1. [G.R. No. L-24471. August 30, 1968.] again.
Consequently, the driver of said bus Silverio Marchan [now
SILVERIO MARCHAN and PHILIPPINE RABBIT BUS CO.,
INC., Petitioners, v. ARSENIO MENDOZA, LEONARDA
ILAYA, and ZENAIDA MENDOZA, Respondents.
Angel A. Sison, for Petitioners.
Manuel M. Crudo for Respondents.
SYLLABUS
1. CIVIL LAW; CONTRACT OF CARRIAGE; RESPONSIBILITY FOR
BREACH THEREOF. — It is clear from Article 1759 of the Civil Code
that common carriers cannot escape liability "for the death of or injuries
to passengers through the negligence and willful acts of the former’s
employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders . . . ." From Vda. de
Medina v. Cresencia, 99 Phil. 506 (1956), where this Court, through
Justice J.B.L. Reyes, stressed the "direct and immediate" liability of
the carrier under the above legal provision, "not merely subsidiary or
secondary," to Maranan v. Perez, L-22272, June 26, 1967, the
invariable holding has been the responsibility for breach of the contract
of carriage on the part of the carrier.
2. ID.; ID.; ID.; COMPENSATORY DAMAGES; BASES FOR AWARD.
— Considering that respondent A. Mendoza was only in his middle
twenties when, thru the negligence of petitioners, he lost the use of his
limbs, being condemned for the remainder of his life to be a paralytic,
in effect leading a maimed, well-nigh useless existence, the fixing of
such liability in the amount of P40,000.00 as compensatory damages
was well within the discretion of the Court of Appeals.
3. ID.; ID.; ID.; EXEMPLARY DAMAGES; AWARD DISCRETIONARY
UPON THE COURT; MAY BE AWARDED EVEN THOUGH NOT
EXPRESSLY PLEADED IN THE COMPLAINT. — Suffice it to state
that when plaintiffs prayed in their complaint for such other relief and
remedies that may be availed of under the premises, in effect,
therefore, the court is called upon to exercise and use its discretion on
whether the imposition of punitive or exemplary damages even though
not expressly prayed or pleaded in the plaintiff’s complaint is proper.
4. ID.; ID.; ID.; WHEN INTEREST ON DAMAGES AND ATTORNEY’S
FEES BEGIN. — Respondents are entitled to the sum of P40,000.00
in the concept of compensatory damages with interest at the legal rate
from and after the date of the decision of the lower court and the sum
of P30,000.00 as exemplary damages with interest at the legal rate
from and after the date of the decision of the Court of Appeals, as well
as for the sum of P5,000.00 as attorney’s fees, likewise earning a legal
rate of interest from and after the date of the decision of the lower
court.
DECISION
FERNANDO, J.:
Petitioners, the driver of the passenger bus responsible for the injuries
sustained by respondents for which he was duly prosecuted and
thereafter convicted for serious, less serious, and slight physical
injuries, and the bus firm, the Philippine Rabbit Bus Lines, seek the
reversal of a Court of Appeals decision of December 14, 1964 and a
resolution of March 31, 1965, holding them liable both for
compensatory and exemplary damages as well as attorney’s fees. It is
the contention of petitioners that errors of law were committed when,
in the aforesaid decision, it was held that there was an implied contract
of carriage between the petitioner bus firm and respondents, the
breach of which was the occasion for their liability for compensatory
and exemplary damages as well as attorney’s fees.
The facts as found by the Court of Appeals follow: "In the evening of
February 22, 1954, between 9:00 and 9:30 o’clock, a passenger bus
No. 141 of the Philippine Rabbit Bus Lines, bearing Plate No. TPU-
708 which was then driven by Silverio Marchan fell into a ditch
somewhere in barrio Malanday, Polo, Bulacan, while travelling on its
way to Manila; as a result of which plaintiffs-appellees Arsenio
Mendoza, his wife and child, [respondents in this proceedings], who
were then inside the bus as passengers were thrown out to the ground
resulting in their multiple injuries. Plaintiff Arsenio Mendoza suffered
the most serious injuries which damaged his vertebrae causing the
paralysis of his lower extremities which up to the time when this case
was tried he continued to suffer. The physician who attended and
treated plaintiff Arsenio Mendoza opined that he may never walk
1 TRANSPO LAW WEEK 5 9/15/19
petitioner] was prosecuted for serious, less serious and slight physical
injuries through reckless imprudence before the Justice of the Peace
Court of Polo, Bulacan, and thereafter convicted as charged on June
29, 1956 . . ., which judgment of conviction was subsequently affirmed
by the Court of First Instance of same province . . . In this present
action before us, plaintiffs-appellees Arsenio Mendoza, his wife and
child sought to recover damages against the defendant-appellant
Silverio Marchan, then the driver of bus No. 141 of the Philippine
Rabbit Bus Lines, and from defendants-appellants Bienvenido P. Buan
and Natividad Paras in their capacity as administrator and
administratrix, respectively, of the estate of the late Florencio P. Buan,
doing business under the style name of the Philippine Rabbit Bus
Lines, predicated not only on a breach of contract of carriage for failure
of defendants operator as well as the defendant driver to safely convey
them to their destination, but also on account of a criminal negligence
on the part of defendant Silverio Marchan resulting to plaintiff-
appellee’s multiple physical injuries." 1
The Court of Appeals in the decision under review found that there
was a preponderance of evidence to the effect that while respondents
Arsenio Mendoza, his wife, Leonarda Ilaya, and child, Zenaida
Mendoza "were waiting for a passenger bus on January 22, 1954 at
about 9:00 in the evening at Malanday, they boarded defendants-
appellants’ bus bearing No. 141 of the Philippine Rabbit Bus Lines with
Plate No. TPU-708 bound for Manila. And they were treated as
passengers thereto, for they paid their corresponding fares. As they
travelled along the highway bound for Manila, said bus was traveling
at a high rate of speed without due regard to the safety of the
passengers. So much so that one of the passengers had to call the
attention of Silverio Marchan who was then at the steering wheel of
said bus to lessen the speed or to slow down, but then defendant
Silverio Marchan did not heed the request of said passenger; neither
did he slacken his speed. On the contrary, defendant Silverio 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. But, when appellant Silverio Marchan veered his
truck to resume position over the right lane, the rear tires of said truck
skidded because of his high rate of speed, thereby causing said truck
to fall into a ditch. Substantially, the happening of the accident resulting
to the multiple injuries of plaintiffs-appellees, was explained by
defendant Silverio Marchan who declared that while he was driving his
bus from barrio Malanday bound towards Manila on a road test, he
suddenly noticed an oncoming vehicle. He thus shifted his light from
dim to bright. Just then, he noticed a six-by-six truck parked on the
right lane of the road where he was driving. Confronted with such
situation that if he would apply his brake he would bump his bus
against the parked truck he then increased his speed with the view of
passing the said parked truck, and thereafter he veered to negotiate
for the proper position on the right lane, but in so doing he swerved to
the right in order to avoid collision from the oncoming vehicle the rear
portion of the bus skidded and fell into the ditch." 2
Hence the finding of negligence in the decision under review. Thus:
"From the facts as established preponderantly by the plaintiff and
substantially corroborated by the defendant Silverio Marchan, it is
clear that the cause of the accident was the gross negligence of the
defendant Silverio Marchan who when driving his vehicle on the night
in question was expected to have employed the highest degree of
care; and should have been assiduously prudent in handling his
vehicle to insure the safety of his passengers. There is no reason why
he could not have stopped his vehicle when noticing a parked truck
ahead of him if he was not driving at a high speed. His admission to
the effect that if he would apply his brake he would bump or hit the
parked truck ahead of him, since there was no time for him to stop the
bus he was driving, is a patent indication that he was travelling at a
high rate of speed without taking the necessary precaution under the
circumstance, considering that it was then nighttime. It is our
considered view that under the situation as pictured before us by the
driver of said bus, he should not have increased his speed and
bypassed the parked truck obviously with the view of preventing a
collision with the incoming vehicle. Any prudent person placed under
the situation of the appellant would not have assumed the risk as what
appellant did. The most natural reaction that could be expected from
one under the circumstance was for him to have slackened and appellants’ carrier. It is argued that this Court is without jurisdiction to
reduced his speed. But this was not done simply because defendant- adjudicate this exemplary damages since there was no allegation nor
appellant could not possibly do so under the circumstance because he prayer, nor proof, nor counterclaim of error for the same by the
was then travelling at a high rate of speed. In fact, he had increased appellees. It is to be observed, however, that in the complaint, plaintiffs
his speed in order to avoid ramming the parked truck without, however, ‘prayed for such other and further relief as this Court may deem just
taking the necessary precaution to insure the safety of his and equitable.’ Now, since the body of the complaint sought to recover
passengers." 3 damages against the defendant-carrier wherein plaintiffs prayed for
indemnification for the damages they suffered as a result of the
On the above facts, the Court of Appeals, in its decision of December
negligence of said Silverio Marchan who is appellant’s employee; and
14, 1964, affirmed the amount of P40,000.00 awarded by the court
since exemplary damages is intimately connected with general
below as compensatory damages modifying the appealed lower court
damages, plaintiffs may not be expected to single out by express term
decision by holding petitioners to pay the amount of P30,000.00 as
the kind of damages they are trying to recover against the defendant’s
exemplary damages and sustaining the award of attorney’s fees in the
carrier. Suffice it to state that when plaintiffs prayed in their complaint
amount of P5,000.00. Then came the resolution of March 31, 1965 by
for such other relief and remedies that may be availed of under the
the Court of Appeals, where the motion for reconsideration of
premises, in effect, therefore, the court is called upon to exercise and
petitioners was denied for lack of merit.
use its discretion whether the imposition of punitive or exemplary
In their brief as petitioners, the first error assigned is the alleged damages even though not expressly prayed or pleaded in the plaintiffs’
absence of an implied contract of carriage by the petitioner bus firm complaint." 9
and respondents. On this point, it was the holding of the Court of
In support of the above view, Singson v. Aragon was cited by the Court
Appeals: "Since it is undisputed by the evidence on record that
of Appeals. 10 As was there held by this Court: "From the above legal
appellant Silverio Marchan was then at the steering wheel of the
provisions it appears that exemplary damages may be imposed by way
vehicle of the defendant transportation company at that moment, the
of example or correction only in addition, among others, to
riding public is not expected to inquire from time to time before they
compensatory damages, but that they cannot be recovered as a matter
board the passenger bus whether or not the driver who is at the
of right, their determination depending upon the discretion of the court.
steering wheel of said bus was authorized to drive said vehicle or that
It further appears that the amount of exemplary damages need not be
said driver is acting within the scope of his authority and observing the
proved, because its determination depends upon the amount of
existing rules and regulations required of him by the management. To
compensatory damages that may be awarded to the claimant. If the
hold otherwise would in effect render the aforequoted provision of law
amount of exemplary damages need not be proved, it need not also
(Article 1759) ineffective." 4 It is clear from the above Civil Code
be alleged, and the reason is obvious because it is merely incidental
provision that common carriers cannot escape liability "for the death of
or dependent upon what the court may award as compensatory
or injuries to passengers through the negligence and willful acts of the
damages. Unless and until this premise is determined and established,
former’s employees, although such employees may have acted
what may be claimed as exemplary damages would amount to a mere
beyond the scope of their authority or in violation of the orders . . ." 5
surmise or speculation. It follows as a necessary consequence that the
From Vda. de Medina v. Cresencia, 6 where this Court, through Justice
amount of exemplary damages need not be pleaded in the complaint
J. B. L. Reyes, stressed the "direct and immediate" liability of the
because the same cannot be predetermined. One can merely ask that
carrier under the above legal provision, "not merely subsidiary or
it be determined by the court if in the use of its discretion the same is
secondary," to Maranan v. Perez, 7 a 1967 decision, the invariable
warranted by the evidence, and this is just what appellee has
holding has been the responsibility for breach of the contract of
done."cralaw virtua1aw library
carriage on the part of the carrier. According to the facts as above
disclosed, which this Court cannot disturb, the applicability of Article Such a principle has been repeatedly upheld. 11 In Corpuz v.
1759 is indisputable. Hence, the total absence of merit of the first Cuaderno, 12 this Court, again through Justice J. B. L. Reyes, made
assignment of error. clear that the amount "lies within the province of the court a quo, . . ."
It must be admitted, of course, that where it could be shown that a
The next two errors assigned would dispute the holding of the Court of
tribunal acted "with vindictiveness or wantonness and not in the
Appeals in imposing liability in the respective amounts of P40,000.00
exercise of honest judgment," then there is room for the interposition
for compensatory damages and P30,000.00 for exemplary damages.
of the corrective power of this Tribunal.
Again, such assignments of error cannot be looked upon with favor.
What the Court of Appeals did deserves not reprobation but approval
No such reproach can be hurled at the decision and resolution now
by this Court.
under review. No such indictment would be justified. As noted earlier,
As to why the amount in compensatory damages should be fixed in both the second and the third assignments of error are devoid of merit.
the sum of P40,000.00 is explained in the appealed decision thus:
"Likewise, it is our considered view that the amount of P40,000.00 Nor is there any occasion to consider further the fourth assigned error,
awarded by the court below as compensatory damages is quite petitioner being dissatisfied with the award of P5,000.00 as attorney’s
reasonable and fair, considering that plaintiff Arsenio Mendoza had fees to respondents. On its face, such an assignment of an alleged
suffered paralysis on the lower extremities, which will incapacitate him error is conspicuously futile.
to engage in his customary occupation throughout the remaining years
The judgment, however, must be modified in accordance with the
of his life, especially so if we take into account that plaintiff Arsenio
ruling of this Court in Soberano v. Manila Railroad Co. 13 Respondents
Mendoza was only 26 years old when he met an accident on January
are entitled to interest for the amount of compensatory damages from
22, 1954; and taking the average span of life of a Filipino, he may be
the date of the decision of the lower court and legal interest on the
expected to live for 30 years more; and bearing in mind the earning
exemplary damages from the date of the decision of the Court of
capacity of Arsenio Mendoza who before the happening of this
Appeals.
accident derived an income of almost P100.00 a month from the
business of his father-in-law as Assistant Supervisor of the small [fairs] WHEREFORE, as thus modified, the decision is affirmed, petitioners
and his income of P100.00 a month which he derived as a professional being liable for the sum of P40,000.00 in the concept of compensatory
boxer." 8 Considering that respondent Arsenio Mendoza was only in damages with interest at the legal rate from and after January 26,
his middle twenties when, thru the negligence of petitioners, he lost 1960, and the sum of P30,000.00 as exemplary damages with interest
the use of his limbs, being condemned for the remainder of his life to at the legal rate from and after December 14, 1964, as well as for the
be a paralytic, in effect leading a maimed, well-nigh useless existence, sum of P5,000.00 as attorney’s fees, likewise earning a legal rate of
the fixing of such liability in the amount of P40,000.00 as interest from and after January 26, 1960. Costs against petitioners.
compensatory damages was well within the discretion of the Court of
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro and
Appeals.
Angeles, JJ., concur.
As to the finding of liability for exemplary damages, the Court of
Reyes, J.B.L., J., did not take part.
Appeals, in its resolution of March 31, 1965, stated the following: "We
now come to the imposition of exemplary damages upon defendants-

2 TRANSPO LAW WEEK 5 9/15/19

 2. G.R. No. L-56487 October 21, 1991
REYNALDA GATCHALIAN, petitioner,
vs.
ARSENIO DELIM and the HON. COURT OF
APPEALS, respondents.
Pedro G. Peralta for petitioner.
Florentino G. Libatique for private respondent.
FELICIANO, J.:
At noon time on 11 July 1973, petitioner Reynalda Gatchalian boarded,
as a paying passenger, respondent's "Thames" mini bus at a point in
San Eugenio, Aringay, La Union, bound for Bauang, of the same
province. On the way, while the bus was 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 flower pot on the side of the road, went off the road, turned
turtle and fell into a ditch. Several passengers, including petitioner
Gatchalian, were injured. They were promptly taken to Bethany
Hospital at San Fernando, La Union, for medical treatment. Upon
medical examination, petitioner was found to have sustained physical
injuries on the leg, arm and forehead, specifically described as follows:
lacerated wound, forehead; abrasion, elbow, left; abrasion, knee, left;
abrasion, lateral surface, leg, left. 1
On 14 July 1973, while injured. passengers were confined in
the hospital, Mrs. Adela Delim, wife of respondent, visited
them and later paid for their hospitalization and medical
expenses. She also gave petitioner P12.00 with which to pay
her transportation expense in going home from the hospital.
However, before Mrs. Delim left, she had the injured
passengers, including petitioner, sign an already prepared
Joint Affidavit which stated, among other things:
That we were passengers of Thames with Plate No. 52-222
PUJ Phil. 73 and victims after the said Thames met an
accident at Barrio Payocpoc Norte, Bauang, La Union while
passing through the National Highway No. 3;
That after a thorough investigation the said Thames met the
accident due to mechanical defect and went off the road and
turned turtle to the east canal of the road into a creek
causing physical injuries to us;
xxx xxx xxx
That we are no longer interested to file a complaint, criminal
or civil against the said driver and owner of the said Thames,
because it was an accident and the said driver and owner of
the said Thames have gone to the extent of helping us to be
treated upon our injuries.
xxx xxx xxx 2
(Emphasis supplied)
Notwithstanding this document, petitioner Gathalian filed with the then
Court of First Instance of La Union an action extra contractu to recover
compensatory and moral damages. She alleged in the complaint that
her injuries sustained from the vehicular mishap had left her with a
conspicuous white scar measuring 1 by 1/2 inches on the forehead,
generating mental suffering and an inferiority complex on her part; and
that as a result, she had to retire in seclusion and stay away from her
friends. She also alleged that the scar diminished her facial beauty and
deprived her of opportunities for employment. She prayed for an award
of: P10,000.00 for loss of employment and other opportunities;
P10,000.00 for the cost of plastic surgery for removal of the scar on
her forehead; P30,000.00 for moral damages; and P1,000.00 as
attorney's fees.
In defense, respondent averred that the vehicular mishap was due
to force majeure, and that petitioner had already been paid and
moreover had waived any right to institute any action against him
(private respondent) and his driver, when petitioner Gatchalian signed
the Joint Affidavit on 14 July 1973.
3 TRANSPO LAW WEEK 5 9/15/19
After trial, the trial court dismissed the complaint upon the ground that
when petitioner Gatchalian signed the Joint Affidavit, she relinquished
any right of action (whether criminal or civil) that she may have had
against respondent and the driver of the mini-bus.
On appeal by petitioner, the Court of Appeals reversed the trial court's
conclusion that there had been a valid waiver, but affirmed the
dismissal of the case by denying petitioner's claim for damages:
We are not in accord, therefore, of (sic) the ground of the trial
court's dismissal of the complaint, although we conform to the
trial court's disposition of the case — its dismissal.
IN VIEW OF THE FOREGOING considerations, there being
no error committed by the lower court in dismissing the
plaintiff-appellant's complaint, the judgment of dismissal is
hereby affirmed.
Without special pronouncement as to costs.
SO ORDERED. 3
In the present Petition for Review filed in forma pauperis, petitioner
assails the decision of the Court of Appeals and ask this Court to award
her actual or compensatory damages as well as moral damages.
We agree with the majority of the Court of Appeals who held that no
valid waiver of her cause of action had been made by petitioner. The
relevant language of the Joint Affidavit may be quoted again:
That we are no longer interested to file a complaint, criminal
or civil against the said driver and owner of the said Thames,
because it was an accident and the said driver and owner of
the said Thames have gone to the extent of helping us to be
treated upon our injuries. (Emphasis supplied)
A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which
A
leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. 4
waiver may not casually be attributed to a person when the terms
thereof do not explicitly and clearly evidence an intent to abandon a
right vested in such person.
The degree of explicitness which this Court has required in purported
waivers is illustrated in Yepes and Susaya v. Samar Express Transit
(supra), where the Court in reading and rejecting a purported waiver
said:
. . . It appears that before their transfer to the Leyte
Provincial Hospital, appellees were asked to sign as, in fact,
they signed the document Exhibit I wherein they stated that
"in consideration of the expenses which said operator has
incurred in properly giving us the proper medical
treatment, we hereby manifest our desire to waive any and
all claims against the operator of the Samar Express
Transit."
xxx xxx xxx
Even a cursory examination of the document mentioned
above will readily show that appellees did not actually waive
their right to claim damages from appellant for the latter's
failure to comply with their contract of carriage. All that said
document proves is that they expressed a "desire" to make
the waiver — which obviously is not the same as making an
actual waiver of their right. A waiver of the kind invoked by
appellant must be clear and unequivocal (Decision of the
Supreme Court of Spain of July 8, 1887) — which is not the
case of the one relied upon in this appeal. (Emphasis
supplied)
If we apply the standard used in Yepes and Susaya, we would have to
conclude that the terms of the Joint Affidavit in the instant case cannot
be regarded as a waiver cast in "clear and unequivocal" terms.
Moreover, the circumstances under which the Joint Affidavit was
signed by petitioner Gatchalian need to be considered. Petitioner
testified that she was still reeling from the effects of the vehicular
accident, having been in the hospital for only three days, when the
purported waiver in the form of the Joint Affidavit was presented to her
for signing; that while reading the same, she experienced dizziness
but that, seeing the other passengers who had also suffered injuries
sign the document, she too signed without bothering to read the Joint
Affidavit in its entirety. Considering these circumstances there appears
substantial doubt whether petitioner understood fully the import of the
Joint Affidavit (prepared by or at the instance of private respondent)
she signed and whether she actually intended thereby to waive any
right of action against private respondent.
Finally, because what is involved here is the liability of a common
carrier for injuries sustained by passengers in respect of whose safety
a common carrier must exercise extraordinary diligence, we must
construe any such purported waiver most strictly against the common
carrier. For a waiver to be valid and effective, it must not be contrary
to law, morals, public policy or good
customs. 5 To uphold a supposed waiver of any right to claim damages
by an injured passenger, under circumstances like those exhibited in
this case, would be to dilute and weaken the standard of extraordinary
diligence exacted by the law from common carriers and hence to
render that standard unenforceable. 6 We believe such a purported
waiver is offensive to public policy.
Petitioner Gatchalian also argues that the Court of Appeals, having by
majority vote held that there was no enforceable waiver of her right of
action, should have awarded her actual or compensatory and moral
damages as a matter of course.
We have already noted that a duty to exercise extraordinary diligence
in protecting the safety of its passengers is imposed upon a common
carrier. 7 In case of death or injuries to passengers, a statutory
presumption arises that the common carrier was at fault or had acted
negligently "unless it proves that it [had] observed extraordinary
diligence as prescribed in Articles 1733 and 1755." 8 In fact, because
of this statutory presumption, it has been held that a court need not
even make an express finding of fault or negligence on the part of the
common carrier in order to hold it liable. 9 To overcome this
presumption, the common carrier must slow to the court that it had
exercised extraordinary diligence to prevent the injuries. 10 The
standard of extraordinary diligence imposed upon common carriers is
considerably more demanding than the standard of ordinary
diligence, i.e., the diligence of a good paterfamilias established in
respect of the ordinary relations between members of society. A
common carrier is bound to carry its passengers safely" as far as
human care and foresight can provide, using the utmost diligence of a
very cautious person, with due regard to all the circumstances". 11
Thus, the question which must be addressed is whether or not private
respondent has successfully proved that he had exercised
extraordinary diligence to prevent the mishap involving his mini-bus.
The records before the Court are bereft of any evidence showing that
respondent had exercised the extraordinary diligence required by law.
Curiously, respondent did not even attempt, during the trial before the
court a quo, to prove that he had indeed exercised the requisite
extraordinary diligence. Respondent did try to exculpate himself from
liability by alleging that the mishap was the result of force majeure. But
allegation is not proof and here again, respondent utterly failed to
substantiate his defense of force majeure. To exempt a common
carrier from liability for death or physical injuries to passengers upon
the ground of force majeure, the carrier must clearly show not only that
the efficient cause of the casualty was entirely independent of the
human will, but also that it was impossible to avoid. Any participation
by the common carrier in the occurrence of the injury will defeat the
defense of force majeure. In Servando v. Philippine Steam Navigation
Company, 12 the Court summed up the essential characteristics of
force majeure by quoting with approval from the Enciclopedia Juridica
Española:
Thus, where fortuitous event or force majeure is the
immediate and proximate cause of the loss, the obligor is
exempt from liability non-performance. The Partidas, the
antecedent of Article 1174 of the Civil Code, defines "caso
fortuito" as 'an event that takes place by accident and could
not have been foreseen. Examples of this are destruction of
houses, unexpected fire, shipwreck, violence of robber.
In its dissertation on the phrase "caso fortuito" the
Enciclopedia Juridica Española says: 'In legal sense and,
consequently, also in relation to contracts, a "caso fortuito"
presents the following essential characteristics: (1) the
cause of the unforeseen and unexpected occurence, or of
the failure of the debtor to comply with his obligation, must
4 TRANSPO LAW WEEK 5 9/15/19
be independent of the human will; (2) it must be impossible
to foresee the event which constitutes the "caso fortuito", or
if it can be foreseen, it must be impossible to avoid; (3) the
occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and (4) the
obligor must be free from any participation in the aggravation
of the injury resulting to the creditor.
Upon the other hand, the record yields affirmative evidence of fault or
negligence on the part of respondent common carrier. In her direct
examination, petitioner Gatchalian narrated that shortly before the
vehicle went off the road and into a ditch, a "snapping sound" was
suddenly heard at one part of the bus. One of the passengers, an old
woman, cried out, "What happened?" ("Apay addan samet
nadadaelen?"). The driver replied, nonchalantly, "That is only
normal" ("Ugali ti makina dayta"). The driver did not stop to check if
anything had gone wrong with the bus. Moreover, the driver's reply
necessarily indicated that the same "snapping sound" had been heard
in the bus on previous occasions. This could only mean that the bus
had not been checked physically or mechanically to determine what
was causing the "snapping sound" which had occurred so frequently
that the driver had gotten accustomed to it. Such a sound is obviously
alien to a motor vehicle in good operating condition, and even a
modicum of concern for life and limb of passengers dictated that the
bus be checked and repaired. The obvious continued failure of
respondent to look after the roadworthiness and safety of the bus,
coupled with the driver's refusal or neglect to stop the mini-bus after
he had heard once again the "snapping sound" and the cry of alarm
from one of the passengers, constituted wanton disregard of the
physical safety of the passengers, and hence gross negligence on the
part of respondent and his driver.
We turn to petitioner's claim for damages. The first item in that claim
relates to revenue which petitioner said she failed to realize because
of the effects of the vehicular mishap. Petitioner maintains that on the
day that the mini-bus went off the road, she was supposed to confer
with the district supervisor of public schools for a substitute teacher's
job, a job which she had held off and on as a "casual employee." The
Court of Appeals, however, found that at the time of the accident, she
was no longer employed in a public school since, being a casual
employee and not a Civil Service eligible, she had been laid off. Her
employment as a substitute teacher was occasional and episodic,
contingent upon the availability of vacancies for substitute teachers. In
view of her employment status as such, the Court of Appeals held that
she could not be said to have in fact lost any employment after and by
reason of the accident. 13 Such was the factual finding of the Court of
Appeals, a finding entitled to due respect from this Court. Petitioner
Gatchalian has not submitted any basis for overturning this finding of
fact, and she may not be awarded damages on the basis of
speculation or conjecture. 14
Petitioner's claim for the cost of plastic surgery for removal of the scar
on her forehead, is another matter. A person is entitled to the physical
integrity of his or her body; if that integrity is violated or diminished,
actual injury is suffered for which actual or compensatory damages are
due and assessable. Petitioner Gatchalian is entitled to be placed as
nearly as possible in the condition that she was before the mishap. A
scar, especially one on the face of the woman, resulting from the
infliction of injury upon her, is a violation of bodily integrity, giving raise
to a legitimate claim for restoration to her conditio ante. If the scar is
relatively small and does not grievously disfigure the victim, the cost
of surgery may be expected to be correspondingly modest. In Araneta,
et al. vs. Areglado, et al., 15 this Court awarded actual or
compensatory damages for, among other things, the surgical removal
of the scar on the face of a young boy who had been injured in a
vehicular collision. The Court there held:
We agree with the appellants that the damages awarded by
the lower court for the injuries suffered by Benjamin Araneta
are inadequate. In allowing not more than P1,000.00 as
compensation for the "permanent deformity and —
something like an inferiority complex" as well as for the
"pathological condition on the left side of the jaw" caused to
said plaintiff, the court below overlooked the clear evidence
on record that to arrest the degenerative process taking
place in the mandible and restore the injured boy to a nearly
 normal condition, surgical intervention was needed, for
which the doctor's charges would amount to P3,000.00,
exclusive of hospitalization fees, expenses and
medicines. Furthermore, the operation, according to Dr.
Diño, would probably have to be repeated in order to
effectuate a complete cure, while removal of the scar on the
face obviously demanded plastic surgery.
xxx xxx xxx
The father's failure to submit his son to a plastic operation
as soon as possible does not prove that such treatment is
not called for. The damage to the jaw and the existence of
the scar in Benjamin Araneta's face are physical facts that
can not be reasoned out of existence. That the injury should
be treated in order to restore him as far as possible to his
original condition is undeniable. The father's delay, or even
his negligence, should not be allowed to prejudice the son
who has no control over the parent's action nor impair his
right to a full indemnity.
. . . Still, taking into account the necessity and cost of
corrective measures to fully repair the damage; the pain
suffered by the injured party; his feelings of inferiority due to
consciousness of his present deformity, as well as the
voluntary character of the injury inflicted; and further
considering that a repair, however, skillfully conducted, is
never equivalent to the original state, we are of the opinion
that the indemnity granted by the trial court should be
increased to a total of P18,000.00. (Emphasis supplied)

Petitioner estimated that the cost of having her scar surgically removed
was somewhere between P10,000.00 to P15,000.00. 16 Upon the
other hand, Dr. Fe Tayao Lasam, a witness presented as an expert by
petitioner, testified that the cost would probably be between P5,000.00
to P10,000.00. 17 In view of this testimony, and the fact that a
considerable amount of time has lapsed since the mishap in 1973
which may be expected to increase not only the cost but also very
probably the difficulty of removing the scar, we consider that the
amount of P15,000.00 to cover the cost of such plastic surgery is not
unreasonable.
Turning to petitioner's claim for moral damages, the long-established
rule is that moral damages may be awarded where gross negligence
on the part of the common carrier is shown. 18 Since we have earlier
concluded that respondent common carrier and his driver had been
grossly negligent in connection with the bus mishap which had injured
petitioner and other passengers, and recalling the aggressive
manuevers of respondent, through his wife, to get the victims to waive
their right to recover damages even as they were still hospitalized for
their injuries, petitioner must be held entitled to such moral damages.
Considering the extent of pain and anxiety which petitioner must have
suffered as a result of her physical injuries including the permanent
scar on her forehead, we believe that the amount of P30,000.00 would
be a reasonable award. Petitioner's claim for P1,000.00 as atttorney's
fees is in fact even more modest. 19

