G.R. No.

118664 August 7, 1998 WHEREFORE, with the foregoing

JAPAN AIRLINES, petitioner,  Modification, the judgment appealed from is
vs. hereby AFFIRMED in all other respects.
THE COURT OF APPEALS, ENRIQUE AGANA., MARIA JAL filed a motion for reconsideration which proved futile and
ANGELA NINA AGANA, ADALIA B. FRANCISCO and JOSE unavailing. 4
MIRANDA, respondents. 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
ROMERO, J.:
its stranded passengers until they have reached their final
Before us is an appeal by certiorari filed by petitioner Japan
destination, even if the delay were caused by "force majeure."
Airlines, Inc. (JAL) seeking the reversal of the decision of the
To begin with, there is no dispute that the Mt. Pinatubo
Court of Appeals, 1 which affirmed with modification the award
eruption prevented JAL from proceeding to Manila on
of damages made by the trial court in favor of herein private
schedule. Likewise, private respondents concede that such
respondents Enrique Agana, Maria Angela Nina Agana, Adelia
event can be considered as "force majeure" since their
Francisco and Jose Miranda.
delayed arrival in Manila was not imputable to JAL. 5
On June 13, 1991, private respondent Jose Miranda boarded
However, private respondents contend that while JAL cannot
JAL flight No. JL 001 in San Francisco, California bound for
be held responsible for the delayed arrival in Manila, it was
Manila. Likewise, on the same day private respondents
nevertheless liable for their living expenses during their
Enrique Agana, Maria Angela Nina Agana and Adelia Francisco
unexpected stay in Narita since airlines have the obligation to
left Los Angeles, California for Manila via JAL flight No. JL 061.
ensure the comfort and convenience of its passengers. While
As an incentive for travelling on the said airline, both flights
we sympathize with the private respondents' plight, we are
were to make an overnight stopover at Narita, Japan, at the
unable to accept this contention.
airlines' expense, thereafter proceeding to Manila the
We are not unmindful of the fact that in a plethora of cases
following day.
we have consistently ruled that a contract to transport
Upon arrival at Narita, Japan on June 14, 1991, private
passengers is quite different in kind, and degree from any
respondents were billeted at Hotel Nikko Narita for the night.
other contractual relation. It is safe to conclude that it is a
The next day, private respondents, on the final leg of their
relationship imbued with public interest. Failure on the part of
journey, went to the airport to take their flight to Manila.
the common carrier to live up to the exacting standards of
However, due to the Mt. Pinatubo eruption, unrelenting ashfall
care and diligence renders it liable for any damages that may
blanketed Ninoy Aquino International Airport (NAIA), rendering
be sustained by its passengers. However, this is not to say
it inaccessible to airline traffic. Hence, private respondents'
that common carriers are absolutely responsible for all injuries
trip to Manila was cancelled indefinitely.
or damages even if the same were caused by a fortuitous
To accommodate the needs of its stranded passengers, JAL
event. To rule otherwise would render the defense of "force
rebooked all the Manila-bound passengers on flight No. 741
majeure," as an exception from any liability, illusory and
due to depart on June 16, 1991 and also paid for the hotel
ineffective.
expenses for their unexpected overnight stay. On June 16,
Accordingly, there is no question that when a party is unable
1991, much to the dismay of the private respondents, their
to fulfill his obligation because of "force majeure," the general
long anticipated flight to Manila was again cancelled due to
rule is that he cannot be held liable for damages for non-
NAIA's indefinite closure. At this point, JAL informed the
performance.6 Corollarily, when JAL was prevented from
private respondents that it would no longer defray their hotel
resuming its flight to Manila due to the effects of Mt. Pinatubo
and accommodation expense during their stay in Narita.
eruption, whatever losses or damages in the form of hotel and
Since NAIA was only reopened to airline traffic on June 22,
meal expenses the stranded passengers incurred, cannot be
1991, private respondents were forced to pay for their
charged to JAL. Yet it is undeniable that JAL assumed the hotel
accommodations and meal expenses from their personal
expenses of respondents for their unexpected overnight stay
funds from June 16 to June 21, 1991. Their unexpected stay in
on June 15, 1991.
Narita ended on June 22, 1991 when they arrived in Manila on
Admittedly, to be stranded for almost a week in a foreign land
board JL flight No. 741.
was an exasperating experience for the private respondents.
Obviously, still reeling from the experience, private
To be sure, they underwent distress and anxiety during their
respondents, on July 25, 1991, commenced an action for
unanticipated stay in Narita, but their predicament was not
damages against JAL before the Regional Trial Court of
due to the fault or negligence of JAL but the closure of NAIA to
Quezon City, Branch 104. 2 To support their claim, private
international flights. Indeed, to hold JAL, in the absence of bad
respondents asserted that JAL failed to live up to its duty to
faith or negligence, liable for the amenities of its stranded
provide care and comfort to its stranded passengers when it
passengers by reason of a fortuitous event is too much of a
refused to pay for their hotel and accommodation expenses
burden to assume.
from June 16 to 21, 1991 at Narita, Japan. In other words, they
Furthermore, it has been held that airline passengers must
insisted that JAL was obligated to shoulder their expenses as
take such risks incident to the mode of travel. 7 In this regard,
long as they were still stranded in Narita. On the other hand,
adverse weather conditions or extreme climatic changes are
JAL denied this allegation and averred that airline passengers
some of the perils involved in air travel, the consequences of
have no vested right to these amenities in case a flight is
which the passenger must assume or expect. After all,
cancelled due to "force majeure."
common carriers are not the insurer of all risks. 8
On June 18, 1992, the trial court rendered its judgment in
Paradoxically, the Court of Appeals, despite the presence of
favor of private respondents holding JAL liable for
"force majeure," still ruled against JAL relying in our decision
damages, viz.:
in PAL v. Court of Appeals, 9 thus:
WHEREFORE, judgment is rendered in favor
The position taken by PAL in this case
of plaintiffs ordering the defendant Japan
clearly illustrates its failure to grasp the
Airlines to pay the plaintiffs Enrique Agana,
exacting standard required by law.
Adalia B. Francisco and Maria Angela Nina
Undisputably, PAL's diversion of its flight
Agana the sum of One million Two Hundred
due to inclement weather was a fortuitous
forty-six Thousand Nine Hundred Thirty-Six
event. Nonetheless, such occurrence did not
Pesos (P1,246,936.00) and Jose Miranda the
terminate PAL's contract with its
sum of Three Hundred Twenty Thousand Six
passengers. Being in the business of air
Hundred sixteen and 31/100 (P320,616.31)
carriage and the sole one to operate in the
as actual, moral and exemplary damages
country, PAL is deemed equipped to deal
and pay attorney's fees in the amount of
with situations as in the case at bar. What
Two Hundred Thousand Pesos
we said in one case once again must be
(P200,000.00), and to pay the costs of suit.
stressed, i.e., the relation of carrier and
Undaunted, JAL appealed the decision before the Court of
passenger continues until the latter has
Appeals, which, however, with the exception of lowering the
been landed at the port of destination and
damages awarded affirmed the trial court's finding, 3 thus:
has left the carrier's premises. Hence, PAL
Thus, the award of moral damages should
necessarily would still have to exercise
be as it is hereby reduced to P200,000.00
extraordinary diligence in safeguarding the
for each of the plaintiffs, the exemplary
comfort, convenience and safety of its
damages to P300,000.00 and the attorney's
stranded passengers until they have
fees to P100,000.00 plus the costs.
reached their final destination. On this
score, PAL grossly failed considering the

1
 then ongoing battle between government At around 6:30 p.m. on November 12, 1991, along
forces and Muslim rebels in Cotabato City Aguinaldo Highway, San Agustin, Dasmarias, Cavite, the
and the fact that the private respondent Celyrosa Express bus, carrying Dr. Mariano as its passenger,
was a stranger to the place. collided with an Isuzu truck with trailer bearing plate numbers
The reliance is misplaced. The factual background of the PAL PJH 906 and TRH 531. The passenger bus was bound for
case is different from the instant petition. In that case there Tagaytay while the trailer truck came from the opposite
was indeed a fortuitous event resulting in the diversion of the direction, bound for Manila. The trailer truck bumped the
PAL flight. However, the unforeseen diversion was worsened passenger bus on its left middle portion. Due to the impact,
when "private respondents (passenger) was left at the airport the passenger bus fell on its right side on the right shoulder of
and could not even hitch a ride in a Ford Fiera loaded with PAL the highway and caused the death of Dr. Mariano and physical
personnel," 10 not to mention the apparent apathy of the PAL injuries to four other passengers. Dr. Mariano was 36 years
station manager as to the predicament of the stranded old at the time of her death. She left behind three minor
passengers. 11 In light of these circumstances, we held that if children, aged four, three and two years.
