G.R. No.
118126 March 4, 1996 moreover, pursuant to Article 2201 of the same Code, to be entitled to
TRANS-ASIA SHIPPING LINES, INC., petitioner,
vs.
COURT OF APPEALS and ATTY. RENATO T. ARROYO,
respondents.
DAVIDE, JR., J.:p
As formulated by the petitioner, the issue in this petition for review on
certiorari under Rule 45 of the Rules of Court is as follows:
In case of interruption of a vessel's voyage and the
consequent delay in that vessel's arrival at its port of destination, is the
right of a passenger affected thereby to be determined and governed by
the vague Civil Code provision on common carriers, or shall it be, in the
absence of a specific provision thereon governed by Art. 698 of the Code
of Commerce?1
The petitioner considers it a "novel question of law."
Upon a closer evaluation, however, of the challenged decision of the
Court of Appeals of 23 November 1994,2 vis-a-vis, the decision of 29
June 1992 in Civil Case No. 91-491 of the Regional Trial Court (RTC) of
Cagayan de Oro City, Branch 24,3 as well as the allegations and
arguments adduced by the parties, we find the petitioner's formulation of
the issue imprecise. As this Court sees it, what stands for resolution is a
common carrier's liability for damages to a passenger who disembarked
from the vessel upon its return to the port of origin, after it suffered
engine trouble and had to stop at sea, having commenced the
contracted voyage on one engine.
The antecedents are summarized by the Court of Appeals as follows:
Plaintiff [herein private respondent Atty. Renato Arroyo], a
public attorney, bought a ticket [from] defendant [herein petitioner], a
corporation engaged in . . . inter-island shipping, for the voyage of M/V
Asia Thailand vessel to Cagayan de Oro City from Cebu City on
November 12, 1991.
At around 5:30 in the evening of November 12, 1991, plaintiff
boarded the M/V Asia Thailand vessel. At that instance, plaintiff noticed
that some repair works [sic] were being undertaken on the engine of the
vessel. The vessel departed at around 11:00 in the evening with only
one (1) engine running.
After an hour of slow voyage, the vessel stopped near Kawit
Island and dropped its anchor thereat. After half an hour of stillness,
some passengers demanded that they should be allowed to return to
Cebu City for they were no longer willing to continue their voyage to,
Cagayan de Oro City. The captain acceeded [sic] to their request and
thus the vessel headed back to Cebu City.
At Cebu City, plaintiff together with the other passengers who
requested to be brought back to Cebu City, were allowed to disembark.
Thereafter, the vessel proceeded to Cagayan de Oro City. Plaintiff, the
next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro
City, likewise a vessel of defendant.
On account of this failure of defendant to transport him to the
place of destination on November 12, 1991, plaintiff filed before the trial
court a complaint for damages against defendant.4
In his complaint, docketed as Civil Case No. 91-491, plaintiff
(hereinafter private respondent) alleged that the engines of the M/V Asia
Thailand conked out in the open sea, and for more than an hour it was
stalled and at the mercy of the waves, thus causing fear in the
passengers. It sailed back to Cebu City after it regained power, but for
unexplained reasons, the passengers, including the private respondent,
were arrogantly told to disembark without the necessary precautions
against possible injury to them. They were thus unceremoniously
dumped, which only exacerbated the private respondent's mental
distress. He further alleged that by reason of the petitioner's wanton,
reckless, and willful acts, he was unnecessarily exposed to danger and,
having been stranded in Cebu City for a day, incurred additional
expenses and loss of income. He then prayed that he be awarded
P1,100.00, P50,000.00, and P25,000.00 as compensatory, moral; and
exemplary damages, respectively.5
In his pre-trial brief, the private respondent asserted that his complaint
was "an action for damages arising from bad faith, breach of contract
and from tort," with the former arising from the petitioner's "failure to
carry [him] to his place of destination as contracted," while the latter from
the "conduct of the [petitioner] resulting [in] the infliction of emotional
distress" to the private respondent.6
After due trial, the trial court rendered its decision7 and ruled that the
action was only for breach of contract, with Articles 1170, 1172, and
1173 of the Civil Code as applicable law — not Article 2180 of the same
Code. It was of the opinion that Article 1170 made a person liable for
damages if, in the performance of his obligation, he was guilty of fraud,
negligence, or delay, or in any manner contravened the tenor thereof;
damages, the non-performance of the obligation must have been tainted
not only by fraud, negligence, or delay, but also bad faith, malice, and
wanton attitude. It then disposed of the case as follows:
WHEREFORE, it not appearing from the evidence that plaintiff
was left in the Port of Cebu because of the fault, negligence, malice or
wanton attitude of defendant's employees, the complaint is DISMISSED.
Defendant's counterclaim is likewise dismissed it not appearing also that
filing of the case by plaintiff was motivated by malice or bad faith.8
The trial court made the following findings to support its disposition:
In the light of the evidence adduced by the parties and of the
above provisions of the New Civil Code, the issue to be resolved, in the
resolution of this case is whether or not, defendant thru its employees in
[sic] the night of November 12, 1991, committed fraud, negligence, bad
faith or malice when it left plaintiff in the Port of Cebu when it sailed back
to Cagayan de Oro City after it has [sic] returned from Kawit Island.
Evaluation of the evidence of the parties tended to show
nothing that defendant committed fraud. As early as 3:00 p.m. of
November 12, 1991, defendant did not hide the fact that the cylinder
head cracked. Plaintiff even saw during its repair. If he had doubts as to
the vessel's capacity to sail, he had time yet to take another boat. The
ticket could be returned to defendant and corresponding cash [would] be
returned to him.
Neither could negligence, bad faith or malice on the part of
defendant be inferred from the evidence of the parties. When the boat
arrived at [the] Port of Cebu after it returned from Kawit Island, there was
an announcement that passengers who would like to disembark were
given ten (10) minutes only to do so. By this announcement, it could be
inferred that the boat will [sic] proceed to Cagayan de Oro City. If plaintiff
entertained doubts, he should have asked a member of the crew of the
boat or better still, the captain of the boat. But as admitted by him, he
was of the impression only that the boat will not proceed to Cagayan de
Oro that evening so he disembarked. He was instead, the ones [sic]
negligent. Had he been prudent, with the announcement that those who
will disembark were given ten minutes only, he should have lingered a
little by staying in his cot and inquired whether the boat will proceed to
Cagayan de Oro City or not. Defendant cannot be expected to be telling
[sic] the reasons to each passenger. Announcement by microphone was
enough.
The court is inclined to believe that the story of defendant that
the boat returned to the Port of Cebu because of the request of the
passengers in view of the waves. That it did not return because of the
defective engines as shown by the fact that fifteen (15) minutes after the
boat docked [at] the Port of Cebu and those who wanted to proceed to
Cagayan de Oro disembarked, it left for Cagayan de Oro City.
The defendant got nothing when the boat returned to Cebu to
let those who did not want to proceed to Cagayan de Oro City including
plaintiff disembarked. On the contrary, this would mean its loss instead
because it will have to refund their tickets or they will use it the next trip
without paying anymore. It is hard therefore, to imagine how defendant
by leaving plaintiff in Cebu could have acted in bad faith, negligently,
wantonly and with malice.
If plaintiff, therefore, was not able to [m]ake the trip that night
of November 12, 1991, it was not because defendant maliciously did it
to exclude him [from] the trip. If he was left, it was because of his fault
or negligence.9
Unsatisfied, the private respondent appealed to the Court of Appeals
(CA-G.R. CV No. 39901) and submitted for its determination the
following assignment of errors: (1) the trial court erred in not finding that
the defendant-appellee was guilty of fraud, delay, negligence, and bad
faith; and (2) the trial court. erred in not awarding moral and exemplary
damages.10
In its decision of 23 November 1994,11 the Court of Appeals reversed
the trial court's decision by applying Article 1755 in relation to Articles
2201, 2208, 2217, and 2232 of the Civil Code and, accordingly, awarded
compensatory, moral, and exemplary damages as follows:
WHEREFORE, premises considered, the appealed decision
is hereby REVERSED and SET ASIDE and another one is rendered
ordering defendant-appellee to pay plaintiff-appellant:
1. P20,000.00 as moral damages;
2. P10,000.00 as exemplary damages;
3. P5,000.00 as attorney's fees;
4. Cost of suit.
SO ORDERED.12
It did not, however, allow the grant of damages for the delay
in the performance of the petitioner's obligation as the requirement of
demand set forth in Article 1169 of the Civil Code had not been met by
the private respondent. Besides, it found that the private respondent
offered no evidence to prove that his contract of carriage with the
petitioner provided for liability in case of delay in departure, nor that a
designation of the time of departure was the controlling motive for the
establishment of the contract. On the latter, the court a quo observed
that the private respondent even admitted he was unaware of the
vessel's departure time, and it was only when he boarded the vessel that
he became aware of such. Finally, the respondent Court found no
reasonable basis for the private respondent's belief that demand was
useless because the petitioner had rendered it beyond its power to
perform its obligation; on the contrary, he even admitted that the
petitioner had been assuring the passengers that the vessel would leave
on time, and that it could still perform its obligation to transport them as
scheduled.
To justify its award of damages, the Court of Appeals ratiocinated as
follows:
It is an established and admitted fact that the vessel before
the voyage had undergone some repair work on the cylinder head of the
engine. It is likewise admitted by defendant-appellee that it left the port
of Cebu City with only one engine running. Defendant-appellee averred:
. . . The dropping of the vessel's anchor after running slowly
on only one engine when it departed earlier must have alarmed some
nervous passengers . . .
The entries in the logbook which defendant-appellee itself offered as
evidence categorically stated therein that the vessel stopped at Kawit
Island because of engine trouble. It reads:
2330 HRS STBD ENGINE' EMERGENCY STOP
2350 HRS DROP ANCHOR DUE TO ENGINE TROUBLE, 2 ENGINE
STOP.
The stoppage was not to start and synchronized [sic] the
engines of the vessel as claimed by defendant-appellee. It was because
one of the engines of the vessel broke down; it was because of the
disability of the vessel which from the very beginning of the voyage was
known to defendant-appellee.
Defendant-appellee from the very start of the voyage knew for
a fact that the vessel was not yet in its sailing condition because the
second engine was still being repaired. Inspite of this knowledge,
defendant-appellee still proceeded to sail with only one engine running.
Defendant-appellee at that instant failed to exercise the
diligence which all common carriers should exercise in transporting or
carrying passengers. The law does not merely require extraordinary
diligence in the performance of the obligation. The law mandates that
common carrier[s] should exercise utmost diligence the transport of
passengers.
Article 1755 of the New Civil Code provides:
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.
Utmost diligence of a VERY CAUTIOUS person dictates that
defendant-appellee should have pursued the voyage only when its
vessel was already fit to sail. Defendant-appellee should have made
certain that the vessel [could] complete the voyage before starting [to]
sail. Anything less than this, the vessel [could not] sail . . . with so many
passengers on board it.
However, defendant-appellant [sic] in complete disregard of
the safety of the passengers, chose to proceed with its voyage even if
only one engine was running as the second engine was still being
repaired during the voyage. Defendant-appellee disregarded the not
very remote possibility that because of the disability of the vessel, other
problems might occur which would endanger the lives of the passengers
sailing with a disabled vessel.
As expected, . . . engine trouble occurred. Fortunate[ly] for
defendant-appellee, such trouble only necessitated the stoppage of the
vessel and did not cause the vessel to capsize. No wonder why some
passengers requested to be brought back to Cebu City. Common
carriers which are mandated to exercise utmost diligence should not be
taking these risks.
On this premise, plaintiff-appellant should not be faulted why
he chose to disembark from the vessel with the other passengers when
it returned back to Cebu City. Defendant-appellee may call him a very
"panicky passenger" or a "nervous person", but this will not relieve
defendant-appellee from the liability it incurred for its failure to exercise
utmost diligence.13
xxx xxx xxx
As to the second assigned error, we find that plaintiff-appellant
is entitled to the award of moral and exemplary damages for the breach
committed by defendant-appellee.
As discussed, defendant-appellee in sailing to Cagayan de
Oro City with only one engine and with full knowledge of the true
condition of the vessel, acted. in bad faith with malice, in complete
disregard for the safety of the passengers and only for its own personal
advancement/interest.
The Civil Code provides: Art. 2201.
In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation.
Plaintiff-appellant is entitled to moral damages for the mental
anguish, fright and serious anxiety he suffered during the voyage when
the vessel's engine broke down and when he disembarked from the
vessel during the wee hours of the morning at Cebu City when it
returned.14
Moral damages are recoverable in a damage suit predicated
upon a breach of contract of carriage where it is proved that the carrier
was guilty of fraud or bad faith even if death does not result. 15
Fraud and bad faith by defendant-appellee having been
established, the award of moral damages is in order.16
To serve as a deterrent to the commission of similar acts in
the future, exemplary damages should be imposed upon defendant-
appellee. 17 Exemplary damages are designed by our civil law to permit
the courts to reshape behavior that is socially deleterious in its
consequence by creating . . . negative incentives or deterrents against
such behavior.18
Moral damages having been awarded, exemplary damages
maybe properly awarded. When entitlement to moral damages has been
established, the award of exemplary damages is proper.19
The petitioner then instituted this petition and submitted the
question of law earlier adverted to.