WHEREFORE, the Decision of the Court of Appeals dated 24 October

1980, as well as the decision of the then Court of First Instance of La
Union dated 4 December 1975 are hereby REVERSED and SET
ASIDE.Respondent is hereby ORDERED to pay petitioner Reynalda
Gatchalian the following sums: 1) P15,000.00 as actual or
compensatory damages to cover the cost of plastic surgery for the
removal of the scar on petitioner's forehead; 2) P30,000.00 as moral
damages; and 3) P1,000.00 as attorney's fees, the aggregate amount
to bear interest at the legal rate of 6% per annum counting from the
promulgation of this decision until full payment thereof. Costs against
private respondent.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

5 TRANSPO LAW WEEK 5 9/15/19

 3. EN BANC
G.R. No. L-19550 June 19, 1967
HARRY S. STONEHILL, ROBERT P. BROOKS, JOHN J. BROOKS
and KARL BECK, petitioners,
vs.
HON. JOSE W. DIOKNO, in his capacity as SECRETARY OF
JUSTICE; JOSE LUKBAN, in his capacity as Acting Director,
National Bureau of Investigation; SPECIAL PROSECUTORS
PEDRO D. CENZON, EFREN I. PLANA and MANUEL VILLAREAL,
JR. and ASST. FISCAL MANASES G. REYES; JUDGE AMADO
ROAN, Municipal Court of Manila; JUDGE ROMAN CANSINO,
Municipal Court of Manila; JUDGE HERMOGENES CALUAG,
Court of First Instance of Rizal-Quezon City Branch, and JUDGE
DAMIAN JIMENEZ, Municipal Court of Quezon City, respondents.
Paredes, Poblador, Cruz and Nazareno and Meer, Meer and Meer and
Juan T. David for petitioners.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor
General Pacifico P. de Castro, Assistant Solicitor General Frine C.
Zaballero, Solicitor Camilo D. Quiason and Solicitor C. Padua for
respondents.
CONCEPCION, C.J.:
Upon application of the officers of the government named on the
margin1 — hereinafter referred to as Respondents-Prosecutors —
several judges2 — hereinafter referred to as Respondents-Judges —
issued, on different dates,3 a total of 42 search warrants against
petitioners herein4 and/or the corporations of which they were
officers,5 directed to the any peace officer, to search the persons
above-named and/or the premises of their offices, warehouses and/or
residences, and to seize and take possession of the following personal
property to wit:
Books of accounts, financial records, vouchers,
correspondence, receipts, ledgers, journals, portfolios,
credit journals, typewriters, and other documents and/or
papers showing all business transactions including
disbursements receipts, balance sheets and profit and loss
statements and Bobbins (cigarette wrappers).
as "the subject of the offense; stolen or embezzled and proceeds or
fruits of the offense," or "used or intended to be used as the means of
committing the offense," which is described in the applications
adverted to above as "violation of Central Bank Laws, Tariff and
Customs Laws, Internal Revenue (Code) and the Revised Penal
Code."
Alleging that the aforementioned search warrants are null and void, as
contravening the Constitution and the Rules of Court — because, inter
alia: (1) they do not describe with particularity the documents, books
and things to be seized; (2) cash money, not mentioned in the
warrants, were actually seized; (3) the warrants were issued to fish
evidence against the aforementioned petitioners in deportation cases
filed against them; (4) the searches and seizures were made in an
illegal manner; and (5) the documents, papers and cash money seized
were not delivered to the courts that issued the warrants, to be
disposed of in accordance with law — on March 20, 1962, said
petitioners filed with the Supreme Court this original action
for certiorari, prohibition, mandamus and injunction, and prayed that,
pending final disposition of the present case, a writ of preliminary
injunction be issued restraining Respondents-Prosecutors, their
agents and /or representatives from using the effects seized as
aforementioned or any copies thereof, in the deportation cases already
adverted to, and that, in due course, thereafter, decision be rendered
quashing the contested search warrants and declaring the same null
and void, and commanding the respondents, their agents or
representatives to return to petitioners herein, in accordance with
Section 3, Rule 67, of the Rules of Court, the documents, papers,
things and cash moneys seized or confiscated under the search
warrants in question.
In their answer, respondents-prosecutors alleged, 6 (1) that the
contested search warrants are valid and have been issued in
accordance with law; (2) that the defects of said warrants, if any, were
cured by petitioners' consent; and (3) that, in any event, the effects
seized are admissible in evidence against herein petitioners,
6 TRANSPO LAW WEEK 5 9/15/19
regardless of the alleged illegality of the aforementioned searches and
seizures.
On March 22, 1962, this Court issued the writ of preliminary injunction
prayed for in the petition. However, by resolution dated June 29, 1962,
the writ was partially lifted or dissolved, insofar as the papers,
documents and things seized from the offices of the corporations
above mentioned are concerned; but, the injunction was maintained
as regards the papers, documents and things found and seized in the
residences of petitioners herein.7
Thus, the documents, papers, and things seized under the alleged
authority of the warrants in question may be split into two (2) major
groups, namely: (a) those found and seized in the offices of the
aforementioned corporations, and (b) those found and seized in the
residences of petitioners herein.
As regards the first group, we hold that petitioners herein
have no cause of action to assail the legality of the contested warrants
and of the seizures made in pursuance thereof, for the simple reason
that said corporations have their respective personalities, separate
and distinct from the personality of herein petitioners, regardless of the
amount of shares of stock or of the interest of each of them in said
corporations, and whatever the offices they hold therein may
be.8 Indeed, it is well settled that the legality of a seizure can be
contested only by the party whose rights have been impaired
thereby,9 and that the objection to an unlawful search and seizure
is purely personal and cannot be availed of by third
parties. 10 Consequently, petitioners herein may not validly object to
the use in evidence against them of the documents, papers and things
seized from the offices and premises of the corporations adverted to
above, since the right to object to the admission of said papers in
evidence belongs exclusively to the corporations, to whom the seized
effects belong, and may not be invoked by the corporate officers in
proceedings against them in their individual capacity. 11 Indeed, it has
been held:
. . . that the Government's action in gaining possession of
papers belonging to the corporation did not relate to nor did
it affect the personal defendants. If these papers were
unlawfully seized and thereby the constitutional rights of or
any one were invaded, they were the rights of
the corporation and not the rights of the other defendants.
Next, it is clear that a question of the lawfulness of a seizure
can be raised only by one whose rights have been invaded.
Certainly, such a seizure, if unlawful, could not affect the
constitutional rights of defendants whose property had not
been seized or the privacy of whose homes had not been
disturbed; nor could they claim for themselves the benefits
of the Fourth Amendment, when its violation, if any, was with
reference to the rights of another. Remus vs. United
States (C.C.A.)291 F. 501, 511. It follows, therefore, that the
question of the admissibility of the evidence based on an
alleged unlawful search and seizure does not extend to the
personal defendants but
embraces only the corporation whose property was taken. .
. . (A Guckenheimer & Bros. Co. vs. United States, [1925] 3
F. 2d. 786, 789, Emphasis supplied.)
With respect to the documents, papers and things seized in the
residences of petitioners herein, the aforementioned resolution of June
29, 1962, lifted the writ of preliminary injunction previously issued by
this Court, 12 thereby, in effect, restraining herein Respondents-
Prosecutors from using them in evidence against petitioners herein.
In connection with said documents, papers and things, two (2)
important questions need be settled, namely: (1) whether the search
warrants in question, and the searches and seizures made under the
authority thereof, are valid or not, and (2) if the answer to the preceding
question is in the negative, whether said documents, papers and
things may be used in evidence against petitioners herein.1äwphï1.ñët
Petitioners maintain that the aforementioned search warrants are in
the nature of general warrants and that accordingly, the seizures
effected upon the authority there of are null and void. In this
connection, the Constitution 13 provides:
The right of the people to be secure in their persons, houses,
papers, and effects against unreasonable searches and
 seizures shall not be violated, and no warrants shall issue
but upon probable cause, to be determined by the judge
after examination under oath or affirmation of the
complainant and the witnesses he may produce, and
particularly describing the place to be searched, and the
persons or things to be seized.
Two points must be stressed in connection with this constitutional
mandate, namely: (1) that no warrant shall issue but upon
probable cause, to be determined by the judge in the manner set forth
in said provision; and (2) that the warrant shall particularly describe the
things to be seized.
None of these requirements has been complied with in the contested
warrants. Indeed, the same were issued upon applications stating that
the natural and juridical person therein named had committed a
"violation of Central Ban Laws, Tariff and Customs Laws, Internal
Revenue (Code) and Revised Penal Code." In other words,
no specific offense had been alleged in said applications. The
averments thereof with respect to the offense committed
were abstract. As a consequence, it was impossible for the judges
who issued the warrants to have found the existence of probable
cause, for the same presupposes the introduction of competent proof
that the party against whom it is sought has performed particular acts,
or committed specific omissions, violating a given provision of our
criminal laws. As a matter of fact, the applications involved in this case
do not allege any specific acts performed by herein petitioners. It would
be the legal heresy, of the highest order, to convict anybody of a
"violation of Central Bank Laws, Tariff and Customs Laws, Internal
Revenue (Code) and Revised Penal Code," — as alleged in the
aforementioned applications — without reference to any determinate
provision of said laws or
To uphold the validity of the warrants in question would be to wipe out
completely one of the most fundamental rights guaranteed in our
Constitution, for it would place the sanctity of the domicile and the
privacy of communication and correspondence at the mercy of the
whims caprice or passion of peace officers. This is precisely the evil
sought to be remedied by the constitutional provision above quoted —
to outlaw the so-called general warrants. It is not difficult to imagine
what would happen, in times of keen political strife, when the party in
power feels that the minority is likely to wrest it, even though by legal
means.
Such is the seriousness of the irregularities committed in connection
with the disputed search warrants, that this Court deemed it fit to
amend Section 3 of Rule 122 of the former Rules of Court 14 by
providing in its counterpart, under the Revised Rules of Court 15 that
"a search warrant shall not issue but upon probable cause in
connection with one specific offense." Not satisfied with this
qualification, the Court added thereto a paragraph, directing that "no
search warrant shall issue for more than one specific offense."
The grave violation of the Constitution made in the application for the
contested search warrants was compounded by the description
therein made of the effects to be searched for and seized, to wit:
Books of accounts, financial records, vouchers, journals,
correspondence, receipts, ledgers, portfolios, credit
journals, typewriters, and other documents and/or papers
showing all business transactions including disbursement
receipts, balance sheets and related profit and loss
statements.
Thus, the warrants authorized the search for and seizure of records
pertaining to all business transactions of petitioners herein, regardless
of whether the transactions were legal or illegal. The warrants
sanctioned the seizure of all records of the petitioners and the
aforementioned corporations, whatever their nature, thus openly
contravening the explicit command of our Bill of Rights — that the
things to be seized be particularly described — as well as tending to
defeat its major objective: the elimination of general warrants.
Relying upon Moncado vs. People's Court (80 Phil. 1), Respondents-
Prosecutors maintain that, even if the searches and seizures under
consideration were unconstitutional, the documents, papers and
things thus seized are admissible in evidence against petitioners
herein. Upon mature deliberation, however, we are unanimously of the
opinion that the position taken in the Moncado case must be
7 TRANSPO LAW WEEK 5 9/15/19
abandoned. Said position was in line with the American common law
rule, that the criminal should not be allowed to go free merely "because
the constable has blundered," 16 upon the theory that the constitutional
prohibition against unreasonable searches and seizures is protected
by means other than the exclusion of evidence unlawfully
obtained, 17 such as the common-law action for damages against the
searching officer, against the party who procured the issuance of the
search warrant and against those assisting in the execution of an
illegal search, their criminal punishment, resistance, without liability to
an unlawful seizure, and such other legal remedies as may be
provided by other laws.
However, most common law jurisdictions have already given up this
approach and eventually adopted the exclusionary rule, realizing that
this is the only practical means of enforcing the constitutional
injunction against unreasonable searches and seizures. In the
language of Judge Learned Hand:
As we understand it, the reason for the exclusion of evidence
competent as such, which has been unlawfully acquired, is
that exclusion is the only practical way of enforcing the
constitutional privilege. In earlier times the action of trespass
against the offending official may have been protection
enough; but that is true no longer. Only in case the
prosecution which itself controls the seizing officials, knows
that it cannot profit by their wrong will that wrong be
repressed.18
In fact, over thirty (30) years before, the Federal Supreme Court had
already declared:
If letters and private documents can thus be seized and held
and used in evidence against a citizen accused of an
offense, the protection of the 4th Amendment, declaring his
rights to be secure against such searches and seizures, is
of no value, and, so far as those thus placed are concerned,
might as well be stricken from the Constitution. The efforts
of the courts and their officials to bring the guilty to
punishment, praiseworthy as they are, are not to be aided
by the sacrifice of those great principles established by years
of endeavor and suffering which have resulted in their
embodiment in the fundamental law of the land.19
This view was, not only reiterated, but, also, broadened in subsequent
decisions on the same Federal Court. 20 After reviewing previous
decisions thereon, said Court held, in Mapp vs. Ohio (supra.):
. . . Today we once again examine the Wolf's constitutional
documentation of the right of privacy free from unreasonable
state intrusion, and after its dozen years on our books, are
led by it to close the only courtroom door remaining open to
evidence secured by official lawlessness in flagrant abuse of
that basic right, reserved to all persons as a specific
guarantee against that very same unlawful conduct. We hold
that all evidence obtained by searches and seizures in
violation of the Constitution is, by that same authority,
inadmissible in a State.
Since the Fourth Amendment's right of privacy has been
declared enforceable against the States through the Due
Process Clause of the Fourteenth, it is enforceable against
them by the same sanction of exclusion as it used against
the Federal Government. Were it otherwise, then just as
without the Weeks rule the assurance against unreasonable
federal searches and seizures would be "a form of words,"
valueless and underserving of mention in a perpetual charter
of inestimable human liberties, so too, without that rule the
freedom from state invasions of privacy would be so
ephemeral and so neatly severed from its conceptual nexus
with the freedom from all brutish means of coercing evidence
as not to permit this Court's high regard as a
freedom "implicit in the concept of ordered liberty." At the
time that the Court held in Wolf that the amendment was
applicable to the States through the Due Process Clause,
the cases of this Court as we have seen, had steadfastly
held that as to federal officers the Fourth Amendment
included the exclusion of the evidence seized in violation of
its provisions. Even Wolf "stoutly adhered" to that
proposition. The right to when conceded operatively
 enforceable against the States, was not susceptible of
destruction by avulsion of the sanction upon which its
protection and enjoyment had always been deemed
dependent under the Boyd, Weeks and Silverthorne Cases.
Therefore, in extending the substantive protections of due
process to all constitutionally unreasonable searches —
state or federal — it was logically and constitutionally
necessarily that the exclusion doctrine — an essential part
of the right to privacy — be also insisted upon as an
essential ingredient of the right newly recognized by the Wolf
Case. In short, the admission of the new constitutional Right
by Wolf could not tolerate denial of its most important
constitutional privilege, namely, the exclusion of the
evidence which an accused had been forced to give by
reason of the unlawful seizure. To hold otherwise is to grant
the right but in reality to withhold its privilege and enjoyment.
Only last year the Court itself recognized that the purpose of
the exclusionary rule to "is to deter — to compel respect for
the constitutional guaranty in the only effectively available
way — by removing the incentive to disregard it" . . . .
The ignoble shortcut to conviction left open to the State
tends to destroy the entire system of constitutional restraints
on which the liberties of the people rest. Having once
recognized that the right to privacy embodied in the Fourth
Amendment is enforceable against the States, and that the
right to be secure against rude invasions of privacy by state
officers is, therefore constitutional in origin, we can no longer
permit that right to remain an empty promise. Because it is
enforceable in the same manner and to like effect as other
basic rights secured by its Due Process Clause, we can no
longer permit it to be revocable at the whim of any police
officer who, in the name of law enforcement itself, chooses
to suspend its enjoyment. Our decision, founded on reason
and truth, gives to the individual no more than that which the
Constitution guarantees him to the police officer no less than
that to which honest law enforcement is entitled, and, to the
courts, that judicial integrity so necessary in the true
administration of justice. (emphasis ours.)
Indeed, the non-exclusionary rule is contrary, not only to the letter, but
also, to the spirit of the constitutional injunction against unreasonable
searches and seizures. To be sure, if the applicant for a search warrant
has competent evidence to establish probable cause of the
commission of a given crime by the party against whom the warrant is
intended, then there is no reason why the applicant should not comply
with the requirements of the fundamental law. Upon the other hand, if
he has no such competent evidence, then it is not possible for the
Judge to find that there is probable cause, and, hence, no justification
for the issuance of the warrant. The only possible explanation (not
justification) for its issuance is the necessity of fishing evidence of the
commission of a crime. But, then, this fishing expedition is indicative
of the absence of evidence to establish a probable cause.
Moreover, the theory that the criminal prosecution of those who secure
an illegal search warrant and/or make unreasonable searches or
seizures would suffice to protect the constitutional guarantee under
consideration, overlooks the fact that violations thereof are, in general,
committed By agents of the party in power, for, certainly, those
belonging to the minority could not possibly abuse a power they do not
have. Regardless of the handicap under which the minority usually —
but, understandably — finds itself in prosecuting agents of the majority,
one must not lose sight of the fact that the psychological and moral
effect of the possibility 21 of securing their conviction, is watered down
by the pardoning power of the party for whose benefit the illegality had
been committed.
In their Motion for Reconsideration and Amendment of the Resolution
of this Court dated June 29, 1962, petitioners allege that Rooms Nos.
81 and 91 of Carmen Apartments, House No. 2008, Dewey Boulevard,
House No. 1436, Colorado Street, and Room No. 304 of the Army-
Navy Club, should be included among the premises considered in said
Resolution as residences of herein petitioners, Harry S. Stonehill,
Robert P. Brook, John J. Brooks and Karl Beck, respectively, and that,
furthermore, the records, papers and other effects seized in the offices
of the corporations above referred to include personal belongings of
said petitioners and other effects under their exclusive possession and
8 TRANSPO LAW WEEK 5 9/15/19
control, for the exclusion of which they have a standing under the latest
rulings of the federal courts of federal courts of the United States. 22
We note, however, that petitioners' theory, regarding their alleged
possession of and control over the aforementioned records, papers
and effects, and the alleged "personal" nature thereof, has Been
Advanced, not in their petition or amended petition herein, but in the
Motion for Reconsideration and Amendment of the Resolution of June
29, 1962. In other words, said theory would appear to be readjustment
of that followed in said petitions, to suit the approach intimated in the
Resolution sought to be reconsidered and amended. Then, too, some
of the affidavits or copies of alleged affidavits attached to said motion
for reconsideration, or submitted in support thereof, contain either
inconsistent allegations, or allegations inconsistent with the theory
now advanced by petitioners herein.
Upon the other hand, we are not satisfied that the allegations of said
petitions said motion for reconsideration, and the contents of the
aforementioned affidavits and other papers submitted in support of
said motion, have sufficiently established the facts or conditions
contemplated in the cases relied upon by the petitioners; to warrant
application of the views therein expressed, should we agree thereto.
At any rate, we do not deem it necessary to express our opinion
thereon, it being best to leave the matter open for determination in
appropriate cases in the future.
We hold, therefore, that the doctrine adopted in the Moncado case
must be, as it is hereby, abandoned; that the warrants for the search
of three (3) residences of herein petitioners, as specified in the
Resolution of June 29, 1962, are null and void; that the searches and
seizures therein made are illegal; that the writ of preliminary injunction
heretofore issued, in connection with the documents, papers and other
effects thus seized in said residences of herein petitioners is hereby
made permanent; that the writs prayed for are granted, insofar as the
documents, papers and other effects so seized in the aforementioned
residences are concerned; that the aforementioned motion for
Reconsideration and Amendment should be, as it is hereby, denied;
and that the petition herein is dismissed and the writs prayed for
denied, as regards the documents, papers and other effects seized in
the twenty-nine (29) places, offices and other premises enumerated in
the same Resolution, without special pronouncement as to costs.
It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar and
Sanchez, JJ., concur.
CASTRO, J., concurring and dissenting:
From my analysis of the opinion written by Chief Justice Roberto
Concepcion and from the import of the deliberations of the Court on
this case, I gather the following distinct conclusions:
1. All the search warrants served by the National Bureau of
Investigation in this case are general warrants and are
therefore proscribed by, and in violation of, paragraph 3 of
section 1 of Article III (Bill of Rights) of the Constitution;
2. All the searches and seizures conducted under the
authority of the said search warrants were consequently
illegal;
3. The non-exclusionary rule enunciated in Moncado vs.
People, 80 Phil. 1, should be, and is declared, abandoned;
4. The search warrants served at the three residences of the
petitioners are expressly declared null and void the
searches and seizures therein made are expressly declared
illegal; and the writ of preliminary injunction heretofore
issued against the use of the documents, papers and effect
seized in the said residences is made permanent; and
5. Reasoning that the petitioners have not in their pleadings
satisfactorily demonstrated that they have legal standing to
move for the suppression of the documents, papers and
effects seized in the places other than the three residences
adverted to above, the opinion written by the Chief
Justice refrains from expressly declaring as null and void
the such warrants served at such other places and as illegal
the searches and seizures made therein, and leaves "the
matter open for determination in appropriate cases in the
future."
It is precisely the position taken by the Chief Justice summarized in
the immediately preceding paragraph (numbered 5) with which I am
not in accord.
I do not share his reluctance or unwillingness to expressly declare, at
this time, the nullity of the search warrants served at places other than
the three residences, and the illegibility of the searches and seizures
conducted under the authority thereof. In my view even the
exacerbating passions and prejudices inordinately generated by the
environmental political and moral developments of this case should
not deter this Court from forthrightly laying down the law not only for
this case but as well for future cases and future generations. All the
search warrants, without exception, in this case are admittedly
general, blanket and roving warrants and are therefore admittedly and
indisputably outlawed by the Constitution; and the searches and
seizures made were therefore unlawful. That the petitioners, let us
assume in gratia argumente, have no legal standing to ask for the
suppression of the papers, things and effects seized from places other
than their residences, to my mind, cannot in any manner affect, alter
or otherwise modify the intrinsic nullity of the search warrants and the
intrinsic illegality of the searches and seizures made thereunder.
Whether or not the petitioners possess legal standing the said
warrants are void and remain void, and the searches and seizures
were illegal and remain illegal. No inference can be drawn from the
words of the Constitution that "legal standing" or the lack of it is a
determinant of the nullity or validity of a search warrant or of the
lawfulness or illegality of a search or seizure.
On the question of legal standing, I am of the conviction that, upon the
pleadings submitted to this Court the petitioners have the requisite
legal standing to move for the suppression and return of the
documents, papers and effects that were seized from places other
than their family residences.
Our constitutional provision on searches and seizures was derived
almost verbatim from the Fourth Amendment to the United States
Constitution. In the many years of judicial construction and
interpretation of the said constitutional provision, our courts have
invariably regarded as doctrinal the pronouncement made on the
Fourth Amendment by federal courts, especially the Federal Supreme
Court and the Federal Circuit Courts of Appeals.
The U.S. doctrines and pertinent cases on standing to move for the
suppression or return of documents, papers and effects which are the
fruits of an unlawful search and seizure, may be summarized as
follows; (a) ownership of documents, papers and effects gives
"standing;" (b) ownership and/or control or possession — actual or
constructive — of premises searched gives "standing"; and (c) the
"aggrieved person" doctrine where the search warrant and the sworn
application for search warrant are "primarily" directed solely and
exclusively against the "aggrieved person," gives "standing."
An examination of the search warrants in this case will readily show
that, excepting three, all were directed against the petitioners
personally. In some of them, the petitioners were named personally,
followed by the designation, "the President and/or General Manager"
of the particular corporation. The three warrants excepted named three
corporate defendants. But the "office/house/warehouse/premises"
mentioned in the said three warrants were also the same
"office/house/warehouse/premises" declared to be owned by or under
the control of the petitioners in all the other search warrants directed
against the petitioners and/or "the President and/or General Manager"
of the particular corporation. (see pages 5-24 of Petitioners' Reply of
April 2, 1962). The searches and seizures were to be made, and were
actually made, in the "office/house/warehouse/premises" owned by or
under the control of the petitioners.
Ownership of matters seized gives "standing."
Ownership of the properties seized alone entitles the petitioners to
bring a motion to return and suppress, and gives them standing as
persons aggrieved by an unlawful search and seizure regardless of
their location at the time of seizure. Jones vs. United States, 362 U.S.
257, 261 (1960) (narcotics stored in the apartment of a friend of the
defendant); Henzel vs. United States, 296 F. 2d. 650, 652-53 (5th Cir.
1961), (personal and corporate papers of corporation of which the
defendant was president), United States vs. Jeffers, 342 U.S. 48
(1951) (narcotics seized in an apartment not belonging to the
defendant); Pielow vs. United States, 8 F. 2d 492, 493 (9th Cir. 1925)
9 TRANSPO LAW WEEK 5 9/15/19
(books seized from the defendant's sister but belonging to the
defendant); Cf. Villano vs. United States, 310 F. 2d 680, 683 (10th Cir.
1962) (papers seized in desk neither owned by nor in exclusive
possession of the defendant).
In a very recent case (decided by the U.S. Supreme Court on
December 12, 1966), it was held that under the constitutional provision
against unlawful searches and seizures, a person places himself or his
property within a constitutionally protected area, be it his home or his
office, his hotel room or his automobile:
Where the argument falls is in its misapprehension of the
fundamental nature and scope of Fourth Amendment
protection. What the Fourth Amendment protects is the
security a man relies upon when he places himself or his
property within a constitutionally protected area, be it his
home or his office, his hotel room or his automobile. There
he is protected from unwarranted governmental intrusion.
And when he puts some thing in his filing cabinet, in his desk
drawer, or in his pocket, he has the right to know it will be
secure from an unreasonable search or an unreasonable
seizure. So it was that the Fourth Amendment could not
tolerate the warrantless search of the hotel room in Jeffers,
the purloining of the petitioner's private papers in Gouled, or
the surreptitious electronic surveilance in Silverman.
Countless other cases which have come to this Court over
the years have involved a myriad of differing factual contexts
in which the protections of the Fourth Amendment have
been appropriately invoked. No doubt, the future will bring
countless others. By nothing we say here do we either
foresee or foreclose factual situations to which the Fourth
Amendment may be applicable. (Hoffa vs. U.S., 87 S. Ct.
408 (December 12, 1966). See also U.S. vs. Jeffers, 342
U.S. 48, 72 S. Ct. 93 (November 13, 1951). (Emphasis
supplied).
Control of premises searched gives "standing."
Independent of ownership or other personal interest in the records and
documents seized, the petitioners have standing to move for return
and suppression by virtue of their proprietary or leasehold interest in
many of the premises searched. These proprietary and leasehold
interests have been sufficiently set forth in their motion for
reconsideration and need not be recounted here, except to emphasize
that the petitioners paid rent, directly or indirectly, for practically all the
premises searched (Room 91, 84 Carmen Apts; Room 304, Army &
Navy Club; Premises 2008, Dewey Boulevard; 1436 Colorado Street);
maintained personal offices within the corporate offices (IBMC,
USTC); had made improvements or furnished such offices; or had paid
for the filing cabinets in which the papers were stored (Room 204,
Army & Navy Club); and individually, or through their respective
spouses, owned the controlling stock of the corporations involved. The
petitioners' proprietary interest in most, if not all, of the premises
searched therefore independently gives them standing to move for the
return and suppression of the books, papers and affects seized
therefrom.
In Jones vs. United States, supra, the U.S. Supreme Court delineated
the nature and extent of the interest in the searched premises
necessary to maintain a motion to suppress. After reviewing what it
considered to be the unduly technical standard of the then prevailing
circuit court decisions, the Supreme Court said (362 U.S. 266):
We do not lightly depart from this course of decisions by the
lower courts. We are persuaded, however, that it is
unnecessarily and ill-advised to import into the law
surrounding the constitutional right to be free from
unreasonable searches and seizures subtle distinctions,
developed and refined by the common law in evolving the
body of private property law which, more than almost any
other branch of law, has been shaped by distinctions whose
validity is largely historical. Even in the area from which they
derive, due consideration has led to the discarding of those
distinctions in the homeland of the common law. See
Occupiers' Liability Act, 1957, 5 and 6 Eliz. 2, c. 31, carrying
out Law Reform Committee, Third Report, Cmd. 9305.
Distinctions such as those between "lessee", "licensee,"
"invitee," "guest," often only of gossamer strength, ought not
 be determinative in fashioning procedures ultimately
referable to constitutional safeguards. See also Chapman
vs. United States, 354 U.S. 610, 616-17 (1961).
It has never been held that a person with requisite interest in the
premises searched must own the property seized in order to have
standing in a motion to return and suppress. In Alioto vs. United
States, 216 F. Supp. 48 (1963), a Bookkeeper for several corporations
from whose apartment the corporate records were seized successfully
moved for their return. In United States vs. Antonelli, Fireworks Co.,
53 F. Supp. 870, 873 (W D. N. Y. 1943), the corporation's president
successfully moved for the return and suppression is to him of both
personal and corporate documents seized from his home during the
course of an illegal search:
The lawful possession by Antonelli of documents and
property, "either his own or the corporation's was entitled to
protection against unreasonable search and seizure. Under
the circumstances in the case at bar, the search and seizure
were unreasonable and unlawful. The motion for the return
of seized article and the suppression of the evidence so
obtained should be granted. (Emphasis supplied).
Time was when only a person who had property in interest in either
the place searched or the articles seize had the necessary standing to
invoke the protection of the exclusionary rule. But in MacDonald vs.
Unite States, 335 U.S. 461 (1948), Justice Robert Jackson joined by
Justice Felix Frankfurter, advanced the view that "even a guest may
expect the shelter of the rooftree he is under against criminal
intrusion." This view finally became the official view of the U.S.
Supreme Court and was articulated in United States vs. Jeffers, 432
U.S 48 (1951). Nine years later, in 1960, in Jones vs. Unite States, 362
U.S. 257, 267, the U.S. Supreme Court went a step further. Jones was
a mere guest in the apartment unlawfully searched but the Court
nonetheless declared that the exclusionary rule protected him as well.
The concept of "person aggrieved by an unlawful search and seizure"
was enlarged to include "anyone legitimately on premise where the
search occurs."
Shortly after the U.S. Supreme Court's Jones decision the U.S. Court
of Appeals for the Fifth Circuit held that the defendant organizer, sole
stockholder and president of a corporation had standing in a mail fraud
prosecution against him to demand the return and suppression of
corporate property. Henzel vs. United States, 296 F 2d 650, 652 (5th
Cir. 1961), supra. The court conclude that the defendant had standing
on two independent grounds: First — he had a sufficient interest in the
property seized, and second — he had an adequate interest in the
premises searched (just like in the case at bar). A postal inspector had
unlawfully searched the corporation' premises and had seized most of
the corporation's book and records. Looking to Jones, the court
observed:
Jones clearly tells us, therefore, what is not required qualify
one as a "person aggrieved by an unlawful search and
seizure." It tells us that appellant should not have been
precluded from objecting to the Postal Inspector's search
and seizure of the corporation's books and records merely
because the appellant did not show ownership or
possession of the books and records or a substantial
possessory interest in the invade premises . . . (Henzel vs.
United States, 296 F. 2d at 651). .
Henzel was soon followed by Villano vs. United States, 310 F. 2d 680,
683, (10th Cir. 1962). In Villano, police officers seized two notebooks
from a desk in the defendant's place of employment; the defendant did
not claim ownership of either; he asserted that several employees
(including himself) used the notebooks. The Court held that the
employee had a protected interest and that there also was an invasion
of privacy. Both Henzel and Villano considered also the fact that the
search and seizure were "directed at" the moving defendant. Henzel
vs. United States, 296 F. 2d at 682; Villano vs. United States, 310 F.
2d at 683.
In a case in which an attorney closed his law office, placed his files in
storage and went to Puerto Rico, the Court of Appeals for the Eighth
Circuit recognized his standing to move to quash as unreasonable
search and seizure under the Fourth Amendment of the U.S.
Constitution a grand jury subpoena duces tecum directed to the
custodian of his files. The Government contended that the petitioner
10 TRANSPO LAW WEEK 5 9/15/19
had no standing because the books and papers were physically in the
possession of the custodian, and because the subpoena was directed
against the custodian. The court rejected the contention, holding that
Schwimmer legally had such possession, control and
unrelinquished personal rights in the books and papers as
not to enable the question of unreasonable search and
seizure to be escaped through the mere procedural device
of compelling a third-party naked possessor to produce and
deliver them. Schwimmer vs. United States, 232 F. 2d 855,
861 (8th Cir. 1956).
Aggrieved person doctrine where the search warrant s primarily
directed against said person gives "standing."
The latest United States decision squarely in point is United States vs.
Birrell, 242 F. Supp. 191 (1965, U.S.D.C. S.D.N.Y.). The defendant
had stored with an attorney certain files and papers, which attorney,
by the name of Dunn, was not, at the time of the seizing of the records,
Birrell's attorney. * Dunn, in turn, had stored most of the records at his
home in the country and on a farm which, according to Dunn's affidavit,
was under his (Dunn's) "control and management." The papers turned
out to be private, personal and business papers together with
corporate books and records of certain unnamed corporations in which
Birrell did not even claim ownership. (All of these type records were
seized in the case at bar). Nevertheless, the search in Birrell was held
invalid by the court which held that even though Birrell did not own the
premises where the records were stored, he had "standing" to move
for the return of all the papers and properties seized. The court, relying
on Jones vs. U.S., supra; U.S. vs. Antonelli Fireworks Co., 53 F. Supp.
870, Aff'd 155 F. 2d 631: Henzel vs. U.S., supra; and Schwimmer vs.
U.S., supra, pointed out that
It is overwhelmingly established that the searches here in
question were directed solely and exclusively against Birrell.
The only person suggested in the papers as having violated
the law was Birrell. The first search warrant described the
records as having been used "in committing a violation of
Title 18, United States Code, Section 1341, by the use of the
mails by one Lowell M. Birrell, . . ." The second search
warrant was captioned: "United States of America vs. Lowell
M. Birrell. (p. 198)
Possession (actual or constructive), no less than ownership,
gives standing to move to suppress. Such was the rule even
before Jones. (p. 199)
If, as thus indicated Birrell had at least constructive
possession of the records stored with Dunn, it matters not
whether he had any interest in the premises searched. See
also Jeffers v. United States, 88 U.S. Appl. D.C. 58, 187 F.
2d 498 (1950), affirmed 432 U.S. 48, 72 S. Ct. 93, 96 L. Ed.
459 (1951).
The ruling in the Birrell case was reaffirmed on motion for reargument;
the United States did not appeal from this decision. The factual
situation in Birrell is strikingly similar to the case of the present
petitioners; as in Birrell, many personal and corporate papers were
seized from premises not petitioners' family residences; as
in Birrell, the searches were "PRIMARILY DIRECTED SOLETY AND
EXCLUSIVELY" against the petitioners. Still both types of documents
were suppressed in Birrell because of the illegal search. In the case at
bar, the petitioners connection with the premises raided is much closer
than in Birrell.
Thus, the petitioners have full standing to move for the quashing of all
the warrants regardless whether these were directed against
residences in the narrow sense of the word, as long as the documents
were personal papers of the petitioners or (to the extent that they were
corporate papers) were held by them in a personal capacity or under
their personal control.
Prescinding a from the foregoing, this Court, at all events, should order
the return to the petitioners all personal and private papers and effects
seized, no matter where these were seized, whether from their
residences or corporate offices or any other place or places.
The uncontradicted sworn statements of the petitioners in their,
various pleadings submitted to this Court indisputably show that
amongst the things seized from the corporate offices and other places
were personal and private papers and effects belonging to the
petitioners.
If there should be any categorization of the documents, papers and
things which where the objects of the unlawful searches and seizures,
I submit that the grouping should be: (a) personal or private papers of
the petitioners were they were unlawfully seized, be it their family
residences offices, warehouses and/or premises owned and/or
possessed (actually or constructively) by them as shown in all the
search and in the sworn applications filed in securing the void search
warrants and (b) purely corporate papers belonging to corporations.
Under such categorization or grouping, the determination of which
unlawfully seized papers, documents and things
are personal/private of the petitioners or purely corporate papers will
have to be left to the lower courts which issued the void search
warrants in ultimately effecting the suppression and/or return of the
said documents.
And as unequivocally indicated by the authorities above cited, the
petitioners likewise have clear legal standing to move for the
suppression of purely corporate papers as "President and/or General
Manager" of the corporations involved as specifically mentioned in the
void search warrants.
Finally, I must articulate my persuasion that although the cases cited
in my disquisition were criminal prosecutions, the great clauses of the
constitutional proscription on illegal searches and seizures do not
withhold the mantle of their protection from cases not criminal in origin
or nature.