the fortuitous event was accompanied by neglect and Petitioner filed a complaint for breach of contract of
malfeasance by the carrier's employees, an action for carriage and damages against respondents for their failure to
damages against the carrier is permissible. Unfortunately, for transport his wife and mother of his three minor children
private respondents, none of these conditions are present in safely to her destination. Respondents denied liability for the
the instant petition. death of Dr. Mariano. They claimed that the proximate cause
We are not prepared, however, to completely absolve of the accident was the recklessness of the driver of the trailer
petitioner JAL from any liability. It must be noted that private truck which bumped their bus while allegedly at a halt on the
respondents bought tickets from the United States with Manila shoulder of the road in its rightful lane. Thus, respondent
as their final destination. While JAL was no longer required to Callejas filed a third-party complaint against Liong Chio
defray private respondents' living expenses during their stay Chang, doing business under the name and style of La Perla
in Narita on account of the fortuitous event, JAL had the duty Sugar Supply, the owner of the trailer truck, for indemnity in
to make the necessary arrangements to transport private the event that he would be held liable for damages to
respondents on the first available connecting flight to Manila. petitioner.
Petitioner JAL reneged on its obligation to look after the Other cases were filed. Callejas filed a complaint,
comfort and convenience of its passengers when it [4]
 docketed as Civil Case No. NC-397 before the RTC of Naic,
declassified private respondents from "transit passengers" to Cavite, against La Perla Sugar Supply and Arcadio Arcilla, the
"new passengers" as a result of which private respondents truck driver, for damages he incurred due to the vehicular
were obliged to make the necessary arrangements accident. On September 24, 1992, the said court dismissed
themselves for the next flight to Manila. Private respondents the complaint against La Perla Sugar Supply for lack of
were placed on the waiting list from June 20 to June 24. To evidence. It, however, found Arcilla liable to pay Callejas the
assure themselves of a seat on an available flight, they were cost of the repairs of his passenger bus, his lost earnings,
compelled to stay in the airport the whole day of June 22, exemplary damages and attorneys fees.[5]
1991 and it was only at 8:00 p.m. of the aforesaid date that A criminal case, Criminal Case No. 2223-92, was also
they were advised that they could be accommodated in said filed against truck driver Arcilla in the RTC of Imus, Cavite. On
flight which flew at about 9:00 a.m. the next day. May 3, 1994, the said court convicted truck driver Arcadio
We are not oblivious to the fact that the cancellation of JAL Arcilla of the crime of reckless imprudence resulting to
flights to Manila from June 15 to June 21, 1991 caused homicide, multiple slight physical injuries and damage to
considerable disruption in passenger booking and reservation. property.[6]
In fact, it would be unreasonable to expect, considering NAIA's In the case at bar, the trial court, in its Decision
closure, that JAL flight operations would be normal on the dated September 13, 1999, found respondents Ildefonso
days affected. Nevertheless, this does not excuse JAL from its Callejas and Edgar de Borja, together with Liong Chio Chang,
obligation to make the necessary arrangements to transport jointly and severally liable to pay petitioner damages and
private respondents on its first available flight to Manila. After costs of suit. The dispositive portion of the Decision reads:
all, it had a contract to transport private respondents from the ACCORDINGLY, the defendants are ordered
United States to Manila as their final destination. to pay as follows:
Consequently, the award of nominal damages is in order. 1.               The sum of P50,000.00
Nominal damages are adjudicated in order that a right of a as civil indemnity for the loss of
plaintiff, which has been violated or invaded by the defendant, life;
may be vindicated or recognized and not for the purpose of 2.               The sum of P40,000.00
indemnifying any loss suffered by him. 12 The court may as actual and compensatory
award nominal damages in every obligation arising from any damages;
source enumerated in article 1157, or in every case where 3.               The sum
any property right has been invaded. 13 of P1,829,200.00 as foregone
WHEREFORE, in view of the foregoing, the decision of the income;
Court of Appeals dated December 22, 1993 is hereby 4.               The sum of P30,000.00
MODIFIED. The award of actual, moral and exemplary as moral damages;
damages is hereby DELETED. Petitioner JAL is ordered to pay 5.               The sum of P20,000.00
each of the private respondents nominal damages in the sum as exemplary damages;
of P100,000.00 each including attorney' s fees of P50,000.00 6.               The costs of suit.
plus costs. SO ORDERED.[7]
SO ORDERED. Respondents Callejas and De Borja appealed to the Court of
Appeals, contending that the trial court erred in holding them
Herminio Mariano, Jr v Ildelfonso C. Callejas and Edgar guilty of breach of contract of carriage.
De Borja On May 21, 2004, the Court of Appeals reversed the
GR No. 166640 July 31, 2009 decision of the trial court. It reasoned:
DECISION . . . the presumption of fault or negligence
PUNO, C.J.: against the carrier is only a disputable
On appeal are the Decision [1] and Resolution[2] of the presumption. It gives in where contrary
Court of Appeals in CA-G.R. CV No. 66891, dated May 21, facts are established proving either that the
2004 and January 7, 2005 respectively, which reversed the carrier had exercised the degree of
Decision[3] of the Regional Trial Court (RTC) of Quezon City, diligence required by law or the injury
dated September 13, 1999, which found respondents jointly suffered by the passenger was due to a
and severally liable to pay petitioner damages for the death of fortuitous event. Where, as in the instant
his wife. case, the injury sustained by the petitioner
First, the facts: was in no way due to any defect in the
Petitioner Herminio Mariano, Jr. is the surviving means of transport or in the method of
spouse of Dr. Frelinda Mariano who was a passenger of a transporting or to the negligent or wilful
Celyrosa Express bus bound for Tagaytay when she met her acts of private respondent's employees, and
death. Respondent Ildefonso C. Callejas is the registered therefore involving no issue of negligence in
owner of Celyrosa Express, while respondent Edgar de Borja its duty to provide safe and suitable cars as
was the driver of the bus on which the deceased was a well as competent employees, with the
passenger. injury arising wholly from causes created by
strangers over which the carrier had no

2
 control or even knowledge or could not have exercised extraordinary diligence as
prevented, the presumption is rebutted and required by law in the performance of
the carrier is not and ought not to be held its contractual obligation, or that the
liable. To rule otherwise would make the injury suffered by the passenger was
common carrier the insurer of the absolute solely due to a fortuitous event.
safety of its passengers which is not the In fine, we can only infer from the
intention of the lawmakers.[8] law the intention of the Code Commission
The dispositive portion of the Decision reads: and Congress to curb the recklessness of
WHEREFORE, the decision drivers and operators of common carriers in
appealed from, insofar as it found the conduct of their business.
defendants-appellants Ildefonso Callejas and Thus, it is clear that neither
Edgar de Borja liable for damages to the law nor the nature of the business
plaintiff-appellee Herminio E. Mariano, Jr., is of a transportation company makes it
REVERSED and SET ASIDE and another one an insurer of the passenger's safety,
entered absolving them from any liability for but that its liability for personal injuries
the death of Dr. Frelinda Cargo Mariano.[9] sustained by its passenger rests upon its
The appellate court also denied the motion for negligence, its failure to exercise the degree
reconsideration filed by petitioner. of diligence that the law requires.