Undoubtedly, there was, between the petitioner and the private
respondent, a contract of common carriage. The laws of primary
application then are the provisions on common carriers under Section 4,
Chapter 3, Title VIII, Book IV of the Civil Code, while for all other matters
not regulated thereby, the Code of Commerce and special laws.20
Under Article 1733 of the Civil Code, the petitioner was bound
to observe extraordinary diligence in ensuring the safety of the private
respondent. That meant that the petitioner was, pursuant to Article 1755
of the said Code, bound to carry the private respondent safely as far as
human care and foresight could provide, using the utmost diligence of
very cautious persons, with due regard for all the circumstances. In this
case, we are in full accord with the Court of Appeals that the petitioner
failed to discharge this obligation.
Before commencing the contracted voyage, the petitioner
undertook some repairs on the cylinder head of one of the vessel's
engines. But even before it could finish these repairs, it allowed the
vessel to leave the port of origin on only one functioning engine, instead
of two. Moreover, even the lone functioning engine was not in perfect
condition as sometime after it had run its course, it conked out. This
caused the vessel to stop and remain a drift at sea, thus in order to
prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel
was unseaworthy even before the voyage began. For a vessel to be
seaworthy, it must be adequately equipped for the voyage and manned
with a sufficient number of competent officers and crew. 21 The failure
of a common carrier to maintain in seaworthy condition its vessel
involved in a contract of carriage is a clear breach of its duty prescribed
in Article 1755 of the Civil Code.
As to its liability for damages to the private respondent, Article
1764 of the Civil Code expressly provides:
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 common carrier.
The damages comprised in Title XVIII of the Civil Code are
actual or compensatory, moral, nominal, temperate or moderate,
liquidated, and exemplary.
In his complaint, the private respondent claims actual or compensatory,
moral, and exemplary damages.
Actual or compensatory damages represent the adequate compensation
for pecuniary loss suffered and for profits the obligee failed to obtain.22
In contracts or quasi-contracts, the obligor is liable for all the damages
which may be reasonably attributed to the non-performance of the
obligation if he is guilty of fraud, bad faith, malice, or wanton attitude.23
Moral damages include moral suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, or similar injury. They may be recovered in the cases
enumerated in Article 2219 of the Civil Code, likewise, if they are the
proximate result of, as in this case, the petitioner's breach of the contract
of carriage.24 Anent a breach of a contract of common carriage, moral
damages may be awarded if the common carrier, like the petitioner,
acted fraudulently or in bad faith.25
Exemplary damages are imposed by way of example or correction for
the public good, in addition to moral, temperate, liquidated or
compensatory damages.26 In contracts and quasi-contracts, exemplary
damages may be awarded if the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.27 It cannot,
however, be considered as a matter of right; the court having to decide
whether or not they should be adjudicated.28 Before the court may
consider an award for exemplary damages, the plaintiff must first show
that he is entitled to moral, temperate or compensatory damages; but it
is not necessary that he prove the monetary value thereof.29
The Court of Appeals did not grant the private respondent actual or
compensatory damages, reasoning that no delay was incurred since
there was no demand, as required by Article 1169 of the Civil Code. This
article, however, finds no application in this case because, as found by
the respondent Court, there was in fact no delay in the commencement
of the contracted voyage. If any delay was incurred, it was after the
commencement of such voyage, more specifically, when the voyage
was subsequently interrupted when the vessel had to stop near Kawit
Island after the only functioning engine conked out.
As to the rights and duties of the parties strictly arising out of such delay,
the Civil Code is silent. However, as correctly pointed out by the
petitioner, Article 698 of the Code of Commerce specifically provides for
such a situation. It reads:
In case a voyage already begun should be interrupted, the
passengers shall be obliged to pay the fare in proportion to the distance
covered, without right to recover for losses and damages if the
interruption is due to fortuitous event or force majeure, but with a right to
indemnity if the interruption should have been caused by the captain
exclusively. If the interruption should be caused by the disability of the
vessel and a passenger should agree to await the repairs, he may not
be required to pay any increased price of passage, but his living
expenses during the stay shall be for his own account.
This article applies suppletorily pursuant to Article 1766 of the
Civil Code.
Of course, this does not suffice for a resolution of the case at bench for,
as earlier stated, the cause of the delay or interruption was the
petitioner's failure to observe extraordinary diligence. Article 698 must
then be read together with Articles 2199, 2200, 2201, and 2208 in
relation to Article 21 of the Civil Code. So read, it means that the
petitioner is liable for any pecuniary loss or loss of profits which the
private respondent may have suffered by reason thereof. For the private
respondent, such would be the loss of income if unable to report to his
office on the day he was supposed to arrive were it not for the delay.
This, however, assumes that he stayed on the vessel and was with it
when it thereafter resumed its voyage; but he did not. As he and some
passengers resolved not to complete the voyage, the vessel had to
return to its port of origin and allow them to disembark. The private
respondent then took the petitioner's other vessel the following day,
using the ticket he had purchased for the previous day's voyage.
Any further delay then in the private respondent's arrival at the
port of destination was caused by his decision to disembark. Had he
remained on the first vessel, he would have reached his destination at
noon of 13 November 1991, thus been able to report to his office in the
afternoon. He, therefore, would have lost only the salary for half of a day.
But actual or compensatory damages must be proved,30 which the
private respondent failed to do. There is no convincing evidence that he
did not receive his salary for 13 November 1991 nor that his absence
was not excused.
We likewise fully agree with the Court of Appeals that the
petitioner is liable for moral and exemplary damages. In allowing its
unseaworthy M/V Asia Thailand to leave the port of origin and undertake
the contracted voyage, with full awareness that it was exposed to perils
of the sea, it deliberately disregarded its solemn duty to exercise
extraordinary diligence and obviously acted with bad faith and in a
wanton and reckless manner. On this score, however, the petitioner
asserts that the safety or the vessel and passengers was never at stake
because the sea was "calm" in the vicinity where it stopped as faithfully
recorded in the vessel's log book (Exhibit "4"). Hence, the petitioner
concludes, the private respondent was merely "over-reacting" to the
situation obtaining then.31
We hold that the petitioner's defense cannot exculpate it nor
mitigate its liability. On the contrary, such a claim demonstrates beyond
cavil the petitioner's lack of genuine concern for the safety of its
passengers. It was, perhaps, only providential then the sea happened to
be calm. Even so, the petitioner should not expect its passengers to act
in the manner it desired. The passengers were not stoics; becoming
alarmed, anxious, or frightened at the stoppage of a vessel at sea in an
unfamiliar zone as nighttime is not the sole prerogative of the faint-
hearted. More so in the light of the many tragedies at sea resulting in the
loss of lives of hopeless passengers and damage to property simply
because common carriers failed in their duty to exercise extraordinary
diligence in the performance of their obligations.
We cannot, however, give our affirmance to the award of
attorney's fees. Under Article 2208 of the Civil Code, these are
recoverable only in the concept of actual damages,32 not as moral
damages33 nor judicial costs. 34 Hence, to merit such an award, it is
settled that the amount thereof must be proven. 35 Moreover, such must
be specifically prayed for — as was not done in this case—and may not
be deemed incorporated within a general prayer for "such other relief
and remedy as this court may deem just and equitable."36 Finally, it
must be noted that aside from the following, the body of the respondent
Court's decision was devoid of any statement regarding attorney's fees:
Plaintiff-appellant was forced to litigate in order that he can
claim moral and exemplary damages for the suffering he encurred [sic].
He is entitled to attorney's fees pursuant to Article 2208 of the Civil Code.
It states:
Art. 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs cannot be recovered
except:
1. When exemplary damages are awarded;
2. When the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest.
This Court holds that the above does not satisfy the
benchmark of "factual, legal and equitable justification" needed as basis
for an award of attorney's fees.3 7 In sum, for lack of factual and legal
basis, the award of attorney's fees must be deleted.
WHEREFORE, the instant petition is DENIED and the
challenged decision of the Court of Appeals in CA-G.R. CV No. 39901
is AFFIRMED subject to the modification as to the award for attorney's
fees which is hereby SET ASIDE.
Costs against the petitioner.
SO ORDERED.
DELSAN TRANSPORT V. American Homes
By this petition for review on certiorari under Rule 45 of the
Rules of Court, petitioner Delsan Transport Lines, Inc. (Delsan
hereafter) assails and seeks to set aside the Decision,1[1] dated July 16,
2001, of the Court of Appeals (CA) in CA-G.R. CV No. 40951 affirming
an earlier decision of the Regional Trial Court (RTC) of Manila, Branch
IX, in two separate complaints for damages docketed as Civil Case No.
85-29357 and Civil Case No. 85-30559.
The facts:
Delsan is a domestic corporation which owns and operates
the vessel MT Larusan. On the other hand, respondent American Home
Assurance Corporation (AHAC for brevity) is a foreign insurance
company duly licensed to do business in the Philippines through its
agent, the American-International Underwriters, Inc. (Phils.). It is
engaged, among others, in insuring cargoes for transportation within the
Philippines.
On August 5, 1984, Delsan received on board MT Larusan a
shipment consisting of 1,986.627 k/l Automotive Diesel Oil (diesel oil) at
the Bataan Refinery Corporation for transportation and delivery to the
bulk depot in Bacolod City of Caltex Phils., Inc. (Caltex), pursuant to a
Contract of Afreightment. The shipment was insured by respondent
AHAC against all risks under Inland Floater Policy No. AH-IF64-
1011549P and Marine Risk Note No. 34-5093-6.
 On August 7, 1984, the shipment arrived in Bacolod City.
Immediately thereafter, unloading operations commenced. The
discharging of the diesel oil started at about 1:30 PM of the same day.
However, at about 10:30 PM, the discharging had to be stopped on
account of the discovery that the port bow mooring of the vessel was
intentionally cut or stolen by unknown persons. Because there was
nothing holding it, the vessel drifted westward, dragged and stretched
the flexible rubber hose attached to the riser, broke the elbow into
pieces, severed completely the rubber hose connected to the tanker
from the main delivery line at sea bed level and ultimately caused the
diesel oil to spill into the sea. To avoid further spillage, the vessels crew
tried water flushing to clear the line of the diesel oil but to no avail. In the
meantime, the shore tender, who was waiting for the completion of the
water flushing, was surprised when the tanker signaled a red light which
meant stop pumping. Unaware of what happened, the shore tender,
thinking that the vessel would, at any time, resume pumping, did not shut
the storage tank gate valve. As all the gate valves remained open, the
diesel oil that was earlier discharged from the vessel into the shore tank
backflowed. Due to non-availability of a pump boat, the vessel could not
send somebody ashore to inform the people at the depot about what
happened. After almost an hour, a gauger and an assistant surveyor
from the Caltexs Bulk Depot Office boarded the vessel. It was only then
that they found out what had happened. Thereafter, the duo immediately
went ashore to see to it that the shore tank gate valve was closed. The
loss of diesel oil due to spillage was placed at 113.788 k/l while some
435,081 k/l thereof backflowed from the shore tank.
As a result of spillage and backflow of diesel oil, Caltex sought
recovery of the loss from Delsan, but the latter refused to pay. As insurer,
AHAC paid Caltex the sum of P479,262.57 for spillage, pursuant to
Marine Risk Note No. 34-5093-6, and P1,939,575.37 for backflow of the
diesel oil pursuant to Inland Floater Policy No. AH-1F64-1011549P.
On February 19, 1985, AHAC, as Caltexs subrogee, instituted
Civil Case No. 85-29357 against Delsan before the Manila RTC, Branch
9, for loss caused by the spillage. It likewise prayed that it be indemnified
for damages suffered in the amount of P652,432.57 plus legal interest
thereon.
Also, on May 5, 1985, in the Manila RTC, Branch 31, AHAC
instituted Civil Case No. 85-30559 against Delsan for the loss caused
by the backflow. It likewise prayed that it be awarded the amount of
P1,939,575.37 for damages and reasonable attorneys fees. As
counterclaim in both cases, AHAC prayed for attorneys fees in the
amount of P200,000.00 and P500.00 for every court appearance.
Since the cause of action in both cases arose out of the same
incident and involved the same issues, the two were consolidated and
assigned to Branch 9 of the court.
On August 31, 1989, the trial court rendered its decision2[2]
in favor of AHAC holding Delsan liable for the loss of the cargo for its
negligence in its duty as a common carrier. Dispositively, the decision
reads:
WHEREFORE, judgment is hereby rendered:
A). In Civil Case No. 85-30559:
(1) Ordering the defendant (petitioner
Delsan) to pay plaintiff (respondent AHAC) the sum of
P1,939,575.37 with interest thereon at the legal rate from
November 21, 1984 until fully paid and satisfied; and
(2) Ordering defendant to pay plaintiff the
sum of P10,000.00 as and for attorneys fees.
For lack of merit, the counterclaim is hereby dismissed.
B). In Civil Case No. 85-29357:
(1) Ordering defendant to pay plaintiff the sum of
P479,262.57 with interest thereon at the legal rate from
February 6, 1985 until fully paid and satisfied;
(2) Ordering defendant to pay plaintiff the sum of
P5,000.00 as and for attorneys fees.
For lack of merit, the counterclaim is hereby dismissed.
Costs against the defendant. SO ORDERED.
In time, Delsan appealed to the CA whereat its recourse was
docketed as CA-G.R. CV No. 40951.
