara Lai Han Chiu. When Ms. Chiu
glanced at the computer monitor, she saw a message that there was a seat change from
Business Class to First Class for the Vazquezes.
Ms. Chiu approached Dr. Vazquez and told him that the Vazquezes
accommodations were upgraded to First Class. Dr. Vazquez refused the upgrade,
reasoning that it would not look nice for them as hosts to travel in First Class and their
guests, in the Business Class; and moreover, they were going to discuss business
matters during the flight. He also told Ms. Chiu that she could have other passengers
instead transferred to the First Class Section. Taken aback by the refusal for upgrading,
Ms. Chiu consulted her supervisor, who told her to handle the situation and convince
the Vazquezes to accept the upgrading. Ms. Chiu informed the latter that the Business
Class was fully booked, and that since they were Marco Polo Club members they had
the priority to be upgraded to the First Class. Dr. Vazquez continued to refuse, so Ms.
Chiu told them that if they would not avail themselves of the privilege, they would not
be allowed to take the flight. Eventually, after talking to his two friends, Dr. Vazquez
gave in. He and Mrs. Vazquez then proceeded to the First Class Cabin.
Upon their return to Manila, the Vazquezes, in a letter of 2 October 1996
addressed to Cathays Country Manager, demanded that they be indemnified in the
amount of P1million for the humiliation and embarrassment caused by its employees.
They also demanded a written apology from the management of Cathay, preferably a
responsible person with a rank of no less than the Country Manager, as well as the
apology from Ms. Chiu within fifteen days from receipt of the letter.
In his reply of 14 October 1996, Mr. Larry Yuen, the assistant to Cathays Country
Manager Argus Guy Robson, informed the Vazquezes that Cathay would investigate the
incident and get back to them within a weeks time.
On 8 November 1996, after Cathays failure to give them any feedback within its
self-imposed deadline, the Vazquezes instituted before the Regional Trial Court of
Makati City an action for damages against Cathay, praying for the payment to each of
them the amounts of P250,000 as temperate damages; P500,000 as moral
damages; P500,000 as exemplary or corrective damages; and P250,000 as attorneys
fees.
In their complaint, the Vazquezes alleged that when they informed Ms. Chiu that
they preferred to stay in Business Class, Ms. Chiu obstinately, uncompromisingly and
in a loud, discourteous and harsh voice threatened that they could not board and leave
with the flight unless they go to First Class, since the Business Class was
overbooked. Ms. Chius loud and stringent shouting annoyed, embarrassed, and
humiliated them because the incident was witnessed by all the other passengers waiting
for boarding. They also claimed that they were unjustifiably delayed to board the plane,
and when they were finally permitted to get into the aircraft, the forward storage
compartment was already full. A flight stewardess instructed Dr. Vazquez to put his
roll-on luggage in the overhead storage compartment. Because he was not assisted by
any of the crew in putting up his luggage, his bilateral carpal tunnel syndrome was
aggravated, causing him extreme pain on his arm and wrist. The Vazquezes also averred
that they belong to the uppermost and absolutely top elite of both Philippine Society and
the Philippine financial community, [and that] they were among the wealthiest persons
in the Philippine[s].
 In its answer, Cathay alleged that it is a practice among commercial airlines to
upgrade passengers to the next better class of accommodation, whenever an opportunity
arises, such as when a certain section is fully booked. Priority in upgrading is given to
its frequent flyers, who are considered favored passengers like the Vazquezes. Thus,
when the Business Class Section of Flight CX-905 was fully booked, Cathays computer
sorted out the names of favored passengers for involuntary upgrading to First Class.
When Ms. Chiu informed the Vazquezes that they were upgraded to First Class, Dr.
Vazquez refused. He then stood at the entrance of the boarding apron, blocking the
queue of passengers from boarding the plane, which inconvenienced other passengers.
He shouted that it was impossible for him and his wife to be upgraded without his two
friends who were traveling with them. Because of Dr. Vazquezs outburst, Ms. Chiu
thought of upgrading the traveling companions of the Vazquezes. But when she
checked the computer, she learned that the Vazquezes companions did not have priority
for upgrading. She then tried to book the Vazquezes again to their original seats.
However, since the Business Class Section was already fully booked, she politely
informed Dr. Vazquez of such fact and explained that the upgrading was in recognition
of their status as Cathays valued passengers. Finally, after talking to their guests, the
Vazquezes eventually decided to take the First Class accommodation.
Cathay also asserted that its employees at the Hong Kong airport acted in good
faith in dealing with the Vazquezes; none of them shouted, humiliated, embarrassed, or
committed any act of disrespect against them (the Vazquezes).Assuming that there was
indeed a breach of contractual obligation, Cathay acted in good faith, which negates any
basis for their claim for temperate, moral, and exemplary damages and attorneys
fees. Hence, it prayed for the dismissal of the complaint and for payment of P100,000
for exemplary damages and P300,000 as attorneys fees and litigation expenses.
During the trial, Dr. Vazquez testified to support the allegations in the
complaint. His testimony was corroborated by his two friends who were with him at the
time of the incident, namely, Pacita G. Cruz and Josefina Vergel de Dios.
For its part, Cathay presented documentary evidence and the testimonies of Mr.
Yuen; Ms. Chiu; Norma Barrientos, Comptroller of its retained counsel; and Mr.
Robson. Yuen and Robson testified on Cathays policy of upgrading the seat
accommodation of its Marco Polo Club members when an opportunity arises. The
upgrading of the Vazquezes to First Class was done in good faith; in fact, the First Class
Section is definitely much better than the Business Class in terms of comfort, quality of
food, and service from the cabin crew. They also testified that overbooking is a widely
accepted practice in the airline industry and is in accordance with the International Air
Transport Association (IATA) regulations.Airlines overbook because a lot of
passengers do not show up for their flight. With respect to Flight CX-905, there was no
overall overbooking to a degree that a passenger was bumped off or downgraded. Yuen
and Robson also stated that the demand letter of the Vazquezes was immediately acted
upon. Reports were gathered from their office in Hong Kong and immediately
forwarded to their counsel Atty. Remollo for legal advice. However, Atty. Remollo
begged off because his services were likewise retained by the Vazquezes; nonetheless,
he undertook to solve the problem in behalf of Cathay. But nothing happened until
Cathay received a copy of the complaint in this case. For her part, Ms. Chiu denied that
she shouted or used foul or impolite language against the Vazquezes.Ms. Barrientos
testified on the amount of attorneys fees and other litigation expenses, such as those for
the taking of the depositions of Yuen and Chiu.
In its decision[1] of 19 October 1998, the trial court found for the Vazquezes and
decreed as follows:
WHEREFORE, finding preponderance of evidence to sustain the instant complaint,
judgment is hereby rendered in favor of plaintiffs Vazquez spouses and against
defendant Cathay Pacific Airways, Ltd., ordering the latter to pay each plaintiff the
following:
a) Nominal damages in the amount of P100,000.00 for each plaintiff;
b) Moral damages in the amount of P2,000,000.00 for each plaintiff;
c) Exemplary damages in the amount of P5,000,000.00 for each
plaintiff;
d) Attorneys fees and expenses of litigation in the amount
of P1,000,000.00 for each plaintiff; and
e) Costs of suit.
SO ORDERED.
According to the trial court, Cathay offers various classes of seats from which
passengers are allowed to choose regardless of their reasons or motives, whether it be
due to budgetary constraints or whim. The choice imposes a clear obligation on Cathay
to transport the passengers in the class chosen by them.The carrier cannot, without
exposing itself to liability, force a passenger to involuntarily change his choice. The
upgrading of the Vazquezes accommodation over and above their vehement objections
was due to the overbooking of the Business Class. It was a pretext to pack as many
passengers as possible into the plane to maximize Cathays revenues. Cathays actuations
in this case displayed deceit, gross negligence, and bad faith, which entitled the
Vazquezes to awards for damages.
On appeal by the petitioners, the Court of Appeals, in its decision of 24 July
2001,[2] deleted the award for exemplary damages; and it reduced the awards for moral
and nominal damages for each of the Vazquezes to P250,000 and P50,000, respectively,
and the attorneys fees and litigation expenses to P50,000 for both of them.
The Court of Appeals ratiocinated that by upgrading the Vazquezes to First Class,
Cathay novated the contract of carriage without the formers consent. There was a
breach of contract not because Cathay overbooked the Business Class Section of Flight
CX-905 but because the latter pushed through with the upgrading despite the objections
of the Vazquezes.
However, the Court of Appeals was not convinced that Ms. Chiu shouted at, or
meant to be discourteous to, Dr. Vazquez, although it might seemed that way to the
latter, who was a member of the elite in Philippine society and was not therefore used to
being harangued by anybody. Ms. Chiu was a Hong Kong Chinese whose fractured
Chinese was difficult to understand and whose manner of speaking might sound harsh
or shrill to Filipinos because of cultural differences. But the Court of Appeals did not
find her to have acted with deliberate malice, deceit, gross negligence, or bad faith. If at
all, she was negligent in not offering the First Class accommodations to other
passengers.Neither can the flight stewardess in the First Class Cabin be said to have
been in bad faith when she failed to assist Dr. Vazquez in lifting his baggage into the
overhead storage bin. There is no proof that he asked for help and was refused even
after saying that he was suffering from bilateral carpal tunnel syndrome.Anent the delay
of Yuen in responding to the demand letter of the Vazquezes, the Court of Appeals
found it to have been sufficiently explained.
The Vazquezes and Cathay separately filed motions for a reconsideration of the
decision, both of which were denied by the Court of Appeals.
Cathay seasonably filed with us this petition in this case. Cathay maintains that the
award for moral damages has no basis, since the Court of Appeals found that there was
no wanton, fraudulent, reckless and oppressive display of manners on the part of its
personnel; and that the breach of contract was not attended by fraud, malice, or bad
faith. If any damage had been suffered by the Vazquezes, it was damnum absque
injuria, which is damage without injury, damage or injury inflicted without injustice,
loss or damage without violation of a legal right, or a wrong done to a man for which
the law provides no remedy. Cathay also invokes our decision in United Airlines, Inc. v.
Court of Appeals[3] where we recognized that, in accordance with the Civil Aeronautics
Boards Economic Regulation No. 7, as amended, an overbooking that does not exceed
ten percent cannot be considered deliberate and done in bad faith. We thus deleted in
that case the awards for moral and exemplary damages, as well as attorneys fees, for
lack of proof of overbooking exceeding ten percent or of bad faith on the part of the
airline carrier.