11 TRANSPO LAW WEEK 5 9/15/19

 4. EN BANC
G.R. No. L-19161 April 29, 1966
MANILA RAILROAD COMPANY, petitioner,
vs.
MACARIA BALLESTEROS, TIMOTEO CAMAYO, JOSE REYES
and JULIAN MAIMBAN, JR., respondents.
Gov't Corp. Counsel S. M. Gopengco and Atty. R. G. Fernando, for
petitioner.
George G. Arbolario, for respondents.
MAKALINTAL, J.:
In civil case No. 45968 of the Court of First Instance of Manila (Macaria
Ballesteros, Timoteo Camayo, Jose Reyes and Julian Maimban, Jr.
vs. Manila Railroad Company) the defendant was adjudged to pay
damages in the following amounts: P2,400 to Macaria Ballesteros;
P4,000 to Timoteo Camayo; P3,000 to Jose Reyes: and P2,000, plus
P1,000 as attorney's fees, to Julian Maimban, Jr.
The defendant appealed from the judgment, but upon motion by the
plaintiffs, the trial court, by order dated October 14, 1961, dismissed
the appeal on the ground that it was "manifestly and palpably frivolous
and interposed ostensibly to delay the settlement of the just and
reasonable claims of the herein plaintiffs, which have been pending
since 1958." The defendant moved to reconsider, and upon denial of
its motion instituted in this Court the instant petition for mandamus to
set aside the order of dismissal and to order respondent court to give
due course to the appeal.
In filing the petition directly with this Court, petitioner evidently intended
to raise only questions of law in the appeal contemplated, since under
Rule 41, section 15, "when erroneously a motion to dismiss an appeal
is granted or a record on appeal is disallowed by the trial court, a
proper petition for mandamus may be filed in the appellate court;" and
under section 17(6) of the Judiciary Act this Court may review on
appeal only questions of law in civil cases decided by inferior courts
unless the value in controversy exceeds P200,000.1äwphï1.ñët
The fact that an appeal is frivolous and interposed only for purposes
of delay has been recognized as a valid ground to deny issuance of
the writ of mandamus to compel the trial court to approve and certify
the appeal. In De la Cruz vs. Blanco and Quevedo, 73 Phil. 596, We
held:
And where as in the instant case, the dismissal has been
ordered by the trial court, it would not be disturbed in the
Appellate Court if the latter finds the appeal to have been
interposed ostensibly for delay. It has been held that a
frivolous appeal is one presenting no justiciable question or
one so readily cognizable as devoid of merit on the face of
the record that there is little, if any, prospect that it can over
succeed. The instant case is one such instance in which the
appeal is evidently without merit, taken manifestly for delay.
And in Paner vs. Yatco, 87 Phil. 271, We denied the writ prayed for
and held that "while strictly and legally speaking the petition may be
granted, we may, before acting thereon, inquire into the facts involved
in order to determine whether once the writ is granted and the case is
brought up here on appeal the appellant has any chance, even
possibility, of having the basic decision of the trial court set aside or
modified; for if the appellant has not that prospect or likelihood then
the granting of the writ and the consequent appeal would be futile and
would mean only a waste of time to the parties and to this Court."
The material facts, as found by respondent court in its decision, are as
follows: Private respondents here, plaintiffs below, were passengers
on petitioner's bus, the driver of which was Jose Anastacio. In
Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got off to
replace a defective spark plug. While he was thus engaged, one
Dionisio Abello, an auditor assigned to defendant company by the
General Auditing Office, took the wheel and told the driver to sit
somewhere else. With Abello driving, the bus proceeded on its way,
from time to time stopping to pick up passengers. Anastacio tried twice
to take the wheel back but Abello would not relinquish it. Then, in the
language of the trial court, "while the bus was negotiating between Km.
posts 328 and 329 (in Isabela) a freight truck ... driven by Marcial
Nocum ... bound for Manila, was also negotiating the same place;
when these two vehicles were about to meet at the bend of the road
12 TRANSPO LAW WEEK 5 9/15/19
Marcial Nocum, in trying to evade several holes on the right lane,
where his truck was running, swerved his truck towards the middle part
of the road and in so doing, the left front fender and left side of the
freight truck smashed the left side of the bus resulting in extensive
damages to the body of the bus and injuries to seventeen of its
passengers, ... including the plaintiffs herein."
In rejecting petitioner's contention that the negligence of Marcial
Nocum could not be imputed to it and relieved it from liability, the trial
court found that Dionisio Abello "was likewise reckless when he was
driving the bus at the rate of from 40 to 50 kilometers per hour on a
bumpy road at the moment of the collision."
Another defense put up by petitioner is that since Abello was not its
employee it should not be held responsible for his acts. This defense
was correctly overruled by the trial court, considering the provisions of
Article 1763 of the Civil Code and section 48 (b) of the Motor Vehicle
Law, which respectively provide as follows:
Art. 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the wilfull acts or
negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented
or stopped the act or omission.
Sec. 48(b). No professional chauffeur shall permit any
unlicensed person to drive the motor vehicle under his
control, or permit a person, sitting beside him or in any other
part of the car, to interfere with him in the operation of the
motor vehicle, by allowing said person to take hold of the
steering wheel, or in any other manner take part in the
manipulation or control of the car.
It appears further, and so the trial court found, that there were
negotiations between the parties to compromise the case, as a result
of which respondents herein, plaintiffs below, considerably reduced
their claims to the amounts subsequently awarded in the judgment;
that petitioner had in fact settled the claims of the other passengers
who were also injured in the same accident and even the claim for
damages filed in another action by the owner of the freight truck; and
that the Government Corporate Counsel himself, who represents
herein petitioner, rendered two separate opinions (Op. No. 86, May 19,
1960; and Op. No. 99, series of 1961) wherein, after analyzing the
facts and the law applicable, he reached the conclusion that the acts
of the bus personnel, particularly "in allowing Mr. Abello to drive
despite two occasions when the bus stopped and the regular driver
could have taken over, constitute reckless imprudence and wanton
injurious conduct on the part of the MRR employees." On the basis of
those opinions the Government Corporate Counsel advised petitioner
that the offer of the claimants was reasonable and should be accepted.
His advice, however, was not favorably acted upon, petitioner
obviously preferring to litigate.
The issues proposed to be taken up on appeal, as set forth in the
petition, are whether or not Dionisio Abello acted with reckless
negligence while driving petitioner's bus at the time of the accident,
and whether or not petitioner may be held liable on account of such
negligence, considering that he was not its employee. These are no
longer justiciable questions which would justify our issuing the
peremptory writ prayed for. The first is a question of fact on which the
affirmative finding of respondent court is not reviewable by Us; and the
second is one as to which there can be no possible doubt in view of
the provisions of the Civil Code and of the Motor Vehicle Law
hereinbefore cited. There would be no point in giving the appeal due
course.
The writ prayed for is denied, with costs against petitioner.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera,
Dizon, Regala, Bengzon, J.P., and Sanchez, JJ., concur.
 5. [G.R. No. 55300. March 15, 1990.]
FRANKLIN G. GACAL and CORAZON M. GACAL, the latter
assisted by her husband, FRANKLIN G. GACAL, Petitioners, v.
PHILIPPINE AIR LINES, INC., and THE HONORABLE PEDRO
SAMSON C. ANIMAS, in his capacity as PRESIDING JUDGE of
the COURT OF FIRST INSTANCE OF SOUTH COTABATO,
BRANCH I, Respondents.
Vicente A. Mirabueno, for Petitioners.
Siguion Reyna, Montecillo & Ongsiako for Private Respondent.
SYLLABUS
1. CIVIL LAW; COMMON CARRIER; REQUIRED TO EXERCISE
EXTRAORDINARY DILIGENCE IN THEIR VIGILANCE OVER
GOODS AND FOR THE SAFETY OF PASSENGER
TRANSPORTED. — Under the Civil Code, common carriers are
required to exercise extraordinary diligence in their vigilance over the
goods and for the safety of passengers transported by them, according
so all the circumstances of each case (Article 1733). The source of a
common carrier’s legal liability is the contract of carriage, and by
entering into said contract, it binds itself to carry the passengers safely
as far as human care and foresight can provide. There is breach of this
obligation if it fails to exert extraordinary diligence according to all the
circumstances of the case in exercise of the utmost diligence of a very
cautious person (Isaac v. Ammen Transportation Co., 101 Phil. 1046
[1957]; Juntilla v. Fontanar, 136 SCRA 624 [1985]).
2. ID.; ID.; ID.; PRESUMED NEGLIGENT IN CASE OF DEATH OR
INJURY RESULTED; DUTY TO OVERCOME THEREOF. — They are
presumed at fault or to have acted negligently whenever a passenger
dies or is injured (Philippine Airlines, Inc. v. National Labor Relations
Commission, 124 SCRA 583 [1983]) or for the loss, destruction or
deterioration of goods in cases other than those enumerated in Article
1734 of the Civil Code (Eastern Shipping Lines, Inc. v. Intermediate
Appellate Court, 150 SCRA 463 [1987]). It is the duty of a common
carrier to overcome the presumption of negligence (Philippine National
Railways v. Court of Appeals, 139 SCRA 87 [1985]) and it must be
shown that the carrier had observed the required extraordinary
diligence of a very cautious person as far as human care and foresight
can provide or that the accident was caused by a fortuitous event
(Estrada v. Consolacion, 71 SCRA 523 [1976]). Thus, as ruled by this
Court, no person shall be responsible for those "events which could
not be foreseen or which though foreseen were inevitable." (Article
1174, Civil Code). The term is synonymous with caso fortuito (Lasam
v. Smith, 45 Phil. 657 [1924]) which is of the same sense as "force
majeure" (Words and Phrases, Permanent Edition, Vol. 17, p. 362).
3. ID.; FORCE MAJEURE; DEFINED; ELEMENTS THAT MUST
CONCUR TO EXEMPT PARTY FROM LIABILITY. — In order to
constitute a caso fortuito or force majeure that would exempt a person
from liability under Article 1174 of the Civil Code, it is necessary that
the following elements must concur: (a) the cause of the breach of the
obligation must be independent of the human will (the will of the debtor
or the obligor); (b) the event must be either unforeseeable or
unavoidable; (c) the event must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner; and (d) the debtor
must be free from any participation in, or aggravation of the injury to
the creditor (Lasam v. Smith, 45 Phil. 657 [1924]; Austria v. Court of
Appeals, 39 SCRA 527 [1971]; Estrada v. Consolacion, supra;
Vasquez v. Court of Appeals, 138 SCRA 553 [1985]; Juan F. Nakpil &
Sons v. Court of Appeals, 144 SCRA 596 [1986]). Caso fortuito or
force majeure, by definition, are extraordinary events not foreseeable
or avoidable, events that could not be foreseen, or which, though
foreseen, are inevitable. It is, therefore, not enough that the event
should not have been foreseen or anticipated, as is commonly
believed, but it must be one impossible to foresee or to avoid. The
mere difficulty to foresee the happening is not impossibility to foresee
the same (Republic v. Luzon Stevedoring Corporation, 21 SCRA 279
[1967]).
4. ID.; ID.; ID.; SATISFIED IN THE CASE AT BAR. — Applying the
above guidelines to the case at bar, the failure to transport petitioners
safely from Davao to Manila was due to the skyjacking incident staged
by six (6) passengers of the same plane, all members of the Moro
13 TRANSPO LAW WEEK 5 9/15/19
National Liberation Front (MNLF), without any connection with private
respondent, hence, independent of the will of either the PAL or of its
passengers. Under normal circumstances, PAL might have foreseen
the skyjacking incident which could have been avoided had there been
a more thorough frisking of passengers and inspection of baggages as
authorized by R.A No. 6235. But the incident in question occurred
during Martial Law where there was a military take-over of airport
security including the frisking of passengers and the inspection of their
luggage preparatory to boarding domestic and international flights. In
fact military take-over was specifically announced on October 20, 1973
by General Jose L. Rancudo, Commanding General of the Philippine
Air Force in a letter to Brig. Gen. Jesus Singson, then Director of the
Civil Aeronautics Administration (Rollo, pp. 71-72) later confirmed
shortly before the hijacking incident of May 21, 1976 by Letter of
Instruction No. 399 issued on April 28, 1976. Otherwise stated, these
events rendered it impossible for PAL to perform its obligations in a
normal manner and obviously it cannot be faulted with negligence in
the performance of duty taken over by the Armed Forces of the
Philippines to the exclusion of the former. There is no dispute that the
fourth element has also been satisfied. Consequently the existence of
force majeure has been established exempting respondent PAL from
the payment of damages to its passengers who suffered death or
injuries in their persons and for loss of their baggages.
DECISION
PARAS, J.:
This is a petition for review on certiorari of the decision of the Court of
First Instance of South Cotabato, Branch 1, * promulgated on August
26, 1980 dismissing three (3) consolidated cases for damages: Civil
Case No. 1701, Civil Case No. 1773 and Civil Case No. 1797 (Rollo,
p. 35).
The facts, as found by respondent court, are as
follows:jgc:chanrobles.com.ph
"Plaintiffs Franklin G. Gacal and his wife, Corazon M. Gacal, Bonifacio
S. Anislag and his wife, Mansueta L. Anislag, and the late Elma de
Guzman, were then passengers boarding defendant’s BAC 111 at
Davao Airport for a flight to Manila, not knowing that on the same flight,
Macalinog, Taurac Pendatum known as Commander Zapata, Nasser
Omar, Liling Pusuan Radia, Dimantong Dimarosing and Mike Randa,
all of Marawi City and members of the Moro National Liberation Front
(MNLF), were their co-passengers, three (3) armed with grenades, two
(2) with .45 caliber pistols, and one with a .22 caliber pistol. Ten (10)
minutes after take off at about 2:30 in the afternoon, the hijackers
brandishing their respective firearms announced the hijacking of the
aircraft and directed its pilot to fly to Libya. With the pilot explaining to
them especially to its leader, Commander Zapata, of the inherent fuel
limitations of the plane and that they are not rated for international
flights, the hijackers directed the pilot to fly to Sabah. With the same
explanation, they relented and directed the aircraft to land at
Zamboanga Airport, Zamboanga City for refueling. The aircraft landed
at 3:00 o’clock in the afternoon of May 21, 1976 at Zamboanga Airport.
When the plane began to taxi at the runway, it was met by two armored
cars of the military with machine guns pointed at the plane, and it
stopped there. The rebels thru its commander demanded that a DC-
aircraft take them to Libya with the President of the defendant
company as hostage and that they be given $375,000 and six (6)
armalites, otherwise they will blow up the plane if their demands will
not be met by the government and Philippine Air Lines. Meanwhile, the
passengers were not served any food nor water and it was only on
May 23, a Sunday, at about 1:00 o’clock in the afternoon that they were
served 1/4 slice of a sandwich and 1/10 cup of PAL water. After that,
relatives of the hijackers were allowed to board the plane but
immediately after they alighted therefrom, an armored car bumped the
stairs. That commenced the battle between the military and the
hijackers which led ultimately to the liberation of the surviving crew and
the passengers, with the final score of ten (10) passengers and three
(3) hijackers dead on the spot and three (3) hijackers
captured.chanrobles lawlibrary : rednad
"City Fiscal Frank in G. Gacal was unhurt. Mrs. Corazon M. Gacal
suffered injuries in the course of her jumping out of the plane when it
was peppered with bullets by the army and after two (2) hand grenades
exploded inside the plane. She was hospitalized at General Santos
Doctors Hospital, General Santos City, for two (2) days, spending
P245.60 for hospital and medical expenses, Assistant City Fiscal
Bonifacio S. Anislag also escaped unhurt but Mrs. Anislag suffered a
fracture at the radial bone of her left elbow for which she was
hospitalized and operated on at the San Pedro Hospital, Davao City,
and therefore, at Davao Regional Hospital, Davao City, spending
P4,500.00. Elma de Guzman died because of that battle. Hence, the
action of damages instituted by the plaintiffs demanding the following
damages, to wit:chanrob1es virtual 1aw library
Civil Case No. 1701 — passengers safely as far as human care and foresight can provide.
City Fiscal Franklin G. Gacal and Mrs. Corazon M. Gacal — actual
damages: P245.60 for hospital and medical expenses of Mrs. Gacal;
P8,995.00 for their personal belongings which were lost and not
recovered; P50,000.00 each for moral damages; and P5,000.00 for
attorney’s fees, apart from the prayer for an award of exemplary
damages (Record, pp. 4-6, Civil Case No. 1701).
Civil Case No. 1773 —
x x x
Civil Case No. 1797 — caused by a fortuitous event (Estrada v. Consolacion, 71 SCRA 523
x x x"
The trial court, on August 26, 1980, dismissed the complaints finding
that all the damages sustained in the premises were attributed to force
majeure.
On September 12, 1980 the spouses Franklin G. Gacal and Corazon
M. Gacal, plaintiffs in Civil Case No. 1701, filed a notice of appeal with
the lower court on pure questions of law (Rollo, p. 55) and the petition
for review on certiorari was filed with this Court on October 20, 1980
(Rollo, p. 30).
The Court gave due course to the petition (Rollo, p. 147) and both
parties filed their respective briefs but petitioner failed to file reply brief
which was noted by the Court in the resolution dated May 3, 1982
(Rollo, p. 183).
Petitioners alleged that the main cause of the unfortunate incident is
the gross, wanton and inexcusable negligence of respondent Airline
personnel in their failure to frisk the passengers adequately in order to
discover hidden weapons in the bodies of the six (6) hijackers. They
claimed that despite the prevalence of skyjacking, PAL did not use a
metal detector which is the most effective means of discovering
potential skyjackers among the passengers (Rollo, pp. 6-
7).chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
Respondent Airline averred that in the performance of its obligation to
safely transport passengers as far as human care and foresight can
provide, it has exercised the utmost diligence of a very cautious person
with due regard to all circumstances, but the security checks and
measures and surveillance precautions in all flights, including the
inspection of baggages and cargo and frisking of passengers at the
Davao Airport were performed and rendered solely by military
personnel who under appropriate authority had assumed exclusive
jurisdiction over the same in all airports in the Philippines.
Similarly, the negotiations with the hijackers were a purely government
matter and a military operation, handled by and subject to the absolute
and exclusive jurisdiction of the military authorities. Hence, it
concluded that the accident that befell RP-C1161 was caused by
fortuitous event, force majeure and other causes beyond the control of
the respondent Airline.
The determinative issue in this case is whether or not hijacking or air
piracy during martial law and under the circumstances obtaining
herein, is a caso fortuito or force majeure which would exempt an
aircraft from payment of damages to its passengers whose lives were
put in jeopardy and whose personal belongings were lost during the
incident.
Under the Civil Code, common carriers are required to exercise
14 TRANSPO LAW WEEK 5 9/15/19
extraordinary diligence in their vigilance over the goods and for the
safety of passengers transported by them, according so all the
circumstances of each case (Article 1733). They are presumed at fault
or to have acted negligently whenever a passenger dies or is injured
(Philippine Airlines, Inc. v. National Labor Relations Commission, 124
SCRA 583 [1983]) or for the loss, destruction or deterioration of goods
in cases other than those enumerated in Article 1734 of the Civil Code
(Eastern Shipping Lines, Inc. v. Intermediate Appellate Court, 150
SCRA 463 [1987]).chanroblesvirtualawlibrary
The source of a common carrier’s legal liability is the contract of
carriage, and by entering into said contract, it binds itself to carry the
There is breach of this obligation if it fails to exert extraordinary
diligence according to all the circumstances of the case in exercise of
the utmost diligence of a very cautious person (Isaac v. Ammen
Transportation Co., 101 Phil. 1046 [1957]; Juntilla v. Fontanar, 136
SCRA 624 [1985]).
It is the duty of a common carrier to overcome the presumption of
negligence (Philippine National Railways v. Court of Appeals, 139
SCRA 87 [1985]) and it must be shown that the carrier had observed
the required extraordinary diligence of a very cautious person as far
as human care and foresight can provide or that the accident was
[1976]). Thus, as ruled by this Court, no person shall be responsible
for those "events which could not be foreseen or which though
foreseen were inevitable." (Article 1174, Civil Code). The term is
synonymous with caso fortuito (Lasam v. Smith, 45 Phil. 657 [1924])
which is of the same sense as "force majeure" (Words and Phrases,
Permanent Edition, Vol. 17, p. 362).
In order to constitute a caso fortuito or force majeure that would
exempt a person from liability under Article 1174 of the Civil Code, it is
necessary that the following elements must concur: (a) the cause of
the breach of the obligation must be independent of the human will
(the will of the debtor or the obligor); (b) the event must be either
unforeseeable or unavoidable; (c) the event must be such as to render
it impossible for the debtor to fulfill his obligation in a normal manner;
and (d) the debtor must be free from any participation in, or
aggravation of the injury to the creditor (Lasam v. Smith, 45 Phil. 657
[1924]; Austria v. Court of Appeals, 39 SCRA 527 [1971]; Estrada v.
Consolacion, supra; Vasquez v. Court of Appeals, 138 SCRA 553
[1985]; Juan F. Nakpil & Sons v. Court of Appeals, 144 SCRA 596
[1986]). Caso fortuito or force majeure, by definition, are extraordinary
events not foreseeable or avoidable, events that could not be
foreseen, or which, though foreseen, are inevitable. It is, therefore, not
enough that the event should not have been foreseen or anticipated,
as is commonly believed, but it must be one impossible to foresee or
to avoid. The mere difficulty to foresee the happening is not
impossibility to foresee the same (Republic v. Luzon Stevedoring
Corporation, 21 SCRA 279 [1967]).
Applying the above guidelines to the case at bar, the failure to
transport petitioners safely from Davao to Manila was due to the
skyjacking incident staged by six (6) passengers of the same plane,
all members of the Moro National Liberation Front (MNLF), without any
connection with private respondent, hence, independent of the will of
either the PAL or of its passengers.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
Under normal circumstances, PAL might have foreseen the skyjacking
incident which could have been avoided had there been a more
thorough frisking of passengers and inspection of baggages as
authorized by R.A No. 6235. But the incident in question occurred
during Martial Law where there was a military take-over of airport
security including the frisking of passengers and the inspection of their
luggage preparatory to boarding domestic and international flights. In
fact military take-over was specifically announced on October 20, 1973
by General Jose L. Rancudo, Commanding General of the Philippine
Air Force in a letter to Brig. Gen. Jesus Singson, then Director of the
Civil Aeronautics Administration (Rollo, pp. 71-72) later confirmed
shortly before the hijacking incident of May 21, 1976 by Letter of
Instruction No. 399 issued on April 28, 1976 (Rollo, p. 72).
Otherwise stated, these events rendered it impossible for PAL to
perform its obligations in a normal manner and obviously it cannot be
faulted with negligence in the performance of duty taken over by the
Armed Forces of the Philippines to the exclusion of the former.

Finally, there is no dispute that the fourth element has also been
satisfied. Consequently the existence of force majeure has been
established exempting respondent PAL from the payment of damages
to its passengers who suffered death or injuries in their persons and
for loss of their baggages.

PREMISES CONSIDERED, the petition is hereby DISMISSED for lack

of merit and the decision of the Court of First Instance of South
Cotabato, Branch I is hereby AFFIRMED.chanrobles law library

SO ORDERED.

Melencio-Herrera (Chairman), Padilla, Sarmiento and Regalado, JJ.,

concur.