In the herein challenged decision,3[3] the CA affirmed the
findings of the trial court. In so ruling, the CA declared that Delsan failed
to exercise the extraordinary diligence of a good father of a family in the
handling of its cargo. Applying Article 17364[4] of the Civil Code, the CA
ruled that since the discharging of the diesel oil into Caltex bulk depot
had not been completed at the time the losses occurred, there was no
reason to imply that there was actual delivery of the cargo to Caltex, the
consignee. We quote the fallo of the CA decision:
WHEREFORE, premises considered, the
appealed Decision of the Regional Trial Court of
Manila, Branch 09 in Civil Case Nos. 85-29357 and
85-30559 is hereby AFFIRMED with a modification
that attorneys fees awarded in Civil Case Nos. 85-
29357 and 85-30559 are hereby DELETED.
SO ORDERED.
Delsan is now before the Court raising substantially the same
issues proffered before the CA.
Principally, Delsan insists that the CA committed reversible
error in ruling that Article 1734 of the Civil Code cannot exculpate it from
liability for the loss of the subject cargo and in not applying the rule on
contributory negligence against Caltex, the shipper-owner of the cargo,
and in not taking into consideration the fact that the loss due to backflow
occurred when the diesel oil was already completely delivered to Caltex.
We are not persuaded.
In resolving this appeal, the Court reiterates the oft-stated doctrine that
factual findings of the CA, affirmatory of those of the trial court, are
binding on the Court unless there is a clear showing that such findings
are tainted with arbitrariness, capriciousness or palpable error.5[5]
Delsan would have the Court absolve it from liability for the loss of its
cargo on two grounds. First, the loss through spillage was partly due to
the contributory negligence of Caltex; and Second, the loss through
backflow should not be borne by Delsan because it was already
delivered to Caltexs shore tank.
Common carriers are bound to observe extraordinary diligence in the
vigilance over the goods transported by them. They are presumed to
have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated.6[6] To overcome the presumption of
negligence in case of loss, destruction or deterioration of the goods, the
common carrier must prove that it exercised extraordinary diligence.
There are, however, exceptions to this rule. Article 1734 of the Civil Code
enumerates the instances when the presumption of negligence does not
attach:
Art. 1734. Common carriers are responsible for the
loss, destruction, or deterioration of the goods, unless the
same is due to any of the following causes only:
1) Flood storm, earthquake, lightning, or
other natural disaster or calamity;
2) Act of the public enemy in war, whether
international or civil;
3) Act or omission of the shipper or owner
of the goods;
4) The character of the goods or defects in
the packing or in the containers;
5) Order or act of competent public authority.
Both the trial court and the CA uniformly ruled that Delsan
failed to prove its claim that there was a contributory negligence on the
part of the owner of the goods Caltex. We see no reason to depart
therefrom. As aptly pointed out by the CA, it had been established that
the proximate cause of the spillage and backflow of the diesel oil was
due to the severance of the port bow mooring line of the vessel and the
failure of the shore tender to close the storage tank gate valve even as
a check on the drain cock showed that there was still a product on the
pipeline. To the two courts below, the actuation of the gauger and the
escort surveyor, both personnel from the Caltex Bulk Depot, negates the
allegation that Caltex was remiss in its duties. As we see it, the crew of
the vessel should have promptly informed the shore tender that the port
mooring line was cut off. However, Delsan did not do so on the lame
excuse that there was no available banca. As it is, Delsans personnel
signaled a red light which was not a sufficient warning because such
signal only meant that the pumping of diesel oil had been finished.
Neither did the blowing of whistle suffice considering the distance of
more than 2 kilometers between the vessel and the Caltex Bulk Depot,
aside from the fact that it was not the agreed signal. Had the gauger and
the escort surveyor from Caltex Bulk Depot not gone aboard the vessel
to make inquiries, the shore tender would have not known what really
happened. The crew of the vessel should have exerted utmost effort to
immediately inform the shore tender that the port bow mooring line was
severed.
To be sure, Delsan, as the owner of the vessel, was obliged
to prove that the loss was caused by one of the excepted causes if it
were to seek exemption from responsibility.7[7] Unfortunately, it
miserably failed to discharge this burden by the required quantum of
proof.
Delsans argument that it should not be held liable for the loss
of diesel oil due to backflow because the same had already been actually
and legally delivered to Caltex at the time it entered the shore tank holds
no water. It had been settled that the subject cargo was still in the
custody of Delsan because the discharging thereof has not yet been
finished when the backflow occurred. Since the discharging of the cargo
into the depot has not yet been completed at the time of the spillage
when the backflow occurred, there is no reason to imply that there was
actual delivery of the cargo to the consignee. Delsan is straining the
issue by insisting that when the diesel oil entered into the tank of Caltex
on shore, there was legally, at that moment, a complete delivery thereof
to Caltex. To be sure, the extraordinary responsibility of common carrier
lasts from the time the goods are unconditionally placed in the
possession of, and received by, the carrier for transportation until the
same are delivered, actually or constructively, by the carrier to the
consignee, or to a person who has the right to receive them.8[8] The
discharging of oil products to Caltex Bulk Depot has not yet been
finished, Delsan still has the duty to guard and to preserve the cargo.
The carrier still has in it the responsibility to guard and preserve the
goods, a duty incident to its having the goods transported.
To recapitulate, common carriers, from the nature of their
business and for reasons of public policy, are bound to observe
extraordinary diligence in vigilance over the goods and for the safety of
the passengers transported by them, according to all the circumstances
of each case.9[9] The mere proof of delivery of goods in good order to
the carrier, and their arrival in the place of destination in bad order, make
out a prima facie case against the carrier, so that if no explanation is
given as to how the injury occurred, the carrier must be held responsible.
It is incumbent upon the carrier to prove that the loss was due to accident
or some other circumstances inconsistent with its liability.10[10]
All told, Delsan, being a common carrier, should have
exercised extraordinary diligence in the performance of its duties.
Consequently, it is obliged to prove that the damage to its cargo was
caused by one of the excepted causes if it were to seek exemption from
responsibility.11[11] Having failed to do so, Delsan must bear the
consequences.
WHEREFORE, petition is DENIED and the assailed decision of the CA
is AFFIRMED in toto.
Cost against petitioner.
SO ORDERED.
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 bayong which 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. 5 Herein
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.
G.R. No. 85331 August 25, 1989
KAPALARAN BUS LINE, petitioner,
vs.
ANGEL CORONADO, LOPE GRAJERA, DIONISIO SHINYO, and THE
COURT OF APPEALS, respondents,
Leopoldo M. Consunto for petitioner.
Danilo S. Cruz for intervenor-appellee.
Conrado Manicad for private respondents.
FELICIANO, J.:
Petitioner Kapalaran Bus Line ("Kapalaran") seeks the reversal or
modification of the Court of Appeals' decision in CA G.R. CV No. 12476
and the absolution of petitioner from all liability arising from the collision
between one of petitioner's buses and a jeepney owned by respondent
Coronado, driven by respondent Grajera and in which jeepney
respondent Shinyo was a passenger.
The facts of this case as found by the trial court and adopted by the
Court of Appeals, are summarized in the trial court's decision and quoted
in the Court of Appeals' own judgment in the following terms:
The accident happened on the National Highway at 10:30
A.M. on August 2, 1982. The jeepney driven by Lope Grajera was then
corning from Pila, Laguna on its way towards the direction of Sta. Cruz,
traversing the old highway. As it reached the intersection where there is
a traffic sign 'yield,' it stopped and cautiously treated the intersection as
a "Thru Stop' street, which it is not. The KBL bus was on its way from
Sta. Cruz, Laguna, driven by its regular driver Virgilio Llamoso, on its
way towards Manila. The regular itinerary of the KBL bus is through the
town proper of Pila, Laguna, but at times it avoids this if a bus is already
fully loaded with passengers and can no longer accommodate additional
passengers. As the KBL bus neared the intersection, Virgilio Llamoso
inquired from his conductor if they could still accommodate passengers
and learning that they were already full, he decided to bypass Pila and
instead, to proceed along the national highway. Virgilio Llamoso
admitted that there was another motor vehicle ahead of him.
The general rule is that the vehicle on the national highway
has the right-of-way as against a feeder road. Another general rule is
that the vehicle coming from the right has the right-of-way over the
vehicle coming from the left. The general rules on right-of-way may be
invoked only if both vehicles approach the intersection at almost the
same time. In the case at bar, both roads are national roads. Also, the
KBL bus was still far from the intersection when the jeepney reached the
same. As testified to by Atty. Conrado L. Manicad who was driving a
Mustang car coming from the direction of Sta. Cruz and proceeding
towards the direction of Manila, he stopped at the intersection to give
way to the jeepney driven by Grajera. Behind Manicad were two
vehicles, a car of his client and another car. A Laguna Transit bus had
just entered the town of Pila ahead of Atty. Manicad.
The sketch marked Exhibit 'E' indicates very clearly that the
jeepney had already traversed the intersection when it met the KBL bus
head-on. It is also obvious that the point of impact was on the right lane
of the highway which is the lane properly belonging to the jeepney. As
testified to by Lope Grajera, the KBL bus ignored the stopped vehicles
of Atty. Manicad and the other vehicles behind Atty. Manicad and
overtook both vehicles at the intersection, therefore, causing the
accident.
Judging from the testimony of Atty. Conrado L. Manicad and
the sketch (Exhibit 'E'), the sequence of events shows that the first
vehicle to arrive at the intersection was the jeepney. Seeing that the road
was clear, the jeepney which had stopped at the intersection began to
move forward, and for his part, Atty. Manicad stopped his car at the
intersection to give way to the jeepney. At about this time, the KBL bus
was approaching the intersection and its driver was engaged in
determining from his conductor if they would still pass through the town
proper of Pila. Upon learning that they were already full, he turned his
attention to the road and found the stopped vehicles at the intersection
with the jeepney trying to cross the intersection. The KBL bus had no
more room within which to stop without slamming into the rear of the
vehicle behind the car of Atty. Manicad. The KBL driver chose to gamble
on proceeding on its way, unfortunately, the jeepney driven by Grajera,
which had the right-of-way, was about to cross the center of the highway
and was directly on the path of the KBL bus. The gamble made by
Llamoso did not pay off. The impact indicates that the KBL bus was
travelling at a fast rate of speed because, after the collision, it did not
stop; it travelled for another 50 meters and stopped only when it hit an
electric post (pp. 3-4, Decision; pp. 166167, Record). 1
On 14 September 1982, Kapalaran, apparently believing that the best
defense was offense, filed a complaint for damage to property and
physical injuries through reckless imprudence against respondents
Angel Coronado and Lope Grajera in the Regional Trial Court, Branch
27, Sta. Cruz, Laguna. Respondents answered with their own claims
(counter-claims) for damages. A third-party complaint and/or a complaint
for intervention was also filed in the same case against Kapalaran by
jeepney passenger Dionisio Shinyo.
On 15 October 1986, after trial, the trial court rendered a
judgment in favor of private respondents and ordering Kapalaran
(a) to pay Angel Coronado the sum of P40,000.00 as
compensation for the totally wrecked jeepney, plus the sum of P5,000.00
as attorney's fees and litigation expenses, and
(b) to Dionisio Shinyo the sum of P35,000.00 representing the
expenses incurred by said intervenor for his treatment including his car-
hire, the further sum of P30,000.00 representing the expenses said
defendant will incur for his second operation to remove the
intramedulary nail from his femur, the additional sum of P50,000.00 to
serve as moral damages for the pain and suffering inflicted on said
defendant, plus the sum of P10,000.00 in the concept of exemplary
damages to serve as a deterrent to others who, like the plaintiff, may be
minded to induce accident victims to perjure themselves in a sworn
statement, and the sum of P15,000.00 as attorney's fees and litigation
expenses.
From the above judgment, Kapalaran appealed to the Court of Appeals
assailing the trial court's findings on the issue of fault and the award of
damages. The Court of Appeals, on 28 June 1988, affirmed the decision
of the trial court but modified the award of damages by setting aside the
grant of exemplary damages as well as the award of attomey's fee and
litigation expenses made to Dionisio Shinyo. 2
This decision of the Court of Appeals is now before us on a
Petition for Review, a motion for reconsideration by Kapalaran having
been denied by that court on 13 October 1988.
Kapalaran assails the findings of fact of the Regional Trial
Court and of the Court of Appeals, and insists before this Court that
respondent Grajera, driver of the jeepney, was at fault and not the driver
of Kapalaran's bus. It must be remembered that it is not the function of
this Court to analyze and weigh evidence presented by the parties all
over again and that our jurisdiction is in principle limited to reviewing
errors of law that might have been committed by the Court of Appeals.
Kapalaran has made no compelling showing of any misapprehension of
facts on the part of the Court of Appeals that would require us to review
and overturn the factual findings of that court. On the contrary,
examination of the record shows that not only are the conclusions of fact
of the Court of Appeals and the trial court on who — the bus driver or
the jeepney driver — had acted negligently and was at fault in the
collision of their vehicles, amply supported by the evidence of record,
but also that Kapalaran's bus driver was grossly negligent and had acted
wantonly and in obvious disregard of the applicable rules on safety on
the highway.