Hence, this appeal, relying on the following ground: In the case at bar, petitioner cannot succeed in his
THE DECISION OF THE HONORABLE COURT contention that respondents failed to overcome the
OF APPEALS, SPECIAL FOURTEENTH presumption of negligence against them. The totality of
DIVISION IS NOT IN ACCORD WITH THE evidence shows that the death of petitioners spouse was
FACTUAL BASIS OF THE CASE.[10] caused by the reckless negligence of the driver of the Isuzu
  trailer truck which lost its brakes and bumped the Celyrosa
The following are the provisions of the Civil Code Express bus, owned and operated by respondents.
pertinent to the case at bar: First, we advert to the sketch prepared by PO3
ART. 1733. Common carriers, from Magno S. de Villa, who investigated the accident. The
the nature of their business and for reasons sketch  shows the passenger bus facing the direction of
[13]

of public policy, are bound to observe Tagaytay City and lying on its right side on the shoulder of the
extraordinary diligence in the vigilance over road, about five meters away from the point of impact. On the
the goods and for the safety of the other hand, the trailer truck was on the opposite direction,
passengers transported by them, according about 500 meters away from the point of impact. PO3 De Villa
to all the circumstances of each case. stated that he interviewed De Borja, respondent driver of the
ART. 1755. A common carrier is passenger bus, who said that he was about to unload some
bound to carry the passengers safely as far passengers when his bus was bumped by the driver of the
as human care and foresight can provide, trailer truck that lost its brakes. PO3 De Villa checked out the
using the utmost diligence of very cautious trailer truck and found that its brakes really failed.He testified
persons, with a due regard for all the before the trial court, as follows:
circumstances. ATTY. ESTELYDIZ:
ART. 1756. In case of death of or q You pointed to the Isuzu truck beyond the
injuries to passengers, common carriers are point of impact. Did you investigate
presumed to have been at fault or to have why did (sic) the Isuzu truck is beyond
acted negligently, unless they prove that the point of impact?
they observed extraordinary diligence as a Because the truck has no brakes.
prescribed in articles 1733 and 1755. COURT:
In accord with the above provisions, Celyrosa q What is the distance between that circle
Express, a common carrier, through its driver, respondent De which is marked as Exh. 1-c to the
Borja, and its registered owner, respondent Callejas, has the place where you found the same?
express obligation to carry the passengers safely as far as a More or less 500 meters.
human care and foresight can provide, using the utmost q Why did you say that the truck has no
diligence of very cautious persons, with a due regard for all brakes?
the circumstances,[11] and to observe extraordinary diligence a I tested it.
in the discharge of its duty. The death of the wife of the q And you found no brakes?
petitioner in the course of transporting her to her destination a Yes, sir.
gave rise to the presumption of negligence of the carrier. To xxx
overcome the presumption, respondents have to show that q When you went to the scene of accident,
they observed extraordinary diligence in the discharge of their what was the position of Celyrosa bus?
duty, or that the accident was caused by a fortuitous event. a It was lying on its side.
This Court interpreted the above quoted provisions COURT:
in Pilapil v. Court of Appeals.[12] We elucidated: q Right side or left side?
While the law requires the highest a Right side.
degree of diligence from common carriers in ATTY. ESTELYDIZ:
the safe transport of their passengers and q On what part of the road was it lying?
creates a presumption of negligence against a On the shoulder of the road.
them, it does not, however, make the COURT:
carrier an insurer of the absolute q How many meters from the point of
safety of its passengers. impact?
Article 1755 of the Civil Code a Near, about 5 meters.[14]
qualifies the duty of extraordinary care, His police report bolsters his testimony and states:
vigilance and precaution in the carriage of Said vehicle 1 [passenger bus] was
passengers by common carriers to only such running from Manila toward south direction
as human care and foresight can provide. when, in the course of its travel, it was hit
What constitutes compliance with said duty and bumped by vehicle 2 [truck with trailer]
is adjudged with due regard to all the then running fast from opposite direction,
circumstances. causing said vehicle 1 to fall on its side on
Article 1756 of the Civil Code, in the road shoulder, causing the death of one
creating a presumption of fault or and injuries of some passengers thereof,
negligence on the part of the common and its damage, after collission (sic), vehicle
carrier when its passenger is injured, merely 2 continiously (sic) ran and stopped at
relieves the latter, for the time being, from approximately 500 meters away from the
introducing evidence to fasten the piont (sic) of impact.[15]
negligence on the former, because the In fine, the evidence shows that before the collision, the
presumption stands in the place of passenger bus was cruising on its rightful lane along the
evidence. Being a mere presumption, Aguinaldo Highway when the trailer truck coming from the
however, the same is rebuttable by opposite direction, on full speed, suddenly swerved and
proof that the common carrier had encroached on its lane, and bumped the passenger bus on its

3
left middle portion. Respondent driver De Borja had every former is a violation of the criminal law,
right to expect that the trailer truck coming from the opposite while the latter is a 'culpa aquiliana' or
direction would stay on its proper lane. He was not expected quasi-delict, of ancient origin, having always
to know that the trailer truck had lost its brakes. The swerving had its own foundation and individuality,
of the trailer truck was abrupt and it was running on a fast separate from criminal negligence. Such
speed as it was found 500 meters away from the point of distinction between criminal negligence and
collision. Secondly, any doubt as to the culpability of the 'culpa extra-contractual' or quasi-delito has
driver of the trailer truck ought to vanish when he pleaded been sustained by decision of the Supreme
guilty to the charge of reckless imprudence resulting to Court of Spain and maintained as clear,
multiple slight physical injuries and damage to property in sound and perfectly tenable by Maura, an
Criminal Case No. 2223-92, involving the same incident. outstanding Spanish jurist. Therefore, under
IN VIEW WHEREOF, the petition is DENIED. The the proposed Article 2177, acquittal from an
Decision dated May 21, 2004 and the Resolution dated accusation of criminal negligence, whether
January 7, 2005 of the Court of Appeals in CA-G.R. CV No. on reasonable doubt or not, shall not be a
66891 are AFFIRMED. bar to a subsequent civil action, not for civil
SO ORDERED. liability arising from criminal negligence, but
for damages due to a quasi-delict or 'culpa
aquiliana'. But said article forestalls a
G.R. No. L-46179 January 31, 1978 double recovery. (Report of the Code
CANDIDA VIRATA, TOMAS VIRATA, MANOLITO VIRATA, Commission, p. 162.)
EDERLINDA VIRATA, NAPOLEON VIRATA, ARACELY Although, again, this Article 2177 does seem
VIRATA, ZENAIDA VIRATA, LUZMINDA VIRATA, PACITA to literally refer to only acts of negligence,
VIRATA, and EVANGELINA VIRATA, petitioners,  the same argument of Justice Bocobo about
vs. construction that upholds 'the spirit that
VICTORIO OCHOA, MAXIMO BORILLA and THE COURT given life' rather than that which is literal
OF FIRST INSTANCE OF CAVITE, 7th JUDICIAL DISTRICT, that killeth the intent of the lawmaker
BRANCH V, stationed at BACOOR, CAVITE, respondents. should be observed in applying the same.
Remulla, Estrella & Associates for petitioners And considering that the preliminary
Exequil C. Masangkay for respondents. chapter on human relations of the new Civil
Code definitely establishes the separability
FERNANDEZ, J.: and independence of liability in a civil action
This is an appeal by certiorari, from the order of the Court of for acts criminal in character (under Articles
First Instance of Cavite, Branch V, in Civil Case No. B-134 29 to 32) from the civil responsibility arising
granting the motion of the defendants to dismiss the from crime fixed by Article 100 of the Penal
complaint on the ground that there is another action pending Code, and, in a sense, the Rules of Court,
between the same parties for the same cause. 1 under Sections 2 and 3(c), Rule 111,
The record shows that on September 24, 1975 one Arsenio contemplate also the same separability, it is
Virata died as a result of having been bumped while walking 'more congruent' with the spirit of law,
along Taft Avenue, Pasay City by a passenger jeepney driven equity and justice, and more in harmony
by Maximo Borilla and registered in the name Of Victoria with modern progress', to borrow the
Ochoa; that Borilla is the employer of Ochoa; that for the felicitous language in Rakes vs. Atlantic Gulf
death of Arsenio Virata, a action for homicide through reckless and Pacific Co., 7 Phil. to 359, to hod as We
imprudence was instituted on September 25, 1975 against do hold, that Article 2176, where it refers to
Maximo Borilla in the Court of First Instance of Rizal at Pasay 'fault covers not only acts 'not punishable
City, docketed as C Case No. 3162-P of said court; that at the by law' but also criminal in character,
hearing of the said criminal case on December 12, 1975, Atty. whether intentional and voluntary or
Julio Francisco, the private prosecutor, made a reservation to consequently, a separate civil action lies
file a separate civil action for damages against the driver on against the in a criminal act, whether or not
his criminal liability; that on February 19, 1976 Atty. Julio he is criminally prosecuted and found guilty
Francisco filed a motion in said c case to withdraw the and acquitted, provided that the offended
reservation to file a separate civil action; that thereafter, the party is not allowed, if he is actually
private prosecutor actively participated in the trial and charged also criminally, to recover damages
presented evidence on the damages; that on June 29, 1976 on both scores, and would be entitled in
the heirs of Arsenio Virata again reserved their right to such eventuality only to the bigger award of
institute a separate civil action; that on July 19, 1977 the heirs the, two assuming the awards made in the
of Arsenio Virata, petitioners herein, commenced Civil No. B- two cases vary. In other words the
134 in the Court of First Instance of Cavite at Bacoor, Branch extinction of civil liability refereed to in Par.