On the other hand, the Vazquezes assert that the Court of Appeals was correct in
granting awards for moral and nominal damages and attorneys fees in view of the
breach of contract committed by Cathay for transferring them from the Business Class
to First Class Section without prior notice or consent and over their vigorous objection.
They likewise argue that the issuance of passenger tickets more than the seating
capacity of each section of the plane is in itself fraudulent, malicious and tainted with
bad faith.
The key issues for our consideration are whether (1) by upgrading the seat
accommodation of the Vazquezes from Business Class to First Class Cathay breached
its contract of carriage with the Vazquezes; (2) the upgrading was tainted with fraud or
bad faith; and (3) the Vazquezes are entitled to damages.
We resolve the first issue in the affirmative.
A contract is a meeting of minds between two persons whereby one agrees to give
something or render some service to another for a consideration. There is no contract
unless the following requisites concur: (1) consent of the contracting parties; (2) an
object certain which is the subject of the contract; and (3) the cause of the obligation
which is established.[4] Undoubtedly, a contract of carriage existed between Cathay and
the Vazquezes. They voluntarily and freely gave their consent to an agreement whose
object was the transportation of the Vazquezes from Manila to Hong Kong and back to
Manila, with seats in the Business Class Section of the aircraft, and whose cause or
consideration was the fare paid by the Vazquezes to Cathay.
The only problem is the legal effect of the upgrading of the seat accommodation of
the Vazquezes. Did it constitute a breach of contract?
Breach of contract is defined as the failure without legal reason to comply with the
terms of a contract.[5] It is also defined as the [f]ailure, without legal excuse, to perform
any promise which forms the whole or part of the contract. [6]
In previous cases, the breach of contract of carriage consisted in either the
bumping off of a passenger with confirmed reservation or the downgrading of a
passengers seat accommodation from one class to a lower class. In this case, what
happened was the reverse. The contract between the parties was for Cathay to transport
the Vazquezes to Manila on a Business Class accommodation in Flight CX-905. After
checking-in their luggage at the Kai Tak Airport in Hong Kong, the Vazquezes were
given boarding cards indicating their seat assignments in the Business Class
Section. However, during the boarding time, when the Vazquezes presented their
boarding passes, they were informed that they had a seat change from Business Class to
First Class. It turned out that the Business Class was overbooked in that there were
more passengers than the number of seats. Thus, the seat assignments of the Vazquezes
were given to waitlisted passengers, and the Vazquezes, being members of the Marco
Polo Club, were upgraded from Business Class to First Class.
We note that in all their pleadings, the Vazquezes never denied that they were
members of Cathays Marco Polo Club. They knew that as members of the Club, they
had priority for upgrading of their seat accommodation at no extra cost when an
opportunity arises. But, just like other privileges, such priority could be waived. The
Vazquezes should have been consulted first whether they wanted to avail themselves of
the privilege or would consent to a change of seat accommodation before their seat
assignments were given to other passengers. Normally, one would appreciate and accept
an upgrading, for it would mean a better accommodation. But, whatever their reason
was and however odd it might be, the Vazquezes had every right to decline the upgrade
and insist on the Business Class accommodation they had booked for and which was
designated in their boarding passes. They clearly waived their priority or preference
when they asked that other passengers be given the upgrade. It should not have been
imposed on them over their vehement objection. By insisting on the upgrade, Cathay
breached its contract of carriage with the Vazquezes.
 We are not, however, convinced that the upgrading or the breach of contract was
attended by fraud or bad faith. Thus, we resolve the second issue in the negative.
Bad faith and fraud are allegations of fact that demand clear and convincing proof.
They are serious accusations that can be so conveniently and casually invoked, and that
is why they are never presumed. They amount to mere slogans or mudslinging unless
convincingly substantiated by whoever is alleging them.
Fraud has been defined to include an inducement through insidious
machination. Insidious machination refers to a deceitful scheme or plot with an evil or
devious purpose. Deceit exists where the party, with intent to deceive, conceals or omits
to state material facts and, by reason of such omission or concealment, the other party
was induced to give consent that would not otherwise have been given. [7]
Bad faith does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of
a known duty through some motive or interest or ill will that partakes of the nature of
fraud.[8]
We find no persuasive proof of fraud or bad faith in this case. The Vazquezes were
not induced to agree to the upgrading through insidious words or deceitful machination
or through willful concealment of material facts. Upon boarding, Ms. Chiu told the
Vazquezes that their accommodations were upgraded to First Class in view of their
being Gold Card members of Cathays Marco Polo Club. She was honest in telling them
that their seats were already given to other passengers and the Business Class Section
was fully booked. Ms. Chiu might have failed to consider the remedy of offering the
First Class seats to other passengers. But, we find no bad faith in her failure to do so,
even if that amounted to an exercise of poor judgment.
Neither was the transfer of the Vazquezes effected for some evil or devious
purpose. As testified to by Mr. Robson, the First Class Section is better than the
Business Class Section in terms of comfort, quality of food, and service from the cabin
crew; thus, the difference in fare between the First Class and Business Class at that time
was $250.[9] Needless to state, an upgrading is for the better condition and, definitely,
for the benefit of the passenger.
We are not persuaded by the Vazquezes argument that the overbooking of the
Business Class Section constituted bad faith on the part of Cathay. Section 3 of the
Economic Regulation No. 7 of the Civil Aeronautics Board, as amended, provides:
Sec 3. Scope. This regulation shall apply to every Philippine and foreign air carrier with
respect to its operation of flights or portions of flights originating from or terminating
at, or serving a point within the territory of the Republic of the Philippines insofar as it
denies boarding to a passenger on a flight, or portion of a flight inside or outside the
Philippines, for which he holds confirmed reserved space. Furthermore, this Regulation
is designed to cover only honest mistakes on the part of the carriers and excludes
deliberate and willful acts of non-accommodation. Provided, however, that overbooking
not exceeding 10% of the seating capacity of the aircraft shall not be considered as a
deliberate and willful act of non-accommodation.
It is clear from this section that an overbooking that does not exceed ten percent is
not considered deliberate and therefore does not amount to bad faith. [10] Here, while
there was admittedly an overbooking of the Business Class, there was no evidence of
overbooking of the plane beyond ten percent, and no passenger was ever bumped off or
was refused to board the aircraft.
Now we come to the third issue on damages.
The Court of Appeals awarded each of the Vazquezes moral damages in the
amount of P250,000. Article 2220 of the Civil Code provides:
Article 2220. Willful injury to property may be a legal ground for awarding moral
damages if the court should find that, under the circumstances, such damages are justly
due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.
Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. Although incapable of pecuniary computation, moral damages may be recovered
if they are the proximate result of the defendants wrongful act or omission. [11] Thus,
case law establishes the following requisites for the award of moral damages: (1) there
must be an injury clearly sustained by the claimant, whether physical, mental or
psychological; (2) there must be a culpable act or omission factually established; (3) the
wrongful act or omission of the defendant is the proximate cause of the injury sustained
by the claimant; and (4) the award for damages is predicated on any of the cases stated
in Article 2219 of the Civil Code.[12]
Moral damages predicated upon a breach of contract of carriage may only be
recoverable in instances where the carrier is guilty of fraud or bad faith or where the
mishap resulted in the death of a passenger.[13] Where in breaching the contract of
carriage the airline is not shown to have acted fraudulently or in bad faith, liability for
damages is limited to the natural and probable consequences of the breach of the
obligation which the parties had foreseen or could have reasonably foreseen. In such a
case the liability does not include moral and exemplary damages.[14]
In this case, we have ruled that the breach of contract of carriage, which consisted
in the involuntary upgrading of the Vazquezes seat accommodation, was not attended
by fraud or bad faith. The Court of Appeals award of moral damages has, therefore, no
leg to stand on.
The deletion of the award for exemplary damages by the Court of Appeals is
correct. It is a requisite in the grant of exemplary damages that the act of the offender
must be accompanied by bad faith or done in wanton, fraudulent or malevolent
manner.[15] Such requisite is absent in this case. Moreover, to be entitled thereto the
claimant must first establish his right to moral, temperate, or compensatory
damages.[16] Since the Vazquezes are not entitled to any of these damages, the award for
exemplary damages has no legal basis. And where the awards for moral and exemplary
damages are eliminated, so must the award for attorneys fees. [17]
The most that can be adjudged in favor of the Vazquezes for Cathays breach of
contract is an award for nominal damages under Article 2221 of the Civil Code, which
reads as follows:
Article 2221 of the Civil Code provides:
Article 2221. Nominal damages are adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may be vindicated or recognized,
and not for the purpose of indemnifying the plaintiff for any loss suffered by him.
Worth noting is the fact that in Cathays Memorandum filed with this Court, it
prayed only for the deletion of the award for moral damages. It deferred to the Court of
Appeals discretion in awarding nominal damages; thus:
The presiding judge of the lower court is enjoined to hearken to the Supreme Courts
admonition in Singson vs. CA (282 SCRA 149 [1997]), where it said:
The well-entrenched principle is that the grant of moral damages depends upon the
discretion of the court based on the circumstances of each case. This discretion is
limited by the principle that the amount awarded should not be palpably and
scandalously excessive as to indicate that it was the result of prejudice or corruption on
the part of the trial court.
and in Alitalia Airways vs. CA (187 SCRA 763 [1990], where it was held:
Nonetheless, we agree with the injunction expressed by the Court of Appeals that
passengers must not prey on international airlines for damage awards, like trophies in a
safari. After all neither the social standing nor prestige of the passenger should
determine the extent to which he would suffer because of a wrong done, since the
dignity affronted in the individual is a quality inherent in him and not conferred by
these social indicators. [19]