Kapalaran's driver had become aware that some vehicles ahead of the
bus and travelling in the same direction had already stopped at the
intersection obviously to give way either to pedestrians or to another
vehicle about to enter the intersection. The bus driver, who was driving
at a speed too high to be safe and proper at or near an intersection on
the highway, and in any case too high to be able to slow down and stop
behind the cars which had preceded it and which had stopped at the
intersection, chose to swerve to the left lane and overtake such
preceding vehicles, entered the intersection and directly smashed into
the jeepney within the intersection. Immediately before the collision, the
bus driver was actually violating the following traffic rules and
regulations, among others, in the Land Transportation and Traffic Code,
Republic Act No. 4136, as amended:
Sec. 35. Restriction as to speed. — (a) Any person driving a
motor vehicle on a highway shall drive the same at a careful and prudent
speed, not greater nor less than is reasonable and proper, having due
regard for the traffic, the width of the highway, and or any other condition
then and there existing; and no person shall drive any motor vehicle
upon a highway at such a speed as to endanger the life, limb and
property of any person, nor at a speed greater than will permit him to
bring the vehicle to a stop within the assured clear distance ahead.
xxx xxx xxx
Sec. 41. Restrictions on overtaking and passing. _1 (a) The
driver of a vehicle shall not drive to the left side of the center line of a
highway in overtaking or passing another vehicle, proceeding in the
same direction, unless such left side is clearly visible, and is free of
oncoming traffic for a sufficient distance ahead to permit such overtaking
or passing to be made in safety.
xxx xxx xxx
(c) The driver of a vehicle shall not overtake or pass any other
vehicle proceeding in the same direction, at any railway grade crossing,
or at any intersection of highways, unless such intersection or crossing
is controlled by traffic signal, or unless permitted to do so by a watchman
or a peace officer, except on a highway having two or more lanes for
movement of traffic in one direction where the driver of a vehicle may
overtake or pass another vehicle on the right. Nothing in this section
shall be construed to prohibit a driver overtaking or passing, upon the
right, another vehicle which is making or about to make a left turn.
xxx xxx xxx
(Emphasis supplied)
Thus, a legal presumption arose that the bus driver was
negligent 3 a presumption Kapalaran was unable to overthrow.
Petitioner's contention that the jeepney should have stopped
before entering the "Y-intersection" because of the possibility that
another vehicle behind the cars which had stopped might not similarly
stop and might swerve to the left to proceed to the highway en route to
Manila, is more ingenious than substantial. It also offers illustration of
the familiar litigation tactic of shifting blame from one's own shoulders to
those of the other party. But the jeepney driver, seeing the cars closest
to the intersection on the opposite side of the highway come to a stop to
give way to him, had the right to assume that other vehicles further away
and behind the stopped cars would similarly come to a stop and not seek
illegally to overtake the stopped vehicles and come careening into the
intersection at an unsafe speed. 4 Petitioner's bus was still relatively far
away from the intersection when the jeepney entered the same; the bus
collided head on into the jeepney because the bus had been going at an
excessively high velocity immediately before and at the time of
overtaking the stopped cars, and so caught the jeepney within the
intersection. It was also the responsibility of the bus driver to see to it,
when it overtook the two (2) cars ahead which had stopped at the
intersection, that the left lane of the road within the intersection and
beyond was clear. The point of impact was on the left side of the
intersection (the light lane so far as concerns the jeepney coming from
the opposite side), which was precisely the lane or side on which the
jeepney had a right to be.
Petitioner Kapalaran also assails the award of moral damages
against itself, upon the ground that its own bus driver, third-party
defendant, was apparently not held liable by the trial court . 5 Hence,
Kapalaran argues that there was no justification for holding it, the
employer, liable for damages, considering that such liability was
premised upon the bus driver's negligence and that petitioner "as mere
employer" was not guilty of such negligence or imprudence. 6 This
contention in thoroughly unpersuasive. The patent and gross negligence
on the part of the petitioner Kapalaran's driver raised the legal
presumption that Kapalaran as employer was guilty of negligence either
in the selection or in the supervision of its bus driver, 7 Where the
employer is held liable for damages, it has of course a right of recourse
against its own negligent employee. If petitioner Kapalaran was
interested in maintaining its right of recourse against or reimbursement
from its own driver, 8 it should have appealled from that portion of the
trial court's decision which had failed to hold the bus driver is not "merely
subsidiary," and is not limited to cases where the employee "cannot pay
his liability" nor are private respondents compelled frist to proceed
against the bus driver. The liability of the employer under Article 2180 of
the Civil Code is direct and immediate; it is not conditioned upon prior
recourse against the negligent employee and a prior showing of the
insolvency of such employee. 9 So far as the record shows, petitioner
Kapalaran was unable to rebut the presumption of negligence on its own
part. The award of moral damages against petitioner Kapalaran is not
only entirely in order; it is also quite modest consideirng Dionisio
Shinyo's death during the pendency of this petition, a death hastened
by, if not directly due to, the grievous injuries sustained by him in the
violent collision.
The Court of Appeals deleted the award of exemplary
damages which the trial court had granted in order "to serve as a
deterrent to others who, like the plaintiff [Kapalaran], may be minded to
induce accident victims to perjure themselves in a sworn statement."
The Court of Appeals held that htere was no basis for this award of
exemplary damages, stating that it was not "such a reprehensible act to
try to gather witnesses for one's cause" and that there was no evidence
of use of "presure or influence" to induce the accident victims to perjure
themselves While that might have been so, both the trial court and the
Court of Appeals overlook another and far more compelling basis for the
award of exemplary damages against petitioner Kapalaran in this case.
There is no question that petitioner's bus driver was grossly and very
probably criminally negligent in his reckless disregard of the rights of
other vehicles and their pasangers and of pedestrian as well The Court
is entitled to take judicial notice of the gross negligence and the appalling
disregard of the physical safety and property of others so commonly
exhibited today by the drivers of passanger bussses and similar vehicles
on our highways. The law requires petitioner as common carrier to
exercise extraordinary diligence incarrying and transporting their
passanger safely "as far as human care and foresight can proved, using
the utmost diligence of very cautious persons, with due regard for all
circumstances." 10 In requiring the highest possible degree of diligence
from common carriers and creating a presumption of negligence against
them, the law compels them to curb the recklessness of their drivers. 11
While the immediate beneficiaries of the standard of extraordinary
diligence are, of course, the passengers and owners of cargo carried by
a common carrier, they are not only persons that the law seeks to
benefit. For if common carriers carefully observed the statutory standard
of extraordinary diligence in respect of of their own passengers, they
cannot help but simultaneously benefit pedestrians and the owners and
passengers of other vehicles who are equally entitled to the safe and
convenient use of our roads and highways. 12 The law seeks to stop
and prevent the slaughter and maiming of people (whether passengers
or not) and the destruction of property (whether freight or not) on our
highways by buses, the very size and power of which seem often to
inflame the minds of their drivers. Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary damages in cases of quasi-
delicts "if the defendant acted with gross negligence." Thus we believe
that the award of exemplary damages by the trial court was quite proper,
although granted for the wrong reason, and should not only be restored
but augmented in the present case. The Court is aware that respondent
Shinyo did not file a separate petition for review to set aside that portion
of the Court of Appeals'decision which deleted the grant by the trial court
of exemplary damages. It is settled, however, that issues which must be
resolved if substantial justice is to be rendered to the parties, may and
should be considered and decided by this Court even if those issues had
not been explicitly raised by the party affected. 13 In the instant case, it
is not only the demands of substantial justice but also the compelling
considerations of public policy noted above, which impel us to the
conclusion that the trial court's award of exemplary damages was
erroneously deleted and must be restored and brought more nearly to
the level which public policy and substantial justice require.
In much the same vein, we believe that the award by the trial court of
P15,000.00 as attorney's fees and litigation expenses, deleted by the
Court of Appeals, should similarly be restored, being both authorized by
law 14 and demanded by substantial justice in the instant case.
WHEREFORE, the Petition for Review on certiorari is
DENIED for lack of merit and the Decision of the Court of Appeals is
hereby AFFIRMED, except (1) that the award of exemplary damages to
Dionisio Shinyo shall be restored and increased from P10,000.00 to
P25,000.00, and (2) that the grant of attorney's fees and litigation
expenses in the sum of P15,000.00 to Dionisio Shinyo shall similarly be
restored. Costs against petitioner.
SO ORDERED.
G.R. No. L-9907 June 30, 1958
LOURDES J. LARA, ET AL., plaintiffs-appellants,
vs.
BRIGIDO R. VALENCIA, defendant-appellant.
Castillo, Cervantes, Occeña, Lozano, Montana, Cunanan, Sison and
Castillo and Eligio G. Lagman for defendant-appellant.
Donato C. Endriga and Emigdio Dakanay for plaintiffs-appellants.
BAUTISTA ANGELO, J.:
This is an action for damages brought by plaintiffs against defendant in
the Court of First Instance of Davao for the death of one Demetrio Lara,
Sr. allegedly caused by the negligent act of defendant. Defendant
denied the charge of negligence and set up certain affirmative defenses
and a counterclaim.
The court after hearing rendered judgment ordering defendant to pay the
plaintiffs the following amount: (a) P10,000 as moral damages; (b)
P3,000 as exemplary damages; and (c) P1,000 as attorney's fees, in
addition to the costs of action. Both parties appealed to this Court
because the damages claimed in the complaint exceed the sum of
P50,000.
In their appeal, plaintiffs claim that the court a quo erred in disregarding
their claim of P41,400 as actual or compensatory damages and in
awarding as attorneys' fees only the sum of P1,000 instead of P3,000
as agreed upon between plaintiffs and their counsel. Defendant, on the
other hand, disputes the finding of the court a quo that the oath of
Demetrio Lara, Sr. was due to the negligence of defendant and the
portion of the judgment which orders dependant to pay to plaintiffs moral
and exemplary damages as well as attorneys' fees, said defendant
contending that the court should have declared that the death of Lara
was due to unavoidable accident.
The deceased was an inspector of the Bureau of Forestry stationed in
Davao with an annual salary of P1,800. The defendant is engaged in the
business of exporting logs from his lumber concession in Cotabato. Lara
went to said concession upon instructions of his chief to classify the logs
of defendant which were about to be loaded on a ship anchored in the
port of Parang. The work Lara of lasted for six days during which he
contracted malaria fever. In the morning of January 9, 1954, Lara who
then in a hurry to return to Davao asked defendant if he could take him
in his pick-up as there was then no other means of transportation, to
which defendant agreed, and in that same morning the pick-up left
Parang bound for Davao taking along six passengers, including Lara.
The pick-up has a front seat where the driver and two
passengers can be accommodated and the back has a steel flooring
enclosed with a steel walling of 16 to 17 inches tall on the sides and with
a 19 inches tall walling at the back. Before leaving Parang, the sitting
arrangement was as follows: defendant was at the wheel and seated
with him in the front seat were Mrs. Valencia and Nicanor Quinain; on
the back of the pick-up were two improvised benches placed on each
side, and seated on the right bench were Ricardo Alojipan and Antonio
Lagahit, and on the left one Bernardo and Pastor Geronimo. A person
by the name of Leoning was seated on a box located on the left side
while in the middle Lara sat on a bag. Before leaving Parang, defendant
invited Lara to sit with him on the front seat but Lara declined. It was
their understanding that upon reaching barrio Samoay, Cotabato, the
passengers were to alight and take a bus bound for Davao, but when
they arrived at that place, only Bernardo alighted and the other
passengers requested defendant to allow them to ride with him up to
Davao because there was then no available bus that they could take in
going to that place. Defendant again accommodated the passengers.
When they continued their trip, the sitting arrangement of the
passengers remained the same, Lara being seated on a bag in the
middle with his arms on a suitcase and his head cove red by a jacket.
Upon reaching Km. 96, barrio Catidtuan, Lara accidentally fell from the
pick-up and as a result he suffered serious injuries. Valencia stopped
the pick-up to see what happened to Lara. He sought the help of the
residents of that place and applied water to Lara but to no avail. They
brought Lara to the nearest place where they could find a doctor and not
having found any they took him to St. Joseph's Clinic of Kidapawan. But
when Lara arrived he was already dead. From there they proceeded to
Davao City and immediately notified the local authorities. An
investigation was made regarding the circumstances surrounding the
death of Lara but no criminal action was taken against defendant.
It should be noted that the deceased went to the lumber concession of
defendant in Parang, Cotabato upon instructions of his chief in order to
classify the logs of defendant which were then ready to be exported and
to be loaded on a ship anchored in the port of Parang. It took Lara six
days to do his work during which he contracted malaria fever and for that
reason he evinced a desire to return immediately to Davao. At that time,
there was no available bus that could take him back to Davao and so he
requested the defendant if he could take him in his own pick-up.
Defendant agreed and, together with Lara, other passengers tagged
along, most of them were employees of the Government. Defendant
merely accommodated them and did not charge them any fee for the
service. It was also their understanding that upon reaching barrio
Samoay, the passengers would alight and transfer to a bus that regularly
makes the trip to Davao but unfortunately there was none available at
the time and so the same passengers, including Lara, again requested
the defendant to drive them to Davao. Defendant again accommodated
them and upon reaching Km. 96, Lara accidentally fell suffering fatal
injuries.
It therefore appears that the deceased, as well his
companions who rode in the pick-up of defendant, were merely
accommodation passengers who paid nothing for the service and so
they can be considered as invited guests within the meaning of the law.