V, for damages based on quasi-delict against the driver (c) of Section 13, Rule 111, refers
Maximo Borilla and the registered owner of the jeepney, exclusively to civil liability founded on
Victorio Ochoa; that on August 13, 1976 the defendants, Article 100 of the Revised Penal Code,
private respondents filed a motion to dismiss on the ground whereas the civil liability for the same act
that there is another action, Criminal Case No. 3162-P, considered as a quasi-delict only and not as
pending between the same parties for the same cause; that a crime is not extinguished even by a
on September 8, 1976 the Court of First Instance of Rizal at declaration in the criminal case that the
Pasay City a decision in Criminal Case No. 3612-P acquitting criminal act charged has not happened or
the accused Maximo Borilla on the ground that he caused an has not been committed by the accused.
injury by name accident; and that on January 31, 1977, the Brief stated, We hold, in reitration of Garcia,
Court of First Instance of Cavite at Bacoor granted the motion that culpa aquilina includes voluntary and
to Civil Case No. B-134 for damages. 2 negligent acts which may be punishable by
The principal issue is weather or not the of the Arsenio Virata, law. 3
can prosecute an action for the damages based on quasi- The petitioners are not seeking to recover twice for the same
delict against Maximo Borilla and Victoria Ochoa, driver and negligent act. Before Criminal Case No. 3162-P was decided,
owner, respectively on the passenger jeepney that bumped they manifested in said criminal case that they were filing a
Arsenio Virata. separate civil action for damages against the owner and
It is settled that in negligence cases the aggrieved parties driver of the passenger jeepney based on quasi-delict. The
may choose between an action under the Revised Penal Code acquittal of the driver, Maximo Borilla, of the crime charged in
or of quasi-delict under Article 2176 of the Civil Code of the Criminal Case No. 3162-P is not a bar to the prosecution of
Philippines. What is prohibited by Article 2177 of the Civil Civil Case No. B-134 for damages based on quasi-delict The
Code of the Philippines is to recover twice for the same source of the obligation sought to be enforced in Civil Case
negligent act. No. B-134 is quasi-delict, not an act or omission punishable by
The Supreme Court has held that: law. Under Article 1157 of the Civil Code of the Philippines,
According to the Code Commission: 'The quasi-delict and an act or omission punishable by law are two
foregoing provision (Article 2177) though at different sources of obligation.
first sight startling, is not so novel or Moreover, for the petitioners to prevail in the action for
extraordinary when we consider the exact damages, Civil Case No. B-134, they have only to establish
nature of criminal and civil negligence. The their cause of action by preponderance of the evidence.

4
WHEREFORE, the order of dismissal appealed from is hereby as provided in these Rules shall constitute a
set aside and Civil Case No. B-134 is reinstated and remanded first lien on the judgment except in an
to the lower court for further proceedings, with costs against award for actual damages.
the private respondents. In cases wherein the amount of damages,
SO ORDERED. other than actual, is alleged in the
complaint or information, the corresponding
G.R. No. 91856 October 5, 1990 filing fees shall be paid by the offended
YAKULT PHILIPPINES AND LARRY SALVADO, petitioner,  party upon the filing thereof in court for
vs. trial. (1a)
COURT OF APPEALS, WENCESLAO M. POLO, in his Although the incident in question and the actions arising
capacity as Presiding Judge of Br. 19 of the RTC of therefrom were instituted before the promulgation of the
Manila, and ROY CAMASO, respondents. 1985 Rules of Criminal Procedure, its provisions which are
Tomas R. Leonidas for petitioners. procedural may apply retrospectively to the present case. 2
David B. Agoncillo for private respondent. Under the aforecited provisions of the rule, the civil action for
the recovery of civil liability is impliedly instituted with the
GANCAYCO, J.: criminal action unless the offended party waives the civil
Can a civil action instituted after the criminal action was filed action, reserves his right to institute it separately or institutes
prosper even if there was no reservation to file a separate the civil action prior to the criminal action.
civil action? This is the issue in this petition. Such civil action includes recovery of indemnity under the
On December 24, 1982, a five-year old boy, Roy Camaso, Revised Penal Code, and damages under Articles 32, 33, 34
while standing on the sidewalk of M. de la Fuente Street, and 2176 of the Civil Code of the Philippines arising from the
Sampaloc, Manila, was sideswiped by a Yamaha motorcycle same act or omission of the accused.
owned by Yakult Philippines and driven by its employee, Larry It is also provided that the reservation of the right to institute
Salvado. the separate civil action shall be made before the prosecution
Salvado was charged with the crime of reckless imprudence starts to present its evidence and under circumstances
resulting to slight physical injuries in an information that was affording the offended party a reasonable opportunity to
filed on January 6, 1983 with the then City Court of Manila, make such reservation.
docketed as Criminal Case No. 027184. On October 19, 1984 In this case, the offended party has not waived the civil
a complaint for damages was filed by Roy Camaso action, nor reserved the right to institute it separately. Neither
represented by his father, David Camaso, against Yakult has the offended party instituted the civil action prior to the
Philippines and Larry Salvado in the Regional Trial Court of criminal action. However, the civil action in this case was filed
Manila docketed as Civil Case No. 84-27317. in court before the presentation of the evidence for the
In due course a decision was rendered in the civil case on May prosecution in the criminal action of which the judge presiding
26, 1989 ordering defendants to pay jointly and severally the on the criminal case was duly informed, so that in the
plaintiff the sum of P13,006.30 for actual expenses for disposition of the criminal action no damages was awarded.
medical services and hospital bills; P3,000.00 attorney's fees The civil liability sought arising from the act or omission of the
and the costs of the suit. Although said defendants appealed accused in this case is a quasi delict as defined under Article
the judgment, they nevertheless filed a petition 2176 of the Civil Code as follows:
for certiorari in the Court of Appeals challenging the ART. 2176. Whoever by act or omission
jurisdiction of the trial court over said civil case. causes damage to another, there being fault
Petitioners' thesis is that the civil action for damages for or negligence, is obliged to pay for the
injuries arising from alleged criminal negligence of Salvado, damage done. Such fault or negligence, if
being without malice, cannot be filed independently of the there is no pre-existing contractual relation
criminal action under Article 33 of the Civil Code. Further, it is between the parties, is called a quasi-
contended that under Section 1, Rule 111 of the 1985 Rules delict and is governed by the provisions of
on Criminal Procedure such a separate civil action may not be this Chapter.
filed unless reservation thereof is expressly made. The aforecited revised rule requiring such previous
In a decision dated November 3, 1989, the Court of Appeals reservation also covers quasi-delict as defined under Article
dismissed the petition.1 A motion for reconsideration thereof 2176 of the Civil Code arising from the same act or omission
filed by petitioners was denied on January 30, 1990. Hence of the accused.
this petition. Although the separate civil action filed in this case was
The petition is devoid of merit. without previous reservation in the criminal case,
Section 1, Rule 111 of the 1985 Rules of Criminal Procedure nevertheless since it was instituted before the prosecution
provides as follows: presented evidence in the criminal action, and the judge
SEC. 1. Institution of criminal and civil handling the criminal case was informed thereof, then the
actions. — When a criminal action is actual filing of the civil action is even far better than a
instituted, the civil action for the recovery of compliance with the requirement of an express reservation
civil liability is impliedly instituted with the that should be made by the offended party before the
criminal action, unless the offended party prosecution presents its evidence.
waives the civil action, reserves his right to The purpose of this rule requiring reservation is to prevent the
institute it separately, or institutes the civil offended party from recovering damages twice for the same
action prior to the criminal action. act or omission.