As far as the award of nominal damages is concerned, petitioner respectfully defers to We adopt as our own this observation of the Court of Appeals.
the Honorable Court of Appeals discretion. Aware as it is that somehow, due to the
resistance of respondents-spouses to the normally-appreciated gesture of petitioner to WHEREFORE, the instant petition is hereby partly GRANTED. The Decision of
upgrade their accommodations, petitioner may have disturbed the respondents-spouses the Court of Appeals of 24 July 2001 in CA-G.R. CV No. 63339 is hereby MODIFIED,
wish to be with their companions (who traveled to Hong Kong with them) at the and as modified, the awards for moral damages and attorneys fees are set aside and
Business Class on their flight to Manila. Petitioner regrets that in its desire to provide deleted, and the award for nominal damages is reduced to P5,000.
the respondents-spouses with additional amenities for the one and one-half (1 1/2) hour
flight to Manila, unintended tension ensued.[18] No pronouncement on costs.
SO ORDERED.
Nonetheless, considering that the breach was intended to give more benefit and
advantage to the Vazquezes by upgrading their Business Class accommodation to First
Class because of their valued status as Marco Polo members, we reduce the award for
nominal damages to P5,000.
Before writing finis to this decision, we find it well-worth to quote the apt
observation of the Court of Appeals regarding the awards adjudged by the trial court:

We are not amused but alarmed at the lower courts unbelievable alacrity, bordering on
the scandalous, to award excessive amounts as damages. In their complaint, appellees
asked for P1 million as moral damages but the lower court awarded P4 million; they
asked for P500,000.00 as exemplary damages but the lower court cavalierly awarded a
whooping P10 million; they asked for P250,000.00 as attorneys fees but were
awarded P2 million; they did not ask for nominal damages but were
awarded P200,000.00. It is as if the lower court went on a rampage, and why it acted
that way is beyond all tests of reason. In fact the excessiveness of the total award invites
the suspicion that it was the result of prejudice or corruption on the part of the trial
court.
AIR FRANCE, G.R. No. 165266 However, upon arriving in Budapest, respondent was unable to locate his
Petitioner, luggage at the claiming section. He sought assistance from petitioners counter at the
Present: airport where petitioners representative verified from their computer that he had indeed
a checked-in luggage. He was advised to just wait for his luggage at his hotel and that
CARPIO MORALES, J., petitioners representatives would take charge of delivering the same to him that same
Chairperson, day. But said luggage was never delivered by petitioners representatives despite follow-
- versus - BERSAMIN, up inquiries by respondent.
MENDOZA,*
VILLARAMA, JR., and
SERENO, JJ. Upon his return to the Philippines, respondents lawyer immediately wrote
petitioners Station Manager complaining about the lost luggage and the resulting
damages he suffered while in Budapest. Respondent claimed that his single luggage
BONIFACIO H. GILLEGO, Promulgated:
contained his personal effects such as clothes, toiletries, medicines for his hypertension,
substituted by his surviving heirs
and the speeches he had prepared, including the notes and reference materials he needed
represented by Dolores P. Gillego, December 15, 2010
for the conference. He was thus left with only his travel documents, pocket money and
Respondent.
the clothes he was wearing. Because petitioners representatives in Budapest failed to
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
deliver his luggage despite their assurances and his repeated follow-ups, respondent was
forced to shop for personal items including new clothes and his medicines. Aside from
DECISION
these unnecessary expenditures of about $1,000, respondent had to prepare another
speech, in which he had difficulty due to lack of data and information. Respondent thus
VILLARAMA, JR., J.:
demanded the sum of P1,000,000.00 from the petitioner as compensation for his loss,
inconvenience and moral damages.[6] Petitioner, however, continued to ignore
For review is the Decision[1] dated June 30, 2004 of the Court of Appeals (CA) in CA- respondents repeated follow-ups regarding his lost luggage.
G.R. CV No. 56587 which affirmed the Decision[2] dated January 3, 1996 of the
Regional Trial Court (RTC) of Makati City, Branch 137 in Civil Case No. 93-2328.
On July 13, 1993, respondent filed a complaint[7] for damages against the
petitioner alleging that by reason of its negligence and breach of obligation to transport
The facts follow: and deliver his luggage, respondent suffered inconvenience, serious anxiety, physical
suffering and sleepless nights. It was further alleged that due to the physical, mental and
emotional strain resulting from the loss of his luggage, aggravated by the fact that he
Sometime in April 1993, respondent Bonifacio H. Gillego, [3] then incumbent failed to take his regular medication, respondent had to be taken to a medical clinic
Congressman of the Second District of Sorsogon and Chairman of the House of in Tokyo, Japan for emergency treatment. Respondent asserted that as a common carrier
Representatives Committee on Civil, Political and Human Rights, was invited to
which advertises and offers its services to the public, petitioner is under obligation to
participate as one of the keynote speakers at the 89th Inter-Parliamentary
observe extraordinary diligence in the vigilance over checked-in luggage and to see to it
Conference Symposium on Parliament Guardian of Human Rights to be held in
that respondents luggage entrusted to petitioners custody would accompany him on his
Budapest, Hungary and Tokyo, Japan from May 19 to 22, 1993. The Philippines is a
flight and/or could be claimed by him upon arrival at his point of destination or
member of the Inter-Parliamentary Union which organized the event.[4] delivered to him without delay. Petitioner should therefore be held liable for actual
damages ($2,000.00 or P40,000.00), moral damages (P1,000,000.00), exemplary
On May 16, 1993, respondent left Manila on board petitioner Air Frances aircraft bound damages (P500,000.00), attorneys fees (P50,000.00) and costs of suit.
for Paris, France. He arrived in Paris early morning of May 17, 1993 (5:00 a.m.). While
waiting at the De Gaulle International Airport for his connecting flight to Budapest
Petitioner filed its answer[8] admitting that respondent was issued tickets for the
scheduled at 3:15 p.m. that same day, respondent learned that petitioner had another
flights mentioned, his subsequent request to be transferred to another flight while at the
aircraft bound for Budapest with an earlier departure time (10:00 a.m.) than his
Paris airport and the loss of his checked-in luggage upon arrival at Budapest, which
scheduled flight. He then went to petitioners counter at the airport and made luggage has not been retrieved to date and the respondents repeated follow-ups
arrangements for the change in his booking. He was given a corresponding ticket and ignored. However, as to the rest of respondents allegations, petitioner said it has no
boarding pass for Flight No. 2024 and also a new baggage claim stub for his checked-in
knowledge and information sufficient to form a belief as to their truth. As special and
luggage.[5]
affirmative defense, petitioner contended that its liability for lost checked-in baggage is
governed by the Warsaw Convention for the Unification of Certain Rules Relating to
International Carriage. Under the said treaty, petitioners liability for lost or delayed
registered baggage of respondent is limited to 250 francs per kilogram or US$20.00,
which constitutes liquidated damages and hence respondent is not entitled to any further
damage.
Petitioner averred that it has taken all necessary measures to avoid loss of
respondents baggage, the contents of which respondent did not declare,and that it has no
intent to cause such loss, much less knew that such loss could occur. The loss of
respondents luggage is due to or occasioned by force majeure or fortuitous event or
other causes beyond the carriers control. Diligent, sincere and timely efforts were
exerted by petitioner to locate respondents missing luggage and attended to his problem
with utmost courtesy, concern and dispatch. Petitioner further asserted that it exercised
due diligence in the selection and supervision of its employees and acted in good faith
in denying respondents demand for damages. The claims for actual, moral and
exemplary damages and attorneys fees therefore have no basis in fact and in law, and
are, moreover speculative and unconscionable.
In his Reply,[9] respondent maintained that the loss of his luggage cannot be
attributed to anything other than petitioners simple negligence and its failure to perform
the diligence required of a common carrier.
On January 3, 1996, the trial court rendered its decision in favor of respondent
and against the petitioner, as follows:
WHEREFORE, premises considered, judgment is rendered
ordering defendant to pay plaintiff:
1. The sum of P1,000,000.00 as moral damages;
2. The sum of P500,000.00 as exemplary damages;
3. The sum of P50,000.00 as attorneys fees; and
4. The costs.
SO ORDERED.[10]
The trial court found there was gross negligence on the part of petitioner which
failed to retrieve respondents checked-in luggage up to the time of the filing of the
complaint and as admitted in its answer, ignored respondents repeated follow-ups. It
likewise found petitioner guilty of willful misconduct as it persistently disregarded the
rights of respondent who was no ordinary individual but a high government official. As
to the applicability of the limited liability for lost baggage under the Warsaw
Convention, the trial court rejected the argument of petitioner citing the case of Alitalia
v. Intermediate Appellate Court.[11]
Petitioner appealed to the CA, which affirmed the trial courts decision. The CA noted
that in the memorandum submitted by petitioner before the trial court it was mentioned
that respondents luggage was eventually found and delivered to him, which was not
denied by respondent and thus resulted in the withdrawal of the claim for actual
damages. As to the trial courts finding of gross negligence, bad faith and willful
misconduct which justified the award of moral and exemplary damages, the CA
sustained the same, stating thus:
It bears stressing that defendant-appellant committed a
breach of contract by its failure to deliver the luggage of plaintiff-
appellee on time despite demand from plaintiff-appellee. The
unreasonable delay in the delivery of the luggage has not been
satisfactorily explained by defendant-appellant, either in its
memorandum or in its appellants brief. Instead of justifying the
delay, defendant-appellant took refuge under the provisions of the
Warsaw Convention to escape liability. Neither was there any
showing of apology on the part of defendant-appellant as to the
delay. Furthermore, the unapologetic defendant-appellant even
faulted plaintiff-appellee for not leaving a local address
in Budapest in order for the defendant-appellant to contact him
(plaintiff-appellee) in the event the luggage is found. This
actuation of defendant-appellant is a clear showing of willful
misconduct and a deliberate design to avoid liability. It amounts
to bad faith. As elucidated by Chief Justice Hilario Davide, Jr., [b]ad
faith does not simply connote bad judgment or negligence; it imports
a dishonest purpose or some moral obliquity and conscious doing of a
wrong, a breach of a known duty through some motive or interest or
ill will that partakes of the nature of fraud.[12](Emphasis supplied.)
Its motion for reconsideration having been denied, petitioner filed the present Rule
45 petition raising the following grounds:
I.
THE AMOUNTS AWARDED TO RESPONDENT AS MORAL
AND EXEMPLARY DAMAGES ARE EXCESSIVE,
UNCONSCIONABLE AND UNREASONABLE.
II.
 THERE IS NO LEGAL AND FACTUAL BASIS TO THE
FINDINGS OF THE TRIAL COURT AND THE COURT OF
APPEALS THAT PETITIONERS ACTIONS WERE ATTENDED
BY GROSS NEGLIGENCE, BAD FAITH AND WILLFUL
MISCONDUCT AND THAT IT ACTED IN A WANTON,
FRAUDULENT, RECKLESS, OPPRESSIVE OR MALEVOLENT
MANNER, TO JUSTIFY THE AWARD OF MORAL AND
EXEMPLARY DAMAGES.[13]
Petitioner assails the trial and appellate courts for awarding extravagant sums to
respondent that already tend to punish the petitioner and enrich the respondent, which is
not the function at all of moral damages. Upon the facts established, the damages
awarded are definitely not proportionate or commensurate to the wrong or injury
supposedly inflicted. Without belittling the problems respondent experienced in
Budapest after losing his luggage, petitioner points out that despite the unfortunate
incident, respondent was able to reconstruct the speeches, notes and study guides he had
earlier prepared for the conference in Budapest and Tokyo, and to attend, speak and
participate therein as scheduled. Since he prepared the research and wrote his speech,
considering his acknowledged and long-standing expertise in the field of human rights
in the Philippines, respondent should have had no difficulty delivering his speech even
