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TRANSPORTATION LAW | ATTY. AMPIL


TRICIA CRUZ
JDCTR – DLSU LAW

Mendoza v. PAL - Mendoza brought this action against the PAL. After trial, the
FACTS: lower court found that because of his failure to exhibit the film
- Mendoza was the owner of the Cita Theater located in the City "Himala ng Birhen" during the town fiesta, Mendoza suffered
of Naga, Camarines Sur, where he used to exhibit movie damages or rather failed to earn profits in the amount of P3K
pictures booked from movie producers or film owners in but finding the PAL not liable for said damages, dismissed the
Manila. complaint.
- To take advantage of the yearly town fiesta at Naga, he - PAL claimed that under paragraph 6 of the Way Bill printed on
decided to exhibit a film which would fit the occasion. On Aug the back thereof, there was no obligation on its part to carry
1948, he contracted with LVN pictures, Inc. (movie producer the film in question on any specified time, it could not be held
in MNL) for him to show during the town fiesta the Tagalog accountable for the delay of about three days.
film entitled “Himala ng Birhen” or Miracle of the Virgin. - RTC found that although the defendant was not obligated to
- He made extensive preparations; he had 2K posters printed load the film on any specified plane or on any particular day,
and later distributed not only in the City of Naga but also in the once said can film was loaded and shipped on one of its
neighboring towns. He also advertised in a weekly of general planes making trip to Camarines, then it assumed the
circulation in the province. The posters and advertisement obligation to unload it at its point of destination and deliver it
stated that the film would be shown in the Cita theater on the to the consignee, and its unexplained failure to comply with
17th and 18th of September, corresponding to the eve and this duty constituted negligence. It however found that fraud
day of the fiesta itself. was not involved and that defendant was debtor in GF.
- LVN Pictures Inc. delivered to the defendant Philippine - RTC held that not because plaintiff failed to realize profits in
Airlines (PAL) a can containing the film "Himala ng Birhen" the sum of P3K due to the negligence of the defendant, should
consigned to the Cita Theater. This can of films was loaded the latter be made to reimburse him said sum. Applying
on flight 113 of PAL. provisions of Art. 1107 of the Civil Code which provides
- For reasons not explained by PAL, but which would appear to that losses and those foreseen, or which might have been
be the fault of its employees or agents, this can of film was not foreseen, at the time of constituting the obligation, and
unloaded at Pili Air Port and it was brought back to Manila. which are a necessary consequence of the failure to
- Mendoza who had completed all arrangements for the perform it, the trial court held that inasmuch as these
exhibition of the film, went to the Air Port and inquired from damages suffered by Mendoza were not foreseen or
the defendant's station master there about the can of film. could not have been foreseen at the time that the
Said station master could not explain why the film was not defendant accepted the can of film for shipment, for the
unloaded and sent several radiograms to his principal in reason that neither the shipper LVN Pictures Inc. nor the
Manila making inquiries and asking that the film be sent to consignee Mendoza had called its attention to the special
Naga immediately. circumstances attending the shipment and the showing
- After investigation and search in the Manila office, the film was of the film during the town fiesta of Naga, plaintiff may
finally located the following day (Sept 18) and then shipped to not recover the damages sought.
the Pili Air Port on Sept 20. - Counsel for appellant insists that the articles of the Code of
- Mendoza received it and exhibited the film but he had missed Commerce rather than those of the Civil Code should have
his opportunity to realize a large profit as he expected for the been applied in deciding this case for the reason that the
people after the fiesta had already left for their towns. shipment of the can of film is an act of commerce. It argued
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

that although the contract of transportation was not by land or exhibit that film during the town fiesta and his preparations, specially
waterways as defined in said Art. 349, nevertheless, air the announcement of said exhibition by posters and advertisement in
transportation being analogous to land and water the newspaper, were not called to the defendant's attention.
transportation, should be considered as included,
especially in view of the second paragraph of Art. 2 of the Common carriers are not obligated by law to carry and to deliver
same Code which says that transactions covered by the merchandise, and persons are not vested with the right of prompt
Code of Commerce and all others of analogous character delivery, unless such common carriers previously assume the
shall be deemed acts of commerce. The trial court, obligation. Said rights and obligations are created by a specific
however, disagreed to this contention and opined that air contract entered into by the parties.
transportation not being expressly covered by the Code of
Commerce, cannot be governed by its provisions.
Maritime Co. v. CA
ISSUE: FACTS:
- W/N PAL is a common carrier? - Rizal Surety was the insurer of 800 packages of PVC
- W/N PAL is liable for the late delivery of goods to consignee compound loaded on the SS Doña Nati (owned by National
Mendoza? Development Company whereas the petitioner Martime Co
was its agent) at Yokohama and consigned to the Acme
RULING: Electrical Manufacturing Company.
1) YES. The obvious reason for its non-inclusion in the Code of - NDC had appointed petitioner Maritime as its agent to
Commerce was that at the time of its promulgation, transportation by manage and operate 3 vessels owned by it, including the
air on a commercial basis was not yet known. In the United Sates SS Doña Nati for and in its behalf and account, and for a
where air transportation has reached its highest development, an determinate period or payment of all guarantees made by
airline company engaged in the transportation business is regarded Maritime Co for account of the vessels (ship agent under
as a common carrier. There can be no doubt, under the general law COC)
of common carriers, that those air lines and aircraft owners engaged - The subject goods were never delivered to the consignee so
in the passenger service on regular schedules on definite routes, who that Rizal as insurer paid consignee the sum of P38K.
solicit the patronage of the traveling public, advertise schedules for - The cause of the non-delivery of the goods, from the evidence
routes, time of leaving, and rates of fare, and make the usual presented by NDC and Martime Co. is that the SS Doña
stipulation as to baggage, are common carriers by air. Nati was rammed by M/V Yasushima Maru, causing damage
to the hull of the SS Doña Nati and the resultant flooding of
the holds damaged beyond repair the goods of the consignee
2) NO. Under Art. 1107 of the Civil Code, a debtor in good faith like in question.
the defendant herein, may be held liable only for damages that were - Rizal Surety & Insurance Co. sued both defendants for the
foreseen or might have been foreseen at the time the contract of the recovery of the sum of money paid by it as insurer for the value
transportation was entered into. The trial court correctly found that the of the goods lost in transit on board SS Doña Nati.
defendant company could not have foreseen the damages that would - RTC dismissed the complaint and held that under the Code of
be suffered by Mendoza upon failure to deliver the can of film on the Commerce, it would be the vessel at fault in this collision that
17th of September, 1948 for the reason that the plans of Mendoza to would be responsible for the damage to the cargo. And the
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

evidence of both Defendants, which has not been rebutted, is be held responsible for the loss of the goods in question. Besides,
that the M/V Yasushima Maru was at fault in the collision, so as remarked by the Court of Appeals, "the principal cause of action is
that the cause of action of plaintiff should be directed to the not derived from a maritime collision, but rather, from a contract of
owners of the negligent vessel. However, as Plaintiff has carriage, as evidenced by the bill of lading."
brought this action in good faith, attorney's fees are not
recoverable.
- Rizal Surety elevated the case to the CA. CA set aside RTC’s De Guzman v. CA and Cendana
judgment and ordered NDC and Maritime Co. to pay jointly FACTS:
and severally to Rizal Surety the sum of P38,758.50 with legal - Respondent Ernesto Cendana, a junk dealer, was engaged in
rate of interest from the filing of the complaint. buying up used bottles and scrap metal in Pangasinan which
he would bring to Manila for resale. He utilized two (2) six-
ISSUE: W/N NDC and Maritime Co are liable to petitioner? wheeler trucks which he owned for hauling the material to
Manila.
RULING: - On the return trip to Pangasinan, respondent would load his
YES. Under the established facts, and in accordance with Article 1734 vehicles with cargo which various merchants wanted
above mentioned, petitioner Maritime Co. and NDC, as "common delivered to differing establishments in Pangasinan. For that
carriers," are liable to Acme for "the loss, destruction or deterioration service, respondent charged freight rates which were
of the goods," and may be relieved of responsibility if the loss, etc., is commonly lower than regular commercial rates.
due to any of the following causes only: - Sometime in November 1970, petitioner Pedro de Guzman a
1. Flood, storm, earthquakes, lightning or other merchant and authorized dealer of General Milk Company
natural disaster or calamity; (Philippines), Inc. in Urdaneta, Pangasinan, contracted with
2. Act of the public enemy in war, whether respondent for the hauling of 750 cartons of Liberty filled
international or civil; milk from a warehouse of General Milk in Makati, Rizal, to
3. Act or omission of the shipper or owner of the petitioner's establishment in Urdaneta on or before 4
goods; December 1970.
4. The character of the goods or defects in the - Accordingly, respondent loaded in Makati the merchandise on
packing or in the containers; to his trucks: 150 cartons were loaded on a truck driven by
5. Order or act of competent public authority.' respondent himself, while 600 cartons were placed on board
the other truck which was driven by Manuel Estrada,
Since none of the specified absolutory causes is present, the carrier's respondent's driver and employee.
liability is clear. The petitioner's other claim that the loss of the goods - Only 150 boxes of Liberty filled milk were delivered to
was due entirely to the fault of the Japanese vessel, Yasushima Maru, petitioner. The other 600 boxes never reached petitioner,
which rammed into the Doña Nati cannot be sustained. CA found, as since the truck which carried these boxes was hijacked
a fact, after a review and study of the evidence, that the Doña Nati somewhere along the MacArthur Highway in Paniqui,
"did not exercise even due diligence to avoid the collision.' Tarlac, by armed men who took with them the truck, its
Having failed to exercise extraordinary diligence to avoid any driver, his helper and the cargo.
loss of life and property, as commanded by law, not having in - De Guzman commenced action against Cendena in the CFI
fact exercised "even due diligence to avoid the collision,' it must of Pangasinan, demanding payment of P 22,150 representing
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

the claimed value of the lost merchandise, plus damages and applicable regulatory statute and implementing regulations and
attorney's fees. Petitioner argued that private respondent, has been granted a certificate of public convenience or other
being a common carrier, and having failed to exercise the franchise. To exempt private respondent from the liabilities of a
extraordinary diligence required of him by the law, should be common carrier because he has not secured the necessary
held liable for the value of the undelivered goods. certificate of public convenience, would be offensive to sound
- Cendena denied that he was a common carrier and argued public policy; that would be to reward private respondent
that he could not be held responsible for the value of the lost precisely for failing to comply with applicable statutory
goods, such loss having been due to force majeure. requirements.
- RTC found private respondent to be a common carrier and
held him liable for the value of the undelivered goods as well 2. NO. The specific cause alleged in the instant case — the hijacking
as P4K as damages and P 2K as attorney's fees. of the carrier's truck — does not fall within any of the five (5) categories
- CA reversed the judgment of the trial court and held that of exempting causes listed in Article 1734. It would follow, therefore,
respondent had been engaged in transporting return loads of that the hijacking of the carrier's vehicle must be dealt with under the
freight "as a casual occupation — a sideline to his scrap iron provisions of Article 1735, in other words, that the private respondent
business" and not as a common carrier. as common carrier is presumed to have been at fault or to have acted
negligently. This presumption, however, may be overthrown by proof
ISSUE/S: of extraordinary diligence on the part of private respondent.
- W/N Cendena may, under the facts presented, be properly
characterized as a common carrier? The duty of extraordinary diligence in the vigilance over goods is,
- W/N Cendena, assuming it is a common carrier, may be held under Article 1733, given additional specification not only by Articles
liable for the loss of goods? 1734 and 1735 but also by Article 1745, numbers 4, 5 and 6.

RULING:
1. YES. It appears to the Court that private respondent is properly
characterized as a common carrier even though he merely "back-
hauled" goods for other merchants from Manila to Pangasinan,
although such back-hauling was done on a periodic or
occasional rather than regular or scheduled manner, and even Under Article 1745 (6) above, a common carrier is held responsible —
though private respondent's principal occupation was not the and will not be allowed to divest or to diminish such responsibility—
carriage of goods for others. There is no dispute that private even for acts of strangers like thieves or robbers, except where such
respondent charged his customers a fee for hauling their goods; that thieves or robbers in fact acted "with grave or irresistible threat,
fee frequently fell below commercial freight rates is not relevant here. violence or force."

A certificate of public convenience is not a requisite for the The limits of the duty of extraordinary diligence in the vigilance over
incurring of liability under the Civil Code provisions governing the goods carried are reached where the goods are lost as a result of
common carriers. That liability arises the moment a person or a robbery which is attended by "grave or irresistible threat, violence or
firm acts as a common carrier, without regard to whether or not force."
such carrier has also complied with the requirements of the
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

In the instant case, armed men held up the second truck owned by P156,404 from the Manila Port Area to Calamba, Laguna at
private respondent which carried petitioner's cargo. The record shows the rate of P50/metric ton.
that the accused were charged with willfully and unlawfully taking - Petitioner Bascos failed to deliver the said cargo. As a
and carrying away with them the second truck, driven by Manuel consequence of that failure, Cipriano paid Jibfair Shipping
Estrada and loaded with the 600 cartons of Liberty filled milk Agency the amount of the lost goods in accordance with the
destined for delivery at petitioner's store in Urdaneta, contract which stated that: “CIPTRADE shall be held liable
Pangasinan. The decision of the trial court shows that the accused and answerable for any loss in bags due to theft, hijacking and
acted with grave, if not irresistible, threat, violence or force. Three (3) non-delivery or damages to the cargo during transport at
of the five (5) hold-uppers were armed with firearms. The robbers not market value”
only took away the truck and its cargo but also kidnapped the driver - Cipriano demanded reimbursement from Bascos but the latter
and his helper, detaining them for several days and later releasing refused to pay. Eventually, Cipriano filed a complaint for a
them in another province (in Zambales). The hijacked truck was sum of money and damages with writ of preliminary
subsequently found by the police in Quezon City. CFI convicted all the attachment for breach of a contract of carriage.
accused of robbery, though not of robbery in band. - RTC rendered a decision in favor of CIPTRADE. CA affirmed.

Thus, the occurrence of the loss must reasonably be regarded as quite ISSUE/S:
beyond the control of the common carrier and properly regarded as a - Was petitioner a common carrier? YES
fortuitous event. It is necessary to recall that even common - Was the hijacking referred to a force majeure? NO
carriers are not made absolute insurers against all risks of travel
and of transport of goods, and are not held liable for acts or RULING:
events which cannot be foreseen or are inevitable, provided that 1) Article 1732 of the Civil Code defines a common carrier as "(a)
they shall have complied with the rigorous standard of person, corporation or firm, or association engaged in the business of
extraordinary diligence. carrying or transporting passengers or goods or both, by land, water
or air, for compensation, offering their services to the public." The test
to determine a common carrier is "whether the given undertaking
is a part of the business engaged in by the carrier which he has
Bascos v. CA held out to the general public as his occupation rather than the
FACTS: quantity or extent of the business transacted." In this case,
- Rodolfo Cipriano representing CIPTRADE entered into a petitioner herself has made the admission that she was in the trucking
hauling contract with Jibfair Shipping Agency Corporation business, offering her trucks to those with cargo to move. Judicial
whereby CIPTRADE bound itself to haul the latter's 2,000 admissions are conclusive and no evidence is required to prove the
m/tons of soya bean meal from Magallanes Drive, Del Pan, same.
Manila to the warehouse of Purefoods Corporation in
Calamba, Laguna. 2) Common carriers are obliged to observe extraordinary diligence in
- To carry out its obligation, CIPTRADE, through Rodolfo the vigilance over the goods transported by them. Accordingly, they
Cipriano, subcontracted with Estrellita Bascos (petitioner) to are presumed to have been at fault or to have acted negligently if the
transport and to deliver 400 sacks of soya bean meal worth goods are lost, destroyed or deteriorated. There are very few
instances when the presumption of negligence does not attach and
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

these instances are enumerated in Article 1734. In those cases where - Petitioner applied for a mayor's permit with the Office of the
the presumption is applied, the common carrier must prove that it Mayor of Batangas City. However, before the mayor's permit
exercised extraordinary diligence in order to overcome the could be issued, the respondent City Treasurer required
presumption. petitioner to pay a local tax based on its gross receipts for
the fiscal year 1993 pursuant to the Local Government
To exculpate the carrier from liability arising from hijacking, he must Code .The respondent City Treasurer assessed a business
prove that the robbers or the hijackers acted with grave or irresistible tax on the petitioner based on the gross receipts for products
threat, violence, or force by virtue of Art. 1745 (6). pumped at GPS-1 for the fiscal year 1993. In order not to
hamper its operations, petitioner paid the tax under protest
Both the trial court and the Court of Appeals have concluded that the for the first quarter of 1993.
affidavits presented by petitioner were not enough to overcome the - Petitioner filed a letter-protest addressed to the respondent
presumption. Petitioner's affidavit about the hijacking was based on City Treasurer which asserts the fact that FPIC is a pipeline
what had been told her by Juanito Morden. It was not a first-hand operator granted with a government concession under the
account. The affidavit of Jesus Bascos did not dwell on how the Petroleum Act and as such, is exempt from paying tax on
hijacking took place. Moreover, while the affidavit of Juanito Morden, gross receipts under Sec. 133(h) of the LGC. It also asserted
the truck helper in the hijacked truck, was presented as evidence in that transportation contractors are not included in the
court, he himself was a witness as could be gleaned from the contents enumeration of contractors under Sec. 131(e) of the LGC,
of the petition. Affidavits are not considered the best evidence if the thus, the authority to impose tax "on contractors and other
affiants are available as witnesses. The subsequent filing of the independent contractors" under this provision does not
information for carnapping and robbery against the accused named in include
said affidavits did not necessarily mean that the contents of the - Respondent City Treasurer denied the protest contending that
affidavits were true because they were yet to be determined in the trial petitioner cannot be considered engaged in transportation
of the criminal cases. business, thus it cannot claim exemption under Section 133
(j) of the Local Government Code.
- Petitioner filed with the RTC of Batangas City a complaint for
The presumption of negligence was raised against petitioner. It was tax refund with prayer for writ of preliminary injunction against
petitioner's burden to overcome it. Thus, contrary to her assertion, respondents City of Batangas and Adoracion Arellano in her
private respondent need not introduce any evidence to prove her capacity as City Treasurer.
negligence. Her own failure to adduce sufficient proof of extraordinary - Respondents argued that petitioner cannot be exempt from
diligence made the presumption conclusive against her. taxes under Section 133 (j) of the Local Government Code as
said exemption applies only to "transportation contractors and
persons engaged in the transportation by hire and common
First Philippine Industrial Corp v. CA carriers by air, land and water." They assert that pipelines are
FACTS: not included in the term "common carrier" which refers solely
- Petitioner is a grantee of a pipeline concession under RA No. to ordinary carriers such as trucks, trains, ships and the like
387, as amended, to contract, install and operate oil pipelines. and that the term "common carrier" under the said code
The original pipeline concession was granted in 1967 and pertains to the mode or manner by which a product is
renewed by the Energy Regulatory Board in 1992. delivered to its destination.
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

- RTC dismissed the complaint and ruled that FIPC is not a petitioner has a limited clientele does not exclude it from the definition
common carrier but a special carrier extending its services of a common carrier.
and facilities to a single specific customer under a special
contract. As correctly pointed out by petitioner, the definition of "common
- CA affirmed RTC’s Decision. carriers" in the Civil Code makes no distinction as to the means of
transporting, as long as it is by land, water or air. It does not provide
ISSUE: W/N petitioner – an oil pipeline owner – is a common carrier? that the transportation of the passengers or goods should be by motor
vehicle. In fact, in the United States, oil pipe line operators are
RULING: considered common carriers.
YES. A "common carrier" may be defined, broadly, as one who holds
himself out to the public as engaged in the business of transporting Under the Petroleum Act of the Philippines (RA 387), petitioner is
persons or property from place to place, for compensation, offering his considered a "common carrier." Thus, Article 86 thereof provides that:
services to the public generally. Art. 86. Pipe line concessionaire as common carrier. — A pipe
line shall have the preferential right to utilize installations for
Art. 1732 of the Civil Code defines a "common carrier" as "any person, the transportation of petroleum owned by him, but is obligated
corporation, firm or association engaged in the business of carrying or to utilize the remaining transportation capacity pro rata for the
transporting passengers or goods or both, by land, water, or air, for transportation of such other petroleum as may be offered by
compensation, offering their services to the public." others for transport, and to charge without discrimination such
rates as may have been approved by the Secretary of
The test for determining whether a party is a common carrier of goods Agriculture and Natural Resources.
is:
1. He must be engaged in the business of carrying goods for Republic Act 387 also regards petroleum operation as a public utility.
others as a public employment, and must hold himself out as Pertinent portion of Article 7 thereof provides:
ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation; that everything relating to the exploration for and
2. He must undertake to carry goods of the kind to which his exploitation of petroleum . . . and everything relating to the
business is confined; manufacture, refining, storage, or transportation by special
3. He must undertake to carry by the method by which his methods of petroleum, is hereby declared to be a public
business is conducted and over his established roads; and utility.
4. The transportation must be for hire.
The Bureau of Internal Revenue likewise considers the petitioner a
Based on the above definitions and requirements, there is no doubt "common carrier." In BIR Ruling No. 069-83, it declared:
that petitioner is a common carrier. It is engaged in the business of
transporting or carrying goods, i.e. petroleum products, for hire as a . . . since [petitioner] is a pipeline concessionaire that is
public employment. It undertakes to carry for all persons indifferently, engaged only in transporting petroleum products, it is
that is, to all persons who choose to employ its services, and considered a common carrier under Republic Act No. 387
transports the goods by land and for compensation. The fact that . . . . Such being the case, it is not subject to withholding
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

tax prescribed by Revenue Regulations No. 13-78, as - On July 25, 1990, the goods were inspected by Marine
amended. Cargo Surveyors, who found that 15 reels of the semi-
chemical fluting paper were "wet/stained/torn" and 3
From the foregoing disquisition, there is no doubt that petitioner is a reels of kraft liner board were likewise torn. The damage
"common carrier" and, therefore, exempt from the business tax as was placed at P93,112.
provided for in Section 133 (j), of the Local Government Code, to wit: - SMC collected payment from respondent UCPB under its
insurance contract for the aforementioned amount.
Sec. 133.Common Limitations on the Taxing Powers of Local - As subrogee of SMC, UCPB brought suit against petitioner in
Government Units. — Unless otherwise provided herein, the the RTC which rendered judgment finding petitioner Calvo
exercise of the taxing powers of provinces, cities, liable to respondent for the damage to the shipment. It held
municipalities, and barangays shall not extend to the levy of that defendant by reason of the nature of [her] business
the following: should have devised ways and means in order to prevent the
xxx damage to the cargoes which it is under obligation to take
(j) Taxes on the gross receipts of transportation contractors custody of and to forthwith deliver to the consignee. It held
and persons engaged in the transportation of passengers or that Calvo did not present any evidence on what precaution
freight by hire and common carriers by air, land or water, she performed to prevent the said incident, hence the
except as provided in this Code. presumption is that the moment the defendant accepts the
cargo she shall perform such extraordinary diligence because
of the nature of the cargo.
Calvo v. UCPB Gen Insurance - CA affirmed RTC’s decision.
FACTS: - Petitioner contends that contrary to the findings of the trial
- Virgines Calvo is the owner of Transorient Container Terminal court and the CA, she is not a common carrier but a private
Services, Inc (TCTSI), a sole proprietorship customs broker. carrier because, as a customs broker and warehouseman,
Calvo entered into a contract with San Miguel Corporation she does not indiscriminately hold her services out to the
(SMC) for the transfer of 114 reels of semi-chemical fluting public, but only offers the same to select parties with whom
paper and 124 reels of kraft liner board from the Port Area in she may contract in the conduct of her business.
Manila to SMC's warehouse at the Tabacalera Compound,
Romualdez St., Ermita, Manila. The cargo was insured by ISSUE: W/N petitioner is a common carrier and is thus liable to
respondent UCPB General Insurance Co., Inc. respondent? YES
- On July 14, 1990, the shipment in question, contained in 30
metal vans, arrived in Manila on board "M/V Hayakawa Maru" RULING:
and, after 24 hours, were unloaded from the vessel to the There is greater reason for holding petitioner to be a common carrier
custody of the arrastre operator, Manila Port Services, Inc. because the transportation of goods is an integral part of her business.
- From July 23 to July 25, 1990, petitioner, pursuant to her To uphold petitioner's contention would be to deprive those with whom
contract with SMC, withdrew the cargo from the arrastre she contracts the protection which the law affords them
operator and delivered it to SMC's warehouse in Ermita, notwithstanding the fact that the obligation to carry goods for her
Manila. customers, as already noted, is part and parcel of petitioner's
business.
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TRANSPORTATION LAW | ATTY. AMPIL
TRICIA CRUZ
JDCTR – DLSU LAW