Such civil action includes recovery of Thus, the Court finds and so holds that the trial court had
indemnity under the Revised Penal Code, jurisdiction over the separate civil action brought before it.
and damages under Articles 32, 33, 34 and WHEREFORE, the petition is DENIED. The questioned decision
2176 of the Civil Code of the Philippines of the Court of Appeals dated November 3, 1989 and its
arising from the same act or omission of the resolution dated January 30, 1990 are hereby AFFIRMED.
accused. SO ORDERED.
A waiver of any of the civil actions
extinguishes the others. The institution of, G.R. No. L-37750 May 19, 1978
or the reservation of the right to file, any of SWEET LINES, INC., petitioner, 
said civil actions separately waives the vs.
others. HON. BERNARDO TEVES, Presiding Judge, CFI of
The reservation of the right to institute the Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR.,
separate civil actions shall be made before and ROGELIO TIRO, respondents.
the prosecution starts to present its Filiberto Leonardo, Abelardo C. Almario & Samuel B. Abadiano
evidence and under circumstances affording for petitioner.
the offended party a reasonable opportunity Leovigildo Vallar for private respondents.
to make such reservation.
In no case may the offended party recover SANTOS, J.:
damages twice for the same act or omission This is an original action for Prohibition with Pre Injunction
of the accused. filed October 3, 1973 to restrain respondent Judge from
When the offended party seeks to enforce proceeding further with Civil Case No. 4091,
civil liability against the accused by way of entitled Leovigildo D. Tandog, Jr. and Rogelio Tiro v. Sweet
moral, nominal, temperate or exemplary Lines, Inc." after he denied petitioner's Motion to Dismiss the
damages, the filing fees for such civil action complaint, and the Motion for Reconsideration of said order. 1

5
Briefly, the facts of record follow. Private respondents Atty. passage tickets too burdensome to bear," that the condition
Leovigildo Tandog and Rogelio Tiro, a contractor by which was printed in fine letters is an imposition on the riding
professions, bought tickets Nos. 0011736 and 011737 for public and does not bind respondents, citing cases; 13 that
Voyage 90 on December 31, 1971 at the branch office of while venue 6f actions may be transferred from one province
petitioner, a shipping company transporting inter-island to another, such arrangement requires the "written
passengers and cargoes, at Cagayan de Oro City. agreement of the parties", not to be imposed unilaterally; and
Respondents were to board petitioner's vessel, M/S "Sweet that assuming that the condition is valid, it is not exclusive
Hope" bound for Tagbilaran City via the port of Cebu. Upon and does not, therefore, exclude the filing of the action in
learning that the vessel was not proceeding to Bohol, since Misamis Oriental, 14
many passengers were bound for Surigao, private There is no question that there was a valid contract of
respondents per advice, went to the branch office for proper carriage entered into by petitioner and private respondents
relocation to M/S "Sweet Town". Because the said vessel was and that the passage tickets, upon which the latter based
already filled to capacity, they were forced to agree "to hide their complaint, are the best evidence thereof. All the
at the cargo section to avoid inspection of the officers of the essential elements of a valid contract, i.e., consent, cause or
Philippine Coastguard." Private respondents alleged that they consideration and object, are present. As held in Peralta de
were, during the trip," "exposed to the scorching heat of the Guerrero, et al. v. Madrigal Shipping Co., Inc., 15
sun and the dust coming from the ship's cargo of corn grits," It is a matter of common knowledge that
and that the tickets they bought at Cagayan de Oro City for whenever a passenger boards a ship for
Tagbilaran were not honored and they were constrained to transportation from one place to another he
pay for other tickets. In view thereof, private respondents is issued a ticket by the shipper which has
sued petitioner for damages and for breach of contract of all the elements of a written contract,
carriage in the alleged sum of P10,000.00 before respondents Namely: (1) the consent of the contracting
Court of First Instance of Misamis Oriental. 2 parties manifested by the fact that the
Petitioner moved to dismiss the complaint on the ground of passenger boards the ship and the shipper
improper venue. This motion was premised on the condition consents or accepts him in the ship for
printed at the back of the tickets, i.e., Condition No. 14, which transportation; (2) cause or consideration
reads: which is the fare paid by the passenger as
14. It is hereby agreed and understood that stated in the ticket; (3) object, which is the
any and all actions arising out of the transportation of the passenger from the
conditions and provisions of this ticket, place of departure to the place of
irrespective of where it is issued, shall be destination which are stated in the ticket.
filed in the competent courts in the City of It should be borne in mind, however, that with respect to the
Cebu. 3 fourteen (14) conditions — one of which is "Condition No. 14"
The motion was denied by the trial court. 4 Petitioner moved which is in issue in this case — printed at the back of the
to reconnsider the order of denial, but no avail. 5 Hence, this passage tickets, these are commonly known as "contracts of
instant petition for prohibition for preliminary injunction, adhesion," the validity and/or enforceability of which will have
'alleging that the respondent judge has departed from the to be determined by the peculiar circumstances obtaining in
accepted and usual course of judicial preoceeding" and "had each case and the nature of the conditions or terms sought to
acted without or in excess or in error of his jurisdicton or in be enforced. For, "(W)hile generally, stipulations in a contract
gross abuse of discretion. 6 come about after deliberate drafting by the parties thereto, ...
In Our resolution of November 20, 1973, We restrained there are certain contracts almost all the provisions of which
respondent Judge from proceeding further with the case and have been drafted only by one party, usually a corporation.
required respondent to comment. 7 On January 18, 1974, We Such contracts are called contracts of adhesion, because the
gave due course to the petition and required respondent to only participation of the party is the signing of his signature or
answer. 8 Thereafter, the parties submitted their respesctive his 'adhesion' thereto. Insurance contracts, bills of lading,
memoranda in support of their respective contentions. 9 contracts of make of lots on the installment plan fall into this
Presented thus for Our resolution is a question is aquestion category" 16
which, to all appearances, is one of first impression, to wit — By the peculiar circumstances under which contracts of
Is Condition No. 14 printed at the back of the petitioner's adhesion are entered into — namely, that it is drafted only by
passage tickets purchased by private respondents, which one party, usually the corporation, and is sought to be
limits the venue of actions arising from the contract of accepted or adhered to by the other party, in this instance the
carriage to theCourt of First Instance of Cebu, valid and passengers, private respondents, who cannot change the
enforceable? Otherwise stated, may a common carrier same and who are thus made to adhere thereto on the "take
engaged in inter-island shipping stipulate thru condition it or leave it" basis — certain guidelines in the determination
printed at the back of passage tickets to its vessels that any of their validity and/or enforceability have been formulated in
and all actions arising out of the ocntract of carriage should order to that justice and fan play characterize the relationship
be filed only in a particular province or city, in this case the of the contracting parties. Thus, this Court speaking through
City of Cebu, to the exclusion of all others? Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock
Petitioner contends thaty Condition No. 14 is valid and Insurance Co.,  17 and later through Justice Fernando
enforceable, since private respndents acceded to tit when in Fieldman Insurance v. Vargas, 18 held —
they purchased passage tickets at its Cagayan de Oro branch The courts cannot ignore that nowadays,
office and took its vessel M/S "Sweet Town" for passage to monopolies, cartels and concentration of
Tagbilaran, Bohol — that the condition of the venue of actions capital endowed with overwhelm economic
in the City of Cebu is proper since venue may be validly power, manage to impose upon parties d
waived, citing cases; 10 that is an effective waiver of venue, with them y prepared 'agreements' that the
valid and binding as such, since it is printed in bold and weaker party may not change one whit his
capital letters and not in fine print and merely assigns the participation in the 'agreement' being
place where the action sing from the contract is institution reduced to the alternative 'to take it or
likewise citing cases; 11 and that condition No. 14 is leave it,' labelled since Raymond Saleilles
unequivocal and mandatory, the words and phrases "any and 'contracts by adherence' (contracts d'
all", "irrespective of where it is issued," and "shag" leave no adhesion) in contrast to those entered into
doubt that the intention of Condition No. 14 is to fix the venue by parties bargaining on an equal footing.
in the City of Cebu, to the exclusion of other places; that the Such contracts (of which policies of
orders of the respondent Judge are an unwarranted departure insurance and international bill of lading are
from established jurisprudence governing the case; and that prime examples) obviously cap for greater
he acted without or in excess of his jurisdiction in is the orders strictness and vigilance on the part of the
complained of. 12 courts of justice with a view to protecting
On the other hand, private respondents claim that Condition the weaker party from abuses and
No. 14 is not valid, that the same is not an essential element imposition, and prevent their becoming
of the contract of carriage, being in itself a different traps for the unwary.