without his notes. In addition, there is no evidence that members of the Inter-
Parliamentary Union made derogatory statements or even knew that he was unprepared
for the conference. Bearing in mind that the actual damages sought by respondent was
only $2,000.00, then clearly the trial court went way beyond that amount in determining
the appropriate damages, inspite of the fact that the respondent eventually got back his
baggage.[14]
Comparing the situation in this case to other cases awarding similar damages
to the aggrieved passenger as a result of breaches of contract by international carriers,
petitioner argues that even assuming that respondent was entitled to moral and
exemplary damages, the sums adjudged should be modified or reduced. It is stressed
that petitioner or its agents were never rude or discourteous toward respondent; he was
not subjected to humiliating treatment or comments as in the case of Lopez, et al. v. Pan
American World Airways,[15] Ortigas, Jr. v. Lufthansa German Airlines[16] and Zulueta
v. Pan American World Airways, Inc.[17]. The mere fact that respondent was a
Congressman should not result in an automatic increase in the moral and exemplary
damages recoverable. As held in Kierulf v. Court of Appeals[18]the social and financial
standing of a claimant may be considered only if he or she was subjected to
contemptuous conduct despite the offenders knowledge of his or her social and financial
standing.[19]
In any event, petitioner invokes the application of the exception to the rule that
only questions of law may be entertained by this Court in a petition for review
under Rule 45 as to allow a factual review of the case. First, petitioner contends that it
has always maintained that the admission in its answer was only made out of
inadvertence, considering that it was inconsistent with the special and affirmative
defenses set forth in the same pleading. The trial court incorrectly concluded that
petitioner had not prepared a Property Irregularity Report (PIR) but fabricated one only
as an afterthought. A PIR can only be initiated upon the instance of a passenger whose
baggage had been lost, and in this case it was prepared by the station where the loss was
reported. The PIR in this case was automatically and chronologically recorded in
petitioners computerized system. Respondent himself admitted in his testimony that he
gave his Philippine address and telephone number to the lady in charge of petitioners
complaint desk in Budapest. It was not necessary to furnish a passenger with a copy of
the PIR since its purpose is for the airline to trace a lost baggage. What respondent
ought to have done was to make a xerox copy thereof for himself.[20]
Petitioner reiterates that there was no bad faith or negligence on its part and the
burden is on the respondent to prove by clear and convincing evidence that it acted in
bad faith. Respondent in his testimony miserably failed to prove that bad faith, fraud or
ill will motivated or caused the delay of his baggage. This Court will surely agree that
mere failure of a carrier to deliver a passengers baggage at the agreed place and time did
not ipso factoamount to willful misconduct as to make it liable for moral and exemplary
damages. Petitioner adduced evidence showing that it exerted diligent, sincere and
timely efforts to locate the missing baggage, eventually leading to its recovery. It
attended to respondents problem with utmost courtesy, concern and
dispatch. Respondent, moreover, never alleged that petitioners employees were at
anytime rude, mistreated him or in anyway showed improper behavior.[21]
The petition is partly meritorious.
A business intended to serve the travelling public primarily, a contract of
carriage is imbued with public interest.[22] The law governing common carriers
consequently imposes an exacting standard. Article 1735 of the Civil Code provides
that in case of lost or damaged goods, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as required by Article 1733.Thus, in an action based on a breach of contract of
carriage, the aggrieved party does not have to prove that the common carrier was at
fault or was negligent. All that he has to prove is the existence of the contract and the
fact of its non-performance by the carrier.[23]
That respondents checked-in luggage was not found upon arrival at his
destination and was not returned to him until about two years later [24] is not
disputed. The action filed by the respondent is founded on such breach of the contract of
carriage with petitioner who offered no satisfactory explanation for the unreasonable
delay in the delivery of respondents baggage. The presumption of negligence was not
overcome by the petitioner and hence its liability for the delay was sufficiently
established. However, upon receipt of the said luggage during the pendency of the case
in the trial court, respondent did not anymore press on his claim for actual or
compensatory damages and neither did he adduce evidence of the actual amount of loss
and damage incurred by such delayed delivery of his luggage. Consequently, the trial
court proceeded to determine only the propriety of his claim for moral and exemplary
damages, and attorneys fees.
In awarding moral damages for breach of contract of carriage, the breach must
be wanton and deliberately injurious or the one responsible acted fraudulently or with
malice or bad faith.[25] Not every case of mental anguish, fright or serious anxiety calls
for the award of moral damages.[26]Where in breaching the contract of carriage the
airline is not shown to have acted fraudulently or in bad faith, liability for damages is
limited to the natural and probable consequences of the breach of the obligation which
the parties had foreseen or could have reasonably foreseen. In such a case the liability
does not include moral and exemplary damages.[27]
Bad faith should be established by clear and convincing evidence. The settled
rule is that the law always presumes good faith such that any person who seeks to be
awarded damages due to the acts of another has the burden of proving that the latter
acted in bad faith or with ill motive.[28]
In the case of Tan v. Northwest Airlines, Inc.,[29] we sustained the CAs deletion
of moral and exemplary damages awarded to a passenger whose baggage were loaded
to another plane with the same expected date and time of arrival but nevertheless not
delivered to her on time. We found that respondent carrier was not motivated by malice
or bad faith in doing so due to weight and balance restrictions as a safety measure. In
another case involving the off-loading of private respondents baggage to another
destination, taken together with petitioner airlines neglect in providing the necessary
accommodations and assistance to its stranded passengers, aggravated by the
discourteous acts of its employees, we upheld the CA in sustaining the trial courts
decision awarding moral and exemplary damages and attorneys fees. We pointed out
that it is PALs duty to provide assistance to private respondents and to any other
passenger similarly inconvenienced due to delay in the completion of the transport and
the receipt of their baggage.[30]
After a careful review, we find that petitioner is liable for moral damages.
Petitioners station manager, Ma. Lourdes Reyes, testified that upon receiving
the letter-complaint of respondents counsel, she immediately began working on the PIR
from their computerized data. Based on her testimony, a PIR is issued at the airline
station upon complaint by a passenger concerning missing baggage. From the
information obtained in the computer-printout, it appears that a PIR[31] was initiated at
petitioners Budapest counter. A search telex for the missing luggage was sent out on the
following dates: May 17, May 21 and May 23, 1993. As shown in the PIR printout, the
information respondent supposedly furnished to petitioner was only his Philippine
address and telephone number, and not the address and contact number of the hotel
where he was billeted at Budapest. According to the witness, PIR usually is printed in
two originals, one is kept by the station manager and the other copy given to the
passenger. The witness further claimed that there was no record or entry in the PIR of
any follow-up call made by the respondent while in Budapest.[32] Respondent, on the
other hand, claimed that he was not given a copy of this PIR and that his repeated
telephone calls to inquire about his lost luggage were ignored.
We hold that the trial and appellate courts did not err in finding that petitioner
acted in bad faith in repeatedly ignoring respondents follow-up calls. The alleged
entries in the PIR deserve scant consideration, as these have not been properly identified
or authenticated by the airline station representative in Budapest who initiated and
inputed the said entries.Furthermore, this Court cannot accept the convenient excuse
given by petitioner that respondent should be faulted in allegedly not giving his hotel
address and telephone number. It is difficult to believe that respondent, who had just
lost his single luggage containing all his necessities for his stay in a foreign land and his
reference materials for a speaking engagement, would not give an information so vital
such as his hotel address and contact number to the airline counter where he had
promptly and frantically filed his complaint. And even assuming arguendo that his
Philippine address and contact number were the only details respondent had provided
for the PIR, still there was no explanation as to why petitioner never communicated
with respondents concerning his lost baggage long after respondent had already
returned to the Philippines. While the missing luggage was eventually recovered, it was
returned to respondent only after the trial of this case.
Furthermore, the alleged copy of the PIR confirmed that the only action taken
by the petitioner to locate respondents luggage were telex searches allegedly made on
May 17, 21 and 23, 1993. There was not even any attempt to explain the reason for the
loss of respondents luggage.Clearly, petitioner did not give the attention and care due to
its passenger whose baggage was not transported and delivered to him at his travel
destination and scheduled time. Inattention to and lack of care for the interest of its
passengers who are entitled to its utmost consideration, particularly as to their
convenience, amount to bad faith which entitles the passenger to an award of moral
damages.[33] What the law considers as bad faith which may furnish the ground for an
award of moral damages would be bad faith in securing the contract and in the
execution thereof, as well as in the enforcement of its terms, or any other kind of
deceit.[34]
While respondent failed to cite any act of discourtesy, discrimination or
rudeness by petitioners employees, this did not make his loss and moral suffering
insignificant and less deserving of compensation. In repeatedly ignoring respondents
inquiries, petitioners employees exhibited an indifferent attitude without due regard for
the inconvenience and anxiety he experienced after realizing that his luggage was
missing. Petitioner was thus guilty of bad faith in breaching its contract of carriage with
the respondent, which entitles the latter to the award of moral damages.
 However, we agree with petitioner that the sum of P1,000,000.00awarded by
the trial court is excessive and not proportionate to the loss or suffering inflicted on the
passenger under the circumstances. As in Trans World Airlines v. Court of
Appeals[35] where this Court after considering the social standing of the aggrieved
passenger who is a lawyer and director of several companies, the amount
of P500,000.00 awarded by the trial court as moral damages was still reduced
to P300,000.00, the moral damages granted to herein respondent should likewise be
adjusted.