15 TRANSPO LAW WEEK 5 9/15/19

 6. G.R. No. 119756 March 18, 1999
FORTUNE EXPRESS, INC., petitioner,
vs.
COURT OF APPEALS, PAULIE U.CAORONG, and minor
childrenYASSER KING CAORONG, ROSE HEINNI and PRINCE
ALEXANDER, all surnamed CAORONG, and represented by their
mother PAULIE U. CAORONG, respondents.
MENDOZA, J.:
This is an appeal by petition for review on certiorari of the decision,
dated July 29, 1994, of the Court of Appeals, which reversed the
decision of the Regional Trial Court, Branch VI, Iligan City. The
aforesaid decision of the trial court dismissed the complaint of public
respondents against petitioner for damages for breach of contract of
carriage filed on the ground that petitioner had not exercised the
required degree of diligence in the operation of one of its buses. Atty.
Talib Caorong, whose heirs are private respondents herein, was a
passenger of the bus and was killed in the ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private respondent
Paulie Caorong is the widow of Atty. Caorong, while private
respondents Yasser King, Rose Heinni, and Prince Alexander are their
minor children.
On November 18, 1989, a bus of petitioner figured in an accident with
a jeepney in Kauswagan, Lanao del Norte, resulting in the death of
several passengers of the jeepney, including two Maranaos. Crisanto
Generalao, a volunteer field agent of the Constabulary Regional
Security Unit No. X, conducted an investigation of the accident. He
found that the owner of the jeepney was a Maranao residing in
Delabayan, Lanao del Norte and that certain Maranaos were planning
to take revenge on the petitioner by burning some of its buses.
Generalao rendered a report on his findings to Sgt. Reynaldo Bastasa
of the Philippine Constabulary Regional Headquarters at Cagayan de
Oro. Upon the instruction of Sgt. Bastasa, he went to see Diosdado
Bravo, operations manager of petitioner, its main office in Cagayan de
Oro City. Bravo assured him that the necessary precautions to insure
the safety of lives and property would be taken.1
At about 6:45 P.M. on November 22, 1989, three armed Maranaos
who pretended to be passengers, seized a bus of petitioner at
Linamon, Lanao del Norte while on its way to Iligan City. Among the
passengers of the bus was Atty. Caorong. The leader of the Maranaos,
identified as one Bashier Mananggolo, ordered the driver, Godofredo
Cabatuan, to stop the bus on the side of the highway. Mananggolo
then shot Cabatuan on the arm, which caused him to slump on the
steering wheel. The one of the companions of Mananggolo started
pouring gasoline inside the bus, as the other held the passenger at
bay with a handgun. Mananggolo then ordered the passenger to get
off the bus. The passengers, including Atty. Caorong, stepped out of
the bus and went behind the bushes in a field some distance from the
highway.2
However, Atty. Caorong returned to the bus to retrieve something from
the overhead rack. at that time, one of the armed men was pouring
gasoline on the head of the driver. Cabatuan, who had meantime
regained consciousness, heard Atty. Caorong pleading with the armed
men to spare the driver as he was innocent of any wrong doing and
was only trying to make a living. The armed men were, however,
adamant as they repeated the warning that they were going to burn
the bus along with its driver. During this exchange between Atty.
Caorong and the assailants, Cabatuan climbed out of the left window
of the bus and crawled to the canal on the opposite side of the
highway. He heard shots from inside the bus. Larry de la Cruz, one of
the passengers, saw that Atty. Caorong was hit. Then the bus was set
on fire. Some of the passengers were able to pull Atty. Caorong out of
the burning bus and rush him to the Mercy Community Hospital in
Iligan City, but he died while undergoing operation.3
The private respondents brought this suit for breach of contract of
carriage in the Regional Trial Court, Branch VI, Iligan City. In its
decision, dated December 28, 1990, the trial court dismissed the
complaint, holding as follows:
16 TRANSPO LAW WEEK 5 9/15/19
The fact that defendant, through Operations Manager
Diosdado Bravo, was informed of the "rumors" that the
Moslems intended to take revenge by burning five buses of
defendant is established since the latter also utilized Crisanto
Generalao as a witness. Yet despite this information, the
plaintiffs charge, defendant did not take proper precautions. . .
. Consequently, plaintiffs now fault the defendant for ignoring
the report. Their position is that the defendant should have
provided its buses with security guards. Does the law require
common carriers to install security guards in its buses for the
protection and safety of its passengers? Is the failure to post
guards on omission of the duty to "exercise the diligence of a
good father of the family" which could have prevented the
killing of Atty. Caorong? To our mind, the diligence demanded
by law does not include the posting of security guard in buses.
It is an obligation that properly belongs to the State. Besides,
will the presence of one or two security guards suffice to deter
a determined assault of the lawless and thus prevent the injury
complained of? Maybe so, but again, perhaps not. In other
words, the presence of a security guard is not a guarantee that
the killing of Atty. Caorong would have been definitely avoided.
xxx xxx xxx
Accordingly, the failure of defendant to accord faith and credit
to the report of Mr. Generalao and the fact that it did not
provide security to its buses cannot, in the light of the
circumstances, be characterized as negligence.
Finally, the evidence clearly shows that the assalants did not
have the least intention of the harming any of the passengers.
They ordered all the passengers to alight and set fire on the
bus only after all the passengers were out of danger. The
death of Atty. Caorong was an unexpected and unforseen
occurrense over which defendant had no control. Atty.
Caorong performed an act of charity and heroism in coming to
the succor of the driver even in the face of danger. He
deserves the undying gratitude of the driver whose life he
saved. No one should blame him for an act of extraordinary
charity and altruism which cost his life. But neither should any
blame be laid on the doorstep of defendant. His death was
solely due to the willfull acts of the lawless which defendant
could neither prevent nor to stop.
WHEREFORE, in view of the foregoing, the complaint is
hereby dismissed. For lack of merit, the counter-claim is
likewise dismissed. No costs.4
On appeal, however, the Court of Appeals reversed. It held:
In the case at bench, how did defendant-appellee react to the
tip or information that certain Maranao hotheads were planning
to burn five of its buses out of revenge for the deaths of two
Maranaos in an earlier collision involving appellee's bus?
Except for the remarks of appellee's operations manager that
"we will have our action . . . . and I'll be the one to settle it
personally," nothing concrete whatsoever was taken by
appellee or its employees to prevent the execution of the
threat. Defendant-appellee never adopted even a single safety
measure for the protection of its paying passengers. Were
there available safeguards? Of course, there were: one was
frisking passengers particularly those en route to the area
where the threats were likely to be carried out such as where
the earlier accident occurred or the place of influence of the
victims or their locality. If frisking was resorted to, even
temporarily, . . . . appellee might be legally excused from
liabilty. Frisking of passengers picked up along the route could
have been implemented by the bus conductor; for those
boarding at the bus terminal, frisking could have been
conducted by him and perhaps by additional personnel of
defendant-appellee. On hindsight, the handguns and
especially the gallon of gasoline used by the felons all of which
were brought inside the bus would have been discovered, thus
preventing the burning of the bus and the fatal shooting of the
victim.
Appellee's argument that there is no law requiring it to provide
guards on its buses and that the safety of citizens is the duty
of the government, is not well taken. To be sure, appellee is
 not expected to assign security guards on all its buses; if at all,
it has the duty to post guards only on its buses plying
predominantly Maranaos areas. As discussed in the next
preceding paragraph, least appellee could have done in
response to the report was to adopt a system of verification
such as the frisking of passengers boarding at its buses.
Nothing, and no repeat, nothing at all, was done by defendant-
appellee to protect its innocent passengers from the danger
arising from the "Maranao threats." It must be observed that
frisking is not a novelty as a safety measure in our society.
Sensitive places — in fact, nearly all important places — have
applied this method of security enhancement. Gadgets and
devices are avilable in the market for this purpose. It would not
have weighed much against the budget of the bus company if
such items were made available to its personnel to cope up
with situations such as the "Maranaos threats."
In view of the constitutional right to personal privacy, our
pronouncement in this decision should not be construed as an
advocacy of mandatory frisking in all public conveyances.
What we are saying is that given the circumstances obtaining
in the case at bench that: (a) two Maranaos died because of a
vehicular collision involving one of appellee's vehicles; (b)
appellee received a written report from a member of the
Regional Security Unit, Constabulary Security Group, that the
tribal/ethnic group of the two deceased were planning to burn
five buses of appellee out of revenge; and (c) appelle did
nothing — absolutely nothing — for the safety of its
passengers travelling in the area of influence of the victims,
appellee has failed to exercise the degree of dilegence
required of common carriers. Hence, appellee must be
adjudge liable.
xxx xxx xxx
WHEREFORE the decision appealed from is hereby
REVERSED and another rendered ordering defendant-
appellee to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorney's fee
and
Costs against defendant-appellee.5
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING
THE DECISION OF THE REGIONAL TRIAL COURT DATED
DECEMBER 28, 1990 DISMISSING THE COMPLAINT AS
WELL AS THE COUNTERCLAIM, AND FINDING FOR
PRIVATE RESPONDENTS BY ORDERING PETITIONER TO
PAY THE GARGANTUAN SUM OF P3,449,649.20 PLUS
P500.00 PER APPEARANCE AS ATTORNEY'S FEES, AS
WELL AS DENYING PETITIONERS MOTION FRO
RECONSIDERATION AND THE SUPPLEMENT TO SAID
MOTION, WHILE HOLDING, AMONG OTHERS, THAT THE
PETITIONER BREACHED THE CONTRACT OF THE
CARRIAGE BY ITS FAILURE TO EXCERCISE THE
REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS WERE
SO GRAVE, IRRESISTABLE, VIOLENT, AND FORCEFULL,
AS TO BE REGARDED AS CASO FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF APPEALS
SERIOUSLY ERRED IN HOLDING THAT PETITIONER
COULD HAVE PROVIDED ADEQUATE SECURITY IN
PREDOMINANTLY MUSLIM AREAS AS PART OF ITS DUTY
TO OBSERVE EXTRA-ORDINARY DILIGENCE AS A
COMMON CARRIER.
The instant has no merit.
First. Petitioner's Breach of the Contract of Carriage.
Art. 1763 of the Civil Code provides that a common carrier is
responsible for injuries suffered by a passenger on account of wilfull
acts of other passengers, if the employees of the common carrier could
have prevented the act through the exercise of the diligence of a good
father of a family. In the present case, it is clear that because of the
17 TRANSPO LAW WEEK 5 9/15/19
negligence of petitioner's employees, the seizure of the bus by
Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro
that the Maranaos were planning to take revenge on the petitioner by
burning some of its buses and the assurance of petitioner's operation
manager, Diosdado Bravo, that the necessary precautions would be
taken, petitioner did nothing to protect the safety of its passengers.
Had petitioner and its employees been vigilant they would not have
failed to see that the malefactors had a large quantity of gasoline with
them. Under the circumstances, simple precautionary measures to
protect the safety of passengers, such as frisking passengers and
inspecting their baggages, preferably with non-intrusive gadgets such
as metal detectors, before allowing them on board could have been
employed without violating the passenger's constitutional rights. As
this Court amended in Gacal v. Philippine Air Lines, Inc., 6 a common
carrier can be held liable for failing to prevent a hijacking by frisking
passengers and inspecting their baggages.
From the foregoing, it is evident that petitioner's employees failed to
prevent the attack on one of petitioner's buses because they did not
exercise the diligence of a good father of a family. Hence, petitioner
should be held liable for the death of Atty. Caorong.
Second. Seizure of Petitioner's Bus not a Case of Force Majeure
The petitioner contends that the seizure of its bus by the armed
assailants was a fortuitous event for which it could not be held liable.
Art. 1174 of the Civil Code defines a fortuitous event as an occurence
which could not be foreseen, is inevitable. In Yobido v. Court of
Appeals, 7 we held that to considered as force majeure, it is necessary
that (1) the cause of the breach of the obligation must be independent
of the human will; (2) the event must be either unforeseeable or
unavoidable; (3) the occurence must be render it impossible for the
debtor to fulfill the obligation in a normal manner; and (4) the obligor
must be free of participation in, or aggravation of, the injury to the
creditor. The absence of any of the requisites mentioned above would
prevent the obligor from being excused from liability.
Thus, in Vasquez v. Court of Appeals, 8 it was held that the common
carrier was liable for its failure to take the necessary precautions
against an approaching typhoon, of which it was warned, resulting in
the loss of the lives of several passengers. The event was forseeable,
and, thus, the second requisite mentioned above was not fulfilled. This
ruling applies by analogy to the present case. Despite the report of PC
agent Generalao that the Maranaos were going to attack its buses,
petitioner took no steps to safeguard the lives and properties of its
passengers. The seizure of the bus of the petitioner was foreseeable
and, therefore, was not a fortuitous event which would exempt
petitioner from liabilty.
Petitioner invokes the ruling in Pilapil v. Court of Appeals, 9 and De
Guzman v. Court of Appeals, 10 in support of its contention that the
seizure of its bus by the assailants constitutes force majeure. In Pilapil
v. Court of Appeals, 11 it was held that a common carrier is not liable
for failing to install window grills on its buses to protect the passengers
from injuries cause by rocks hurled at the bus by lawless elements. On
the other hand, in De Guzman v. Court of Appeals, 12 it was ruled that
a common carriers is not responsible for goods lost as a result of a
robbery which is attended by grave or irresistable threat, violence, or
force.
It is clear that the cases of Pilapil and De Guzman do not apply to the
prensent case. Art. 1755 of the Civil Code provides that "a common
carrier is bound to carry the passengers as far as human care and
foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances." Thus, we held in
Pilapil and De Guzman that the respondents therein were not negligent
in failing to take special precautions against threats to the safety of
passengers which could not be foreseen, such as tortious or criminal
acts of third persons. In the present case, this factor of unforeseeability
(the second requisite for an event to be considered force majeure) is
lacking. As already stated, despite the report of PC agent Generalao
that the Maranaos were planning to burn some of petitioner's buses
and the assurance of petitioner's operation manager (Diosdado Bravo)
that the necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers.
Third. Deceased not Guilty of Contributory Negligence Capacity Expectancy Income Expenses
The petitioner contends that Atty. Caorong was guilty of contributory Life expectancy is equivalent to two thirds (2/3) multiplied by the
negligence in returning to the bus to retrieve something. But Atty. difference of eighty (80) and the age of the deceased. 20 Since Atty.
Caorong did not act recklessly. It should be pointed out that the Caorong was 37 years old at that time of his death, 21 he had a life
intended targets of the violence were petitioners and its employees, expectancy of 28 2/3 more years.22 His projected gross annual
not its passengers. The assailant's motive was to retaliate for the loss income, computed based on his monthly salary of P11,385.00. 23 as a
of life of two Maranaos as a result of the collision between petitioner's lawyer in the Department of Agrarian Reform at the time of his death,
bus and the jeepney in which the two Maranaos were riding. was P148,005.00. 24 Allowing for necessary living expenses of fifty
Mananggolo, the leader of the group which had hijacked the bus, percent (50%) 25 of his projected gross annual income, his total
ordered the passengers to get off the bus as they intended to burn it earning capacity amounts to P2,121,404.90. 26 Hence, the petitioner is
and its driver. The armed men actually allowed Atty. Caorong to liable to the private respondents in the said amount as a compensation
retrieve something from the bus. What apparently angered them was for loss of earning capacity.
his attempt to help the driver of the bus by pleading for his life. He was
WHEREFORE, the decision, dated July 29, 1994, of the Court of
playing the role of the good Samaritan. Certainly, this act cannot Appeals is hereby AFFIRMED with the MODIFICATION that petitioner
considered an act of negligence, let alone recklessness.
Fortune Express, Inc. is ordered to pay the following amounts to
Fourth. Petitioner Liable to Private Respaondents for Damages private respondents Paulie, Yasser King, Rose Heinni, and Prince
Alexander Caorong:
We now consider the question of damages that the heirs of Atty.
Caorong, private respondents herein, are entitled to recover from the 1. death indemnity in the amount of fifty thousand pesos (P50,000.00);
petitioner.
2. actual damages in the amount of thirty thousand pesos
Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 (P30,000.00);
thereof, provides for the payment of indemnity for the death of
3. moral damages in the amount of one hundred thousand pesos
passengers caused by the breach of contract of carriage by a common (P100,000.00);
carrier. Initially fixed in Art. 2206 at P3,000.00, the amount of the said
indemnity for death has through the years been gradually increased in 4. exemplary damages in the amount of one hundred thousand pesos
view of the declining value of the peso. It is presently fixed at (P100,000.00);
P50,000.00. 13 Private respondents are entitled to this amount. 5. attorney's fees in the amount of fifty thousand pesos (P50,000.00);
Actual Damages. Art. 2199 provides that "except as provided by law 6. compensation for loss of earning capacity in the amount of two
or by stipulation, one is entitled to an adequate compensation only for million one hundred twenty-one thousand four hundred four pesos and
such pecuniary loss suffered by him as has duly proved." The trial ninety centavos (P2,121,404.90); and
court found that the private respondents spent P30,000.00 for the
wake and burial of Atty. Caorong. 14 Since petitioner does not question 7. cost of suits.
this finding of the trial court, it is liable to private respondent in the said SO ORDERED.
amount as actual damages.
Bellosillo, Puno and Buena, JJ., concur.
Moral Damages. Under Art. 2206, the "spouse, legitimate and
illegitimate descendants and ascendants of the deceased may Quisumbing, J., abroad on official business.
demand moral damages for mental anguish by reason of the death of
the deceased." The trial court found that private respondent Paulie
Caorong suffered pain from the death of her husband and worry on
how to provide support for their minor children, private respondents
Yasser King, Rose Heinni, and Prince Alexander. 15 The petitioner
likewise does not question this finding of the trial court. Thus, in
accordance with recent decisions of this Court, 16 we hold that the
petitioner is liable to the private respondents in the amount of
P100,000.00 as moral damages for the death of Atty. Caorong.
Exemplary Damages. Art. 2232 provides that "in contracts and quasi-
contracts, the court may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent
reckless manner." In the present case, the petitioner acted in a wanton
and reckless manner. Despite warning that the Maranaos were
planning to take revenge against the petitioner by burning some of its
buses, and contary to the assurance made by its operations manager
that the necessary precautions would be take, the petitioner and its
employees did nothing to protect the safety of passengers. Under the
circumtances, we deem it reasonable to award private respondents
exemplary damages in the amount of P100,000.00.17
Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be
recovered when, as in the instant case, exemplary damages are
awarded. In the recent case of Sulpicio Lines, Inc. v. Court of
Appeals, 18 we held an award of P50,000.00 as attorney's fees to be
reasonable. Hence, the private respondents are entitled to attorney's
fees in that amount.
Compensation for Loss of Earning Capacity. Art. 1764 of the Civil
Code, in relation to Art. 2206 thereof, provides that in addition to the
indemnity for death arising from the breach of contrtact of carriage by
a common carrier, the "defendant shall be liable for the loss of the
earning capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter." The formula established in decided cases for
computing net earning capacity is as follows:19
Gross Necessary
Net Earning = Life x Annual — Living
18 TRANSPO LAW WEEK 5 9/15/19
 7. G.R. No. 52159 December 22, 1989
JOSE PILAPIL, petitioner,
vs.
HON. COURT OF APPEALS and ALATCO TRANSPORTATION
COMPANY, INC., respondents.
Martin Badong, Jr. for petitioner.
Eufronio K. Maristela for private respondent.
PADILLA, J.:
This is a petition to review on certiorari the decision* rendered by the
Court of Appeals dated 19 October 1979 in CA-G.R. No. 57354-R
entitled "Jose Pilapil, plaintiff-appellee versus Alatco Transportation
Co., Inc., defendant-appellant," which reversed and set aside the
judgment of the Court of First Instance of Camarines Sur in Civil Case
No. 7230 ordering respondent transportation company to pay to
petitioner damages in the total sum of sixteen thousand three hundred
pesos (P 16,300.00).
The record discloses the following facts:
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded
respondent-defendant's bus bearing No. 409 at San Nicolas, Iriga City
on 16 September 1971 at about 6:00 P.M. While said bus No. 409 was
in due course negotiating the distance between Iriga City and Naga
City, upon reaching the vicinity of the cemetery of the Municipality of
Baao, Camarines Sur, on the way to Naga City, an unidentified man,
a bystander along said national highway, hurled a stone at the left side
of the bus, which hit petitioner above his left eye. Private respondent's
personnel lost no time in bringing the petitioner to the provincial
hospital in Naga City where he was confined and treated.
Considering that the sight of his left eye was impaired, petitioner was
taken to Dr. Malabanan of Iriga City where he was treated for another
week. Since there was no improvement in his left eye's vision,
petitioner went to V. Luna Hospital, Quezon City where he was treated
by Dr. Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and sustained a
permanent scar above the left eye.
Thereupon, petitioner instituted before the Court of First Instance of
Camarines Sur, Branch I an action for recovery of damages sustained
as a result of the stone-throwing incident. After trial, the court a quo
rendered judgment with the following dispositive part:
Wherefore, judgment is hereby entered:
1. Ordering defendant transportation company to pay
plaintiff Jose Pilapil the sum of P 10,000.00, Philippine
Currency, representing actual and material damages for
causing a permanent scar on the face and injuring the eye-
sight of the plaintiff;
2. Ordering further defendant transportation company to pay
the sum of P 5,000.00, Philippine Currency, to the plaintiff as
moral and exemplary damages;
3. Ordering furthermore, defendant transportation company
to reimburse plaintiff the sum of P 300.00 for his medical
expenses and attorney's fees in the sum of P 1,000.00,
Philippine Currency; and
4. To pay the costs.
SO ORDERED 1
From the judgment, private respondent appealed to the Court of
Appeals where the appeal was docketed as CA-G.R. No. 57354R. On
19 October 1979, the Court of Appeals, in a Special Division of Five,
rendered judgment reversing and setting aside the judgment of the
court a quo.
Hence the present petition.
In seeking a reversal of the decision of the Court of Appeals, petitioner
contends that said court has decided the issue not in accord with law.
Specifically, petitioner argues that the nature of the business of a
transportation company requires the assumption of certain risks, and
the stoning of the bus by a stranger resulting in injury to petitioner-
19 TRANSPO LAW WEEK 5 9/15/19
passenger is one such risk from which the common carrier may not
exempt itself from liability.
We do not agree.
In consideration of the right granted to it by the public to engage in the
business of transporting passengers and goods, a common carrier
does not give its consent to become an insurer of any and all risks to
passengers and goods. It merely undertakes to perform certain duties
to the public as the law imposes, and holds itself liable for any breach
thereof.
Under Article 1733 of the Civil Code, common carriers are required to
observe extraordinary diligence for the safety of the passenger
transported by them, according to all the circumstances of each case.
The requirement of extraordinary diligence imposed upon common
carriers is restated in Article 1755: "A common carrier is bound to carry
the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due regard
for all the circumstances." Further, in case of death of or injuries to
passengers, the law presumes said common carriers to be at fault or
to have acted negligently. 2
While the law requires the highest degree of diligence from common
carriers in the safe transport of their passengers and creates a
presumption of negligence against them, it does not, however, make
the carrier an insurer of the absolute safety of its passengers. 3
Article 1755 of the Civil Code qualifies the duty of extraordinary care,
vigilance and precaution in the carriage of passengers by common
carriers to only such as human care and foresight can provide. what
constitutes compliance with said duty is adjudged with due regard to
all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or
negligence on the part of the common carrier when its passenger is
injured, merely relieves the latter, for the time being, from introducing
evidence to fasten the negligence on the former, because the
presumption stands in the place of evidence. Being a mere
presumption, however, the same is rebuttable by proof that the
common carrier had exercised extraordinary diligence as required by
law in the performance of its contractual obligation, or that the injury
suffered by the passenger was solely due to a fortuitous event. 4
In fine, we can only infer from the law the intention of the Code
Commission and Congress to curb the recklessness of drivers and
operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a
transportation company makes it an insurer of the passenger's safety,
but that its liability for personal injuries sustained by its passenger rests
upon its negligence, its failure to exercise the degree of diligence that
the law requires. 5
Petitioner contends that respondent common carrier failed to rebut the
presumption of negligence against it by proof on its part that it
exercised extraordinary diligence for the safety of its passengers.
We do not agree.
First, as stated earlier, the presumption of fault or negligence against
the carrier is only a disputable presumption. It gives in where contrary
facts are established proving either that the carrier had exercised the
degree of diligence required by law or the injury suffered by the
passenger was due to a fortuitous event. Where, as in the instant case,
the injury sustained by the petitioner was in no way due to any defect
in the means of transport or in the method of transporting or to the
negligent or willful acts of private respondent's employees, and
therefore involving no issue of negligence in its duty to provide safe
and suitable cars as well as competent employees, with the injury
arising wholly from causes created by strangers over which the carrier
had no control or even knowledge or could not have prevented, the
presumption is rebutted and the carrier is not and ought not to be held
liable. To rule otherwise would make the common carrier the insurer
of the absolute safety of its passengers which is not the intention of
the lawmakers.
Second, while as a general rule, common carriers are bound to
exercise extraordinary diligence in the safe transport of their
passengers, it would seem that this is not the standard by which its
liability is to be determined when intervening acts of strangers is to be
determined directly cause the injury, while the contract of carriage
Article 1763 governs:
Article 1763. A common carrier is responsible for
injuries suffered by a passenger on account of the
wilful acts or negligence of other passengers or of
strangers, if the common carrier's employees
through the exercise of the diligence of a good
father of a family could have prevented or stopped
the act or omission.
Clearly under the above provision, a tort committed by a stranger
which causes injury to a passenger does not accord the latter a cause
of action against the carrier. The negligence for which a common
carrier is held responsible is the negligent omission by the carrier's
employees to prevent the tort from being committed when the same
could have been foreseen and prevented by them. Further, under the
same provision, it is to be noted that when the violation of the contract
is due to the willful acts of strangers, as in the instant case, the degree
of care essential to be exercised by the common carrier for the
protection of its passenger is only that of a good father of a family.
Petitioner has charged respondent carrier of negligence on the ground
that the injury complained of could have been prevented by the
common carrier if something like mesh-work grills had covered the
windows of its bus.
We do not agree.
Although the suggested precaution could have prevented the injury
complained of, the rule of ordinary care and prudence is not so
exacting as to require one charged with its exercise to take doubtful or
unreasonable precautions to guard against unlawful acts of strangers.
The carrier is not charged with the duty of providing or maintaining
vehicles as to absolutely prevent any and all injuries to passengers.
Where the carrier uses cars of the most approved type, in general use
by others engaged in the same occupation, and exercises a high
degree of care in maintaining them in suitable condition, the carrier
cannot be charged with negligence in this respect. 6
Finally, petitioner contends that it is to the greater interest of the State
if a carrier were made liable for such stone-throwing incidents rather
than have the bus riding public lose confidence in the transportation
system.
Sad to say, we are not in a position to so hold; such a policy would be
better left to the consideration of Congress which is empowered to
enact laws to protect the public from the increasing risks and dangers
of lawlessness in society.
WHEREFORE, the judgment appealed from is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairperson), Sarmiento and Regalado, concur.
Paras, J., took no part.

20 TRANSPO LAW WEEK 5 9/15/19

 8. [G.R. No. 85691. July 31, 1990.]
BACHELOR EXPRESS, INCORPORATED, and CRESENCIO
RIVERA, Petitioners, v. THE HONORABLE COURT OF APPEALS
(Sixth Division), RICARDO BETER, SERGIA BETER, TEOFILO
RAUTRAUT and ZOETERA RAUTRAUT, Respondents.
Aquino W. Gambe for Petitioners.
Tranquilino O. Calo, Jr. for Private Respondents.
DECISION
GUTIERREZ, JR., J.:
This is a petition for review of the decision of the Court of Appeals
which reversed and set aside the order of the Regional Trial Court,
Branch I, Butuan City dismissing the private respondents’ complaint
for collection of "a sum of money" and finding the petitioners solidarily
liable for damages in the total amount of One Hundred Twenty
Thousand Pesos (P120,000.00). The petitioners also question the
appellate court’s resolution denying a motion for reconsideration.
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and
driven by Cresencio Rivera was the situs of a stampede which resulted
in the death of passengers Ornominio Beter and Narcisa Rautraut.
The evidence shows that the bus came from Davao City on its way to
Cagayan de Oro City passing Butuan City; that while at Tabon-Tabon,
Butuan City, the bus picked up a passenger; that about fifteen (15)
minutes later, a passenger at the rear portion suddenly stabbed a PC
soldier which caused commotion and panic among the passengers;
that when the bus stopped, passengers Ornominio Beter and Narcisa
Rautraut were found lying down the road, the former already dead as
a result of head injuries and the latter also suffering from severe
injuries which caused her death later. The passenger-assailant
alighted from the bus and ran toward the bushes but was killed by the
police. Thereafter, the heirs of Ornomino Beter and Narcisa Rautraut,
private respondents herein (Ricardo Beter and Sergia Beter are the
parents of Ornominio while Teofilo Rautraut and Zoetera [should be
Zotera] Rautraut are the parents of Narcisa) filed a complaint for "sum
of money" against Bachelor Express, Inc. its alleged owner Samson
Yasay, and the driver Rivera.
In their answer, the petitioners denied liability for the death of
Ornominio Beter and Narcisa Rautraut. They alleged that ." . . the
driver was able to transport his passengers safely to their respective
places of destination except Ornominio Beter and Narcisa Rautraut
who jumped off the bus without the knowledge and consent, much
less, the fault of the driver and conductor and the defendants in this
case; the defendant corporation had exercised due diligence in the
choice of its employees to avoid as much as possible accidents; the
incident on August 1, 1980 was not a traffic accident or vehicular
accident, it was an incident or event very much beyond the control of
the defendants; defendants were not parties to the incident
complained of as it was an act of a third party who is not in any way
connected with the defendants and of which the latter have no control
and supervision; . . ." (Rollo, pp. 112-113).
After due trial, the trial court issued an order dated August 8, 1985
dismissing the complaint. chanrobles.com:cralaw:red
Upon appeal however, the trial court’s decision was reversed and set
aside. The dispositive portion of the decision of the Court of Appeals
states:jgc:chanrobles.com.ph
"WHEREFORE, the Decision appealed from is REVERSED and SET
ASIDE and a new one entered finding the appellees jointly and
21 TRANSPO LAW WEEK 5 9/15/19
solidarily liable to pay the plaintiffs-appellants the following
amounts:chanrob1es virtual 1aw library
1) To the heirs of Ornominio Beter, the amount of Seventy Five
Thousand Pesos (P75,000.00) in loss of earnings and support, moral
damages, straight death indemnity and attorney’s fees; and,
2) To the heirs of Narcisa Rautraut, the amount of Forty Five Thousand
Pesos (P45,000.00) for straight death indemnity, moral damages and
attorney’s fees. Costs against appellees." (Rollo, pp. 71-72)
The petitioners now pose the following
questions:jgc:chanrobles.com.ph
"What was the proximate cause of the whole incident? Why were the
passengers on board the bus panicked (sic) and why were they
shoving one another? Why did Narcisa Rautraut and Ornominio Beter
jump off from the running bus?"
The petitioners opine that answers to these questions are material to
arrive at "a fair, just and equitable judgment." (Rollo, p. 5) They claim
that the assailed decision is based on a misapprehension of facts and
its conclusion is grounded on speculation, surmises or conjectures.
As regards the proximate cause of the death of Ornominio Beter and
Narcisa Rautraut, the petitioners maintain that it was the act of the
passenger who ran amuck and stabbed another passenger of the bus.
They contend that the stabbing incident triggered off the commotion
and panic among the passengers who pushed one another and that
"presumably out of fear and moved by that human instinct of self-
preservation Beter and Rautraut jumped off the bus while the bus was
still running resulting in their untimely death." (Rollo, p. 6) Under these
circumstances, the petitioners asseverate that they were not negligent
in the performance of their duties and that the incident was completely
and absolutely attributable to a third person, the passenger who ran
amuck, for without his criminal act, Beter and Rautraut could not have
been subjected to fear and shock which compelled them to jump off
the running bus. They argue that they should not be made liable for
damages arising from acts of third persons over whom they have no
control or supervision.
Furthermore, the petitioners maintain that the driver of the bus, before,
during and after the incident was driving cautiously giving due regard
to traffic rules, laws and regulations. The petitioners also argue that
they are not insurers of their passengers as ruled by the trial court.
The liability, if any, of the petitioners is anchored on culpa contractual
or breach of contract of carriage. The applicable provisions of law
under the New Civil Code are as follows:jgc:chanrobles.com.ph
"ART. 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both by land, water, or air, for compensation,
offering their services to the public.
"ART. 1733. Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of
each case.
x x x
"ART. 1755. A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances.
"ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in Articles 1733 and 1755."cralaw virtua1aw
library
There is no question that Bachelor Express, Inc. is a common carrier. (5) Enciclopedia Juridica Española, 309)
Hence, from the nature of its business and for reasons of public policy
Bachelor Express, Inc. is bound to carry its passengers safely as far As will be seen, these authorities agree that some extraordinary
as human care and foresight can provide using the utmost diligence of circumstance independent of the will of the obligor, or of his
very cautious persons, with a due regard for all the circumstances. employees, is an essential element of a caso fortuito. . . ."cralaw
virtua1aw library
In the case at bar, Ornominio Beter and Narcisa Rautraut were
passengers of a bus belonging to petitioner Bachelor Express, Inc. The running amuck of the passenger was the proximate cause of the
and, while passengers of the bus, suffered injuries which caused their incident as it triggered off a commotion and panic among the
death. Consequently, pursuant to Article 1756 of the Civil Code, passengers such that the passengers started running to the sole exit
petitioner Bachelor Express, Inc. is presumed to have acted shoving each other resulting in the falling off the bus by passengers
negligently unless it can prove that it had observed extraordinary Beter and Rautraut causing them fatal injuries. The sudden act of the
diligence in accordance with Articles 1733 and 1755 of the New Civil passenger who stabbed another passenger in the bus is within the
Code. context of force majeure.