agreement which requires the mutual consent of the parties To the same effect and import, and, in recognition of the
to it; that they had no say in its preparation, the existence of character of contracts of this kind, the protection of the
which they could not refuse, hence, they had no choice but to disadvantaged is expressly enjoined by the New Civil Code —
pay for the tickets and to avail of petitioner's shipping In all contractual property or other relations,
facilities out of necessity; that the carrier "has been exacting when one of the parties is at a disadvantage
too much from the public by inserting impositions in the on account of his moral dependence,

6
 ignorance indigence, mental weakness, was done in the instant case, will not cause inconvenience to,
tender age and other handicap, the courts much less prejudice, petitioner.
must be vigilant for his  Public policy is ". . . that principle of the law which holds that
protection. 19 no subject or citizen can lawfully do that which has a
Considered in the light Of the foregoing norms and in the tendency to be injurious to the public or against the public
context Of circumstances Prevailing in the inter-island ship. good ... 22 Under this principle" ... freedom of contract or
ping industry in the country today, We find and hold that private dealing is restricted by law for the good of the
Condition No. 14 printed at the back of the passage tickets public. 23 Clearly, Condition No. 14, if enforced, will be
should be held as void and unenforceable for the following subversive of the public good or interest, since it will frustrate
reasons first, under circumstances obligation in the inter- in meritorious cases, actions of passenger cants outside of
island ship. ping industry, it is not just and fair to bind Cebu City, thus placing petitioner company at a decided
passengers to the terms of the conditions printed at the back advantage over said persons, who may have perfectly
of the passage tickets, on which Condition No. 14 is Printed in legitimate claims against it. The said condition should,
fine letters, and second, Condition No. 14 subverts the public therefore, be declared void and unenforceable, as contrary to
policy on transfer of venue of proceedings of this nature, since public policy — to make the courts accessible to all who may
the same will prejudice rights and interests of innumerable have need of their services.
passengers in different s of the country who, under Condition WHEREFORE, the petition for prohibition is DISMISS. ED. The
No. 14, will have to file suits against petitioner only in the City restraining order issued on November 20, 1973, is hereby
of Cebu. LIFTED and SET ASIDE. Costs against petitioner.
1. It is a matter of public knowledge, of which We can take
judicial notice, that there is a dearth of and acute shortage in
inter- island vessels plying between the country's several
islands, and the facilities they offer leave much to be desired.
Thus, even under ordinary circumstances, the piers are
congested with passengers and their cargo waiting to be
transported. The conditions are even worse at peak and/or the
rainy seasons, when Passengers literally scramble to
whatever accommodations may be availed of, even through
circuitous routes, and/or at the risk of their safety — their
immediate concern, for the moment, being to be able to
board vessels with the hope of reaching their destinations.
The schedules are — as often as not if not more so — delayed
or altered. This was precisely the experience of private
respondents when they were relocated to M/S "Sweet Town" G.R. No. 95582 October 7, 1991
from M/S "Sweet Hope" and then any to the scorching heat of DANGWA TRANSPORTATION CO., INC. and THEODORE
the sun and the dust coming from the ship's cargo of corn LARDIZABAL y MALECDAN, petitioners, 
grits, " because even the latter was filed to capacity. vs.
Under these circumstances, it is hardly just and proper to COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA
expect the passengers to examine their tickets received from CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA
crowded/congested counters, more often than not during rush CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT,
hours, for conditions that may be printed much charge them SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of
with having consented to the conditions, so printed, especially the late Pedrito Cudiamat represented by Inocencia
if there are a number of such conditions m fine print, as in this Cudiamat, respondents.
case. 20 Francisco S. Reyes Law Office for petitioners.
Again, it should be noted that Condition No. 14 was prepared Antonio C. de Guzman for private respondents.
solely at the ms of the petitioner, respondents had no say in
its preparation. Neither did the latter have the opportunity to
take the into account prior to the purpose chase of their
REGALADO, J.:
tickets. For, unlike the small print provisions of contracts —
On May 13, 1985, private respondents filed a complaint 1 for
the common example of contracts of adherence — which are
damages against petitioners for the death of Pedrito Cudiamat
entered into by the insured in his awareness of said
as a result of a vehicular accident which occurred on March
conditions, since the insured is afforded the op to and co the
25, 1985 at Marivic, Sapid, Mankayan, Benguet. Among
same, passengers of inter-island v do not have the same
others, it was alleged that on said date, while petitioner
chance, since their alleged adhesion is presumed only from
Theodore M. Lardizabal was driving a passenger bus
the fact that they purpose chased the tickets.
belonging to petitioner corporation in a reckless and
It should also be stressed that slapping companies are
imprudent manner and without due regard to traffic rules and
franchise holders of certificates of public convenience and
regulations and safety to persons and property, it ran over its
therefore, posses a virtual monopoly over the business of
passenger, Pedrito Cudiamat. However, instead of bringing
transporting passengers between the ports covered by their
Pedrito immediately to the nearest hospital, the said driver, in
franchise. This being so, shipping companies, like petitioner,
utter bad faith and without regard to the welfare of the victim,
engaged in inter-island shipping, have a virtual monopoly of
first brought his other passengers and cargo to their
the business of transporting passengers and may thus dictate
respective destinations before banging said victim to the
their terms of passage, leaving passengers with no choice but
Lepanto Hospital where he expired.
to buy their tickets and avail of their vessels and facilities.
On the other hand, petitioners alleged that they had observed
Finally, judicial notice may be taken of the fact that the bulk
and continued to observe the extraordinary diligence required
of those who board these inter-island vested come from the
in the operation of the transportation company and the
low-income groups and are less literate, and who have little or
supervision of the employees, even as they add that they are
no choice but to avail of petitioner's vessels.
not absolute insurers of the safety of the public at large.
2. Condition No. 14 is subversive of public policy on transfers
Further, it was alleged that it was the victim's own
of venue of actions. For, although venue may be changed or
carelessness and negligence which gave rise to the subject
transferred from one province to another by agreement of the
incident, hence they prayed for the dismissal of the complaint
parties in writing t to Rule 4, Section 3, of the Rules of Court,
plus an award of damages in their favor by way of a
such an agreement will not be held valid where it practically
counterclaim.
negates the action of the claimants, such as the private
On July 29, 1988, the trial court rendered a decision,
respondents herein. The philosophy underlying the provisions
effectively in favor of petitioners, with this decretal portion:
on transfer of venue of actions is the convenience of the
IN VIEW OF ALL THE FOREGOING, judgment is hereby
plaintiffs as well as his witnesses and to promote 21 the ends
pronounced that Pedrito Cudiamat was negligent,
of justice. Considering the expense and trouble a passenger
which negligence was the proximate cause of his
residing outside of Cebu City would incur to prosecute a claim
death. Nonetheless, defendants in equity, are hereby
in the City of Cebu, he would most probably decide not to file
ordered to pay the heirs of Pedrito Cudiamat the sum
the action at all. The condition will thus defeat, instead of
of P10,000.00 which approximates the amount
enhance, the ends of justice. Upon the other hand, petitioner
defendants initially offered said heirs for the
has branches or offices in the respective ports of call of its
amicable settlement of the case. No costs.
vessels and can afford to litigate in any of these places.
SO ORDERED. 2
Hence, the filing of the suit in the CFI of Misamis Oriental, as
Not satisfied therewith, private respondents appealed to the
Court of Appeals which, in a decision 3 in CA-G.R. CV No.

7
19504 promulgated on August 14, 1990, set aside the duty and obligation as common carrier to the end
decision of the lower court, and ordered petitioners to pay that they should observe extra-ordinary diligence in
private respondents: the vigilance over the goods and for the safety of the
1. The sum of Thirty Thousand (P30,000.00) Pesos by passengers transported by them according to the
way of indemnity for death of the victim Pedrito circumstances of each case (Article 1733, New Civil
Cudiamat; Code). 8
2. The sum of Twenty Thousand (P20,000.00) by way
of moral damages;
After a careful review of the evidence on record, we find no
3. The sum of Two Hundred Eighty Eight Thousand
reason to disturb the above holding of the Court of Appeals.