The purpose of awarding moral damages is to enable the injured party to

obtain means, diversion or amusement that will serve to alleviate the moral suffering he
has undergone by reason of defendant's culpable action. On the other hand, the aim of
awarding exemplary damages is to deter serious wrongdoings.[36] Article 2216 of
the Civil Code provides that assessment of damages is left to the discretion of the court
according to the circumstances of each case. This discretion is limited by the principle
that the amount awarded should not be palpably excessive as to indicate that it was the
result of prejudice or corruption on the part of the trial court. Simply put, the amount of
damages must be fair, reasonable and proportionate to the injury suffered. [37]

Where as in this case the air carrier failed to act timely on the passengers
predicament caused by its employees mistake and more than ordinary inadvertence or
inattention, and the passenger failed to show any act of arrogance, discourtesy or
rudeness committed by the air carriers employees, the amounts
of P200,000.00, P50,000.00 and P30,000.00 as moral damages, exemplary damages and
attorneys fees would be sufficient and justified.[38]

WHEREFORE, the petition is DENIED. The Decision dated June 30,

2004 of the Court of Appeals in CA-G.R. CV No. 56587 is
hereby AFFIRMED with MODIFICATION in that the award of moral damages,
exemplary damages and attorneys fees are hereby reduced to P200,000.00, P50,000.00
and P30,000.00, respectively.