Bachelor Express, Inc. denies liability for the death of Beter and However, in order that a common carrier may be absolved from liability
Rautraut on its posture that the death of the said passengers was in case of force majeure, it is not enough that the accident was caused
caused by a third person who was beyond its control and supervision. by force majeure. The common carrier must still prove that it was not
In effect, the petitioner, in order to overcome the presumption of fault negligent in causing the injuries resulting from such accident. Thus, as
or negligence under the law, states that the vehicular incident resulting early as 1912, we ruled:jgc:chanrobles.com.ph
in the death of passengers Beter and Rautraut was caused by force
majeure or caso fortuito over which the common carrier did not have "From all the foregoing, it is concluded that the defendant is not liable
any control. for the loss and damage of the goods shipped on the lorcha Pilar by
the Chinaman, Ong Bien Sip, inasmuch as such loss and damage
Article 1174 of the present Civil Code states:jgc:chanrobles.com.ph were the result of a fortuitous event or force majeure, and there was
no negligence or lack of care and diligence on the part of the defendant
"Except in cases expressly specified by law, or when it is otherwise company or its agents." (Tan Chiong Sian v. Inchausti & Co., 22 Phil.
declared by stipulations, or when the nature of the obligation requires 152 [1912] Emphasis supplied).
the assumption of risk, no person shall be responsible for those events
which could not be foreseen, or which though foreseen, were This principle was reiterated in a more recent case, Batangas Laguna
inevitable."cralaw virtua1aw library Tayabas Co. v. Intermediate Appellate Court (167 SCRA 379 [1988]),
wherein we ruled:jgc:chanrobles.com.ph
The above - mentioned provision was substantially copied from Article
1105 of the old Civil Code which states" ". . . [F]or their defense of force majeure or act of God to prosper the
accident must be due to natural causes and exclusively without human
"No one shall be liable for events which could not be foreseen or which, intervention." (Emphasis supplied)
even if foreseen, were inevitable, with the exception of the cases in
which the law expressly provides otherwise and those in which the Therefore, the next question to be determined is whether or not the
obligation itself imposes liability."cralaw virtua1aw library petitioner’s common carrier observed extraordinary diligence to
safeguard the lives of its passengers.
In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined
"events" which cannot be foreseen and which, having been foreseen, In this regard the trial court and the appellate court arrived at conflicting
are inevitable in the following manner:jgc:chanrobles.com.ph factual findings.

". . . The Spanish authorities regard the language employed as an
effort to define the term ‘caso fortuito’ and hold that the two
expressions are synonymous. (Manresa Comentarios al Codigo Civil
Español, vol. 8, pp. 88 et seq.; Scaevola, Codigo Civil, vol. 19, pp. 526
et seq.)
The antecedent to Article 1105 is found in Law II, Title 33, Partida 7,
which defines caso fortuito as ‘ocasion que acaese por aventura de
que non se puede ante ver. E son estos, derrivamientos de casas e
fuego que enciende a so ora, e quebrantamiento de navio, fuerca de
ladrones.’ (An event that takes place by incident and could not have
been foreseen. Examples of this are destruction of houses,
unexpected fire, shipwreck, violence of robbers. . . .)
Escriche defines caso fortuito as an unexpected event or act of God
which could neither be foreseen nor resisted, such as floods, torrents,
shipwrecks, conflagrations, lightning, compulsion, insurrections,
destruction of buildings by unforeseen accidents and other
occurrences of a similar nature.
In discussing and analyzing the term caso fortuito the Enciclopedia
Juridica Española says: ‘In a legal sense and, consequently, also in
relation to contracts, a caso fortuito presents the following essential
characteristics: (1 ) The cause of the unforeseen and unexpected
occurrence, or of the failure of the debtor to comply with his obligation,
must be independent of the human will. (2) It must be impossible to
foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid. (3) The occurrence must be
such as to render it impossible for the debtor to fulfill his obligation in
a normal manner. And (4) the obligor (debtor) must be free from any
participation in the aggravation of the injury resulting to the creditor.
22 TRANSPO LAW WEEK 5 9/15/19
The trial court found the following facts:jgc:chanrobles.com.ph
"The parties presented conflicting evidence as to how the two
deceased Narcisa Rautruat and Ornominio Beter met their deaths.
However, from the evidence adduced by the plaintiffs, the Court could
not see why the two deceased could have fallen off the bus when their
own witnesses testified that when the commotion ensued inside the
bus, the passengers pushed and shoved each other towards the door
apparently in order to get off from the bus through the door. But the
passengers also could not pass through the door because according
to the evidence the door was locked.
On the other hand, the Court is inclined to give credence to the
evidence adduced by the defendants that when the commotion
ensued inside the bus, the two deceased panicked and, in state of
shock and fear, they jumped off from the bus by passing through the
window. chanrobles.com : virtual law library
It is the prevailing rule and settled jurisprudence that transportation
companies are not insurers of their passengers. The evidence on
record does not show that defendants’ personnel were negligent in
their duties. The defendants’ personnel have every right to accept
passengers absent any manifestation of violence or drunkenness. If
and when such passengers harm other passengers without the
knowledge of the transportation company s personnel, the latter
should not be faulted." (Rollo, pp. 46-47)
A thorough examination of the records, however, show that there are
material facts ignored by the trial court which were discussed by the
appellate court to arrive at a different conclusion. These circumstances
show that the petitioner common carrier was negligent in the provision COURT:
of safety precautions so that its passengers may be transported safely Let the witness answer. Estimate only, the conductor experienced.
to their destinations. The appellate court
states: chanrobles.com:cralaw:red Witness:
Not less than 30 to 40 miles.
"A critical eye must be accorded the lower court’s conclusions of fact
in its tersely written ratio decidendi. The lower court concluded that the COURT:
door of the bus was closed; secondly, the passengers, specifically the Kilometers or miles?
two deceased, jumped out of the window. The lower court therefore A Miles.
concluded that the defendant common carrier is not liable for the death
of the said passengers which it implicitly attributed to the unforeseen Atty. Gambe:chanrob1es virtual 1aw library
acts of the unidentified passenger who went amuck. Q That is only your estimate by your experience?
A Yes, sir, estimate.
There is nothing in the record to support the conclusion that the solitary
door of the bus was locked as to prevent the passengers from passing (Tsn., pp. 4-5, Oct. 17, 1983).
through. Leonila Cullano, testifying for the defense, clearly stated that
the conductor opened the door when the passengers were shouting At such speed of not less than 30 to 40 miles . . ., or about 48 to 65
that the bus stop while they were in a state of panic. Sergia Beter kilometers per hour, the speed of the bus could scarcely be considered
categorically stated that she actually saw her son fall from the bus as slow considering that according to Collango himself, the bus had just
the door was forced open by the force of the onrushing passengers. come from a full stop after picking a passenger (Tsn, p. 4, id.) and that
the bus was still on its second or third gear (Tsn., p. 12, id.).
Pedro Collango, on the other hand, testified that he shut the door after
the last passenger had boarded the bus. But he had quite conveniently In the light of the foregoing, the negligence of the common carrier,
neglected to say that when the passengers had panicked, he himself through its employees, consisted of the lack of extraordinary diligence
panicked and had gone to open the door. Portions of the testimony of required of common carriers, in exercising vigilance and utmost care
Leonila Cullano, quoted below, are illuminating: of the safety of its passengers, exemplified by the driver’s belated stop
and the reckless opening of the doors of the bus while the same was
x x x
Q When you said the conductor opened the door, the door at the front travelling at an appreciably fast speed. At the same time, the common
carrier itself acknowledged, through its administrative officer,
or rear portion of the bus?
Benjamin Granada, that the bus was commissioned to travel and take
A: Front door.
on passengers and the public at large, while equipped with only a
solitary door for a bus its size and loading capacity, in contravention of
Q And these two persons whom you said alighted, where did they
rules and regulations provided for under the Land Transportation and
pass, the fron(t) door or rear door?
A Front door. Traffic Code (RA 4136 as amended.)" (Rollo, pp. 23-26)

x x x Considering the factual findings of the Court of Appeals - the bus driver
did not immediately stop the bus at the height of the commotion; the
(Tsn., p. 4, Aug. 8, 1984) bus was speeding from a full stop; the victims fell from the bus door
x x x when it was opened or gave way while the bus was still running; the
conductor panicked and blew his whistle after people had already
Q What happened after there was a commotion at the rear portion of fallen off the bus; and the bus was not properly equipped with doors in
the bus? accordance with law — it is clear that the petitioners have failed to
overcome the presumption of fault and negligence found in the law
A When the commotion occurred, I stood up and I noticed that there governing common carriers.
was a passenger who was sounded (sic). The conductor panicked
because the passengers were shouting ‘stop, stop’. The conductor The petitioners’ argument that the petitioners "are not insurers of their
opened the bus.’" passengers" deserves no merit in new of the failure of the petitioners
to prove that the deaths of the two passengers were exclusively due
(Tsn., p. 3, August 8, 1984). to force majeure and not to the failure of the petitioners to observe
extraordinary diligence in transporting safely the passengers to their
Accordingly, there is no reason to believe that the deceased destinations as warranted by law. (See Batangas Laguna Tayabas Co.
passengers jumped from the window when it was entirely possible for v. Intermediate Appellate Court, supra).
them to have alighted through the door. The lower court’s reliance on
the testimony of Pedro Collango, as the conductor and employee of The petitioners also contend that the private respondents failed to
the common carrier, is unjustified, in the light of the clear testimony of show to the court that they are the parents of Ornominio Beter and
Leonila Cullano as the sole uninterested eyewitness of the entire Narcisa Rautraut respectively and therefore have no legal personality
episode. Instead we find Pedro Collango’s testimony to be infused by to sue the petitioners. This argument deserves scant consideration.
bias and fraught with inconsistencies, if not notably unreliable for lack We find this argument a belated attempt on the part of the petitioners
of veracity. On direct examination, he testified: to avoid liability for the deaths of Beter and Rautraut. The private
respondents were identified as the parents of the victims by witnesses
x x x during the trial and the trial court recognized them as such. The trial
Q So what happened to the passengers inside your bus? court dismissed the complaint solely on the ground that the petitioners
A Some of the passengers jumped out of the window. were not negligent.
COURT: Finally, the amount of damages awarded to the heirs of Beter and
Q While the bus was in motion? Rautraut by the appellate court is supported by the evidence. The
A Yes, your Honor, but the speed was slow because we have just appellate court stated: chanrobles.com.ph : virtual law library
picked up a passenger.
Atty. Gambe: "Ornominio Beter was 32 years of age at the time of his death, single,
Q You said that at the time of the incident the bus was running slow in good health and rendering support and service to his mother. As far
because you have just picked up a passenger. Can you estimate what as Narcisa Rautraut is concerned, the only evidence adduced is to the
was your speed at that time?. effect that at her death, she was 23 years of age, in good health and
without visible means of support.
Atty. Calo:
No basis, your Honor, he is neither a driver nor a conductor. In accordance with Art. 1764 in conjunction with Art. 2206 of the Civil
23 TRANSPO LAW WEEK 5 9/15/19
Code, and established jurisprudence, several factors may be
considered in determining the award of damages, namely: 1) life
expectancy (considering the state of health of the deceased and the
mortality tables are deemed conclusive) and loss of earning capacity;
(2) pecuniary loss, loss of support and service; and (3) moral and
mental suffering (Alcantara, et el. v. Surro, Et Al., 93 Phil. 470).

In the case of People v. Daniel (No. L-66551, April 25, 1985, 136
SCRA 92, at page 104), the High Tribunal, reiterating the rule in Villa
Rey Transit, Inc. v. Court of Appeals (31 SCRA 511), stated that the
amount of loss of earning capacity is based mainly on two factors,
namely, (1) the number of years on the basis of which the damages
shall be computed; and (2) the rate at which the losses sustained by
the heirs should be fixed.

As the formula adopted in the case of Davila v. Philippine Air Lines, 49

SCRA 497, at the age of 30 one’s normal life expectancy is 33 1/3
years based on the American Expectancy Table of Mortality (2/3 x 80-
32). By taking into account the pace and nature of the life of a
carpenter, it is reasonable to make allowances for these
circumstances and reduce the life expectancy of the deceased
Ornominio Beter to 25 years (People v. Daniel, supra). To fix the rate
of losses it must be noted that Art. 2206 refers to gross earnings less
necessary living expenses of the deceased, in other words, only net
earnings are to be considered (People v. Daniel, supra; Villa Rey
Transit, Inc. v. Court of Appeals, supra).

Applying the foregoing rules with respect to Ornominio Beter, it is both

just and reasonable, considering his social standing and position, to
fix the deductible, living and incidental expenses at the sum of Four
Hundred Pesos (P400.00) a month, or Four Thousand Eight Hundred
Pesos (P4,800.00) annually. As to his income, considering the
irregular nature of the work of a daily wage carpenter which is
seasonal, it is safe to assume that he shall have work for twenty (20)
days a month at Twenty Five Pesos (P25.00) a day or Five Hundred
Pesos (P500.00) a month. Annually, his income would amount to Six
Thousand Pesos (P6,000.00) or One Hundred Fifty Thousand Pesos
(P150,000.00) for twenty five years. Deducting therefrom his
necessary expenses, his heirs would be entitled to Thirty Thousand
Pesos (P30,000.00) representing loss of support and service
(P150,000.00 less P120,000.00). In addition, his heirs are entitled to
Thirty Thousand Pesos (P30,000.00) as straight death indemnity
pursuant to Article 2206 (People v. Daniel, supra). For damages for
their moral and mental anguish, his heirs are entitled to the reasonable
sum of P10,000.00 as an exception to the general rule against moral
damages in case of breach of contract rule Art. 2200 (Necesito v.
Paras, 104 Phil. 75). As attorney’s fees, Beter’s heirs are entitled to
P5,000.00. All in all, the plaintiff-appellants Ricardo and Sergia Beter
as heirs of their son Ornominio are entitled to an indemnity of Seventy
Five Thousand Pesos (P75,000.00). chanrobles virtual lawlibrary

In the case of Narcisa Rautraut, her heirs are entitled to a straight

death indemnity of Thirty Thousand Pesos (P30,000.00), to moral
damages in the amount of Ten Thousand Pesos (P10,000.00) and
Five Thousand Pesos (P5,000.00) as attorneys fees, or a total of Forty
Five Thousand Pesos (P45,000.00) as total indemnity for her death in
the absence of any evidence that she had visible means of support."
(Rollo, pp. 30-31)

WHEREFORE, the instant petition is DISMISSED. The questioned

decision dated May 19, 1988 and the resolution dated August 1, 1988
of the Court of Appeals are AFFIRMED.

SO ORDERED.

Fernan C.J., Feliciano, Bidin and Cortes, JJ., concur.

24 TRANSPO LAW WEEK 5 9/15/19

 9. [G.R. NO. 161730 : January 28, 2005]
JAPAN AIRLINES, Petitioner, v. MICHAEL ASUNCION and
JEANETTE ASUNCION, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This Petition for Review seeks to reverse and set aside the October 9,
2002 decision1 of the Court of Appeals and its January 12, 2004
resolution,2 which affirmed in toto the June 10, 1997 decision of the
Regional Trial Court of Makati City, Branch 61 in Civil Case No. 92-
3635.3
On March 27, 1992, respondents Michael and Jeanette Asuncion left
Manila on board Japan Airlines' (JAL) Flight 742 bound for Los
Angeles. Their itinerary included a stop-over in Narita and an overnight
stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs. Noriko Etou-
Higuchi of JAL endorsed their applications for shore pass and directed
them to the Japanese immigration official.4 A shore pass is required of
a foreigner aboard a vessel or aircraft who desires to stay in the
neighborhood of the port of call for not more than 72 hours.
During their interview, the Japanese immigration official noted that
Michael appeared shorter than his height as indicated in his passport.
Because of this inconsistency, respondents were denied shore pass
entries and were brought instead to the Narita Airport Rest House
where they were billeted overnight.
The immigration official also handed Mrs. Higuchi a Notice5 where it
was stated that respondents were to be "watched so as not to escape".
Mr. Atsushi Takemoto of the International Service Center (ISC), the
agency tasked by Japan's Immigration Department to handle
passengers who were denied shore pass entries, brought respondents
to the Narita Airport Rest House where they stayed overnight until their
departure the following day for Los Angeles. Respondents were
charged US$400.00 each for their accommodation, security service
and meals.
On December 12, 1992, respondents filed a complaint for
damages6 claiming that JAL did not fully apprise them of their travel
requirements and that they were rudely and forcibly detained at Narita
Airport.
JAL denied the allegations of respondents. It maintained that the
refusal of the Japanese immigration authorities to issue shore passes
to respondents is an act of state which JAL cannot interfere with or
prevail upon. Consequently, it cannot impose upon the immigration
authorities that respondents be billeted at Hotel Nikko instead of the
airport resthouse.7
On June 10, 1997, the trial court rendered its decision, the dispositive
portion of which reads:
WHEREFORE PREMISES CONSIDERED, judgment is hereby
rendered in favor of plaintiffs ordering defendant JAL to pay plaintiffs
as follows:
1. the sum of US$800.00 representing the expenses incurred at the
Narita Airport with interest at 12% per annum from March 27, 1992
until the sum is fully paid;
2. the sum of P200,000.00 for each plaintiff as moral damages;
3. the amount of P100,000.00 for each plaintiff as exemplary damages;
4. the amount of P100,000.00 as attorney's fees; andcralawlibrary
5. costs of suit.
SO ORDERED.8
The trial court dismissed JAL's counterclaim for litigation expenses,
exemplary damages and attorney's fees.
On October 9, 2002, the Court of Appeals affirmed in toto the decision
of the trial court. Its motion for reconsideration having been
denied,9 JAL now files the instant petition.
The basic issue for resolution is whether JAL is guilty of breach of
contract.
Under Article 1755 of the Civil Code, a common carrier such as JAL is
bound to carry its passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious
25 TRANSPO LAW WEEK 5 9/15/19
persons, with due regard for all the circumstances. When an airline
issues a ticket to a passenger, confirmed for a particular flight on a
certain date, a contract of carriage arises. The passenger has every
right to expect that he be transported on that flight and on that date
and it becomes the carrier's obligation to carry him and his luggage
safely to the agreed destination.10 If the passenger is not so
transported or if in the process of transporting he dies or is injured, the
carrier may be held liable for a breach of contract of carriage.11
We find that JAL did not breach its contract of carriage with
respondents. It may be true that JAL has the duty to inspect whether
its passengers have the necessary travel documents, however, such
duty does not extend to checking the veracity of every entry in these
documents. JAL could not vouch for the authenticity of a passport and
the correctness of the entries therein. The power to admit or not an
alien into the country is a sovereign act which cannot be interfered with
even by JAL. This is not within the ambit of the contract of carriage
entered into by JAL and herein respondents. As such, JAL should not
be faulted for the denial of respondents' shore pass applications.
Prior to their departure, respondents were aware that upon arrival in
Narita, they must secure shore pass entries for their overnight stay.
Respondents' mother, Mrs. Imelda Asuncion, insisted though that Ms.
Linda Villavicencio of JAL assured her that her children would be
granted the passes.12 This assertion was satisfactorily refuted by Ms.
Villavicencio's testimony during the cross examination, to wit:
ATTY. GONZAGA:
Q I will show to you Exh. 9 which is the TIM and on page 184 hereof,
particularly number 10, and I quote, "Those holding tickets with
confirmed seats and other documents for their onward journey and
continuing their journey to a third country provided that they obtain an
indorsement with an application of shore pass or transit pass from the
airline ground personnel before clearing the immigration formality?"
WITNESS:
A Yes, Sir.
Q Did you tell this provision to Mrs.
Asuncion?chanroblesvirtualawlibrary
A Yes, Sir. I did.
Q Are you sure?chanroblesvirtualawlibrary
A Yes, Sir.
Q Did you give a copy?chanroblesvirtualawlibrary
A No, Sir, I did not give a copy but verbally I explained to her the
procedure they have to undergo when they get to narita airport.
Q And you read the contents of this [TIM]?chanroblesvirtualawlibrary
A No, Sir, I did not read it to her but I explained to her the procedure
that each passenger has to go through before when they get to narita
airport before they line up in the immigration counter.
Q In other words, you told Mrs. Asuncion the responsibility of securing
shore passes bears solely on the passengers only?
A Yes, Sir.
Q That the airline has no responsibility whatsoever with regards (sic)
to the application for shore passes?
A Yes, Sir.13
Next, respondents claimed that petitioner breached its contract of
carriage when it failed to explain to the immigration authorities that
they had overnight vouchers at the Hotel Nikko Narita. They imputed
that JAL did not exhaust all means to prevent the denial of their shore
pass entry applications.
To reiterate, JAL or any of its representatives have no authority to
interfere with or influence the immigration authorities. The most that
could be expected of JAL is to endorse respondents' applications,
which Mrs. Higuchi did immediately upon their arrival in Narita.
As Mrs. Higuchi stated during her deposition:
ATTY. QUIMBO
Q: Madam Witness, what assistance did you give, if any, to the
plaintiffs during this interview?chanroblesvirtualawlibrary
A: No, I was not present during their interview. I cannot assist.
Q: Why not?chanroblesvirtualawlibrary
A: It is forbidden for a civilian personnel to interfere with the
Immigration agent's duties.14
Q: During the time that you were in that room and you were given this
notice for you to sign, did you tell the immigration agent that Michael
and Jeanette Asuncion should be allowed to stay at the Hotel Nikko
Narita because, as passengers of JAL, and according to the plaintiff,
they had vouchers to stay in that hotel that
night?chanroblesvirtualawlibrary
A: No, I couldn't do so.
Q: Why not?chanroblesvirtualawlibrary
A: This notice is evidence which shows the decision of immigration
authorities. It shows there that the immigration inspector also
designated Room 304 of the Narita Airport Resthouse as the place
where the passengers were going to wait for their outbound
flight.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
I cannot interfere with that decision.15
Mrs. Higuchi did all she could to assist the respondents. Upon being
notified of the denial of respondents' applications, Mrs. Higuchi
immediately made reservations for respondents at the Narita Airport
Rest House which is really more a hotel than a detention house as
claimed by respondents.16
More importantly, nowhere in respondent Michael's testimony did he
state categorically that Mrs. Higuchi or any other employee of JAL
treated them rudely or exhibited improper behavior throughout their
stay. We therefore find JAL not remiss in its obligations as a common
carrier.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Moral damages may be recovered in cases where one willfully causes
injury to property, or in cases of breach of contract where the other
party acts fraudulently or in bad faith. Exemplary damages are
imposed by way of example or correction for the public good, when the
party to a contract acts in wanton, fraudulent, oppressive or malevolent
manner. Attorney's fees are allowed when exemplary damages are
awarded and when the party to a suit is compelled to incur expenses
to protect his interest.17 There being no breach of contract nor proof
that JAL acted in wanton, fraudulent or malevolent manner, there is no
basis for the award of any form of damages.
Neither should JAL be held liable to reimburse respondents the
amount of US$800.00. It has been sufficiently proven that the amount
pertained to ISC, an agency separate and distinct from JAL, in
payment for the accommodations provided to respondents. The
payments did not in any manner accrue to the benefit of JAL.
However, we find that the Court of Appeals correctly dismissed JAL's
counterclaim for litigation expenses, exemplary damages and
attorney's fees. The action was filed by respondents in utmost good
faith and not manifestly frivolous. Respondents honestly believed that
JAL breached its contract. A person's right to litigate should not be
penalized by holding him liable for damages. This is especially true
when the filing of the case is to enforce what he believes to be his
rightful claim against another although found to be erroneous.18
WHEREFORE, in view of the foregoing, the instant petition is PARTLY
GRANTED. The October 9, 2002 decision of the Court of Appeals and
its January 12, 2004 resolution in CA-G.R. CV No. 57440, are
REVERSED and SET ASIDE insofar as the finding of breach on the
part of petitioner and the award of damages, attorney's fees and costs
of the suit in favor of respondents is concerned. Accordingly, there
being no breach of contract on the part of petitioner, the award of
actual, moral and exemplary damages, as well as attorney's fees and
costs of the suit in favor of respondents Michael and Jeanette
Asuncion, is DELETED for lack of basis. However, the dismissal for
lack of merit of petitioner's counterclaim for litigation expenses,
exemplary damages and attorney's fees, is SUSTAINED. No
pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.
Quisumbing, J., no part.