exercise of extraordinary diligence, petitioner must do more than


Now, as to petitioner's liability, Art. 1733 of the Civil Code provides: merely show the possibility that some other party could be responsible
Common carriers, from the nature of their business and for for the damage. It must prove that it used "all reasonable means to
reasons of public policy, are bound to observe extraordinary ascertain the nature and characteristic of goods tendered for transport
diligence in the vigilance over the goods and for the safety of and that it exercised due care in the handling thereof. Petitioner failed
the passengers transported by them, according to all the to do this.
circumstances of each case. . . .
Nor is there basis to exempt provision to apply petitioner from liability
In the case at bar, petitioner denies liability for the damage to the under Art. 1734(4) because the rule is that if the improper packing or,
cargo. She claims that the "spoilage or wettage" took place while the in this case, the defect/s in the container, is/are known to the carrier
goods were in the custody of either the carrying vessel "M/V or his employees or apparent upon ordinary observation, but he
Hayakawa Maru," which transported the cargo to Manila, or the nevertheless accepts the same without protest or exception
arrastre operator, to whom the goods were unloaded and who notwithstanding such condition, he is not relieved of liability for
allegedly kept them in open air for nine days from July notwithstanding damage resulting therefrom.14 In this case, petitioner accepted the
the fact that some of the containers were deformed, cracked or cargo without exception despite the apparent defects in some of the
otherwise damaged. container vans. Hence, for failure of petitioner to prove that she
exercised extraordinary diligence in the carriage of goods in this case
Contrary to petitioner's assertion, the Survey Report of the Marine or that she is exempt from liability, the presumption of negligence as
Cargo Surveyors indicates that when the shipper transferred the cargo provided under Art. 1735.
in question to the arrastre operator, these were covered by clean
Equipment Interchange Report (EIR) and, when petitioner's
employees withdrew the cargo from the arrastre operator, they did so
without exception or protest either with regard to the condition of
container vans or their contents.
To put it simply, Calvo received the shipment in good order and
condition and delivered the same to the consignee damaged. CA can Home Insurance Co. v. American Steamship Agencies
only conclude that the damages to the cargo occurred while it was in FACTS:
the possession of the defendant-appellant. Whenever the thing is - "Consorcio Pesquero del Peru of South America" shipped
lost (or damaged) in the possession of the debtor (or obligor), it freight pre-paid at Chimbate, Peru, 21,740 jute bags of
shall be presumed that the loss (or damage) was due to his fault, Peruvian fish meal through SS Crowborough on January 17,
unless there is proof to the contrary. No proof was proffered to 1963. The cargo, consigned to SMC and insured by Home
rebut this legal presumption and the presumption of negligence Insurance Company for $202,505, arrived in Manila on March
attached to a common carrier in case of loss or damage to the 7, 1963 and was discharged into the lighters of Luzon
goods. Stevedoring Company.
- When the cargo was delivered to consignee San Miguel
Anent petitioner's insistence that the cargo could not have been Brewery Inc/SMC there were shortages amounting to
damaged while in her custody as she immediately delivered the P12,033.85, causing SMC to lay claims against Luzon
containers to SMC's compound, suffice it to say that to prove the Stevedoring Corporation, Home Insurance Company and
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the American Steamship Agencies, owner and operator are in bad order at the place of destination, the carrier is prima
of SS Crowborough. facie liable.
- Because the others denied liability, Home Insurance
Company paid the consignee P14,870.71 — the insurance ISSUE: Is the stipulation in the charter party of the owner's non-liability
value of the loss, as full settlement of the claim. valid so as to absolve the American Steamship Agencies from liability
- Having been refused reimbursement by both the Luzon for loss? NO
Stevedoring Corporation and American Steamship Agencies,
Home Insurance Company, as subrogee to the consignee, RULING:
filed against them before the CFI a complaint for recovery of A perusal of the charter party referred to shows that while the
P14,870.71 with legal interest, plus attorney's fees. possession and control of the ship were not entirely transferred to the
- In answer, Luzon Stevedoring Corporation alleged that it charterer, the vessel was chartered to its full and complete capacity.
delivered with due diligence the goods in the same quantity Furthermore, the, charter had the option to go north or south or vice-
and quality that it had received the same from the carrier. versa, loading, stowing and discharging at its risk and expense.
- American Steamship Agencies OTOH, denied liability by Accordingly, the charter party contract is one of affreightment over the
alleging that under the provisions of the Charter party referred whole vessel rather than a demise. As such, the liability of the
to in the bills of lading, the charterer, not the shipowner, was shipowner for acts or negligence of its captain and crew, would remain
responsible for any loss or damage of the cargo. Furthermore, in the absence of stipulation.
it claimed to have exercised due diligence in stowing the
goods and that as a mere forwarding agent, it was not Section 2, paragraph 2 of the charter party, provides that the owner is
responsible for losses or damages to the cargo. liable for loss or damage to the goods caused by personal want of due
- CFI absolved Luzon Stevedoring Corporation, having found diligence on its part or its manager to make the vessel in all respects
the latter to have merely delivered what it received from the seaworthy and to secure that she be properly manned, equipped and
carrier in the same condition and quality, and ordered supplied or by the personal act or default of the owner or its manager.
American Steamship Agencies to pay plaintiff. It held that the Said paragraph, however, exempts the owner of the vessel from any
non-liability claim of American Steamship Agencies under the loss or damage or delay arising from any other source, even from the
charter party contract is not tenable because Article 587 of the neglect or fault of the captain or crew or some other person employed
Code of Commerce makes the ship agent also civilly liable for by the owner on board, for whose acts the owner would ordinarily be
damages in favor of third persons due to the conduct of the liable except for said paragraph.
captain of the carrier; the stipulation in the charter party
contract exempting the owner from liability is against public The provisions of our Civil Code on common carriers were taken from
policy under Article 1744 of the Civil Code; In case of loss, Anglo-American law. Under American jurisprudence, a common
destruction or deterioration of goods, common carriers are carrier undertaking to carry a special cargo or chartered to a special
presumed at fault or negligent under Article 1735 of the Civil person only, becomes a private carrier. As a private carrier, a
Code unless they prove extraordinary diligence, and they stipulation exempting the owner from liability for the negligence of its
cannot by contract exempt themselves from liability resulting agent is not against public policy, and is deemed valid.
from their negligence or that of their servants; and when
goods are delivered to the carrier in good order and the same The Civil Code provisions on common carriers should not be applied
where the carrier is not acting as such but as a private carrier. The
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stipulation in the charter party absolving the owner from liability for - A check for P5625 to cover payment of the premium and
loss due to the negligence of its agent would be void only if the strict documentary stamps due on the policy was tendered due to
public policy governing common carriers is applied. Such policy has the insurer but was not accepted. Instead, the South Sea
no force where the public at large is not involved, as in the case of a Surety and Insurance Co., Inc. cancelled the insurance policy
ship totally chartered for the use of a single party. it issued as of the date of the inception for non-payment of the
premium due in accordance with Section 77 of the Insurance
And furthermore, in a charter of the entire vessel, the bill of lading Code.
issued by the master to the charterer, as shipper, is in fact and legal - Plaintiff demanded from defendant South Sea Surety and
contemplation merely a receipt and a document of title not a contract, Insurance Co., Inc. the payment of the proceeds of the policy
for the contract is the charter party. The consignee may not claim but the latter denied liability under the policy. Plaintiff likewise
ignorance of said charter party because the bills of lading expressly filed a formal claim with defendant Seven Brothers Shipping
referred to the same. Accordingly, the consignees under the bills of Corporation for the value of the lost logs but the latter denied
lading must likewise abide by the terms of the charter party. And as the claim.
stated, recovery cannot be had thereunder, for loss or damage to the - RTC rendered judgment in favor of plaintiff and against
cargo, against the shipowners, unless the same is due to personal defendants. The trial court deemed the charter party
acts or negligence of said owner or its manager, as distinguished from stipulation exempting owners from liability for loss or any type
its other agents or employees. In this case, no such personal act or of breakage void for being contrary to public policy, citing
negligence has been proved. Article 1745 of the Civil Code.
- Both defendants shipping corporation and the surety
company appealed.
- CA affirmed in part the RTC judgment by sustaining the
liability of South Sea Surety and Insurance Company but
modified it by holding that Seven Brothers Shipping
Valenzuela Hardwood and Industrial Supply v. CA Corporation ("Seven Brothers") was not liable for the lost
FACTS: cargo. It upheld the stipulation in the charter party that the ship
- Valenzuela Hardwood and Industrial Supply, Inc. (VHIS) owner would be exempted from liability in case of loss. It also
entered into an agreement with the defendant Seven Brothers held that the RTC erred in applying the provisions of the Civil
(Shipping Corporation) whereby the latter undertook to load Code on common carriers to establish the liability of the
on board its vessel M/V Seven Ambassador the VHIS’ lauan shipping corporation. The provisions on common carriers
round logs numbering 940 at the port of Maconacon, Isabela should not be applied where the carrier is not acting as such
for shipment to Manila. but as a private carrier. The shipping corporation should not
- VIHS insured the logs against loss and/or damage with therefore be held liable for the loss of the logs.
defendant South Sea Surety and Insurance Co., Inc. for P2M - It should be noted at the outset that there is no dispute
and the latter issued its Marine Cargo Insurance Policy No. between the parties that the proximate cause of the sinking
- In the meantime, the said vessel M/V Seven Ambassador of M/V Seven Ambassadors resulting in the loss of its cargo
sank on Jan 25 resulting in the loss of the plaintiff's insured was the "snapping of the iron chains and the subsequent
logs. rolling of the logs to the portside due to the negligence of
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the captain in stowing and securing the logs on board the wants to, it cannot submit its own stipulations for the approval of the
vessel and not due to fortuitous event." common carrier. Thus, the law on common carriers extends its
protective mantle against one-sided stipulations inserted in tickets,
ISSUE: invoices or other documents over which the riding public has no
- Whether the stipulation in the subject charter party exempting understanding or, worse, no choice. Compared to the general
owners for loss, split, short-landing, breakages and any kind public, a charterer in a contract of private carriage is not similarly
of damages to the cargo valid? situated. It can — and in fact it usually does — enter into a free
- Whether defendants shipping corporation and the surety and voluntary agreement. In practice, the parties in a contract of
company are liable to the plaintiff for the latter's lost logs? private carriage can stipulate the carrier's obligations and
liabilities over the shipment which, in turn, determine the price or
RULING: consideration of the charter.
1. YES. It is undisputed that private respondent had acted as a private
carrier in transporting petitioner's lauan logs. Thus, Article 1745 and 2. YES. In view of the above disquisition upholding the validity of the
other Civil Code provisions on common carriers which were cited by questioned charter party stipulation and holding that petitioner may not
petitioner may not be applied unless expressly stipulated by the recover from private respondent, the present issue is moot and
parties in their charter party. academic. It suffices to state that the Resolution of this Court dated
June 2, 1995 affirming the liability of South Sea does not, by itself,
In a contract of private carriage, the parties may validly stipulate that necessarily preclude the petitioner from proceeding against private
responsibility for the cargo rests solely on the charterer, exempting the respondent. An aggrieved party may still recover the deficiency for the
shipowner from liability for loss of or damage to the cargo caused even person causing the loss in the event the amount paid by the insurance
by the negligence of the ship captain. Pursuant to Article 1306 of the company does not fully cover the loss by virtue of Article 2207 of the
Civil Code, such stipulation is valid because it is freely entered into by Civil Code.
the parties and the same is not contrary to law, morals, good customs,
public order, or public policy. Indeed, their contract of private carriage
is not even a contract of adhesion. In a contract of private carriage, National Steel Corp. v. CA and Vlasons Shipping Inc.
the parties may freely stipulate their duties and obligations which FACTS:
perforce would be binding on them. Unlike in a contract involving a - The MV Vlasons I is a vessel which renders tramping service
common carrier, private carriage does not involve the general public. and, as such, does not transport cargo or shipment for the
Hence, the stringent provisions of the Civil Code on common carriers general public. Its services are available only to specific
protecting the general public cannot justifiably be applied to a ship persons who enter into a special contract of charter party with
transporting commercial goods as a private carrier. Consequently, the its owner. It is undisputed that the ship is a private carrier. And
public policy embodied therein is not contravened by stipulations in a it is in the capacity that its owner, Vlasons Shipping, Inc.,
charter party that lessen or remove the protection given by law in entered into a contract of affreightment or contract of voyage
contracts involving common carriers. charter hire with National Steel Corporation.
- Plaintiff National Steel Corporation (NSC) as Charterer and
The general public enters into a contract of transportation with defendant Vlasons Shipping, Inc. (VSI) as Owner, entered
common carriers without a hand or a voice in the preparation thereof. into a Contract of Voyage Charter Hire whereby NSC hired
The riding public merely adheres to the contract; even if the public VSI's vessel, the MV "VLASONS I" to make one (1) voyage to
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load steel products at Iligan City and discharge them at North rusting of the packages of hot rolled sheets and metal covers
Harbor, Manila. of the tinplates; that tarpaulin hatch covers were noted torn at
- The parties stipulated in their contract that the terms and various extents; that container/metal casings of the skids were
conditions of the NONYOZAI Charter Party shall form part of rusting all over. MASCO ventured the opinion that "rusting of
their terms. The terms "F.I.O.S.T." (Freight In and Out the tinplates was caused by contact with SEA WATER
including Stevedoring and Trading) which is used in the sustained while still on board the vessel as a
shipping business is a standard provision in said Charter consequence of the heavy weather and rough seas
Party means that the handling, loading and unloading of encountered while en route to destination”. It was also
the cargoes are the responsibility of the Charterer. Under reported that MASCO's surveyors drew at random samples of
Paragraph 5 of the NANYOZAI Charter Party, it states, bad order packing materials of the tinplates and delivered the
"Charterers to load, stow and discharge the cargo free of risk same to the M.I.T. Testing Laboratories for analysis which
and expenses to owners. affirmed MASCO’s finding.
- It also stipulated that the owners shall not be liable for loss of - On the basis of the aforesaid report, NSC filed with the
or damage of the cargo arising or resulting from: defendant its claim for damages suffered due to the
unseaworthiness unless caused by want of due diligence on downgrading of the damaged tinplates in the amount of
the part of the owners to make the vessel seaworthy, and to P941K.
secure that the vessel is properly manned, equipped and - Plaintiff formally demanded payment of said claim but
supplied and to make the holds and all other parts of the defendant VSI refused and failed to pay. In its complaint, it
vessel in which cargo is carried, fit and safe for its reception, claimed that it sustained losses as a result of the act, neglect
carriage and preservation xxx and default of the master and crew in the management of the
- In accordance with the Contract of Voyage Charter Hire, the vessel as well as the want of due diligence on the part of the
MV "VLASONS I" loaded at plaintiffs pier at Iligan City, the defendant to make the vessel seaworthy and to make the
NSC's shipment of 1,677 skids of tinplates and 92 packages holds and all other parts of the vessel in which the cargo was
of hot rolled sheets for carriage to Manila. The shipment was carried, fit and safe for its reception, carriage and preservation
placed in the 3 hatches of the ship. — all in violation of defendant's undertaking under their
- The vessel arrived with the cargo at North Harbor, Manila. The Contract of Voyage Charter Hire.
following day, when the vessel's 3 hatches containing the - Defendant denied liability for the alleged damage claiming
shipment were opened by plaintiff's agents, nearly all the that the MV "VLASONS I" was seaworthy in all respects for
skids of tinplates and hot rolled sheets were allegedly the carriage of plaintiff's cargo and that said vessel was not a
found to be wet and rusty. "common carrier" inasmuch as she was under voyage charter
- The cargo was discharged and unloaded by stevedores hired contract with the plaintiff as charterer under the charter party.
by the Charterer. Unloading was completed after incurring a - RTC ruled in favor of defendant. It held that The MV
delay of 11 days due to the heavy rain which interrupted the "VLASONS I" is a vessel of Philippine registry engaged in the
unloading operations. tramping service and is available for hire only under special
- MASCO (surveyor hired by the NSC) made a report of its contracts of charter party as in this particular case. It further
ocular inspection conducted on the cargo, both while it was held that defendant cannot be held liable for it pursuant to
still on board the vessel and later at the NDC warehouse Article 1734 of the Civil Case which exempts the carrier from
where the cargo was taken and stored. It found wetting and responsibility for loss or damage arising from the "character
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of the goods . . ." All the 1,769 skids of the tinplates could not the prima facie presumption of negligence on a common carrier. It is
have been damaged by water as claimed by plaintiff but a hornbook doctrine that: “In an action against a private carrier for loss
because of its own “sweating”; and that due to the fact the of, or injury to, cargo, the burden is on the plaintiff to prove that the
vessel encountered rough seas and bad weather on which carrier was negligent or unseaworthy, and the fact that the goods were
account the master filed a Marine Protest can be invoked as lost or damaged while in the carrier's custody does not put the burden
a defense of force majeure. of proof on the carrier.”
- CA modified the decision of the RTC by reducing the
demurrage and deleting attorneys fees and expenses. Indicators of VSI’s due diligence:
a) It was drylocked and inspected by the Philippine Coast Guard
ISSUE: before it proceeded to Iligan City for its voyage to Manila under the
- W/N VSI is a private/common carrier? PRIVATE contract of voyage charter hire. The vessel's voyage from Iligan to
- W/N defendant may be held liable on account of the damage Manila was the vessel's first voyage after drydocking. The Philippine
of the cargo owned by plaintiff? NO Coast Guard Station in Cebu cleared it as seaworthy, fitted and
equipped; it met all requirements for trading as cargo vessel.
RULING: b) The records sufficiently support VSI's contention that the ship used
In the instant case, it is undisputed that VSI did not offer its services the old tarpaulin, only in addition to the new one used primarily to
to the general public. As found by the RTC, it carried passengers or make the ship's hatches watertight.
goods only for those it chose under a "special contract of charter c) Despite encountering rough weather twice, the new tarpaulin did
party." The MV Vlasons I "was not a common but a private carrier. not give way and the ship's hatches and cargo holds remained
Consequently, the rights and obligations of VSI and NSC, including waterproof.
their respective liability for damage to the cargo, are determined Indeed, NSC failed to discharge its burden to show negligence on the
primarily by stipulations in their contract of private carriage or charter part of the officers and the crew of MV Vlasons I. On the contrary, the
party. records reveal that it was the stevedores of NSC who were negligent
in unloading the cargo from the ship. The stevedores employed only
It is clear from the parties' Contract of Voyage Charter Hire that VSI a tent-like material to cover the hatches when strong rains occasioned
"shall not be responsible for losses except on proven willful negligence by a passing typhoon disrupted the unloading of the cargo. This tent-
of the officers of the vessel." The NANYOZAI Charter Party, which was like covering, however, was clearly inadequate for keeping rain and
incorporated in the parties' contract of transportation further provided seawater away from the hatches of the ship.
that the shipowner shall not be liable for loss of or a damage to the
cargo arising or resulting from unseaworthiness, unless the same was The charter party is a normal commercial contract and its stipulations
caused by its lack of due diligence to make the vessel seaworthy or to are agreed upon in consideration of many factors, not the least of
ensure that the same was "properly manned, equipped and supplied," which is the transport price which is determined not only by the actual
and to "make the holds and all other parts of the vessel in which cargo costs but also by the risks and burdens assumed by the shipper in
was carried, fit and safe for its reception, carriage and preservation." regard to possible loss or damage to the cargo. In recognition of such
factors, the parties even stipulated that the shipper should insure the
Because the MV Vlasons I was a private carrier, the shipowner's cargo to protect itself from the risks it undertook under the charter
obligations are governed by the foregoing provisions of the Code of party. That NSC failed or neglected to protect itself with such
Commerce and not by the Civil Code which, as a general rule, places
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insurance should not adversely affect VSI, which had nothing to do - W/N GPS may be considered as a common carrier as defined
with such failure or neglect. under the law and existing jurisprudence? NO
- W/N GPS may be presumed to have been negligent when the
goods it undertook to transport safely were subsequently
FGU Insurance v. GP Sarmiento Trucking and Lambert Eroles damaged while in its custody? YES
FACTS:
- G.P. Sarmiento Trucking Corporation (GPS) undertook to RULING:
deliver 30 units of Condura S.D. white refrigerators aboard GPS, being an exclusive contractor and hauler of Concepcion
one of its Isuzu trucks, driven by Lambert Eroles, from the Industries, Inc., rendering or offering its services to no other individual
plant site of Concepcion Industries, Inc., along South or entity, cannot be considered a common carrier. Common carriers
Superhighway in Alabang, Metro Manila, to the Central Luzon are persons, corporations, firms or associations engaged in the
Appliances in Dagupan City. While the truck was traversing business of carrying or transporting passengers or goods or both, by
the north diversion road along McArthur highway in land, water, or air, for hire or compensation, offering their services to
Barangay Anupol, Bamban, Tarlac, it collided with an the public, whether to the public in general or to a limited clientele in
unidentified truck, causing it to fall into a deep canal, particular, but never on an exclusive basis. The true test of a common
resulting in damage to the cargoes. carrier is the carriage of passengers or goods, providing space for
- FGU Insurance Corporation (FGU), an insurer of the those who opt to avail themselves of its transportation service for a
shipment, paid to Concepcion Industries, Inc., the value of the fee. Given accepted standards, GPS scarcely falls within the term
covered cargoes in the sum of P204,450. "common carrier."
- FGU, in turn, being the subrogee of the rights and interests of The above conclusion nothwithstanding, GPS cannot escape
Concepcion Industries, Inc., sought reimbursement of the from liability. In culpa contractual, upon which the action of petitioner
amount it had paid to the latter from GPS. rests as being the subrogee of Concepcion Industries, Inc., the mere
- Since the trucking company failed to heed the claim, FGU filed proof of the existence of the contract and the failure of its compliance
a complaint for damages and breach of contract of carriage justify, prima facie, a corresponding right of relief. The law,
against GPS and its driver Lambert Eroles with the RTC. recognizing the obligatory force of contracts, will not permit a party to
- Respondents asserted that GPS was the exclusive hauler be set free from liability for any kind of misperformance of the
only of Concepcion Industries, Inc., since 1988, and it was not contractual undertaking or a contravention of the tenor thereof. A
so engaged in business as a common carrier. Respondents breach upon the contract confers upon the injured party a valid cause
further claimed that the cause of damage was purely for recovering that which may have been lost or suffered.
accidental. GPS instead of submitting evidence, filed with
leave of court a motion to dismiss the complaint by way of Respondent trucking corporation recognizes the existence of a
demurrer to evidence on the ground that petitioner had failed contract of carriage between it and petitioner’s assured, and admits
to prove that it was a common carrier. that the cargoes it has assumed to deliver have been lost or damaged
- RTC granted the motion to dismiss. FGU appealed. CA while in its custody. In such a situation, a default on, or failure of
rejected such appeal and ruled in favor of petitioner. compliance with, the obligation – in this case, the delivery of the goods
in its custody to the place of destination - gives rise to a presumption
ISSUE: of lack of care and corresponding liability on the part of the contractual
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obligor the burden being on him to establish otherwise. GPS has failed - As the insurer, MIC paid P6M to the insured in full settlement
to do so. of its claim, and the latter executed a subrogation receipt
therefor.
Respondent driver, on the other hand, without concrete proof of his - MIC filed a complaint against LOADSTAR and PGAI, alleging
negligence or fault, may not himself be ordered to pay petitioner. The that the sinking of the vessel was due to the fault and
driver, not being a party to the contract of carriage between petitioner’s negligence of LOADSTAR and its employees. It also prayed
principal and defendant, may not be held liable under the agreement. that PGAI be ordered to pay the insurance proceeds from the
A contract can only bind the parties who have entered into it or their loss the vessel directly to MIC, said amount to be deducted
successors who have assumed their personality or their juridical from MIC's claim from LOADSTAR.
position.Consonantly with the axiom res inter alios acta aliis neque - LOADSTAR denied any liability for the loss of the shipper's
nocet prodest, such contract can neither favor nor prejudice a third goods and claimed that sinking of its vessel was due to force
person. Petitioner’s civil action against the driver can only be based majeure. PGAI, on the other hand, averred that MIC had no
on culpa aquiliana, which, unlike culpa contractual, would require the cause of action against it, LOADSTAR being the party
claimant for damages to prove negligence or fault on the part of the insured. In any event, PGAI was later dropped as a party
defendant. defendant after it paid the insurance proceeds to LOADSTAR.
- RTC rendered judgment in favor of MIC, prompting
LOADSTAR to elevate the matter to the court of Appeals,
which, however, agreed with the trial court and affirmed its
decision in toto.
- LOADSTAR submits that the vessel was a private carrier
Loadstar Shipping Co. v. CA and Manila Insurance Co. because it was not issued a certificate of public convenience,
FACTS: it did not have a regular trip or schedule nor a fixed route, and
- LOADSTAR received on board its M/V "Cherokee" the there was only one shipper, one consignee for a special
following goods for shipment: a) 705 bales of lawanit cargo.
hardwood; b) 27 boxes and crates of tilewood assemblies and
the others; and c) 49 bundles of mouldings R & W (d) Apitong ISSUE: W/N LOADSTAR is a private/common carrier?
Bolidenized.
- The goods, amounting to P6M were insured for the same RULING:
amount with respondent MIC against various risks including LOADSTAR is a common carrier. It is not necessary that the carrier
"TOTAL LOSS BY TOTAL OF THE LOSS THE VESSEL." The be issued a certificate of public convenience, and this public character
vessel, in turn, was insured by Prudential Guarantee & is not altered by the fact that the carriage of the goods in question was
Assurance, Inc. (hereafter PGAI) for P4 million. periodic, occasional, episodic or unscheduled.
- On its way to Manila from the port of Nasipit, Agusan del
Norte, the vessel, along with its cargo, sank off Limasawa In support of its position, LOADSTAR relied on the 1968 case of Home
Island. Insurance Co. v. American Steamship Agencies, Inc., where this
- As a result of the total loss of its shipment, the consignee Court held that a common carrier transporting special cargo or
made a claim with LOADSTAR which, however, ignored the chartering the vessel to a special person becomes a private carrier
same. that is not subject to the provisions of the Civil Code. Any stipulation
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in the charter party absolving the owner from liability for loss due to
the negligence of its agent is void only if the strict policy governing A certificate of public convenience is not a requisite for the
common carriers is upheld. Such policy has no force where the public incurring of liability under the Civil Code provisions governing
at is not involved, as in the case of a ship totally chartered for the use common carriers. That liability arises the moment a person or
of a single party. LOADSTAR also cited Valenzuela firm acts as a common carrier, without regard to whether or not
Hardwood and Industrial Supply, Inc. v. Court of Appeals and National such carrier has also complied with the requirements of the
Steel Corp. v. Court of Appeals, both of which upheld the Home applicable regulatory statute and implementing regulations and
Insurance doctrine. has been granted a certificate of public convenience or other
franchise.
These cases invoked by LOADSTAR are not applicable in the
case at bar for the simple reason that the factual settings are As regards the issue of seaworthiness of M/V Cherokee, the Court
different. The records do not disclose that the M/V "Cherokee," on the found that the subject vessel was not seaworthy when it embarked on
date in question, undertook to carry a special cargo or was chartered its voyage on 19 November 1984. The vessel was not even sufficiently
to a special person only. There was no charter party. The bills of lading manned at the time. "For a vessel to be seaworthy, it must be
failed to show any special arrangement, but only a general provision adequately equipped for the voyage and manned with a sufficient
to the effect that the M/V"Cherokee" was a "general cargo number of competent officers and crew. The failure of a common
carrier." Further, the bare fact that the vessel was carrying a particular carrier to maintain in seaworthy condition its vessel involved in a
type of cargo for one shipper, which appears to be purely coincidental, contract of carriage is a clear breach of its duty prescribed in Article
is not reason enough to convert the vessel from a common to a private 1755 of the Civil Code."
carrier, especially where, as in this case, it was shown that the vessel Arada v. CA
was also carrying passengers. FACTS:
- Petitioner Alejandro Arada is the proprietor and operator of
Under the facts and circumstances obtaining in this case, the firm South Negros Enterprises which has been
LOADSTAR fits the definition of a common carrier under Article organized and established for more than 10 years. It is
1732 of the Civil Code. The SC upheld the doctrine enshrined in De engaged in the business of small scale shipping as a common
Guzman v. Court of Appeals, where the Court juxtaposed the statutory carrier, servicing the hauling of cargoes of different
definition of "common carriers" with the peculiar circumstances of that corporations and companies with the 5 vessels it was
case. Art. 1732 makes no distinction between one operating.
whose principal business activity is the carrying of persons or goods - On March 24, 1982, petitioner entered into a contract with
or both, and one who does such carrying only as ancillary activity. private respondent to safely transport as a common carrier,
Article 1732 also carefully avoids making any distinction between a cargoes of the latter from San Carlos City, Negros Occidental
person or enterprise offering transportation service on a regular or to Mandaue City using one of petitioner's vessels, M/L Maya.
scheduled basis and one offering such service on an occasional, The cargoes of private respondent San Miguel Corporation
episodic or unscheduled basis. Neither does Article 1732 distinguish consisted of 9,824 cases of beer empties valued at
between a carrier offering its services to the "general public," i.e., the P176,824.80.
general community or population, and one who offers services or - Petitioner thru its crew master, Mr. Vivencio Babao, applied
solicits business only from a narrow segment of the general for a clearance with the Philippine Coast Guard for M/L
population.
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Maya to leave the port of San Carlos City, but due to a RULING:
typhoon, it was denied clearance. There is no doubt that petitioner was exercising its function as a
- The next day, M/L Maya was given clearance as there was no common carrier when it entered into a contract with private respondent
storm and the sea was calm. Hence, said vessel left for to carry and transport the latter's cargoes.
Mandaue City. While it was navigating towards Cebu, a
typhoon developed and said vessel was buffeted on all A common carrier, both from the nature of its business and for insistent
its sides by big waves. Its rudder was destroyed and it reasons of public policy is burdened by law with the duty of
drifted for sixteen (16) hours although its engine was exercising extraordinary diligence not only in ensuring the safety of
running. passengers, but in caring for the goods transported by it. The loss or
- At about 4:00 a.m., the vessel sank with whatever was left of destruction or deterioration of goods turned over to the common
its cargoes. The crew was rescued by a passing pump boat carrier for the conveyance to a designated destination raises instantly
and was brought to Calanggaman Island. Later in the a presumption of fault or negligence on the part of the carrier, save
afternoon, they were brought to Palompon, Leyte, where only where such loss, destruction or damage arises from extreme
Vivencio Babao filed a marine protest. circumstances such as a natural disaster or calamity.
- On the basis of such marine protest, the Board of Marine
Inquiry recommended that the owner/operator, officers and In order that the common carrier may be exempted from responsibility,
crew of M/L Maya be exonerated or absolved from any the natural disaster must have been the proximate and only cause of
administrative liability on account of this incident. the loss. However, the common carrier must exercise due diligence to
- The Board's report containing its findings and prevent or minimize the loss before, during and after the occurrence
recommendation was then forwarded to the headquarters of of flood, storm or other natural disaster in order that the common
the Philippine Coast Guard for appropriate action. On the carrier may be exempted from liability for the destruction or
basis of such report, the Commandant of the Philippine Coast deterioration of the goods (Article 1739, New Civil Code).
Guard rendered a decision exonerating the owner/operator
officers and crew of the ill-fated M/L Maya from any In the instant case, the appellate court was correct in finding that
administrative liability on account of said incident. petitioner failed to observe the extraordinary diligence over the cargo
- SMC filed a complaint in the RTC its first cause of action being in question and he or the master in his employ was negligent previous
for the recovery of the value of the cargoes anchored on to the sinking of the carrying vessel. Respondent court's conclusion
breach of contract of carriage. RTC dismissed the plaintiff’s as to the negligence of petitioner is supported by evidence. It will be
claim on the basis of its first cause of action. noted that Vivencio Babao knew of the impending typhoon when the
- SMC appealed to the CA. CA reversed the decision and Arada Philippine Coast Guard denied M/L Maya the issuance of a clearance
was ordered to pay unto the appellant SMC. It ruled that "in to sail. Less than 24 hours elapsed since the time of the denial of said
view of his failure to observe extraordinary diligence over the clearance and the time a clearance to sail was finally issued.
cargo in question and his negligence previous to the sinking
of the carrying vessel, as above shown, the appellee is liable A common carrier is obliged to observe extraordinary diligence and
to the appellant for the value of the lost cargo the failure of Babao to ascertain the direction of the storm and the
weather condition of the path they would be traversing, constitute lack
ISSUE: Whether or not petitioner is liable for the value of the lost of foresight and minimum vigilance over its cargoes taking into
cargoes? YES account the surrounding circumstances of the case.
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- The plaintiff now seeks to recover from the defendants what it


Furthermore, the records show that the crew of M/L Maya did not have has indemnified the consignee, less P48,293.70, the salvage
the required qualifications provided for in P.D. No. 97 or the Philippine value of the cargo, or the total amount of P123,629.30.
Merchant Marine Officers Law, all of whom were unlicensed. While it - It appears that while enroute from Kobe to Manila, the
is true that they were given special permit to man the vessel, such carrying vessel "encountered very rough seas and
permit was issued at the risk and responsibility of the owner. stormy weather" for three days, more or less, which
caused it to roll and pound heavily, moving its master to
Finally, petitioner claims that the factual findings of the Special Board execute a marine note of protest upon arrival at the port
of Marine Inquiry exonerating the owner/operator, crew officers of the of Manila; that the coils wrapped in burlap cloth and
ill-fated vessel M/L Maya from any administrative liability is binding on cardboard paper were stored in the lower hold of the
the court. hatch of the vessel which was flooded with water about one
foot deep; that the water entered the hatch when the vessel
In rejecting petitioner's claim, respondent court was correct in ruling encountered heavy weather enroute to Manila; that upon
that "such exoneration was but with respect to the administrative request, a survey of bad order cargo was conducted at the
liability of the owner/operator, officers and crew of the ill-fated" vessel. pier in the presence of the representatives of the consignee
It could not have meant exoneration of appellee from liability as a and the defendant E. Razon, Inc. and it was found that seven
common carrier for his failure to observe extraordinary diligence in the coils were rusty on one side each; that upon survey conducted
vigilance over the goods it was transporting and for the negligent acts at the consignee's warehouse it was found that the "wetting
or omissions of his employees. Such is the function of the Court, not (of the cargo) was caused by fresh water" that entered the
the Special Board of Marine Inquiry." hatch when the vessel encountered heavy weather enroute to
Manila; and that all thirteen coils were extremely rusty and
totally unsuitable for the intended purpose.
Eastern Shipping Lines v. CA and First Nationwide Assurance Co. - The complaint that was filed by the First Nationwide
FACTS: Assurance Corporation (insurer) against Eastern Shipping
- On September 4, 1978, 13 coils of uncoated 7-wire stress Lines, Inc. and E. Razon, Inc., in the RTC was dismissed in a
relieved wire strand for prestressed concrete were shipped on decision.
board the vessel "Japri Venture," owned and operated by - An appeal therefrom was interposed by the insurer to the CA
the defendant Eastern Shipping Lines, Inc., at Kobe, which ordered Eastern Shipping and E. Razon to pay the
Japan, for delivery to Stresstek Post-Tensioning Phils., Inc. insurer as subrogee of the Stresstek.
in Manila, and 6-Razon which were insured by the plaintiff
First Nationwide Assurance Corporation for P171,923. ISSUE: W/N defendants are liable to plaintiff insurer-subrogee? YES
- The carrying vessel arrived in Manila and discharged the
cargo to the custody of the defendant E. Razon, Inc. from RULING:
whom the consignee's customs broker received it for delivery The heavy seas and rains referred to in the master's report were
to the consignee's warehouse. not caso fortuito, but normal occurrences that an ocean-going vessel,
- Plaintiff indemnified the consignee in the amount of particularly in the month of September which, in our area, is a month
P171,923.00 for damage and loss to the insured cargo, of rains and heavy seas would encounter as a matter of routine. They
whereupon the former was subrogated for the latter. are neither unforeseen nor unforeseeable. These are conditions that
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ocean-going vessels would encounter and provide for, in the ordinary - MT Maysum set sail from Batangas for Zamboanga City.
course of a voyage. That rain water (not sea water) found its way into Unfortunately, the vessel sank near Panay Gulf in the
the holds of the Jupri Venture is a clear indication that care and Visayas taking with it the entire cargo of fuel oil.
foresight did not attend the closing of the ship's hatches so that rain - AHAC paid Caltex the sum of P5,096,635.67 representing the
water would not find its way into the cargo holds of the ship. insured value of the lost cargo. Exercising its right of
subrogation under Article 2207 of the New Civil Code, the
Moreover, under Article 1733 of the Civil Code, common carriers are private respondent demanded of the petitioner the same
bound to observe "extra-ordinary vigilance over goods according to all amount it paid to Caltex.
circumstances of each case”. - AHAC then filed a complaint with the RTC for collection of a
sum of money. RTC rendered a decision dismissing the
Since the carrier has failed to establish any caso fortuito, the complaint against herein petitioner. RTC found that the
presumption by law of fault or negligence on the part of the carrier vessel, MT Maysum, was seaworthy to undertake the voyage
applies; and the carrier must present evidence that it has observed the as determined by the Philippine Coast Guard per Survey
extraordinary diligence required by Article 1733 of the Civil Code in Certificate Report upon inspection during its annual dry-
order to escape liability for damage or destruction to the goods that it docking and that the incident was caused by unexpected
had admittedly carried in this case. No such evidence exists of record. inclement weather condition or force majeure, thus exempting
Thus, the carrier cannot escape liability. the common carrier (herein petitioner) from liability for the loss
of its cargo.
The Court agrees with and is bound by the foregoing findings of fact - CA reversed. It gave credence to the weather report issued
made by the appellate court. The presumption, therefore, that the by the PAGASA which showed that from 2:00 o’clock to 8:oo
cargo was in apparent good condition when it was delivered by the o’clock in the morning on August 16, 1986, the wind speed
vessel to the arrastre operator by the clean tally sheets has been remained at 10 to 20 knots per hour while the waves
overturned and traversed. The evidence is clear to the effect that the measured from .7 to two (2) meters in height only in the vicinity
damage to the cargo was suffered while aboard petitioner's vessel. of the Panay Gulf where the subject vessel sank, in contrast
to herein petitioner’s allegation that the waves were twenty
(20) feet high. In the absence of any explanation as to what
Delsan Transport Lines v. CA and American Home Assurance Corp. may have caused the sinking of the vessel coupled with the
FACTS: finding that the same was improperly manned, the appellate
- Caltex Philippines entered into a contract of affreightment with court ruled that the petitioner is liable on its obligation as
the petitioner, Delsan Transport Lines, Inc., for a period of one common carrier to herein private respondent insurance
year whereby the said common carrier agreed to transport company as subrogee of Caltex.
Caltex’s industrial fuel oil from the Batangas-Bataan Refinery - Petitioner Delsan Transport Lines, Inc. invokes the provision
to different parts of the country. of Section 113 of the Insurance Code which states that in
- Under the contract, petitioner took on board its vessel, MT every marine insurance upon a ship or freight, or freightage,
Maysun 2,277.314 kiloliters of industrial fuel oil of Caltex to be or upon any thing which is the subject of marine insurance
delivered to the Caltex Oil Terminal in Zamboanga City. The there is an implied warranty by the shipper that the ship is
shipment was insured with the private respondent, American seaworthy. Consequently, the insurer will not be liable to the
Home Assurance Corporation. assured for any loss under the policy in case the vessel would
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later on be found as not seaworthy at the inception of the Consequently, the payment made by the private respondent (insurer)
insurance. It theorized that when private respondent paid to Caltex (assured) operates as an equitable assignment to the former
Caltex the value of its lost cargo, the act of the private of all the remedies which the latter may have against the petitioner.
respondent is equivalent to a tacit recognition that the ill-fated
vessel was seaworthy. It further avers that private respondent From the nature of their business and for reasons of public policy,
failed, for unknown reason, to present in evidence during the common carriers are bound to observe extraordinary diligence in the
trial of the instant case the subject marine cargo insurance vigilance over the goods and for the safety of passengers transported
policy it entered into with Caltex. By virtue of the doctrine laid by them, according to all the circumstance of each case. In the event
down in the case of Home Insurance Corporation vs. CA, the of loss, destruction or deterioration of the insured goods, common
failure of the private respondent to present the insurance carriers shall be responsible unless the same is brought about, among
policy in evidence is allegedly fatal to its claim inasmuch as others, by flood, storm, earthquake, lightning or other natural disaster
there is no way to determine the rights of the parties thereto. or calamity. In all other cases, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or
ISSUE/S: to have acted negligently, unless they prove that they observed
- Whether or not the payment made by the private respondent extraordinary diligence.
to Caltex for the insured value of the lost cargo amounted to
an admission that the vessel was seaworthy, thus precluding Petitioner attributes the sinking of MT Maysun to fortuitous even
any action for recovery against the petitioner? NO or force majeure. This tale of strong winds and big waves by the said
- Whether or not the non-presentation of the marine insurance officers of the petitioner however, was effectively rebutted and belied
policy bars the complaint for recovery of sum of money for by the weather report from the PAGASA which the Court believed to
lack of cause of action. NO of greater merit. Therefore, petitioner’s vessel, MT Maysun, sank with
its entire cargo for the reason that it was not seaworthy. There was no
RULING: squall or bad weather or extremely poor sea condition in the vicinity
The payment made by the private respondent for the insured value of when the said vessel sank.
the lost cargo operates as waiver of its (private respondent) right to
enforce the term of the implied warranty against Caltex under the Anent the second issue, the SC held that the presentation in evidence
marine insurance policy. However, the same cannot be validly of the marine insurance policy is not indispensable in this case before
interpreted as an automatic admission of the vessel’s seaworthiness the insurer may recover from the common carrier the insured value of
by the private respondent as to foreclose recourse against the the lost cargo in the exercise of its subrogatory right. The subrogation
petitioner for any liability under its contractual obligation as a common receipt, by itself, is sufficient to establish not only the relationship of
carrier. The fact of payment grants the private respondent herein private respondent as insurer and Caltex, as the assured
subrogatory right which enables it to exercise legal remedies that shipper of the lost cargo of industrial fuel oil, but also the amount paid
would otherwise be available to Caltex as owner of the lost cargo to settle the insurance claim. The right of subrogation accrues simply
against the petitioner common carrier under Art. 2207 of the Civil upon payment by the insurance company of the insurance claim.
Code.

Bankers and Manufacturers Assurance Corp v. CA, F.E. Zuellig & Co.
Inc. and E. Razon
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FACTS: stressed at this point, that the three cases found in bad order
- There were 108 cases of copper tubings that were imported are not the cases for which the claim below was presented,
by Ali Trading Company. for although the three cases appeared to be in bad order, the
- The tubings were insured by petitioner and arrived in Manila contents remained good and intact.
on board and vessel S/S "Oriental Ambassador" and turned - The two other container vans were not moved from the
over the private respondent E. Razon, the Manila arrastre container yard and they were not stripped. On December 8,
operator upon discharge at the waterfront. 1978, the cargo was released to the care of the consignee's
- The carrying vessel is represented in the Philippines by its authorized customs broker, the RGS Customs Brokerage.
agent, the other private respondent, F. E. Zuellig and Co., Inc., - The broker, accepting the shipment without exception as to
- Upon inspection by the importer, the shipment was bad order, caused the delivery of the vans to the consignee's
allegedly found to have sustained losses by way of theft warehouse in Makati. It was at that place, when the contents
and pilferage for which petitioner, as insurer, of the two containers were removed and inspected, that
compensated the importer in the amount of P31,014.00. petitioner's surveyors reported, that checked against the
- Petitioner, in subrogation of the importer-consignee and on packing list, the shipment was short of seven cases.
the basis of what it asserts had been already established — - RTC then dismissed petitioner’s complaint for recovery of the
that a portion of that shipment was lost through theft and amount it had paid its insured concerning the loss of a portion
pilferage — forthwith concludes that the burden of proof of of a shipment. CA affirmed the dismissal
proving a case of non-liability shifted to private respondents,
one of whom, the carrier, being obligated to exercise ISSUE: W/N the owner of the vessel should be held liable for the lost
extraordinary diligence in the transport and care of the goods? NO
shipment.
- It must be underscored that the shipment involved in the case RULING:
at bar was "containerized". The goods under this arrangement The CA correctly found that the subject container was not stripped of
are stuffed, packed, and loaded by the shipper at a place of its content at the pier zone. The two unstripped containers (together
his choice, usually his own warehouse, in the absence of the with the 19 cases removed from the stripped third container) were
carrier. The container is sealed by the shipper and thereafter delivered to, and received by, the customs broker for the consignee
picked up by the carrier. without any exception or notation of bad order of shortlanding. If there
- A shipment under this arrangement is not inspected nor was any suspicion or indication of irregularity or theft or pilferage,
inventoried by the carrier whose duty is only to transport and plaintiff or consignee's representatives should have noted the same
deliver the containers in the same condition as when the on the gate passes or insisted that some form of protest form part of
carrier received and accepted the containers for transport. the documents concerning the shipment. Yet, no such step was taken.
- Upon arrival in Manila, the shipment was discharged in The shipment appears to have been delivered to the customs broker
apparent good order and condition and from the pier's docking in good order and condition and complete save for the three cases
apron, the containers were shifted to the container yard of Pier noted as being apparently in bad order.
3 for safekeeping. Three weeks later, one of the container
vans, said to contain 19 cases of the cargo, was Verily, if any of the vans found in bad condition, or if any inspection of
"stripped" in the presence of petitioner's surveyors, and the goods was to be done in order to determine the condition thereof,
three cases were found to be in bad order. It should be the same should have been done at the pierside, the pier warehouse,
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or at any time and place while the vans were under the care and - After returning to Bicol, respondents asked assistance from
custody of the carrier or of the arrastre operator. Unfortunately for the radio stations and even from Philtranco bus drivers who
petitioner, even as one of the three vans was inspected and stripped, plied the same route on August 31st. The effort paid off when
the two other vans and the contents of the owner previously stripped one of Fatima's bags was recovered. Marisol further reported
were accepted without exception as to any supposed bad order or the incident to the NBI field office in Legazpi City and to the
condition by petitioner's own broker. To all appearances, therefore, local police.
the shipment was accepted by petitioner in good order. - Eventually respondents, through counsel, formally demanded
satisfaction of their complaint from petitioner.
It logically follows that the case at bar presents no occasion for the - In a letter dated October 1, 1984, Sarkies Tours apologized
necessity of discussing the diligence required of a carrier or of the for the delay and said that "a team has been sent out to Bicol
theory of prima facie liability of the carrier, for from all indications, the for the purpose of recovering or at least getting the full
shipment did not suffer loss or damage while it was under the care of detail" of the incident.
the carrier, or of the arrastre operator. - After more than nine months of fruitless waiting, respondents
decided to file the case below to recover the value of the
remaining lost items, as well as moral and exemplary
Sarkies Tours Phils v. CA damages, attorney's fees and expenses of litigation. They
FACTS: claimed that the loss was due to petitioner's failure to observe
- On August 31, 1984, Fatima boarded petitioner's De Luxe Bus extraordinary diligence in the care of Fatima's luggage and
No. 5 in Manila on her way to Legazpi City. Her brother Raul that petitioner dealt with them in bad faith from the start.
helped her load three pieces of luggage containing all of her Petitioner, on the other hand, disowned any liability for the
optometry review books, materials and equipment, trial loss on the ground that Fatima allegedly did not declare any
lenses, trial contact lenses, passport and visa, as well as her excess baggage upon boarding its bus.
mother Marisol's U.S. immigration (green) card, among other - RTC ordered Sarkies Tours to pay respondents P30K for
important documents and personal belongings. value of lost belongings, P90K for transpo expenses,
- Her belongings were kept in the baggage compartment of attorneys fees, damages, litigation expenses.
the bus, but during a stopover at Daet, it was discovered - CA affirmed but deleted award for damages.
that only one bag remained in the open compartment. The - Petitioner claims that Fatima did not bring any piece of
others, including Fatima's things, were missing and luggage with her, and even if she did, none was declared at
might have dropped along the way. Some of the the start of the trip.
passengers suggested retracing the route of the bus to
try to recover the lost items, but the driver ignored them ISSUE: W/N petitioner is liable for the loss of the personal belongings
and proceeded to Legazpi City. of its passenger (respondent)? YES
- Fatima immediately reported the loss to her mother who, in
turn, went to Sarkies Tours’ office in Legazpi City and later at RULING:
its head office in Manila. Petitioner, however, merely offered Under the Civil Code, "common carriers, from the nature of their
her P1K (this was yr 1997) for each piece of luggage lost, business and for reasons of public policy, are bound to observe
which she turned down. extraordinary diligence in the vigilance over the goods transported by
them," and this liability "lasts from the time the goods are
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unconditionally placed in the possession of, and received by the testimony introduced by plaintiffs and defendants as to the
carrier for transportation until the same are delivered, actually or execution of the contract with this defendant is, as stated by
constructively, by the carrier to the person who has a right to receive the trial court in its decision, contradictory in the extreme; in
them," unless the loss is due to any of the excepted causes under our opinion, however, the weight of the evidence sustains the
Article 1734 thereof. finding of the trial judge that plaintiffs succeeded in
establishing the transportation contract set out in the
The cause of the loss in the case at bar was petitioner's negligence in complaint, and the delivery of the rice to the defendant Leon
not ensuring that the doors of the baggage compartment of its bus Chan Gioco and his codefendant, Anastasio Atregenio, the
were securely fastened. As a result of this lack of care, almost all of latter being the patron or captain of the boat on which the rice
the luggage was lost, to the prejudice of the paying passengers. As was loaded, employed as such by Leon Chan Gioco.
the Court of Appeals correctly observed: - Counsel for Leon Chan contends that the loss of the rice was
due to the sinking of the boat on which it was loaded, as a
. . . . Where the common carrier accepted its passenger's result of a strong wind which struck her as she was entering
baggage for transportation and even had it placed in the the port of San Fernando; and that appellants should not be
vehicle by its own employee, its failure to collect the freight held responsible therefor, the loss having resulted from an act
charge is the common carrier's own lookout. It is responsible of God ( fuerza mayor) or an unavoidable accident (caso
for the consequent loss of the baggage. In the instant case, fortuíto), and without blame upon their part.
defendant appellant's employee even helped Fatima Minerva
Fortades and her brother load the luggages/baggages in the ISSUE: W/N defendant is liable for the loss of goods owned by
bus' baggage compartment, without asking that they be plaintiff? YES
weighed, declared, receipted or paid for.
RULING:
The evidence in support of Leon Chan’s claim that the loss of the rice
Keep v. Chan Gioco was the result of an act of God or an unavoidable accident is not
FACTS: satisfactorily established; and, as appears from an examination of the
- Plaintiff, upon a contract for its transportation by boat from the above-cited article of the code, the burden of proof in this regard
port of Luna, LU to the port of San Fernando, LU, delivered to rested upon the defendants.
defendants 120 cavanes of rice in consideration of the sum of
twenty-five centavos per cavan. Allegedly because of The SC gave credence to the testimony of the Weather Bureau
defedant’s negligence, carelessness, and lack of due stationed at San Fernando, which was introduced by the plaintiffs,
precaution in the management of the boat on which it was that, while there may have been a strong wind moving on the
being transported, as result of which the boat sank as she night in question, there was no such heavy wind or violent storm
entered the port of San Fernando, on the night of the 8th of blowing as would unavoidably swamp a boat manned by a
April, 1907. capable crew, commanded by a careful navigator, and properly
- Plaintiff lodged a complaint unto the CFI of LU which rendered equipped for sailing the high seas.
a decision favorable to him.
- Defendant appealed. He denied having entered into the It not having been otherwise expressly stipulated, it is to be presumed
transportation contract, as allegedly by the plaintiffs, and the that the owner of the boat, Leon Chan Gioco, when he contracted to
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transport the rice in question over the high seas, obligated himself to Sur. As a consequence thereof, the cargo belonging to
furnish a boat suitable for the work which he undertook to perform, San Miguel Corporation was lost.
and a capable crew to man her and the mere fact that a strong wind - Subsequently, San Miguel Corporation claimed the amount of
was blowing when the boat changed its course is not in itself its loss from petitioner.
sufficient to excuse her owners for losses incurred as a result of - The Surveyor’s report stated that the vessel was structurally
so poor an execution of this maneuver as to result in sinking her. sound and that he did not see any damage or crack thereon.
He concluded that the proximate cause of the listing and
In the absence of proof of such a violent storm or such an subsequent sinking of the vessel was the shifting of ballast
exceptionally high sea that, despite the proper equipment of the boat water from starboard to portside. The said shifting of ballast
and the exercise of due skill and diligence by the patron and crew, water allegedly affected the stability of the M/V Peatheray
those in charge of the boat were overpowered by the force of the Patrick-G.
elements, the Court will not hold that the sinking of the boat can - Petitioner paid SMC the full amount of P5,836,222.80
justly be said to have been the result of an act of God or of an pursuant to the terms of their insurance contract.
unavoidable accident; the blowing of strong winds must always be - Petitioner as subrogee of SMC filed with the Regional Trial
anticipated by men who go down into the sea in ships, and in the Court (RTC) of Makati City a case for collection against private
absence of evidence of some unusual intervening cause, we must respondents to recover the amount it paid to San Miguel
hold that the exercise of due diligence in the performance of their duty Corporation for the loss of the latter's cargo.
by the patron and the members of his crew, had they been reasonably - Meanwhile, the Board of Marine Inquiry conducted its own
expert as seafaring men, could have and would have avoided the investigation of the sinking of the M/V Peatheray Patrick-G to
accident which actually occurred, provided the boat was suited to the determine whether or not the captain and crew of the vessel
work required of her. should be held responsible for the incident.
- The Board rendered its decision exonerating the captain and
crew of the ill-fated vessel for any administrative liability. It
Phil American Gen Insurance. v. MCG Marine Services found that the cause of the sinking of the vessel was the
FACTS: existence of strong winds and enormous waves in Surigao del
- San Miguel Corporation insured several beer bottle cases with Sur, a fortuitous event that could not have been for seen at
an aggregate value of almost P6M with petitioner Philippine the time the M/V Peatheray Patrick-G left the port of Mandaue
American General Insurance Company. City. It was further held by the Board that said fortuitous event
- The cargo were loaded on board the M/V Peatheray Patrick- was the proximate and only cause of the vessel's sinking.
G to be transported from Mandaue City to Bislig, Surigao del - RTC found private respondents solidarily liable for the loss of
Sur. SMC’s cargo and ordering them to pay petitioner the full
- After having been cleared by the Coast Guard Station in Cebu amount of the lost cargo plus legal interest, attorney's fees
the previous day, the vessel left the port of Mandaue City for and costs of suit.
Bislig, Surigao del Sur. The weather was calm when the - Private respondents appealed. CA reversed. It held that
vessel started its voyage. private respondents could not be held liable for the loss of San
- The following day, M/V Peatheray Patrick-G listed and Miguel Corporation's cargo because said loss occurred as a
subsequently sunk off Cawit Point, Cortes, Surigao del consequence of a fortuitous event, and that such fortuitous
event was the proximate and only cause of the loss
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ISSUE: Whether the loss of the cargo was due to the occurrence of a It was also proven through sufficient evidence that "LCT Peatheray
natural disaster, and if so, whether such natural disaster was the sole Patrick-G" was considered seaworthy vessel at the time she
and proximate cause of the loss or whether private respondents were undertook that fateful voyage on March 2, 1987. The vessel was
partly to blame for failing to exercise due diligence to prevent the loss propelled with 3 diesel engines, it had 3 propellers each which were
of the cargo? operating satisfactorily and that it was granted SOLAS clearance by
the Phil Coast Guard to depart from Mandawe City for Bislig, Surigao
RULING: del Sur.
The findings of the Board of Marine Inquiry indicate that the
attendance of strong winds and huge waves while the M/V Peatheray Although the Board of Marine Inquiry ruled only on the administrative
Patrick-G was sailing through Cortes, Surigao del Norte on March 3, liability of the captain and crew of the M/V Peatheray Patrick-G, it had
1987 was indeed fortuitous. A fortuitous event has been defined as to conduct a thorough investigation of the circumstances surrounding
one which could not be foreseen, or which though foreseen, is the sinking of the vessel and the loss of its cargo in order to determine
inevitable. An event is considered fortuitous if the following elements their responsibility, if any. The results of its investigation as embodied
concur: in its decision on the administrative case clearly indicate that the loss
of the cargo was due solely to the attendance of strong winds and
(a) the cause of the unforeseen and unexpected occurrence, huge waves which caused the vessel accumulate water, tilt to the port
or the failure of the debtor to comply with his obligations, must side and to eventually keel over. There was thus no error on the part
be independent of human will; (b) it must be impossible to of the Court of Appeals in relying on the factual findings of the Board
foresee the event which constitutes the caso fortuito, or if it of Marine Inquiry, for such factual findings, being supported by
can be foreseen, it must be impossible to avoid; (c) the substantial evidence are persuasive, considering that said
occurrence must be such as to render it impossible for the administrative body is an expert in matters concerning marine
debtor to fulfill his obligation in a normal manner; and (d) the casualties.
obligor must be free from any participation in the aggravation
of the injury resulting to the creditor.
Since the presence of strong winds and enormous waves at Cortes,
Surigao del Sur on March 3, 1987 was shown to be the proximate
In the case at bar, it was adequately shown that before the M/V and only cause of the sinking of the M/V Peatheray Patrick-G and
Peatheray Patrick-G left the port of Mandaue City, the Captain the loss of the cargo belonging to San Miguel Corporation, private
confirmed with the Coast Guard that the weather condition would respondents cannot be held liable for the said loss.
permit the safe travel of the vessel to Bislig, Surigao del Sur. Thus, he
could not be expected to have foreseen the unfavorable weather
condition that awaited the vessel in Cortes, Surigao del Sur. It was the Phil American Gen Insurance v. CA and Transpacific Towage Inc.
presence of the strong winds and enormous waves which caused the FACTS:
vessel to list, keel over, and consequently lose the cargo contained
- Davao Union Marketing Corporation of Davao City
therein. The appellate court likewise found that there was no
shipped on board the vessel M/V "Crazy Horse" operated
negligence on the part of the crew of the M/V Peatheray Patrick-G
by the Transpacific Towage, Inc. cargo consisting of 9,750
following the decision of the Board of Marine Inquiry.
sheets of union brand GI sheets with a declared value of P1M
and 86,860 bags of union Pozzolan and union Portland
Cement with a declared value of P4.3M.
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- The cargo was consigned to the Bicol Union Center of against the rocks, and the anchor chain stopper gave way.
Pasacao, Camarines Sur, with a certain Pedro Olivan as the The vessel sustained holes in the engine room and there was
"Notify-Party." a power failure in the vessel. Water started to fill the engine
- The cargo was insured by the Philippine American General room and at about 6:15 A.M. the engine broke down.
Insurance Co., Inc., for the amount of P3,440,000.00. - The shipmaster had no choice but to order the ship to be
- The vessel M/V "Crazy Horse" arrived at the port of Pasacao, abandoned. He told the crew to secure the vessel while he
Camarines Sur. went to the Municipal Mayor of Pasacao to request for police
- Upon arrival the shipmaster notified the consignee's "Notify- assistance to prevent pilferage of the vessel and its cargo.
Party" that the vessel was already to discharge the cargo. The - He was, however, unable to get any assistance. The
discharging could not be affected immediately and shipmaster reported the incident to the Philippine Coast
continuously because of certain reasons. First, the buoys Guard but inspite the presence of three (3) coast guards,
were installed only on September 11, 1985; second, the nothing could be done about the pilferage done on the vessel
discharge permit was secured by the consignee only on and its cargo. Almost the whole barrio and because there
September 13, 1985; third a wooden catwalk had to be were so many of them the crew and the guards were helpless
installed and extension of the wharf had to be made, which to stop the pilferage and looting.
was completed only on September 26, 1985; fourth, the - As a result of the incident the cargo of cement was damaged
discharging was not continuous because there were while the GI sheets were looted and nothing was left of the
intermittent rains and the stevedores supplied by the undischarged pieces.
consignee did not work during the town fiesta. - The total number of cement bags damaged and/or lost was
- A super typhoon code named "Saling" entered the Philippine 26,424 costing P1,056,960.00 while there were 4,000 pieces
area of responsibility and was felt in the eastern coast of the of the GI sheets unrecovered, the cost of which was
country. The discharging of the cargo had to be suspended at P454,250.00.
11:40 A.M. on October 17, 1985 due to the heavy downpour, - The Philippine American General Insurance Co., Inc. paid the
strong winds, and turbulent sea. To prevent damage to the shipper Davao Union Marketing Corporation the sum of
cargo all hatches of the vessel were closed and secured. P1,511,210.00.
- At the time the discharging of the cargo was suspended, a - Thereafter, the said insurer made demands upon the
total of 59,625 bags of cement and 26 crates of GI sheets had Transpacific Towage, Inc. for the payment of said amount as
already been discharged. subrogee of the insured, claiming that the loss of the cargo
- In further preparation for the typhoon the vessel was loaded was directly and exclusively brought about by the fault and
with 22 tons of fresh water and 3,000 liters of fuel. The negligence of the shipmaster and the crew of M/V "Crazy
shipmaster ordered the vessel to be moved about 300 meters Horse". Because the latter refused to pay the amount of
seaward in order that it would not hit the cat walk or the P1,511,210.00 demanded, the Philippine American General
wooden bridge or the wharf, or the rocks. The vessel was Insurance Co., Inc. filed the present complaint.
ready for any maneuver that may have to be made. - RTC found that although the immediate cause of the loss may
- It was at about 5:20 A.M. of October 18, 1985 when the have been due to an act of God, the defendant carrier had
shipmaster ordered the maneuvering of the vessel but it could exposed the property to the accident. The court also found
not be steered on account of the strong winds and rough seas. plaintiff guilty of contributory negligence and mitigated the
The vessel's lines snapped, causing her to be dragged plaintiff's claim to three-fourths (3/4) of its value.
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- CA reversed the decision of the trial court and ruled instead Considering the disputed fact that there really was delay in completing
that private respondent, as a common carrier, is not the unloading of the goods from the vessel, the Court believes that the
responsible for the loss of the insured cargo involved in the real issue at bar centers on the application of Article 1740 of the Civil
case at bar, as said loss was due solely to a fortituous event. Code. In short, the principal question, in determining which of the
parties in the present case should bear the loss of the goods, is
ISSUE: W/N respondent as a common carrier is liable for the loss of whether the delay involved in the unloading of the goods is deemed
the cargo due to a fortuitous event? NO negligently incurred in, so as not to free private respondent from
liability, notwithstanding the fact that the ultimate cause of the loss of
RULING: CA Decision AFFIRMED. the goods was the sinking of the vessel brought about by typhoon
It is not disputed that private respondent is a common carrier as "Saling."
defined in Article 1732 of the Civil Code. The following facts are also
not contested: (1) that the cargo-carrying vessel was wrecked and While it is true that there was indeed delay in discharging the
partially sank on 18 October 1985 due to typhoon "Saling"; (2) that cargo from the vessel, neither of the parties herein could be
typhoon "Saling" was a fortuitous event; and (3) that at the time said faulted for such delay, for the same (delay) was due not to
vessel sank, the remaining undischarged cargo, consisting of 26,424 negligence, but to several factors. The cargo having been lost
cement bags and 4,000 pieces of G.I. sheets, were still on board the due to typhoon "Saling", and the delay incurred in its unloading
vessel. not being due to negligence, private respondent is exempt from
liability for the loss of the cargo, pursuant to Article 1740 of the
The appellate court in exempting private respondent from liability Civil Code.
applied Article 1739 of the Civil Code which provides as follows:
The diligence exercised by the shipmaster further supports the
In order that the common carrier may be exempted exemption of private respondent from liability for the loss of the
from responsibility, the natural disaster must have cargo, in accordance with Article 1739 of the Civil Code.
been the proximate and only cause of the loss.
However, the common carrier must exercise due
diligence to prevent or minimize loss before, during Maersk Line v. CA and Efren Castillo
and after the occurrence of flood, storm, or other FACTS:
natural disaster in order that the common carrier may - Petitioner Maersk Line is engaged in the transportation of
be exempted from liability for the loss, destruction, or goods by sea, doing business in the Philippines through its
deterioration of the goods. general agent Compania General de Tabacos de Filipinas.
- Private respondent Efren Castillo, on the other hand, is the
The appellate court correctly ruled that the loss of cargo in the present proprietor of Ethegal Laboratories, a firm engaged in the
case was due solely to typhoon "Saling" and that private respondent manufacture of pharmaceutical products.
had shown that it had observed due diligence before, during and after - Private respondent ordered from Eli Lilly. Inc. of Puerto
the occurrence of "Saling"; hence, it should not be liable under Article Rico through its (Eli Lilly, Inc.'s) agent in the Philippines,
1739. Elanco Products, 600,000 empty gelatin capsules for the
manufacture of his pharmaceutical products. The capsules
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were placed in six (6) drums of 100,000 capsules each to ship the 6 drums of empty Gelatin Capsules.CA affirmed
valued at US $1,668.71. the RTC’s decision with slight modifications.
- Through a Memorandum of Shipment, the shipper Eli Lilly, - Petitioner maintains that it cannot be held liable for damages
Inc. of Puerto Rico advised private respondent as consignee for the alleged delay in the delivery of the 600K empty gelatine
that the 600,000 empty gelatin capsules in six (6) drums of capsules since it acted in GF and there was no special
100,000 capsules each, were already shipped on board MV contract under which the carrier undertook to deliver the
"Anders Maerskline" for shipment to the Philippines via shipment on or before a specific date.
Oakland, California.
- For reasons unknown, said cargo of capsules were mishipped ISSUE: Whether or not respondent Castillo is entitled to damages
and diverted to Richmond, Virginia, USA and then transported resulting from delay in the delivery of the shipment in the absence in
back Oakland, Califorilia. The goods finally arrived in the the bill of lading of a stipulation on the period of delivery? YES
Philippines after two (2) months from the date specified in the
memorandum. As a consequence, private respondent as
consignee refused to take delivery of the goods on account of RULING:
its failure to arrive on time. Both the trial court and CA found petitioner liable for damages for the
- Private respondent alleging gross negligence and undue delay in the delivery of goods, reliance was made on the rule that
delay in the delivery of the goods, filed an action before the contracts of adhesion are void. Added to this, the lower court stated
RTC for rescission of contract with damages against that the exemption against liability for delay is against public policy
petitioner and Eli Lilly, Inc. as defendants. and is thus, void. Besides, private respondent's action is anchored on
- Denying that it committed breach of contract, petitioner Article 1170 of the New Civil Code and not under the law on Admiralty.
alleged in its that answer that the subject shipment was
transported in accordance with the provisions of the covering The bill of lading covering the subject shipment among others, reads:
bill of lading and that its liability under the law on 6. GENERAL
(1) The Carrier does not undertake that the goods shall arive at the
transportation of good attaches only in case of loss, port of discharge or the place of delivery at any particular time or to
destruction or deterioration of the goods as provided for in meet any particular market or use and save as is provided in clause
Article 1734 of Civil Code. 4 the Carrier shall in no circumstances be liable for any direct,
- Defendant Eli Lilly, Inc., on the other hand, alleged that the indirect or consequential loss or damage caused by delay. If the
Carrier should nevertheless be held legally liable for any such
delay in the arrival of the the subject merchandise was due direct or indirect or consequential loss or damage caused by delay,
solely to the gross negligence of petitioner Maersk Line. such liability shall in no event exceed the freight paid for the
- PR moved for the dismissal of the complaint against Eli Lilly, transport covered by this Bill of Lading.
Inc. on the ground that the evidence on record shows that the
delay in the delivery of the shipment was attributable solely to It is not disputed that the aforequoted provision at the back of the bill
petitioner. of lading, in fine print, is a contract of adhesion. Generally, contracts
- RTC dismissed the complaint against Eli Lilly, Inc. of adhesion are considered void since almost all the provisions of
- After trial held between respondent and petitioner, RTC these types of contracts are prepared and drafted only by one party,
rendered judgment in favor of respondent Castillo and held usually the carrier. The only participation left of the other party in such
that there was a breach in the performance of their obligation a contract is the affixing of his signature thereto, hence the term
by the defendant Maersk Line consisting of their negligence "Adhesion"
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beyond the realm of reasonableness. Described as gelatin capsules