As accommodation passengers or invited guests, defendant as owner
and driver of the pick-up owes to them merely the duty to exercise
reasonable care so that they may be transported safely to their
destination. Thus, "The rule is established by the weight of authority that
the owner or operator of an automobile owes the duty to an invited guest
to exercise reasonable care in its operation, and not unreasonably to
expose him to danger and injury by increasing the hazard of travel. This
rule, as frequently stated by the courts, is that an owner of an automobile
owes a guest the duty to exercise ordinary or reasonable care to avoid
injuring him. Since one riding in an automobile is no less a guest
because he asked for the privilege of doing so, the same obligation of
care is imposed upon the driver as in the case of one expressly invited
to ride" (5 Am. Jur., 626-627). Defendant, therefore, is only required to
observe ordinary care, and is not in duty bound to exercise extraordinary
diligence as required of a common carrier by our law (Articles 1755 and
1756, new Civil Code).
The question that now arises is: Is there enough evidence to
show that defendant failed to observe ordinary care or diligence in
transporting the deceased from Parang to Davao on the date in
question?
The trial court answered the question in the affirmative but in
so doing it took into account only the following facts:
Even if we admit as true the facts found by the trial court, still
we find that the same are not sufficient to show that defendant has failed
to take the precaution necessary to conduct his passengers safely to
their place of destination for there is nothing there to indicate that
defendant has acted with negligence or without taking the precaution
that an ordinary prudent man would have taken under similar
circumstances. It should be noted that Lara went to the lumber
concession of defendant in answer to a call of duty which he was bound
to perform because of the requirement of his office and he contracted
the malaria fever in the course of the performance of that duty. It should
also be noted that defendant was not in duty bound to take the deceased
in his own pick-up to Davao because from Parang to Cotabato there was
a line of transportation that regularly makes trips for the public, and if
defendant agreed to take the deceased in his own car, it was only to
accommodate him considering his feverish condition and his request
that he be so accommodated. It should also be noted that the
passengers who rode in the pick-up of defendant took their respective
seats therein at their own choice and not upon indication of defendant
with the particularity that defendant invited the deceased to sit with him
in the front seat but which invitation the deceased declined. The reason
for this can only be attributed to his desire to be at the back so that he
could sit on a bag and travel in a reclining position because such was
more convenient for him due to his feverish condition. All the
circumstances therefore clearly indicate that defendant had done what
a reasonable prudent man would have done under the circumstances.
There is every reason to believe that the unfortunate happening was
only due to an unforeseen accident accused by the fact that at the time
the deceased was half asleep and must have fallen from the pick-up
when it ran into some stones causing it to jerk considering that the road
was then bumpy, rough and full of stones.
The finding of the trial court that the pick-up was running at more than
40 kilometers per hour is not supported by the evidence. This is a mere
surmise made by the trial court considering the time the pick-up left
barrio Samoay and the time the accident occured in relation to the
distance covered by the pick-up. And even if this is correct, still we say
that such speed is not unreasonable considering that they were traveling
on a national road and the traffic then was not heavy. We may rather
attribute the incident to lack of care on the part of the deceased
considering that the pick-up was open and he was then in a crouching
position. Indeed, the law provides that "A passenger must observe the
diligence of a good father of a family to avoid injury to himself" (Article
1761, new Civil Code), which means that if the injury to the passenger
has been proximately caused by his own negligence, the carrier cannot
be held liable.
All things considered, we are persuaded to conclude that the accident
occurred not due to the negligence of defendant but to circumstances
beyond his control and so he should be exempt from liability.
Wherefore, the decision appealed from is reversed, without
pronouncement as to costs.
G.R. No. L-30309 November 25, 1983
BRINAS VS PEOPLE
This is a petition to review the decision of respondent Court of
Appeals, now Intermediate Appellate Court, affirming the decision of the
Court of First Instance of Quezon, Ninth Judicial District, Branch 1, which
found the accused Clemente Briñas guilty of the crime of DOUBLE
HOMICIDE THRU RECKLESS IMPRUDENCE prior the deaths of
Martina Bool and Emelita Gesmundo.
The information charged the accused-appellant. and others as follows:
That on or about the 6th day of January, 1957, in the
Municipality of Tiaong, Province of Quezon, Philippines, and within the
jurisdiction of this Hon. Court, the said accused Victor Milan, Clemente
Briñas and Hermogenes Buencamino, being then persons in charge of
passenger Train No. 522-6 of the Manila Railroad Company, then
running from Tagkawayan to San Pablo City, as engine driver, conductor
and assistant conductor, respectively, wilfully and unlawfully drove and
operated the same in a negligent, careless and imprudent manner,
without due regard to existing laws, regulations and ordinances, that
although there were passengers on board the passenger coach, they
failed to provide lamps or lights therein, and failed to take the necessary
precautions for the safety of passengers and to prevent accident to
persons and damage to property, causing by such negligence,
carelessness and imprudence, that when said passenger Train No. 522-
6 was passing the railroad tracks in the Municipality of Tiaong, Quezon,
two of its passengers, Martina Bool, an old woman, and Emelita
Gesmundo, a child about three years of age, fell from the passenger
coach of the said train, as a result of which, they were over run, causing
their instantaneous death. "
The facts established by the prosecution and accepted by the
respondent court as basis for the decision are summarized as follows:
The evidence of the prosecution tends to show that in the afternoon of
January 6, 1957, Juanito Gesmundo bought a train ticket at the railroad
station in Tagkawayan, Quezon for his 55-year old mother Martina Bool
and his 3-year old daughter Emelita Gesmundo, who were bound for
Barrio Lusacan, Tiaong, same province. At about 2:00 p.m., Train No.
522 left Tagkawayan with the old woman and her granddaughter among
the passengers. At Hondagua the train's complement were relieved, with
Victor Millan taking over as engineman, Clemente Briñas as conductor,
and Hermogenes Buencamino as assistant conductor. Upon
approaching Barrio Lagalag in Tiaong at about 8:00 p.m. of that same
night, the train slowed down and the conductor shouted 'Lusacan',
'Lusacan'. Thereupon, the old woman walked towards the left front door
facing the direction of Tiaong, carrying the child with one hand and
holding her baggage with the other. When Martina and Emelita were
near the door, the train suddenly picked up speed. As a result the old
woman and the child stumbled and they were seen no more. It took three
minutes more before the train stopped at the next barrio, Lusacan, and
the victims were not among the passengers who disembarked thereat
.têñ.£îhqwâ£
Next morning, the Tiaong police received a report that two
corpses were found along the railroad tracks at Barrio Lagalag.
Repairing to the scene to investigate, they found the lifeless body of a
female child, about 2 feet from the railroad tracks, sprawled to the
ground with her belly down, the hand resting on the forehead, and with
the back portion of the head crushed. The investigators also found the
corpse of an old woman about 2 feet away from the railroad tracks with
the head and both legs severed and the left hand missing. The head was
located farther west between the rails. An arm was found midway from
the body of the child to the body of the old woman. Blood, pieces of
scattered brain and pieces of clothes were at the scene. Later, the
bodies were Identified as those of Martina Bool and Emelita Gesmundo.
Among the personal effects found on Martina was a train ticket (Exhibits
"B").
On January 7, 1957, the bodies of the deceased were
autopsied by Dr. Pastor Huertas, the Municipal Health Officer of Tiaong.
Dr. Huertas testified on the cause of death of the victims as follows:
têñ.£îhqwâ£
FISCAL YNGENTE:
Q What could have caused the death of those women?
A Shock.
Q What could have caused that shock?
A Traumatic injury.
Q What could have caused traumatic injury?
A The running over by the wheel of the train.
Q With those injuries, has a person a chance to survive?
A No chance to survive.
Q What would you say death would come?
A Instantaneous.
Q How about the girl, the young girl about four years old, what could
have caused the death?
A Shock too.
Q What could have caused the shock?
A Compound fracture of the skull and going out of the brain.
Q What could have caused the fracture of the skull and the going out of
the brain?
A That is the impact against a steel object. (TSN., pp. 81-82, July 1,
1959)
The Court of First Instance of Quezon convicted defendant-appellant
Clemente Briñas for double homicide thru reckless imprudence but
acquitted Hermogenes Buencamino and Victor Millan The dispositive
portion of the decision reads:
WHEREFORE, the court finds the defendant Clemente Briñas
guilty beyond doubt of the crime of double homicide thru reckless
imprudence, defined and punished under Article 305 in connection with
Article 249 of the Revised Penal Code, and sentences him to suffer six
(6) months and one (1) day of prision correccional to indemnify the heirs
of the deceased Martina Bool and Emelita Gesmundo in the amounts of
P6,000 and P3,000, respectively, with subsidiary imprisonment in case
of insolvency not to exceed one-third of the principal penalty, and to pay
the costs.
For lack of sufficient evidence against the defendant
Hermogenes Buencamino and on the ground of reasonable doubt in the
case of defendant Victor Millan the court hereby acquits them of the
crime charged in the information and their bail bonds declared cancelled.
As to the responsibility of the Manila Railroad Company in this
case, this will be the subject of court determination in another
proceeding.
On appeal, the respondent Court of Appeals affirmed the
judgment of the lower court.
During the pendency of the criminal prosecution in the Court
of First Instance of Quezon, the heirs of the deceased victims filed with
the same court, a separate civil action for damages against the Manila
Railroad Company entitled "Civil Case No. 5978, Manaleyo Gesmundo,
et al., v. Manila Railroad Company". The separate civil action was filed
for the recovery of P30,350.00 from the Manila Railroad Company as
damages resulting from the accident.
The accused-appellant alleges that the Court of Appeals made the
following errors in its decision:
THE HONORABLE COURT OF APPEALS ERRED IN
CONVICTING PETITIONER-APPELLANT UNDER THE FACTS AS
FOUND BY SAID COURT; and
THE HONORABLE COURT OF APPEALS ERRED IN
INCLUDING THE PAYMENT OF DEATH INDEMNITY BY THE
PETITIONER- APPELLANT, WITH SUBSIDIARY IMPRISONMENT IN
CASE OF INSOLVENCY, AFTER THE HEIRS OF THE DECEASED
HAVE ALREADY COMMENCED A SEPARATE CIVIL ACTION FOR
DAMAGES AGAINST THE RAILROAD COMPANY ARISING FROM
THE SAME MISHAP.
We see no error in the factual findings of the respondent court
and in the conclusion drawn from those findings.
It is undisputed that the victims were on board the second coach where
the petitioner-appellant was assigned as conductor and that when the
train slackened its speed and the conductor shouted "Lusacan,
Lusacan", they stood up and proceeded to the nearest exit. It is also
undisputed that the train unexpectedly resumed its regular speed and
as a result "the old woman and the child stumbled and they were seen
no more.
In finding petitioner-appellant negligent, respondent Court têñ.£îhqwâ£
xxx xxx xxx
The appellant's announcement was premature and
erroneous, for it took a full three minutes more before the next barrio of
Lusacan was reached. In making the erroneous and premature
announcement, appellant was negligent. He ought to have known that
train passengers invariably prepare to alight upon notice from the
conductor that the destination was reached and that the train was about
to stop. Upon the facts, it was the appellant's negligent act which led the
victims to the door. Said acts virtually exposed the victims to peril, for
had not the appellant mistakenly made the announcement, the victims
would be safely ensconced in their seats when the train jerked while
picking up speed, Although it might be argued that the negligent act of
the appellant was not the immediate cause of, or the cause nearest in
time to, the injury, for the train jerked before the victims stumbled, yet in
legal contemplation appellant's negligent act was the proximate cause
of the injury. As this Court held in Tucker v. Milan, CA G.R. No. 7059-R,
June 3, 1953: 'The proximate cause of the injury is not necessarily the
immediate cause of, or the cause nearest in time to, the injury. It is only
when the causes are independent of each other that the nearest is to be
charged with the disaster. So long as there is a natural, direct and
continuous sequence between the negligent act the injury (sic) that it
can reasonably be said that but for the act the injury could not have
occurred, such negligent act is the proximate cause of the injury, and
whoever is responsible therefore is liable for damages resulting
therefrom. One who negligently creates a dangerous condition cannot
escape liability for the natural and probable consequences thereof,
although the act of a third person, or an act of God for which he is not
responsible intervenes to precipitate the loss.
xxx xxx xxx
It is a matter of common knowledge and experience about
common carriers like trains and buses that before reaching a station or
flagstop they slow down and the conductor announces the name of the
place. It is also a matter of common experience that as the train or bus
slackens its speed, some passengers usually stand and proceed to the
nearest exit, ready to disembark as the train or bus comes to a full stop.
This is especially true of a train because passengers feel that if the train
resumes its run before they are able to disembark, there is no way to
stop it as a bus may be stopped.
It was negligence on the conductor's part to announce the
next flag stop when said stop was still a full three minutes ahead. As the
respondent Court of Appeals correctly observed, "the appellant's
announcement was premature and erroneous.
That the announcement was premature and erroneous is
shown by the fact that immediately after the train slowed down, it
unexpectedly accelerated to full speed. Petitioner-appellant failed to
show any reason why the train suddenly resumed its regular speed. The
announcement was made while the train was still in Barrio Lagalag.
The proximate cause of the death of the victims was the
premature and erroneous announcement of petitioner' appelant Briñas.
This announcement prompted the victims to stand and proceed to the
nearest exit. Without said announcement, the victims would have been
safely seated in their respective seats when the train jerked as it picked
up speed. The connection between the premature and erroneous
announcement of petitioner-appellant and the deaths of the victims is
direct and natural, unbroken by any intervening efficient causes.
Petitioner-appellant also argues that it was negligence per se for Martina
Bool to go to the door of the coach while the train was still in motion and
that it was this negligence that was the proximate cause of their deaths.