26 TRANSPO LAW WEEK 5 9/15/19

 10. [G.R. No. 60501. March 5, 1993.]
CATHAY PACIFIC AIRWAYS, LTD, Petitioner, v. COURT OF
APPEALS and TOMAS L. ALCANTARA, Respondents.
Siguion-Reyna, Montecillo & Ongsiako and Tomacruz, Manguiat
& Associates for Petitioner.
Tanjuatco, Oreta, Tanjuatco, Berenger & Corpus for Private
Respondent.
SYLLABUS
1. CIVIL LAW; CONTRACT OF CARRIAGE; BREACH THEREOF;
PETITIONER BREACHED ITS CONTRACT OF CARRIAGE WITH
PRIVATE RESPONDENT WHEN IT FAILED TO DELIVER HIS
LUGGAGE AT THE DESIGNATED PLACE AND TIME. — Petitioner
breached its contract of carriage with private respondent when it failed
to deliver his luggage at the designated place and time, it being the
obligation of a common carrier to carry its passengers and their
luggage safely to their destination, which includes the duty not to delay
their transportation, and the evidence shows that petitioner acted
fraudulently or in bad faith.
2. DAMAGES; MORAL AND EXEMPLARY DAMAGES PREDICATED
UPON A BREACH OF CONTRACT OF CARRIAGE; RECOVERABLE
ONLY IN INSTANCES WHERE THE MISHAP RESULTS IN DEATH
OF A PASSENGER, OR WHERE THE CARRIER IS GUILTY OF
FRAUD OR BAD FAITH; THE CONDUCT OF PETITIONER’S
REPRESENTATIVE TOWARDS RESPONDENT JUSTIFIES THE
GRANT OF MORAL AND EXEMPLARY DAMAGES IN CASE AT
BAR. — Moral damages predicated upon a breach of contract of
carriage may only be recoverable in instances where the mishap
results in death of a passenger, or where the carrier is guilty of fraud
or bad faith. The language and conduct of petitioner’s representative
towards respondent Alcantara was discourteous or arbitrary to justify
the grant of moral damages. The CATHAY representative was not only
indifferent and impatient; he was also rude and insulting. He simply
advised Alcantara to buy anything he wanted. But even that was not
sincere because the representative knew that the passenger was
limited only to $20.00 which, certainly, was not enough to purchase
comfortable clothings appropriate for an executive conference.
Considering that Alcantara was not only a revenue passenger but even
paid for a first class airline accommodation and accompanied at the
time by the Commercial Attache of the Philippine Embassy who was
assisting him in his problem, petitioner or its agents should have been
more courteous and accommodating to private respondent, instead of
giving him a curt reply, "What can we do, the baggage is missing. I
cannot do anything . . . Anyhow, you can buy anything you need,
charged to Cathay Pacific." Where in breaching the contract of
carriage the defendant airline is not shown to have acted fraudulently
or in bad faith, liability for damages is limited to the natural and
probable consequences of the breach of obligation which the parties
had foreseen or could have reasonably foreseen. In that case, such
liability does not include moral and exemplary damages. Conversely,
if the defendant airline is shown to have acted fraudulently or in bad
faith, the award of moral and exemplary damages is proper.
3. TEMPERATE DAMAGES; RECOVERABLE ONLY UPON PROOF
THAT THE CLAIMANT SUSTAINED SOME PECUNIARY LOSS. —
However, respondent Alcantara is not entitled to temperate damages,
contrary to the ruling of the court a quo, in the absence of any showing
that he sustained some pecuniary loss. It cannot be gainsaid that
respondent’s luggage was ultimately delivered to him without serious
or appreciable damage.
4. WARSAW CONVENTION; DOES NOT OPERATE AS AN
EXCLUSIVE ENUMERATION OF THE INSTANCES FOR
DECLARING A CARRIER LIABLE FOR BREACH OF CONTRACT OF
CARRIAGE OR AS AN ABSOLUTE LIMIT OF THE EXTENT OF
THAT LIABILITY; DOES NOT PRECLUDE THE OPERATION OF
THE CIVIL CODE AND OTHER PERTINENT LAWS. — As We have
repeatedly held, although the Warsaw Convention has the force and
effect of law in this country, being a treaty commitment assumed by
the Philippine government, said convention does not operate as an
27 TRANSPO LAW WEEK 5 9/15/19
exclusive enumeration of the instances for declaring a carrier liable for
breach of contract of carriage or as an absolute limit of the extent of
that liability. The Warsaw Convention declares the carrier liable for
damages in the enumerated cases and under certain limitations.
However, it must not be construed to preclude the operation of the Civil
Code and other pertinent laws. It does not regulate, much less exempt,
the carrier from liability for damages for violating the rights of its
passengers under the contract of carriage, especially if wilfull
misconduct on the part of the carrier’s employees is found or
established, which is clearly the case before Us.
DECISION
BELLOSILLO, J.:
This is a petition for review on certiorari of the decision of the Court of
Appeals which affirmed with modification that of the trial court by
increasing the award of damages in favor of private respondent Tomas
L. Alcantara.
The facts are undisputed: On 19 October 1975, respondent Tomas L.
Alcantara was a first class passenger of petitioner Cathay Pacific
Airways, Ltd. (CATHAY for brevity) on its Flight No. CX-900 from
Manila to Hongkong and onward from Hongkong to Jakarta on Flight
No. CX-711. The purpose of his trip was to attend the following day,
20 October 1975, a conference with the Director General of Trade of
Indonesia, Alcantara being the Executive Vice-President and General
Manager of Iligan Cement Corporation, Chairman of the Export
Committee of the Philippine Cement Corporation, and representative
of the Cement Industry Authority and the Philippine Cement
Corporation. He checked in his luggage which contained not only his
clothing and articles for personal use but also papers and documents
he needed for the conference.
Upon his arrival in Jakarta, respondent discovered that his luggage
was missing. When he inquired about his luggage from CATHAY’s
representative in Jakarta, private respondent was told that his luggage
was left behind in Hongkong. For this, respondent Alcantara was
offered $20.00 as "inconvenience money" to buy his immediate
personal needs until the luggage could be delivered to him.
His luggage finally reached Jakarta more than twenty four (24) hours
after his arrival. However, it was not delivered to him at his hotel but
was required by petitioner to be picked up by an official of the
Philippine Embassy.
On 1 March 1976, respondent filed his complaint against petitioner
with the Court of First Instance (now Regional Trial Court) of Lanao del
Norte praying for temperate, moral and exemplary damages, plus
attorney’s fees.
On 18 April 1976, the trial court rendered its decision ordering
CATHAY to pay Plaintiff P20,000.00 for moral damages, P5,000.00 for
temperate damages, P10,000.00 for exemplary damages, and
P25,000.00 for attorney’s fees, and the costs. 1
Both parties appealed to the Court of Appeals. CATHAY assailed the
conclusion of the trial court that it was accountable for breach of
contract and questioned the non-application by the court of the
Warsaw Convention as well as the excessive damages awarded on
the basis of its finding that respondent Alcantara was rudely treated by
petitioner’s employees during the time that his luggage could not be
found. For his part, respondent Alcantara assigned as error the failure
of the trial court to grant the full amount of damages sought in his
complaint.
On 11 November 1981, respondent Court of Appeals rendered its
decision affirming the findings of fact of the trial court but modifying its
award by increasing the moral damages to P80,000.00, exemplary
damages to P20,000.00 and temperate or moderate damages to
P10,000.00. The award of P25,000.00 for attorney’s fees was
maintained.
The same grounds raised by petitioner in the Court of Appeals are
reiterated before Us. CATHAY contends that: (1) the Court of Appeals
erred in holding petitioner liable to respondent Alcantara for moral,
exemplary and temperate damages as well as attorney’s fees; and, (2)
the Court of Appeals erred in failing to apply the Warsaw Convention
on the liability of a carrier to its passengers.
On its first assigned error, CATHAY argues that although it failed to
transport respondent Alcantara’s luggage on time, the one-day delay
was not made in bad faith so as to justify moral, exemplary and
temperate damages. It submits that the conclusion of respondent
appellate court that private respondent was treated rudely and
arrogantly when he sought assistance from CATHAY’s employees has
no factual basis, hence, the award of moral damages has no leg to
stand on.
Petitioner’s first assigned error involves findings of fact which are not
reviewable by this Court. 2 At any rate, it is not impressed with merit.
Petitioner breached its contract of carriage with private respondent
when it failed to deliver his luggage at the designated place and time,
it being the obligation of a common carrier to carry its passengers and
their luggage safely to their destination, which includes the duty not to
delay their transportation, 3 and the evidence shows that petitioner
acted fraudulently or in bad faith.
Moral damages predicated upon a breach of contract of carriage may
only be recoverable in instances where the mishap results in death of
a passenger, 4 or where the carrier is guilty of fraud or bad faith. 5
In the case at bar, both the trial court and the appellate court found
that CATHAY was grossly negligent and reckless when it failed to
deliver the luggage of petitioner at the appointed place and time. We
agree. CATHAY alleges that as a result of mechanical trouble, all
pieces of luggage on board the first aircraft bound for Jakarta were
unloaded and transferred to the second aircraft which departed an
hour and a half later. Yet, as the Court of Appeals noted, petitioner
was not even aware that it left behind private respondent’s luggage
until its attention was called by the Hongkong Customs authorities.
More, bad faith or otherwise improper conduct may be attributed to the
employees of petitioner. While the mere failure of CATHAY to deliver
respondent’s luggage at the agreed place and time did not ipso facto
amount to willful misconduct since the luggage was eventually
delivered to private respondent, albeit belatedly, 6 We are persuaded
that the employees of CATHAY acted in bad faith. We refer to the
deposition of Romulo Palma, Commercial Attache of the Philippine
Embassy at Jakarta, who was with respondent Alcantara when the
latter sought assistance from the employees of CATHAY. This
deposition was the basis of the findings of the lower courts when both
awarded moral damages to private Respondent. Hereunder is part of
Palma’s testimony — does not operate as an exclusive enumeration of the instances for
"Q: What did Mr. Alcantara say, if any?
A. Mr. Alcantara was of course . . . . I could understand his position.
He was furious for the experience because probably he was thinking
he was going to meet the Director-General the following day and, well,
he was with no change of proper clothes and so, I would say, he was
not happy about the situation.
Q: What did Mr. Alcantara say?
A: He was trying to press the fellow to make the report and if possible
make the delivery of his baggage as soon as possible.
Q: And what did the agent or duty officer say, if any?
A: The duty officer, of course, answered back saying ‘What can we do,
the baggage is missing. I cannot do anything.’ something like
it.’Anyhow you can buy anything you need, charged to Cathay Pacific.’
Q: What was the demeanor or comportment of the duty officer of
Cathay Pacific when he said to Mr. Alcantara ‘You can buy anything
chargeable to Cathay Pacific’?
A: If I had to look at it objectively, the duty officer would like to dismiss
the affair as soon as possible by saying indifferently ‘Don’t worry. It
can be found.’"
28 TRANSPO LAW WEEK 5 9/15/19
Indeed, the aforequoted testimony shows that the language and
conduct of petitioner’s representative towards respondent Alcantara
was discourteous or arbitrary to justify the grant of moral damages.
The CATHAY representative was not only indifferent and impatient; he
was also rude and insulting. He simply advised Alcantara to buy
anything he wanted. But even that was not sincere because the
representative knew that the passenger was limited only to $20.00
which, certainly, was not enough to purchase comfortable clothings
appropriate for an executive conference. Considering that Alcantara
was not only a revenue passenger but even paid for a first class airline
accommodation and accompanied at the time by the Commercial
Attache of the Philippine Embassy who was assisting him in his
problem, petitioner or its agents should have been more courteous and
accommodating to private respondent, instead of giving him a curt
reply, "What can we do, the baggage is missing. I cannot do anything
. . . Anyhow, you can buy anything you need, charged to Cathay
Pacific." CATHAY’s employees should have been more solicitous to a
passenger in distress and assuaged his anxieties and apprehensions.
To compound matters, CATHAY refused to have the luggage of
Alcantara delivered to him at his hotel; instead, he was required to pick
it up himself and an official of the Philippine Embassy. Under the
circumstances, it is evident that petitioner was remiss in its duty to
provide proper and adequate assistance to a paying passenger, more
so one with first class accommodation.
Where in breaching the contract of carriage the defendant airline is not
shown to have acted fraudulently or in bad faith, liability for damages
is limited to the natural and probable consequences of the breach of
obligation which the parties had foreseen or could have reasonably
foreseen. In that case, such liability does not include moral and
exemplary damages. 8 Conversely, if the defendant airline is shown to
have acted fraudulently or in bad faith, the award of moral and
exemplary damages is proper.
However, respondent Alcantara is not entitled to temperate damages,
contrary to the ruling of the court a quo, in the absence of any showing
that he sustained some pecuniary loss. 9 It cannot be gainsaid that
respondent’s luggage was ultimately delivered to him without serious
or appreciable damage.
As regards its second assigned error, petitioner airline contends that
the extent of its liability for breach of contract should be limited
absolutely to that set forth in the Warsaw Convention. We do not
agree. As We have repeatedly held, although the Warsaw Convention
has the force and effect of law in this country, being a treaty
commitment assumed by the Philippine government, said convention
declaring a carrier liable for breach of contract of carriage or as an
absolute limit of the extent of that liability. 10 The Warsaw Convention
declares the carrier liable for damages in the enumerated cases and
under certain limitations. 11 However, it must not be construed to
preclude the operation of the Civil Code and other pertinent laws. It
does not regulate, much less exempt, the carrier from liability for
damages for violating the rights of its passengers under the contract
of carriage, 12 especially if wilfull misconduct on the part of the
carrier’s employees is found or established, which is clearly the case
before Us. For, the Warsaw Convention itself provides in Art. 25 that
—
"(1) The carrier shall not be entitled to avail himself of the provisions
of this convention which exclude or limit his liability, if the damage is
caused by his wilfull misconduct or by such default on his part as, in
accordance with the law of the court to which the case is submitted, is
considered to be equivalent to wilfull misconduct."cralaw virtua1aw
library
(2) Similarly the carrier shall not be entitled to avail himself of the said
provisions, if the damage is caused under the same circumstances by
any agent of the carrier acting within the scope of his
employment."cralaw virtua1aw library
When petitioner airline misplaced respondent’s luggage and failed to
deliver it to its passenger at the appointed place and time, some
7 special species of injury must have been caused to him. For sure, the
latter underwent profound distress and anxiety, and the fear of losing
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
the arrival of his luggage, to his embarrassment and consternation
respondent Alcantara had to seek postponement of his pre-arranged
conference with the Director General of Trade of the host country.

In one case, 13 this Court observed that a traveller would naturally

suffer mental anguish, anxiety and shock when he finds that his
luggage did not travel with him and he finds himself in a foreign land
without any article of clothing other than what he has on.

Thus, respondent is entitled to moral and exemplary damages. We

however find the award by the Court of Appeals of P80,000.00 for
moral damages excessive, hence, We reduce the amount to
P30,000.00. The exemplary damages of P20,000.00 being reasonable
is maintained, as well as the attorney’s fees of P25,000.00 considering
that petitioner’s act or omission has compelled Alcantara to litigate with
third persons or to incur expenses to protect his interest. 14

WHEREFORE, the assailed decision of respondent Court of Appeals

is AFFIRMED with the exception of the award of temperate damages
of P10,000.00 which is deleted, while the award of moral damages of
P80,000.00 is reduced to P30,000.00. The award of P20,000.00 for
exemplary damages is maintained as reasonable together with the
attorney’s fees of P25,000.00. The moral and exemplary damages
shall earn interest at the legal rate from 1 March 1976 when the
complaint was filed until full payment.

SO ORDERED.

Cruz, Griño-Aquino and Quiason, JJ., concur.

29 TRANSPO LAW WEEK 5 9/15/19

 11. [G.R. No. L-9671. August 23, 1957.]
CESAR L. ISAAC, Plaintiff-Appellant, v. A. L. AMMEN
TRANSPORTATION CO., INC., Defendant-Appellee.
Angel S. Gamboa for Appellant.
Manuel O. Chan for Appellee.
SYLLABUS
1. PUBLIC UTILITIES; PRINCIPLES GOVERNING LIABILITY OF
COMMON CARRIER. — The following are the principles governing
the liability of a common carrier: (1) the liability of a carrier is
contractual and arises upon breach of its obligation. There is a breach
if it fails to exert extraordinary diligence according to all the
circumstances of each case; (2) a carrier is obliged to carry its
passenger with the utmost diligence of a very cautious person, having
due regard for all circumstances; (3) a carrier is presumed to be at fault
or to have acted negligently in case of death of, or injury to,
passengers, it being its duty to prove that it exercised extraordinary
diligence; and (4) the carrier is not an insurer against all risks of travel.
2. ID.; ID.; CONTRIBUTORY NEGLIGENCE OF PASSENGER
MILITATES AGAINST HIS CLAIM; CASE AT BAR. — A circumstance
which militates against the stand of appellant is the fact borne out by
the evidence that when he boarded the bus in question, he seated
himself on the left side thereof resting his left arm on the window sill
but with his left elbow outside the window, this being his position in the
bus when the collision took place. It is for this reason that the collision
resulted in the severance of said left arm from the body of appellant
thus doing him a great damage. It is therefore apparent that appellant
is guilty of contributory negligence.
DECISION
BENGZON, J.:
A. L. Ammen Transportation Co., Inc., hereinafter referred to as
defendant, is a corporation engaged in the business of transporting
passengers by land for compensation in the Bicol provinces and one
of the lines it operates is the one connecting Legaspi City, Albay with
Naga City, Camarines Sur. One of the buses which defendant was
operating is Bus No. 31. On May 31, 1951, plaintiff boarded said bus
as a passenger paying the required fare from Ligao, Albay bound for
Pili, Camarines Sur, but before reaching his destination, the bus
collided with a motor vehicle of the pick-up type coming from the
opposite direction, as a result of which plaintiff’s left arm was
completely severed and the severed portion fell inside the bus. Plaintiff
was rushed to a hospital in Iriga, Camarines Sur where he was given
blood transfusion to save his life. After four days, he was transferred
to another hospital in Tabaco, Albay, where he underwent treatment
for three months. He was moved later to the Orthopedic Hospital
where he was operated on and stayed there for another two months.
For these services, he incurred expenses amounting to P623.40,
excluding medical fees which were paid by defendant.
As an aftermath, plaintiff brought this action against defendant for
damages alleging that the collision which resulted in the loss of his left
arm was mainly due to the gross incompetence and recklessness of
the driver of the bus operated by defendant and that defendant
incurred in culpa contractual arising from its non-compliance with its
obligation to transport plaintiff safely to his destination. Plaintiff prays
for judgment against defendant as follows: (1) P5,000 as expenses for
his medical treatment, and P3,000 as the cost of an artificial arm, or a
total of P8,000; (2) P6,000 representing loss of earning; (3) P75,000
for diminution of his earning capacity; (4) P50,000 as moral damages;
and (5) P10,000 as attorneys’ fees and costs of suit.
Defendant set up as special defense that the injury suffered by plaintiff
was due entirely to the fault or negligence of the driver of the pick-up
car which collided with the bus driven by its driver and to the
contributory negligence of plaintiff himself. Defendant further claims
that the accident which resulted in the injury of plaintiff is one which
defendant could not foresee or, though foreseen, was inevitable.
30 TRANSPO LAW WEEK 5 9/15/19
The court after trial found that the collision occurred due to the
negligence of the driver of the pick-up car and not to that of the driver
of the bus it appearing that the latter did everything he could to avoid
the same but that notwithstanding his efforts, he was not able to avoid
it. As a consequence, the court dismissed the complaint, with costs
against plaintiff. This is an appeal from said decision.
It appears that plaintiff boarded a bus of defendant as paying
passenger from Ligao, Albay, bound for Pili, Camarines Sur, but before
reaching his destination, the bus collided with a pick-up car which was
coming from the opposite direction and, as a result, his left arm was
completely severed and fell inside the back part of the bus. Having this
background in view, and considering that plaintiff chose to hold
defendant liable on its contractual obligation to carry him safely to his
place of destination, it becomes important to determine the nature and
extent of the liability of a common carrier to a passenger in the light of
the law applicable in this jurisdiction.
In this connection, appellant invokes the rule that, "when an action is
based on a contract of carriage, as in this case, all that is necessary
to sustain recovery is proof of the existence of the contract and of the
breach thereof by act or omission", and in support thereof, he cites
several Philippine cases. 1 With this ruling in mind, appellant seems
to imply that once the contract of carriage is established and there is
proof that the same was broken by failure of the carrier to transport the
passenger safely to his destination, the liability of the former attaches.
On the other hand, appellee claims that that is a wrong presentation
of the rule. It claims that the decisions of this Court in the cases cited
do not warrant the construction sought to be placed upon them by
appellant for a mere perusal thereof would show that the liability of the
carrier was predicated not upon mere breach of its contract of carriage
but upon the finding that its negligence was found to be the direct or
proximate cause of the injury complained of. Thus, appellee contends
that "if there is no negligence on the part of the common carrier but
that the accident resulting in injuries is due to causes which are
inevitable and which could not have been avoided or anticipated
notwithstanding the exercise of that high degree of care and skill which
the carrier is bound to exercise for the safety of his passengers",
neither the common carrier nor the driver is liable therefor.
We believe that the law concerning the liability of a common carrier
has now suffered a substantial modification in view of the innovations
introduced by the new Civil Code. These innovations are the ones
embodied in Articles 1733, 1755 and 1756 in so far as the relation
between a common carrier and its passengers is concerned, which,
for ready reference, we quote hereunder:jgc:chanrobles.com.ph
"ART. 1733. Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them according to all the circumstances of
each case.
"Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set
forth in articles 1755 and 1756. .
"ART. 1755. A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances."cralaw virtua1aw library
"ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755."cralaw virtua1aw
library
The Code Commission, in justifying this extraordinary diligence
required of a common carrier, says the
following:jgc:chanrobles.com.ph
"A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of
very cautious persons, with due regard for all circumstances. This
extraordinary diligence required of common carriers is calculated to
protect the passengers from the tragic mishaps that frequently occur
in connection with rapid modern transportation. This high standard of
care is imperatively demanded by the preciousness of human life and
by the consideration that every person must in every way be
safeguarded against all injury. (Report of the Code Commission, pr.
35-36)" (Padilla, Civil Code of the Philippines, Vol. IV, 1956 ed., p.
197).
From the above legal provisions, we can make the following
restatement of the principles governing the liability of a common
carrier: (1) the liability of a carrier is contractual and arises upon breach
of its obligation. There is breach if it fails to exert extraordinary
diligence according to all the circumstances of each case; (2) a carrier
is obliged to carry its passenger with the utmost diligence of a very
cautious person, having due regard for all the circumstances; (3) a
carrier is presumed to be at fault or to have acted negligently in case
of death of, or injury to, passengers, it being its duty to prove that it
exercised extraordinary diligence; and (4) the carrier is not an insurer
against all risks of travel.
The question that now arises is: Has defendant observed extraordinary
diligence or the utmost diligence of every cautious person, having due
regard for all circumstances, in avoiding the collision which resulted in
the injury caused to the plaintiff?
After examining the evidence in connection with how the collision
occurred, the lower court made the following
finding:jgc:chanrobles.com.ph
"Hemos examinado muy detenidamente las pruebas presentadas en
la vista, principalmente, las declaraciones que hemos acotado arriba,
y hemos llegado a la conclusion de que el demandado ha hecho, todo
cuanto estuviere de su parte para evitar el accidente, pero sin
embargo, no ha podido evitarlo.
"El hecho de que el demandado, antes del choque, tuvo que hacer
pasar su truck encima de los montones de grava que estaban
depositados en la orilla del camino, sin que haya ido mas alla, por el
grave riesgo que corrian las vidas de sus pasajeros, es prueba
concluyente de lo que tenemos dicho, a saber: — que el demandado
hizo cuanto estaba de su parte, para evitar el accidente, sin que haya
podido evitarlo, por estar fuera de su control."cralaw virtua1aw library
The evidence would appear to support the above finding. Thus, it
appears that Bus No. 31, immediately prior to the collision, was
running at a moderate speed because it had just stopped at the school
zone of Matacong, Polangui, Albay. The pick-up car was at full speed
and was running outside of its proper lane. The driver of the bus, upon
seeing the manner in which the pick-up was then running, swerved the
bus to the very extreme right of the road until its front and rear wheels
have gone over the pile of stones or gravel situated on the rampart of
the road. Said driver could not move the bus farther right and run over
a greater portion of the pile, the peak of which was about 3 feet high,
without endangering the safety of his passengers. And
notwithstanding all these efforts, the rear left side of the bus was hit by
the pick-up car.
Of course, this finding is disputed by appellant who cannot see eye to
eye with the evidence for the appellee and insists that the collision took
place because the driver of the bus was going at a fast speed. He
contends that, having seen that a car was coming from the opposite
direction at a distance which allows the use of moderate care and
prudence to avoid an accident, and knowing that on the side of the
road along which he was going there was a pile of gravel, the driver of
the bus should have stopped and waited for the vehicle from the
opposite direction to pass, and should have proceeded only after the
other vehicle had passed. In other words, according to appellant, the
act of the driver of the bus in squeezing his way through between the
oncoming pick-up and the pile of gravel under the circumstances was
considered negligent.
But this matter is one of credibility and evaluation of the evidence. This
is the function of the trial court. The trial court has already spoken on
31 TRANSPO LAW WEEK 5 9/15/19
this matter as we have pointed out above. This is also a matter of
appreciation of the situation on the part of the driver. While the position
taken by appellant appeals more to the sense of caution that one
should observe in a given situation to avoid an accident or mishap,
such however can not always be expected from one who is placed
suddenly in a predicament where he is not given enough time to take
the proper course of action as he should under ordinary
circumstances. One who is placed in such a predicament cannot
exercise such coolness or accuracy of judgment as is required of him
under ordinary circumstances and he cannot therefore be expected to
observe the same judgment, care and precaution as in the latter. For
this reason, authorities abound where failure to observe the same
degree of care that as ordinary prudent man would exercise under
ordinary circumstances when confronted with a sudden emergency
was held to be warranted and a justification to exempt the carrier from
liability. Thus, it was held that "where a carrier’s employee is
confronted with a sudden emergency, the fact that he is obliged to act
quickly and without a chance for deliberation must be taken into
account, and he is not held to the same degree of care that he would
otherwise be required to exercise in the absence of such emergency
but must exercise only such care as any ordinary prudent person
would exercise under like circumstances and conditions, and the
failure on his part to exercise the best judgment the case renders
possible does not establish lack of care and skill on his part which
renders the company, liable. . . ." (13 C. J. S., 1412; 10 C. J., 970).
Considering all the circumstances, we are persuaded to conclude that
the driver of the bus has done what a prudent man could have done to
avoid the collision and in our opinion this relieves appellee from liability
under our law.
A circumstance which militates against the stand of appellant is the
fact borne out by the evidence that when he boarded the bus in
question, he seated himself on the left side thereof resting his left arm
on the window sill but with his left elbow outside the window, this being
his position in the bus when the collision took place. It is for this reason
that the collision resulted in the severance of said left arm from the
body of appellant thus doing him a great damage. It is therefore
apparent that appellant is guilty of contributory negligence. Had he not
placed his left arm on the window sill with a portion thereof protruding
outside, perhaps the injury would have been avoided as is the case
with the other passengers. It is to be noted that appellant was the only
victim of the collision.
It is true that such contributory negligence cannot relieve appellee of
its liability but will only entitle it to a reduction of the amount of damage
caused (Article 1762, new Civil Code), but this is a circumstance which
further militates against the position taken by appellant in this case.
"It is the prevailing rule that it is negligence per se for a passenger on
a railroad voluntarily or inadvertently to protrude his arm, hand, elbow,
or any other part of his body through the window of a moving car
beyond the outer edge of the window or outer surface of the car, so as
to come in contact with objects or obstacles near the track, and that
no recovery can be had for an injury which but for such negligence
would not have been sustained. . . ." (10 C. J. 1139).
"Plaintiff (passenger) while riding on an interurban car, to flick the
ashes from his cigar, thrust his hand over the guard rail a sufficient
distance beyond the side line of the car to bring it in contact with the
trunk of a tree standing beside the track; the force of the blow breaking
his wrist. Held, that he was guilty of contributory negligence as a matter
of law." (Malakia v. Rhode Island Co., 89 A., 337.)
Wherefore, the decision appealed from is affirmed, with costs
against Appellant.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador,
Concepcion, Endencia and Felix, JJ., concur.
12. G.R. No. 118664. August 7, 1998
JAPAN AIRLINES, Petitioner, v. THE COURT OF APPEALS
ENRIQUE AGANA, MARIA ANGELA NINA AGANA, ADALIA B.
FRANCISCO and JOSE MIRANDA, Respondents.
DECISION
ROMERO, J.:
Before us is an appeal by certiorari filed by petitioner Japan Airlines,
Inc. (JAL) seeking the reversal of the decision of the Court of
Appeals,1 which affirmed with modification the award of damages
made by the trial court in favor of herein private respondents Enrique
Agana, Maria Angela Nina Agana, Adelia Francisco and Jose Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight
No. JL 001 in San Francisco, California bound for Manila. Likewise, on
the same day private respondents Enrique Agana, Maria Angela Nina
Agana and Adelia Francisco left Los Angeles, California for Manila via
JAL flight No. JL 061. As an incentive for travelling on the said airline,
both flights were to make an overnight stopover at Narita, Japan, at
the airlines expense, thereafter proceeding to Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents
were billeted at Hotel Nikko Narita for the night. The next day, private
respondents, on the final leg of their journey, went to the airport to take
their flight to Manila. However, due to the Mt. Pinatubo eruption,
unrelenting ashfall blanketed Ninoy Aquino International Airport
(NAIA), rendering it inaccessible to airline traffic. Hence, private
respondents trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked
all the Manila-bound passengers on flight No. 741 due to depart on
June 16, 1991 and also paid for the hotel expenses for their
unexpected overnight stay. On June 16, 1991, much to the dismay of
the private respondents, their long anticipated flight to Manila was
again cancelled due to NAIAs indefinite closure. At this point, JAL
informed the private respondents that it would no longer defray their
hotel and accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991,
private respondents were forced to pay for their accommodations and
meal expenses from their personal funds from June 16 to June 21,
1991. Their unexpected stay in Narita ended on June 22, 1991 when
they arrived in Manila on board JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on
July 25, 1991, commenced an action for damages against JAL before
the Regional Trial Court of Quezon City, Branch 104.2 To support their
claim, private respondents asserted that JAL failed to live up to its duty
to provide care and comfort to its stranded passengers when it refused
to pay for their hotel and accommodation expenses from June 16 to
21, 1991 at Narita, Japan. In other words, they insisted that JAL was
obligated to shoulder their expenses as long as they were still stranded
in Narita. On the other hand, JAL denied this allegation and averred
that airline passengers have no vested right to these amenities in case
a flight is cancelled due to force majeure.
On June 18, 1992, the trial court rendered its judgment in favor of
private respondents holding JAL liable for damages, viz.:
WHEREFORE, judgment is rendered in favor of plaintiffs ordering the
defendant Japan Airlines to pay the plaintiffs Enrique Agana, Adalia B.
Francisco and Maria Angela Nina Agana the sum of One million Two
Hundred forty-six Thousand Nine Hundred Thirty-Six Pesos
(P1,246,936.00) and Jose Miranda the sum of Three Hundred Twenty
Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual,
moral and exemplary damages and pay attorneys fees in the amount
of Two Hundred Thousand Pesos (P200,000.00), and to pay the costs
of suit.
Undaunted, JAL appealed the decision before the Court of Appeals,
which, however, with the exception of lowering the damages awarded
affirmed the trial courts finding,3 thus:
Thus, the award of moral damages should be as it is hereby reduced
to P200,000.00 for each of the plaintiffs, the exemplary damages
to P300,000.00 and the attorneys fees to P100,000.00 plus the costs.
WHEREFORE, with the foregoing Modification, the judgment
appealed from is hereby AFFIRMED in all other respects.
32 TRANSPO LAW WEEK 5 9/15/19
JAL filed a motion for reconsideration which proved futile and
unavailing.4cräläwvirtualibräry
Failing in its bid to reconsider the decision, JAL has now filed this
instant petition.
The issue to be resolved is whether JAL, as a common carrier has the
obligation to shoulder the hotel and meal expenses of its stranded
passengers until they have reached their final destination, even if the
delay were caused by force majeure.
To begin with, there is no dispute that the Mt. Pinatubo eruption
prevented JAL from proceeding to Manila on schedule. Likewise,
private respondents concede that such event can be considered as
force majeure since their delayed arrival in Manila was not imputable
to JAL.5cräläwvirtualibräry
However, private respondents contend that while JAL cannot be held
responsible for the delayed arrival in Manila, it was nevertheless liable
for their living expenses during their unexpected stay in Narita since
airlines have the obligation to ensure the comfort and convenience of
its passengers. While we sympathize with the private respondents
plight, we are unable to accept this contention.
We are not unmindful of the fact that in a plethora of cases we have
consistently ruled that a contract to transport passengers is quite
different in kind and degree from any other contractual relation. It is
safe to conclude that it is a relationship imbued with public interest.
Failure on the part of the common carrier to live up to the exacting
standards of care and diligence renders it liable for any damages that
may be sustained by its passengers. However, this is not to say that
common carriers are absolutely responsible for all injuries or damages
even if the same were caused by a fortuitous event. To rule otherwise
would render the defense of force majeure, as an exception from any
liability, illusory and ineffective.
Accordingly, there is no question that when a party is unable to fulfill
his obligation because of force majeure, the general rule is that he
cannot be held liable for damages for non-performance.6 Corollarily,
when JAL was prevented from resuming its flight to Manila due to the
effects of Mt. Pinatubo eruption, whatever losses or damages in the
form of hotel and meal expenses the stranded passengers incurred,
cannot be charged to JAL. Yet it is undeniable that JAL assumed the
hotel expenses of respondents for their unexpected overnight stay on
June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land was an
exasperating experience for the private respondents. To be sure, they
underwent distress and anxiety during their unanticipated stay in
Narita, but their predicament was not due to the fault or negligence of
JAL but the closure of NAIA to international flights. Indeed, to hold JAL,
in the absence of bad faith or negligence, liable for the amenities of its
stranded passengers by reason of a fortuitous event is too much of a
burden to assume.
Furthermore, it has been held that airline passengers must take such
risks incident to the mode of travel.7 In this regard, adverse weather
conditions or extreme climatic changes are some of the perils involved
in air travel, the consequences of which the passenger must assume
or expect. After all, common carriers are not the insurer of all
risks.8cräläwvirtualibräry
Paradoxically, the Court of Appeals, despite the presence of force
majeure, still ruled against JAL relying in our decision in PAL v. Court
of Appeals,9 thus:
The position taken by PAL in this case clearly illustrates its failure to
grasp the exacting standard required by law. Undisputably, PALs
diversion of its flight due to inclement weather was a fortuitous event.
Nonetheless, such occurrence did not terminate PALs contract with its
passengers. Being in the business of air carriage and the sole one to
operate in the country, PAL is deemed equipped to deal with situations
as in the case at bar. What we said in one case once again must be
stressed, i.e., the relation of carrier and passenger continues until the
latter has been landed at the port of destination and has left the
carriers premises. Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and
safety of its stranded passengers until they have reached their final
destination. On this score, PAL grossly failed considering the then
ongoing battle between government forces and Muslim rebels in
Cotabato City and the fact that the private respondent was a stranger
to the place.
The reliance is misplaced. The factual background of the PAL case is
different from the instant petition. In that case there was indeed a
fortuitous event resulting in the diversion of the PAL flight. However,
the unforeseen diversion was worsened when private respondents
(passenger) was left at the airport and could not even hitch a ride in a
Ford Fiera loaded with PAL personnel,10 not to mention the apparent
apathy of the PAL station manager as to the predicament of the
stranded passengers.11 In light of these circumstances, we held that if
the fortuitous event was accompanied by neglect and malfeasance by
the carriers employees, an action for damages against the carrier is
permissible. Unfortunately, for private respondents, none of these
conditions are present in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL
from any liability. It must be noted that private respondents bought
tickets from the United States with Manila as their final destination.
While JAL was no longer required to defray private respondents living
expenses during their stay in Narita on account of the fortuitous event,
JAL had the duty to make the necessary arrangements to transport
private respondents on the first available connecting flight to Manila.
Petitioner JAL reneged on its obligation to look after the comfort and
convenience of its passengers when it declassified private
respondents from transit passengers to new passengers as a result of
which private respondents were obliged to make the necessary
arrangements themselves for the next flight to Manila. Private
respondents were placed on the waiting list from June 20 to June 24.
To assure themselves of a seat on an available flight, they were
compelled to stay in the airport the whole day of June 22, 1991 and it
was only at 8:00 p.m. of the aforesaid date that they were advised that
they could be accommodated in said flight which flew at about 9:00
a.m. the next day.
We are not oblivious to the fact that the cancellation of JAL flights to
Manila from June 15 to June 21, 1991 caused considerable disruption
in passenger booking and reservation. In fact, it would be
unreasonable to expect, considering NAIAs closure, that JAL flight
operations would be normal on the days affected. Nevertheless, this
does not excuse JAL from its obligation to make the necessary
arrangements to transport private respondents on its first available
flight to Manila. After all, it had a contract to transport private
respondents from the United States to Manila as their final destination.
Consequently, the award of nominal damages is in order. Nominal
damages are adjudicated in order that a right of a plaintiff, which has
been violated or invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying any loss suffered
by him.12 The court may award nominal damages in every obligation
arising from any source enumerated in Article 1157, or in every case
where any property right has been invaded.13cräläwvirtualibräry
WHEREFORE, in view of the foregoing, the decision of the Court of
Appeals dated December 22, 1993 is hereby MODIFIED. The award
of actual, moral and exemplary damages is hereby DELETED.
Petitioner JAL is ordered to pay each of the private respondents
nominal damages in the sum of P100,000.00 each including attorneys
fees of P50,000.00 plus costs.
SO ORDERED.
Narvasa, C.J. (Chairman), Kapunan and Purisima, JJ. concur.