(P288,000.00) Pesos as actual and compensatory
Its aforesaid findings are supported by the testimony of
damages;
petitioners' own witnesses. One of them, Virginia Abalos,
4. The costs of this suit. 4
testified on cross-examination as follows:
Petitioners' motion for reconsideration was denied by the
Court of Appeals in its resolution dated October 4,
1990, 5 hence this petition with the central issue herein being
whether respondent court erred in reversing the decision of Q It is not a fact Madam witness, that at bunkhouse
the trial court and in finding petitioners negligent and liable 54, that is before the place of the incident, there is a
for the damages claimed. crossing?
It is an established principle that the factual findings of the A The way going to the mines but it is not being
Court of Appeals as a rule are final and may not be reviewed pass(ed) by the bus.
by this Court on appeal. However, this is subject to settled Q And the incident happened before bunkhouse 56,
exceptions, one of which is when the findings of the appellate is that not correct?
court are contrary to those of the trial court, in which case a
reexamination of the facts and evidence may be
undertaken. 6 A It happened between 54 and 53 bunkhouses. 9

In the case at bar, the trial court and the Court of Appeal have The bus conductor, Martin Anglog, also declared:
discordant positions as to who between the petitioners an the
victim is guilty of negligence. Perforce, we have had to
conduct an evaluation of the evidence in this case for the
prope calibration of their conflicting factual findings and legal Q When you arrived at Lepanto on March 25, 1985,
conclusions. will you please inform this Honorable Court if there
The lower court, in declaring that the victim was negligent, was anv unusual incident that occurred?
made the following findings: A When we delivered a baggage at Marivic
because a person alighted there between Bunkhouse
53 and 54.
This Court is satisfied that Pedrito Cudiamat was Q What happened when you delivered this passenger
negligent in trying to board a moving vehicle, at this particular place in Lepanto?
especially with one of his hands holding an umbrella. A When we reached the place, a passenger alighted
And, without having given the driver or the conductor and I signalled my driver. When we stopped we went
any indication that he wishes to board the bus. But out because I saw an umbrella about a split second
defendants can also be found wanting of the and I signalled again the driver, so the driver
necessary diligence. In this connection, it is safe to stopped and we went down and we saw Pedrito
assume that when the deceased Cudiamat Cudiamat asking for help because he was lying
attempted to board defendants' bus, the vehicle's down.
door was open instead of being closed. This should Q How far away was this certain person, Pedrito
be so, for it is hard to believe that one would even Cudiamat, when you saw him lying down — from the
attempt to board a vehicle (i)n motion if the door of bus how far was he?
said vehicle is closed. Here lies the defendant's lack A It is about two to three meters.
of diligence. Under such circumstances, equity Q On what direction of the bus was he found about
demands that there must be something given to the three meters from the bus, was it at the front or at
heirs of the victim to assuage their feelings. This, the back?
also considering that initially, defendant common
carrier had made overtures to amicably settle the
case. It did offer a certain monetary consideration to A At the back, sir. 10 (Emphasis supplied.)
the victim's heirs. 7
The foregoing testimonies show that the place of the accident
However, respondent court, in arriving at a different opinion, and the place where one of the passengers alighted were both
declares that: between Bunkhouses 53 and 54, hence the finding of the
Court of Appeals that the bus was at full stop when the victim
boarded the same is correct. They further confirm the
conclusion that the victim fell from the platform of the bus
From the testimony of appellees'own witness in the when it suddenly accelerated forward and was run over by the
person of Vitaliano Safarita, it is evident that the rear right tires of the vehicle, as shown by the physical
subject bus was at full stop when the victim Pedrito evidence on where he was thereafter found in relation to the
Cudiamat boarded the same as it was precisely on bus when it stopped. Under such circumstances, it cannot be
this instance where a certain Miss Abenoja alighted said that the deceased was guilty of negligence.
from the bus. Moreover, contrary to the assertion of
the appellees, the victim did indicate his intention to The contention of petitioners that the driver and the
board the bus as can be seen from the testimony of conductor had no knowledge that the victim would ride on the
the said witness when he declared that Pedrito bus, since the latter had supposedly not manifested his
Cudiamat was no longer walking and made a sign to intention to board the same, does not merit consideration.
board the bus when the latter was still at a distance When the bus is not in motion there is no necessity for a
from him. It was at the instance when Pedrito person who wants to ride the same to signal his intention to
Cudiamat was closing his umbrella at the platform of board. A public utility bus, once it stops, is in effect making a
the bus when the latter made a sudden jerk continuous offer to bus riders. Hence, it becomes the duty of
movement (as) the driver commenced to accelerate the driver and the conductor, every time the bus stops, to do
the bus. no act that would have the effect of increasing the peril to a
passenger while he was attempting to board the same. The
Evidently, the incident took place due to the gross premature acceleration of the bus in this case was a breach of
negligence of the appellee-driver in prematurely such duty. 11
stepping on the accelerator and in not waiting for the It is the duty of common carriers of passengers, including
passenger to first secure his seat especially so when common carriers by railroad train, streetcar, or motorbus, to
we take into account that the platform of the bus was stop their conveyances a reasonable length of time in order to
at the time slippery and wet because of a drizzle. The afford passengers an opportunity to board and enter, and they
defendants-appellees utterly failed to observe their are liable for injuries suffered by boarding passengers

8
resulting from the sudden starting up or jerking of their A Because Mr. Cudiamat met an accident, so I ask
conveyances while they are doing so. 12 somebody to call for the family of Mr. Cudiamat.
Further, even assuming that the bus was moving, the act of Q But nobody ask(ed) you to call for the family of Mr.
the victim in boarding the same cannot be considered Cudiamat?
negligent under the circumstances. As clearly explained in the A No sir. 21
testimony of the aforestated witness for petitioners, Virginia With respect to the award of damages, an oversight was,
Abalos, th bus had "just started" and "was still in slow motion" however, committed by respondent Court of Appeals in
at the point where the victim had boarded and was on its computing the actual damages based on the gross income of
platform. 13 the victim. The rule is that the amount recoverable by the
It is not negligence per se, or as a matter of law, for one heirs of a victim of a tort is not the loss of the entire earnings,
attempt to board a train or streetcar which is moving but rather the loss of that portion of the earnings which the
slowly. 14 An ordinarily prudent person would have made the beneficiary would have received. In other words, only net
attempt board the moving conveyance under the same or earnings, not gross earnings, are to be considered, that is, the
similar circumstances. The fact that passengers board and total of the earnings less expenses necessary in the creation
alight from slowly moving vehicle is a matter of common of such earnings or income and minus living and other
experience both the driver and conductor in this case could incidental expenses. 22
not have been unaware of such an ordinary practice. We are of the opinion that the deductible living and other
The victim herein, by stepping and standing on the platform expense of the deceased may fairly and reasonably be fixed
of the bus, is already considered a passenger and is entitled at P500.00 a month or P6,000.00 a year. In adjudicating the
all the rights and protection pertaining to such a contractual actual or compensatory damages, respondent court found
relation. Hence, it has been held that the duty which the that the deceased was 48 years old, in good health with a
carrier passengers owes to its patrons extends to persons remaining productive life expectancy of 12 years, and then
boarding cars as well as to those alighting therefrom. 15 earning P24,000.00 a year. Using the gross annual income as
Common carriers, from the nature of their business and the basis, and multiplying the same by 12 years, it
reasons of public policy, are bound to observe extraordina accordingly awarded P288,000. Applying the aforestated rule
diligence for the safety of the passengers transported by the on computation based on the net earnings, said award must
according to all the circumstances of each case. 16 A common be, as it hereby is, rectified and reduced to P216,000.00.
carrier is bound to carry the passengers safely as far as However, in accordance with prevailing jurisprudence, the
human care and foresight can provide, using the utmost death indemnity is hereby increased to P50,000.00. 23
diligence very cautious persons, with a due regard for all the
circumstances. 17
WHEREFORE, subject to the above modifications, the
It has also been repeatedly held that in an action based on a
challenged judgment and resolution of respondent Court of
contract of carriage, the court need not make an express
Appeals are hereby AFFIRMED in all other respects.
finding of fault or negligence on the part of the carrier in order
SO ORDERED.
to hold it responsible to pay the damages sought by the
G.R. No. 145804             February 6, 2003
passenger. By contract of carriage, the carrier assumes the
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO
express obligation to transport the passenger to his
ROMAN, petitioners, 
destination safely and observe extraordinary diligence with a
vs.
due regard for all the circumstances, and any injury that
MARJORIE NAVIDAD, Heirs of the Late NICANOR
might be suffered by the passenger is right away attributable
NAVIDAD & PRUDENT SECURITY AGENCY, respondents.
to the fault or negligence of the carrier. This is an exception to
DECISION
the general rule that negligence must be proved, and it is
VITUG, J.:
therefore incumbent upon the carrier to prove that it has
The case before the Court is an appeal from the decision and
exercised extraordinary diligence as prescribed in Articles
resolution of the Court of Appeals, promulgated on 27 April
1733 and 1755 of the Civil Code. 18
2000 and 10 October 2000, respectively, in CA-G.R. CV No.