A bill of lading usually becomes effective upon its delivery to and for use in pharmaceutical products, subject shipment was delivered
acceptance by the shipper. It is presumed that the stipulations of the to, and left in, the possession and custody of petitioner-carrier for
bill were, in the absence of fraud, concealment or improper conduct, transport to Manila via Oakland, California. But through petitioner's
known to the shipper, and he is generally bound by his acceptance negligence was mishipped to Richmond, Virginia. Petitioner's
whether he reads the bill or not. However, the aforequoted ruling insitence that it cannot be held liable for the delay finds no merit.
applies only if such contracts will not create an absurd situation as in
the case at bar. The questioned provision in the subject bill of lading
has the effect of practically leaving the date of arrival of the subject Compania Maritima v. CA and Vicente Concepcion
shipment on the sole determination and will of the carrier. FACTS:
- Private respondent Vicente E. Concepcion, a civil engineer
While it is true that common carriers are not obligated by law to doing business under the name and style of Consolidated
carry and to deliver merchandise, and persons are not vested Construction, had a contract with the Civil Aeronautics
with the right to prompt delivery, unless such common carriers Administration (CAA) sometime in 1964 for the construction of
previously assume the obligation to deliver at a given date or the airport in Cagayan de Oro City Misamis Oriental.
time, delivery of shipment or cargo should at least be made within a - Vicente E. Concepcion had to ship his construction equipment
reasonable time. to Cagayan de Oro City. Having shipped some of his
equipment through petitioner and having settled the balance
The oft-repeated rule regarding a carrier's liability for delay is that in of P2,628.77 with respect to said shipment, Concepcion
the absence of a special contract, a carrier is not an insurer against negotiated anew with petitioner, thru its collector, Pacifico
delay in transportation of goods. When a common carrier undertakes Fernandez, on August 28, 1964 for the shipment to Cagayan
to convey goods, the law implies a contract that they shall be delivered de Oro City of one (1) unit payloader, four (4) units 6x6 Reo
at destination within a reasonable time, in the absence, of any trucks and two (2) pieces of water tanks.
agreement as to the time of delivery. But where a carrier has made an - These equipment were loaded aboard the MV Cebu. The Reo
express contract to transport and deliver properly within a specified trucks and water tanks were safely unloaded within a few
time, it is bound to fulfil its contract and is liable for any delay, no matter hours after arrival, but while the payloader was about two
from what cause it may have arisen. surrounding the case and by (2) meters above the pier in the course of unloading, the
application of the ordinary rules for the interpretation of contracts. swivel pin of the heel block of the port block of Hatch No.
2 gave way, causing the payloader to fall. The payloader
While there was no special contract entered into by the parties was damaged and was thereafter taken to petitioner's
indicating the date of arrival of the subject shipment, petitioner compound in Cagayan de Oro City.
nevertheless, was very well aware of the specific date when the goods - Consolidated Construction, thru Vicente E. Concepcion, wrote
were expected to arrive as indicated in the bill of lading itself. In this Compañia Maritima to demand a replacement of the
regard, there arises no need to execute another contract for the payloader which it was considering as a complete loss
purpose as it would be a mere superfluity. because of the extent of damage. Consolidated Construction
likewise notified petitioner of its claim for damages.
In the case before us, we find that a delay in the delivery of the goods - Meanwhile, petitioner shipped the payloader to Manila where
spanning a period of two (2) months and seven (7) days falls was it was weighed at the San Miguel Corporation. Finding that the
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payloader weighed 7.5 tons and not 2.5 tons as declared in common carriers to render service with the greatest skill and foresight
the B-111 of Lading, petitioner denied the claim for damages and "to use all reasonable means to ascertain the nature and
of Consolidated Construction contending that had Vicente E. characteristic of goods tendered for shipment, and to exercise due
Concepcion declared the actual weight of the payloader, care in the handling and stowage, including such methods as their
damage to their ship as well as to his payloader could have nature requires." Under Article 1736 of the Civil Code, the
been prevented. responsibility to observe extraordinary diligence commences and lasts
- To replace the damaged payloader, Consolidated from the time the goods are unconditionally placed in the possession
Construction in the meantime bought a new one at P45K from of, and received by the carrier for transportation until the same are
Bormaheco Inc. delivered, actually or constructively, by the carrier to the consignee, or
- Vicente E. Concepcion filed an action for damages against to the person who has the right to receive them without prejudice to
petitioner with the then CFI of Manila, seeking to recover the provisions of Article 1738.
damages and other expenses.
- CFI dismissed the complaint with costs against therein Where, as in the instant case, petitioner, upon the testimonies of its
plaintiff, herein private respondent Vicente E. Concepcion, own crew, failed to take the necessary and adequate precautions for
stating that the proximate cause of the fall of the payloader avoiding damage to, or destruction of, the payloader entrusted to it for
was Vicente E. Concepcion's act or omission in having safe carriage and delivery to Cagayan de Oro City, it cannot be
misrepresented the weight of the payloader as 2.5 tons reasonably concluded that the damage caused to the payloader was
instead of its true weight of 7.5 tons, which due to the alleged misrepresentation of private respondent
underdeclaration was intended to defraud Compañia Concepcion as to the correct and accurate weight of the payloader.
Maritima of the payment of the freight charges and which As found by the respondent Court of Appeals, the fact is that petitioner
likewise led the Chief Officer of the vessel to use the heel used a 5-ton capacity lifting apparatus to lift and unload a visibly heavy
block of hatch No. 2 in unloading the payloader. cargo like a payloader. Private respondent has, likewise, sufficiently
- CA reversed and rendered judgment in favor of Vicente established the laxity and carelessness of petitioner's crew in their
Concepcion. methods of ascertaining the weight of heavy cargoes offered for
shipment before loading and unloading them, as is customary among
ISSUE: Whether or not the act of private respondent Vicente E. careful persons.
Concepcion in furnishing petitioner Compañia Maritima with an
inaccurate weight of 2.5 tons instead of the payloader's actual weight
of 7.5 tons was the proximate and only cause of the damage on the
Oliver Payloader OC-12 when it fell while being unloaded by Private respondent's act of furnishing petitioner with an inaccurate
petitioner's crew, as would absolutely exempt petitioner from liability weight of the payloader upon being asked by petitioner's collector,
for damages under paragraph 3 of Article 1734 of the Civil Code? NO cannot be used by said petitioner as an excuse to avoid liability for the
damage caused, as the same could have been avoided had petitioner
RULING: utilized the "jumbo" lifting apparatus which has a capacity of lifting 20
The extraordinary diligence in the vigilance over the goods tendered to 25 tons of heavy cargoes.
for shipment requires the common carrier to know and to follow the
required precaution for avoiding damage to, or destruction of the While the act of private respondent in furnishing petitioner with an
goods entrusted to it for sale, carriage and delivery. It requires inaccurate weight of the payloader cannot successfully be used as an
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excuse by petitioner to avoid liability to the damage thus caused, said to prove that the damages suffered by the goods were "by virtue of the
act constitutes a contributory circumstance to the damage caused on nature or defect of the articles." Under the provisions of Article 362,
the payloader, which mitigates the liability for damages of petitioner in the plaintiff, in order to hold the defendant liable, was obliged to prove
accordance with Article 1741 of the Civil Code, that the damages to the goods by virtue of their nature, occurred on
account of its negligence or because the defendant did not take the
precaution adopted by careful persons.
Southern Lines, Inc. v. CA
FACTS: Petitioner claims exemption from liability by contending that the
- Sometime in 1948, the City of Iloilo requested for rice from the shortage in the shipment of rice was due to such factors as the
National Rice and Corn Corporation (hereafter referred to as shrinkage, leakage or spillage of the rice on account of the bad
NARIC) in Manila. condition of the sacks at the time it received the same and the
- NARIC, pursuant to the order, shipped 1,726 sacks of rice negligence of the agents of respondent City of Iloilo in receiving the
consigned to the City of Iloilo on board the SS "General shipment. The contention is untenable, for, if the fact of improper
Wright" belonging to the Southern Lines, Inc. Each sack of packing is known to the carrier or his servants, or apparent upon
rice weighed 75 kilos and the entire shipment as indicated in ordinary observation, but it accepts the goods notwithstanding
the bill of lading had a total weight of 129,450 kilos. According such condition, it is not relieved of liability for loss or injury
to the bill of lading, the cost of the shipment was P63,115.50. resulting thereform.
- The City of Iloilo received the shipment and paid the amount
of P63,115.50. However, it was noted that the foot of the bill Furthermore, according to the Court of Appeals, "appellant (petitioner)
of lading that there was shortage was equivalent to 41 itself frankly admitted that the strings that tied the bags of rice were
sacks of rice with a net weight of 13,319 kilos, the broken; some bags were with holes and plenty of rice were spilled
proportionate value of which was P6,486.35. inside the hull of the boat, and that the personnel of the boat collected
- The City of Iloilo filed a complaint in the Court of First Instance no less than 26 sacks of rice which they had distributed among
of Iloilo against NARIC and the Southern Lines, Inc. for the themselves." This finding, which is binding upon this Court,
recovery of the amount of P6,486.35 representing the value shows that the shortage resulted from the negligence of
of the shortage of the shipment of rice. petitioner.
- After trial, the lower court absolved NARIC from the complaint,
but sentenced the Southern Lines, Inc. to pay.
- The Southern Lines, Inc. appealed to the Court of Appeals
which affirmed the judgment of the trial court. Hence, this Ganzon v. CA and Gelacio Tumambing
petition for review. FACTS:
- - Gelacio Tumambing contracted the services of Mauro B.
ISSUE: Whether or not the defendant-carrier, the herein petitioner, is Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan,
liable for the loss or shortage of the rice shipped? YES to the port of Manila on board the lighter LCT "Batman"
- Pursuant to that agreement, Mauro B. Ganzon sent his lighter
RULING: "Batman" to Mariveles where it docked in three feet of water.
Under the provisions of Article 361 of the Code of Commerce, the - On December 1, 1956, Gelacio Tumambing delivered the
defendant-carrier in order to free itself from liability, was only obliged scrap iron to defendant Filomeno Niza, captain of the lighter,
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for loading which was actually begun on the same date by the was accilmillated by the appellant through separate purchases from
crew of the lighter under the captain's supervision. When private individuals.
about half of the scrap iron was already loaded, Mayor
Jose Advincula of Mariveles, Bataan, arrived and The fact remains that the order given by the acting mayor to dump the
demanded P5,000.00 from Gelacio Tumambing. The latter scrap iron into the sea was part of the pressure applied by Mayor Jose
resisted the shakedown and after a heated argument Advincula to shakedown the appellant for P5,000.00. The order of
between them, Mayor Jose Advincula drew his gun and the acting mayor did not constitute valid authority for appellee
fired at Gelacio Tumambing. The gunshot was not fatal but Mauro Ganzon and his representatives to carry out.
Tumambing had to be taken to a hospital in Balanga, Bataan,
for treatment. The intervention of the municipal officials was not in any case, of a
- After sometime, the loading of the scrap iron was resumed. character that would render impossible the fulfilment by the carrier of
Several months after, Acting Mayor Basilio Rub, accompanied its obligation. The petitioner was not duty bound to obey the illegal
by three policemen, ordered captain Filomeno Niza and his order to dump into the sea the scrap iron. Moreover, there is absence
crew to dump the scrap iron where the lighter was docked. of sufficient proof that the issuance of the same order was attended
The rest was brought to the compound of NASSCO. Later on with such force or intimidation as to completely overpower the will of
Acting Mayor Rub issued a receipt stating that the Municipality the petitioner's employees. The mere difficulty in the fulfilment of the
of Mariveles had taken custody of the scrap iron. obligation is not considered force majeure. The scraps could have
- Tumambing instituted in the CFI an action against petitioner been properly unloaded at the shore or at the NASSCO compound,
for damages based on culpa contractual. CFI rendered so that after the dispute with the local officials concerned was settled,
judgment in favor of Ganzon. Tumambing appealed. CA the scraps could then be delivered in accordance with the contract of
reversed. carriage.
- Petitioner maintains that he is exempt from any liability
because the loss of the scraps was due mainly to the Dissent (Melencio-Herrera, J.): Petitioner cannot be held liable in
intervention of the municipal officials of Mariveles which damages for the loss and destruction of the scrap iron. The loss of
constitutes a caso fortuito as defined in Article 1174(5) of the said cargo was due to an excepted cause an 'order or act of competent
Civil Code. public authority" (Article 1734[5], Civil Code).

ISSUE: W/N petitioner is exempt from liability by virtue of Art. 1174(5) The loading of the scrap iron on the lighter had to be suspended
in the light of the circumstances mentioned in the case? NO because of Municipal Mayor Jose Advincula's intervention, who was a
"competent public authority." Petitioner had no control over the
RULING: situation as, in fact, Tumambing himself, the owner of the cargo, was
SC cited CA’s ruling that Acting Mayor Basilio Rub had the power to impotent to stop the "act' of said official and even suffered a gunshot
issue the disputed order, or that it was lawful, or that it was issued wound on the occasion.
under legal process of authority. Ganzon has failed to establish this.
Indeed, no authority or power of the acting mayor to issue such an Through the "order" or "act" of "competent public authority," therefore,
order was given in evidence. Neither has it been shown that the cargo the performance of a contractual obligation was rendered impossible.
of scrap iron belonged to the Municipality of Mariveles. What we have The scrap iron that was dumped into the sea was "destroyed" while
in the record is the stipulation of the parties that the cargo of scrap iron the rest of the cargo was "seized." The seizure is evidenced by the
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receipt issues by Acting Mayor Rub stating that the Municipality of been defined to be, not the care which may or should be used by the
Mariveles had taken custody of the scrap iron. Apparently, therefore, prudence man generally, but the care which a man of ordinary
the seizure and destruction of the goods was done under legal process prudence would use under similar circumstances to avoid injury.
or authority so that petitioner should be freed from responsibility.
FACTS:
- Jose Cangco was in the employment of Manila Railroad Co.
(MRC) in the capacity of clerk, with a monthly wage of P25.
He lived in the pueblo of San Mateo, in the province of Rizal,
which is located upon the line of the defendant MRC; and in
coming daily by train to the company’s office in the city of
Manila where he worked, he used a pass for free.
- On Jan 1915, Cangco arose from his seat in the second-class
car where he was riding and, as he was on his way to exit
through the door, he seized the guardrail with his right hand
for support and took his position upon the steps of the coach.
- On the side of the train where passengers alight at the San
Mateo station there is a cement platform which begins to rise
with a moderate gradient some distance away from MRC’s
office. As the train slowed down, another passenger (Emilio
Zuniga) alighted safely at the point where the platform begins
to rise from the level of the ground. When the train proceeded
a little farther, Jose Cangco stepped off but one/both of his
feet came in contact with a sack of watermelons with the
result that his feet slipped from under him and he fell
violently on the platform. His body at once rolled from the
platform and was drawn under the moving car, where his
right arm was badly crushed and lacerated. It appears
that after the plaintiff alighted from the train the car
moved forward about 6m before it came to a full stop.
Note that the accident occurred between 7-8pm and the
Cangco v. Manila Railroad Co. railroad station was dimly lit.
WHO WON: Cangco - Cangco was drawn under the car in an unconscious condition,
DOCTRINE: The test by which to determine whether the passenger and it appeared that the injuries he sustained were very
has been guilty of negligence in attempting to alight from a moving serious. He was then brought to the hospital where his arm
railway train, is that of ordinary or reasonable care. It is to be had to be amputated. The result of the first operation was
considered whether an ordinarily prudent person, of the age, sex and unsatisfactory and so Cangco was then carried to another
condition of the passenger, would have acted as the passenger acted hospital and the arm was again amputated. It appears in
under the circumstances disclosed by the evidence. This care has evidence that he spent P790.25 for medic/surg fees.
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- Cangco filed a civil suit in the CFI to recover damages on the MRC was bound by reason of its public duty as a public carrier to
ground of the negligence of the servants/employees of MRC afford its passengers facilities for safe egress from its train, Cangco
in placing the sacks of [water]melon upon the platform. had a right to assume, in the absence of some circumstance to warn
- CFI ruled in favor of MRC. It drew its conclusion from the fact him to the contrary, that the platform was clear. There was failure on
that Cangco himself had failed to use due caution in alighting the part of the common carrier to place the pile of sacks adequately
from the coach and is thus precluded from recovering, albeit so that their presence would be revealed to alighting passengers in
MRC was guilty of negligence. such a dimly lit place.

ISSUE: W/N plaintiff is guilty of contributory negligence so as to


preclude him from recovering from defendant common carrier? NO Lasam v. Smith
WHO WON: Lasam spouses
RULING: DOCTRINE:
The conduct of the plaintiff in undertaking to alight while the train was Elements of FE/Casa Fortuito:
yet slightly under way was not characterized by imprudence and that - The cause of the unforeseen and unexpected occurrence or
therefore he was not guilty of contributory negligence. of the failure of the debtor to comply with his obligation, must
be independent of the human will.
The test by which to determine whether the passenger has been guilty - It must be impossible to foresee the event which constitutes
of negligence in attempting to alight from a moving railway train, is that the casa fortuito, or if it can be foreseen, it must be impossible
of ordinary or reasonable care. It is to be considered whether an to avoid.
ordinarily prudent person, of the age, sex and condition of the - The occurrence must be such as to render it impossible for
passenger, would have acted as the passenger acted under the the debtor to fulfill his obligation in a normal manner.
circumstances disclosed by the evidence. This care has been defined - The obligor must be free from any participation in the
to be, not the care which may or should be used by the prudence man aggravation of the injury resulting to the creditor.
generally, but the care which a man of ordinary prudence would use
under similar circumstances to avoid injury. FACTS:
- On Feb 1918, Frank Smith – owner of a public garage in San
It may be admitted that had plaintiff waited until the train had come to Fernando, LU engaged in the business of carrying
a full stop before alighting, the particular injury suffered by him could passengers for hire from one point to another in LU and other
not have occurred. Defendant contends that it is negligence per se for provinces – undertook to convey Honorio Lasam and his wife
a passenger to alight from a moving train. The SC, however, is of the from San Fernando to Ilocos Norte in a Ford automobile.
opinion that this proposition is contrary to the experience of everyday - On leaving San Fernando, the automobile was operated by a
life. In the case at bar, the train was barely moving when plaintiff licensed chauffeur, but after having reached the town of San
alighted, as shown by the fact that it came to a stop within 6m from Juan, the chauffeur allowed his assistant, Remigio Bueno, to
the place where he stepped from it. Thousands of people alight under drive the car.
these conditions and sustain no injury where the company has kept its - Bueno held no driver’s license but had some experience in
platform free from dangerous obstructions. driving, and with the exception of some slight engine trouble,
the car functioned well UNTIL after the crossing of Abra River
in Tagudin, when defects developed in the steering gear so
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as to make accurate steering impossible, and after zigzagging obligor, or his employees has caused injury to the plaintiff. The
for a distance of about half a kilometer, the car left the road Court is of the view that such element is lacking. It is not suggested
and went down a steep embankment. that the accident in question was due to an act of God or to adverse
- In going over the bank of the road, the automobile was road conditions which could not have been foreseen. As far as the
overturned and the plaintiffs pinned down under it. Mr. records shows, the accident was caused either by the defects in the
Lasama sustained a few contusions and a dislocated rib while automobile or else through the negligence of its driver. This is not casa
his wife Joaquina sustained a compound fracture of a bone in fortuito.
her wrist.
- A year after the aforesaid event, spouses Lasam filed a civil A carrier of passengers is not an absolute insurer against all the
suit against defendant on the ground that the accident was risks of travel from which the passenger may protect himself by
due to the defects in the automobile as well as to the exercising ordinary care and diligence. But such is not the
incompetence and negligence of the chauffeur, and that the present case since the passengers has no means of avoiding the
liability of the defendant is governed by art. 1903 of the old danger/escaping the injury.
CC (tort).
- Trial court held that the cause of action rests on defendant’s
breach of the CoC and that consequently, arts. 1101-1107 La Mallorca v. De Jesus
apply. It also held that the breach of contract was not due to WHO WON: De Jesus and Tolentino
FE and so defendant is liable for damages. DOCTRINE: To exempt a common carrier from liability for death or
physical injuries to passengers upon the ground of force majeure, the
ISSUE: W/N defendant common carrier is liable for plaintiffs’ injuries? carrier must clearly show not only that the efficient cause of the
YES casualty was entirely independent of the human will, but also that it
was impossible to avoid. Any participation by the common carrier in
RULING: the occurrence of the injury will defeat the defense of force majeure.
Elements of FE/Casa Fortuito were first laid down by the SC to
substantiate its decision namely: FACTS:
- The cause of the unforeseen and unexpected occurrence or - Lolita De Jesus, 20 yr old daughter of respondent Valentin De
of the failure of the debtor to comply with his obligation, must Jesus and wife of Manolo Tolentino, died from a head-on
be independent of the human will. collision between La Mallorca and Pampanga Bus Co’s
- It must be impossible to foresee the event which constitutes (LaMallorca-Pambusco) bus, on which she was a passenger
the casa fortuito, or if it can be foreseen, it must be impossible and freight truck traveling in the opposite direction. The
to avoid. immediate cause of the collision was the fact that the driver of
- The occurrence must be such as to render it impossible for the bus lost control of the wheel when its left front tire
the debtor to fulfill his obligation in a normal manner. suddenly exploded.
- The obligor must be free from any participation in the - De Jesus and Tolentino filed a civil suit with the trial court
aggravation of the injury resulting to the creditor. which sentenced LaMallorca-Pambusco to pay plaintiffs
damages (inclusive of moral damages).
As will be seen, the essential element in casa fortuito is that an
extraordinary circumstance independent of the will of the
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- Petitioner now filed an appeal by certiorari with the CA - For a waiver to be valid and effective, it must not be contrary
alleging that a tire blow-out is a FE and gives rise to no liability to law, morals, public policy, or good customs. To uphold a
for negligence. supposed waiver of any right to claim damages by an injured
passenger, under circumstances like those exhibited in this
ISSUE: W/N the common carrier must be exonerated from liability due case, would be to dilute and weaken the standard of
to the occurrence of a fortuitous event by way of a tire blow-out? NO extraordinary diligence exacted by the law from common
carriers and hence to render that standard unenforceable.
RULING: The purported waiver is offensive to public policy.
To exempt a common carrier from liability for death or physical - A common carrier is bound to carry its passengers safely" as
injuries to passengers upon the ground of force majeure, the far as human care and foresight can provide, using the utmost
carrier must clearly show not only that the efficient cause of the diligence of a very cautious person, with due regard to all the
casualty was entirely independent of the human will, but also that circumstances". In case of death or injuries to passengers, a
it was impossible to avoid. Any participation by the common carrier statutory presumption arises that the common carrier was at
in the occurrence of the injury will defeat the defense of force majeure. fault or had acted negligently "unless it proves that it had
(This was actually cited in Gatchalian v. DeLim but such doctrine applies very well in observed extraordinary diligence as prescribed in Articles
this case. Also there was not much principle enunciated here and so I just chose to cite
this one)
1733 and 1755."
- To exempt a common carrier from liability for death or physical
In the case at bar, the Court found that the cause of blow-out was injuries to passengers upon the ground of force majeure, the
known. The inner tube of the left front tire, according to petitioner’s carrier must clearly show not only that the efficient cause of
own evidence and as found by the CA “was pressed between the inner the casualty was entirely independent of the human will, but
circle of the left wheel and the rim which has slipped out of the wheel.” also that it was impossible to avoid. Any participation by the
This was a mechanical defect of the conveyance or a fault in its common carrier in the occurrence of the injury will defeat the
equipment which was easily discoverable if the bus had been defense of force majeure.
subjected to a more thorough, or rigid check-up before it took to
the road that morning. Moreover, both the trial court and CA found
as a fact that the bus was running quite fast immediately before the
accident. Considering that the tire which exploded was not new –
petitioner describes it as not so very worn out – the plea of casa FACTS:
fortuito cannot be entertained. - Petitioner Reynalda Gatcalian boarded, as paying passenger,
respondent’s “Thames” mini bus at a point in San Eugenio,
Moral damages are recoverable by reason of the death of a passenger LU bound for Bauang, LU. On the way, while the bus was
caused by the breach of CoC by virtue of Art. 1764 in rel to Art. 2206. running along the highway in Barrio Payocpoc, Bauang,
Union, “a snapping sound” was suddenly heard at one part of
the bus and, shortly thereafter, the vehicle bumped a cement
Gatchalian v. Delim flower pot on the side of the road, went off the road, turned
WHO WON: Gatchalian turtle and fell into a ditch.
DOCTRINE: - Several passengers, including Gatchalian, were injured and
were promptly brought to a hospital. Upon medical
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examination, petitioner was found to have sustained physical 1. W/N a waiver relinquishing the rights to file a civil/criminal suit
injuries on the leg, arm and forehead. against a common carrier is valid? NO
- Passengers were confined in the hospital, Mrs. Adela Delim, 2. W/N defendant common carrier is liable to plaintiff? YES
wife of respondent, visited them and later paid for their
hospitalization and medical expenses. She also gave RULING:
petitioner P12with which to pay her transportation expense in 1. A waiver, to be valid and effective, must in the first place be couched
going home from the hospital. However, before Mrs. Delim in clear and unequivocal terms which leave no doubt as to the intention
left, she had the injured passengers, including petitioner, sign of a person to give up a right or benefit which legally pertains to him.
an already prepared Joint Affidavit which stated, among other A waiver may not casually be attributed to a person when the terms
things that plaintiffs are “no longer interested to file a thereof do not explicitly and clearly evidence an intent to abandon a
complaint, criminal or civil against the said driver and owner right vested in such person.
of the said Thames, because it was an accident” and that the
said driver and owner has already helped them. The terms of the Joint Affidavit in the instant case cannot be regarded
- Notwithstanding such document, Gatchalian filed with the CFI as a waiver cast in "clear and unequivocal" terms. Moreover, the
an action extra contractu to recover compensatory and moral circumstances under which the Joint Affidavit was signed by petitioner
damages. She alleged in the complaint that her injuries Gatchalian need to be considered. Petitioner testified that she was still
sustained from the vehicular mishap had left her with a reeling from the effects of the vehicular accident, having been in the
conspicuous white scar on the forehead, generating mental hospital for only three days, when the purported waiver in the form of
suffering and an inferiority complex on her part; and that as a the Joint Affidavit was presented to her for signing; that while reading
result, she had to retire in seclusion and stay away from her the same, she experienced dizziness but that, seeing the other
friends. She also alleged that the scar diminished her facial passengers who had also suffered injuries sign the document, she too
beauty and deprived her of opportunities for employment. signed without bothering to read the Joint Affidavit in its entirety.
- Respondent averred that the vehicular mishap was due Considering these circumstances there appears substantial doubt
to force majeure, and that petitioner had already been paid whether petitioner understood fully the import of the Joint Affidavit
and moreover had waived any right to institute any action (prepared by or at the instance of private respondent) she signed and
against him (private respondent) and his driver, when whether she actually intended thereby to waive any right of action
petitioner Gatchalian signed the Joint Affidavit. against private respondent.
- CFI dismissed the complaint upon the ground that when Since what is involved here is the liability of a common carrier
petitioner Gatchalian signed the Joint Affidavit, she for injuries sustained by passengers in respect of whose safety
relinquished any right of action (whether criminal or civil) that a common carrier must exercise extraordinary diligence, any
she may have had against respondent and the driver of the waiver limiting its liability must be construed strictly against it.
mini-bus. For a waiver to be valid and effective, it must not be contrary to
- On appeal, CA reversed the TC’s conclusion that there had law, morals, public policy, or good customs. To uphold a
been a valid waiver, but affirmed the dismissal of the case by supposed waiver of any right to claim damages by an injured
denying petitioner’s claim for damages. passenger, under circumstances like those exhibited in this
case, would be to dilute and weaken the standard of
ISSUE/S: extraordinary diligence exacted by the law from common carriers
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and hence to render that standard unenforceable. The purported sound”. This could only mean that the bus had not been checked
waiver is offensive to public policy. physically or mechanically to determine what was causing the
"snapping sound" which had occurred so frequently that the driver had
2. A common carrier is bound to carry its passengers safely" as far as gotten accustomed to it.
human care and foresight can provide, using the utmost diligence of a
very cautious person, with due regard to all the circumstances". In
case of death or injuries to passengers, a statutory presumption arises Roque v. Buan
that the common carrier was at fault or had acted negligently "unless WHO WON: Roque
it proves that it had observed extraordinary diligence as prescribed in DOCTRINE: Negligence on the part of the common carrier is
Articles 1733 and 1755." In fact, because of this statutory presumed where, as in the present case, the passenger suffers
presumption, it has been held that a court need not even make an injuries. In case of death or injuries to passengers, common carriers
express finding of fault or negligence on the part of the common carrier are presumed to have been at fault or to have acted negligently,
in order to hold it liable. To overcome this presumption, the common unless they proved that they observed extraordinary diligence as
carrier must show to the court that it had exercised extraordinary prescribed in Articles 1733 and 1755.
diligence to prevent the injuries. The standard of extraordinary
diligence imposed upon common carriers is considerably more FACTS:
demanding than the standard of ordinary diligence, i.e., the diligence - On Feb 1955, Antonio Roque was a paying passenger of
of a good pater familias established in respect of the ordinary relations Philippine Rabbit Bus Lines (PRBL) operated by defendants.
between members of society. The bus left Manila for Angeles, Pampanga driven by
Celestino Soliman, an employee of operator. When the bus
In the case at bar, there is no evidence showing that respondent had was over the Sulipan bridge at Apalit, Pampanga, it met a
exercised the extraordinary diligence required by law. Respondent did cargo truck coming from the opposite direction. To avoid
not even attempt, during the trial, to prove that he had indeed colliding with the truck, the driver swerved the bus to the right,
exercised the requisite extraordinary diligence. Respondent did try to which however, sideswiped the railing of the bridge. So violent
exculpate himself from liability by alleging that the mishap was the was the impact, that the two iron grills of a window of the bus
result of force majeure. But allegation is not proof and here again, were detached, dangling thereat, and the rear right portion of
respondent utterly failed to substantiate his defense of force the bus was dented inward. Roque was seated by the side of
majeure. To exempt a common carrier from liability for death or the window where the iron grills were detached with his right
physical injuries to passengers upon the ground of force majeure, the arm resting on the sill of the frame of the window. Roque then
carrier must clearly show not only that the efficient cause of the suffered several injuries e.g. abrasion, fracture, lacerated
casualty was entirely independent of the human will, but also that it wounds, etc.
was impossible to avoid. Any participation by the common carrier in - Roque then filed a civil suit against Bienvenido Buan and
the occurrence of the injury will defeat the defense of force majeure. Natividad Paras, co-administrators of the Estate of the
deceased spouses Florencio and Rizalina – the owners of
Moreover, the record yields affirmative evidence of fault or negligence PRBL, in the CFI for alleged breach of CoC, resulting from a
on the part of respondent common carrier. The driver did not stop to traffic accident which occurred at Sulipan Bridge.
check if anything had gone wrong with the bus despite the fact that
one of the passengers had already apprised him of the “snapping
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- To avoid liability, the thesis of the defense is that plaintiff’s arm the bus was running at an unreasonable speed when it approached
was injured because he extended it outside the window, and and crossed the bridge.
struck it against the railing of the bridge.
- CFI ruled in favor of Roque and ordered defendants to pay The negligence of the defendants in the case at bar, rests on
plaintiff. something more solid than a legal presumption. The accident occurred
- CA reversed and held that the plaintiff's arm was injured because of want of care and prudence on the part of bus driver. As
because — "he must have extended his right elbow beyond the defendants failed to prove their observance of extraordinary
or outside the grills of the window of the bus." diligence in discharging their obligation unto plaintiff, their liability as
public utility operator is beyond question.
ISSUE: W/N common carrier PRBL is liable to plaintiff? YES