With costs against the petitioner.

SO ORDERED.
G.R. No. 88052 December 14, 1989
JOSE P. MECENAS, ROMEO P. MECENAS, LILIA P. MECENAS, ORLANDO
P. MECENAS, VIOLETA M. ACERVO, LUZVIMINDA P. MECENAS; and
OFELIA M. JAVIER, petitioners,
vs.
HON. COURT OF APPEALS, CAPT. ROGER SANTISTEBAN and NEGROS
NAVIGATION CO., INC., respondents.
Benito P. Favie and Jose Dario Magno for petitioners.
Hernandez, Velicaria, Vibar & Santiago for private respondents.
FELICIANO, J.:
At 6:20 o'clock in the morning of 22 April 1980, the M/T "Tacloban City," a barge-type
oil tanker of Philippine registry, with a gross tonnage of 1,241,68 tons, owned by the
Philippine National Oil Company (PNOC) and operated by the PNOC Shipping and
Transport Corporation (PNOC Shipping), having unloaded its cargo of petroleum
products, left Amlan, Negros Occidental, and headed towards Bataan. At about 1:00
o'clock in the afternoon of that same day, the M/V "Don Juan," an interisland vessel,
also of Philippine registry, of 2,391.31 tons gross weight, owned and operated by the
Negros Navigation Co., Inc. (Negros Navigation) left Manila bound for Bacolod with
seven hundred fifty (750) passengers listed in its manifest, and a complete set of
officers and crew members.
On the evening of that same day, 22 April 1980, at about 10:30 o'clock, the "Tacloban
City" and the "Don Juan" collided at the Talbas Strait near Maestra de Ocampo Island
in the vicinity of the island of Mindoro. When the collision occurred, the sea was calm,
the weather fair and visibility good. As a result of this collision, the M/V "Don Juan"
sank and hundreds of its passengers perished. Among the ill-fated passengers were the
parents of petitioners, the spouses Perfecto Mecenas and Sofia Mecenas, whose bodies
were never found despite intensive search by petitioners.
On 29 December 1980, petitioners filed a complaint in the then Court- of First Instance
of Quezon City, docketed as Civil Case No. Q-31525, against private respondents
Negros Navigation and Capt. Roger Santisteban, the captain of the "Don Juan" without,
however, impleading either PNOC or PNOC Shipping. In their complaint, petitioners
alleged that they were the seven (7) surviving legitimate children of Perfecto Mecenas
and Sofia Mecenas and that the latter spouses perished in the collision which had
resulted from the negligence of Negros Navigation and Capt. Santisteban. Petitioners
prayed for actual damages of not less than P100,000.00 as well as moral and exemplary
damages in such amount as the Court may deem reasonable to award to them.
Another complaint, docketed as Civil Case No. Q-33932, was filed in the same court by
Lilia Ciocon claiming damages against Negros Navigation, PNOC and PNOC Shipping
for the death of her husband Manuel Ciocon, another of the luckless passengers of the
"Don Juan." Manuel Ciocon's body, too, was never found.
The two (2) cases were consolidated and heard jointly by the Regional Trial Court of
Quezon City, Branch 82. On 17 July 1986, after trial, the trial court rendered a decision,
the dispositive of which read as follows:
WHEREFORE, the Court hereby renders judgment ordering:
a) The defendant Negros Navigation Co., Inc. and Capt. Roger Santisteban
jointly and severally liable to pay plaintiffs in Civil Case No Q-31525, the sum
of P400,000.00 for the death of plaintiffs' parents, Perfecto A. Mecenas and
Sofia P. Mecenas; to pay said plaintiff's the sum of P15.000,00 as and for
attorney's fees; plus costs of the suit.
b) Each of the defendants Negros Navigation Co Inc. and Philippine National
Oil Company/PNOC Shipping and Transportation Company, to pay the
plaintiff in Civil Case No. Q-33932, the sum of P100,000.00 for the death of
Manuel Ciocon, to pay said plaintiff jointly and severally, the sum of P1
5,000.00 as and for attorney's fees, plus costs of the suit. 1
Negros Navigation, Capt. Santisteban, PNOC and PNOC Shipping appealed the trial
court's decision to the Court of Appeals. Later, PNOC and PNOC Shipping withdrew
their appeal citing a compromise agreement reached by them with Negros Navigation;
the Court of Appeals granted the motion by a resolution dated 5 September 1988,
subject to the reservation made by Lilia Ciocon that she could not be bound by the
compromise agreement and would enforce the award granted her by the trial court.
In time, the Court of Appeals rendered a decision dated 26 January 1989 which decreed
the following:
WHEREFORE, in view of the foregoing, the decision of the court a quo is hereby
affirmed as modified with respect to Civil Case No. 31525, wherein defendant appellant
Negros Navigation Co. Inc. and Capt. Roger Santisteban are held jointly and severally
liable to pay the plaintiffs the amount of P100,000. 00 as actual and compensatory
damages and P15,000.00 as attorney's fees and the cost of the suit. 2
The issue to be resolved in this Petition for Review is whether or not the Court of
Appeals had erred in reducing the amount of the damages awarded by the trial court to
the petitioners from P400,000.00 to P100,000.00.
We note that the trial court had granted petitioners the sum of P400,000,00 "for the
death of [their parents]" plus P15,000.00 as attorney's fees, while the Court of Appeals
awarded them P100,000.00 "as actual and compensatory damages" and P15,000.00 as
attorney's fees. To determine whether such reduction of the damages awarded was
proper, we must first determine whether petitioners were entitled to an award of
damages other than actual or compensatory damages, that is, whether they were entitled
to award of moral and exemplary damages.
We begin by noting that both the trial court and the Court of Appeals considered the
action (Civil Case No. Q-31525) brought by the sons and daughters of the deceased
Mecenas spouses against Negros Navigation as based on quasi-delict. We believed that
action is more appropriately regarded as grounded on contract, the contract of carriage
between the Mecenas spouses as regular passengers who paid for their boat tickets and
Negros Navigation; the surviving children while not themselves passengers are in effect
suing the carrier in representation of their deceased parents. 3 Thus, the suit (Civil Case
No. Q-33932) filed by the widow Lilia Ciocon was correctly treated by the trial and
appellate courts as based on contract (vis-a-vis Negros Navigation) and as well on
quasi-delict (vis-a-vis PNOC and PNOC Shipping). In an action based upon a breach of
the contract of carriage, the carrier under our civil law is liable for the death of
passengers arising from the negligence or willful act of the carrier's employees although
such employees may have acted beyond the scope of their authority or even in violation
of the instructions of the carrier, 4 which liability may include liability for moral
damages. 5 It follows that petitioners would be entitled to moral damages so long as the
collision with the "Tacloban City" and the sinking of the "Don Juan" were caused or
attended by negligence on the part of private respondents.
In respect of the petitioners' claim for exemplary damages, it is only necessary to refer
to Article 2232 of the Civil Code:
Article 2332. In contracts and quasi-contracts, the court may exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner. 6
Thus, whether petitioners are entitled to exemplary damages as claimed must depend
upon whether or not private respondents acted recklessly, that is, with gross negligence.
We turn, therefore, to a consideration of whether or not Negros Navigation and Capt.
Santisteban were grossly negligent during the events which culminated in the collision
with "Tacloban City" and the sinking of the "Don Juan" and the resulting heavy loss of
lives.
The then Commandant of the Philippine Coast Guard, Commodore B.C. Ochoco, in a
decision dated 2 March 1981, held that the "Tacloban City" was "primarily and solely
[sic] at fault and responsible for the collision." 7 Initially, the Minister of National
Defense upheld the decision of Commodore Ochoco. 8 On Motion for Reconsideration,
however, the Minister of National Defense reversed himself and held that both vessels
had been at fault:
It is therefore evident from a close and thorough review of the evidence
that fault is imputable to both vessels for the collision. Accordingly, the
decision dated March 12, 1982, subject of the Motion for Reconsideration
filed by counsel of M/T Tacloban City, is hereby reversed. However, the
administrative penalties imposed oil both vessels and their respective crew
concerned are hereby affirmed. 9
The trial court, after a review of the evidence submitted during the trial, arrived at the
same conclusion that the Minister of National Defense had reached that both the
"Tacloban City" and the "Don Juan" were at fault in the collision. The trial court
summarized the testimony and evidence of PNOC and PNOC Shipping as well as of
Negros Navigation in the following terms:
Defendant PNOC's version of the incident:
M/V Don Juan was first sighted at about 5 or 6 miles from Tacloban City
(TSN, January 21, 1985, p. 13); it was on the starboard (right) side of Tacloban
City. This was a visual contact; not picked up by radar (p. 15, Ibid). Tacloban
City was travelling 310 degrees with a speed of 6 knots, estimated speed of
Don Juan of 16 knots (TSN, May 9, pp. 5-6). As Don Juan approached,
Tacloban City gave a leeway of 1 0 degrees to the left. 'The purpose was to
enable Tacloban to see the direction of Don Juan (p. 19, Ibid). Don Juan
switched to green light, signifying that it will pass Tacloban City's right side; it
will be a starboard to starboard passing (p. 21, Ibid) Tacloban City's purpose in
giving a leeway of 10 degrees at this point, is to give Don Juan more space for
her passage (p. 22, Ibid). This was increased by Tacloban City to an additional
15 degrees towards the left (p. 22, Ibid). The way was clear and Don Juan has
not changed its course (TSN, May 9,1985, p. 39).
When Tacloban City altered its course the second time, from 300 degrees to
285 degrees, Don Juan was about 4.5 miles away (TSN, May 9,1985, p. 7).
Despite executing a hardport maneuver, the collision nonetheless occurred.
Don Juan rammed the Tacloban City near the starboard bow (p. 7, Ibid)."
NENACO's [Negros Navigation] version.
Don Juan first sighted Tacloban City 4 miles away, as shown by radar (p. 13,
May 24, 1983). Tacloban City showed its red and green lights twice; it
proceeded to, and will cross, the path of Don Juan. Tacloban was on the left
side of Don Juan (TSN, April 20,1983, p. 4).
Upon seeing Tacloban's red and green lights, Don Juan executed hard
starboard (TSN, p. 4, Ibid.) This maneuver is in conformity with the rule that
'when both vessels are head on or nearly head on, each vessel must turn to the
 right in order to avoid each other. (p. 5, Ibid). Nonetheless, Tacloban appeared
to be heading towards Don Juan (p. 6, Ibid),
When Don Juan executed hard starboard, Tacloban was about 1,500 feet away
(TSN, May 24,1983, p. 6). Don Juan, after execution of hard starboard, will
move forward 200 meters before the vessel will respond to such maneuver (p.
7, Ibid). The speed of Don Juan at that time was 17 knits; Tacloban City 6.3
knots. t "Between 9 to 15 seconds from execution of hard starboard, collision
occurred (p. 8, Ibid). (pp. 3-4 Decision). 10
The trial court concluded:
M/ V Don Juan and Tacloban City became aware of each other's presence in
the area by visual contact at a distance of something like 6 miles from each
other. They were fully aware that if they continued on their course, they will
meet head on. Don Juan - steered to the right; Tacloban City continued its
course to the left. There can be no excuse for them not to realize that, with
such maneuvers, they will collide. They executed maneuvers inadequate, and
too late, to avoid collision.
The Court is of the considered view that the defendants are equally negligent
and are liable for damages. (p. 4, decision). 11
The Court of Appeals, for its part, reached the same conclusion. 12
There is, therefore, no question that the "Don Juan" was at least as negligent as the M/T
"Tacloban City" in the events leading up to the collision and the sinking of the "Don
Juan." The remaining question is whether the negligence on the part of the "Don Juan"
reached that level of recklessness or gross negligence that our Civil Code requires for
the imposition of exemplary damages. Our own review of the record in the case at bar
requires us to answer this in the affirmative.
In the first place, the report of the Philippine Coast Guard Commandant (Exhibit "l 0"),
while holding the "Tacloban City" as "primarily and solely [sic] at fault and responsible
for the collision," did itself set out that there had been fault or negligence on the part of
Capt. Santisteban and his officers and crew before the collision and immediately after
contact of the two (2) vessels. The decision of Commodore Ochoco said:
xxxxxxxxx
M/S Don Juan's Master, Capt. Rogelio Santisteban, was playing mahjong
before and up to the time of collision. Moreover, after the collision, he failed to
institute appropriate measures to delay the sinking MS Don Juan and to
supervise properly the execution of his order of abandonship. As regards the
officer on watch, Senior 3rd Mate Rogelio Devera, he admitted that he failed
or did not call or inform Capt. Santisteban of the imminent danger of collision
and of the actual collision itself Also, he failed to assist his master to prevent
the fast sinking of the ship. The record also indicates that Auxiliary Chief Mate
Antonio Labordo displayed laxity in maintaining order among the passengers
after the collision.
x x x x x x x x x. 13
We believe that the behaviour of the captain of the "Don Juan" in tills instance-playing
mahjong "before and up to the time of collision constitutes behaviour that is simply
unacceptable on the part of the master of a vessel to whose hands the lives and welfare
of at least seven hundred fifty (750) passengers had been entrusted. Whether or not
Capt. Santisteban was "off-duty" or "on-duty" at or around the time of actual collision is
quite immaterial; there is, both realistically speaking and in contemplation of law, no
such thing as "off-duty" hours for the master of a vessel at sea that is a common carrier