33 TRANSPO LAW WEEK 5 9/15/19

 13. G.R. No. 122039 May 31, 2000
VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and
FRANCISCO SALVA, respondents.
MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the Court of
Appeals, dated March 31, 1991, reversing the contrary decision of the
Regional Trial Court, Branch 36, Dumaguete City, and awarding
damages instead to private respondent Eliza Jujeurche Sunga as
plaintiff in an action for breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent
Eliza Jujeurche G. Sunga, then a college freshman majoring in
Physical Education at the Siliman University, took a passenger
jeepney owned and operated by petitioner Vicente Calalas. As the
jeepney was filled to capacity of about 24 passengers, Sunga was
given by the conductor an "extension seat," a wooden stool at the back
of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney
stopped to let a passenger off. As she was seated at the rear of the
vehicle, Sunga gave way to the outgoing passenger. Just as she was
doing so, an Isuzu truck driven by Iglecerio Verena and owned by
Francisco Salva bumped the left rear portion of the jeepney. As a
result, Sunga was injured. She sustained a fracture of the "distal third
of the left tibia-fibula with severe necrosis of the underlying skin."
Closed reduction of the fracture, long leg circular casting, and case
wedging were done under sedation. Her confinement in the hospital
lasted from August 23 to September 7, 1989. Her attending physician,
Dr. Danilo V. Oligario, an orthopedic surgeon, certified she would
remain on a cast for a period of three months and would have to
ambulate in crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against
Calalas, alleging violation of the contract of carriage by the former in
failing to exercise the diligence required of him as a common carrier.
Calalas, on the other hand, filed a third-party complaint against
Francisco Salva, the owner of the Isuzu truck.
The lower court rendered judgment against Salva as third-party
defendant and absolved Calalas of liability, holding that it was the
driver of the Isuzu truck who was responsible for the accident. It took
cognizance of another case (Civil Case No. 3490), filed by Calalas
against Salva and Verena, for quasi-delict, in which Branch 37 of the
same court held Salva and his driver Verena jointly liable to Calalas
for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was
reversed on the ground that Sunga's cause of action was based on a
contract of carriage, not quasi-delict, and that the common carrier
failed to exercise the diligence required under the Civil Code. The
appellate court dismissed the third-party complaint against Salva and
adjudged Calalas liable for damages to Sunga. The dispositive portion
of its decision reads:
WHEREFORE, the decision appealed from is hereby
REVERSED and SET ASIDE, and another one is entered
ordering defendant-appellee Vicente Calalas to pay plaintiff-
appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case
No. 3490 that the negligence of Verena was the proximate cause of
the accident negates his liability and that to rule otherwise would be to
make the common carrier an insurer of the safety of its passengers.
He contends that the bumping of the jeepney by the truck owned by
34 TRANSPO LAW WEEK 5 9/15/19
Salva was a caso fortuito. Petitioner further assails the award of moral
damages to Sunga on the ground that it is not supported by evidence.
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490
finding the driver and the owner of the truck liable for quasi-delict
ignores the fact that she was never a party to that case and, therefore,
the principle of res judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case the
same. The issue in Civil Case No. 3490 was whether Salva and his
driver Verena were liable for quasi-delict for the damage caused to
petitioner's jeepney. On the other hand, the issue in this case is
whether petitioner is liable on his contract of carriage. The first, quasi-
delict, also known as culpa aquiliana or culpa extra contractual, has as
its source the negligence of the tortfeasor. The second, breach of
contract or culpa contractual, is premised upon the negligence in the
performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly
established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the existence
of the contract and the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to his destination. 2 In
case of death or injuries to passengers, Art. 1756 of the Civil Code
provides that common carriers are presumed to have been at fault or
to have acted negligently unless they prove that they observed
extraordinary diligence as defined in Arts. 1733 and 1755 of the Code.
This provision necessarily shifts to the common carrier the burden of
proof.
There is, thus, no basis for the contention that the ruling in Civil Case
No. 3490, finding Salva and his driver Verena liable for the damage to
petitioner's jeepney, should be binding on Sunga. It is immaterial that
the proximate cause of the collision between the jeepney and the truck
was the negligence of the truck driver. The doctrine of proximate cause
is applicable only in actions for quasi-delict, not in actions involving
breach of contract. The doctrine is a device for imputing liability to a
person where there is no relation between him and another party. In
such a case, the obligation is created by law itself. But, where there is
a pre-existing contractual relation between the parties, it is the parties
themselves who create the obligation, and the function of the law is
merely to regulate the relation thus created. Insofar as contracts of
carriage are concerned, some aspects regulated by the Civil Code are
those respecting the diligence required of common carriers with regard
to the safety of passengers as well as the presumption of negligence
in cases of death or injury to passengers. It provides:
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods
is further expressed in articles 1734, 1735, and 1746, Nos.
5, 6, and 7, while the extraordinary diligence for the safety of
the passengers is further set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed by articles 1733 and
1755.
In the case at bar, upon the happening of the accident, the
presumption of negligence at once arose, and it became the duty of
petitioner to prove that he had to observe extraordinary diligence in the
care of his passengers.
Now, did the driver of jeepney carry Sunga "safely as far as human
care and foresight could provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances" as
required by Art. 1755? We do not think so. Several factors militate
against petitioner's contention.
First, as found by the Court of Appeals, the jeepney was not properly to Art. 2206(3) of the Civil Code; and (2) in the cases in which the
parked, its rear portion being exposed about two meters from the carrier is guilty of fraud or bad faith, as provided in Art. 2220.6
broad shoulders of the highway, and facing the middle of the highway
In this case, there is no legal basis for awarding moral damages since
in a diagonal angle. This is a violation of the R.A. No. 4136, as
there was no factual finding by the appellate court that petitioner acted
amended, or the Land Transportation and Traffic Code, which
in bad faith in the performance of the contract of carriage. Sunga's
provides:
contention that petitioner's admission in open court that the driver of
Sec. 54. Obstruction of Traffic. — No person shall the jeepney failed to assist her in going to a nearby hospital cannot be
drive his motor vehicle in such a manner as to construed as an admission of bad faith. The fact that it was the driver
obstruct or impede the passage of any vehicle, of the Isuzu truck who took her to the hospital does not imply that
nor, while discharging or taking on passengers or petitioner was utterly indifferent to the plight of his injured passenger.
loading or unloading freight, obstruct the free If at all, it is merely implied recognition by Verena that he was the one
passage of other vehicles on the highway. at fault for the accident.
Second, it is undisputed that petitioner's driver took in more WHEREFORE, the decision of the Court of Appeals, dated March 31,
passengers than the allowed seating capacity of the jeepney, a 1995, and its resolution, dated September 11, 1995, are AFFIRMED,
violation of §32(a) of the same law. It provides: with the MODIFICATION that the award of moral damages is
Exceeding registered capacity. — No person DELETED.
operating any motor vehicle shall allow more SO ORDERED.
passengers or more freight or cargo in his vehicle Bellosillo and Buena, JJ., concur.
than its registered capacity.
Quisumbing and De Leon, Jr., JJ., are on leave.
The fact that Sunga was seated in an "extension seat" placed her in a
peril greater than that to which the other passengers were exposed.
Therefore, not only was petitioner unable to overcome the presumption
of negligence imposed on him for the injury sustained by Sunga, but
also, the evidence shows he was actually negligent in transporting
passengers.
We find it hard to give serious thought to petitioner's contention that
Sunga's taking an "extension seat" amounted to an implied
assumption of risk. It is akin to arguing that the injuries to the many
victims of the tragedies in our seas should not be compensated merely
because those passengers assumed a greater risk of drowning by
boarding an overloaded ferry. This is also true of petitioner's
contention that the jeepney being bumped while it was improperly
parked constitutes caso fortuito. A caso fortuito is an event which
could not be foreseen, or which, though foreseen, was inevitable.3 This
requires that the following requirements be present: (a) the cause of
the breach is independent of the debtor's will; (b) the event is
unforeseeable or unavoidable; (c) the event is such as to render it
impossible for the debtor to fulfill his obligation in a normal manner,
and (d) the debtor did not take part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking his
jeepney with its body protruding two meters into the highway.
Finally, petitioner challenges the award of moral damages alleging that
it is excessive and without basis in law. We find this contention well
taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the accident was a first-year
college student in that school year 1989-1990 at the Silliman
University, majoring in Physical Education. Because of the
injury, she was not able to enroll in the second semester of
that school year. She testified that she had no more intention
of continuing with her schooling, because she could not walk
and decided not to pursue her degree, major in Physical
Education "because of my leg which has a defect already."
Plaintiff-appellant likewise testified that even while she was
under confinement, she cried in pain because of her injured
left foot. As a result of her injury, the Orthopedic Surgeon also
certified that she has "residual bowing of the fracture side."
She likewise decided not to further pursue Physical Education
as her major subject, because "my left leg . . . has a defect
already."
Those are her physical pains and moral sufferings, the
inevitable bedfellows of the injuries that she suffered. Under
Article 2219 of the Civil Code, she is entitled to recover moral
damages in the sum of P50,000.00, which is fair, just and
reasonable.
As a general rule, moral damages are not recoverable in actions for
damages predicated on a breach of contract for it is not one of the
items enumerated under Art. 2219 of the Civil Code.5 As an exception,
such damages are recoverable: (1) in cases in which the mishap
results in the death of a passenger, as provided in Art. 1764, in relation
35 TRANSPO LAW WEEK 5 9/15/19
 14. G.R. No. L-25488 September 28, 1979
ESSO STANDARD EASTERN, INC., Plaintiff- Appellee, v. MANILA
RAILROAD CO. (Philippine National Railways) and MANILA
PORT SERVICE, Defendants-Appellants.
D.F. Macaranas & J Mate Engage for appellants.chanrobles virtual law
library
Bengson Villegas & Zarraga for appellee.
DE CASTRO, J:
On February 1, 1964, plaintiff-appellee filed in the City Court of Manila,
Branch III, - a complaint for the recovery of the sum of P2,691.18 for
loss and damage caused to four shipments of goods consigned to it
which arrived from abroad on four different occasions in the year 1962
and which were handled by defendants - appellants as arrastre
operators for the port of Manila. Almost a year later, on January 7,
1966, the said City Court rendered, on the basis of the stipulation of
facts (p. 32, Original CFI Records) entered into on November 20, 1964
by both parties and of the annexes thereto, a decision dismissing the
complaint. A motion for reconsideration of this decision was
denied.chanrobles virtual law library
Thereafter, plaintiff-appellee appealed to the Court of First Instance of
Manila, Branch V. On the basis of another stipulation of facts (p. 69,
Id) entered into on September 2, 1965 by both parties and of the
annexes of the stipulation of facts submitted before the City Court of
Manila which were adopted by them as part of their respective
evidence before the Court of First Instance of Manila, said Court of
First Instance rendered on September 23, 1965 a decision reversing
that of the City Court of Manila. Hence, this appeal.chanrobles virtual
law library
The basic issue in this appeal in whether plaintiff-appellee's right to
bring this action has already prescribed, the same having been
brought beyond one (1) year from the dates of discharge of the
shipments in question. Necessarily involved in this issue is the
determination of whether the provisional claims herein involved
(Exhibits A, D and G, pp. 1, 6 and 12, respectively, Folder of Exhibits)
satisfy the condition set forth in Section 15 of the Management
Contract (pp. 24-25, Folder of Exhibits) that the "claim for the value"
should be filed within fifteen (15) days from the date of discharge of
the last package of the said shipments.chanrobles virtual law library
Defendants-appellants contend that the said provisional claims are not
in compliance with Section 15 of the Management Contract because
the latter requires the filing not merely of a "provisional claim' but of a
claim for the value" (p. 12, Appellants Brief). This argument lays much
stress on the terminological difference between a "provisional claim"
and a "claim for the value," which distinction is, in our opinion, of no
consequential import. The test in determining whether the said section
of the Management Contract has been complied with is whether a
claim, be it called a "Provisional claim" or a "claim for the value," has
served the purpose of giving the arrastre operator(s) reasonable
opportunity to check the validity of the claim while the facts are still
fresh in the minds of the persons who took part in the transaction and
while the pertinent documents are still available(Consunji v. Manila
Port Service, L-15551, November 29, 1960, 110 Phil. 231). Upon
perusal of the said provisional claims, We find that they contain
descriptions of the shipments in question sufficient to have allowed
defendants-appellants to make a reasonable verification, consistent
with our ruling in a long line of cases 1 involving this same argument.
Accordingly, We hold that the filing of the said provisional claim is a
sufficient compliance with the requirement of said section of the
Management Contract.chanrobles virtual law library
In furtherance of their stance that the provisional claims herein
involved fall short of the claims for the value contemplated and
required by the said section of the Management Contract, defendants-
appellants contend that the said provisional do not claim for actual and
itemized goods lost or damaged but, instead, merely advise that the
entire shipments stated therein have been damaged and/or short-
delivered ex parte their respective carriers (p. 13, Appellants' Brief).
Stated otherwise, defendants-appellants argue that inasmuch as the
provisional claims do not state an itemized specification of the value
of the loss or damage suffered by the shipments in question, said
provisional claims cannot be categorized as "claims for the value,"
and, hence, cannot be said to comply with the requirement of the
36 TRANSPO LAW WEEK 5 9/15/19
aforesaid section of the Management Contract. We cannot subscribe
to this argument. In the first place, it is not necessary that the said
provisional claimss should state a detailed fist of the loss or damage
suffered by the said shipments; they only have to meet the test We
have earlier mentioned. The reason behind this is that the
determination and preparation of the specific amount of damages
claimed should be done carefully and without haste, and these can be
done practically only in a formal claim which can be filed even long
after a provisional claim has been filed. Secondly, Our holding that the
circumstance that the provisional claim did not specify the value of the
loss still substantially fulfills the requirement of the contract. ... and is
not a defense against the claim of the consignee for recovery after it
shall have ascertained later its actual loss or damage" 2 is clearly
applicable to this case where plaintiff-appellee, at first, filed provisional
claims advising defendants-appellants that the shipments stated
therein have been damaged and/or short-delivered, then followed the
same with formal claims (Exhibits B, E and H, pp. 2, 7 and 13,
respectively, Folder of Exhibits) specifying the value of the loss or
damage suffered by the said shipments (Stipulation of Facts, p. 69 ff.,
Original CFI Records).chanrobles virtual law library
Lastly, defendants-appellants, relying on the statement in the
provisional claims that the shipments stated therein have been
damaged and/or short-delivered ex their respective carriers, argue that
they cannot be held liable by the said provisional claims inasmuch as
being arrastre operators, they are not responsible for loss or damage
aboard, or under the control of the said carriers. This argument is
belied by the Stipulation of Facts (supra) submitted before the Court
of First Instance of Manila. Stipulation Nos. 2, 3, and 4 categorically
state that the shipments therein stated have all been discharged in
good order unto the custody of defendant-appellant Manila Port
Service, implying thereby that the loss or damage to said shipments
occurred only when they were already within its safe-
keeping.chanrobles virtual law library
The foregoing discussion next brings up the question of whether the
said provisional claims have been seasonably filed. Upon examination
of the aforementioned Stipulation of Facts, We find that the dates of
last discharge from the vessels "Genevieve Lykes...... Pioneer Moor",
and "Pioneer Main" are May 10, 1962, May 7, 1962, and May 30, 1962,
and that the provisional claims therefor have been filed on May 14,
1962, May 14, 1962, and May 30, 1962, respectively. It is obvious,
then, that the said provisional claims to have all been filed within the
requisite 15-day period.chanrobles virtual law library
We now discuss the basic issue We have earlier adverted
to.chanrobles virtual law library
Defendants-appellants claim that "it is illegal to shift to [them] the duty
of provising [plaintiff-appellees] case, i.e., to show that claims for the
value were rejected or denied so as to extend further the running of
the prescriptive period." 3 It is apparent from this argument that
defendants-appellants invoke prescription in their favor but would
rather have placed on plaintiff- appellee the burden of proving that the
suit has not yet prescribed. The claim that the suit has prescribed is
an affirmative allegation. According to Rule 131, Section I of the
Revised Rules of Court, "Each party must prove his own affirmative
allegation," and evidence need not be given in support of a negative
allegation. Hence, the defendants-appellants have the burden of
proving that the suit has prescribed. 4
Defendants-appellants also contend that Section 15 of the
Management Contract should be interpreted to mean that "in cases
where there is no denial or rejection of the claim or when the denial or
rejection is made after the lapse of one year from the date of discharge
of the goods, the prescriptive period shag commence from the date of
discharge and not from the date of rejection." 5 We have already had
occasion to rule on this point. In Delgado Brothers, Inc., et al. v. Manila
Port Service, et al., L-21781, June 30, 1966; 17 SCRA 471, where
herein defendants-appellants insisted therein that "while there are two
periods provided for in the contract, in any event the suit must be filed
within one year from the date of arrival of the goods," We rejected the
same, holding that "[y]o uphold this contention would [be] unfair to the
consignee, for all that the arrastre contractor would [do would] be to
assure the [former] that his claim is under consideration and that he
would be informed of its decision in due time; wait for one year; and
then send notice that the claim has prescribed." 6 We have, thus,
adopted the rule that in cases where the arrastre contractor does not
act on the claim one way or the other within the period of one year from
the date of discharge of the last package, the claim should be deemed
constructively denied or rejected upon the expiration of one year
therefrom. 7
As earlier pointed out, the dates of discharge from the vessels
"Genevieve Lykes," "Pionee Moor" and "Pioneer Main" are May 10,
1962, May 7, 1962, and May 30, 1962, respectively; that provisional
claims therefor have all been seasonably filed but that the same have
not been acted upon by defendants- appellants. Applying the above-
stated rule, said claims are then deemed constructively denied upon
the expiration of one year from May 10, 1962, May 7, 1962, and May
30, 1962 or more exactly on May 10, 1963, May 7,1963, and May 30,
1963, respectively. Counting from these dates the one-year period
within which action may be filed, We find that this suit which has been
filed on February 1, 1964 has not yet been barred by
prescription.chanrobles virtual law library
Defendants also find as error the trial court's adoption of the rates of
exchange of the U.S. dollar appearing in the so called formal claims.
They argue that even if the said formal claims have been filed, the
facts stated therein, especially with respect to the rates of exchange
of the U.S. dollar are not admitted to be true and correct; that while in
the stipulation of facts submitted before the City Court of Manila there
appeared provisions regarding said rates of exchange (p. 32 ff.
Original CFI Records), the same have been discarded or deleted in
the stipulation of facts submitted before the Court of First Instance of
Manila because there has been no reliable proof to support them; and
that as plaintiff-appellee has failed to prove said rates of exchange
despite its reservation to do so, the international rate of exchange of
p2.015 to a dollar should be applied in this case (p. 14 ff Appellants
Brief).chanrobles virtual law library
In an order dated September 2, 1965 of the Court of First Instance of
Manila (p. 74, Original CFI Records), this case was submitted for
decision on the basis of the stipulation of facts submitted before said
court, together with the annexes to the stipulation of facts submitted in
the City Court of Manila which have been adopted by the parties as
part of their respective evidence. Among these annexes are the so
called formal claims (supra) and the Central Bank Release Certificates
(Exhibits B-1, E-1, and H-1, pp. 3, 8, & 14 respectively, Folder of
Exhibits) wherein are stated the rates of exchange applicable to the
value of the shipments therein mentioned. Nowhere in the records can
We find anything which supports the contention of defendants-
appellants that the rates of exchange stated in said exhibits are not
true and correct. Otherwise, defendants- appellants could have easily
submitted evidence proving their own version of the true and correct
rates of exchange. They have not done so. Hence, applying by
analogy Section 23, Rule 130 of the Revised Rules of Court, We may
say that this seeming silence on their part can only be interpreted as
an admission of the truth and correctness Of the rates of exchange
appearing in the exhibits aforementioned.chanrobles virtual law library
The contention that there was no reliable proof to support said rates of
exchange because although there appeared provisions on them in the
stipulation of facts submitted before the City Court of Manila, the same
were later discarded or deleted in the stipulation of facts submitted
before the Court of First Instance of Manila is without basis, plaintiff-
appellee having submitted the aforesaid Exhibits B, B-1, E, E-1 H and
H-1 to prove the said rates of exchange.chanrobles virtual law library
It is true that in the stipulation of facts submitted before the Court of
First Instance of Manila, plaintiff-appellee made the reservation to
prove the rates of exchange applicable to the invoice value of the
shipments in question. contrary to appellants' allegation, plaintiff-
appellee has, in fact, submitted exhibits as proof of said rates of
exchange, failing perhaps to avail of the reservation to prove rates of
exchange greater than those already appearing in the aforesaid
exhibits, which is the real import of the reservation made in the
stipulation of facts submitted before the Court a quo.chanrobles virtual
law library
WHEREFORE, the decision appealed from is hereby affirmed in
toto.chanrobles virtual law library
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez, Guerrero and
Melencio-Herrera, JJ., concur.

37 TRANSPO LAW WEEK 5 9/15/19

 15. [G.R. No. L-28145. July 7, 1976.]
SHELL CHEMICAL COMPANY (PHILIPPINES), INC., Plaintiff-
Appellee, v. MANILA PORT SERVICE and/or MANILA RAILROAD
COMPANY, later substituted by PHILIPPINE NATIONAL
RAILWAYS, Defendant-Appellant.
D.F. Macaranas & Antonio G. Holgado for Appellant.
Picazo, Santayana, Reyes & Tayao for Appellee.
SYNOPSIS
Shell Chemical Company was the consignee of fifteen drums of
synthetic resin shipped on board a vessel which arrived at the Port of
Manila on August 7, 1962. The following day, the cargo was unloaded
and delivered in good to the Manila Port Service (MPS for short) as
arrastre operator. When the goods were delivered to the consignee,
one drum was missing. It was only several months thereafter,
however, that consignee filed a formal claim for the value of the
missing cargo. The MPS having refused to pay, the consignee filed
suit in the municipal court of Manila which rendered a decision in the
latter’s favor. This was affirmed by the Court of First Instance of
Manila.
The Supreme Court reversed the judgment on the ground relied upon
by the MPS that the consignee’s failure to file a claim for loss or
damage within 15 days from the date of discharge of the cargo from
the carrying vessel under paragraph 15 of the management contract
which was incorporated in the gate pass and delivery permit, relieved
the said arrastre operator of any liability for nondelivery.
SYLLABUS
1. ARRASTRE SERVICE; CLAIM FOR SHORT DELIVERY;
MANAGEMENT CONTRACT ENFORCEABLE AGAINST
CONSIGNEE IN INSTANT CASE. — The management contract is
enforceable against the consignee because it was incorporated in the
gate pass and delivery permit. The consignee obtained delivery of the
cargo by means of those documents. The consignee availed itself of
the arrastre operator’s services. Moreover, the consignee’s action for
damages is based on the provision of the management contract.
Paragraph 15 thereof contains a stipulation for the liability of the
arrastre contractor to the consignee. It is a sort of stipulation pour atrui
within the meaning of article 1311 of the Civil Code. The consignee
cannot be permitted to take advantage of the favorable provisions of
paragraph 15 and reject those that are disadvantageous to it.
2. ID.; ID.; REQUIREMENT OF FILING CLAIM WITHIN THE
FIFTEEN-DAY PERIOD UNDER MANAGEMENT CONTRACT
PURPOSE. — The purpose of the requirement that a claim should be
filed within the fifteen-day period is a apprise the arrastre operator of
the existence of a claim and to enable it to check on the validity of the
claimant’s demand while the facts are still fresh in the recollection of
the persons who took part in the undertaking and the pertinent papers
are still available.
3. ID.; ID.; ID.; PROVISIONAL CLAIM FILED FIFTEEN DAYS
BEFORE VESSEL’S ARRIVAL NOT A COMPLIANCE THEREWITH;
CASE AT BAR. — The provisional claim which plaintiff filed fifteen
days before the vessel’s arrival at the port of Manila in anticipation of
any possible shortage or damage was premature and speculative. It
was not in compliance with paragraph 15 of the management contract.
Even the filing of a provisional claim on the day of the vessel’s arrival
but one day prior to the discharge to the cargo was held to be a non-
compliance with paragraph 15.
4. ID.; ID.; ID.; FAILURE TO FILE CLAIM WITHIN FIFTEEN DAYS
RELIEVES ARRASTRE CONTRACTOR OF ANY LIABILITY. —
Failure to file the claim within the fifteen-day period prescribed in
paragraph 15 of the management contract relieves the arrastre
contractor of any liability for nondelivery of the cargo and is a bar to
the court action.
38 TRANSPO LAW WEEK 5 9/15/19
DECISION
AQUINO, J.:
Shell Chemical Company (Philippines), Inc. was the consignee of
fifteen drums of synthetic resin shipped by Asiatic Petroleum
Corporation of New York on board the SS Fernview. That vessel
arrived at the port of Manila on August 7, 1962. On the following day,
August 8, the said cargo was unloaded and delivered in good order to
the Manila Port Service, the arrastre operator, a subsidiary of the
Manila Railroad Company, now the Philippine National Railways.
The Manila Port Service delivered to Shell Chemical Company on
September 7, 1962 fourteen drums. One drum was missing. On
January 25, 1963 Shell Chemical Company filed with the Manila Port
Service a formal claim for the value of the undelivered cargo in the
sum of P1,152.28. The arrastre operator refused to pay the claim.
On August 8, 1963 Shell Chemical Company sued the Manila Port
Service and its principal, the Manila Railroad Company, in the
municipal court of Manila for the recovery of the said sum of
P1,152.28. The municipal court rendered judgment in favor of Shell
Chemical Company. On appeal, the Court of First Instance of Manila
affirmed the municipal court’s judgment. It ordered the Manila Port
Service and the Manila Railroad Company to pay solidarily to Shell
Chemical Company the sum of P1,152.28 with legal rate of interest
from August 8, 1963 up to the date of payment, plus P200 as attorney’s
fees (Civil Case No. 55871).
The defendants appealed to this Court on pure questions of law. (The
appeal was made prior to Republic Act No. 5440 which took effect on
September 9, 1968).
Paragraph 15 of the management contract between the Manila Port
Service and the Bureau of Customs provides that the Manila Port
Service "shall be relieved and released of any and all responsibility or
liability for loss, damage, misdelivery, and/or nondelivery of goods,
unless suit in the court of proper jurisdiction is brought within a period
of one (1) year from the date of the discharge of the goods, or from the
date when the claim for the value of such goods have been rejected or
denied by the contractor, provided that such claim shall have been filed
with the contractor within fifteen (15) days from the date of the
discharge of the last package from the carrying vessel" (Exh. I and I-
A).
It should be stressed that the management contract, including the
conditions in paragraph 15 thereof, was incorporated by reference in
the gate passes and delivery permits which were used by the customs
broker of Shell Chemical Company to obtain delivery of the cargo from
the Manila Port Service (Exh. I and I-A, page 16 Record on Appeal).
Appellants Manila Port Service and Manila Railroad Company contend
that Shell Chemical Company cannot recover the value of the missing
cargo because it failed to comply with the condition precedent in
paragraph 15 that the consignee should file a claim for loss or damage
within fifteen days from the date of the discharge of the last package
from the carrying vessel.
Shell Chemical Company, instead of filing its claim within the fifteen-
day period from August 8, 1962, anticipated the shortage or damage
by filing a provisional claim with the Manila Port Service on July 23,
1962 or fifteen (15) days before the arrival of the carrying vessel (Exh.
F, page 15, Record on Appeal).
The trial court ruled that the management contract was not binding on
Shell Chemical Company because it was not a party or signatory
thereto. That ruling is erroneous. It was overturned by this Court in
several cases.
The management contract is enforceable against the consignee 1966, 16 SCRA 324; Domestic Insurance Company v. Manila Railroad
because, as already noted, it was incorporated in the gate pass and Company, L-24066, August 30, 1967, 20 SCRA 1190; Fireman’s Fund
delivery permit. The consignee obtained delivery of the cargo by Insurance Company v. Manila Port Service, L-22454, April 29, 1966,
means of those documents. The consignee availed itself of the arrastre 16 SCRA 795; Insurance Company of North America v. Manila
operator’s services. Moreover, the consignee’s action for damages is Railroad Company, L-23124, October 11, 1967, 21 SCRA 421).
based on the provisions of the management contract. Paragraph 15
contains a stipulation for the liability of the arrastre service contractor Failure to file the claim within the fifteen-day period prescribed in
to the consignee. It is a sort of stipulation pour atrui within the meaning paragraph 15 relieves the arrastre contractor of any liability for
of article 1311 of the Civil Code. The consignee cannot be permitted nondelivery of the cargo and is a bar to the court action (Insurance
to take advantage of the favorable provisions of paragraph 15 and Company of North America v. Manila Port Service, L-26268, March 25,
reject those that are disadvantageous to it (Manila Port Service v. 1970, 32 SCRA 39; Universal Insurance & Indemnity Company v.
Fortune Insurance Co., Inc., L-29812, May 24, 1972, 45 SCRA 65; Manila Railroad Company, L-24600, April 27, 1970, 32 SCRA 364).
Domestic Insurance Co. of the Phils. v. Manila Port Service and
M.R.R. Co., 114 Phil. 131; Insurance Co. of North America v. Manila WHEREFORE, the trial court’s judgment is reversed and set aside and
Port Service, 113 Phil. 553; Atlantic Mutual Insurance Co. v. Manila plaintiff-appellee’s claim is dismissed. No costs.
Port Service, 113 Phil. 395; Commercial Union Assurance Co., Ltd. v.
Manila Port Service, 113 Phil. 358; GSIS v. Manila Railroad Co. and SO ORDERED.
Manila Port Service, 111 Phil. 154; Smith, Bell & Co., Ltd. v. Manila
Port Service, 111 Phil. 628; Villanueva v. Barber Wilhelmsen Line, 110 Fernando (Chairman), Barredo, Antonio and Martin, JJ., concur.
Phil. 34; Jose Bernabe & Co., Inc. v. Delgado Brothers, Inc., 107 Phil.
287 and 107 Phil. 679; Northern Motors, Inc. v. Prince Line, 107 Phil. Concepcion, Jr., J., is on leave.
253; Tomas Grocery v. Delgado Brothers, 105 Phil. 549; Delgado
Brothers v. Li Yao & Co., 107 Phil. 939; Sun Brothers v. Manila Port Martin J., was designated to sit in the Second Division.
Service, 107 Phil. 988; Juan Ysmael & Co. v. United States Lines Co.,
107 Phil. 1178; Lo Kiong v. United States Lines Co., L-18673,
November 29, 1965, 15 SCRA 339; Lexal Pure Drug Laboratories v.
Manila Railroad Company, L-20155, April 30, 1966, 16 SCRA 866;
Manila Port Service v. Court of Appeals, L-22618, August 31, 1967, 20
SCRA 1214; Republic Manufacturing Co., Inc. v. Manila Railroad
Company, L-22382, April 30, 1969, 27 SCRA 1237; Fearnley & Eger
and Macondray & Co., Inc. v. M.R.R. and/or Manila Port Service, 112
Phil. 370; Atlantic Mutual Ins. Co. v. Manila Port Service and MRR Co.,
116 Phil. 786; American Machinery & Parts Mfg., Inc. v. Hamburg-
Amerika Linie, L-21497, April 16, 1968, 23 SCRA 47; Yu Kimteng
Construction Corporation v. Manila Railroad Company, L-17027,
March 3, 1967, 19 SCRA 587; South Sea Surety & Insurance
Company v. Manila Port Service, L-26901, May 29, 1970, 33 SCRA
238).