RULING: Brinas v. People


Negligence on the part of the common carrier is presumed where, as WHO WON: Juanito Gesmundo
in the present case, the passenger suffers injuries. In case of death or DOCTRINE: The proximate cause of the injury is not necessarily the
injuries to passengers, common carriers are presumed to have been immediate cause of, or the cause nearest in time to, the injury. It is
at fault or to have acted negligently, unless they proved that they only when the causes are independent of each other that the nearest
observed extraordinary diligence as prescribed in Articles 1733 and is to be charged with the disaster. So long as there is a natural, direct
1755. and continuous sequence between the negligent act and the injury
that it can reasonably be said that but for the act the injury could not
When the action is based on a contract of carriage and not of tort, the have occurred, such negligent act is the proximate cause of the injury,
court need not make an express finding of fault or negligence on the and whoever is responsible therefore is liable for damages resulting
part of the carrier in order to hold it responsible to any damages sought therefrom. One who negligently creates a dangerous condition cannot
for by the plaintiff. For the carrier by accepting the passenger assumes escape liability for the natural and probable consequences thereof,
express obligation to transport him to his destination safely, and to although the act of a third person, or an act of God for which he is not
observe extraordinary diligence with due regard for all the responsible intervenes to precipitate the loss.
circumstances, and any injury that may be suffered: by the passenger
is right away attributable to the fault or negligence of the carrier. This FACTS:
is an exception to the general rule that negligence must be proved and - On Jan 1957, Juanito Gesmundo bought a train ticket at the
it is incumbent upon the carrier to prove that it exercised extraordinary railroad station in Tagkayawan, Quezon for his 55-year old
diligence as prescribed in NCC 1733&1755. mother Martina Bool and his 3-year old daughter Emelita
Gesmundo who were bound for Barrio Lusacan, Tiaong.
In the case at bar, the physical fact that the bus suffered damage to - At about 2pm that day, the train left Tagkawayan with the old
the extent as shown by plaintiff's evidence, is proof that that portion of woman and her granddaughter among the passengers. At
the bus came into violent contact with some protruding hard object on Hondagua, the train's complement were relieved, with Victor
the railing capable of producing such damage. The SC is persuaded Millan taking over as engineman, Clemente Briñas as
to believe, as found by the trial court, that the violent contact of the conductor, and Hermogenes Buencamino as assistant
bus with the railing was what caused the damage to the bus. The SC conductor.
has also accorded more credence to the evidence of the plaintiff that
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- Upon approaching Barrio Lagalag in Tiaong, the train slowed although the act of a third person, or an act of God for which he is not
down and the conductor shouted 'Lusacan', 'Lusacan'. responsible intervenes to precipitate the loss.
Thereupon, the old woman walked towards the left front door
facing the direction of Tiaong, carrying the child. When the two It was negligence on the conductor's part to announce the next flag
were near the door, the train suddenly picked up speed. As a stop when said stop was still a full three minutes ahead. As the
result the two stumbled and they were seen no more. It took respondent CA correctly observed, "the appellant's announcement
3 mins more before the train stopped at the next barrio, was premature and erroneous. That the announcement was
Lusacan, and the victims were not among the passengers premature and erroneous is shown by the fact that immediately after
who disembarked thereat. The next morning, the dead bodies the train slowed down, it unexpectedly accelerated to full speed.
of the old woman and the child were seen in the railroad tracks Petitioner-appellant failed to show any reason why the train suddenly
by the police. resumed its regular speed. The announcement was made while the
- CFI of Quezon convicted defendant-appellant Clemente train was still in Barrio Lagalag.
Briñas for double homicide thru reckless imprudence but
acquitted Buencamino and Millan OTG of reasonable doubt. The proximate cause of the death of the victims was the premature
Apart from imprisonment for violation of Art. 305 in rel to Art. and erroneous announcement of petitioner' appellant Briñas. This
249 of the RPC, the lower court ordered Briñas to indemnify announcement prompted the victims to stand and proceed to the
the heirs of the deceased. As to the responsibility of the nearest exit. Without said announcement, the victims would have
Manila Railroad Company, the court held that it shall be the been safely seated in their respective seats when the train jerked as it
subject of a separate proceeding. CA affirmed. picked up speed. The connection between the premature and
- Petitioner argues that it was negligence per se for Martina erroneous announcement of petitioner-appellant and the deaths of the
Bool to go to the door of the coach while the train was still in victims is direct and natural, unbroken by any intervening efficient
motion and that it was this negligence that was the proximate causes.
cause of their deaths?

ISSUE: W/N Brinas’ premature announcement of the train’s stop was Mallari v. CA and Bulletin Publishing Corp.
the proximate cause of Bool and Gesmundo’s death? YES WHO WON: Bulletin
DOCTRINE: In an action based on contract of carriage, the court need
RULING: not make an express finding of fault or negligence on the part of the
The proximate cause of the injury is not necessarily the immediate carrier in order to hold it responsible for the payment of damages
cause of, or the cause nearest in time to, the injury. It is only when the sought by the passenger. Under Art. 1755 of the Civil Code, a common
causes are independent of each other that the nearest is to be charged carrier is bound to carry the passengers safely as far as human care
with the disaster. So long as there is a natural, direct and continuous and foresight can provide using the utmost diligence of very cautious
sequence between the negligent act and the injury that it can persons with due regard for all the circumstances. Moreover, under
reasonably be said that but for the act the injury could not have Art. 1756 of the Civil Code, in case of death or injuries to passengers,
occurred, such negligent act is the proximate cause of the injury, and a common carrier is presumed to have been at fault or to have acted
whoever is responsible therefore is liable for damages resulting negligently, unless it proves that it observed extraordinary diligence.
therefrom. One who negligently creates a dangerous condition cannot Further, pursuant to Art. 1759 of the same Code, it is liable for the
escape liability for the natural and probable consequences thereof, death of or injuries to passengers through the negligence or willful acts
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of the former’s employees. This liability of the common carrier does Fiera. CA ordered the Mallaris to compensate Reyes and
not cease upon proof that it exercised all the diligence of a good father absolved respondent Bulletin.
of a family in the selection of its employees.
ISSUE: Who among the two carriers in a collision is liable to the
FACTS: injuries sustained by the plaintiff’s husband? Mallaris
- On Oct 1987, the passenger jeepney driven by petitioner
Alfredo Mallari Jr. and owned by his co-petitioner Alfredo RULING:
Mallari Sr. collided with the delivery van of respondent Bulletin The SC found that the proximate cause of the collision resulting in the
Publishing Corp. (Bulletin) along the National Highway in death of Israel Reyes, a passenger of the jeepney, was the sole
Barangay San Pablo, Dinalupihan, Bataan. negligence of the driver of the passenger jeepney, petitioner Alfredo
- The collision occurred after Mallari Jr. overtook the Fiera while Mallari Jr., who recklessly operated and drove his jeepney in a lane
negotiating a curve in the highway. The points of collision where overtaking was not allowed by traffic rules. Under Art. 2185 of
were the left rear portion of the passenger jeepney and the the Civil Code, unless there is proof to the contrary, it is
left front side of the delivery van of Bulletin. The two right presumed that a person driving a motor vehicle has been
wheels of the delivery van were on the right shoulder of the negligent if at the time of the mishap he was violating a traffic
road and pieces of debris from the accident were found regulation. As found by the appellate court, petitioners failed to
scattered along the shoulder of the road up to a certain portion present satisfactory evidence to overcome this legal
of the lane travelled by the passenger jeepney. The impact presumption.
caused the jeepney to turn around and fall on its left side
resulting in injuries to its passengers one of whom was Israel The negligence and recklessness of the driver of the passenger
Reyes who eventually died due to the gravity of his injuries. jeepney is binding against petitioner Mallari Sr., who was the owner of
- Claudia G. Reyes, the widow of Israel M. Reyes, filed a the passenger jeepney engaged as a common carrier, considering the
complaint for damages with the RTC against Alfredo Mallari fact that in an action based on contract of carriage, the court need
Sr. and Alfredo Mallari Jr., and also against Bulletin, its driver not make an express finding of fault or negligence on the part of
Felix Angeles, and the N.V. Netherlands Insurance Company. the carrier in order to hold it responsible for the payment of
RTC found that the proximate cause of the collision was the damages sought by the passenger. Under Art. 1755 of the Civil
negligence of Felix Angeles, driver of the Bulletin delivery van, Code, a common carrier is bound to carry the passengers safely
considering the fact that the left front portion of the delivery as far as human care and foresight can provide using the utmost
truck driven by Felix Angeles hit and bumped the left rear diligence of very cautious persons with due regard for all the
portion of the passenger jeepney driven by Alfredo Mallari Jr. circumstances. Moreover, under Art. 1756 of the Civil Code, in
- CA modified the decision of the RTC and found no negligence case of death or injuries to passengers, a common carrier is
on the part of Angeles and Bulletin (his employer). It ruled that presumed to have been at fault or to have acted negligently,
the collision was caused by the sole negligence of petitioner unless it proves that it observed extraordinary diligence. Further,
Alfredo Mallari Jr. who admitted that immediately before the pursuant to Art. 1759 of the same Code, it is liable for the death
collision and after he rounded a curve on the highway, he of or injuries to passengers through the negligence or willful acts
overtook a Fiera which had stopped on his lane and that he of the former’s employees. This liability of the common carrier
had seen the van driven by Angeles before overtaking the does not cease upon proof that it exercised all the diligence of a
good father of a family in the selection of its employees.
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due care in carrying its passengers safely is a breach of duty (culpa


Clearly, by the contract of carriage, the carrier jeepney owned by contractual) under articles 1101, 1103 and 1104 of the Civil Code.
Mallari Sr. assumed the express obligation to transport the Furthermore, the duty that the carrier of passengers owes to its
passengers to their destination safely and to observe extraordinary patrons extends to persons boarding the cars as well as to those
diligence with due regard for all the circumstances, and any injury or alighting therefrom.
death that might be suffered by its passengers is right away
attributable to the fault or negligence of the carrier. FACTS:
- Manila Electric Company (MEC) is engaged in operating
street cars in the City for the conveyance of passengers;
- On Nov 1925, Teodorico Florenciano, as MEC’s
motorman, was in charge of car No. 74 running from east
to west on R. Hidalgo Street.
- After the car had stopped at its appointed place for taking on
and letting off passengers, just east of the intersection, it
resumed its course at a moderate speed under the guidance
of the motorman.
- Del Prado, upon approaching the car, raised his hand as an
indication to the motorman of his desire to board the car, in
response to which the motorman eased up a little, without
stopping.
- Del Prado then seized, with his hand, the front
perpendicular handspot and at the same time placing his
left foot upon the platform. However, before the Del Prado’s
position had become secure, and even before his raised right
Del Prado v. Manila Electric Co. foot had reached the flatform, the motorman applied the
WHO WON: Del Prado power, with the result that the car gave a slight lurch forward.
This sudden impulse to the car caused the plaintiff's foot
DOCTRINE: As a general rule, there is no obligation on the part of a to slip, and his hand was jerked loose from the handpost,
street railway company to stop its cars to let on intending passengers He therefore fell to the ground, and his right foot was
at other points than those appointed for stoppage. Nevertheless, caught and crushed by the moving car. The next day the
although the motorman of this car was not bound to stop to let the member had to be amputated in the hospital.
plaintiff on, it was his duty to do act that would have the effect of - Del Prado filed a civil suit against MEC with the CFI of Manila
increasing the plaintiff's peril while he was attempting to board the car. to recover damages. CFI awarded to Del Prado the sum of
The premature acceleration of the car was, in our opinion, a breach of P10K as damages. Defendant MEC appealed.
this duty. - The motorman stated at the trial that he did not see the plaintiff
attempting to board the car; that he did not accelerate the
The relation between a carrier of passengers for hire and its patrons speed of the car as claimed by the plaintiff's witnesses; and
is of a contractual nature; and in failure on the part of the carrier to use
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that he in fact knew nothing of the incident until after the to the circumstances of the case (art 1103). No such general discretion
plaintiff had been hurt and someone called to him to stop. is given by the Code in dealing with liability arising under article 1902
(tort).
ISSUE/S:
1. W/N common carrier MEC is liable to plaintiff Del Prado? YES 2. As to the contributory negligence of the plaintiff, the Court applied
2. W/N Del Prado is guilty of contributory negligence? YES the ruling in Rakes vs. Atlantic, Gulf and Pacific Co., where it was
considered as a mitigating circumstance under article 1103 of the Civil
RULING: Code. It is obvious that the plaintiff's negligence in attempting to board
1. As a general rule, there is no obligation on the part of a street the moving car was not the proximate cause of the injury. The direct
railway company to stop its cars to let on intending passengers and proximate cause of the injury was the act of appellant's
at other points than those appointed for stoppage. Nevertheless, motorman in putting on the power prematurely. A person
although the motorman of this car was not bound to stop to let boarding a moving car must be taken to assume the risk of injury
the plaintiff on, it was his duty to do act that would have the effect from boarding the car under the conditions open to his view, but
of increasing the plaintiff's peril while he was attempting to board he cannot fairly be held to assume the risk that the motorman,
the car. The premature acceleration of the car was, in our opinion, having the situation in view, will increase his peril by accelerating
a breach of this duty. the speed of the car before he is planted safely on the platform.
The rule here applicable seems to be analogous to the doctrine of "the
The relation between a carrier of passengers for hire and its last clear chance." In accordance with this doctrine, the contributory
patrons is of a contractual nature; and in failure on the part of the negligence of the party injured will not defeat the action if it be shown
carrier to use due care in carrying its passengers safely is a that the defendant might, by the exercise of reasonable care and
breach of duty (culpa contractual) under articles 1101, 1103 and prudence, have avoided the consequences of the negligence of the
1104 of the Civil Code. Furthermore, the duty that the carrier of injured party. The negligence of the plaintiff was, however,
passengers owes to its patrons extends to persons boarding the contributory to the accident and must be considered as a mitigating
cars as well as to those alighting therefrom. circumstance.

The distinction between these two kinds of negligence (culpa Aboitiz Shipping v. CA
contractual and culpa aquiliana) is important in this jurisdiction, for the WHO WON: Vianas
reason that where liability arises from a mere tort (culpa aquiliana), not
involving a breach of positive obligation, an employer, or master, may DOCTRINE: All persons who remain on the premises a reasonable
exculpate himself, under the last paragraph of article 1903 of the Civil time after leaving the conveyance are to be deemed passengers, and
Code, by providing that he had exercised due diligence to prevent the what is a reasonable time or a reasonable delay within this rule is to
damage; whereas this defense is not available if the liability of the be determined from all the circumstances, and includes a reasonable
master arises from a breach of contractual duty (culpa contractual). time to see after his baggage and prepare for his departure. The
Another practical difference between liability for negligence arising carrier-passenger relationship is not terminated merely by the fact that
under 1902 of the Civil Code and liability arising from negligence in the person transported has been carried to his destination if, for
the performance of a positive duty, under article 1101 and related example, such person remains in the carrier's premises to claim his
provisions of the Civil Code, is that, in dealing with the latter form of baggage
negligence, the court is given a discretion to mitigate liability according
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FACTS: not an employee of Aboitiz, the latter cannot be held liable


- On May 11, 1975, Anacleto Viana boarded the vessel M/V under the fellow-servant rule. Thereafter, Aboitiz filed a third-
Antonia owned by defendant Aboitiz Shipping Corp (Aboitiz), party complaint against Pioneer.
at the port at San Jose, Occidental Mindoro, bound for Manila, - Pioneer averred, among among other things, that Aboitiz had
having purchased a a ticket in the sum of P23.10. no cause of action against Pioneer considering that Aboitiz is
- A day after, said vessel arrived at Pier 4, North Harbor, being sued by the Vianas for breach of contract of carriage to
Manila, and the passengers therein disembarked, a which Pioneer is not a party and that Pioneer had observed
gangplank having been provided connecting the side of the the diligence of a good father of a family both in the selection
vessel to the pier. Instead of using said gangplank and supervision of its employees as well as in the prevention
Anacleto Viana disembarked on the third deck which was of damage or injury to anyone including the victim Anacleto
on the level with the pier. After said vessel had landed, the Viana.
Pioneer Stevedoring Corporation (Pioneer) took over the - RTC ruled in favor of Vianas and ordered Aboitiz to pay the
exclusive control of the cargoes loaded on said vessel Vianas for damages incurred and Pioneer was ordered to
pursuant to the Memorandum of Agreement (MOA) between reimburse Aboitiz for whatever amount the latter has paid the
the third-party defendant Pioneer and defendant Aboitiz. Vianas.
- The crane owned by Pioneer and operated by its crane - Both Aboitiz and Pioneer filed separate MRs wherein they
operator Alejo Figueroa was placed alongside the vessel raised that Anacleto acted with gross negligence.
and one (1) hour after the passengers of said vessel had - RTC absolved Pioneer from liability for failure of the Vianas
disembarked, it started operation by unloading the cargoes and Aboitiz to establish a case of negligence against the crane
from said vessel. While the crane was being operated, operator which is never presumed aside from the fact that the
Anacleto Viana who had already disembarked from said MOA refers only to Pioneer's liability in case of loss or damage
vessel obviously remembering that some of his cargoes were to goods handled by it but not in the case of personal injuries,
still loaded in the vessel, went back to the vessel, and it was and, finally that Aboitiz cannot properly invoke the fellow-
while he was pointing to the crew of the said vessel to the servant rule simply because its liability stems from a breach
place where his cargoes were loaded that the crane hit of contract of carriage. CA affirmed.
him, pinning him between the side of the vessel and the
crane. ISSUE: W/N common carrier Aboitiz is liable for the death of Viana
- Anacleto was thereafter brought to the hospital where he later resulting from the accidental fall of the crane towards him? YES
died 3 days after. The cause of his deathbeing "hypostatic
pneumonia secondary to traumatic fracture of the pubic RULING:
bone lacerating the urinary bladder". The rule is that the relation of carrier and passenger continues until
- Private respondent Vianas filed a complaint for damages the passenger has been landed at the port of destination and has left
against Aboitiz for breach of CoC. the vessel owner's dock or premises. Once created, the relationship
- Aboitiz denied responsibility contending that at the time of the will not ordinarily terminate until the passenger has, after reaching his
accident, the vessel was completely under the control of destination, safely alighted from the carrier's conveyance or had a
Pioneer as the exclusive stevedoring contractor of Aboitiz, reasonable opportunity to leave the carrier's premises. All persons
which handled the unloading of cargoes from the vessel of who remain on the premises a reasonable time after leaving the
Aboitiz. It is also averred that since the crane operator was conveyance are to be deemed passengers, and what is a
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reasonable time or a reasonable delay within this rule is to be WHO WON: Heirs of (passengers) Beter and Rautraut
determined from all the circumstances, and includes a
reasonable time to see after his baggage and prepare for his DOCTRINE: In order that a common carrier may be absolved from
departure. The carrier-passenger relationship is not terminated liability in case of force majeure, it is not enough that the accident was
merely by the fact that the person transported has been carried caused by force majeure. The common carrier must still prove that it
to his destination if, for example, such person remains in the was not negligent in causing the injuries resulting from such accident.
carrier's premises to claim his baggage
FACTS:
In the case at bar, the SC ruled that there was justifiable cause for the - On Aug 1980, a bus owned by Bachelor Express, Inc. (BEI)
presence of Anacleto on or near the petitioner’s vessel an hour after and driven by Cresencio Rivera came from Davao City on its
the petitioner disembarked from the vessel. It is of common knowledge way to Cagayan de Oro City passing Butuan City.
that, by the very nature of petitioner's business as a shipper, the - While at Tabon-Tabon, Butuan City, the bus picked up a
passengers of vessels are allotted a longer period of time to disembark passenger and about 15 mins later, a passenger at the rear
from the ship than other common carriers such as a passenger bus. portion suddenly stabbed a PC soldier which caused
With respect to the bulk of cargoes and the number of passengers it commotion and panic among the passengers.
can load, such vessels are capable of accommodating a bigger - When the bus stopped, passengers Ornominio Beter and
volume of both as compared to the capacity of a regular commuter Narcisa Rautraut were found lying down the road, the former
bus. Consequently, a ship passenger will need at least an hour as already dead as a result of head injuries and the latter also
is the usual practice, to disembark from the vessel and claim his suffering from severe injuries which caused her death later.
baggage whereas a bus passenger can easily get off the bus and - The passenger assailant alighted from the bus and ran toward
retrieve his luggage in a very short period of time. When the the bushes but was killed by the police. Thereafter, the heirs
accident occurred, the victim was in the act of unloading his of Ornominio Beter and Narcisa Rautraut, private respondents
cargoes, which he had every right to do, from petitioner's vessel. herein the parents of Beter and Rautraut.
As earlier stated, a carrier is duty bound not only to bring its - RTC dismissed the complaint. Upon appeal, the decision was
passengers safely to their destination but also to afford them a reversed and set aside. CA found BEI and Rivera solidarily
reasonable time to claim their baggage. liable to pay the private respondents herein.

While the victim was admittedly contributorily negligent, still Aboitiz’s ISSUE:
failure to exercise extraordinary diligence was the proximate and 1. What was the proximate cause of the whole incident?
direct cause of, because it could definitely have prevented, the 2. Whether or not the petitioner’ common carrier observed
former's death. extraordinary diligence to safeguard the lives of its passengers? NO

The Court also held that there was no negligence on the part of RULING:
Pioneer, a confirmation of the trial court's finding to that effect, hence, 1. Petitioner, in order to overcome the presumption of fault/negligence
it is absolved from liability. under the law, states that the vehicular incident resulting in the death
of the passengers Beter and Rautraut was caused by force
majeure/casa fortuito.
Bachelor Express Inc. v. CA
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The following essential characteristics of casa fortuito are: (1) The Therefore, the negligence of the common carrier, through its
cause of the unforeseen and unexpected occurrence, or of the failure employees, consisted of the lack of extraordinary diligence required of
of the debtor to comply with his obligation, must be independent of the common carriers, in exercising vigilance and utmost care of the safety
human will; (2) It must be impossible to foresee the event which of its passengers, exemplified by the driver's belated stop and the
constitutes the caso fortuito, or if it can be foreseen, it must be reckless opening of the doors of the bus while the same was travelling
impossible to avoid; (3) The occurrence must be such as to render it at an appreciably fast speed. At the same time, the common carrier
impossible for the debtor to fulfill his obligation in a normal manner. itself acknowledged, through its administrative officer, Benjamin
and (4) the obligor (debtor) must be free from any participation in the Granada, that the bus was commissioned to travel and take on
aggravation of the injury resulting to the creditor. passengers and the public at large, while equipped with only a solitary
door for a bus its size and loading capacity, in contravention of rules
The running amuck of the passenger was the proximate cause of and regulations provided for under the Land Transportation and Traffic
the incident as it triggered off a commotion and panic among Code
passengers started running to the sole exit shoving each other
resulting in the falling off the passengers Beter and Rautraut
causing them fatal injuries. The sudden act of the passenger who
stabbed another passenger in the bus is within context of force Maranan v. Perez
majeure. WHO WON: Maranan

However, in order that a common carrier may be absolved from DOCTRINE: By virtue of Art. 1759 of the Civil Code, common carriers
liability in case of force majeure, it is not enough that the are liable for the death of or injuries to passengers through the
accident was caused by force majeure. The common carrier must negligence or willful acts of the former's employees, although such
still prove that it was not negligent in causing the injuries employees may have acted beyond the scope of their authority or in
resulting from such accident. violation of the orders of the common carriers. Accordingly, it is the
carrier's strict obligation to select its drivers and similar employees
2. There is nothing in the record to support the conclusion that the with due regard not only to their technical competence and physical
solitary door of the bus was locked as to prevent the passengers from ability, but also, no less important, to their total personality, including
passing through. Leonila Cullano (witness) clearly stated that the their patterns of behavior, moral fibers, and social attitude.
conductor opened the door when the passengers were shouting that
the bus stop while they were in a state of panic. Sergia Beter FACTS:
categorically stated that she actually saw her son fall from the bus as - On October 1960, Rogelio Corachea, a passenger in a
the door was forced open by the force of the onrushing passengers. taxicab owned and operated by Pascual Perez was stabbed
Moreover, the records show that the bus was running at a speed of and killed by the driver, Simeon Valenzuela.
48-65 km/hour, the speed of the bus scarcely be considered slow - Valenzuela was convicted of homicide by the CFI of
considering that according to Collango (conductor) himself, the bus Batangas.
had just come from a full stop after picking a passenger and that the - While appeal was pending in the CA, Antonia Maranan
bus was still on its second or third gear. (victim’s mother), filed an action in the CFI of Batangas to
recover damages from Perez and Valenzuela for the death of
her son.
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- Defendants asserted that the deceased was killed in self- their total personality, including their patterns of behavior, moral
defense, since he first assaulted the driver by stabbing him fibers, and social attitude.
from behind. Defendant Perez further claimed that the death
was a caso fortuito for which the carrier was not liable. Applying this stringent norm to the facts in this case, therefore, the
- CFI found for Antonia and awarded her damages against lower court rightly adjudged the defendant carrier liable pursuant to
Perez. The claim against Valenzuela was dismissed. CA Art. 1759 of the Civil Code. The dismissal of the claim against the
affirmed the judgment of conviction. defendant driver was also correct. Plaintiff's action was predicated on
breach of contract of carriage and the cab driver was not a party
ISSUE: W/N common carrier Perez is liable for the act of his employee thereto. His civil liability is covered in the criminal case wherein he was
against its passenger? YES convicted by final judgment.

RULING:
By virtue of Art. 1759 of the Civil Code, common carriers are PAL v. NLRC
liable for the death of or injuries to passengers through the WHO WON: PAL – its application for clearance to terminate Gempis
negligence or willful acts of the former's employees, although was approved.
such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers. DOCTRINE: The business of petitioner Philippine Airlines is such that
whenever a passenger dies or is injured the presumption is, it is at
Three very cogent reasons underlie this rule as explained in Texas fault notwithstanding the fact that it has exercised due diligence of a
Midland R.R. v. Monroe and Haver v. Central Railroad Co.: (1) the good father of a family in the selection and supervision of its
special undertaking of the carrier requires that it furnish its passenger employees. Thus, extraordinary measures and diligence should be
that full measure of protection afforded by the exercise of the high exercised by it for the safety of its passengers and their belongings.
degree of care prescribed by the law, inter alia from violence and Needless to state, a pilot must be sober all the time for he may be
insults at the hands of strangers and other passengers, but above all, called upon to fly a plane even before his regular scheduled hours,
from the acts of the carrier's own servants charged with the otherwise so many lives will be in danger if he is drunk. It would be
passenger's safety; (2) said liability of the carrier for the servant's unjust for an employer like herein petitioner PAL to be compelled to
violation of duty to passengers, is the result of the formers confiding in continue with the employment of a person whose continuance in the
the servant's hands the performance of his contract to safely transport service is obviously inimical to its interest.
the passenger, delegating therewith the duty of protecting the
passenger with the utmost care prescribed by law; and (3) as between FACTS:
the carrier and the passenger, the former must bear the risk of - On November 1980, private respondent, Salvador Gempis, a
wrongful acts or negligence of the carrier's employees against YS-11 pilot of PAL with the rank of captain, filed with the
passengers, since it, and not the passengers, has power to select and Ministry of Labor, NCR, a complaint against PAL for illegal
remove them. suspension and dismissal.
- The next day, PAL filed with the same office an application for
Accordingly, it is the carrier's strict obligation to select its drivers clearance to terminate the employment of Gempis on the
and similar employees with due regard not only to their technical grounds of (1) serious misconduct and (2) violation of the
competence and physical ability, but also, no less important, to liquor ban and company policies.
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- The charge of petitioners against Gempis was "serious WHO WON: PAL
misconduct (abuse of authority)" for forcing First Officers
A. Barcebal and J. Ranches to drink on February 27, 1980, at DOCTRINE: Where the [common carrier] has faithfully complied with
10:30 in the evening at the coffee shop of the Triton Hotel at the requirements of government agencies and adhered to the
Cebu, six (6) bottles of beer each, within thirty minutes. established procedures and precautions of the airline industry at any
Unable to consume the bottles of beer within the time limit set particular time, its failure to take certain steps that a passenger in
by Gempis, the two pilots were ordered to stand erect and hindsight believes should have been taken is not the negligence or
were hit on the stomach by Gempis. The petition alleged that misconduct which mingles with force majeure as an active and
"the incident occurred with the full knowledge of private cooperative cause.
respondent that the 2 affected co-pilots have flight duties the
next day with initial assignments as early as 7:10 am and as FACTS:
late as 12:00 pm. - Norberto Quisumbing, Sr. and Gunther Leoffler were among
- Labor Arbiter Dogelio denied PAL’s application for clearance the of PAL’s Fokker 'Friendship' PIC-536 plane in its flight
to terminate complainant’s services, the penalty of six months of November 6, 1968 which left Mactan City at about 7:30 in
demotion being sufficient. He has also ordered PAL to the evening with Manila for its destination.
reinstate Gempis in his position as YS-11 Captain, with - After the plane had taken off, Florencio O. Villarin, a Senior
backwages for six months. NLRC affirmed. NBI Agent who was also a passenger of the said plane,
noticed a certain 'Zaldy,' a suspect in the killing of Judge
ISSUE: W/N Gempis’ act of compelling his subordinates to drink Valdez, seated at the front seat near the door leading to
alcohol the night before the latter’s flight constitutes extraordinary the cockpit of the plane.
measures and diligence for the safety of its would-be passengers? NO - Villarin then scribbled a note addressed to the pilot of the
plane requesting the latter to contact NBI duty agents in
RULING: Manila for the said agents to ask the Director of the NBI to
The business of petitioner Philippine Airlines is such that whenever a send about six NBI agents to meet the plane because the
passenger dies or is injured the presumption is, it is at fault suspect in the killing of Judge Valdez was on board
notwithstanding the fact that it has exercised due diligence of a good - After receiving the note, 15 mins after take-off, Capt. Luis
father of a family in the selection and supervision of its employees. Bonnevie, Jr., came out of the cockpit and sat beside Villarin
Thus, extraordinary measures and diligence should be exercised by it at the rear portion of the plane and explained that he could not
for the safety of its passengers and their belongings. Needless to send the message because it would be heard by all ground
state, a pilot must be sober all the time for he may be called upon to aircraft stations. Villarin, however, told the pilot of the danger
fly a plane even before his regular scheduled hours, otherwise so of commission of violent acts on board the plane by the
many lives will be in danger if he is drunk. It would be unjust for an notorious 'Zaldy' and his three companions.
employer like herein petitioner PAL to be compelled to continue with - While the pilot and Villarin were talking, 'Zaldy' and one of his
the employment of a person whose continuance in the service is companions walked to the rear and stood behind them. 'Zaldy'
obviously inimical to its interest. and his three (3) companions returned to their seats, but after
a few minutes they moved back to the rear throwing ugly looks
at Villarin.
Quisumbing v. CA
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- Soon thereafter an exchange of gunshots ensued between for failing "to take positive measures to implement Civil
Villarin and 'Zaldy' and the latter's companions. 'Zaldy' Aeronautics Administration regulations prohibiting civilians
announced to the passengers and the pilots in the cockpit that from carrying firearms on board aircrafts;" and that "the
it was a hold-up and ordered the pilot not to send any SOS. absence of coded transmissions, the amateurish behaviour of
The hold-uppers divested passengers of their belongings. the pilot in dealing with the NBI agent, the allegedly open
Specifically, Norberto Quisumbing, Sr. was divested of cockpit door, and the failure to return to Mactan, in the light of
[pieces of jewelry] and cash in the total amount of P18,650 the circumstances of the case were not negligent acts
out of which recoveries were made amounting to P4,550. On sufficient to overcome the force majeure nature of the armed
the other hand, Gunther Leoffler was divested of a wrist robbery.
watch, cash and a wallet in the total of P1,700 As a result of
the incident, Quisumbing, Sr. suffered shock, because a gun ISSUE: W/N common carrier PAL is liable to plaintiffs? NO
had been pointed at him by one of the holduppers. RULING:
- Upon landing at the Manila International Airport. 'Zaldy' and The Supreme Court is convinced of the correctness of the essential
his three companions succeeded in escaping. conclusion of both the trial and appellate courts that the evidence
- Quisumbing and Loeffler brought suit against PAL in the CFI, does indeed fail to prove any want of diligence on the part of PAL,
to recover the value of the property lost by them to the robbers or that, more specifically, it had failed to comply with applicable
as well as moral and exemplary damages, attorney's fees and regulations or universally accepted and observed procedures to
expenses of litigation. The plaintiffs declared that their suit preclude hijacking; and that the particular acts singled out by the
was instituted pursuant to Civil Code articles 1754, 998, 2000 petitioners as supposedly demonstrative of negligence were, in
and 2001 and on the ground that in relation to said Civil Code the light of the circumstances of the case, not in truth negligent
article 2001 the complained-of act of the armed robbers is not acts "sufficient to overcome the force majeure nature of the
a force majeure, as the 'use of arms' or 'irresistible force' was armed robbery."
not taken advantage of by said armed robbers in gaining
entrance to defendant's ill-fated plane in question. Where the defendant has faithfully complied with the
- PAL denied liability alleging that the robbery during the flight requirements of government agencies and adhered to the
and after the aircraft was forcibly landed at the Manila Airport established procedures and precautions of the airline industry at
did indeed constitute force majeure, and neither of the any particular time, its failure to take certain steps that a
plaintiffs had notified PAL "or its crew or employees that they passenger in hindsight believes should have been taken is not
were in possession of cash, German marks and valuable the negligence or misconduct which mingles with force majeure
[pieces of jewelry] and watches" or surrendered said items to as an active and cooperative cause. Under the circumstance of the
"the crew or personnel on board the aircraft." instant case, the acts of the airline and its crew cannot be faulted as
- CFI rendered judgment 'dismissing plaintiffs' complaint. It negligence. The hijackers had already shown their willingness to kill.
upheld PAL’s contention. Plaintiffs appealed to the CA. One passenger was in fact killed and another survived gunshot
- CA affirmed CFI. It rejected the argument that "the use of arms wounds. The lives of the rest of the passengers and crew were more
or irresistible force" referred to in Article 2001 important than their properties. Cooperation with the hijackers until
constitutes force majeure only if resorted to gain entry into the they released their hostages at the runway end near the South
airplane, and not if it attends "the robbery itself.” It also ruled Superhighway was dictated by the circumstances.
that PAL could not be faulted for want of diligence, particularly
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bus, which was running at the speed of 50 kilometers per


Fabre, Jr. v. CA hour, to skid to the left road shoulder. The bus hit the left
WHO WON: Private respondents (Amyline Antonio, WWCF, etc.) traffic steel brace and sign along the road and rammed
the fence of one Jesus Escano, then turned over and
DOCTRINE: Due diligence in selection of employees is not satisfied landed on its left side, coming to a full stop only after a
by finding that the applicant possessed a professional driver’s series of impacts. The bus came to rest off the road. A
license. The employer should also examine the applicant for his coconut tree which it had hit fell on it and smashed its
qualifications, experience and record of service. Due diligence in front portion.
supervision, on the other hand, requires the formulation of rules and - Several passengers were injured. Private respondent
regulations for the guidance of employees and the issuance of proper Amyline Antonio was thrown on the floor of the bus and
instructions as well as actual implementation and monitoring of pinned down by a wooden seat which came off after being
consistent compliance with the rules. unscrewed. It took three persons to safely remove her from
this position. She was in great pain and could not move.
FACTS: - The Lingayen police investigated the incident the next day
- Petitioners Engracio Fabre, Jr. and his wife were owners of a and subsequently filed a criminal complaint against the driver,
1982 model Mazda minibus. They used the bus principally in Porfirio Cabil. The case was later filed with the RTC
connection with a bus service for school children which Lingayen.
they operated in Manila. - Amyline Antonio, who was seriously injured, brought this case
- The couple had a driver, Porfirio J. Cabil, whom they hired in in the RTC Makati. As a result of the accident, she is now
1981, after trying him out for two weeks. His job was to take suffering from paraplegia and is permanently paralyzed from
school children to and from the St. Scholastica’s College the waist down. During the trial she described the operations
in Malate, Manila. she underwent and adduced evidence regarding the cost of
- Private respondent Word for the World Christian Fellowship her treatment and therapy.
Inc. (WWCF) arranged with petitioners for the transportation - RTC gave judgment for private respondents ordering
of 33 members of its Young Adults Ministry from Manila to La petitioners Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil
Union and back in consideration of which private respondent pursuant to articles 2176 and 2180 to pay the respondents
paid petitioners the amount of P3K. jointly and severally. CA affirmed.
- The group was scheduled to leave at 5PM. However, as
several members of the party were late, the bus did not leave ISSUE: W/N common carrier Fabres were negligent, and accordingly,
the Tropical Hut at the corner of Ortigas Avenue and EDSA liable to private respondents? YES
until 8PM. Petitioner Porfirio Cabil drove the minibus.
- The usual route to Caba, La Union was through Carmen, RULING:
Pangasinan. Petitioner Cabil, who was unfamiliar with the Pursuant to Arts. 2176 and 2180 of the Civil Code, Cabil’s negligence
area (it being his first trip to La Union), was forced to take gave rise to the presumption that his employers, the Fabres, were
a detour through the town of Ba-ay in Lingayen, themselves negligent in the selection and supervision of their
Pangasinan. At 11:30PM, he came upon a sharp curve on employee.
the highway, running on a south to east direction/“siete.”
The road was slippery because it was raining, causing the
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The finding that Cabil drove his bus negligently, while his employer, exercised the diligence of a good father of the family in the selection
the Fabres, who owned the bus, failed to exercise the diligence of a and supervision of their employee.
good father of the family in the selection and supervision of their
employee is fully supported by the evidence on record. Indeed, it was
admitted by Cabil that on the night in question, it was raining, and, as
a consequence, the road was slippery, and it was dark which
according to him, was the reason for his failure to see that there lay a
sharp curve ahead. However, it is undisputed that Cabil drove his bus
at the speed of 50 kilometers per hour and only slowed down when he
noticed the curve some 15 to 30 meters ahead. By then it was too late
for him to avoid falling off the road. Given the conditions of the road
and considering that the trip was Cabil’s first one outside of Manila,
Cabil should have driven his vehicle at a moderate speed.