upon whom the law imposes the duty of extraordinary diligence-
[t]he duty to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard
for all the circumstances. 14
The record does not show that was the first or only time that Capt. Santisteban had
entertained himself during a voyage by playing mahjong with his officers and
passengers; Negros Navigation in permitting, or in failing to discover and correct such
behaviour, must be deemed grossly negligent.
Capt. Santisteban was also faulted in the Philippine Coast Guard decision for failing
after the collision, "to institute appropriate measures to delay the sinking of M/V Don
Juan." This appears to us to be a euphemism for failure to maintain the sea-worthiness
or the water-tight integrity of the "Don Juan." The record shows that the "Don Juan"
sank within ten (10) to fifteen (15) minutes after initial contact with the "Tacloban
City. 15 While the failure of Capt. Santisteban to supervise his officers and crew in the
process of abandoning the ship and his failure to avail of measures to prevent the too
rapid sinking of his vessel after collision, did not cause the collision by themselves,
such failures doubtless contributed materially to the consequent loss of life and,
moreover, were indicative of the kind and level of diligence exercised by Capt.
Santisteban in respect of his vessel and his officers and men prior to actual contact
between the two (2) vessels. The officer-on-watch in the "Don Juan" admitted that he
had failed to inform Capt. Santisteban not only of the "imminent danger of collision" but
even of "the actual collision itself "
There is also evidence that the "Don Juan" was carrying more passengers than she had
been certified as allowed to carry. The Certificate of Inspection 16 dated 27 August
1979, issued by the Philippine Coast Guard Commander at Iloilo City, the Don Juan's
home port, states:
 Passengers allowed : 810
Total Persons Allowed : 864
The report of the Philippine Coast Guard (Exhibit "10") stated that the "Don Juan" had
been "officially cleared with 878 passengers on board when she sailed from the port of
Manila on April 22, 1980 at about 1:00 p.m." This head-count of the passengers "did
not include the 126 crew members, children below three (3) years old and two (2) half-
paying passengers" which had been counted as one adult passenger. 17 Thus, the total
number of persons on board the "Don Juan" on that ill-starred night of 22 April 1 980
was 1,004, or 140 persons more than the maximum lumber that could be safely carried
by the "Don Juan," per its own Certificate of Inspection. 18 We note in addition,
that only 750 passengers had been listed in its manifest for its final voyage; in other
words, at least 128 passengers on board had not even been entered into the "Don Juan's"
manifest. The "Don Juan's" Certificate of Inspection showed that she carried life boat
and life raft accommodations for only 864 persons, the maximum number of persons
she was permitted to carry; in other words, she did not carry enough boats and life rafts
for all the persons actually on board that tragic night of 22 April 1980.
We hold that under these circumstances, a presumption of gross negligence on the part
of the vessel (her officers and crew) and of its ship-owner arises; this presumption was
never rebutted by Negros Navigation.
The grossness of the negligence of the "Don Juan" is underscored when one considers
the foregoing circumstances in the context of the following facts: Firstly, the "Don
Juan" was more than twice as fast as the "Tacloban City." The "Don Juan's" top speed
was 17 knots; while that of the "Tacloban City" was 6.3. knots. 19 Secondly, the "Don
Juan" carried the full complement of officers and crew members specified for a
passenger vessel of her class. Thirdly, the "Don Juan" was equipped with radar which
was functioning that night. Fourthly, the "Don Juan's" officer on-watch had sighted the
"Tacloban City" on his radar screen while the latter was still four (4) nautical miles
away. Visual confirmation of radar contact was established by the "Don Juan" while the
"Tacloban City" was still 2.7 miles away. 20 In the total set of circumstances which
existed in the instant case, the "Don Juan," had it taken seriously its duty of
extraordinary diligence, could have easily avoided the collision with the "Tacloban
City," Indeed, the "Don Juan" might well have avoided the collision even if it had
exercised ordinary diligence merely.
It is true that the "Tacloban City" failed to follow Rule 18 of the International Rules of
the Road which requires two (2) power- driven vessels meeting end on or nearly end on
each to alter her course to starboard (right) so that each vessel may pass on the port side
(left) of the other.21 The "Tacloban City," when the two (2) vessels were only three-
tenths (0.3) of a mile apart, turned (for the second time) 150 to port side while the "Don
Juan" veered hard to starboard. This circumstance, while it may have made the collision
immediately inevitable, cannot, however, be viewed in isolation from the rest of the
factual circumstances obtaining before and up to the collision. In any case, Rule 18 like
all other International Rules of the Road, are not to be obeyed and construed without
regard to all the circumstances surrounding a particular encounter between two (2)
vessels. 22 In ordinary circumstances, a vessel discharges her duty to another by a
faithful and literal observance of the Rules of Navigation, 23 and she cannot be held at
fault for so doing even though a different course would have prevented the collision.
This rule, however, is not to be applied where it is apparent, as in the instant case, that
her captain was guilty of negligence or of a want of seamanship in not perceiving the
necessity for, or in so acting as to create such necessity for, a departure from the rule
and acting accordingly. 24 In other words, "route observance" of the International Rules
of the Road will not relieve a vessel from responsibility if the collision could have been
avoided by proper care and skill on her part or even by a departure from the rules. 25
In the petition at bar, the "Don Juan" having sighted the "Tacloban City" when it was
still a long way off was negligent in failing to take early preventive action and in
allowing the two (2) vessels to come to such close quarters as to render the collision
inevitable when there was no necessity for passing so near to the "Tacloban City" as to
create that hazard or inevitability, for the "Don Juan" could choose its own distance. 26,
It is noteworthy that the "Tacloban City," upon turning hard to port shortly before the
moment of collision, signalled its intention to do so by giving two (2) short blasts with
horn. 26A The "Don Juan " gave no answering horn blast to signal its own intention and
proceeded to turn hatd to starboard. 26B
We conclude that Capt. Santisteban and Negros Navigation are properly held liable for
gross negligence in connection with the collision of the "Don Juan" and "Tacloban
City" and the sinking of the "Don Juan" leading to the death of hundreds of passengers.
We find no necessity for passing upon the degree of negligence or culpability properly
attributable to PNOC and PNOC Shipping or the master of the "Tacloban City," since
they were never impleaded here.
It will be recalled that the trial court had rendered a lump sum of P400,000.00 to
petitioners for the death of their parents in the "Don Juan" tragedy. Clearly, the trial
court should have included a breakdown of the lump sum award into its component
parts: compensatory damages, moral damages and exemplary damages. On appeal, the
Court of Appeals could have and should have itself broken down the lump sum award
of the trial court into its constituent parts; perhaps, it did, in its own mind. In any case,
the Court of Appeals apparently relying upon Manchester Development Corporation V.
Court of Appeals 27 reduced the P400,000.00 lump sum award into a P100,000.00 for
actual and compensatory damages only.
We believe that the Court of Appeals erred in doing so, It is true that the petitioners'
complaint before the trial court had in the body indicated that the petitioner-plaintiffs
believed that moral damages in the amount of at least P1,400,000.00 were properly due
to them (not P12,000,000.00 as the Court of Appeals erroneously stated) as well as
exemplary damages in the sum of P100,000.00 and that in the prayer of their complaint,
they did not specify the amount of moral and exemplary damages sought from the trial
court. We do not believe, however, that theManchester doctrine, which has been
modified and clarified in subsequent decision by the Court in Sun Insurance Office, Ltd.
(SIOL), et al. v. Asuncion, et al. 28 can be applied in the instant case so as to work a
striking out of that portion of the trial court's award which could be deemed nationally
to constitute an award of moral and exemplary damages. Manchester was promulgated
by the Court on 7 May 1987. Circular No. 7 of this Court, which embodied the doctrine
in Manchester, is dated 24 March 1988. Upon the other hand, the complaint in the case
at bar was filed on 29 December 1980, that is, long before either Manchester or Circular
No. 7 of 24 March 1988 emerged. The decision of the trial court was itself promulgated
on 17 July 1986, again, before Manchester and Circular No. 7 were promulgated. We
do not believe that Manchester should have been applied retroactively to this case
where a decision on the merits had already been rendered by the trial court, even though
such decision was then under appeal and had not yet reached finality. There is
no indication at all that petitioners here sought simply to evade payment of the court's
filing fees or to mislead the court in the assessment of the filing fees. In any event, we
apply Manchester as clarified and amplified by Sun Insurance Office Ltd. (SIOL), by
holding that the petitioners shall pay the additional filing fee that is properly payable
given the award specified below, and that such additional filing fee shall constitute a
lien upon the judgment.
We consider, finally, the amount of damages-compensatory, moral and exemplary-
properly imposable upon private respondents in this case. The original award of the trial
court of P400,000.00 could well have been disaggregated by the trial court and the
Court of Appeals in the following manner:
1. actual or compensatory damages proved in the course of trial
consisting of actual expenses
incurred by petitioners
in their search for their
parents' bodies- -P126,000.00
2. actual or compensatory
damages in case of
wrongful death
(P30,000.00 x 2) -P60,000.00 29
(3) moral damages -P107,000.00
(4) exemplary damages -P107,000.00
Total -P400,000.00
Considering that petitioners, legitimate children of the deceased spouses Mecenas, are
seven (7) in number and that they lost both father and mothe in one fell blow of fate,
and considering the pain and anxiety they doubtless experienced while searching for
their parents among the survivors and the corpses recovered from the sea or washed
ashore, we believe that an additional amount of P200,000.00 for moral damages,
making a total of P307,000.00 for moral damages, making a total of P307,000.00 as
moral damages, would be quite reasonable.
Exemplary damages are designed by our civil law to permit the courts to reshape
behaviour that is socially deleterious in its consequence by creating negative incentives
or deterrents against such behaviour. In requiring compliance with the standard which is
in fact that of the highest possible degree of diligence, from common carriers and in
creating a presumption of negligence against them, the law seels to compel them to
control their employees, to tame their reckless instincts and to force them to take
adequate care of human beings and their property. The Court will take judicial notive of
the dreadful regularity with which grievous maritime disasters occur in our waters with
massive loss of life. The bulk of our population is too poor to afford domestic air
transportation. So it is that notwithstanding the frequent sinking of passenger vessels in
our waters, crowds of people continue to travel by sea. This Court is prepared to use the
instruments given to it by the law for securing the ends of law and public policy. One of
those instruments is the institution of exemplary damages; one of those ends, of special
importance in an archipelagic state like the Philippines, is the safe and reliable carriage
of people and goods by sea. Considering the foregoing, we believe that an additional
award in the amount of P200,000.00 as exmplary damages, is quite modest.
The Court is aware that petitioners here merely asked for the restoration of the P
400.000.00 award of the trial court. We underscore once more, however, the firmly
settled doctrine that this Court may consider and resolved all issues which must be
decided in order to render substantial justice to the parties, including issues not explicity
raised by the party affected. In the case at bar, as in Kapalaran Bus Line v. Coronado, et
al., 30 both the demands of sustantial justice and the imperious requirements of public
policy compel us to the conclusion that the trial court's implicit award of moral and
exemplary damages was erronoeusly deledted and must be restored and augmented and
brought more nearely to the level required by public policy and substantial justice.
WHEREFORE, the Petition for Review on certiorari is hereby GRANTED and the
Decision of the Court of Appeals insofar as it redurce the amount of damages awarded
to petitioners to P100,000.00 is hereby REVERSED and SET ASIDE. The award
granted by the trial court is hereby RESTORED and AUGMENTED as follows:
(a) P 126,000.00 for actual damages;
 (b) P 60,000.00 as compensatory damages for wrongful death;

(c) P 307,000.00 as moral damages;

(d) P 307,000.00 as exemplary damages making a total of P

800,000.00; and

(e) P 15,000.00 as attorney's fees.

Petitioners shall pay the additional filing fees properly due and payable in view of the
award here made, which fees shall be computed by the Clerks of Court of the trial court,
and shall constitute a lien upon the judgment here awarded. Cost against private
respondents.

SO ORDERED.