The instant action of Shell Chemical Company should be dismissed

because it did not file any claim within the fifteen-day period. The filing
of such a claim was a condition precedent to the institution of the suit
for damages (Consunji v. Manila Port Service and Manila Railroad
Company, 110 Phil. 231; Ang Ching Gi v. Delgado Brothers, Inc., L-
22138, February 17, 1968, 22 SCRA 598; Villaruel v. Manila Port
Service, L-22535, March 28, 1968, 22 SCRA 1326; Manila Port
Service v. Court of Appeals, L-21890, March 29, 1968, 22 SCRA 1364;
Filipro, Inc. v. Manila Port Service, L-25724, October 8, 1968, 25
SCRA 457).

That defense that the consignee did not file a claim within the fifteen-
day period was pleaded in defendant’s answer. That defense was
erroneously rejected by the trial court. The purpose of the requirement
that a claim should be filed within the fifteen-day period is to apprise
the arrastre operator of the existence of a claim and to enable it to
check on the validity of the claimant’s demand while the facts are still
fresh in the recollection of the persons who took part in the undertaking
and the pertinent papers are still available (Manila Port Service v.
Fortune Insurance & Surety Co., Inc., supra).

The provisional claim which Shell Chemical Company filed on July 23,
1962, fifteen days before the vessel’s arrival at the port of Manila in
anticipation of any possible shortage or damage, was premature and
speculative. It was not in compliance with paragraph 15. Even the filing
of a provisional claim on the day of the vessel’s arrival but one day
prior to the discharge of the cargo was held to be a noncompliance
with paragraph 15 (Manila Port Service v. Fortune Insurance & Surety
Co., Inc., supra; New Hampshire Fire Insurance Co. v. Manila Port
Service, L-20938, August 9, 1966, 17 SCRA 899; Rizal Surety and
Insurance Co., Inc. v. Manila Railroad Company, L-22409, April 27,
1967, 19 SCRA 870; Insurance Company of North America v. Manila
Port Service, L-23124, October 11, 1967, 21 SCRA 421; Shell
Company of the Phil., Ltd. v. Compañia General de Tabacos de
Filipinas, L-20230, July 30, 1965, 14 SCRA 763; State Bonding &
Insurance Co., Inc. v. Manila Port Service, L-21833, February 28,
39 TRANSPO LAW WEEK 5 9/15/19
 16. G.R. No. 168402 August 6, 2008
ABOITIZ SHIPPING CORPORATION, petitioner,
vs.
INSURANCE COMPANY OF NORTH AMERICA, respondent.
DECISION
REYES, R.T., J.:
THE RIGHT of subrogation attaches upon payment by the insurer of
the insurance claims by the assured. As subrogee, the insurer steps
into the shoes of the assured and may exercise only those rights that
the assured may have against the wrongdoer who caused the
damage.
Before Us is a petition for review on certiorari of the Decision1 of the
Court of Appeals (CA) which reversed the Decision2 of the Regional
Trial Court (RTC). The CA ordered petitioner Aboitiz Shipping
Corporation to pay the sum of P280,176.92 plus interest and attorney's
fees in favor of respondent Insurance Company of North America
(ICNA).
The Facts
Culled from the records, the facts are as follows:
On June 20, 1993, MSAS Cargo International Limited and/or
Associated and/or Subsidiary Companies (MSAS) procured a marine
insurance policy from respondent ICNA UK Limited of London. The
insurance was for a transshipment of certain wooden work tools and
workbenches purchased for the consignee Science Teaching
Improvement Project (STIP), Ecotech Center, Sudlon Lahug, Cebu
City, Philippines.3 ICNA issued an "all-risk" open marine
policy,4 stating:
This Company, in consideration of a premium as agreed and
subject to the terms and conditions printed hereon, does
insure for MSAS Cargo International Limited &/or
Associated &/or Subsidiary Companies on behalf of the title
holder: - Loss, if any, payable to the Assured or order.5
The cargo, packed inside one container van, was shipped "freight
prepaid" from Hamburg, Germany on board M/S Katsuragi. A clean bill
of lading6 was issued by Hapag-Lloyd which stated the consignee to
be STIP, Ecotech Center, Sudlon Lahug, Cebu City.
The container van was then off-loaded at Singapore and transshipped
on board M/S Vigour Singapore. On July 18, 1993, the ship arrived
and docked at the Manila International Container Port where the
container van was again off-loaded. On July 26, 1993, the cargo was
received by petitioner Aboitiz Shipping Corporation (Aboitiz) through
its duly authorized booking representative, Aboitiz Transport System.
The bill of lading7 issued by Aboitiz contained the notation "grounded
outside warehouse."
The container van was stripped and transferred to another
crate/container van without any notation on the condition of the cargo
on the Stuffing/Stripping Report.8 On August 1, 1993, the container
van was loaded on board petitioner's vessel, MV Super Concarrier I.
The vessel left Manila en route to Cebu City on August 2, 1993.
On August 3, 1993, the shipment arrived in Cebu City and discharged
onto a receiving apron of the Cebu International Port. It was then
brought to the Cebu Bonded Warehousing Corporation pending
clearance from the Customs authorities. In the Stripping Report9 dated
August 5, 1993, petitioner's checker noted that the crates were slightly
broken or cracked at the bottom.
On August 11, 1993, the cargo was withdrawn by the representative
of the consignee, Science Teaching Improvement Project (STIP) and
delivered to Don Bosco Technical High School, Punta Princesa, Cebu
City. It was received by Mr. Bernhard Willig. On August 13, 1993, Mayo
B. Perez, then Claims Head of petitioner, received a telephone call
from Willig informing him that the cargo sustained water damage.
Perez, upon receiving the call, immediately went to the bonded
warehouse and checked the condition of the container and other
cargoes stuffed in the same container. He found that the container van
and other cargoes stuffed there were completely dry and showed no
sign of wetness.10
Perez found that except for the bottom of the crate which was slightly
broken, the crate itself appeared to be completely dry and had no
40 TRANSPO LAW WEEK 5 9/15/19
water marks. But he confirmed that the tools which were stored inside
the crate were already corroded. He further explained that the
"grounded outside warehouse" notation in the bill of lading referred
only to the container van bearing the cargo.11
In a letter dated August 15, 1993, Willig informed Aboitiz of the
damage noticed upon opening of the cargo.12 The letter stated that the
crate was broken at its bottom part such that the contents were
exposed. The work tools and workbenches were found to have been
completely soaked in water with most of the packing cartons already
disintegrating. The crate was properly sealed off from the inside with
tarpaper sheets. On the outside, galvanized metal bands were nailed
onto all the edges. The letter concluded that apparently, the damage
was caused by water entering through the broken parts of the crate.
The consignee contacted the Philippine office of ICNA for insurance
claims. On August 21, 1993, the Claimsmen Adjustment Corporation
(CAC) conducted an ocular inspection and survey of the damage. CAC
reported to ICNA that the goods sustained water damage, molds, and
corrosion which were discovered upon delivery to consignee.13
On September 21, 1993, the consignee filed a formal claim14 with
Aboitiz in the amount of P276,540.00 for the damaged condition of the
following goods:
ten (10) wooden workbenches
three (3) carbide-tipped saw blades
one (1) set of ball-bearing guides
one (1) set of overarm router bits
twenty (20) rolls of sandpaper for stroke sander
In a Supplemental Report dated October 20, 1993,15 CAC reported to
ICNA that based on official weather report from the Philippine
Atmospheric, Geophysical and Astronomical Services Administration,
it would appear that heavy rains on July 28 and 29, 1993 caused water
damage to the shipment. CAC noted that the shipment was placed
outside the warehouse of Pier No. 4, North Harbor, Manila when it was
delivered on July 26, 1993. The shipment was placed outside the
warehouse as can be gleaned from the bill of lading issued by Aboitiz
which contained the notation "grounded outside warehouse." It was
only on July 31, 1993 when the shipment was stuffed inside another
container van for shipment to Cebu.
Aboitiz refused to settle the claim. On October 4, 1993, ICNA paid the
amount of P280,176.92 to consignee. A subrogation receipt was duly
signed by Willig. ICNA formally advised Aboitiz of the claim and
subrogation receipt executed in its favor. Despite follow-ups, however,
no reply was received from Aboitiz.
RTC Disposition
ICNA filed a civil complaint against Aboitiz for collection of actual
damages in the sum of P280,176.92, plus interest and attorney's
fees.16 ICNA alleged that the damage sustained by the shipment was
exclusively and solely brought about by the fault and negligence of
Aboitiz when the shipment was left grounded outside its warehouse
prior to delivery.
Aboitiz disavowed any liability and asserted that the claim had no
factual and legal bases. It countered that the complaint stated no
cause of action, plaintiff ICNA had no personality to institute the suit,
the cause of action was barred, and the suit was premature there being
no claim made upon Aboitiz.
On November 14, 2003, the RTC rendered judgment against ICNA.
The dispositive portion of the decision17 states:
WHEREFORE, premises considered, the court holds that
plaintiff is not entitled to the relief claimed in the complaint
for being baseless and without merit. The complaint is
hereby DISMISSED. The defendant's counterclaims are,
likewise, DISMISSED for lack of basis.18
The RTC ruled that ICNA failed to prove that it is the real party-in-
interest to pursue the claim against Aboitiz. The trial court noted that
Marine Policy No. 87GB 4475 was issued by ICNA UK Limited with
address at Cigna House, 8 Lime Street, London EC3M 7NA. However,
complainant ICNA Phils. did not present any evidence to show that
ICNA UK is its predecessor-in-interest, or that ICNA UK assigned the
insurance policy to ICNA Phils. Moreover, ICNA Phils.' claim that it had
been subrogated to the rights of the consignee must fail because the
subrogation receipt had no probative value for being hearsay
evidence. The RTC reasoned:
While it is clear that Marine Policy No. 87GB 4475 was
issued by Insurance Company of North America (U.K.)
Limited (ICNA UK) with address at Cigna House, 8 Lime
Street, London EC3M 7NA, no evidence has been adduced
which would show that ICNA UK is the same as or the
predecessor-in-interest of plaintiff Insurance Company of
North America ICNA with office address at Cigna-Monarch
Bldg., dela Rosa cor. Herrera Sts., Legaspi Village,
Makati, Metro Manila or that ICNA UK assigned the Marine
Policy to ICNA. Second, the assured in the Marine Policy
appears to be MSAS Cargo International Limited &/or
Associated &/or Subsidiary Companies. Plaintiff's witness,
Francisco B. Francisco, claims that the signature below the
name MSAS Cargo International is an endorsement of the
marine policy in favor of Science Teaching Improvement
Project. Plaintiff's witness, however, failed to identify whose
signature it was and plaintiff did not present on the witness
stand or took (sic) the deposition of the person who made
that signature. Hence, the claim that there was an
endorsement of the marine policy has no probative value as
it is hearsay.
Plaintiff, further, claims that it has been subrogated to the
rights and interest of Science Teaching Improvement Project
as shown by the Subrogation Form (Exhibit "K") allegedly
signed by a representative of Science Teaching
Improvement Project. Such representative, however, was
not presented on the witness stand. Hence, the Subrogation
Form is self-serving and has no probative
value.19 (Emphasis supplied)
The trial court also found that ICNA failed to produce evidence that it
was a foreign corporation duly licensed to do business in the
Philippines. Thus, it lacked the capacity to sue before Philippine
Courts, to wit:
Prescinding from the foregoing, plaintiff alleged in its
complaint that it is a foreign insurance company duly
authorized to do business in the Philippines. This
allegation was, however, denied by the defendant. In fact, in
the Pre-Trial Order of 12 March 1996, one of the issues
defined by the court is whether or not the plaintiff has legal
capacity to sue and be sued. Under Philippine law, the
condition is that a foreign insurance company must obtain
licenses/authority to do business in the Philippines. These
licenses/authority are obtained from the Securities and
Exchange Commission, the Board of Investments and the
Insurance Commission. If it fails to obtain these
licenses/authority, such foreign corporation doing business
in the Philippines cannot sue before Philippine courts.
Mentholatum Co., Inc. v. Mangaliman, 72 Phil. 524.
(Emphasis supplied)
CA Disposition
ICNA appealed to the CA. It contended that the trial court failed to
consider that its cause of action is anchored on the right of subrogation
under Article 2207 of the Civil Code. ICNA said it is one and the same
as the ICNA UK Limited as made known in the dorsal portion of the
Open Policy.20
On the other hand, Aboitiz reiterated that ICNA lacked a cause of
action. It argued that the formal claim was not filed within the period
required under Article 366 of the Code of Commerce; that ICNA had
no right of subrogation because the subrogation receipt should have
been signed by MSAS, the assured in the open policy, and not Willig,
who is merely the representative of the consignee.
On March 29, 2005, the CA reversed and set aside the RTC ruling,
disposing as follows:
WHEREFORE, premises considered, the present appeal is
hereby GRANTED. The appealed decision of the Regional
Trial Court of Makati City in Civil Case No. 94-1590 is hereby
REVERSED and SET ASIDE. A new judgment is hereby
rendered ordering defendant-appellee Aboitiz Shipping
41 TRANSPO LAW WEEK 5 9/15/19
Corporation to pay the plaintiff-appellant Insurance
Company of North America the sum of P280,176.92 with
interest thereon at the legal rate from the date of the
institution of this case until fully paid, and attorney's fees in
the sum of P50,000, plus the costs of suit.21
The CA opined that the right of subrogation accrues simply upon
payment by the insurance company of the insurance claim. As
subrogee, ICNA is entitled to reimbursement from Aboitiz, even
assuming that it is an unlicensed foreign corporation. The CA ruled:
At any rate, We find the ground invoked for the dismissal of
the complaint as legally untenable. Even assuming
arguendo that the plaintiff-insurer in this case is an
unlicensed foreign corporation, such circumstance will not
bar it from claiming reimbursement from the defendant
carrier by virtue of subrogation under the contract of
insurance and as recognized by Philippine courts. x x x
xxxx
Plaintiff insurer, whether the foreign company or its duly
authorized Agent/Representative in the country, as
subrogee of the claim of the insured under the subject
marine policy, is therefore the real party in interest to bring
this suit and recover the full amount of loss of the subject
cargo shipped by it from Manila to the consignee in Cebu
City. x x x22
The CA ruled that the presumption that the carrier was at fault or that
it acted negligently was not overcome by any countervailing evidence.
Hence, the trial court erred in dismissing the complaint and in not
finding that based on the evidence on record and relevant provisions
of law, Aboitiz is liable for the loss or damage sustained by the subject
cargo.
Issues
The following issues are up for Our consideration:
(1) THE HONORABLE COURT OF APPEALS COMMITTED
A REVERSIBLE ERROR IN RULING THAT ICNA HAS A
CAUSE OF ACTION AGAINST ABOITIZ BY VIRTUE OF
THE RIGHT OF SUBROGATION BUT WITHOUT
CONSIDERING THE ISSUE CONSISTENTLY RAISED BY
ABOITIZ THAT THE FORMAL CLAIM OF STIP WAS NOT
MADE WITHIN THE PERIOD PRESCRIBED BY ARTICLE
366 OF THE CODE OF COMMERCE; AND, MORE SO,
THAT THE CLAIM WAS MADE BY A WRONG CLAIMANT.
(2) THE HONORABLE COURT OF APPEALS COMMITTED
A REVERSIBLE ERROR IN RULING THAT THE SUIT FOR
REIMBURSEMENT AGAINST ABOITIZ WAS PROPERLY
FILED BY ICNA AS THE LATTER WAS AN AUTHORIZED
AGENT OF THE INSURANCE COMPANY OF NORTH
AMERICA (U.K.) ("ICNA UK").
(3) THE HONORABLE COURT OF APPEALS COMMITTED
A REVERSIBLE ERROR IN RULING THAT THERE WAS
PROPER INDORSEMENT OF THE INSURANCE
POLICY FROM THE ORIGINAL ASSURED MSAS CARGO
INTERNATIONAL LIMITED ("MSAS") IN FAVOR OF THE
CONSIGNEE STIP, AND THAT THE SUBROGATION
RECEIPT ISSUED BY STIP IN FAVOR OF ICNA IS VALID
NOTWITHSTANDING THE FACT THAT IT HAS NO
PROBATIVE VALUE AND IS MERELY HEARSAY AND A
SELF-SERVING DOCUMENT FOR FAILURE OF ICNA TO
PRESENT A REPRESENTATIVE OF STIP TO IDENTIFY
AND AUTHENTICATE THE SAME.
(4) THE HONORABLE COURT OF APPEALS COMMITTED
A REVERSIBLE ERROR IN RULING THAT THE EXTENT
AND KIND OF DAMAGE SUSTAINED BY THE SUBJECT
CARGO WAS CAUSED BY THE FAULT OR NEGLIGENCE
OF ABOITIZ.23 (Underscoring supplied)
Elsewise stated, the controversy rotates on three (3) central questions:
(a) Is respondent ICNA the real party-in-interest that possesses the
right of subrogation to claim reimbursement from petitioner Aboitiz? (b)
Was there a timely filing of the notice of claim as required under Article
366 of the Code of Commerce? (c) If so, can petitioner be held liable
on the claim for damages?
Our Ruling
We answer the triple questions in the affirmative.
A foreign corporation not licensed to do business in the
Philippines is not absolutely incapacitated from filing a suit in
local courts. Only when that foreign corporation is "transacting" or
"doing business" in the country will a license be necessary before it
can institute suits.24 It may, however, bring suits on isolated business
transactions, which is not prohibited under Philippine law.25 Thus, this
Court has held that a foreign insurance company may sue in Philippine
courts upon the marine insurance policies issued by it abroad to cover
international-bound cargoes shipped by a Philippine carrier, even if it
has no license to do business in this country. It is the act of engaging
in business without the prescribed license, and not the lack of license
per se, which bars a foreign corporation from access to our courts.26
In any case, We uphold the CA observation that while it was the ICNA
UK Limited which issued the subject marine policy, the present suit
was filed by the said company's authorized agent in Manila. It was the
domestic corporation that brought the suit and not the foreign
company. Its authority is expressly provided for in the open policy
which includes the ICNA office in the Philippines as one of the foreign
company's agents.
As found by the CA, the RTC erred when it ruled that there was no
proper indorsement of the insurance policy by MSAS, the shipper, in
favor of STIP of Don Bosco Technical High School, the consignee.
The terms of the Open Policy authorize the filing of any claim on the
insured goods, to be brought against ICNA UK, the company who
issued the insurance, or against any of its listed agents
worldwide.27 MSAS accepted said provision when it signed and
accepted the policy. The acceptance operated as an acceptance of
the authority of the agents. Hence, a formal indorsement of the policy
to the agent in the Philippines was unnecessary for the latter to
exercise the rights of the insurer.
Likewise, the Open Policy expressly provides that:
The Company, in consideration of a premium as agreed and
subject to the terms and conditions printed hereon, does
insure MSAS Cargo International Limited &/or Associates
&/or Subsidiary Companies in behalf of the title holder: -
Loss, if any, payable to the Assured or Order.
The policy benefits any subsequent assignee, or holder, including the
consignee, who may file claims on behalf of the assured. This is in
keeping with Section 57 of the Insurance Code which states:
A policy may be so framed that it will inure to the benefit of
whosoever, during the continuance of the risk, may become
the owner of the interest insured. (Emphasis added)
Respondent's cause of action is founded on it being subrogated
to the rights of the consignee of the damaged shipment. The right
of subrogation springs from Article 2207 of the Civil Code, which
states:
Article 2207. If the plaintiff's property has been insured, and
he has received indemnity from the insurance company for
the injury or loss arising out of the wrong or breach of
contract complained of, the insurance company shall be
subrogated to the rights of the insured against the
wrongdoer or the person who has violated the contract. If the
amount paid by the insurance company does not fully cover
the injury or loss, the aggrieved party shall be entitled to
recover the deficiency from the person causing the loss or
injury. (Emphasis added)
As this Court held in the case of Pan Malayan Insurance Corporation
v. Court of Appeals,28 payment by the insurer to the assured operates
as an equitable assignment of all remedies the assured may have
against the third party who caused the damage. Subrogation is not
dependent upon, nor does it grow out of, any privity of contract or upon
written assignment of claim. It accrues simply upon payment of the
insurance claim by the insurer.29
Upon payment to the consignee of indemnity for damage to the insured
goods, ICNA's entitlement to subrogation equipped it with a cause of
action against petitioner in case of a contractual breach or
negligence.30 This right of subrogation, however, has its limitations.
42 TRANSPO LAW WEEK 5 9/15/19
First, both the insurer and the consignee are bound by the contractual
stipulations under the bill of lading.31 Second, the insurer can be
subrogated only to the rights as the insured may have against the
wrongdoer. If by its own acts after receiving payment from the insurer,
the insured releases the wrongdoer who caused the loss from liability,
the insurer loses its claim against the latter.32
The giving of notice of loss or injury is a condition precedent to
the action for loss or injury or the right to enforce the carrier's
liability. Circumstances peculiar to this case lead Us to conclude
that the notice requirement was complied with. As held in the case
of Philippine American General Insurance Co., Inc. v. Sweet Lines,
Inc.,33 this notice requirement protects the carrier by affording it an
opportunity to make an investigation of the claim while the matter is
still fresh and easily investigated. It is meant to safeguard the carrier
from false and fraudulent claims.
Under the Code of Commerce, the notice of claim must be made within
twenty four (24) hours from receipt of the cargo if the damage is not
apparent from the outside of the package. For damages that are visible
from the outside of the package, the claim must be made immediately.
The law provides:
Article 366. Within twenty four hours following the receipt of
the merchandise, the claim against the carrier for damages
or average which may be found therein upon opening the
packages, may be made, provided that the indications of the
damage or average which give rise to the claim cannot be
ascertained from the outside part of such packages, in which
case the claim shall be admitted only at the time of receipt.
After the periods mentioned have elapsed, or the
transportation charges have been paid, no claim shall be
admitted against the carrier with regard to the condition in
which the goods transported were delivered. (Emphasis
supplied)
The periods above, as well as the manner of giving notice may be
modified in the terms of the bill of lading, which is the contract between
the parties. Notably, neither of the parties in this case presented the
terms for giving notices of claim under the bill of lading issued by
petitioner for the goods.
The shipment was delivered on August 11, 1993. Although the letter
informing the carrier of the damage was dated August 15, 1993, that
letter, together with the notice of claim, was received by petitioner only
on September 21, 1993. But petitioner admits that even before it
received the written notice of claim, Mr. Mayo B. Perez, Claims Head
of the company, was informed by telephone sometime in August 13,
1993. Mr. Perez then immediately went to the warehouse and to the
delivery site to inspect the goods in behalf of petitioner.34
In the case of Philippine Charter Insurance Corporation (PCIC) v.
Chemoil Lighterage Corporation,35 the notice was allegedly made by
the consignee through telephone. The claim for damages was denied.
This Court ruled that such a notice did not comply with the notice
requirement under the law. There was no evidence presented that the
notice was timely given. Neither was there evidence presented that the
notice was relayed to the responsible authority of the carrier.
As adverted to earlier, there are peculiar circumstances in the instant
case that constrain Us to rule differently from the PCIC case, albeit this
ruling is being made pro hac vice, not to be made a precedent for other
cases.
Stipulations requiring notice of loss or claim for damage as a condition
precedent to the right of recovery from a carrier must be given a
reasonable and practical construction, adapted to the circumstances
of the case under adjudication, and their application is limited to cases
falling fairly within their object and purpose.36
Bernhard Willig, the representative of consignee who received the
shipment, relayed the information that the delivered goods were
discovered to have sustained water damage to no less than the Claims
Head of petitioner, Mayo B. Perez. Immediately, Perez was able to
investigate the claims himself and he confirmed that the goods were,
indeed, already corroded.
Provisions specifying a time to give notice of damage to common
carriers are ordinarily to be given a reasonable and practical, rather
than a strict construction.37 We give due consideration to the fact that
the final destination of the damaged cargo was a school institution stored indoors during the time when it exercised custody before
where authorities are bound by rules and regulations governing their shipment to Cebu. As amply explained by the CA:
actions. Understandably, when the goods were delivered, the
On the other hand, the supplemental report submitted by the
necessary clearance had to be made before the package was opened.
surveyor has confirmed that it was rainwater that seeped into
Upon opening and discovery of the damaged condition of the goods,
the cargo based on official data from the PAGASA that there
a report to this effect had to pass through the proper channels before
was, indeed, rainfall in the Port Area of Manila from July 26
it could be finalized and endorsed by the institution to the claims to 31, 1993. The Surveyor specifically noted that the subject
department of the shipping company.
cargo was under the custody of appellee carrier from the
The call to petitioner was made two days from delivery, a reasonable time it was delivered by the shipper on July 26, 1993 until it
period considering that the goods could not have corroded instantly was stuffed inside Container No. ACCU-213798-4 on July
overnight such that it could only have sustained the damage during 31, 1993. No other inevitable conclusion can be deduced
transit. Moreover, petitioner was able to immediately inspect the from the foregoing established facts that damage from
damage while the matter was still fresh. In so doing, the main objective "wettage" suffered by the subject cargo was caused by the
of the prescribed time period was fulfilled. Thus, there was substantial negligence of appellee carrier in grounding the shipment
compliance with the notice requirement in this case. outside causing rainwater to seep into the cargoes.
To recapitulate, We have found that respondent, as subrogee of the Appellee's witness, Mr. Mayo tried to disavow any
consignee, is the real party in interest to institute the claim for damages responsibility for causing "wettage" to the subject goods by
against petitioner; and pro hac vice, that a valid notice of claim was claiming that the notation "GROUNDED OUTSIDE WHSE."
made by respondent. actually refers to the container and not the contents thereof
or the cargoes. And yet it presented no evidence to explain
We now discuss petitioner's liability for the damages sustained by the
shipment. The rule as stated in Article 1735 of the Civil Code is where did they place or store the subject goods from the time
it accepted the same for shipment on July 26, 1993 up to the
that in cases where the goods are lost, destroyed or deteriorated,
time the goods were stripped or transferred from the
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed container van to another container and loaded into the
vessel M/V Supercon Carrier I on August 1, 1993 and left
extraordinary diligence required by law.38 Extraordinary diligence is
Manila for Cebu City on August 2, 1993. x x x If the subject
that extreme measure of care and caution which persons of unusual
cargo was not grounded outside prior to shipment to Cebu
prudence and circumspection use for securing and preserving their
City, appellee provided no explanation as to where said
own property rights.39 This standard is intended to grant favor to the
shipper who is at the mercy of the common carrier once the goods cargo was stored from July 26, 1993 to July 31, 1993. What
the records showed is that the subject cargo was stripped
have been entrusted to the latter for shipment.40
from the container van of the shipper and transferred to the
Here, the shipment delivered to the consignee sustained water container on August 1, 1993 and finally loaded into the
damage. We agree with the findings of the CA that petitioner failed to appellee's vessel bound for Cebu City on August 2, 1993.
overturn this presumption: The Stuffing/Stripping Report (Exhibit "D") at the Manila port
x x x upon delivery of the cargo to the consignee Don Bosco did not indicate any such defect or damage, but when the
Technical High School by a representative from Trabajo container was stripped upon arrival in Cebu City port after
Arrastre, and the crates opened, it was discovered that the being discharged from appellee's vessel, it was noted that
workbenches and work tools suffered damage due to only one (1) slab was slightly broken at the bottom allegedly
"wettage" although by then they were already physically hit by a forklift blade (Exhibit "F").43 (Emphasis added)
dry. Appellee carrier having failed to discharge the burden of Petitioner is thus liable for the water damage sustained by the goods
proving that it exercised extraordinary diligence in the due to its failure to satisfactorily prove that it exercised the
vigilance over such goods it contracted for carriage, the extraordinary diligence required of common carriers.
presumption of fault or negligence on its part from the time
the goods were unconditionally placed in its possession WHEREFORE, the petition is DENIED and the appealed
Decision AFFIRMED.
(July 26, 1993) up to the time the same were delivered to the
consignee (August 11, 1993), therefore stands. The SO ORDERED.
presumption that the carrier was at fault or that it acted
negligently was not overcome by any countervailing
evidence. x x x41 (Emphasis added)
The shipment arrived in the port of Manila and was received by
petitioner for carriage on July 26, 1993. On the same day, it was
stripped from the container van. Five days later, on July 31, 1993, it
was re-stuffed inside another container van. On August 1, 1993, it was
loaded onto another vessel bound for Cebu. During the period
between July 26 to 31, 1993, the shipment was outside a container
van and kept in storage by petitioner.
The bill of lading issued by petitioner on July 31, 1993 contains the
notation "grounded outside warehouse," suggesting that from July 26
to 31, the goods were kept outside the warehouse. And since evidence
showed that rain fell over Manila during the same period, We can
conclude that this was when the shipment sustained water damage.
To prove the exercise of extraordinary diligence, petitioner must do
more than merely show the possibility that some other party could be
responsible for the damage. It must prove that it used "all reasonable
means to ascertain the nature and characteristic of the goods tendered
for transport and that it exercised due care in handling
them.42 Extraordinary diligence must include safeguarding the
shipment from damage coming from natural elements such as rainfall.
Aside from denying that the "grounded outside warehouse" notation
referred not to the crate for shipment but only to the carrier van,
petitioner failed to mention where exactly the goods were stored during
the period in question. It failed to show that the crate was properly
43 TRANSPO LAW WEEK 5 9/15/19