Due diligence in selection of employees is not satisfied by finding that


the applicant possessed a professional driver’s license. The employer
should also examine the applicant for his qualifications, experience
and record of service. Due diligence in supervision, on the other hand,
requires the formulation of rules and regulations for the guidance of
employees and the issuance of proper instructions as well as actual
implementation and monitoring of consistent compliance with the
rules.

In the case at bar, the Fabres, in allowing Cabil to drive the bus to La
Union, apparently did not consider the fact that Cabil had been driving
for school children only, from their homes to the St. Scholastica’s
College in Metro Manila.They had hired him only after a two-week
apprenticeship. They had tested him for certain matters, such as
whether he could remember the names of the children he would be
taking to school, which were irrelevant to his qualification to drive on
a long distance travel, especially considering that the trip to La Union
was his first. The existence of hiring procedures and supervisory
policies cannot be casually invoked to overturn the presumption of
negligence on the part of an employer.

As common carriers, the Fabres were bound to exercise


“extraordinary diligence” for the safe transportation of the passengers
to their destination. This duty of care is not excused by proof that they
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such terrific force that the first six wheels of the train
were derailed, the engine and the front part of the body of
the bus was wrecked, the driver of the bus died instantly,
while many of its passengers, Edgardo among them,
were severely injured.
- Edgardo was first confined at the San Pablo City Hospital
(June 18) and then brought next to the De los Santos Clinic
(June 20), Quezon City. He again left such clinic to be
transferred to the University of Santo Tomas Hospital (Oct 14-
Cariaga v. LTB Nov 15) where he stayed for a relatively longer period. On this
WHO WON: Cariaga last date he was taken back to the De los Santos Clinic (Jan
15). He was unconscious during the first 35 days after the
DOCTRINE: accident. Dr. Gustilo removed the fractured bones which
- The income of the plaintiff which he could have earned if he lacerated the right frontal lobe of his brain and at the UST
should he finish his course and pass the board exams must Hospital, Dr. Gustilo performed another operation to
be deemed to be within the natural and probable cover a big hole on the right frontal part of the head with
consequences of the breach –along with medical, hospital a tantalum plate.
and other expenses– because they could have reasonably - LTB paid the sum of P16,964.45 for all the hospital,
been foreseen by the parties at the time the plaintiff boarded medical and miscellaneous expenses incurred from June
the bus owned and operated by the common carrier. 18, 1952 - April, 1953. From January 15, 1953 - April 1953,
- Moral damages may only be awarded upon showing of any of Edgardo stayed in a private house in Quezon, City, the LTB
the instances enumerated under Art. 2219 of the New Civil having agreed to give him a subsistence allowance of P10
Code or upon showing of bad faith or fraud under Art. 2220 of daily during his period of recovery, having spent in this
the same Code. connection the total sum of P775.30 in addition to the amount
- Attorney’s fees may only be recovered upon showing of any already referred to.
of the instances enumerated under Art. 2208 of the New Civil - Edgardo filed a civil suit against LTB and the Manila Railroad
Code. Co. the total sum of P312,000 as actual, compensatory,
moral and exemplary damages, and for his parents, the
sum of P18,000 in the same concepts.
FACTS: - LTB disclaimed liability claiming that the accident was due to
- At about 1PM on June 18, 1952, a passenger bus of the the negligence of its co-defendant Manila Railroad Co., for not
Laguna Tayabas Bus Co. (LTB) driven by Alfredo Moncada, providing a crossing bar at the point where the national
left for Lilio, Laguna, with Edgardo Cariaga, a fourth-year highway crossed the railway track, and for the reason filed the
medical student of the University of Santo Tomas, as one corresponding cross-claim against the latter company to
of its passengers. recover the total sum of P18,194.75 representing the
- As the bus reached that part of the poblacion of Bay, Laguna, expenses paid to Edgardo.
where the national highway crossed a railroad track, it
bumped against the engine of a train then passing by with
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- Manila Railroad Co, in turn, denied liability upon the complaint engineer sounded two long and two short whistles and upon reaching
and cross-claim alleging that it was reckless negligence of the a point about 100 meters from the highway, he sounded a long whistle
bus driver that caused the accident. which lasted up to the time the train was about to cross it. The bus
- The lower court held that it was the negligence of the bus proceeded on its way without slackening its speed and it bumped
driver that caused the accident and, as a result, rendered against the train engine, causing the first six wheels of the latter to be
judgment sentencing the LTB to pay Edgardo Cariaga the derailed…”
sum of P10,490 as compensatory damages, with interest
at the legal rate from the filing of the complaint, and Moreover, LTB’s charge against Manila Railroad Company of its
dismissing the cross-claim against the Manila Railroad contributory negligence due to an alleged violation of section 91 of Art.
Company. From this decision the Cariagas and the LTB 1459 of MRR’s chapter by its failure to ring the bell was not
appealed. satisfactorily proven. Consequently, the burden of proof on the part of
- Cariagas claim that the TC erred in awarding only P10,490 as LTB was not discharged.
compensatory damages to Edgardo; in not awarding them
actual and moral damages, and in not sentencing LTB to pay 2. According to Edgardo’s neurosurgeon Dr. Romeo Gustilo, it
attorney’s fees. appears that, as a result of the injuries suffered by him, his right
- LTB's contends that the TC should have held that the collision forehead was fractured necessitating the removal of practically
was due to the fault of both the locomotive driver and the bus all of the right frontal lobe of his brain. From the testimony of Dr.
driver and erred, as a consequence, in not holding the Manila Jose A. Fernandez, a psychiatrist, it may be gathered that, because
Railroad Company liable upon the cross-claim filed against it. of the physical injuries suffered by Edgardo, his mentality has been
LTB also avers that the driver of the train locomotive, like the so reduced that he can no longer finish his studies as a medical
bus driver, violated the law, first, in sounding the whistle only student; that he has become completely misfit for any kind of
when the collision was about to take place instead of at a work; that he can hardly walk around without someone helping
distance at least 300 meters from the crossing, and second, him, and has to use a brace on his left leg and feet. Thus, as a
in not ringing the locomotive bell at all. result of the physical injuries suffered by Edgardo Cariaga, he is
now in a helpless condition, virtually an invalid, both physically
ISSUE/S: and mentally.
1. W/N Manila Railroad Company should also be held liable in the
collision? NO The SC is of the opinion that the income which Edgardo Cariaga
2. W/N the award of compensatory damages to Eduardo is could have earned if he should finish the medical course and
inadequate considering the nature and the after effects of the pass the corresponding board examinations must be deemed to
physical injuries suffered by him? YES be within the natural and probable consequences of the breach –
3. W/N Edgardo Cariaga is entitled to moral damages and along with medical, hospital and other expenses totaling P17,719.75–
attorney’s fees? NO because they could have reasonably been foreseen by the parties at
the time he boarded the bus owned and operated by the LTB. At that
RULING: time he was already a fourth-year student in medicine in a reputable
1. The Supreme Court quoted the lower court’s finding regarding university.
LTB’s contention on Manila Railroad Company’s alleged liability to wit:
“While the train was approximately 300 meters from the crossing, the
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As regards the income that he could possibly earn as a medical To reiterate, the sum of P2,000 awarded as moral damages by the
practitioner, it appears that, according to Dr. Amado Doria, a witness trial court has to be eliminated, for under the law it is not a
for the LTB, the amount of P300 could easily be expected as the compensation awardable in a case like the one at bar. The claim
minimum monthly income of Edgardo had he finished his studies. made by said spouses for actual and compensatory damages is
likewise without merits since the present action is based upon a
Upon consideration of all the facts mentioned heretofore this breach of contract of carriage to which said spouses were not a
Court is of the opinion, and so holds, that the compensatory party, and neither can they premise their claim upon the
damages awarded to Edgardo Cariaga should be increased to negligence or quasi-delict of the LTB simply because they were
P25,000. not themselves injured as a result of the collision between the
LTB bus and train owned by the Manila Railroad Company.
3. Plaintiffs' claim for moral damages cannot be granted. Article
2219 of the Civil Code enumerates the instances when moral Davila v. PAL
damages may be covered and the case under consideration does WHO WON: Davila
not fall under any one of them. The present action cannot come
under paragraph 2 of said article because it is not one of quasi-delict DOCTRINE:
because of the pre-existing contractual relation between the - According to Article 2206, paragraph (1), of the Civil Code,
Laguna Tayabas Bus Company and Edgardo Cariaga. Neither "the defendant shall be liable for the loss of the earning
could defendant Laguna Tayabas Bus Company be held liable to capacity of the deceased and indemnity shall be paid to the
pay moral damages to Edgardo Cariaga under Article 2220 of the heirs of the latter." This Article, while referring to "damages for
Civil Code on account of breach of its contract of carriage death caused by crime or quasi-delict," is expressly made
because said defendant did not act fraudulently or in bad faith in applicable by Article 1764 "to the death of a passenger
connection therewith. Defendant Laguna Tayabas Bus Company caused by the breach of contract by a common carrier.
had exercised due diligence in the selection and supervision of its - The formula to compute damages for Davila’s death is this:
employees like the drivers of its buses in connection with the his life expectancy (2/3 x [80-age of death]) x net income
discharge of their duties and so it must be considered an obligor in (gross income-expense)
good faith. - According to Article 2206, in relation to Article 1764, of the
Civil Code, the parents of the deceased are entitled to moral
The plaintiff Edgardo Cariaga is also not entitled to recover for damages for their mental anguish.
attorney's fees, because this case does not fall under any of the - According to Article 2232 of the Civil Code, in contracts and
instances enumerated in Article 2208 of the Civil Code. Defendant quasi-contracts the court may award exemplary damages if
has not committed in connection with this case any "criminal offense the defendant acted in a wanton, fraudulent, reckless,
resulting in physical injuries". The present complaint is not based oppressive or malevolent manner.
either on a "quasi-delict causing physical injuries” nor “any criminal
offense resulting in physical injuries” – FACTS:
LTB’s driver herein being the one who committed the offense is - The case arose from the tragic crash of a passenger plane of
already dead from the collision. the defendant which took the lives of all its crew and
passengers. The plane was a DC-3 type of aircraft,
manufactured in 1942 and acquired by the defendant in
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1948. It had flown almost 18,000 hours at the time of its why the accident occurred, the presumption is that it was at fault,
ill-fated flight. Despite its age, however, it had been certified under Article 1756 of the Civil Code.
as airworthy by the Civil Aeronautics Administration.
- On November 23, 1960, at 5:30PM, it took off from the The trial court fixed the indemnity for his death in the amount of
Manduriao Airport, Iloilo, on its way to Manila, with 33 people P6,000. Pursuant to current jurisprudence on the point it should
on board, including the plane's complement. It did not reach be increased to P12,000.
its destination, but crashed at Mt. Baco, Mindoro, one hour
and fifteen minutes after take-off. A massive search was According to Article 2206, paragraph (1), of the Civil Code, "the
undertaken by the defendant and by other parties as soon as defendant shall be liable for the loss of the earning capacity of
it was realized that the plane's arrival in Manila was overdue. the deceased and indemnity shall be paid to the heirs of the
- The plaintiffs, parents of Pedro T. Davila, Jr., who was one of latter." This Article, while referring to "damages for death caused by
the passengers, had no definite news of what had happened crime or quasi-delict," is expressly made applicable by Article 1764 "to
to their son, getting what information they could only from the death of a passenger caused by the breach of contract by a
conflicting newspaper reports, until they received, on common carrier."
December 19, 1960, a letter of condolence from the
defendant's president Andres Soriano, informing them that The deceased, Pedro Davila, Jr., was single and 30 years of age
their son had died in the crash. And it was only on December when he died. At that age one's normal life expectancy is 33-1/3
29 that his body was recovered and taken back to Iloilo. years, according to the formula (2/3 x [80-30]) adopted by this
- Plaintiffs Spouses Davila filed a civil suit against PAL with the Court in the case of Villa Rey Transit, Inc. vs. Court of Appeals
CFI which ruled in their favor. CFI ordered PAL to pay the ff: on the basis of the American Expectancy Table of Mortality or the
(1) Pedro Davila’s death – 6K; (2) Loss of earning capacity – Actuarial of Combined Experience Table of Mortality. However,
60K; (3) moral damages – 10K; (4) exemplary damages – although the deceased was in relatively good health, his medical
10K; (5) actual damages – 5K; (6) attorney’s fees – 10K; history shows that he had complained of and been treated for
TOTAL=P101,000. such ailments as backaches, chest pains and occasional feelings
of tiredness. It is reasonable to make an allowance for these
ISSUE: W/N PAL is liable for violation of its contract of carriage and if circumstances and consider, for purposes of this case, a
so, for how much? reduction of his life expectancy to 25 years.

RULING: Considering the fact that the deceased was getting his income
What is undisputed is that the pilot did not follow the route (Iloilo- from three (3) different sources, namely from managing a radio
Romblon-Manila) prescribed for his flight, at least between Romblon station, from law practice and from farming, the expenses
and Manila. Since up to that point over Romblon, where he was incidental to the generation of such income were necessarily
supposed to intersect airway "Amber I" the weather was clear, the more than if he had only one source. Together with his living
most reasonable conclusion is that his failure to do so was intentional, expenses, a deduction of P600.00 a month, or P7,200.00 a year,
and that he probably wanted to fly on a straight line to Manila. It was leaving a net yearly income of P7,800.00. This amount, multiplied
a violation of air-craft traffic rules to which, under the circumstances, by 25 years, or P195,000 is the amount which should be awarded
the accident may be directly attributable. In any case, absent a to the plaintiffs in this particular respect. In short, the formula to
satisfactory explanation on the part of the defendant as to how and
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compute damages for Davila’s death is this: his life expectancy of the claimants to appeal the judgment, as warranted by the
(2/3 x [80-age of death]) x net income (gross income-expense). circumstances, pursuant to Art. 2210 of the Civil Code which provides
that “interest may, in the discretion of the court, be allowed upon
Actual losses sustained consist of the following, as found by the trial damages awarded for breach of contract.”
court: "Rolex Watch — P600.00; pistol — P300.00; Burial Expenses
— P600.00; and cost of cemetery lot and mausoleum - P3,500.00." FACTS:
- This present action arose from a collision between a
According to Article 2206, in relation to Article 1764, of the Civil passenger bus of the Laguna Tayabas Bus Co. (LTB) and a
Code, the parents of the deceased are entitled to moral damages delivery truck of the Seven-up Bottling Co. of the Philippines
for their mental anguish. The SC affirmed the P10,000 award by the resulting in the death of Petra de la Cruz and serious
trial court in this concept considering the long period of uncertainty physical injuries of Eladia de Lima and Nemesio Flores,
and suffering the plaintiffs underwent from November 23, when the all passengers of the LTB bus.
plane crash occurred, to December 19, when they received a letter - Three civil suits were filed against herein respondents which
from the defendant's president confirming the death of their son, and were consolidated for trial before the Court of First Instance
again to the following December 29, when his body was finally of Laguna. Said court rendered judgment in their favor and
recovered and taken back to them. ordered defendants to pay jointly and severally De Lima,
Requijos, De la Cruz and Flores.
However, the award of P10,000.00 as exemplary damages should be - De Lima and Requijos filed a MR of the decision seeking
eliminated. According to Article 2232 of the Civil Code, in an award of legal interest on the amounts adjudged in
contracts and quasi-contracts the court may award exemplary their favor from the date of the said decision but their
damages if the defendant acted in a wanton, fraudulent, reckless, motion was not acted upon by the lower court. Only the
oppressive or malevolent manner. The failure of the defendant here said defendants appealed to the CA.
to exercise extraordinary diligence, as required by law, does not - In the motion of petitioners filed with the CA, they sought for
amount to anyone of the circumstances contemplated in the said an immediate decision of the case with a prayer for the
provision. The Court has likewise affirmed the trial court’s award granting of legal interest from the date of the decision of the
of P10,000 for attorney’s fees. The total of the different items court a quo and for the increase to P12,000 of the civil
above enumerated is P232,000. indemnity of P3,000.00 awarded for the death of Petra de la
Cruz.
- CA denied the MR holding that since the plaintiffs did not
De Lima v. LTB appeal from the failure of the lower court to award interest on
WHO WON: De Lima et al the damages and that the court on its own discretion awarded
such interest in view of Art. 2210 of the Civil Code, the
DOCTRINE: effectivity of the interest should not be rolled back to the time
As a general rule, a party who does not appeal from the decision may the decision of the court a quo was rendered.
not obtain any affirmative relief from the appellate court other than - De Lima et al now filed a petition for review on certiorari of the
what he has obtained from the lower court, if any, whose decision is decision of the CA affirming the decision of the lower court
brought up on appeal. By way of exception, the claim for legal interest with modification to including an award of legal interest
and increase in the indemnity may be entertained in spite of the failure on the amounts adjudged in favor of petitioners from the
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date of the decision of the CA to the time of actual Pleadings as well as remedial laws should be construed liberally in
payment. order that the litigants may have ample opportunity to pursue their
respective claims and that a possible denial of substantial justice due
ISSUE/S: to legal technicalities may be avoided.
1. W/N legal interest on damages should be awarded from the date of
the trial court’s decision? YES Where under the circumstances of this case, the heirs of the
2. W/N the indemnity for the death of Petra de la Cruz should be victim in the traffic accident chose not to appeal in the hope that
increased? YES the transportation company will pay the damages awarded by the
lower court but unfortunately said company still appealed to the
RULING: Court of Appeals, which step was obviously dilatory and
1. It is true that the rule is well-settled that a party cannot impugn the oppressive of the rights of the said claimants: that the case had
correctness of a judgment not appealed from by him, and while he been pending in court for about 30 years from the date of the
may make counter assignment of errors, he can do so only to sustain accident in 1958 so that as an exception to the general rule
the judgment on other grounds but not to seek modification or reversal aforestated, the said heirs who did not appeal the judgment,
thereof, for in such case he must appeal. A party who does not appeal should be afforded equitable relief by the courts as it must be
from the decision may not obtain any affirmative relief from the vigilant for their protection. The claim for legal interest and
appellate court other than what he has obtained from the lower court, increase in the indemnity should be entertained in spite of the
if any, whose decision is brought up on appeal. failure of the claimants to appeal the judgment.

However, respondents failed to note that the legal interest was Thus, as an exception to the ruling of the CA as to the date when the
awarded by the Appellate Court in its discretion based on legal interest should commence to run, the legal interest of six
equitable grounds which is duly sanctioned by Art. 2210 of the percent (6) on the amounts adjudged in favor of petitioners should
Civil Code which provides — “Interest may, in the discretion of start from the time of the rendition of the trial court's decision on
the court, be allowed upon damages awarded for breach of December 27, 1963 instead of January 31, 1972, the promulgation of
contract.” the decision of the Court of Appeals.

The Supreme Court in this case, was inclined to adopt a liberal 2. Civil indemnity for the death of Petra de la Cruz was properly
stance as it has done in previous decisions where it has held that awarded by virtue of Art. 1764 in relation to Art. 2206 of the Civil Code
litigations should, as much as possible be decided on their of the Philippines which allows a minimum indemnity of P3,000 for the
merits and not on technicality. Noteworthy is the fact that death of a passenger caused by the breach of contract by a common
petitioners are litigating as paupers. Although they may not have carrier. In accordance with prevailing jurisprudence the indemnity
appealed, they had filed their motion for reconsideration with the of P3,000 should be increased to P30,000.00 and not P12,000 as
court a quo which unfortunately did not act on it. By reason of prayed for by petitioner.
their indigence, they failed to appeal but petitioners De Lima and
Requijo had filed their manifestation making reference to the law If the transportation company had only accepted the judgment of the
and jurisprudence upon which they base their prayer for relief trial court and paid its just awards instead of appealing the same to
while petitioner Flores filed his brief. the Court of Appeals, no further delay would have been occasioned
on the simple issue of interest and indemnity. To mitigate the impact
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of such a great delay in this case the Court found ample justification regard to the safety of the passengers. So much so that one
in the aforesaid award for interest and indemnity. of the passengers had to call the attention of Marchan who
was then at the steering wheel of said bus to lessen the speed
or to slow down, but then Marchan did not heed the request
of said passenger; neither did he slacken his speed. On the
contrary, Marchan even increased his speed while
approaching a six-by-six truck which was then parked
ahead, apparently for the purpose of passing the said
parked truck and to avoid collision with the incoming
vehicle from the opposite direction. However, when he
Marchan v. Mendoza veered his truck to resume position over the right lane,
WHO WON: Mendoza the rear tires of said truck skidded because of his high
rate of speed, thereby causing said truck to fall into a
DOCTRINE: ditch.
- Exemplary damages may be imposed by way of example or - As a result of which Arsenio Mendoza, his wife and child, who
correction only in addition, among others, to compensatory were then inside the bus as passengers were thrown out to
damages, but that they cannot be recovered as a matter of the ground resulting in their multiple injuries.
right, their determination depending upon the discretion of the - Arsenio Mendoza suffered the most serious injuries which
court. damaged his vertebrae causing the paralysis of his lower
- The amount of exemplary damages need not be proved, extremities which up to the time when the case was tried
because its determination depends upon the amount of he continued to suffer. The physician who attended and
compensatory damages that may be awarded to the claimant. treated plaintiff Arsenio Mendoza opined that he may never
- The amount of exemplary damages need not also be alleged, walk again.
and the reason is obvious because it is merely incidental or - Consequently the driver of said bus Silverio Marchan was
dependent upon what the court may award as compensatory prosecuted for serious, less serious and slight physical
damages. injuries through reckless imprudence before the Justice of
- The amount of exemplary damages need not be pleaded in the Peace Court of Polo Bulacan, and thereafter convicted as
the complaint because the same cannot be predetermined. charged which judgment of conviction was subsequently
One can merely ask that it be determined by the court if in the affirmed by the CFI of same province.
use of its discretion the same is warranted by the evidence, - Plaintiffs Arsenio, his wife and child sought to recover
and this is just what the respondents have done. damages against Marchan (driver) and from Bienvenido Buan
and Natividad Paras (administrator of the estate of Florencio
FACTS: Buan – owner of PRBL) on the basis of a breach of CoC for
- On Feb 1954, around 9PM, a passenger bus operated by the failure of defendants operator and driver to safely convey
Philippine Rabbit Bus Lines (PRBL) and driven by Silverio them to their destination and also on account of Marchan’s
Marchan fell into a ditch somewhere in Barrio Malanday, criminal negligence resulting to plaintiff’s multiple damages.
Polo, Bulacan, while travelling on its way to Manila. The - RTC found for the plaintiffs and awarded the amount of P40K
said bus was traveling at a high rate of speed without due as compensatory damages and attorney’s fees.
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- CA found that there was negligence on the part of the had suffered paralysis on the lower extremities, which will
defendants.CA affirmed the award of compensatory damages incapacitate him to engage in his customary occupation
modifying the appealed lower court decision by holding throughout the remaining years of his life, especially so that
petitioners to pay the amount of P30K as exemplary damages Mendoza was only 26 years old when he met an accident and taking
and sustaining the award of attorney's fees in the amount of the average span of life of a Filipino, he may be expected to live for
P5K. 30 years more; and bearing in mind the earning capacity of Arsenio
- Petitioners sought the reversal of the CA Decision imputing Mendoza who before the happening of this accident derived an
error on the appellate court for finding an implied contract of income of almost P100/month from the business of his father-in-
carriage by the petitioner bus firm and respondent. Petitioners law as Assistant Supervisor of the small fairs and his income of
also argue that CA is without jurisdiction to adjudicate P100/month which he derived as a professional boxer. Considering
exemplary damages since there was no allegation nor prayer, that respondent Arsenio Mendoza was only in his middle twenties
nor proof, nor counterclaim of error for the same by the when, thru the negligence of petitioners, he lost the use of his limbs,
respondents. being condemned for the remainder of his life to be a paralytic, in effect
leading a maimed, well-nigh useless existence.
ISSUE/S:
1. W/N there was a CoC between petitioners and respondent and if As to the finding of liability for exemplary damages, it is to be observed
there was breach? YES however, that in the complaint, plaintiffs "prayed for such other and
2. W/N the awarding of damages by the CA was proper? YES further relief as this Court may deem just and equitable”. Suffice
it to state that when plaintiffs prayed in their complaint for such other
RULING: relief and remedies that may be availed of under the premises, in
1. It is undisputed by the evidence on record that Silverio Marchan effect, therefore, the court is called upon the exercise and use its
was then at the steering wheel of the vehicle of the defendant discretion whether the imposition of punitive or exemplary damages
transportation company. At that moment, the riding public is not even though not expressly prayed or pleaded in the plaintiffs'
expected to inquire from time to time before they board the passenger complaint.
bus whether or not the driver who is at the steering wheel of said bus
was authorized to drive said vehicle or that said driver is acting within It appears that exemplary damages may be imposed by way of
the scope of his authority and observing the existing rules and example or correction only in addition, among others, to
regulations required of him by the management. To hold otherwise compensatory damages, but that they cannot be recovered as a
would in effect render the aforequoted provision of law (Article 1759) matter of right, their determination depending upon the
ineffective." It is clear from the above Civil Code provision that discretion of the court. It further appears that the amount of
common carriers cannot escape liability "for the death of or exemplary damages need not be proved, because its determination
injuries to passengers through the negligence and willful acts of depends upon the amount of compensatory damages that may be
the former's employees, although such employees may have awarded to the claimant. If the amount of exemplary damages need
acted beyond the scope of their authority or in violation of the not be proved, it need not also be alleged, and the reason is
orders. obvious because it is merely incidental or dependent upon what
the court may award as compensatory damages. Unless and until
2. The amount of P40,000 awarded as compensatory damages is this premise is determined and established, what may be claimed as
quite reasonable and fair, considering that plaintiff Arsenio Mendoza exemplary damages would amount to a mere surmise or speculation.
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It follows as a necessary consequence that the amount of expense and would be brought the following day to San
exemplary damages need not be pleaded in the complaint Francisco (SF), U.S.A., where they would be furnished an
because the same cannot be predetermined. One can merely ask immediate flight connection to LAX.
that it be determined by the court if in the use of its discretion the - This arrangement went well until Osorio and her co-
same is warranted by the evidence, and this is just what the passengers arrived in SF, U.S.A. the next day at around 1:31
respondents have done. p.m., SF local time. No instructions having been received
regarding them by petitioner's SF Office due to the delay
THUS, the Decision of the CA is affirmed. Petitioners are liable in the transmission of the telex messages from Manila,
for the sum of P40K (compensatory), P30K (exemplary) and P5K Osorio and her co-passengers were asked to deplane and
as attorney’s fees all with interest at the legal rate. wait while contact with Manila was being made. This,
however, could not be done immediately because of the time
difference between the 2 places.
China Airlines v. IAC - Later, when it appeared that Osrio and her co-passengers
WHO WON: Osorio (as regards to the finding of the breach on the part might have to spend the night in San Francisco, they asked
of air carrier); China Airlines (as regards to the amount) that they be provided food and overnight accommodations as
transit passengers, but were refused by petitioner's
DOCTRINE: passenger service agent, Dennis Cheng. Apparently pissed
- Moral damages are recoverable in a damage suit predicated by this refusal, in addition to the information that their
upon a breach of contract of carriage only where [1] the luggages were not unloaded, Osorio and some of her fellow
mishap results in the death of a passenger and [2] it is proved passengers angrily left petitioner's SF Office without
that the carrier was guilty of fraud or bad faith, even if death leaving a contact address. Thus, when word from Manila
does not result. came at 6:45PM authorizing the issuance of tickets for LAX to
- The award of exemplary damages must be had only upon Osorio and her companions, the latter could not be informed
showing that the carrier committed breach of contract of thereof.
carriage in a wanton, fraudulent, reckless, oppressive or - It was only on the following day (April 16), after spending the
malevolent manner. night at YMCA (cost her $5) that Osorio learned through her
companions Atty. Laud and Mrs. Sim that her ticket for LAX
FACTS: and luggage were ready for pick-up any time.
- On April 14, 1980, after a four-day delay caused by an engine - Notwithstanding, Osorio preferred to pick up her luggage on
malfunction, private respondent Claudia B. Osorio boarded April 17 and fly to LAX with a Western Airlines ticket which
petitioner China Airlines Ltd’s (CAL) Manila Flight for she purchased for $56. Osorio spent the night at Mrs Sim’s
Taipei. Said flight, as originally scheduled, was to bring friend’s house for free but was obliged to buy groceries for the
Osorio and nine (9) other passengers to Taipei in time for hostess.
petitioner airline's flight for Los Angeles (LAX). - Osorio filed before the CFI a complaint for damages for
- As this schedule had been rendered impossible by the delay, breach of CoC against CAL. CFI found for CAL. It absolved
it was agreed, prior to their departure from Manila that petitioner airline from any liability except for the sum of P1248
Osorio and the nine (9) other passengers similarly as reimbursement for the $100 spent by Osorio as an
situated would spend the night in Taipei at petitioner's
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involuntary rerouted passenger in SF and the $56 for her while petitioner may have been remiss in its total reliance upon the
Western Airlines ticket. telex communications and therefore considered negligent in view of
- IAC reversed. It found a breach of CoC and ordered CAL to the degree of diligence required of it as a common carrier, such
pay Osorio in addition to the actual damages, moral and negligence cannot under the obtaining circumstances be said to
exemplary damages in the amount of P100K and P20K, be so gross as to amount to bad faith.
respectively plus P5K attorney’s fees.
ISSUE: 2. The Court is also convinced that CAL’s personnel were NOT
- Did the failure of China Airlines to arrange for Osorio’s motivated by ill will or malice in their dealings with Osorio, “let along
immediate flight to LAX constitute palpable breach of CoC? the well-known custom and policy of Chinese businessmen and
NO employees of being courteous and attentive to customers.”
- Was the treatment of CAL by petitioner’s agent in SF CAL’s refusal to accede to Osorio’s demands for a flight connection to
characterized by malice or bad faith? LAX and/or food and hotel accommodations was due primarily to lack
of information or knowledge upon which to act upon and not from a
RULING: deliberate intent to ignore Osorio’s rights as a passenger. They cannot
1. It was upon CAL’s traffic agent Mrs. Diana Lim's assurance of an be faulted for wanting to verify with Manila private respondent's status
immediate flight connection from San Francisco that Osorio agreed to before acting upon her request as tickets for Los Angeles cannot be
be re-routed to San Francisco. Due, however, to the delay in the used in going to San Francisco, and possession of a ticket with Los
receipt of the telex messages regarding Osorio’s status and the Angeles as destination was not an indication that one was a transit or
arrangements to be made for her, the promised immediate flight an involuntarily re-routed passenger.
connection was not reaped.
Ultimately, the breach of contract under consideration having
Verily, petitioner airlines committed a breach of contract in failing been incurred in good faith, petitioner airlines is liable for
to secure an immediate flight connection for private Osorio. damages which are the natural and probable consequences of
Under Article 1755 of the Civil Code, petitioner, as a common said breach and which the parties have foreseen at the time the
carrier, is duty bound to "carry passengers safely as far as obligation was constituted. These damages consist of the actual
human care and foresight can provide, using the utmost damages awarded by the trial court to Osorio.
diligence of very cautious persons, with due regard for all the
circumstances." The reliance of petitioner on the subject telex With respect to moral damages, the rule is that the same are
communications falls short of the utmost diligence of a very recoverable in a damage suit predicated upon a breach of
cautious person expected of it, thereby rendering it liable for its contract of carriage only where [1] the mishap results in the death
failure to abide by the promised immediate connection. of a passenger and [2] it is proved that the carrier was guilty of
fraud or bad faith, even if death does not result. As the present
However, the Court found that the breach of contract committed case does not fall under either of the cited instances, the award
by CAL was NOT attended by gross negligence, or wanton of moral damages was DISALLOWED.
disregard of the rights of Osorio as a passenger. Telex was the
established mode of communication between petitioner's Manila The award of exemplary damages was likewise DELETED, as it
and San Francisco offices. Contact by telephone was not a has not been shown that petitioner, in committing the breach of
practice due to the time difference between the two places. Thus,
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contract of carriage, acted in a wanton, fraudulent, reckless, baggage and discovered that some of its contents were
oppressive or malevolent manner. destroyed and soiled.
- Claiming that they suffered mental anguish, sleepless
The award of attorney's fees is justified under Article 2208(2) of nights and great damage because of Northwest's failure
the Civil Code which states that the same may be recovered when to inform them in advance that their baggage would not
the defendant's act or omission has compelled the plaintiff to be loaded on the same flight they boarded and because
litigate with third persons or to incur expenses to protect his of their delayed arrival, they demanded from Northwest
interest. The amount of P6K awarded by respondent court should be Airlines compensation for the damages they suffered.
increased to P10K considering that the case has reached the SC. - Northwest Airlines averred that petitioner’s baggage could not
be carried on the same flight because of "weight and balance
restrictions” and that when petitioner received her baggage in
Tan v. Northwest Airlines v. CA damaged condition, Northwest offered to either (1) reimburse
WHO WON: Northwest Airlines (carrier) the cost or repair of the bags; or (2) reimburse the cost for the
purchase of new bags, upon submission of receipts.
DOCTRINE: - RTC found for petitioner and held Northwest liable for
Bad faith does not simply connote bad judgment or negligence, it damages (actual, compensatory, moral, exemplary plus
imports a dishonest purpose or some moral obliquity and conscious AFees).
doing of a wrong, a breach of known duty through some motive or - Northwest appealed contending that the lower court erred in
interest or ill-will that partakes of the nature of fraud. finding it guilty of breach of CoC and of wilful misconduct and
awarded damages which had no basis and were excessive.
Where in breaching the contract of carriage the defendant airline is not CA partially granted the appeal by deleting the award of moral
shown to have acted fraudulently or in bad faith, liability for damages and exemplary damages and reducing the AFees.
is limited to the natural and probable consequences of the breach of
obligation which the parties had foreseen or could have reasonably ISSUE: W/N Northwest is liable for moral and exemplary damages for
foreseen. In that case, such liability does not include moral and willful misconduct and breach of CoC? NO
exemplary damages.
RULING:
FACTS: Northwest is NOT guilty of willful misconduct. For willful misconduct to
- On May 31, 1994, Priscilla L. Tan and Connie Tan boarded exist there must be a showing that the acts complained of were
Northwest Airlines in Chicago, U. S. A. bound for the impelled by an intention to violate the law, or were in persistent
Philippines, with a stop-over at Detroit, U. S. A. They arrived disregard of one's rights. It must be evidenced by a flagrantly or
at the Ninoy Aquino International Airport (NAIA) the next day shamefully wrong or improper conduct.
at about 10:40PM.
- Upon their arrival, petitioner and her companion Connie Tan Contrary to petitioner's contention, there was nothing in the conduct of
found that pieces of their baggage were missing. They respondent which showed that they were motivated by malice or bad
returned to the airport in the evening of the following day and faith in loading her baggage on another plane. Due to weight and
they were informed that their baggage might still be in another balance restrictions, as a safety measure, respondent airline had
plane in Tokyo, Japan. Few days after, they recovered their to transport the baggage on a different flight, but with the same
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expected date and time of arrival in the Philippines. ‘To ensure the FACTS:
safety of each flight, Northwest's personnel determine every flight's - Rogelio A. Vinluan is a practicing lawyer who had to travel
compliance with "weight and balance restrictions." They check the in April, 1979 to several cities in Europe and the U.S. to attend
factors like weight of the aircraft used for the flight gas input, to some matters involving several clients. He entered into a
passenger and crew load, baggage weight, all in relation to the wind contract for air carriage for valuable consideration with Japan
factor anticipated on the flight. If there is an overload, i.e., a perceived Airlines first class from Manila to Tokyo, Moscow, Paris,
safety risk, the aircraft's load will be reduced by off-loading cargo, Hamburg, Zurich, New York, Los Angeles, Honolulu and
which will then be placed on the next available flight. back to Manila thru the same airline and other airlines it
represents for which he was issued the corresponding first
It is admitted that respondent failed to deliver petitioner's luggages on class tickets for the entire trip.
time. However, there was no showing of malice in such failure. By its - While in Paris, he went to the office of Trans World Airlines
concern for safety, respondent had to ship the baggage in another (TWA) and confirmed a reservation for first class
flight with the same date of arrival. accommodation on board from New York to San Francisco
which was scheduled to depart on April 20, 1979.
Bad faith does not simply connote bad judgment or negligence, - On April 20, 1979, at around 8AM, Vinluan reconfirmed his
it imports a dishonest purpose or some moral obliquity and reservation for first class accommodation on board with its
conscious doing of a wrong, a breach of known duty through New York office. He was advised that his reservation was
some motive or interest or ill-will that partakes of the nature of confirmed. He was even requested to indicate his seat
fraud. preference.
- On the schedule date of his departure, Vinluan presented his
Where in breaching the contract of carriage the defendant airline ticket for check-in at the counter of TWA at JFK International
is not shown to have acted fraudulently or in bad faith, liability Airport at about 9AM the scheduled time of the departure
for damages is limited to the natural and probable consequences being 11AM. He was informed that there was no first class
of the breach of obligation which the parties had foreseen or seat available for him on the flight. He asked for an
could have reasonably foreseen. In that case, such liability does explanation but TWA employees on duty declined to give
not include moral and exemplary damages. any reason. When he began to protest, one of the TWA
employees, a certain Mr. Braam, rudely threatened him
Petition DENIED. CA Decision affirmed deleting however the award of with the words "Don't argue with me, I have a very bad
attorney’s fees. temper."
- To be able to keep his schedule, Vinluan was compelled to
take the economy seat offered to him and he was issued a
Trans World Airlines v. CA refund application" as he was downgraded from first class to
WHO WON: Vinluan economy class. While waiting for his flight, Vinluan also
noticed that other passengers who were white Caucasians
DOCTRINE: The social standing of plaintiff in the community may be and who had checked-in later than him were given preference
considered by the Court in awarding moral and exemplary damages in some first class seats which became available due to "no
for injuries sustained from a carrier’s breach of CoC. show" passengers.
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- Vinluan filed an action for damages against the TWA in the Petitioner sacrificed the comfort of its first class passengers
CFI alleging breach of CoC and bad faith. CFI found for including private respondent Vinluan for the sake of economy.
plaintiff and ordered defendant carrier to pay damages Such inattention and lack of care for the interest of its
(actual- difference in fare between first class and economy, passengers who are entitled to its utmost consideration,
moral damages, exemplary and attorney’s fees). CA affirmed particularly as to their convenience, amount to bad faith which
but modified interest and reduced AFees. entitles the passenger to the award of moral damages. More so
- Petitioner contends that because of maintenance problems of in this case where instead of courteously informing private
the aircraft on the day of the flight, said flight was cancelled respondent of his being downgraded under the circumstances,
and a special flight was organized to operate. Vinluan’s flight he was angrily rebuffed by an employee of petitioner.
was to have utilized a (Lockheed 101) plane with 34 first
class seats, but instead, a smaller plane (Boeing 707) with At the time of this unfortunate incident, Vinluan was a practicing
only 16 first class seats was substituted for use. Hence, lawyer, a senior partner of a big law firm in Manila. He was a
passengers who had first class reservations had to be director of several companies and was active in civic and social
accommodated on a first-come, first-served basis. An organizations in the Philippines. Considering the circumstances of
announcement was allegedly made to all passengers in this case and the social standing of private respondent in the
the entire terminal of the airport advising them to get community, he is entitled to the award of moral and exemplary
boarding cards for the flight to San Francisco. damages. However, the moral damages should be reduced to P300K
- On the other hand, Vinluan asserts that he did not hear such and the exemplary damages should be reduced to P200K. This award
announcement at the terminal and that he was among the should be reasonably sufficient to indemnify private respondent for the
early passengers to present his ticket for check-in only to be humiliation and embarrassment that he suffered and to serve as an
informed that there was no first class seat available for him example to discourage the repetition of similar oppressive and
and that he had to be downgraded. discriminatory acts.