We have carefully examined the records and we agree with the
respondent court that the negligence of petitioner-appellant in
prematurely and erroneously announcing the next flag stop was the
proximate cause of the deaths of Martina Bool and Emelita Gesmundo.
Any negligence of the victims was at most contributory and does not
exculpate the accused from criminal liability.
With respect to the second assignment of error, the petitioner
argues that after the heirs of Martina Bool and Emelita Gesmundo had
actually commenced the separate civil action for damages in the same
trial court during the pendency of the criminal action, the said court had
no more power to include any civil liability in its judgment of conviction.
The source of the obligation sought to be enforced in Civil
Case No. 5978 is culpa contractual, not an act or omission punishable
by law. We also note from the appellant's arguments and from the title
of the civil case that the party defendant is the Manila Railroad Company
and not petitioner-appellant Briñas Culpa contractual and an act or
omission punishable by law are two distinct sources of obligation.
The petitioner-appellant argues that since the information did
not allege the existence of any kind of damages whatsoever coupled by
the fact that no private prosecutors appeared and the prosecution
witnesses were not interrogated on the issue of damages, the trial court
erred in awarding death indemnity in its judgment of conviction.
A perusal of the records clearly shows that the complainants
in the criminal action for double homicide thru reckless imprudence did
not only reserve their right to file an independent civil action but in fact
filed a separate civil action against the Manila Railroad Company.
The trial court acted within its jurisdiction when, despite the
filing with it of the separate civil action against the Manila Railroad
Company, it still awarded death indemnity in the judgment of conviction
against the petitioner-appellant.
It is well-settled that when death occurs as a result of the
commission of a crime, the following items of damages may be
recovered: (1) an indemnity for the death of the victim; (2) an indemnity
for loss of earning capacity of the deceased; (3) moral damages; (4)
exemplary damages; (5) attorney's fees and expenses of litigation, and
(6) interest in proper cases.
The indemnity for loss of earning capacity, moral damages,
exemplary damages, attorney's fees, and interests are recoverable
separately from and in addition to the fixed slim of P12,000.00
corresponding to the indemnity for the sole fact of death. This indemnity
arising from the fact of death due to a crime is fixed whereas the others
are still subject to the determination of the court based on the evidence
presented. The fact that the witnesses were not interrogated on the issue
of damages is of no moment because the death indemnity fixed for death
is separate and distinct from the other forms of indemnity for damages.
WHEREFORE, the judgment appealed from is modified in that the
award for death indemnity is increased to P12,000.00 for the death of
Martina Bool instead of P6,000.00 and P12,000.00 for the death of
Emelita Gesmundo instead of P3,000.00, but deleting the subsidiary
imprisonment in case of insolvency imposed by the lower court. The
judgment is AFFIRMED in all other respects.
SO ORDERED.1äw
G.R. No. 188961 October 13, 2009
AIR FRANCE PHILIPPINES/KLM AIR FRANCE, Petitioner,
vs.
JOHN ANTHONY DE CAMILIS, Respondent.
RESOLUTION
CORONA, J.:
Respondent John Anthony de Camilis filed a case for breach
of contract of carriage, damages and attorney’s fees against petitioner
Air France Philippines/KLM Air France (AF) in the Regional Trial Court
(RTC) of Makati City, Branch 59.
Respondent alleged that he went on a pilgrimage with a group
of Filipinos to selected countries in Europe. According to respondent: (1)
AF’s agent in Paris failed to inform him of the need to secure a transit
visa for Moscow, as a result of which he was denied entry to Moscow
and was subjected to humiliating interrogation by the police; (2) another
AF agent (a certain Ms. Soeyesol) rudely denied his request to contact
his travel companions to inform them that he was being sent back to
Paris from Moscow with a police escort; Ms. Soeyesol even reported him
as a security threat which resulted in his being subjected to further
interrogation by the police in Paris and Rome, and worse, also lifted his
flight coupons for the rest of his trip; (3) AF agents in Rome refused to
honor his confirmed flight to Paris; (4) upon reaching Paris for his
connecting flight to Manila, he found out that the AF agents did not check
in his baggage and since he had to retrieve his bags at the baggage
area, he missed his connecting flight; (5) he had to shoulder his
extended stay in Paris for AF’s failure to make good its representation
that he would be given a complimentary motel pass and (6) he was given
a computer print-out of his flight reservation for Manila but when he went
to the airport, he was told that the flight was overbooked. It was only
when he made a scene that the AF agent boarded him on an AF flight
to Hongkong and placed him on a connecting Philippine Airlines flight to
Manila.
The RTC found that AF breached its contract of carriage and
that it was liable to pay ₱200,000 actual damages, ₱1 million moral
damages, ₱1 million exemplary damages and ₱300,000 attorney’s fees
to respondent.
On appeal, the Court of Appeals (CA) affirmed the RTC
decision with modifications.1
The CA ruled that it was respondent (as passenger), and not
AF, who was responsible for having the correct travel documents.
However, the appellate court stated that this fact did not absolve AF from
liability for damages.
The CA agreed with the findings of fact of the RTC that AF’s
agents and representatives repeatedly subjected respondent to very
poor service, verbal abuse and abject lack of respect and consideration.
As such, AF was guilty of bad faith for which respondent ought to be
compensated.
The appellate court affirmed the award of ₱1 million moral
damages and ₱300,000 attorney’s fees. However, it reduced the actual
damages to US$906 (or its peso equivalent). According to the CA, this
amount represented the expenses respondent incurred from the time he
was unable to join his group in Rome (due to the unfounded
"communiqué" of Ms. Soeyesol that he was a security threat) up to the
time his flight reservation from Paris to Manila was dishonored for which
he was forced to stay in Paris for two additional days. The appellate court
pointed out that, on the other hand, respondent’s expenses for the
Moscow leg of the trip must be borne by him as AF could not be faulted
when he was refused entry to Moscow for lack of a transit visa.
The CA also decreased the exemplary damages from ₱1
million to ₱300,000. The CA further imposed interest at the rate of 6%
p.a. from the date of extrajudicial demand2 until full satisfaction, but
before judgment becomes final. From the date of finality of the judgment
until the obligation is totally paid, 12% interest p.a. shall be imposed.
Hence, this recourse.
Essentially, AF assails the CA’s award of moral and
exemplary damages and attorney’s fees to respondent as the alleged
injury sustained was not clearly established. AF added that, even if
respondent was entitled to the same, the amounts awarded were
exorbitant. Lastly, it argued that the interest rate should run not from the
time of respondent’s extrajudicial demand but from the time of judgment
of the RTC.
We deny the petition.
Preliminarily, on the issue pertaining to whether or not
respondent was entitled to damages and attorney’s fees, the same
entails a resort to the parties’ respective evidence. Thus, AF is clearly
asking us to consider a question of fact.
Time and again, we have held that the jurisdiction of this Court
in a petition for review on certiorari under Rule 45 is limited only to
questions of law,3 save for certain exceptions,4 none of which are
present in this case.
Both the RTC and the CA have competently ruled on the issue
of respondent’s entitlement to damages and attorney’s fees as they
properly laid down both the factual and legal bases for their respective
decisions. We see no reason to disturb their findings.
The above liabilities of AF shall earn legal interest pursuant to
the Court’s ruling in Construction Development Corporation of the
Philippines v. Estrella,5 citing Eastern Shipping Lines, Inc. v.
CA.61avvphi1
Pursuant to this ruling, the legal interest is 6% p.a. and it shall
be reckoned from April 25, 2007 when the RTC rendered its judgment,
not from the time of respondent’s extrajudicial demand. This must be so
as it was at the time the RTC rendered its judgment that the
quantification of damages may be deemed to have been reasonably
ascertained. Then, from the time this decision becomes final and
executory, the interest rate shall be 12% p.a. until full satisfaction.
WHEREFORE, the petition is hereby DENIED. The decision of the Court
of Appeals in CA-G.R. CV No. 90151 is AFFIRMED. Petitioner is
ordered to PAY legal interest of 6% p.a. from the date of promulgation
of the decision dated April 25, 2007 of the Regional Trial Court, Branch
59, Makati City and 12% p.a. from the time the decision of this Court
attains finality, on all sums awarded until their full satisfaction.
Costs against petitioner.
SO ORDERED.
G.R. No. 187701 July 23, 2014
PHILAM INSURANCE COMPANY, INC. (now CHARTIS PHILIPPINES
INSURANCE, INC.*), Petitioner,
vs.
HEUNG-A SHIPPING CORPORATION and WALLEM PHILIPPINES
SHIPPING, INC., Respondents.
x-----------------------x
G.R. No. 187812
HEUNG-A SHIPPING CORPORATION and WALLEM PHILIPPINES
SHIPPING, INC., Petitioners,
vs.
PHILAM INSURANCE COMPANY, INC. (now CHARTIS PHILIPPINES
INSURANCE, INC.), Respondent.
At bar are consolidated petitions for review on certiorari1
under Rule 45 of the Rules of Court assailing the Decision2 dated
January 30, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 89482
affirming with modifications the Decision3 dated February 26, 2007 of
the Regional Trial Court (RTC) of Makati City, Branch 148, in Civil Case
No. 01-889.
The Factual Antecedents
On December 19, 2000, Novartis Consumer Health
Philippines, Inc. (NOVARTIS) imported from Jinsuk Trading Co. Ltd.,
(JINSUK) in South Korea, 19 pallets of 200 rolls of Ovaltine Power 18
Glaminated plastic packaging material.
In order to ship the goods to the Philippines, JINSUK engaged the
services of Protop Shipping Corporation (PROTOP), a freight forwarder
likewise based in South Korea, to forward the goods to their consignee,
NOVARTIS.
Based on Bill of Lading No. PROTAS 200387 issued by
PROTOP, the cargo was on freight prepaid basis and on "shipper’s load
and count" which means that the "container [was] packed with cargo by
one shipper where the quantity, description and condition of the cargo is
the sole responsibility of the shipper."4 Likewise stated in the bill of
lading is the name Sagawa Express Phils., Inc., (SAGAWA) designated
as the entity in the Philippines which will obtain the delivery contract.
PROTOP shipped the cargo through Dongnama Shipping Co. Ltd.
(DONGNAMA) which in turn loaded the same on M/V Heung-A Bangkok
V-019 owned and operated by Heung-A Shipping Corporation,
(HEUNG-A), a Korean corporation, pursuant to a ‘slot charter
agreement’ whereby a space in the latter’s vessel was reserved for the
exclusive use of the former. Wallem Philippines Shipping, Inc.
(WALLEM) is the ship agent of HEUNG-A in the Philippines. NOVARTIS
insured the shipment with Philam Insurance Company, Inc. (PHILAM,
now Chartis Philippines Insurance, Inc.) under All Risk Marine Open
Insurance Policy No. MOP-0801011828 against all loss, damage,
liability, or expense before, during transit and even after the discharge
of the shipment from the carrying vessel until its complete delivery to the
consignee’s premises. The vessel arrived at the port ofManila, South
Harbor, on December 27, 2000 and the subject shipment contained in
Sea Van Container No. DNAU 420280-9 was discharged without
exception into the possession, custody and care of Asian Terminals, Inc.
(ATI) as the customs arrastre operator.
The shipment was thereafter withdrawn on January 4, 2001,
by NOVARTIS’ appointed broker, Stephanie Customs Brokerage
Corporation (STEPHANIE) from ATI’s container yard.
The shipment reached NOVARTIS’ premises on January 5, 2001 and
was thereupon inspected by the company’s Senior Laboratory
Technician, Annie Rose Caparoso (Caparoso).5
Upon initial inspection, Caparoso found the container van
locked with its load intact. After opening the same, she inspected its
contents and discovered that the boxes of the shipment were wet and
damp. The boxes on one side of the van were in disarray while others
were opened or damaged due to the dampness. Caparoso further
observed that parts of the container van were damaged and rusty. There
were also water droplets on the walls and the floor was wet. Since the
damaged packaging materials might contaminate the product they were
meant to hold, Caparoso rejected the entire shipment.
Renato Layug and Mario Chin, duly certified adjusters of the Manila
Adjusters and Surveyors Company wereforthwith hailed to inspect and
conduct a survey of the shipment.6 Their Certificate of Survey7 dated
January 17, 2001 yielded results similar to the observations of
Caparoso, thus:
[T]he sea van panels/sidings and roofing were noted with varying
degrees of indentations and partly corroded/rusty. Internally, water bead
clung along the roofs from rear to front section. The mid section
dented/sagged with affected area was noted withminutes hole evidently
due to thinning/corroded rusty metal plates. The shipment was noted
with several palletized cartons already in collapsed condition due to
wetting. The van’s entire floor length was also observed wet.8
All 17 pallets of the 184 cartons/rolls contained in the sea van
were found wet/water damaged. Sixteen (16)cartons/rolls supposedly
contained in 2 pallets were unaccounted for although the surveyors
remarked that this may be due to short shipment by the supplier
considering that the sea van was fully loaded and can no longer
accommodate the said unaccounted items. The survey report further
stated that the "wetting sustained by the shipment may have reasonably
be attributed to the water seepage that gain entry into the sea van
container damageroofs (minutes hole) during transit period[sic]."9
Samples from the wet packing materials/boxes were
submitted to the chemist of Precision Analytical Services, Inc.