ISSUE: W/N defendant carrier is liable for breach of CoC and if so,
how much? Zalamea v. CA
WHO WON: Zalameas
RULING:
The Court found that the discrimination shown by petitioner in DOCTRINE:
accommodating Caucasians in their first-class seats is obvious and Overbooking amounts to bad faith, entitling the passengers concerned
the humiliation to which Vinluan was subjected is undeniable. to an award of moral damages
Consequently, the award of moral and exemplary damages by the
respondent court is in order. FACTS:
- Spouses Cesar C. Zalamea and Suthira Zalamea, and their
Indeed, Vinluan had shown that the alleged switch of planes was daughter, Liana Zalamea, purchased 3 airline tickets from the
because there were only 138 confirmed economy class Manila agent of respondent TransWorld Airlines, Inc. (TWA)
passengers who could very well be accommodated in the smaller for a flight from New York to Los Angeles on June 6, 1984.
plane and not because of maintenance problems. The tickets of petitioners-spouses were purchased at a
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discount of 75% while that of their daughter was a full fare


ticket. All three tickets represented confirmed reservations. ISSUE: W/N there was fraud or bad faith on the part of defendant
- While in NYC, petitioners received notice of the reconfirmation carrier so as to hold them liable for damages? YES
of their reservations for said flight. On the appointed date,
however, petitioners checked in at 10AM an hour earlier RULING:
than the scheduled flight at 11AM but were placed on the The U.S. law or regulation allegedly authorizing overbooking has
wait-list because the number of passengers who had never been proved. Foreign laws do not prove themselves nor can the
checked in before them had already taken all the seats courts take judicial notice of them. Like any other fact, they must be
available on the flight. alleged and proved. Written law may be evidenced by an official
- Liana Zalamea appeared as the No. 13 on the wait-list while publication thereof or by a copy attested by the officer having the legal
the spouses Zalamea were listed as "No. 34, showing a custody of the record, or by his deputy, and accompanied with a
party of two." Out of the 42 names on the wait list, the first certificate that such officer has custody. Respondent TWA relied
22 names were eventually allowed to board the flight to solely on the statement of its customer service agent that the
Los Angeles, including petitioner Cesar Zalamea. The two Code of Federal Regulations of the Civil Aeronautics Board
others, on the other hand, at No. 34, were not able to fly. allows overbooking. Aside from said statement, no official
- As it were, those holding full-fare tickets were given first publication of said code was presented as evidence. Thus,
priority among the wait-listed passengers. Mr. Zalamea, respondent court's finding that overbooking is specifically
who was holding the full-fare ticket of his daughter, was allowed by the US Code of Federal Regulations has no basis in
allowed to board the plane; while his wife and daughter, who fact.
presented the discounted tickets, were denied boarding.
According to Mr. Zalamea, it was only later when he Even if the claimed U.S. Code of Federal Regulations does exist, the
discovered the he was holding his daughter's full-fare ticket. same is not applicable to the case at bar in accordance with the
- Even in the next TWA flight to LAX, Mrs. Zalamea and her principle of lex loci contractus which require that the law of the place
daughter could not be accommodated because it was fully where the airline ticket was issued should be applied by the court
booked. Thus, they were constrained to book another flight where the passengers are residents and nationals of the forum
and purchased two tickets from American Airlines which cost and the ticket is issued in such State by the defendant
them $918. airline. Since the tickets were sold and issued in the Philippines, the
- The Zalameas filed an action for damages based on breach applicable law in this case would be Philippine law.
of CoC before the RTC. RTC ruled in favor of petitioners. On
appeal, CA held that moral damages are recoverable in a Existing jurisprudence explicitly states that overbooking
damage suit predicated upon breach of CoC only when there amounts to bad faith, entitling the passengers concerned to an
is fraud or bad faith. Since it is a matter of record that award of moral damages. Even on the assumption that overbooking
overbooking of flights is a common and accepted practice of is allowed, TWA is still guilty of bad faith in not informing its
airlines in the US and is specifically allowed under the Code passengers beforehand that it could breach the contract of
of Federal Regulations by the Civil Aeronautics Board, no carriage even if they have confirmed tickets if there was
fraud nor bad faith could be imputed on TWA. CA then overbooking.TWA should have incorporated stipulations on
modified the lower court’s decision insofar as the award of overbooking on the tickets issued or to properly inform its passengers
moral and exemplary damages was deleted.
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about these policies so that the latter would be prepared for such The logical conclusion, therefore, is that both petitioners and
eventuality or would have the choice to ride with another airline. respondent TWA agreed, albeit impliedly, to the course of action
taken.
Moreover, respondent TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to CA erred, however, in not ordering the refund of the American Airlines
discounted tickets. While the petitioners had checked in at the same tickets purchased and used by petitioners Suthira and Liana. The
time, and held confirmed tickets, yet, only one of them was allowed to evidence shows that petitioners Suthira and Liana were constrained
board the plane ten minutes before departure time because the full- to take the American Airlines flight to Los Angeles not because they
fare ticket he was holding was given priority over discounted tickets. "opted not to use their TWA tickets on another TWA flight" but because
The other two petitioners were left behind. respondent TWA could not accommodate them either on the next
TWA flight which was also fully booked. The purchase of the
It is respondent TWA's position that the practice of overbooking and American Airlines tickets by petitioners Suthira and Liana was
the airline system of boarding priorities are reasonable policies, which the consequence of respondent TWA's unjustifiable breach of its
when implemented do not amount to bad faith. But the issue raised contracts of carriage with petitioners. In accordance with Article
in this case is NOT the reasonableness of said policies but 2201, New Civil Code, respondent TWA should, therefore, be
whether or not said policies were incorporated or deemed written responsible for all damages which may be reasonably attributed
on petitioners' contracts of carriage. Respondent TWA failed to to the non-performance of its obligation. Thus, instead of simply
show that there are provisions to that effect. Neither did it present any being refunded for the cost of the unused TWA tickets, petitioners
argument of substance to show that petitioners were duly apprised of should be awarded the actual cost of their flight from New York to Los
the overbooked condition of the flight or that there is a hierarchy of Angeles.
boarding priorities in booking passengers. The failure of respondent
TWA to so inform them when it could easily have done so thereby The award to petitioners of attorney's fees is also justified under
enabling respondent to hold on to them as passengers up to the Article 2208(2) of the Civil Code which allows recovery when the
last minute amounts to bad faith. defendant's act or omission has compelled plaintiff to litigate or
to incur expenses to protect his interest. An award of P50,000.00
Evidently, respondent TWA placed its self-interest over the rights moral damages and another P50,000.00 exemplary damages would
of petitioners under their contracts of carriage. Such conscious suffice under the circumstances obtaining in the instant case.
disregard of petitioners' rights makes respondent TWA liable for
moral damages. To deter breach of contracts by respondent TWA
in similar fashion in the future, the Court adjudged respondent
TWA liable for exemplary damages, as well.

Petitioners also assail the respondent court's decision not to require


the refund of Liana Zalamea's ticket because the ticket was used by
her father. HOWEVER, petitioners had not shown with certainty that
the act of respondent TWA in allowing Mr. Zalamea to use the ticket
of her daughter was due to inadvertence or deliberate act. Petitioners Munsayac v. De Lara
had also failed to establish that they did not accede to said agreement. WHO WON: De Lara
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De Lara points out that the act referred to in Article 2232 must be
DOCTRINE: A principal or master can be held liable for exemplary or one which is coexistent with and characterizes the breach of the
punitive damages based upon the wrongful act of his agent or servant contract on which the suit is based, and not one which is
only where he participated in the doing of such wrongful act or has subsequent to such breach and therefore has no causal relation
previously authorized or subsequently ratified it with full knowledge of thereto, such as the herein defendant's failure to placate (pacify)
the facts. the sufferings of the plaintiff.

FACTS: A principal or master can be held liable for exemplary or punitive


damages based upon the wrongful act of his agent or servant
- Munsayac, while riding as a passenger on a jeepney owned only where he participated in the doing of such wrongful act or
and operated by Benedicta Lara (defendant) and driven by its has previously authorized or subsequently ratified it with full
hired chauffer at an excessive speed, unmindful of the fact knowledge of the facts. Reasons given for this rule are that since
that the road was under repair and heedless of the damages are penal in character, the motive authorizing their infliction
passengers' pleas that he go more slowly, sustained will not be imputed by presumption to the principal when the act is
extensive injuries from an accident she encountered from committed by an agent or servant, and that since they are awarded
riding the said carrier. not by way of compensation, but as a warning to others, they can only
- Munsayac then filed a civil suit against Benedicta de Lara and be awarded against one who has participated in the offense, and the
the driver. The trial Judge found the driver recklessly negligent principal therefore cannot be held liable for them merely by reason of
and awarded compensatory damages for actual expenses wanton, oppressive or malicious intent on the part of the agent (15 Art.
incurred and loss of income, P1K as exemplary damages and Jur. 730).
P500 as attorney's fees. On these last two items (exemplary
and AFees) the defendant appealed to the CA, which affirmed It is difficult to conceive how the defendant in a breach of
the lower court’s order. CA held that the defendant has failed, contract case could be held to have acted in a wanton, fraudulent,
or even refused to placate the sufferings of plaintiff, reckless, oppressive or violent manner within the meaning of
necessitating the filing of a civil action which will entitle the Article 2232 for something he did or did not do after the breach,
latter to an award of exemplary damages – to set an example which had no causal connection therewith. The law does not
to others – and attorney’s fees. contemplate a vicarious liability on his part: the breach is his as party
to the contract, and so if he is to be held liable at all for exemplary
ISSUE: W/N defendant-employer is liable for exemplary damages to damages by reason of the wrongful act of his agent, it must be shown
plaintiff? NO that he had previously authorized or knowingly ratified it thereafter, in
effect making him a co-participant. In the instant case, there is
RULING: nothing to show previous authority or subsequent ratification by
The Civil Code provides that "exemplary or corrective damages are De Lara insofar as the recklessness of the driver was concerned.
imposed, by way of example or correction for the public good" (Art The mere statement that the defendant failed, even refused, to placate
2229); and that in contracts "the Court may award exemplary the suffering of the plaintiff, necessitating the filing of the action, is a
damages if the defendant acted in wanton, fraudulent, reckless, futile basis to warrant the conclusion that the defendant approved of
oppressive or malevolent manner" (Art. 2232). the wrongful act of his servant with full knowledge of the facts.
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officers of the MV Doña Marilyn had acted with the diligence


Sulpicio Lines v. Domingo Curso required of a common carrier; (3) the sinking of the vessel and
WHO WON: Sulpicio Lines the death of its passengers, including Dr.Curso, could not
have been avoided; (4) there was no basis to consider the
DOCTRINE: Moral damages may be recovered in an action upon MV Doña Marilyn not seaworthy at the time of the voyage; (5)
breach of contract of carriage only when: (a) where death of a the findings of the Special Board of Marine Inquiry (SBMI)
passenger results, or (b) it is proved that the carrier was guilty of fraud constituted to investigate the disaster absolved the petitioner,
and bad faith, even if death does not result. Article 2206 of the Civil its officers, and crew of any negligence and administrative
Code entitles the descendants, ascendants, illegitimate children, and liability; and (6) the respondents failed to prove their claim for
surviving spouse of the deceased passenger to demand moral damages.
damages for mental anguish by reason of the death of the deceased. - CA reversed RTC’s ruling. It found inadequate proof to show
that Sulpicio Lines, Inc., or its officers and crew, had exercised
the required degree of diligence to acquit the Sulpicio Lines of
FACTS: liability since (1) the court finds inadequate explanation why
- On October 23, 1988, Dr.Curso boarded at the port of Manila the officers of the M.V. Doña Marilyn had not apprised
the MV Doña Marilyn, an inter-island vessel owned and themselves of the weather reports on the approach of
operated by petitioner Sulpicio Lines, Inc., bound for Tacloban typhoon "Unsang" which had the power of a signal no. 3
City. cyclone, bearing upon the general direction of the path of
- Unfortunately, the MV Doña Marilyn sank in the afternoon of the M.V. Doña Marilyn; (2) there was no account of the acts
October 24, 1988 while at sea due to the inclement sea and and decision of the crew of the ill-fated ship. It does not appear
weather conditions brought about by Typhoon Unsang. The what occurred during that time, or what weather reports were
body of Dr.Curso was not recovered, along with hundreds of received and acted upon by the ship captain; (3) the fitness of
other passengers of the ill-fated vessel. the ship for the voyage is of doubtful character since at the
- At the time of his death, Dr.Curso was 48 years old, and first sign of bad weather, the ship’s hydraulic system failed
employed as a resident physician at the Naval District and had to be repaired mid-voyage, making the vessel a
Hospital in Naval, Biliran. He had a basic monthly salary virtual derelict amidst a raging storm at sea. CA ordered
of P3,940 and would have retired from government service by Sulpicio Lines to pay plaintiff heirs of Dr.Curso indemnity for
December 20, 2004 at the age of 65. the latter’s death, loss of earning capacity, moral damages
- Respondents (surviving bros and sis of Dr. Curso) sued and costs of suit.
petitioner in the RTC to claim damages based on breach of - Sulpicio appealed the said decision due to CA’s decision to
CoC by sea, averring that petitioner had acted negligently in award the surviving brothers and sisters of the late Dr. Cenon
transporting Dr. Curso and the other passengers. They stated, moral damages among others.
among others, that their parents had predeceased Dr. Curso,
who died single and without issue and that, as such, they were ISSUE: Are the surviving brothers and sisters of a passenger of a
Dr.Curso’s surviving heirs and successors in interest entitled vessel that sinks during a voyage entitled to recover moral damages
to recover moral and other damages. from the vessel owner as common carrier? NO
- RTC dismissed the complaint due to the following reasons: (1)
the sinking of the vessel was due to force majeure; (2) the RULING:
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the defendant must be the proximate cause of the injury sustained by


the claimant; and (d) the award of damages is predicated on any of
As a general rule, moral damages are not recoverable in actions for the cases stated in Article 2219 of the Civil Code.
damages predicated on a breach of contract, unless there is fraud or
bad faith. As an exception, moral damages may be awarded in case To be entitled to moral damages, the respondents must have a right
of breach of contract of carriage that results in the death of a based upon law. It is true that under Article 1003 of the Civil Code they
passenger, in accordance with Article 1764, in relation to Article 2206 succeeded to the entire estate of the late Dr.Curso in the absence of
(3), of the Civil Code, which provide: the latter’s descendants, ascendants, illegitimate children, and
surviving spouse. However, they were not included among the
Article 1764. Damages in cases comprised in this Section persons entitled to recover moral damages, as enumerated in
shall be awarded in accordance with Title XVIII of this Book, Article 2219 of the Civil Code. Article 2219 circumscribes the
concerning Damages. Article 2206 shall also apply to the instances in which moral damages may be awarded. The said
death of a passenger caused by the breach of contract by a provision does not include succession in the collateral line as a
common carrier. source of the right to recover moral damages.

Article 2206. The amount of damages for death caused by a In fine, moral damages may be recovered in an action upon
crime or quasi-delict shall be at least three thousand pesos, breach of contract of carriage only when: (a) where death of a
even though there may have been mitigating circumstances. passenger results, or (b) it is proved that the carrier was guilty of
In addition: fraud and bad faith, even if death does not result. Article 2206 of
xxx the Civil Code entitles the descendants, ascendants, illegitimate
(3) The spouse, legitimate and illegitimate descendants and children, and surviving spouse of the deceased passenger to
ascendants of the deceased may demand moral damages for demand moral damages for mental anguish by reason of the
mental anguish by reason of the death of the deceased. death of the deceased.

Verily, the omission from Article 2206 (3) of the brothers and
sisters of the deceased passenger reveals the legislative intent
to exclude them from the recovery of moral damages for mental
anguish by reason of the death of the deceased. Thus, the CA
erred in awarding moral damages to the respondents.

Essentially, the purpose of moral damages is indemnity or reparation,


that is, to enable the injured party to obtain the means, diversions, or
KLM v. CA
amusements that will serve to alleviate the moral suffering he has
WHO WON: Respondents Mendoza
undergone by reason of the tragic event. According to Villanueva v.
Salvador, the conditions for awarding moral damages are: (a)
DOCTRINE:
there must be an injury, whether physical, mental, or psychological,
- Article 30 of the Warsaw Convention has no application in the
clearly substantiated by the claimant; (b) there must be a culpable act
case at bar which involves, not an accident or delay, but a
or omission factually established; (c) the wrongful act or omission of
willful misconduct on the part of KLM’s agent, the Aer Lingus.
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- As the airline which issued those tickets with the knowledge Germany where they went to a KLM office and obtained a
that the respondents would be flown on the various legs of confirmation from Aer Lingus of seat reservations on
their journey by different air carriers, KLM was chargeable flight 861. After a roundabout route in London, Paris and
with the duty and responsibility of specifically informing the Lisbon, they (foursome) all took wing to Barcelona or their trip
respondents of conditions prescribed in their tickets or, in the to Lourdes, France.
very least, to ascertain that the respondents read them before - The respondents and wards went to Barcelona airport to take
they accepted their passage tickets. their plane which arrived at 4 ‘o clock. At the airport, the
manager of Aer Lingus directed the respondents to check
FACTS: in. They did so as instructed and were accepted for passage.
- Sometime in 1965, respondents Consuelo Mendoza and However, although their daughter and niece were allowed to
Rufino Mendoza approached Tirso Reyes, manager of a take the plane, the respondents were off-loaded on orders
branch of the Philippine Travel Bureau (a travel agency of the Aer Lingus manager who shoved them aside with
AND an agent for international air carriers which are the aid of a policeman and who shouted at them, "Conos!
members of the IATA of which both the KLM Royal Dutch Ignorantes Filipinos!"
Airlines and the Aer Lingus are members) for consultations - Mrs. Mendoza later called up the manager of Aer Lingus and
about a world tour which they were intending to make with requested that they provide her and her husband the means
their daughter and a niece. to get to Lourdes, but the request was DENIED. A stranger,
- Reyes submitted to them, after preliminary discussions, a advised them to take a train, which the two did, despite
tentative itinerary which prescribed a trip of 35 legs; the the third class accommodations and lack of food service.
respondents would fly on different airlines. Three segments They reached Lourdes the following morning. During the
of the trip, the longest, would be via KLM. train trip the respondents had to suffer draft winds as
- The respondents decided on the Barcelona-Lourdes route they wore only minimum clothing, their luggage having
with knowledge that only one airline, Aer Lingus, serviced it. gone ahead with the Aer Lingus plane. They spent $50 for
- After two weeks, respondents approved the itinerary prepared that train trip; their plane passage was worth $43.35.
for them and asked Reyes to make the necessary plane - Respondents filed a complaint for damages with the CFI
reservations. Reyes went to the KLM, for which the referring to KLM as the principal of Aer Lingus arising from
respondents had expressed preference. breach of contract of carriage and for the humiliating
- KLM thereafter secured seat reservations for the treatment received by them at the hands of the Aer Lingus
respondents and their two companions from the carriers manager in Barcelona. CFI awarded damages to the
which would ferry them throughout their trip, with the respondents. Both parties appealed to the CA.
exception of Aer Lingus. - KLM sought complete exoneration. Respondents prayed for
- When the respondents left the Philippines (without their young an increase in the award of damages.
wards who had enplaned much earlier), they were issued
KLM tickets for their entire trip. However, their coupon for the ISSUE/S:
Aer Lingus portion was marked "RQ" which meant "on 1. W/N Art. 30 of the Warsaw Convention (WC) is applicable to the
request". case? NO
- After sightseeing in American/European cities with their two
young companions, respondents arrived in Frankfurt
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2. W/N KLM’s liability for the tortuous conduct of Aer Lingus is limited of the said condition so as to preclude any doubt that it was fairly and
based on the stipulation printed on respondents’ tickets expressly freely agreed upon by the respondents when they accepted the
limiting KLM’s liability for damages? NO passage tickets issued to them by KLM. As the airline which issued
3. W/N respondents entered into a series of independent contracts those tickets with the knowledge that the respondents would be
with several carriers which took them on various segments of the trip flown on the various legs of their journey by different air carriers,
and KLM – as a mere travel agency – should not be held liable for the KLM was chargeable with the duty and responsibility of
breach in any of those contracts? NO specifically informing the respondents of conditions prescribed
in their tickets or, in the very least, to ascertain that the
RULING: respondents read them before they accepted their passage
1. The applicability insisted upon by the KLM of article 30 of the tickets. KLM unilaterally assumed the role of a mere ticket-issuing
Warsaw Convention cannot be sustained. That article presupposes agent for other airlines and limited its liability only to untoward
the occurrence of either an accident or a delay, neither of which occurrences on its own lines.
took place at the Barcelona airport. In the case at bar, Aer Lingus,
through its manager in Barcelona, refused to transport the 3. The respondents dealt exclusively with the KLM which issued
respondents to their planned and contracted destination. Article them tickets for their entire trip and which in effect guaranteed to
30 of the Warsaw Convention has no application in the case at them that they would have sure space in Aer Lingus flight 861.
bar which involves, not an accident or delay, but a willful The respondents, under that assurance of the internationally
misconduct on the part of KLM’s agent, the Aer Lingus. prestigious KLM, naturally had the right to expect that their tickets
would be honored by Aer Lingus to which the KLM had indorsed and
(Pointed out by the respondent although it wasn’t mentioned if the in effect guaranteed the performance of its principal engagement to
Court upheld respondents’ contention): Article 25 of the WC is carry out the respondents' scheduled itinerary previously and mutually
applicable in the case at bar viz: agreed upon between the parties. The breach of that guarantee was
ART. 25. (1) The carrier shall not be entitled to avail himself aggravated by the discourteous and highly arbitrary conduct of
of the provisions of this convention which exclude or limit his an official of the Aer Lingus which the KLM had engaged to
liability, if the damage is caused by his willful misconduct or transport the respondents on the Barcelona-Lourdes segment of
by such default on his part as, in accordance with the law of their itinerary.
the court to which the case is submitted, is considered to be
equivalent to willful misconduct.

(2) Similarly, the carrier shall not be entitled to avail himself of Alitalia v. IAC
the said provisions, if the damage is caused under the same WHO WON: Dra. Pablo
circumstances by any agent of the carrier acting within the
scope of his employment. DOCTRINE:
- Under the Warsaw Convention, an air carrier is made liable
2. As noted by the CA, the condition provided at the back of for damages for: 1) the death, wounding or other bodily injury
respondents’ tickets was printed in letters so small that one would of a passenger if the accident causing it took place on board
have to use a magnifying glass to read the words. It would be the aircraft or in the course of its operations of embarking or
unfair to charge the respondents with automatic knowledge or notice disembarking; 2) the destruction or loss of, or damage to, any
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registered luggage or goods, if the occurrence causing it took - She arrived in Milan on the day before the meeting in
place during the carriage by air;" and 3) delay in the accordance with the itinerary and time table set for her by
transportation by air of passengers, luggage or goods. In ALITALIA. She was however told by the ALITALIA
these cases, it is provided in the Convention that the "action personnel there at Milan that her luggage was "delayed
for damages, however, founded, can only be brought subject inasmuch as the same was in one of the succeeding
to conditions and limits set out" therein. flights from Rome to Milan."
- (DOCTRINE in Cathay Pacific Case but applicable to this - Dra. Pablo’s luggage consisted of two (2) suitcases: (1)
case as well) Although the Warsaw Convention has the force contained her clothing and other personal items; (2) her
and effect of law in this country, being a treaty commitment scientific papers, slides and other research material. But the
assumed by the Philippine government, said convention does other flights arriving from Rome did not have her baggage on
not operate as an exclusive enumeration of the instances for board.
declaring a carrier liable for breach of contract of carriage or - She went to Rome to try to locate her bags herself. There,
as an absolute limit of the extent of that liability. The Warsaw she inquired about her suitcases in the domestic and
Convention declares the carrier liable for damages in the international airports, and filled out the forms prescribed
enumerated cases and under certain limitations. However, it by ALITALIA for people in her predicament. However, her
must not be construed to preclude the operation of the Civil baggage could not be found. Completely distraught and
Code and other pertinent laws. It does not regulate, much less discouraged, she returned to Manila without attending the
exempt, the carrier from liability for damages for violating the meeting in Ispra, Italy.
rights of its passengers under the contract of carriage, - Dra. Pablo's suitcases were in fact located and forwarded
especially if willful misconduct on the part of the carrier's to Ispra, Italy, but only on the day after her scheduled
employees is found or established. appearance and participation at the U.N. meeting there.
Of course Dr. Pablo was no longer there to accept delivery;
FACTS: she was already on her way home to Manila. And for some
- Dr. Felipa Pablo — an associate professor in the reason or other, the suitcases were not actually restored
University of the Philippines and a research grantee of to Prof. Pablo by ALITALIA until eleven (11) months later,
the Philippine Atomic Energy Agency — was invited to take and four (4) months after institution of her action.
part at a meeting of the Department of Research and - She then demanded that ALITALIA make reparation for the
Isotopes of the Joint FAO-IAEA Division of Atomic damages thus suffered by her. ALITALIA offered her "free
Energy in Food and Agriculture of the United Nations in airline tickets to compensate her for any alleged damages."
Ispra, Italy. She was invited in view of her specialized She rejected the offer, and forthwith commenced a civil action
knowledge in "foreign substances in food and the against the carrier.
agriculture environment." She accepted the invitation, and - CFI rendered judgment in Dr. Pablo's favor. IAC not only
was then scheduled by the organizers, to read a paper on affirmed the Trial Court's decision but also increased the
"The Fate of Radioactive Fusion Products Contaminating award of nominal damages payable by ALITALIA to P40K.
Vegetable Crops." The program announced that she would
be the second speaker on the first day of the meeting. To ISSUE: W/N the Warsaw Convention should be applied to limit
fulfill this engagement, Dr. Pablo booked passage on ALITALIA’s liability? NO
petitioner airline, ALITALIA.
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RULING:
Under the Warsaw Convention, an air carrier is made liable for The Warsaw Convention however denies to the carrier availment "of
damages for: 1) the death, wounding or other bodily injury of a the provisions which exclude or limit his liability, if the damage is
passenger if the accident causing it took place on board the aircraft or caused by his willful misconduct or by such default on his part as, in
in the course of its operations of embarking or disembarking; 2) the accordance with the law of the court seized of the case, is considered
destruction or loss of, or damage to, any registered luggage or goods, to be equivalent to willful misconduct," or "if the damage is similarly
if the occurrence causing it took place during the carriage by air;" and caused by any agent of the carrier acting within the scope of his
3) delay in the transportation by air of passengers, luggage or goods. employment.
In these cases, it is provided in the Convention that the "action for
damages, however, founded, can only be brought subject to In the case at bar, no bad faith or otherwise improper conduct
conditions and limits set out" therein. may be ascribed to the employees of petitioner airline; and Dr.
Pablo's luggage was eventually returned to her, belatedly, it is
The Convention also purports to limit the liability of the carriers true, but without appreciable damage.
in the following manner:
NEVERTHELESS, some special species of injury was caused to
1. In the carriage of passengers the liability of the carrier for each passenger Dr. Pablo because petitioner ALITALIA misplaced her baggage
is limited to the sum of 250,000 francs. Nevertheless, by special contract, the
and failed to deliver it to her at the time appointed — a breach of
carrier and the passenger may agree to a higher limit of liability; 2. a) In the
carriage of registered baggage and of cargo, the liability of the carrier is its contract of carriage — with the result that she was unable to
limited to a sum of 250 francs per kilogram, unless the passenger or read the paper and make the scientific presentation (consisting
consignor has made, at the time when the package was handed over to the of slides, autoradiograms or films, tables and tabulations) that
carrier, a special declaration of interest in delivery at destination and has paid
she had painstakingly labored over, at the prestigious
a supplementary sum if the case so requires. In that case the carrier will be
liable to pay a sum not exceeding the declared sum, unless he proves that international conference, to attend which she had traveled
sum is greater than the actual value to the consignor at delivery; b) In the hundreds of miles, to her chagrin and embarrassment and the
case of loss, damage or delay of part of registered baggage or cargo, or disappointment and annoyance of the organizers. She felt, not
of any object contained therein, the weight to be taken into
consideration in determining the amount to which the carrier's liability
unreasonably, that the invitation for her to participate at the
is limited shall be only the total weight of the package or packages conference, extended by the Joint FAO/IAEA Division of Atomic
concerned. Nevertheless, when the loss, damage or delay of a part of Energy in Food and Agriculture of the United Nations, was a
the registered baggage or cargo, or of an object contained therein, singular honor not only to herself, but to the University of the
affects the value of other packages covered by the same baggage check
Philippines and the country as well, an opportunity to make some
or the same air way bill, the total weight of such package or packages
shall also be taken into consideration in determining the limit of liability; sort of impression among her colleagues in that field of scientific
3. As regards objects of which the passenger takes charge himself the liability activity. The opportunity to claim this honor or distinction was
of the carrier is limited to 5000 francs per passenger. 4. The limits prescribed irretrievably lost to her because of Alitalia's breach of its
shall not prevent the court from awarding, in accordance with its own law, in
contract.
addition, the whole or part of the court costs and of the other expenses of
litigation incurred by the plaintiff. The foregoing provision shall not apply if the
amount of the damages awarded, excluding court costs and other expenses Apart from this, there can be no doubt that Dr. Pablo underwent
of the litigation, does not exceed the sum which the carrier has offered in profound distress and anxiety, which gradually turned to panic and
writing to the plaintiff within a period of six months from the date of the
occurrence causing the damage, or before the commencement of the action,
finally despair.
if that is later.
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Certainly, the compensation for the injury suffered by Dr. Pablo sarcastically remarked that "If I were to help all 300
CANNOT under the circumstances be restricted to that passengers in this flight, I would have a broken back!"
prescribed by the Warsaw Convention for delay in the transport - Petitioner further alleged that when the plane was about to
of baggage. land in Rome, Italy, another flight attendant, Nickolas
Kerrigan (Kerrigan), singled her out from among all the
She is not, of course, entitled to be compensated for loss or passengers in the business class section to lecture on
damage to her luggage. As already mentioned, her baggage was plane safety. Allegedly, Kerrigan made her appear to the
ultimately delivered to her in Manila, tardily but safely. She is however other passengers to be ignorant, uneducated, stupid, and
entitled to nominal damages — which, as the law says, is adjudicated in need of lecturing on the safety rules and regulations of
in order that a right of the plaintiff, which has been violated or invaded the plane. Affronted, petitioner assured Kerrigan that she
by the defendant, may be vindicated and recognized, and not for the knew the plane’s safety regulations being a frequent traveler.
purpose of indemnifying the plaintiff for any loss suffered — and the Thereupon, Kerrigan allegedly thrust his face a mere few
SC agreed that the CA correctly set the amount thereof at P40K. centimeters away from that of the petitioner and menacingly
told her that "We don’t like your attitude."
- Upon arrival in Rome, petitioner complained to
Lhuillier v. British Airways respondent’s ground manager and demanded an
WHO WON: British Airways apology. However, the latter declared that the flight
stewards were "only doing their job."
DOCTRINE: - Thus, petitioner filed a complaint before the RTC of Makati
- Under Article 28(1) of the Warsaw Convention, the plaintiff for damages praying that respondent be ordered to pay P5M
may bring the action for damages before – as moral damages, P2M as nominal damages, P1M as
1. The court where the carrier is domiciled; exemplary damages, P300K as attorney’s fees, P200K as
2. The court where the carrier has its principal place of litigation expenses, and cost of the suit.
business; - Summons, together with a copy of the complaint, was served
3. The court where the carrier has an establishment by which on the respondent through Violeta Echevarria, General
the contract has been made; or Manager of Euro-Philippine Airline Services, Inc.
4. The court of the place of destination. - Respondent by way of special appearance through
- Jurisdiction is a power introduced for the public good, on counsel, filed a Motion to Dismiss on grounds of lack of
account of the necessity of dispensing justice. (Justice Del jurisdiction over the case and over the person of the
Castillo’s take away) respondent. Respondent alleged that only the courts of
London, United Kingdom or Rome, Italy, have jurisdiction
FACTS: over the complaint for damages pursuant to the Warsaw
- Petitioner Edna Diago Lhuillier took British Airways’ flight from Convention, Article 28(1). Likewise, it was alleged that
London, United Kingdom to Rome, Italy. Once on board, the case must be dismissed OTG of lack of jurisdiction
she allegedly requested Julian Halliday (Halliday), one of because the summons was erroneously served on Euro-
the respondent’s flight attendants, to assist her in placing Philippine Airline Services which is not its resident agent
her hand-carried luggage in the overhead bin. However, in the PI.
Halliday allegedly refused to help and assist her, and even
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- RTC issued an order requiring petitioner to file her Thus, when the place of departure and the place of destination in
comment/opposition on the MTD. Instead of doing so, a contract of carriage are situated within the territories of two
petitioner filed an Urgent Ex-Parte Motion to Admit Formal High Contracting Parties, said carriage is deemed an
Amendment to the Complaint and Issuance of Alias Summon. "international carriage". The High Contracting Parties referred to
She alleged that upon verification with the SEC, she found herein were the signatories to the Warsaw Convention and those
that the resident agent of respondent in the PI is Alonzo which subsequently adhered to it.
Q. Ancheta.
- RTC of Makati City granted respondents’ MTD. In the case at bench, petitioner’s place of departure was London,
ISSUE/S: United Kingdom while her place of destination was Rome, Italy. Both
1. W/N Philippine Court’s have jurisdiction over a tortuous conduct the United Kingdom and Italy signed and ratified the Warsaw
committed against a Filipino citizen and resident by airline personnel Convention. As such, the transport of the petitioner is deemed to be
of a foreign carrier travelling beyond the territorial limit of any foreign an "international carriage" within the contemplation of the Warsaw
country and is thus outside the ambit of the WC? NO Convention. Since the Warsaw Convention applies in the instant case,
2. W/N respondent air carrier of passengers in filing its MTD may be then the jurisdiction over the subject matter of the action is governed
deemed as having in fact and law submitted itself to the jurisdiction of by the provisions of the Warsaw Convention.
the lower court? NO
Under Article 28(1) of the Warsaw Convention, the plaintiff may
RULING: bring the action for damages before –
1. The Warsaw Convention is a treaty commitment voluntarily 1. The court where the carrier is domiciled;
assumed by the Philippine government and, as such, has the force 2. The court where the carrier has its principal place of business;
and effect of law in this country. The Warsaw Convention applies 3. The court where the carrier has an establishment by which the
because the air travel, where the alleged tortuous conduct occurred, contract has been made; or
was between the United Kingdom and Italy, which are both signatories 4. The court of the place of destination.
to the Warsaw Convention.
In this case, it is not disputed that respondent is a British
Article 1 of the Warsaw Convention provides: corporation domiciled in London, United Kingdom with London
1. This Convention applies to all international carriage of persons, luggage or as its principal place of business. Hence, under the first and
goods performed by aircraft for reward. It applies equally to gratuitous
carriage by aircraft performed by an air transport undertaking. second jurisdictional rules, the petitioner may bring her case
2. For the purposes of this Convention the expression "international carriage" before the courts of London in the United Kingdom. In the
means any carriage in which, according to the contract made by the parties, passenger ticket and baggage check presented by both the
the place of departure and the place of destination, whether or not there be a petitioner and respondent, it appears that the ticket was issued
break in the carriage or a transhipment, are situated either within the
territories of two High Contracting Parties, or within the territory of a single in Rome, Italy. Consequently, under the third jurisdictional rule,
High Contracting Party, if there is an agreed stopping place within a territory the petitioner has the option to bring her case before the courts
subject to the sovereignty, suzerainty, mandate or authority of another Power, of Rome in Italy. Finally, both the petitioner and respondent aver
even though that Power is not a party to this Convention. A carriage without that the place of destination is Rome, Italy, which is properly
such an agreed stopping place between territories subject to the sovereignty,
suzerainty, mandate or authority of the same High Contracting Party is not designated given the routing presented in the said passenger
deemed to be international for the purposes of this Convention. ticket and baggage check. Accordingly, petitioner may bring her
action before the courts of Rome, Italy. Thus, the RTC of Makati
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correctly ruled that it DOES NOT have jurisdiction over the case filed damages in the enumerated cases and under certain limitations.
by petitioner. However, it must not be construed to preclude the operation of the
Civil Code and other pertinent laws. It does not regulate, much less
The SC has also cited various cases showing that tortuous conduct exempt, the carrier from liability for damages for violating the rights of
as ground for petitioner’s complaint is within the purview of its passengers under the contract of carriage, especially if willful
Warsaw Convention. It is thus settled that allegations of tortious misconduct on the part of the carrier's employees is found or
conduct committed against an airline passenger during the course of established.
the international carriage do not bring the case outside the ambit of
the Warsaw Convention. FACTS:
- On 19 October 1975, respondent Tomas L. Alcantara was a
2. Respondent, in seeking remedies from the trial court through first class passenger of petitioner Cathay Pacific
special appearance of counsel, is not deemed to have voluntarily Airways, Ltd. (CATHAY) on its flight from Manila to
submitted itself to the jurisdiction of the trial court. Sec. 20, Rule 14 of Hongkong and onward from Hongkong to Jakarta on another
the Revised Rules of Civil Procedure clearly provides that the flight. The purpose of his trip was to attend the following
defendant’s voluntary appearance in the action shall be equivalent to day, a conference with the Director General of Trade of
service of summons. The inclusion in a motion to dismiss of other Indonesia, Alcantara being the Executive Vice-President
grounds aside from lack of jurisdiction over the person of the and General Manager of Iligan Cement Corporation,
defendant shall not be deemed a voluntary appearance. Thus, a Chairman of the Export Committee of the Philippine
defendant who files a motion to dismiss, assailing the jurisdiction of Cement Corporation, and representative of the Cement
the court over his person, together with other grounds raised therein, Industry Authority and the Philippine Cement
is not deemed to have appeared voluntarily before the court. What the Corporation.
rule on voluntary appearance – the first sentence of the above-quoted - Alcantara checked in his luggage which contained not only his
rule – means is that the voluntary appearance of the defendant in court clothing and articles for personal use but also papers and
is without qualification, in which case he is deemed to have waived his documents he needed for the conference.
defense of lack of jurisdiction over his person due to improper service - Upon his arrival in Jakarta, respondent discovered that
of summons. his luggage was missing. When he inquired about his
luggage from CATHAY's representative in Jakarta,
Alcantara was told that his luggage was left behind in
Cathay Pacific Airways, Ltd. V. CA Hongkong. For this, respondent Alcantara was offered
WHO WON: Tomas Alcantara $20.00 as "inconvenience money" to buy his immediate
personal needs until the luggage could be delivered to him.
DOCTRINE: - His luggage finally reached Jakarta more than twenty four (24)
Although the Warsaw Convention has the force and effect of law in hours after his arrival. However, it was not delivered to him
this country, being a treaty commitment assumed by the Philippine at his hotel but was required by petitioner to be picked up
government, said convention does not operate as an exclusive by an official of the Philippine Embassy.
enumeration of the instances for declaring a carrier liable for breach - Alcantara filed a complaint against CATHAY with the CFI
of contract of carriage or as an absolute limit of the extent of that praying for damages.
liability. The Warsaw Convention declares the carrier liable for
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- CFI ordered CATHAY to pay Alcantara moral, temperate,


exemplary and attorney’s fees. Both parties appealed to the Where in breaching the contract of carriage the defendant airline
CA. CATHAY assailed the conclusion of the trial court that it is not shown to have acted fraudulently or in bad faith, liability
was accountable for breach of contract and questioned the for damages is limited to the natural and probable consequences
non-application by the court of the Warsaw Convention of the breach of obligation which the parties had foreseen or
as well as the excessive damages awarded on the basis of its could have reasonably foreseen. In that case, such liability does
finding that respondent Alcantara was rudely treated by not include moral and exemplary damages. Conversely, if the
petitioner's employees during the time that his luggage could defendant airline is shown to have acted fraudulently or in bad
not be found. For his part, respondent Alcantara assigned as faith, the award of moral and exemplary damages is proper.
error the failure of the trial court to grant the full amount of
damages sought in his complaint. CA rendered its decision However, respondent Alcantara is not entitled to temperate damages,
affirming the findings of fact of the trial court but modifying its contrary to the ruling of the court a quo, in the absence of any showing
award by increasing the moral damages to P80K exemplary that he sustained some pecuniary loss. t cannot be gainsaid that
damages to P20K and temperate or moderate damages to respondent's luggage was ultimately delivered to him without serious
P10K. or appreciable damage.

ISSUE/S: 2. Although the Warsaw Convention has the force and effect of
1. W/N the award of damages was proper? YES save for the award of law in this country, being a treaty commitment assumed by the
temperate damages. Philippine government, said convention does not operate as an
2. W/N the Warsaw Convention is applicable to the present case? NO exclusive enumeration of the instances for declaring a carrier
liable for breach of contract of carriage or as an absolute limit of
RULING: the extent of that liability. The Warsaw Convention declares the
1. Both the trial court and the appellate court found that CATHAY was carrier liable for damages in the enumerated cases and under
grossly negligent and reckless when it failed to deliver the luggage of certain limitations. However, it must not be construed to preclude
petitioner at the appointed place and time. CATHAY alleges that as a the operation of the Civil Code and other pertinent laws. It does
result of mechanical trouble, all pieces of luggage on board the first not regulate, much less exempt, the carrier from liability for
aircraft bound for Jakarta were unloaded and transferred to the damages for violating the rights of its passengers under the
second aircraft which departed an hour and a half later. Yet, as the contract of carriage, especially if willful misconduct on the part
CA noted, petitioner was not even aware that it left behind private of the carrier's employees is found or established, which is what
respondent's luggage until its attention was called by the was manifested in the instant case.
Hongkong Customs authorities. More, bad faith or otherwise
improper conduct may be attributed to the employees of For, the Warsaw Convention itself provides in Art. 25 that —(1)
petitioner. While the mere failure of CATHAY to deliver The carrier shall not be entitled to avail himself of the provisions
respondent's luggage at the agreed place and time did not ipso of this convention which exclude or limit his liability, if the
facto amount to willful misconduct since the luggage was damage is caused by his willful misconduct or by such default
eventually delivered to private respondent, albeit belatedly, the on his part as, in accordance with the law of the court to which
Court is persuaded that the employees of CATHAY acted in bad the case is submitted, is considered to be equivalent to willful
faith. misconduct; (2) Similarly the carrier shall not be entitled to avail
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himself of the said provisions, if the damage is caused under the be invoked to justify the disregard of some extraordinary sort of
same circumstances by any agent of the carrier acting within the damage resulting to a passenger and preclude recovery therefor
scope of his employment; beyond the limits set by said Convention. Likewise, the Convention
does not preclude the operation of the Civil Code and other pertinent
When petitioner airline misplaced respondent's luggage and failed to laws. It does not regulate, much less exempt, the carrier from liability
deliver it to its passenger at the appointed place and time, some for damages for violating the rights of its passengers under the
special species of injury must have been caused to him. For sure, the contract of carriage, especially if willful misconduct on the part of the
latter underwent profound distress and anxiety, and the fear of losing carrier's employees is found or established.
the opportunity to fulfill the purpose of his trip. In fact, for want of
appropriate clothings for the occasion brought about by the delay of FACTS:
the arrival of his luggage, to his embarrassment and consternation - On 13 October 1989 respondent Willie J. Uy, a revenue
respondent Alcantara had to seek postponement of his pre-arranged passenger on United Airlines Flight No. 819 for the San
conference with the Director General of Trade of the host country. Francisco — Manila route, checked in together with his
luggage one piece of which was found to be overweight
In one case, this Court observed that a traveller would naturally suffer at the airline counter.
mental anguish, anxiety and shock when he finds that his luggage did - To his utter humiliation, an employee of petitioner rebuked
not travel with him and he finds himself in a foreign land without any him saying that he should have known the maximum weight
article of clothing other than what he has on. Thus, respondent is allowance to be 70 kgs. per bag and that he should have
entitled to moral and exemplary damages packed his things accordingly. Then, in a loud voice in
front of the milling crowd, she told respondent to repack
United Airlines v. Uy his things and transfer some of them from the overweight
WHO WON: Uy luggage to the lighter ones.
- The airline then billed him overweight charges which he
DOCTRINE: offered to pay with a miscellaneous charge order or an airline
Article 29 of the Warsaw Convention provides: (1) The right to pre-paid credit. However, the airline's employee, and later
damages shall be extinguished if an action is not brought within two its airport supervisor, adamantly refused to honor the
(2) years, reckoned from the date of arrival at the destination, or from MCO pointing out that there were conflicting figures
the date on which the aircraft ought to have arrived, or from the date listed on it. Despite the explanation from respondent that the
on which the transportation stopped; (2) The method of calculating the last figure written on the MCO represented his balance,
period of limitation shall be determined by the law of the court to which petitioner's employees did not accommodate him. Faced
the case is submitted. with the prospect of leaving without his luggage, respondent
paid the overweight charges with his American Express
Within our jurisdiction, the Court has held that the Warsaw Convention credit card.
can be applied, or ignored, depending on the peculiar facts presented - Upon arrival in Manila, he discovered that one of his bags
by each case. Thus, we have ruled that the Convention's provisions had been slashed and its contents stolen. He
do not regulate or exclude liability for other breaches of contract by the particularized his losses to be around US $5,310.00.
carrier or misconduct of its officers and employees, or for some - In a letter dated 16 October 1989 respondent bewailed the
particular or exceptional type of damage. Neither may the Convention insult, embarrassment and humiliating treatment he
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suffered in the hands of United Airlines employees, Respondent's failure to file his complaint within the two (2)-
notified petitioner of his loss and requested year limitation provided in the Warsaw Convention did not bar
reimbursement thereof. Petitioner United Airlines, through his action since he could still hold petitioner liable for breach
Central Baggage Specialist Joan Kroll, did not refute any of of other provisions of the Civil Code which prescribe a
respondent's allegations and mailed a check representing the different period or procedure for instituting an action.
payment of his loss based on the maximum liability of US
$9.70 per pound. Respondent, thinking the amount to be
grossly inadequate to compensate him for his losses, as ISSUE:
well as for the indignities he was subjected to, sent two 1. W/N the notice of appeal to the appellate court was timely filed?
(2) more letters to petitioner airline, one dated 4 January YES
1990 through a certain Atty. Pesigan, and another dated 2. W/N Art. 29 of the Warsaw Convention should apply to the case at
28 October 1991 through Atty. Ramon U. Ampil bar? NO
demanding an out-of-court settlement of P1M. Petitioner
United Airlines did NOT accede to his demands. RULING:
- Consequently, on 9 June 1992 respondent filed a complaint 1. Respondent filed his notice of appeal two (2) days later than the
for damages against United Airlines alleging that he was a prescribed period. Although his counsel failed to give the reason for
person of good station, sitting in the board of directors of the delay, we are inclined to give due course to his appeal due to the
several top 500 corporations and holding senior executive unique and peculiar facts of the case and the serious question of law
positions for such similar firms; that petitioner airline accorded it poses. In the now almost trite but still good principle, technicality,
him ill and shabby treatment to his extreme embarrassment when it deserts its proper office as an aid to justice and becomes
and humiliation; and, as such he should be paid moral its great hindrance and chief enemy, deserves scant
damages of at least P1M exemplary damages of at least consideration.
P500K plus attorney's fees of at least P50K. Similarly, he
requested reimbursement for his stolen luggage. Moreover, the Court also took note of the fact that while respondent
- United Airlines moved to dismiss the complaint on the ground filed his complaint more than two (2) years later (beyond the period of
that respondent's cause of action had prescribed, invoking limitation prescribed by the Warsaw Convention for filing a claim for
Art. 29 of the Warsaw Convention. On the other hand, damages), it is obvious that respondent was forestalled from
respondent noted that according to Philippine laws the immediately filing an action because petitioner airline gave him
prescription of actions is interrupted “when they are filed the runaround, answering his letters but not giving in to his
before the court, when there is a written extrajudicial demand demands. True, respondent should have already filed an action at the
by the creditors, and when there is any written first instance when his claims were denied by petitioner but the same
acknowledgment of the debt by the debtor.” could only be due to his desire to make an out-of-court settlement for
- TC ordered dismissal of the action holding that the language which he cannot be faulted. Hence, despite the express mandate of
of Art. 29 is clear that the action must be brought within two Art. 29 of the Warsaw Convention that an action for damages
(2) years from the date of arrival at the destination. On the should be filed within two (2) years from the arrival at the place
applicability of the Warsaw Convention, the appellate court of destination, such rule shall not be applied in the instant case
ruled that the Warsaw Convention did not preclude the because of the delaying tactics employed by petitioner airline
operation of the Civil Code and other pertinent laws. itself. Thus, private respondent's second cause of action cannot
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be considered as time-barred under Art. 29 of the Warsaw damages arising from the misconduct of the airline employees and the
Convention. violation of respondent's rights as passenger — clearly is not.

2. Article 29 of the Warsaw Convention provides: (1) The right to Consequently, insofar as the first cause of action is concerned,
damages shall be extinguished if an action is not brought within respondent's failure to file his complaint within the two (2)-year
two (2) years, reckoned from the date of arrival at the destination, limitation of the Warsaw Convention does not bar his action since
or from the date on which the aircraft ought to have arrived, or petitioner airline may still be held liable for breach of other provisions
from the date on which the transportation stopped; (2) The of the Civil Code which prescribe a different period or procedure for
method of calculating the period of limitation shall be determined instituting the action, specifically, Art. 1146 thereof which prescribes
by the law of the court to which the case is submitted. four (4) years for filing an action based on torts.

Within our jurisdiction, the Court has held that the Warsaw
Convention can be applied, or ignored, depending on the peculiar
facts presented by each case. Thus, we have ruled that the
Convention's provisions do not regulate or exclude liability for
other breaches of contract by the carrier or misconduct of its
officers and employees, or for some particular or exceptional
type of damage. Neither may the Convention be invoked to justify Lufthansa German Airlines v. CA
the disregard of some extraordinary sort of damage resulting to WHO WON: Tirso Antiporda
a passenger and preclude recovery therefor beyond the limits set
by said Convention. Likewise, the Convention does not preclude DOCTRINE:
the operation of the Civil Code and other pertinent laws. It does Sections (1) and (2), Article 30 of the Warsaw Convention provide:
not regulate, much less exempt, the carrier from liability for (1). In the case of transportation to be performed by various
damages for violating the rights of its passengers under the successive carriers and falling within the definition set out in the third
contract of carriage, especially if willful misconduct on the part paragraph of Article I, each carrier who accepts passengers, baggage,
of the carrier's employees is found or established. or goods shall be subject to the rules set out in the convention, and
shall be deemed to be one of the contracting parties to the contract of
Respondent's complaint reveals that he is suing on two (2) causes of transportation insofar as the contract deals with that part of the
action: (a) the shabby and humiliating treatment he received from transportation which is performed under his supervision;
petitioner's employees at the San Francisco Airport which caused him (2) In the case of transportation of this nature, the passenger or his
extreme embarrassment and social humiliation; and, (b) the slashing representative can take action only against the carrier who performed
of his luggage and the loss of his personal effects amounting to US the transportation, during which the accident or the delay occurred,
$5,310.00. save in the case where, by express agreement, the first carrier has
assumed liability for the whole journey.
While his second cause of action — an action for damages arising
from theft or damage to property or goods — is well within the bounds Bumping-off, which is the refusal to transport passengers with
of the Warsaw Convention, his first cause of action — an action for confirmed reservation to their planned and contracted destinations,
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totally forecloses said passengers' right to be transported, whereas given him by Lufthansa, to leave Bombay in the morning
delay merely postpones for a time being the enforcement of such right. of September 26, 1984. Finding no representative of
Lufthansa waiting for him at the gate, Antiporda asked the
Consequently, Section 2, Article 30 of the Warsaw Convention which duty officer of Air India how he could get in touch with
does not contemplate the instance of "bumping-off" but merely of Lufthansa. He was told to call up Lufthansa which informed
simple delay, cannot provide a handy excuse for Lufthansa as to him that somebody would attend to him shortly. Ten minutes
exculpate it from any liability to Antiporda. later, Gerard Matias, Lufthansa's traffic officer, arrived,
asked for Antiporda's ticket and told him to just sit down
FACTS: and wait. Matias returned with one Leslie Benent, duty
- Tirso V. Antiporda, Sr. was an associate director of the officer of Lufthansa, who informed Antiporda that his
Central Bank of the Philippines and a registered seat in Air Kenya Flight 203 to Nairobi had been given to
consultant of the Asian Development Bank, the World a very important person of Bombay who was attending a
Bank and the UNDP. He was, contracted by Sycip, Gorres, religious function in Nairobi.
Velayo & Co. (SGV) to be the institutional financial specialist - Antiporda protested, stressing that he had an important
for the agricultural credit institution project of the Investment professional engagement in Blantyre, Malawi in the afternoon
and Development Bank of Malawi in Africa. of September 26, 1984. He requested that the situation be
- According to the letter addressed to Antiporda from J.F. remedied but Air Kenya Flight 203 left for Nairobi without him
Singson of SGV, he would render his services to the Malawi on board. Stranded in Bombay, Antiporda was booked for
bank as an independent contractor for which he would be Nairobi via Addis Ababa only the next day. He finally
paid US$9,167 for a 50-day period commencing sometime arrived in Blantyre at 9:00 o'clock in the evening of
in September 1984. For the engagement, Antiporda would Sept.28 more than a couple of days late for his
be provided one round-trip economy ticket from Manila appointment with people from the institution he was to
to Blantyre and back with a maximum travel time of four work with in Malawi.
days per round-trip and, in addition, a travel allowance of - Consequently, Antiporda's counsel wrote the general
$50 per day, a travel insurance coverage of P100,000 and manager of Lufthansa in Manila demanding P1M in damages
major hospitalization with AFIA and an accident for the airline's "malicious, wanton, disregard of the contract
insurance coverage of P150,000. of carriage." In reply, Lufthansa general manager Hagen
- On September 17, 1984, Lufthansa, through SGV, issued a Keilich assured Antiporda that the matter would be
ticket for Antiporda's confirmed flights to Malawi, Africa. The investigated.
ticket particularized his itinerary as follows: (1) Manila to - Apparently getting no positive action from Lufthansa,
Singapore; (2) Singapore to Bombay; (3) Bombay to Nairobi; Antiporda filed with the RTC a complaint against Lufthansa.
(4) Nairobi to Lilongwe; (5) Lilongwe to Blantyre = TOTAL OF - Lufthansa admits the issuance and validity of Antiporda’s
5 LEGS. ticket issued by it. However, it denies its obligation to transport
- Thus, on the date of his flight, Antiporda took the Lufthansa the plaintiff to his point of destination at Blantyre, Malawi,
flight to Singapore from where he proceeded to Bombay on Africa. Defendant claims that it was obligated to transport the
board the same airline. He arrived in Bombay as scheduled plaintiff only up to Bombay, India.
and waited at the transit area of the airport for his - RTC held that Lufthansa cannot limit its liability as a mere
connecting flight to Nairobi which was, per schedule ticket issuing agent for other airlines and only to untoward
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occurrences on its own line based on an express stipulation and responsibility of the defendant Lufthansa to transport the plaintiff
in the Condition of Contracts of the ticket it issued. It also from Manila to Blantyre, on a trip of five legs.
added that under the pool arrangement of the International Air
Transport Association (IATA), of which Lufthansa and Air The posture taken by the defendant that it was Air Kenya's, not
Kenya are members, member airlines are agents of each Lufthansa's, liability to transport plaintiff from Bombay to Malawi, is
other in the issuance of tickets and, therefore, in accordance unacceptable. The plaintiff dealt exclusively with the defendant
with Ortigas v. Lufthansa, an airline company is considered Lufthansa which issued to him the ticket for his entire trip and which in
bound by the mistakes committed by another member of IATA effect guaranteed to the plaintiff that he would have sure space in Air
which, in behalf of the former, had confirmed a passenger's Kenya's flight to Nairobi. Plaintiff, under that assurance of the
reservation for accommodation. defendant, naturally, had the right to expect that his ticket would be
- Lufthansa elevated the matter to the CA. Lufthansa invoked honored by Air Kenya, to which, in the legal sense, Lufthansa had
Section 2, Article 30 of the Warsaw Convention which endorsed and in effect guaranteed the performance of its principal
expressly stipulates that in cases where the transportation of engagement to carry out plaintiff's scheduled itinerary previously and
passengers or goods is performed by various successive mutually agreed upon by the parties. Defendant itself admitted that the
carriers, the passenger can take action only against the flight from Manila, Singapore, Bombay, Nairobi, Lilongwe, Blantyre,
carrier which performed the transportation, during which the Malawi, were all confirmed with the stamped letters "OK" thereon. The
accident or delay occurred. However, CA affirmed trial court’s contract of air transportation was exclusively between the plaintiff
decision. It ruled that although the contract of carriage Antiporda and the defendant Lufthansa, the latter merely endorsing its
was to be performed by several air carriers, the same is performance to Air Kenya, as its subcontractor or agent.
to be treated as a single operation conducted by
Lufthansa because Antiporda dealt exclusively with it In light of the stipulations expressly specified in the ticket defining the
which issued him a Lufthansa ticket for the entire trip. true nature of its contract of carriage with Antiporda, Lufthansa
cannot claim that its liability thereon ceased at Bombay Airport
ISSUE/S: and thence, shifted to the various carriers that assumed the
1. W/N there was an exclusive contract of carriage between Antiporda actual task of transporting said private respondent. In the very
and Lufthansa such that the nature of such contract if a continuous nature of their contract, Lufthansa is clearly the principal in the
carriage from MNL to AFRICA? YES. contract of carriage with Antiporda and remains to be so,
2. W/N Sec. 2 Article 30 of the Warsaw Convention is applicable to the regardless of those instances when actual carriage was to be
case at bar? NO. performed by various carriers. The issuance of a confirmed
Lufthansa ticket in favor of Antiporda covering his entire five-leg
RULING: trip abroad successive carriers concretely attests to this.
1. Antiporda was issued a confirmed Lufthansa ticket all throughout
the five-leg trip. The fourth paragraph of the "Conditions of Contract" This also serves as proof that Lufthansa, in effect guaranteed that the
stipulated in the ticket indubitably showed that the contract of carriage successive carriers, such as Air Kenya would honor his ticket; assure
was considered as one of continuous air transportation from Manila to him of a space therein and transport him on a particular segment of
Blantyre, Malawi, thus: “…carriage to be performed hereunder by his trip.
several successive carriers is regarded as a single operation.”
From the ticket, therefore, it is indubitably clear that it was the duty
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2. Sections (1) and (2), Article 30 of the Warsaw Convention provide:


Art. 30 (1). In the case of transportation to be performed by various
successive carriers and falling within the definition set out in the third
paragraph of Article I, each carrier who accepts passengers, baggage,
or goods shall be subject to the rules set out in the convention, and
shall be deemed to be one of the contracting parties to the contract of
transportation insofar as the contract deals with that part of the
transportation which is performed under his supervision; (2) In the
case of transportation of this nature, the passenger or his
representative can take action only against the carrier who
performed the transportation during which the accident or the
delay occurred, save in the case where, by express agreement, Yu Con v. Ipil
the first carrier has assumed liability for the whole journey. WHO WON: Yu Con
DOCTRINE:
Lufthansa prays this court to take heed of jurisprudence in the United - The old Code of Commerce absolved the shipowner from
States where the term "delay" was interpreted to include "bumping- liability for the negligence of the captain and its crew but, in
off" or failure to carry a passenger with a confirmed reservation. the light of the principles of modern law, this doctrine on the
Bumping-off, which is the refusal to transport passengers with non-liability of the shipowner for the unlawful acts, crimes or
confirmed reservation to their planned and contracted quasi crimes, committed by the captain and the crew can no
destinations, totally forecloses said passengers' right to be longer be maintained in its absolute and categorical terms.
transported, whereas delay merely postpones for a time being - It is well and good that ship owners be not held criminally
the enforcement of such right. liable for such crimes or quasi crimes; but he cannot be
excused from liability for the damage and harm which, in
Consequently, Section 2, Article 30 of the Warsaw Convention consequence of those acts, may be suffered by the third
which does not contemplate the instance of "bumping-off" but parties who contracted with the captain, in his double capacity
merely of simple delay, cannot provide a handy excuse for of agent and subordinate of the shipowner himself.
Lufthansa as to exculpate it from any liability to Antiporda. The - In maritime commerce, the shippers and passengers in
payment of damages is, thus, deemed warranted by this Court. The making contracts with the captain do so through the
SC does not find any reversible error in the lower court's award of confidence they have in the shipowner who appointed him;
moral and exemplary damages, including attorney's fees in favor of they presume that the owner made a most careful
Antiporda. investigation before appointing him, and, above all, they
themselves are unable to make such an investigation, and
even though they should do so, they could not obtain
complete security, inasmuch as the shipowner can, whenever
he sees fit, appoint another captain instead.

FACTS:
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- Yu Con (plaintiff), a merchant and a resident of the town of inside the stateroom and witnessed its removal to said trunk
San Nicolas, Cebu, engaged in the sale of cloth and domestic from the plaintiff’s. Ipil also testified that he slept outside the
articles and having a share in a shop situated in the town of stateroom that night the sum of money was stolen but a cabin-
Catmon had several times CHARTERED from the defendant boy named Gabriel slept inside. The latter, however was not
Narciso Lauron, a banca named Maria belonging to the presented in court to be examined. Finally, the master and the
latter, of which Glicerio Ipil was master and Justo supercargo also gave no satisfactory explanation in regard to
Solamo, supercargo, for the transportation of certain the disappearance of the trunk and the money therein
merchandise and some money to and from the said town and contained, from the stateroom in which the trunk was, nor as
the port of Cebu. to who stole or might have stolen it. Ipil merely testified that
- On or about the 17th of October, 1911, Yu Con chartered the they did to know who the robbers were, for, when the robbery
said banca from the defendant Lauron for the transportation was committed, they were sound asleep, as they were tired,
of various merchandise from the port of Cebu to Catmon, at and that he believed that the guard Simeon also fell asleep
the price of P45 for the round trip, which merchandise was because he, too, was tired
loaded on board the said craft which was then at anchor in - Yu Con based his action on the charge that the disappearance
front of one of the graded fills of the wharf of said port. of said sum was due to the abandonment, negligence, or
- The following day, Yu Con delivered to the other two voluntary breach, on the part of the defendants, of the duty
defendants, Ipil, and Solamo, master and supercargo, they had in respect to the safe-keeping of the aforementioned
respectively, of the afore-named banca, the sum of P450, sum.
which was in a trunk belonging to the plaintiff and was - Defendants pleaded by way of special defense that the
taken charge of by said two defendants, who received plaintiff, at his own expense and under his exclusive
this money from the plaintiff, for the purpose of its responsibility, chartered the said banca, for a fixed period and
delivery to the latter's shop in Catmon for the purchase price, and that, through the misfortune, negligence, or
of corn in this town. abandonment of Yu Con himself the loss complained of
- While the money was still in said truck abroad the vessel, on occurred, while said banca was at anchor in the port of Cebu,
the night of the said Oct 18 the time scheduled for the and was caused by theft committed by unknown thieves. They
departure of the Maria from the port of Cebu, said master further alleged that said defendant Lauron (banca owner)
and said supercargo transferred the P450 from the merely placed his craft at the disposal of Yu Con for the price
plaintiff's trunk, where it was, to theirs, which was in a and period agreed upon, and did not go with it on its voyage.
stateroom of the banca, from which stateroom both the - The trial court held that the sole cause of the disappearance
trunk and the money disappeared during that same night, of the money from the said banca was the negligence of the
and that the investigations, made to ascertain their master (Ipil) and the supercargo (Solamo) and that defendant
whereabouts, produced no result. Lauron was responsible for that negligence, as owner of the
- Yu Con brought a civil action to recover from Ipil, Lauron and banca pursuant to articles 589, 587 and 618 of the Code of
Solamo, jointly and severally, the sum of P450, which had Commerce, Yu Con therefore being entitled to recover the
been delivered by Yu Con to Ipil and Solamo. amount lost.
- It was proven by the affidavits executed by the master,
supercargo and the four cabin boys before the provincial fiscal ISSUE: W/N Defendants are liable for the loss of plaintiff’s sum of
that they all knew of the existence of the money in the trunk money placed in the banca? YES
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shipowner for the unlawful acts, crimes or quasi crimes, committed by


RULING: the captain and the crew can no longer be maintained in its absolute
It is therefore beyond all doubt that the loss of the money occurred and categorical terms.
through the manifest fault and negligence of Ipil and Solamo, for It is well and good that ship owners be not held criminally liable for
not only did they fail to take the necessary precautions in order that such crimes or quasi crimes; but he cannot be excused from liability
the stateroom containing the trunk in which they kept the money for the damage and harm which, in consequence of those acts, may
should be properly guarded by members of the crew and put in such be suffered by the third parties who contracted with the captain, in his
condition that it would be impossible to steal the trunk from it or that double capacity of agent and subordinate of the shipowner himself.
persons not belonging to vessel might force an entrance into the
stateroom from the outside but also they did not expressly station In maritime commerce, the shippers and passengers in making
some person inside the stateroom for the guarding and safe-keeping contracts with the captain do so through the confidence they have in
of the trunk. the shipowner who appointed him; they presume that the owner made
a most careful investigation before appointing him, and, above all, they
All of these circumstances, together with that of its having been themselves are unable to make such an investigation, and even
impossible to know who took the trunk and the money, make the though they should do so, they could not obtain complete security,
conduct of Ipil, Solamo, and the other crew members eminently inasmuch as the shipowner can, whenever he sees fit, appoint another
suspicious and prevent our holding that the disappearance or loss of captain instead. Thus, it is only proper that the shipowner should be
the money was due to a fortuitous event, to force majeure, or that it made liable.
was an occurrence which could not have been foreseen, or which, if
foreseen, was inevitable.
Yu Biao Sontua v. Ossorio
Ipil and Solamo were depositaries of the sum in question and, WHO WON: Sontua
having failed to exercise the diligence required by the nature of
the obligation of safe-keeping assumed by them and by the DOCTRINE:
circumstances of the time and the place, it is evident that they - Where the vessel is one of freight, a public concern or public
are liable for its loss or misplacement and must restore it. utility, its owner or agent is liable for the tortious acts of his
agents (arts. 587, 613, and 618, Code of Commerce; and arts.
With respect to Lauron, he is also liable in accordance with the 1902, 1903, 1908, Civil Code). This principle has been
provisions of the Code of Commerce in force because, as the repeatedly upheld in various decisions of this court.
proprietor and owner of the vessel who executed a contract of - The general liability of a vessel owner extends to losses by
carriage with Yu Con, there occurred the loss, theft, or robbery fire arising from other than a natural or other excepted cause,
of the P450 that belonged to Yu Con through the negligence of whether occurring on the ship accidentally, or communicated
Ipil and Solamo and which theft does not appear to have been from another vessel, or from the shore; and the fact that fire
committed by a person not belonging to the craft. produces the motive power of a boat does not affect the case.
Such losses are not within the exceptions either of act of God,
The old Code of Commerce absolved the shipowner from liability for or peril of the sea, except by local custom, unless proximately
the negligence of the captain and its crew but, in the light of the caused by one of these events. In jurisdictions where the civil
principles of modern law, this doctrine on the non-liability of the law obtains, however, it has been held that if property on a
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steamboat is destroyed by fire, the owners of the boat are not - Trial court sentenced the defendant to pay plaintiff the
responsible, if it was being navigated with proper diligence, abovementioned sum with legal interest.
although the accident occurred at night. The common law
liability extends even to loss by fires caused entirely by ISSUE:
spontaneous combustion of the cargo, without any negligence - W/N defendant is liable to plaintiff? YES
on the part of master or crew. - W/N defendant is liable for the negligence of his agents and
employees? YES
FACTS:
- On March 12, 1920, there were loaded in the motor boat RULING:
Alfonso 2,000 cases of petroleum and 8,473 cases of (1) Expert testimony introduced by Sontua shows the explosion and
gasoline, of which 5,000 cases of gasoline and 2,000 of fire, which caused the damages, are imputable to the negligence of
petroleum were placed in the hold of said motor boat, and the the persons having charge of Alfonso at that time. It was shown that:
balance on deck. Said loading was done without permission o Due to the manner by which the cases were loaded (by means
from the customs authorities. Said cases were loaded by of straps), the cases would receive violent bumps resulting in
means of straps supporting 10 or 12 cases at a time. Said damage to the cans and consequent leakage.
cases were placed in the hold of the ship, which is 14ft from o The gases formed by the volatilization are apt to accumulate
the boiler of the main engine and 4ft from the boiler of the in a compartment (hold of a ship) without sufficient ventilation.
smaller engine. o This accumulation will cause the gases to ignite upon coming
- On the evening of March 13, the smaller engine was in in contact with a spark or upon temperature being
operation preparatory to the departure of the motor boat sufficiently raised (smaller engine was in operation).
which, at the time, was getting ready to leave. A fire in said
motor boat burst out with an explosion followed by a violent Under these circumstances, the Court held that the fire which caused
expulsion of gasoline and petroleum. the damages for which the plaintiff seeks redress was the inevitable
- Due to the proximity of the motor boat to a steamer Y. Sontua effect of the explosion and fire which occurred in the motor boat and
owned by plaintiff, the magnitude of the fire and the that this explosion and fire was imputable to the negligence of the
inflammability of the material that served as fuel, the fire persons having charge at that time of said motor boat and under
spread to the said steamer and so rapidly that it was whose direction the loading of the aforesaid cases of petroleum and
impossible for the crew of the Y. Sontua, and so rapidly that it gasoline had been performed.
was impossible for the crew of the said steamer to check its
progress. (2) It is proven that the agents and employees, through whose
- Thus, plaintiff brought a civil action to recover from defendant negligence the explosion and fire in question occurred, were agents,
(owner and agent of the subject motor boat) damages to her employees, and mandatories of the defendant. Where the vessel is
deck amounting to P67,400. Defendant alleges, as a special one of freight, a public concern or public utility, its owner or agent is
defense, that he has taken no part either directly or indirectly liable for the tortious acts of his agents (arts. 587, 613, and 618, Code
in the acts alleged in the complaint and that if plaintiff of Commerce; and arts. 1902, 1903, 1908, Civil Code). This principle
sustained damages, they are not imputable to the negligence has been repeatedly upheld in various decisions of this court.
of his agents, employees or mandatories.
In American law, principles similar to those in force in the Philippines
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and contained in the Code of Commerce abovecited, are prevailing: - Chua Yek Hong is a duly licensed copra dealer based at
Vessel owner's liability in general. — The general liability of a vessel Puerto Galera, Oriental Mindoro, while Guno and Olit are the
owner extends to losses by fire arising from other than a natural or owners of the vessel M/V Luzviminda I, a common carrier
other excepted cause, whether occurring on the ship accidentally, or engaged in coastwise trade from the different ports of Oriental
communicated from another vessel, or from the shore; and the fact Mindoro to the Port of Manila.
that fire produces the motive power of a boat does not affect the case. - Chua Yek loaded 1,000 sacks of copra, valued at
Such losses are not within the exceptions either of act of God, or peril P101,227.40, on board the vessel "M/V Luzviminda I" for
of the sea, except by local custom, unless proximately caused by one shipment from Puerta Galera, Oriental Mindoro, to Manila.
of these events. In jurisdictions where the civil law obtains, however, Said cargo, however, did not reach Manila because
it has been held that if property on a steamboat is destroyed by fire, somewhere between Cape Santiago and Calatagan,
the owners of the boat are not responsible, if it was being navigated Batangas, the vessel capsized and sank with all its cargo.
with proper diligence, although the accident occurred at night. The - On 30 March 1979, petitioner instituted before the then Court
common law liability extends even to loss by fires caused entirely by of First Instance of Oriental Mindoro, a Complaint for damages
spontaneous combustion of the cargo, without any negligence on the based on breach of contract of carriage against private
part of master or crew. respondents.
- Respondents averred that even assuming that the alleged
With regard to the allegation that the obligations enumerated in article cargo was truly loaded aboard their vessel, their liability had
612 of our Code of Commerce are inherent in the master, such been extinguished by reason of the total loss of said vessel.
inherent duties do not limit to the latter the civil liability arising from - Trial court held in favor of Chua Yek by ordering respondents,
their nonfulfillment, but while the master is responsible to the ship jointly and severally, to pay plaintiff the sum of P101,227.40
agent, the ship agent, in turn, is responsible to third persons, as is representing the value of the cargo which was lost while in the
clearly provided in article 618 of said Code, in which express mention custody of respondents. CA reversed. It applied Art. 587 of
is made, is subsections 5 and 7, of the duties enumerated in the said the Code of Commerce and the doctrine in Yangco v. Laserna
article 612. (73 Phil. 330 [1941]) and held that private respondents'
liability, as ship owners, for the loss of the cargo is merely co-
extensive with their interest in the vessel such that a total loss
Chua Yek Hong v. IAC, Guno and Olit thereof results in its extinction.
WHO WON: Guno and Olit
ISSUE: W/N CA has erred in applying the doctrine of limited liability
DOCTRINE: under Art. 587 of the Code of Commerce as expounded in Yangco v.
The doctrine of limited liability gives the ship agent’s or owner’s right Laserna? NO
of abandonment of the vessel and earned freight and such
abandonment provides the cessation of the responsibility of the ship RULING:
agent/owner. In other words, the ship agent/owner’s liability is merely Article 587 of the Code of Commerce provides: The ship agents shall
co-extensive with his interest in the vessel that a total loss thereof be civilly liable for the indemnities in favor of third persons which may
results in its extinction, “no vessel, no liability.” arise from the conduct of the captain in the care of the goods which
he loaded on the vessel; but he may exempt himself therefrom by
FACTS:
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abandoning the vessel with all the equipment and the freight it may In sum, it is held that the respondents are freed from their liabilities
have earned during the voyage. applying the limited liability rule for having totally lost the vessel and
none of the exceptions apply to them, the liability for the loss of the
Said article is the source of the doctrine of limited liability, which gives cargo of the copra must be deemed extinguished.
the ship agent’s or owner’s right of abandonment of the vessel and
earned freight and such abandonment provides the cessation of the
responsibility of the ship agent/owner. In other words, the ship Phil-Am General Insurance v. CA
agent/owner’s liability is merely co-extensive with his interest in the WHO WON: Phil-Am Gen
vessel that a total loss thereof results in its extinction, “no vessel, no
liability.” DOCTRINE:
Art. 587 of the Code of Commerce is NOT applicable to the case at
RATIO of this doctrine *in case sir asks* bar. Simply put, the ship agent is liable for the negligent acts of the
To offset against innumerable hazards and perils and to encourage captain in the care of goods loaded on the vessel. This liability
ship building and maritime commerce, it was deemed necessary to however can be limited through abandonment of the vessel, its
confine the liability of the owner or agent arising from the operation of equipment and freightage as provided in Art. 587. Nonetheless, there
a ship to the vessel, equipment, and freight, or insurance, if any. are exceptional circumstances wherein the ship agent could still be
Without the principle of limited liability, a ship owner and investor in held answerable despite the abandonment, as where the loss or injury
maritime commerce would run the risk of being ruined by the bad faith was due to the fault of the shipowner and the captain. The international
or negligence of his captain, and the apprehension of this would be rule is to the effect that the right of abandonment of vessels, as a legal
fatal to the interest of navigation." (Yangco vs. Lasema) limitation of a shipowner’s liability, does not apply to cases where the
injury or average was occasioned by the shipowner’s own fault. It must
The limited liability rule, however provides for exceptions: (1) where be stressed at this point that Art. 587 speaks only of situations where
the injury or death to a passenger is due either to the fault of the ship the fault or negligence is committed solely by the captain. Where the
owner, or to the concurring negligence of the ship owner and the shipowner is likewise to be blamed, Art. 587 will not apply, and such
captain (2) where the vessel is insured; and (3) in workmen's situation will be covered by the provisions of the Civil Code on
compensation claims. In this case, there is nothing in the records to common carrier.
show that the loss of the cargo was due to the fault of the private
respondent as ship owners, or to their concurrent negligence with the FACTS:
captain of the vessel and there was no showing that the vessel was - On July 6, 1983, Coca-Cola Bottlers Philippines, Inc.,
insured. loaded on board “MV Asilda,” a vessel owned and operated
by respondent Felman Shipping Lines (FELMAN), 7,500
Also, the provisions of the Civil Code on common carriers do not apply cases of 1-liter Coca-Cola softdrink bottles to be
in this case since the circumstances of the case are not within those transported from Zamboanga City to
that can be regulated by such law, specifically there were no Cebu City for consignee Coca-
provisions regulating liability of the ship owners or agent in the event Cola Bottlers Philippines, Inc., Cebu. The shipment was
of total loss/destruction of the vessel, and so the Code of Commerce insured with petitioner Philippine American General
and other special laws shall apply. Insurance Co., Inc. (PHILAMGEN).
- “MV Asilda” left the port of Zamboanga in fine weather at
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eight o’clock in the evening of the same day. At around Zamboanga as confirmed by certificates issued by the
8:45AM, July 7, the vessel sank in the waters of Philippine Coast Guard and the shipowner’s surveyor
Zamboanga del Norte bringing down her entire cargo with attesting to its seaworthiness. Thus the loss of the vessel and
her including the subject 7,500 cases of 1-liter Coca-Cola its entire shipment could only be attributed to either a
softdrink bottles. fortuitous event, in which case, no liability should attach
- On 15 July 1983 the consignee Coca-Cola Bottlers unless there was a stipulation to the contrary, or to the
Philippines, Inc., Cebu plant, filed a claim with respondent negligence of the captain and his crew, in which case, Art. 587
FELMAN for recovery of damages it sustained as a result of of the Code of Commerce should apply. Moreover, assuming
the loss of its softdrink bottles that sank with “MV “MV Asilda” was unseaworthy, still PHILAMGEN could not
Asilda.” FELMAN denied the claim thus prompting the recover from FELMAN since the assured (Coca-Cola Bottlers
consignee to file an insurance claim with PHILAMGEN which Philippines, Inc.) had breached its implied warranty on the
paid its claim of P755,250. vessel’s seaworthiness. Resultantly, the payment made by
- Claiming its right of subrogation PHILAMGEN sought PHILAMGEN to the assured was an undue, wrong and
recourse against respondent FELMAN which disclaimed any mistaken payment.
liability for the loss. Consequently, PHILAMGEN sued the - PHILAMGEN appealed the decision to the CA. CA rendered
shipowner for sum of money and damages. judgment finding “MV Asilda” unseaworthy for being top-
- In its complaint PHILAMGEN alleged that the sinking and total heavy as 2,500 cases of Coca-Cola softdrink bottles were
loss of “MV Asilda” and its cargo were due to the vessel’s improperly stowed on deck. In other words, while the vessel
unseaworthiness as she was put to sea in an unstable possessed the necessary Coast Guard certification indicating
condition. It further alleged its seaworthiness with respect to the structure of the ship
that the vessel was improperly manned and that its itself, it was not seaworthy with respect to the
officers were grossly negligent in failing to take appropriate cargo. Nonetheless, said court denied the claim of
measures to proceed to a nearby port or beach after the PHILAMGEN on the ground that the assured’s implied
vessel started to list. warranty of seaworthiness was not complied
- FELMAN filed a MTD based on the affirmative defense that with. Perfunctorily, PHILAMGEN was not properly
no right of subrogation in favor of PHILAMGEN was subrogated to the rights and interests of the
transmitted by the shipper, and that, in any event, FELMAN shipper. Furthermore, respondent court held that the filing of
had abandoned all its rights, interests and ownership over notice of abandonment had absolved the shipowner/agent
“MV Asilda” together with her freight and appurtenances for from liability under the limited liability rule.
the purpose of limiting and extinguishing its liability under Art.
587 of the Code of Commerce. ISSUES:
- The trial court dismissed the complaint of PHILAMGEN. On (1) W/N “MV Asilda” was seaworthy when it left the port of
appeal the Court of Appeals set aside the dismissal and Zamboanga? YES
remanded the case to the lower court for trial on the (2) W/N the limited liability under Art.
merits. FELMAN filed a petition for certiorari with the SC 587 of the Code of Commerce should apply? NO
which was subsequently denied. (3) W/N PHILAMGEN was properly subrogated to the rights and legal
- The trial court rendered judgment in favor of FELMAN. It ruled actions which the shipper had against FELMAN, the shipowner? YES
that “MV Asilda” was seaworthy when it left the port of
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RULING: is also to be noted that the subject vessel was designed as a fishing
(1) “MV Asilda” was unseaworthy when it left the port of vessel and it was not designed to carry a substantial amount or
Zamboanga. In a joint statement, the captain as well as the chief mate quantity of cargo on deck. Therefore, the report strongly asserted that
of the vessel confirmed that the weather was fine when they left the had her cargo been confined to those that could have been
port of Zamboanga. According to them, the vessel was carrying accommodated under deck, her stability would not have been affected
7,500 cases of 1-liter Coca-Cola softdrink bottles, 300 sacks of and the vessel would not have been in any danger of capsizing, even
seaweeds, 200 empty CO2 cylinders and an undetermined given the prevailing weather conditions at that time of sinking.
quantity of empty boxes for fresh eggs. They loaded the empty
boxes for eggs and about 500 cases of Coca-Cola bottles on deck. But from the moment that the vessel was utilized to load heavy cargo
The ship captain stated that around 4AM of 7 July he was awakened on its deck, the vessel was rendered unseaworthy for the purpose of
by the officer on duty to inform him that the vessel had hit a floating carrying the type of cargo because the weight of the deck cargo so
log. At that time he noticed that the weather had deteriorated with decreased the vessel’s metacentric height as to cause it to become
strong southeast winds inducing big waves. After thirty minutes he unstable. Thus, the Court held that the proximate cause of the
observed that the vessel was listing slightly to starboard and would not sinking of the M/V “Asilda” was her condition of
correct itself despite the heavy rolling and pitching. He then ordered unseaworthiness arising from her having been top-
his crew to shift the cargo from starboard to portside until the vessel heavy when she departed from the Port of Zamboanga. Her
was balanced. At about 7AM, the master of the vessel stopped the having capsized and eventually sunk was bound to happen and
engine because the vessel was listing dangerously to portside. He was therefore in the category of an inevitable occurrence.
ordered his crew to shift the cargo back to starboard. The shifting of
cargo took about an hour after which he rang the engine room to (2) Art. 587 of the Code of Commerce is NOT applicable to the
resume full speed. After an hour and a half, the vessel suddenly listed case at bar. Simply put, the ship agent is liable for the negligent
to portside and before the captain could decide on his next move, acts of the captain in the care of
some of the goods loaded on the vessel. This liability however can be limited
cargo on deck were thrown overboard and seawater entere through abandonment of the vessel, its equipment and
d the engine room and cargo holds of the vessel. At that instance, freightage as provided in Art. 587. Nonetheless, there are
the master of the vessel ordered his crew to abandon exceptional circumstances wherein the ship agent could still be
ship. Shortly thereafter, “MV Asilda” capsized and sank. He held answerable despite the abandonment, as where the loss or
ascribed the sinking to the entry of seawater through a hole in injury was due to the fault of the shipowner and the captain. The
the hull caused by the vessel’s collision with a partially international rule is to the effect that the right of abandonment of
submerged log. vessels, as a legal limitation of a shipowner’s liability, does not
apply to cases where the injury or average was occasioned by
The Elite Adjusters, Inc., submitted a report regarding the sinking of the shipowner’s own fault. It must be stressed at this point that
“MV Asilda” which was given credence both by the CA and the SC Art. 587 speaks only of situations where the fault or negligence
finding that the vessel was top-heavy which is to say that while the is committed solely by the captain. Where the shipowner is
vessel may not have been overloaded, yet the distribution or stowage likewise to be blamed, Art. 587 will not apply, and such situation
of the cargo on board was done in such a manner that the vessel was will be covered by the provisions of the Civil Code on common
in top-heavy condition at the time of her departure and which condition carrier.
rendered her unstable and unseaworthy for that particular voyage. It
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It was already established at the outset that the sinking of “MV remedies which the assured may have against the third party whose
Asilda” was due to its unseaworthiness even at the time of its negligence or wrongful act caused the loss. The right of
departure from the port of Zamboanga. It was top-heavy as an subrogation is not dependent upon, nor does it grow out of any privity
excessive amount of cargo was loaded on deck. Closer of contract or upon payment by the insurance company of the
supervision on the part of the shipowner could have prevented insurance claim. It accrues simply upon payment by the insurance
this fatal miscalculation. As such, FELMAN was equally company of the insurance claim.
negligent. It cannot therefore escape liability through the
expedient of filing a notice of abandonment of the vessel by Wing Kee Compradoring Co v. The Bark “Monongahela,” Victor S. Fox
virtue of Art. 587 of the Code of Commerce. FELMAN, the & Co. Inc., owner of the bark Monongahela, The Admiral Line, and
shipowner, was likewise not able to rebut the presumption of C.G. Lothigius
negligence as stated in Art. 1733 of the NCC.
WHO WON: Wing Kee Compradoring Co
(3) The marine policy issued by PHILAMGEN to the Coca-Cola
bottling firm in at least two (2) instances has dispensed with the usual DOCTRINE: An agent is understood the person entrusted with the
warranty of worthiness. Paragraph 15 of the Marine Open Policy provisioning of a vessel, or who represents her in the port in which she
reads “(t)he liberties as per Contract of Affreightment the presence of happens to be.
the Negligence Clause and/or Latent Defect Clause in the Bill of
Lading and/or Charter Party and/or Contract of Affreightment as FACTS:
between the Assured and the Company shall not prejudice the - Beginning with March 16 - August 16, 1921, various supplies
insurance. The seaworthiness of the vessel as between the Assured were furnished the Bark Monongahela by Wing Kee
and the Assurers is hereby admitted.” The same clause is present in Compradoring Company.
par. 8 of the Institute Cargo Clauses (F.P.A.) of the policy which - Most of the bills for these goods are made out against the
states “(t)he seaworthiness of the vessel as between the Assured and “Admiral Line, S.S. Monongahela.” All are considered by
Underwriters in hereby admitted x x x x" the master and the first steward.
The result of the admission of seaworthiness by the assurer - The first requisitions (formal order claiming the use of property
PHILAMGEN may mean one or two things: (a) that the warranty of or materials) for the supplies are on forms headed "The
the seaworthiness is to be taken as fulfilled; or, (b) that the risk of Admiral Line." Then follows Manila, the date, and the name,
unseaworthiness is assumed by the insurance company. The insertion "Wing Kee Compradoring Co." Next is the order, reading:
of such waiver clauses in cargo policies is in recognition of the "Please deliver to S. S. Monongahela now lying at Bay,
realistic fact that cargo owners cannot control the state of the the following goods and send bills to the Admiral Line".
vessel. Thus it can be said that with such categorical After this goods are named. At the foot is found, "United
waiver, PHILAMGEN has accepted the risk of unseaworthiness so States Shipping Board Emergency Fleet Corporation,"
that if the ship should sink by unseaworthiness, as what occurred in although these words are erased in a few of the requisitions,
this case, PHILAMGEN is liable. "The Admiral Line (Pacific Steamship Co.) Operating
Agents. By J. J. Armstrong." On the side of the requisitions
PHILAMGEN’s action against FELMAN is squarely sanctioned by Art. in red ink is the following: "Note: This requisition must be
2207 of the Civil Code. Payment by the assurer to the assured receipted by either Chief Officer, Chief Steward or Chief
operates as an equitable assignment to the assurer of all the
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Engineer and returned to the Admiral Line, with six