(PRECISION), Virgin Hernandez (Hernandez), and per Laboratory
Report No. 042-07 dated January 16, 2001, the cause of wetting in the
carton boxes and kraft paper/lining materials as well as the aluminum
foil laminated plastic packaging material, was salt water.10
Aggrieved, NOVARTIS demanded indemnification for the
lost/damaged shipment from PROTOP, SAGAWA, ATI and
STEPHANIE but was denied. Insurance claims were, thus, filed with
PHILAM which paid the insured value of the shipment inthe adjusted
amount of One Million Nine Hundred Four Thousand Six Hundred
Thirteen Pesos and Twenty Centavos (₱1,904,613.20). Claiming that
after such payment, it was subrogated to all the rights and claims of
NOVARTIS against the parties liable for the lost/damaged shipment,
PHILAM filed on June 4, 2001, a complaint for damages against
PROTOP, as the issuer of Bill of Lading No. PROTAS 200387, its ship
agent in the Philippines, SAGAWA, consignee, ATI and the broker,
STEPHANIE.
On October 12, 2001, PHILAM sent a demand letter to
WALLEM for reimbursement of the insurance claims paid to
NOVARTIS.11 When WALLEM ignored the demand, PHILAM
impleaded it as additional defendant in an Amended Complaint duly
admitted by the trial court on October 19, 2001.12
On December 11, 2001, PHILAM filed a Motion to Admit
Second Amended Complaint this time designating PROTOP as the
owner/operator of M/V Heung-A Bangkok V-019 and adding HEUNG-A
as party defendant for being the registered owner of the vessel.13 The
motion was granted and the second amended complaint was admitted
by the trial court on December 14, 2001.14
PROTOP, SAGAWA, ATI, STEPHANIE, WALLEM and
HEUNG-A denied liability for the lost/damaged shipment.
SAGAWA refuted the allegation that it is the ship agent of
PROTOP and argued that a ship agent represents the owner of the
vessel and not a mere freight forwarder like PROTOP. SAGAWA
averred that its only role with respect to the shipment was to inform
NOVARTIS of its arrival in the Philippines and to facilitate the surrender
of the original bill of lading issued by PROTOP.
SAGAWA further remarked that it was deprived an opportunity
to examine and investigate the nature and extent of the damage while
the matter was still fresh so as tosafeguard itself from false/fraudulent
claims because NOVARTIS failed totimely give notice about the
loss/damage.15
 SAGAWA admitted that it has a non-exclusive agency
agreement with PROTOP to serve as the latter’s delivery contact person
in the Philippines with respect to the subject shipment. SAGAWA is also
a freight forwarding company and that PROTOPwas not charged any
fee for the services rendered by SAGAWA with respect to the subject
shipment and instead the latter was given US$10 as commission.16 For
having been dragged into court on a baseless cause, SAGAWA
counterclaimed for damages in the form of attorney’s fees.
ATI likewise interposed a counterclaim for damages against
PHILAM for its allegedly baseless complaint. ATI averred that it
exercised due care and diligence in handling the subject container. Also,
NOVARTIS, through PHILAM, is now barred from filing any claim for
indemnification because the latter failed to file the same within 15 days
from receipt of the shipment.17 Meanwhile, STEPHANIE asserted that
its only role with respect to the shipment was its physical retrieval from
ATI and thereafter its delivery to NOVARTIS. That entire time, the
sealwas intact and not broken. Also, based on the Certificate of Survey,
the damage to the shipment was due to salt water which means that it
could not have occurred while STEPHANIE was in possession thereof
during its delivery from ATI’s container yard to NOVARTIS’ premises.
STEPHANIE counterclaimed for moral damages and attorney’s fees.18
WALLEM alleged that the damageand shortages in the
shipment were the responsibility of the shipper, JINSUK, because it was
taken on board on a "shipper’s load and count" basis which means that
it was the shipper that packed, contained and stuffed the shipment in the
container van without the carrier’s participation. The container van was
already sealed when it was loadedon the vessel and hence, the carrier
was in no position to verify the condition and other particulars of the
shipment.
WALLEM also asserted that the shipment was opened long
after it was discharged from the vessel and that WALLEM or HEUNG-A
were not present during the inspection, examination and survey.
WALLEM pointed the blame to PROTOP because its
obligation to the shipper as freight forwarder carried the concomitant
responsibility of ensuring the shipment’s safety from the port of loading
until the final place of delivery. WALLEM claimed to haveexercised due
care and diligence in handling the shipment.
In the alternative, WALLEM averred that any liability which
may be imputed to it is limited only to US$8,500.00 pursuant to the
Carriage of Goods by Sea Act (COGSA).19
HEUNG-A argued that it is not the carrier insofar as
NOVARTIS is concerned. The carrier was either PROTOP, a freight
forwarder considered as a non-vessel operating common carrier or
DONGNAMA which provided the container van to PROTOP.20 HEUNG-
A denied being the carrier of the subjectshipment and asserted that its
only obligation was to provide DONGNAMA a space on board M/V
Heung-A Bangkok V-019.
PROTOP failed to file an answer to the complaint despite
having been effectively served with alias summons. It was declared in
default in the RTC Order dated June 6, 2002.21
Ruling of the RTC
In a Decision22 dated February 26, 2007, the RTC ruled that
the damage to the shipment occurred onboard the vessel while in transit
from Korea to the Philippines.
HEUNG-A was adjudged as the common carrier of the subject shipment
by virtue of the admissions of WALLEM’s witness, Ronald Gonzales
(Gonzales) that despite the slot charter agreement with DONGNAMA, it
was still the obligation of HEUNG-A to transport the cargo from Busan,
Korea to Manila and thus any damage to the shipment is the
responsibility of the carrier to the consignee.
The RTC further observed that HEUNG-A failed to present
evidence showing that it exercised the diligence required of a common
carrier in ensuring the safety of the shipment.
The RTC discounted the slot charter agreement between HEUNG-A and
DONGNAMA, and held that it did not bind the consignee who was not a
party thereto. Further, it was HEUNG-A’s duty to ensure that the
container van was in good condition by taking an initiative to state in its
contract and demand from the owner of the container van that it should
be in a good condition all the time. Such initiative cannot be shifted to
the shipper because it is in no position to demand the same from the
owner of the container van.
WALLEM was held liable as HEUNG-A’s ship agent in the
Philippines while PROTOP was adjudged liable because the damage
sustained by the shipment was due to the bad condition of the container
van. Also, based on the statement at the backof the bill of lading, it
assumed responsibility for loss and damage as freight forwarder, viz:
6.1 The responsibility of the Freight Forwarder for the goods under these
conditions covers the period from the time the Freight Forwarder has
taken the goods in his charge to the time of the delivery.
6.2 The Freight Forwarde[r] shall beliable for loss or damage to the
goods as well as for delay in delivery if the occurrence which caused the
loss, damage, delay in delivery took place while the goods were in his
charge as defined in clause 2.1.a unless the Freight Forwarder proves
that no fault or neglect of his own servants or agents or any other person
referred to in Clause 2.2 has caused or contributed to such loss, damage
or delay. However, the Freight Forwarder shall only be liable for loss
following from delay in delivery if the Consignor has made a declaration
of interest in timely delivery which has been accepted by the Freight
Forwarder and stated in this FBL.23
PHILAM was declared to havebeen validly subrogated in NOVARTIS’
stead and thus entitled to recover the insurance claims it paid to the
latter.
ATI and STEPHANIE were exonerated from any liability.
SAGAWA was likewise adjudged not liable for the loss/damage to the
shipment by virtue of the phrase "Shipper’s Load and Count" reflected
in the bill of lading issued by PROTOP. Since the container van was
packed under the sole responsibility of the shipper in Korea, SAGAWA,
which is based in the Philippines, had no chance to check if the contents
were in good condition or not. The RTC concluded that SAGAWA cannot
be expected to observe the diligence or care required of a carrier or ship
agent. SAGAWA, ATI and STEPHANIE’s counterclaims for attorney’s
fees were granted and PHILAM was ordered to pay the same for having
been filed a ‘shotgun case’ against them. Accordingly, the dispositive
portion of the RTC decision read:
WHEREFORE, premises considered, judgment is hereby
rendered declaring defendants PROTOP SHIPPING CORPORATION,
HEUNG-A SHIPPING CORPORATION and WALLEM PHILIPPINES
SHIPPING, INC. solidarily liable to pay x x x PHILAM INSURANCE
COMPANY, INC. the following amounts:
1. [P]1,904,613.20 plus interest of 12% per annum from
December 26, 2001 (date of service of summons to defendant
Heung-A) until full payment;
2. [P]350,000.00 as attorney’s fees; and 3. Cost of suit.
With regards to the counter claims, x x x PHILAM INSURANCE
COMPANY, INC. is hereby ordered to pay defendants SAGAWA
EXPRESS PHILIPPINES, INC., ASIAN TERMINALS, INC., and
STEPHANIE CUSTOMS BROKERAGE CORPORATION the amount of
[P]100,000.00 each as attorney’s fees.
SO ORDERED.24
Ruling of the CA
An appeal to the CA was interposed by PHILAM, WALLEM
and HEUNG-A. In a Decision25 dated January 30, 2009, the CA agreed
with the RTC that PROTOP, HEUNG-A and WALLEM are liable for the
damaged shipment. The fact that HEUNG-A was not a party to the bill
of lading did not negate the existence of a contract of carriage between
HEUNG-A and/or WALLEM and NOVARTIS. A bill of lading is not
indispensable for the creation of a contract of carriage. By agreeing to
transport the goods contained in the sea van providedby DONGNAMA,
HEUNG-A impliedly entered into a contract of carriage with NOVARTIS
with whom the goods were consigned. Hence, it assumed the
obligations of a common carrier to observe extraordinary diligence in the
vigilance over the goods transported by it. Further the Slot Charter
Agreement did not change HEUNG-A’s character as a common carrier.
Moreover, the proximate cause ofthe damage was the failure of
HEUNG-A to inspect and examine the actual condition of the sea van
before loading it on the vessel. Also, propermeasures in handling and
stowage should have been adopted to prevent seepage of sea water
into the sea van.
The CA rejected WALLEM and HEUNG-A’s argument that
NOVARTIS failed to comply with Article 366 of the Code of Commerce
requiring that a claim must be made against the carrier within 24 hours
from receipt of the merchandise because such provision applies only to
inter-island shipments within the Philippines.
The CA limited the liability of PROTOP, WALLEM and
HEUNG-A to US$8,500.00 pursuant to the liability limitation under the
COGSA since the shipper failed to declare the value of the subject cargo
in the bill of lading and since they could not be made answerable for the
two (2) unaccounted pallets because the shipment was on a "shipper’s
load, count and seal" basis.
The attorney’s fees awarded to SAGAWA, ATI and STEPHANIE were
deleted because it was not shown that PHILAM was motivated by malice
and bad faith in impleading them as defendants. Thus, the CA decision
was disposed as follows:
 WHEREFORE, premises considered, the appealed Decision
is hereby AFFIRMED with MODIFICATION.Defendants PROTOP
SHIPPING CORPORATION, HEUNG-A SHIPPING CORPORATION
[and] WALLEM PHILIPPINES SHIPPING,INC.’s solidary liability to
PHILAM INSURANCE COMPANY, INC. is reduced to $8,500.00 plus
interest per annum from26 December 2001 (date ofservice of summons
to defendant Heung-A) until full payment. The award of attorney’s fees
in the amount of One Hundred Thousand Pesos ([P]100,000.[00]) each
to SAGAWA EXPRESS PHILIPPINES, INC., ASIAN TERMINALS, INC.
and STEPHANIE CUSTOMS BROKERAGE is hereby DELETED.
SO ORDERED.26
The foregoing judgment was reiterated in the CA
Resolution27 dated May 8, 2009 which denied the motions for
reconsideration filed by PHILAM, WALLEM and HEUNG-A.
PHILAM thereafter filed a petition for review before the Court docketed
as G.R. No. 187701. WALLEM and HEUNG-A followed suit and their
petition was docketed as G.R. No. 187812. Considering that both
petitions involved similar parties and issue, emanated from the same
Civil Case No. 01-889 and assailed the same CA judgment, they were
ordered consolidated in a Resolution28 dated January 13, 2010.