copies of invoice immediately after delivery of goods." By agent is understood the person intrusted with the
- After May 4, 1921, the requisitions seem to have been made provisioning of a vessel, or who represents her in the port in
out by the steward and the master. The Court deduced from which she happens to be.
a reading of the documents that the Admiral Line was the
operating agent for Monongahela, and was responsible as The civil law, in this respect, is not at all dissimilar to the common law.
such until the agency was terminated. By the general law of the United States, as well as of England and of
- In the Manila Daily Bulletin for August 2, 1921, appeared the Europe, it has been held, that when the agents buy in their own
following: "Notice — Bark Monongahela — The undersigned names, but really for the account of their principal, the seller has
hereby give notice that they are not responsible in any manner an option to look to either for payment, unless (1) he trusted the
whatsoever for any indebtedness incurred by the Bark agent exclusively; or (2) by the usage and understanding of the
Monongahela, its Master and/or Crew — The Admiral Line." business the agent only is held; or (3) unless the special
(Admiral Line tried to excuse itself from any liability incurred circumstances of the case show that only the agent was intended
by Monongahela/Master/Crew by posting this notice) to be bound and the seller knew it or was chargeable with
- The trial judge found as a fact that on or before August 4, knowledge of it.
1921, the Admiral Line had ceased to act as agent for the
Monongahela. Nevertheless, supplies were furnished the It is first to be noted that the [Wing Kee Compradoring Co] has not
Monongahela after these dates by the plaintiff. followed out its allegation that it has a claim against the Bark
- Wing Kee Compradoing Co now seeks to recover from the Monongahela, and might not have prospered any way, considering the
defendants (Bark Monongahela, Admiral Line – agent, C.G. rather dubious doctrine announced in the case of Health vs. Steamer
Lothiguis – captain and Victor S. Fox & Co. Inc. or the United San Nicolas. Not only this, but [Wing Kee Compradoring Co] has
States Shipping Board Emergency Fleet Corporation - owners made no effort to bring the owner of the bark into the case and
of the boat), principally the Admiral Line as agent for the Bark has pushed with no enthusiasm its case against the captain of
Monongahela, the sum of P17,675 w/ interest and costs, on the boat. What apparently the plaintiff wants is for the Admiral
account of goods, wares, and merchandise sold and delivered Line, as the agent for the Bark Monongahela, to pay the claim,
by Wing Kee Compradoring to the defendants for the use of leaving the latter to reimburse itself, if sees fit, from the owners.
the crew of the Bark Monongahela.
On the other hand, [Admiral Line] avers that as the agency has
ISSUE: W/N Admiral Line – an agent of the Bark Monongahela – is ceased, action cannot be brought against it. The Court said that this
liable to the plaintiff? YES is a rather far-fetched argument, for, pursued to its logical
conclusion, every agent for a vessel could thus avoid
RULING: responsibility pursuant to article 568 of the Code of Commerce,
Article 586, Section 1 of Title 2 of the Code of Commerce "Owners of by giving up its agency when threatened with suit to enforce the
Vessels and Their Agents” provides: The owner of a vessel and the obligations of third parties. Moreover, the bills were presented
agent shall be civilly liable for the acts of the captain and for the when the Admiral Line was yet the agent.
obligations contracted by the latter to repair, equip, and
provision the vessel, provided the creditor proves that the Thus, the Court held that the Admiral Line, as agent for the Bark
amount claimed was invested therein. Monongahela, is liable to the plaintiff for supplies furnished the
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Monongahela between March 16, 1921 and August 2, 1921, but is not - The amount was then paid by SGIC to BIP, by virtue of which
responsible for supplies furnished after that date. The mathematical payment it became subrogated to the rights of the latter.
additions show that the debt of the Admiral Line to the plaintiff amounts - SGIC made demands against Oyama Shipping Co. (Oyama
to P16,526.29. Lines), Citadel Lines and/or Mabuhay Brokerage Co. Inc.
Switzerland General Insurance Co. Ltd. v. Hon. Ramirez, Oyama (MBC) but no payment was made and, uncertain in whose
Lines, Citadel Lines and Mabuhay Brokerage Inc. custody the goods were damaged, impleaded the private
WHO WON: SGIC respondents as alternative defendants to determine their
respective liability.
DOCTRINE: - On December 24, 1975, SGIC thru its agent, F. E. Zuellig Inc.,
- Respondent agent in the instant case cannot be considered filed an admiralty case against Oyama Lines, Citadel and/or
as a "mere agent" under the civil law on agency as Mabuhay Brokerage Co., Inc (MBC).
distinguished from a ship agent, within the context of the Code - Citadel Lines alleged that it was merely a civil agent in the
of Commerce. A ship agent, according to Article 586 of the Philippines for the Japanese firm Oyama Lines, which was the
Code of Commerce, is the person entrusted with the charterer of the vessel S/S St. Lourdes, said vessel being
provisioning of a vessel or who represents her in the port in owned by Companies Martime de Brios, Sociedad Anonima,
which she happens to be." a Panamanian Corporation. Citadel also alleged that the
- The Code of Commerce provides, among others, that the ship principal agency relationship between Oyama Lines and
agent shall also be liable for the indemnities in favor of third Citadel Lines was terminated on Aug 21, 1975 when the
persons which arise from the conduct of the captain in the Tokyo District Court declared and decreed the insolvency of
care of the goods which the vessel carried; but he may exempt the said Oyama Lines. Defendant Citadel Lines argues that it
himself therefrom by abandoning the vessel with all her “has always acted as an agent of a disclosed principal and,
equipments and the freightage he may have earned during therefore, Citadel is without any liability at all” in connection
the voyage. (Article 587). with SGIC’s claim.
- By way of cross-claim, Citadel Lines alleged that that the
FACTS: loss/damaged to the cargo took place while the latter was
- On December 21, 1974, 60,000 bags of Urea Nitrogen were being delivered to the consignee thereof by the Mabuhay
shipped from Niihama Japan, on board the S/S St. Lourdes, Brokerage, Inc. and said corporation should be held liable
claimed to be owned and operated by defendant Citadel therefor, as well as for all damages suffered and expenses
Lines, Inc. The goods were consigned to Borden incurred by Citadel Lines as a result of the filing of the suit.
International Phils., Inc. (BIP), and insured by Switzerland Citadel likewise interposed a counterclaim for damages
General Insurance Co (SGIC) for the sum of P9M against all against SGIC.
risks. - Oyama Lines alleged that it had ceased to be represented in
- The shipment was discharged from the vessel S/S St. Lourdes the Philippines upon the declaration of its insolvency by the
shipside into lighters owned by Mabuhay Brokerage Tokyo Court; that it was a mere charterer of the S/S "St.
Company, Inc., but when the same was subsequently Lourdes" which is owned by Companies Maritime de Brios,
delivered to and received by the consignee, it was found to Sociedad Anonima a Panamanian corporation; that due to its
have sustained losses and/or damage amounting to P38K. insolvency, the case as against it should be dismissed, the
remedy for SGIC is to file its claim before the insolvency court
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in Tokyo, Japan. Further, it imputed the loss or damage to the It is not disputed by Citadel Lines that it is the local representative in
shipment to the shipper, Sumitomo Shoji Kaisha, Ltd. for the Philippines of the Oyama Shipping Co., Ltd. and, as alleged by
failing to provide seaworthy packages for the goods, and/or petitioner, upon arrival of the vessel S/S "St. Lourdes" in Manila, it took
the Mabuhay Brokerage for failure to exercise utmost charge of the unloading of the cargo and issued cargo receipts (or tally
diligence after it took possession of the cargo from the vessel sheets) in its own name, for the purpose of evidencing discharge of
S/S "St. Lourdes". cargoes and the conditions thereof from the vessel to the arrastre
- Finally, it was averred that SGIC’s reinsurer had already paid operators and/or unto barges/lighters, and that claims against the
its claim and, hence, said reinsurer is the real party to the vessel S/S "St. Lourdes" for losses/damages sustained by shipments
action, and that assuming Oyama Lines to be liable, its liability were in fact filed and processed by respondent Citadel Lines, Inc.
is limited to the amount of the loss in relation to the total
amount of the freight of the goods, which if computed, would Thus, Citadel Lines is the entity that represents the vessel in the port
be a much lower amount. of Manila and hence is a ship agent within the meaning and context of
- The trial court ruled in favor of SGIC as against Oyama Lines Art. 586 of the Code of Commerce.
but absolved Citadel Lines and MBC from liability.
- SGIC filed a MR insofar as it absolves Citadel Lines Inc and The Code of Commerce provides, among others, that the ship agent
MB from liability but said MR was denied. shall also be liable for the indemnities in favor of third persons which
arise from the conduct of the captain in the care of the goods which
ISSUE: W/N respondent Citadel Lines Inc., the local agent of a foreign the vessel carried; but he may exempt himself therefrom by
ocean going vessel, the S/S St. Lourdes, may be held primarily liable abandoning the vessel with all her equipments and the freightage he
for the loss/damage found to have been sustained by subject may have earned during the voyage. (Article 587).
shipment while on board and/or still in the custody of the said vessel?
YES In addition, Article 618 of the same Code states:
Art. 618. The captain shall be civilly liable to the ship agent and the latter to the third
persons who may have made contracts with the former —
RULING: 1. For all the damages suffered by the vessel and its cargo by reason of want of skill or
Considering the relationship of the parties, respondent Citadel Lines, negligence on his part. If a misdemeanor or crime has been committed he shall be liable
Inc. cannot be considered as a "mere agent" under the civil law on in accordance with the Penal Code.
2. For all the thefts and robberies committed by the crew, reserving his right of action
agency as distinguished from a ship agent, within the context of the against the guilty parties.
Code of Commerce. 3. For the losses, fines, and confiscations imposed on account of violation. of the laws
and regulations of customs, police, health, and navigation
In Yu Biao Sontua & Co. v. Ossorio, for example, it was held that the 4. For the losses and damages caused by mutinies on board the vessel or by reason of
faults committed by the crew in the service and defense of the same, if he does not
doctrines having reference to the relations between principal and prove Chat, he made full use of his authority to prevent or avoid them.
agent cannot be applied in the case of ship agents and ship owners. 5. For those arising by reason of a misuse of powers and non-fulfillment of the duties
For this reason, Citadel Lines cannot validly claim that the court a quo which pertain to him in accordance with Articles 610 and 612.
made a finding of fact which is conclusive upon this Court. A ship 6. For those arising by reason of his going out of his course or taking a course which,
in the opinion of the officers of the vessel, at a meeting attended by the shippers or
agent, according to Article 586 of the Code of Commerce, is the super
person entrusted with the provisioning of a vessel or who represents cargoes who may be on board, he should not have taken without sufficient cause.
her in the port in which she happens to be." No exception whatsoever shall exempt him from his obligation.
7. For those arising by reason of his voluntarily entering a port other than his destination,
with the exception of the cases or without the formalities referred to in Article 612.
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8. For those arising by reason of the non-observance of the provisions contained in the tendered for shipment, and to exercise due care in the
regulations for lights and maneuvers for the purpose of preventing collisions.
handling and stowage, including such methods as their nature
It appearing that the Citadel Lines is the ship agent for the vessel S/S requires".
"St. Lourdes" at the port of Manila, it is, therefore, liable to the FACTS:
petitioner, solidarily with its principal, Oyama Shipping Co., Ltd., in an - On 2 August 1990, 20,234 sacks of corn grains valued at
amount representing the value of the goods lost and or damaged, P3,500,640 were shipped on board North Front 777, a vessel
amounting to P38,698.94, which was likewise the amount paid by owned by North Front Shipping Services, Inc. (NFSI). The
petitioner, as insurer, to the insured consignee As found by the court cargo was consigned to Republic Flour Mills Corporation
a quo, there has been no proof presented to show that the officers of (RFMC) in Manila and insured with the herein mentioned
the vessel, in whose custody the goods were lost or damaged, are insurance companies.
exempt from liability therefrom and that the damage was caused by - The vessel was inspected prior to actual loading by
factors and circumstances exempting them from liability. representatives of the shipper and was found fit to carry the
merchandise. The cargo was covered with tarpaulins and
The insolvency of Oyama Lines has no bearing on the instant case wooden boards. The hatches were sealed and could only be
insofar as the liability of Citadel Lines, Inc. is concerned. The law does opened by representatives of Republic Flour Mills
does not make the liability of the ship agent dependent upon the Corporation.
solvency or insolvency of the ship owner. - The vessel left Cagayan de Oro City on 2 August 1990 and
arrived at Manila on 16 August 1990. Republic Flour Mills
Corporation was advised of its arrival but it did not
Tabacalera Insurance Co., Prudential Guarantee & Assurance Inc. immediately commence the unloading operations. There
and New Zealand Insurance Co. Ltd. v. North Front Shipping Services were days when unloading had to be stopped due to variable
Inc. weather conditions and sometimes for no apparent reason at
all.
WHO WON: Petitioner insurance companies - When the cargo was eventually unloaded there was a
shortage of 26.333 metric tons. The remaining
DOCTRINE: merchandise was already moldy, rancid and
- It is therefore imperative that a public carrier shall remain as deteriorating.
such, notwithstanding the charter of the whole or portion of a - The unloading operations were completed on 5 September
vessel by one or more persons, provided the charter is limited 1990 or twenty (20) days after the arrival of the barge at the
to the ship only, as in the case of a time-charter or voyage- wharf of Republic Flour Mills Corporation in Pasig City.
charter. - A Certificate of Analysis by a surveyor was issued indicating
- The extraordinary diligence in the vigilance over the goods that the corn grains had 18.56% moisture content and the
tendered for shipment requires the common carrier to know wetting was due to contact with salt water. The mold growth
and to follow the required precaution for avoiding damage to, was only incipient and not sufficient to make the corn grains
or destruction of the goods entrusted to it for safe carriage and toxic and unfit for consumption. In fact, the mold growth could
delivery. It requires common carriers to render service with still be arrested by drying.
the greatest skill and foresight and "to use all reasonable - RFMC rejected the entire cargo and formally demanded from
means to ascertain the nature and characteristics of goods NFSI payment for damage suffered by it. The damages were
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unheeded. The insurance companies were obliged to pay


RFMC P2M. ISSUE: W/N NFSI is liable? YES
- Insurance companies were then subrogated to the rights of
RFMC. Thus, they filed a complaint for damages against NFSI RULING:
claiming that the loss was exclusively attributable to the fault The charter-party agreement between North Front Shipping Services,
and negligence of the carrier. Inc., and Republic Flour Mills Corporation did not in any way convert
- The Marine Cargo Adjusters hired by the insurance the common carrier into a private carrier.
companies conducted a survey and found cracks in the
bodega of the barge and heavy concentration of molds A "charter-party" is defined as a contract by which an entire ship, or
on the tarpaulins and wooden boards. They did not notice some principal part thereof, is let by the owner to another person for a
any seals in the hatches. The tarpaulins were not brand specified time or use; a contract of affreightment by which the owner
new as there were patches on them, contrary to the claim of of a ship or other vessel lets the whole or a part of her to a merchant
North Front Shipping Services, Inc., thus making it possible or other person for the conveyance of goods, on a particular voyage,
for water to seep in. They also discovered that the bulkhead in consideration of the payment of freight. Upon the other hand, the
of the barge was rusty. term "common or public carrier" is defined in Art. 1732 of the Civil
- NFSI averred that it could not be made culpable for the loss Code. The definition extends to carriers either by land, air or water
and deterioration of the cargo as it was never negligent. which hold themselves out as ready to engage in carrying goods or
Captain Solomon Villanueva, master of the vessel, reiterated transporting passengers or both for compensation as a public
that the barge was inspected prior to the actual loading and employment and not as a casual occupation . . .
was found adequate and seaworthy. In addition, they were
issued a permit to sail by the Coast Guard. The tarpaulins It is therefore imperative that a public carrier shall remain as
were doubled and brand new and the hatches were properly such, notwithstanding the charter of the whole or portion of a
sealed. They did not encounter big waves hence it was not vessel by one or more persons, provided the charter is limited to
possible for water to seep in. He further averred that the corn the ship only, as in the case of a time-charter or voyage-charter.
grains were farm wet and not properly dried when loaded.
- RTC dismissed the complaint and ruled that the contract NFSI is a corporation engaged in the business of transporting cargo
entered into between NFSI and RFMC was a charter-party and offers its services indiscriminately to the public. It is without doubt
agreement and as such, only ordinary diligence in the care of a common carrier. As such it is required to observe extraordinary
goods was required of NFSI. The inspection of the barge by diligence in its vigilance over the goods it transports. When goods
the shipper and the representatives of the shipping company placed in its care are lost or damaged, the carrier is presumed to have
before actual loading, coupled with the Permit to Sail issued been at fault or to have acted negligently. NFSI therefore has the
by the Coast Guard, sufficed to meet the degree of diligence burden of proving that it observed extraordinary diligence in order to
required of the carrier. avoid responsibility for the lost cargo. NFSI proved that the vessel was
- CA ruled that as a common carrier required to observe a inspected prior to actual loading by representatives of the shipper and
higher degree of diligence North Front 777 satisfactorily was found fit to take a load of corn grains.
complied with all the requirements hence was issued a Permit
to Sail after proper inspection. Consequently, the complaint They were also issued Permit to Sail by the Coast Guard. The master
was dismissed and the motion for reconsideration rejected. of the vessel testified that the corn grains were farm wet when loaded.
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However, this testimony was disproved by the clean bill of lading yet toxic or unfit for consumption. For its contributory negligence,
issued by North Front Shipping Services, Inc., which did not Republic Flour Mills Corporation should share at least 40% of the loss.
contain a notation that the corn grains were wet and improperly
dried. Having been in the service since 1968, the master of the
vessel would have known at the outset that corn grains that were Philippine Home Assurance Corporation v. CA and Eastern Shipping
farm wet and not properly dried would eventually deteriorate Lines, Inc.
when stored in sealed and hot compartments as in hatches of a WHO WON: PHAC
ship. Equipped with this knowledge, the master of the vessel and
his crew should have undertaken precautionary measures to DOCTRINE:
avoid or lessen the cargo's possible deterioration as they were - Fire may not be considered a natural disaster or calamity
presumed knowledgeable about the nature of such cargo. But since it almost always arises from some act of man or by
none of such measures was taken. human means. It cannot be an act of God unless caused by
lightning or a natural disaster or casualty not attributable to
The extraordinary diligence in the vigilance over the goods human agency.
tendered for shipment requires the common carrier to know and - As a rule, general or gross averages include all damages and
to follow the required precaution for avoiding damage to, or expenses which are deliberately caused in order to save the
destruction of the goods entrusted to it for safe carriage and vessel, its cargo, or both at the same time, from a real and
delivery. It requires common carriers to render service with the known risk. While the instant case may technically fall within
greatest skill and foresight and "to use all reasonable means to the purview of the said provision, the formalities prescribed
ascertain the nature and characteristics of goods tendered for under Articles 813 and 814 of the Code of Commerce in order
shipment, and to exercise due care in the handling and stowage, to incur the expenses and cause the damage corresponding
including such methods as their nature requires". to gross average were not complied with.

In fine, the SC found that the carrier failed to observe the required FACTS:
extraordinary diligence in the vigilance over the goods placed in its - Eastern Shipping Lines, Inc. (ESLI) loaded on board SS
care. The proofs presented by NFSI were insufficient to rebut the Eastern Explorer in Kobe, Japan, the following shipment for
prima facie presumption of private respondent's negligence. carriage to Manila and Cebu, freight pre-paid and in good
order and condition, viz: (a) 2 boxes internal combustion
However, the SC also found that the consignee Republic Flour Mills engine parts, consigned to William Lines, Inc.; (b) 10 metric
Corporation guilty of contributory negligence. It was seasonably ton. (334 bags) ammonium chloride, consigned to Orca's
notified of the arrival of the barge but did not immediately start the Company; (c) 200 bags Glue 300, consigned to Pan Oriental
unloading operations. No explanation was proffered by the consignee Match Company; and (d) garments, consigned to Ding
as to why there was a delay of six (6) days. Had the unloading been Velayo.
commenced immediately the loss could have been completely - While the vessel was off Okinawa, Japan, a small flame was
avoided or at least minimized. As testified to by the chemist who detected on the acetylene cylinder located in the
analyzed the corn samples, the mold growth was only at its incipient accommodation area near the engine room on the main
stage and could still be arrested by drying. The corn grains were not deck level.
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- As the crew was trying to extinguish the fire, the acetylene proportion to the value of the vessel and the value of the cargo
cylinder suddenly exploded sending a flash of flame saved."
throughout the accommodation area, thus causing death - The burning of "EASTERN EXPLORER" while off Okinawa
and severe injuries to the crew and instantly setting fire rendered it physically impossible for defendant to comply with
to the whole superstructure of the vessel. The incident its obligation of delivering the goods to their port of destination
forced the master and the crew to abandon the ship. pursuant to the contract of carriage. Under Article 1266 of the
- Thereafter, SS Eastern Explorer was found to be a Civil Code, the physical impossibility of the prestation
constructive total loss and its voyage was declared extinguished defendant's obligation. It is but legal and
abandoned. equitable for ESLI therefore, to demand additional freight
- Several hours later, a tugboat under the control of Fukuda from the consignees for forwarding the goods from Naha,
Salvage Co. arrived near the vessel and commenced to tow Japan to Manila and Cebu City on board another vessel,
the vessel for the port of Naha, Japan. the "EASTERN MARS” by virtue of Art. 844 of the Code of
- Fire fighting operations were again conducted at the said port. Commerce.
After the fire was extinguished, the cargoes which were saved - On appeal, CA affirmed the trial court’s ruling.
were loaded to another vessel for delivery to their original
ports of destination. ESLI charged the consignees several ISSUE:
amounts corresponding to additional freight and salvage (1) Who, among the carrier, consignee or insurer of the goods, is liable
charges. for the additional charges or expenses incurred by the owner of the
- The charges were ALL PAID by Philippine Home Assurance ship in the salvage operations and in the transshipment of the goods
Company (PHAC) under protest for and in behalf of the via a different carrier? ESLI
consignees. (2) W/N respondent court committee an error in concluding the
- PHAC, as subrogee of the consignees, filed a complaint expenses incurred in saving the cargo are considered general
before the RTC against ESLI to recover the sum paid under average? YES
protest OTG that the same were actually damages brought
about by the fault, negligence, illegal act and/or breach of RULING:
contract of ESLI. (1) It is worthy to note at the outset that the goods subject of the
- RTC dismissed PHAC’s complaint and ruled in favor of ESLI. present controversy were neither lost nor damaged in transit by the
- The RTC held that Sec. 1 of Act No. 2616 (Salvage Law) fire that razed the carrier. In fact, the said goods were all delivered to
applies in the case at bar. Act No. 2616, otherwise known as the consignees, even if the transshipment took longer than necessary.
the Salvage Law, is thus applicable to the case at bar to wit:
“Sec 1. When in case of shipwreck, the vessel or its cargo It is erroneous for the respondent Court to say that fire is considered
shall be beyond the control of the crew, or shall have been a natural calamity. Fire may not be considered a natural disaster
abandoned by them, and picked up and conveyed to a safe or calamity since it almost always arises from some act of man
place by other persons, the latter shall be entitled to a reward or by human means. It cannot be an act of God unless caused by
for the salvage. Those who, not being included in the above lightning or a natural disaster or casualty not attributable to
paragraph, assist in saving a vessel or its cargo from human agency.
shipwreck, shall be entitled to like reward.” Thus, the
"compensation to be paid by the owner of the cargo is in
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In the case at bar, it is not disputed that a small flame was detected (2) As a rule, general or gross averages include all damages and
on the acetylene cylinder and that by reason thereof, the same expenses which are deliberately caused in order to save the vessel,
exploded despite efforts to extinguish the fire. Neither is there any its cargo, or both at the same time, from a real and known risk. While
doubt that the acetylene cylinder, obviously fully loaded, was stored in the instant case may technically fall within the purview of the said
the accommodation area near the engine room and not in a storage provision, the formalities prescribed under Articles 813 and 814 of the
area considerably far, and in a safe distance, from the engine room. Code of Commerce in order to incur the expenses and cause the
Moreover, there was no showing, and none was alleged by the parties, damage corresponding to gross average were not complied with.
that the fire was caused by a natural disaster or calamity not Consequently, respondent ESLI's claim for contribution from the
attributable to human agency. On the contrary, there is strong consignees of the cargo at the time of the occurrence of the average
evidence indicating that the acetylene cylinder caught fire turns to naught. Thus, it indubitably follows that the cargo
because of the fault and negligence of respondent ESLI, its consignees cannot be made liable to respondent carrier for
captain and its crew through the ff. instances: additional freight and salvage charges. Consequently,
 The acetylene cylinder which was fully loaded should not have respondent carrier must refund to herein petitioner the amount it
been stored in the accommodation area near the engine room paid under protest for additional freight and salvage charges in
where the heat generated therefrom could cause the behalf of the consignees.
acetylene cylinder to explode by reason of spontaneous
combustion. Respondent ESLI should have easily foreseen
that the acetylene cylinder, containing highly inflammable Manila Steamship v. Abdulhaman
material was in real danger of exploding because it was stored WHO WON: Insa Abdulhaman
in close proximity to the engine room.
 ESLI should have known that by storing the acetylene cylinder DOCTRINE:
in the accommodation area supposed to be reserved for - In fact, it is a general principle, well established maritime law
passengers, it unnecessarily exposed its passengers to grave and custom, that shipowners and ship agents are civilly liable
danger and injury. Curious passengers, ignorant of the danger for the acts of the captain (Code of Commerce, Article 586)
the tank might have on humans and property could have and for the indemnities due the third persons (Article 587) yso
handled the same or could have lighted and smoked that injured parties may immediately look for reimbursement
cigarettes while repairing in the accommodation area. to the owner of the ship, it being universally recognized that
 The fact that the acetylene cylinder was checked, tested and the ship master or captain is primarily the representative of
examined and subsequently certified as having complied with the owner. This direct liability, moderated and limited by the
the safety measures and standards by qualified experts owner’s right of abandonment of the vessel and earned freight
before it was loaded in the vessel only shows to a great extent (Article 587), has been declared to exist, not only in case of
that negligence was present in the handling of the acetylene breached contracts, but also in cases of tortious negligence.
cylinder after it was loaded and while it was on board the ship. - Due diligence of a bonus paterfamilias (in the selection and
Indeed, had the respondent and its agents not been negligent vigilance of the officers) cannot exempt the shipowner from
in storing the acetylene cylinder near the engine room, the any liability for their faults for the greater protection of injured
same would not have leaked and exploded during the voyage. parties.
- The international rule is to the effect that the right of
abandonment of vessels, as a legal limitation of a shipowner’s
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liability, does not apply to cases where the injury or the Steamship Co., owner of the M/S “Bowline Knot”, and Lim
average is due to shipowner’s own fault. Hong To, owner of the M/L “Consuelo V”, to recover damages
for the death of his five children and loss of personal
FACTS: properties on board the M/L “Consuelo V” as a result of a
- From 7-8PM of May 4, 1948, the M/L “Consuelo V”, laden maritime collision between said vessel and the M/S “Bowline
with cargoes and passengers left the port of Zamboanga City Knot” on May 4, 1948, a few kilometers distant from San
bound for Siokon under the command of Faustino Macrohon. Ramon Beach, Zamboanga City.
She was then towing a kumpit, named “Sta. Maria Bay”. The - CA affirmed the findings of the Board of Marine Inquiry, that
weather was good and fair. Among her passengers were the commanding officer of the colliding vehicles had both
the Plaintiff Insa Abdulhaman, his wife Carimla Mora and been negligent in operating their respective vessels. It held
their five children. Abdulhaman and his wife paid their fare the owners of both vessels solidarily liable to Abdulhaman for
before the voyage started. the damages caused to him by the collision, under Article 827
- On that same night the M/S “Bowline Knot” was navigating of the Code of Commerce but exempted Defendant Lim
from Maribojoc towards Zamboanga. Hong To from liability by reason of the sinking and total loss
- Between 9:30-10PM, the dark clouds bloated with rain began of his vessel, the M/L “Consuelo V”, while the
to fall and the gushing strong wind began to blow steadily other Defendant, the Manila Steamship Co., owner of the
harder, lashing the waves into a choppy and roaring sea. Such M/S “Bowline Knot”, was ordered to pay all of Plaintiff’s
weather lasted for about an hour and then it became fair damages in the amount of P20,784.
although it was showering and the visibility was good enough. - Petitioner Manila Steamship Co. pleads that it is exempt from
- When some of the passengers of the M/L “Consuelo V” were any liability to Plaintiff under Article 1903 of the Civil Code
then sleeping and some were lying down awake, all of a because it had exercised the diligence of a good father of a
sudden they felt the shocking collision of the M/L “Consuelo family in the selection of its employees, particularly Third Mate
V” and a big motorship, which later on was identified as the Simplicio Ilagan, the officer in command of its vessels, the M/S
M/V “Bowline Knot”. “Bowline Knot”, at the time of the collision.
- Because the M/L “Consuelo V” capsized, her crew and
passengers, before realizing what had happened, found ISSUE:
themselves swimming and floating on the crest of the waves (1) W/N Manila Steamship Co is exempt from liability to Abdulhaman
and as a result of which 9 passengers were dead and missing bec it had exercised ordinary diligence in the selection of its
and all the cargoes carried on said boat, including those of employees under Art. 1903 of the NCC? NO
the Plaintiff , were also lost. (2) W/N Manila Steamship Co. is liable for the negligence of his agents
- Among the dead passengers found were Maria, Amlasa, and employees? YES
Bidoaya and Bidalla, all surnamed Inasa, while the body of (3) W/N Lim Hong To (owner of M/L “Consuelo”) is exempt from
the child Abdula Inasa of 6 years of age was never liability in view of the total loss of his vessel that sank as a result of the
recovered. Before the collision, none of the passengers were collision? NO
warned or informed of the impending danger as the collision
was so sudden and unexpected. All those rescued at sea RULING:
were brought by the M/V “Bowline Knot” to Zamboanga City. (1) While it is true that Abdulhaman’s action against Manila Steamship
- Insa Abdulhaman filed a civil suit against the Manila Co is based on a tort or quasi-delict, the tort in question is NOT a civil
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tort under the Civil Code but a maritime tort resulting in a collision at and crew) as exempting the shipowner from any liability for their
sea, governed by Articles 826-939 of the Code of Commerce. Under faults, would render nugatory the solidary liability established by
Article 827 of the Code of Commerce, in case of collision between two Article 827 of the Code of Commerce for the greater protection of
vessels imputable to both of them, each vessel shall suffer her own injured parties. Shipowners would be able to escape liability in
damage and both shall be solidarily liable for the damages occasioned practically every case, considering that the qualifications and
to their cargoes. The characteristic language of the law in making licensing of ship masters and officers are determined by the
the “vessels” solidarily liable for the damages due to the State, and that vigilance is practically impossible to exercise over
maritime collision emphasizes the direct nature of the officers and crew of vessels at sea.
responsibilities on account of the collision incurred by the
shipowner under maritime law, as distinguished from the civil (3) It is to be noted that both the master and the engineer of the motor
law and mercantile law in general. This direct responsibility is launch “Consuelo V” were not duly licensed as such. In applying for
recognized in Article 618 of the Code of Commerce under which the permission to operate, despite the lack of properly trained and
captain shall be civilly liable to the ship agent, and the latter is the one experienced, crew, Lim Hong To gave the Court the reason “that the
liable to third persons. income derived from the vessel is insufficient to pay licensed officers
who demand high salaries”, and expressly declared, “that in case of
In fact, it is a general principle, well established maritime law and any accident, damage or loss, I shall assume full risk and responsibility
custom, that shipowners and ship agents are civilly liable for the for all the consequences thereof.”
acts of the captain (Code of Commerce, Article 586) and for the
indemnities due the third persons (Article 587) yso that injured By operating with an unlicensed master, Lim Hong To deliberately
parties may immediately look for reimbursement to the owner of increased the risk to which the passengers and shippers of cargo
the ship, it being universally recognized that the ship master or aboard the “Consuelo V” would be subjected. In his desire to reap
captain is primarily the representative of the owner. This direct greater benefits in the maritime trade, Lim Hong To willfully
liability, moderated and limited by the owner’s right of augmented the dangers and hazards to his vessel’s unwary
abandonment of the vessel and earned freight (Article 587), has passengers, who would normally assume that the launch officers
been declared to exist, not only in case of breached contracts, possessed the necessary skill and experience to evade the perils of
but also in cases of tortious negligence. the sea. Hence, the liability of said Respondent cannot be the identical
to that of a shipowner who bears in mind the safety of the passengers
(2) It is proven that the agents and employees, through whose and cargo by employing duly licensed officers.
negligence the explosion and fire in question occurred, were agents,
employees and mandatories of Manila Steamship Co. Where the The international rule is to the effect that the right of
vessel is one of freight, a public concern or public utility, its owner or abandonment of vessels, as a legal limitation of a shipowner’s
agents is liable for the tortious acts of his agents (Articles 587, 613, liability, does not apply to cases where the injury or the average
and 618 Code of Commerce; and Article 1902, 1903, 1908, Civil is due to shipowner’s own fault.
Code). This principle has been repeatedly upheld in various decisions
of this court. THUS, the SC held that Manila Steamship Co. is directly and primarily
responsible in tort for the injuries caused to Abdulhaman through the
It is easy to see that to admit the defense of due diligence of a negligence of the crews of both vessels. And that Lim Hong having
bonus paterfamilias (in the selection and vigilance of the officers caused the same to sail without licensed officers, is liable for the
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injuries caused by the collision over and beyond the value of said
launch. And both vessels being at fault, the liability of Lim Hong To
and Manila Steamship Co to Abdulhaman is in solidum as prescribed
in Art. 827 of the Code of Commerce.