In G.R. No. 187701, PHILAM raised the following grounds:
THE HONORABLE [CA] COMMITTED SERIOUS ERROR
WHEN IT RULED IN ITS DECISION OF 30 JANUARY 2009 THAT
[HEUNG-A and WALLEM] HAVE THE RIGHT TO LIMIT THEIR
LIABILITY UNDER THE PACKAGE LIMITATION OF LIABILITY OF
SECTION 4(5) OF THE CARRIAGE OF GOODS BY SEA ACT, 1924,
IN VIEW OF ITS OBSERVATION THAT [NOWHERE] IN THE BILL OF
LADING DID THE SHIPPER DECLARE THE VALUE OF THE
SUBJECT CARGO;
THE HONORABLE [CA] COMMITTED SERIOUS ERROR
WHEN IT COMPLETELY DISREGARDED THE FUNDAMENTAL
BREACHES OF [HEUNG-A and WALLEM] OF [THEIR] OBLIGATIONS
AND RESPONSIBILITIES UNDER THE CONTRACT OF CARRIAGE
AND LAW OF THE CASE AS LEGAL GROUNDS TO PRECLUDE ITS
AVAILMENT OF THE PACKAGE LIMITATION OF LIABILITY UNDER
SECTION 4(5) OF THE CARRIAGE OF GOODS BY SEA ACT, 1924.29
In G.R. No. 187812, HEUNG-A and WALLEM argued that:
THE [CA] COMMITTED A SERIOUS ERROR OF LAW IN
RULING THAT THE CODE OFCOMMERCE, SPECIFICALLY ARTICLE
366 THEREOF, DOES NOT APPLY IN THIS CASE[;]
THE [CA] COMMITTED A SERIOUS ERROR OF LAW IN
RULING THAT THE SO-CALLED "PARAMOUNT CLAUSE" IN THE
BILL OF LADING, WHICH PROVIDED THAT "COGSA" SHALL
GOVERN THE TRANSACTION, RESULTED IN THE EXCLUSION OR
INAPPLICABILITY OF THE CODE OF COMMERCE[;]
THE [CA] COMMITTED A SERIOUS ERROR OF LAW IN
NOT RULING THAT [PHILAM] HAS NO RIGHT OF ACTION AGAINST
[HEUNG-A and WALLEM] INSOFAR AS DAMAGE TO CARGO IS
CONCERNED IN VIEW OF THE FACT THAT NO TIMELY CLAIM WAS
FILED PURSUANT TO ARTICLE 366 OF THE CODE OF COMMERCE
OR THE PROVISIONS OF THE BILL OF LADING NO.DNALGOBUM
005019[;]
THE [CA] GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO EXCESS OR LACK OF JURISDICTION IN FINDING
THAT THE CONTAINERIZED CARGO WAS DAMAGED WHILE IN
THE POSSESSION OR CUSTODY OF THE VESSEL "HEUNG-A
BANGKOK".30
Issues
The arguments proffered by the parties can be summed up
into the following issues: (1) Whether the shipment sustained damage
while in the possession and custody of HEUNG-A, and if so, whether
HEUNG-A’s liability can be limited to US$500 per package pursuant
tothe COGSA; (2) Whether or not NOVARTIS/PHILAM failed to file a
timely claim against HEUNG-A and/or WALLEM.
Ruling of the Court
It must be stressed that the question on whether the subject
shipment sustained damaged while in the possession and custody of
HEUNG-A is a factual matter which has already beendetermined by the
RTC and the CA. The courts a quowere uniform in finding that the goods
inside the container van were damaged by sea water whilein transit on
board HEUNG-A’s vessel.
Being a factual question, it is notreviewable in the herein
petition filed under Rule 45 of the Rules of Court. It isnot the Court’s duty
to evaluate and weigh the evidence all over again as such function is
conceded to be within the expertise of the trial court whose findings,
when supported by substantial evidence on record and affirmed by the
CA, are regarded with respect, if not binding effect, by this Court.31
There are certain instances, however, when the Court is
compelled to deviate from this rule, dismantle the factual findings of the
courts a quoand conduct a probe into the factual questions at issue.
These circumstances are: (1) the inference made ismanifestly mistaken,
absurd or impossible; (2) there is grave abuse of discretion; (3) the
findings are grounded entirely on speculations, surmises or conjectures;
(4) the judgment of the CA is based on misapprehension of facts; (5) the
CA, in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee; (6)
the findings of fact are conclusions without citation of specific evidence
on which theyare based; (7) the CA manifestly overlooked certain
relevant facts not disputed by the parties and which, if properly
considered, would justify a different conclusion; and (8) the findings of
fact of the CA are premised on the absence ofevidence and are
contradicted by the evidence on record.32
None of the foregoing instances is extant from records of the
present case. Instead, the Court finds that the factual findings of the
courts a quo are supported by evidence on record.
The uncontested results of the inspection survey conducted
by Manila Adjusters Surveyors Company showed that sea water seeped
into the panels/sidings and roofing of the container van. This was
confirmed by the examination conducted by Hernandez, the chemist of
PRECISION, on samples from the cartons, boxes, aluminum foil and
laminated plastic packaging materials. Based on the laboratory
examination results, the contents of the van were drenched by sea
water, an element which is highly conspicuous in the high seas. It can
thus be reasonably concluded that negligence occurred while the
container van was in transit, in HEUNG-A’s possession, control and
custody as the carrier.
Although the container van had defects, they were not, however, so
severe as to accommodate heavy saturation of sea water. The holes
were tiny and the rusty portions did not cause gaps or tearing. Hence,
the van was still in a suitable condition to hold the goods and protect
them from natural weather elements or even the normal flutter of waves
in the seas.
The scale of the damage sustained by the cargo inside the
van could have been only caused by large volume of sea water since
not a single package inside was spared. Aside from the defective
condition of the van, some other circumstance or occurrence contributed
to the damages sustained by the shipment. Since the presence of sea
water is highly concentrated in the high seas and considering HEUNG-
A’s failure to demonstrate how it exercised due diligence in handling and
preserving the container van while in transit, it is liable for the damages
sustained thereby.
As the carrier of the subject shipment, HEUNG-A was bound
to exercise extraordinary diligence in conveying the same and its slot
charter agreement with DONGNAMA did not divest it of such
characterization nor relieve it of any accountability for the shipment.
Based on the testimony of Gonzales,33 WALLEM’s employee and
witness, the charter party between HEUNG-A and DONGNAMA was a
contract of affreightment and not a bare boat or demise charter, viz:
Q: Now, the space charter that you are mentioning is not either a
bareboat or a demise?
A: Yes, sir.
Q: Okay. So in other words, that space charter party is only to allow the
shipper, Dongnama, to load its cargo for a certain specified space?
A: Yes, sir.34
A charter party has been defined in Planters Products, Inc. v. Court of
Appeals35 as:
[A] contract by which an entire ship, orsome principal part
thereof, is let by the owner to another person for a specified time or use;
a contract of affreightment by which the owner of a ship or other vessel
lets the whole or a part of her to a merchant or other person for the
conveyance of goods, on a particular voyage, in consideration of the
payment of freight. x x x.36 (Citations omitted)
A charter party has two types. First, it could be a contract of
affreightment whereby the use of shipping space on vessels is leased in
part or as a whole, to carry goods for others. The charter-party provides
for the hire of vessel only, either for a determinate period of time (time
charter) or for a single or consecutive voyage (voyage charter). The
shipowner supplies the ship’s stores, pay for the wages ofthe master
and the crew, and defray the expenses for the maintenance of the
ship.37 The voyage remains under the responsibility of the carrier and it
is answerable for the loss of goods received for transportation. The
charterer is free from liability to third persons in respect of the ship.38
Second, charter by demise or bareboat charter under which
the whole vessel is let to the charterer with a transfer to him of its entire
command and possession and consequent control over its navigation,
including the master and the crew, who are his servants.39 The
charterer mans the vessel with his own people and becomes, in effect,
the owner for the voyage or service stipulated and hence liable for
damages or loss sustained by the goods transported.40
Clearly then, despite its contract of affreightment with
DONGNAMA, HEUNG-A remained responsible as the carrier, hence,
answerable for the damages incurred by the goods received for
transportation. "[C]ommon carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligenceand vigilance with respect to the safety of the goods and the
passengers they transport. Thus, common carriers are required to
render service with the greatest skill and foresight and ‘to use all
reasonable means to ascertain the nature and characteristics of the
goods tendered for shipment, and toexercise due care in the handling
and stowage, including such methods as their nature requires.’"41
"[C]ommon carriers, as a general rule, are presumed to have
been at fault or negligent if the goods they transported deteriorated or
got lost or destroyed. That is, unless they provethat they exercised
extraordinary diligence in transporting the goods. Inorder to avoid
responsibility for any loss or damage, therefore, they have the burden of
proving that they observed such diligence."42 Further, under Article
1742 of the Civil Code, even if the loss, destruction, or deterioration of
the goods should be caused by the faulty nature of the containers, the
common carrier must exercise due diligence to forestall or lessen the
loss.
Here, HEUNG-A failed to rebut this prima faciepresumption
when it failed to give adequate explanation as to how the shipment inside
the container van was handled, stored and preserved to forestall or
prevent any damage or loss while the same was inits possession,
custody and control.
PROTOP is solidarily liable with HEUNG-A for the
lost/damaged shipment in view of the bill of lading the former issued to
NOVARTIS. "A bill of lading is a written acknowledgement of the receipt
of goods and an agreement to transport and to deliver them at a
specified place to a person named or on his or her order. It operates
both as a receipt and as a contract. It is a receipt for the goods shipped
and a contract to transport and deliver the same as therein stipulated."43
PROTOP breached its contract with NOVARTIS when it failed to deliver
the goods in the same quantity, quality and description as stated in Bill
of Lading No. PROTAS 200387.
The CA did not err in applying the provisions of the COGSA
specifically, the rule on Package Liability Limitation.
Under Article 1753 of the Civil Code, the law of the country to which the
goods are to be transported shall govern the liability of the common
carrier for their loss, destruction or deterioration. Since the subject
shipment was being transported from South Korea to the Philippines, the
Civil Code provisions shall apply. In all mattersnot regulated by the Civil
Code, the rights and obligations of common carriers shall be governed
by the Code of Commerce and by special laws,44 such as the COGSA.
While the Civil Code contains provisions making the common carrier
liable for loss/damage to the goods transported, it failed to outline the
manner of determining the amount of suchliability. Article372 of the
Code of Commerce fills in this gap, thus:
Article 372. The value of the goods which the carrier must pay
in cases if loss or misplacement shall be determined in accordance with
that declared in the bill of lading, the shipper not being allowed to present
proof that among the goods declared therein there were articles of
greater value and money.
Horses, vehicles, vessels, equipment and all other principal
and accessory means of transportation shall be especially bound infavor
of the shipper, although with respect to railroads said liability shall be
subordinated to the provisions of the laws of concession with respect to
the property, and to what this Code established as to the manner and
form of effecting seizures and attachments against said companies.
(Emphasis ours)
In case, however, of the shipper’s failure to declare the value
of the goods in the bill of lading, Section 4, paragraph 5 of the COGSA
provides:
Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package
lawful money of the United States, or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of that sum in
other currency, unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the bill of lading.
This declaration, if embodied in the bill of lading shall be prima
facieevidence, but shall be conclusive on the carrier.
Hence, when there is a loss/damage to goods covered by
contracts of carriage from a foreign port to a Philippine port and in the
absence a shipper’s declaration of the value of the goods in the bill of
lading, as in the present case, the foregoing provisions of the COGSA
shall apply. The CA, therefore, did not err in ruling that HEUNG-A,
WALLEM and PROTOP’s liability is limited to $500 per package or
pallet.45
The Court likewise affirms the CA in pronouncing HEUNG-A,
WALLEM and PROTOP liable only for the lost/damaged 17 pallets
instead of 19 pallets stated in the bill of lading. This is because, per the
"Shipper’s Load and Count" arrangement, the contents are not required
to be checked and inventoried by the carrier at the port of loading or
before said carrier enters the port of unloading in the Philippines since it
is the shipper who has the sole responsibility for the quantity, description
and condition of the cargoes shipped in container vans.46 As such, the
carrier cannot be held responsible for any discrepancy if the description
in the bill of lading is different from the actual contents of the container.47
Consonant with the ruling in the recent Asian Terminals, Inc. v. Philam
Insurance Co., Inc.,48 the prescriptive period for filing an action for
lost/damaged goods governed by contracts of carriage by sea to and
from Philippine ports in foreign trade is governed by paragraph 6,Section
3 of the COGSA which states:
(6) Unless notice of loss or damageand the general nature of such loss
or damage be given in writing to the carrier or his agent at the port of
discharge before or at the time of the removal of the goods into the
custody of the person entitled to delivery thereof under the contract of
carriage, such removal shall be prima facieevidence of the delivery by
the carrier of the goods as described in the bill of lading. If the loss or
damage is not apparent, the notice must be given within three days of
the delivery.
Said notice of loss or damage maybe endorsed upon the
receipt for the goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods
has at the time of their receipt been the subject of joint survey or
inspection. In any event the carrier and the ship shall be discharged from
all liability in respect of loss or damage unless suit is brought withinone
year after delivery of the goods or the date when the goods should have
been delivered: Provided, That if a notice of loss or damage, either
apparent or concealed, is not given as provided for in this section, that
fact shall not affect or prejudice the right of the shipper to bring suit within
one year after the delivery of the goods or the date when the goods
should have been delivered.
It was further ruled in Asian Terminals that pursuant to the
foregoing COGSA prov:sion, failure to comply with the notice
requirement shall not affect or prejudice the right of the shipper to bring
suit within one year after delivery of the goods.
The consignee, NOV ARTIS, received the subject shipment
on January 5, 2001. PHILAM, as the subrogee of NOVARTIS, filed a
claim against PROTOP on June 4, 2001, against WALLEM on October
12, 2001 and against HEUNG-A on December 11, 2001, or all within the
one-year prescriptive period. Verily then, despite NOV AR TIS' failure to
comply with the three-day notice requirement, its subrogee PHILAM is
not barred from seeking reimbursement from PROTOP, HEUNG-A and
WALLEM because the demands for payment were timely filed.
The amount which PHILAM is entitled to receive shall earn a
legal interest at the rate of six percent (6%) per annum from the date of
finality of this judgment until its full satisfaction pursuant to Nacar v.
Gallery Frames.49
WHEREFORE, all the foregoing considered, the Decision
dated January 30, 2009 of the Court of Appeals in CA-G.R. CV No.
89482 is hereby AFFlHMED with MODIFICATION in that the interest
rate on the award of US$8,500.00 shall be six percent (6%) per annum
from the date of finality of this judgment until fully paid.
SO ORDERED.