60720, entitled "Marjorie Navidad and Heirs of the Late
Moreover, the circumstances under which the driver and the Nicanor Navidad vs. Rodolfo Roman, et. al.," which has
conductor failed to bring the gravely injured victim modified the decision of 11 August 1998 of the Regional Trial
immediately to the hospital for medical treatment is a patent Court, Branch 266, Pasig City, exonerating Prudent Security
and incontrovertible proof of their negligence. It defies Agency (Prudent) from liability and finding Light Rail Transit
understanding and can even be stigmatized as callous Authority (LRTA) and Rodolfo Roman liable for damages on
indifference. The evidence shows that after the accident the account of the death of Nicanor Navidad.
bus could have forthwith turned at Bunk 56 and thence to the On 14 October 1993, about half an hour past seven o’clock in
hospital, but its driver instead opted to first proceed to Bunk the evening, Nicanor Navidad, then drunk, entered the EDSA
70 to allow a passenger to alight and to deliver a refrigerator, LRT station after purchasing a "token" (representing payment
despite the serious condition of the victim. The vacuous of the fare). While Navidad was standing on the platform near
reason given by petitioners that it was the wife of the the LRT tracks, Junelito Escartin, the security guard assigned
deceased who caused the delay was tersely and correctly to the area approached Navidad. A misunderstanding or an
confuted by respondent court: altercation between the two apparently ensued that led to a
fist fight. No evidence, however, was adduced to indicate how
the fight started or who, between the two, delivered the first
... The pretension of the appellees that the delay was
blow or how Navidad later fell on the LRT tracks. At the exact
due to the fact that they had to wait for about twenty
moment that Navidad fell, an LRT train, operated by petitioner
minutes for Inocencia Cudiamat to get dressed
Rodolfo Roman, was coming in. Navidad was struck by the
deserves scant consideration. It is rather scandalous
moving train, and he was killed instantaneously.
and deplorable for a wife whose husband is at the
On 08 December 1994, the widow of Nicanor, herein
verge of dying to have the luxury of dressing herself
respondent Marjorie Navidad, along with her children, filed a
up for about twenty minutes before attending to help
complaint for damages against Junelito Escartin, Rodolfo
her distressed and helpless husband. 19
Roman, the LRTA, the Metro Transit Organization, Inc. (Metro
Further, it cannot be said that the main intention of petitioner
Transit), and Prudent for the death of her husband. LRTA and
Lardizabal in going to Bunk 70 was to inform the victim's
Roman filed a counterclaim against Navidad and a cross-claim
family of the mishap, since it was not said bus driver nor the
against Escartin and Prudent. Prudent, in its answer, denied
conductor but the companion of the victim who informed his
liability and averred that it had exercised due diligence in the
family thereof. 20 In fact, it was only after the refrigerator was
selection and supervision of its security guards.
unloaded that one of the passengers thought of sending
The LRTA and Roman presented their evidence while Prudent
somebody to the house of the victim, as shown by the
and Escartin, instead of presenting evidence, filed a demurrer
testimony of Virginia Abalos again, to wit:
contending that Navidad had failed to prove that Escartin was
Q Why, what happened to your refrigerator at that
negligent in his assigned task. On 11 August 1998, the trial
particular time?
court rendered its decision; it adjudged:
A I asked them to bring it down because that is the
"WHEREFORE, judgment is hereby rendered in favor of the
nearest place to our house and when I went down
plaintiffs and against the defendants Prudent Security and
and asked somebody to bring down the refrigerator, I
Junelito Escartin ordering the latter to pay jointly and severally
also asked somebody to call the family of Mr.
the plaintiffs the following:
Cudiamat.
"a) 1) Actual damages of P44,830.00;
COURT:
2) Compensatory damages of P443,520.00;
Q Why did you ask somebody to call the family of Mr.
Cudiamat?

9
 3) Indemnity for the death of Nicanor Navidad in the "Article 1756. In case of death of or injuries to passengers,
sum of P50,000.00; common carriers are presumed to have been at fault or to
"b) Moral damages of P50,000.00; have acted negligently, unless they prove that they observed
"c) Attorney’s fees of P20,000; extraordinary diligence as prescribed in articles 1733 and
"d) Costs of suit. 1755."
"The complaint against defendants LRTA and Rodolfo Roman "Article 1759. Common carriers are liable for the death of or
are dismissed for lack of merit. injuries to passengers through the negligence or willful acts of
"The compulsory counterclaim of LRTA and Roman are the former’s employees, although such employees may have
likewise dismissed."1 acted beyond the scope of their authority or in violation of the
Prudent appealed to the Court of Appeals. On 27 August 2000, orders of the common carriers.
the appellate court promulgated its now assailed decision "This liability of the common carriers does not cease upon
exonerating Prudent from any liability for the death of Nicanor proof that they exercised all the diligence of a good father of
Navidad and, instead, holding the LRTA and Roman jointly and a family in the selection and supervision of their employees."
severally liable thusly: "Article 1763. A common carrier is responsible for injuries
"WHEREFORE, the assailed judgment is hereby MODIFIED, by suffered by a passenger on account of the willful acts or
exonerating the appellants from any liability for the death of negligence of other passengers or of strangers, if the common
Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and carrier’s employees through the exercise of the diligence of a
the Light Rail Transit Authority (LRTA) are held liable for his good father of a family could have prevented or stopped the
death and are hereby directed to pay jointly and severally to act or omission."
the plaintiffs-appellees, the following amounts: The law requires common carriers to carry passengers safely
a) P44,830.00 as actual damages; using the utmost diligence of very cautious persons with due
b) P50,000.00 as nominal damages; regard for all circumstances.5 Such duty of a common carrier
c) P50,000.00 as moral damages; to provide safety to its passengers so obligates it not only
d) P50,000.00 as indemnity for the death of during the course of the trip but for so long as the passengers
the deceased; and are within its premises and where they ought to be in
e) P20,000.00 as and for attorney’s fees."2 pursuance to the contract of carriage.6 The statutory
The appellate court ratiocinated that while the deceased provisions render a common carrier liable for death of or
might not have then as yet boarded the train, a contract of injury to passengers (a) through the negligence or wilful acts
carriage theretofore had already existed when the victim of its employees or b) on account of wilful acts or negligence
entered the place where passengers were supposed to be of other passengers or of strangers if the common carrier’s
after paying the fare and getting the corresponding token employees through the exercise of due diligence could have
therefor. In exempting Prudent from liability, the court prevented or stopped the act or omission. 7 In case of such
stressed that there was nothing to link the security agency to death or injury, a carrier is presumed to have been at fault or
the death of Navidad. It said that Navidad failed to show that been negligent, and8 by simple proof of injury, the passenger
Escartin inflicted fist blows upon the victim and the evidence is relieved of the duty to still establish the fault or negligence
merely established the fact of death of Navidad by reason of of the carrier or of its employees and the burden shifts upon
his having been hit by the train owned and managed by the the carrier to prove that the injury is due to an unforeseen
LRTA and operated at the time by Roman. The appellate court event or to force majeure.9 In the absence of satisfactory
faulted petitioners for their failure to present expert evidence explanation by the carrier on how the accident occurred,
to establish the fact that the application of emergency brakes which petitioners, according to the appellate court, have
could not have stopped the train. failed to show, the presumption would be that it has been at
The appellate court denied petitioners’ motion for fault,10 an exception from the general rule that negligence
reconsideration in its resolution of 10 October 2000. must be proved.11
In their present recourse, petitioners recite alleged errors on The foundation of LRTA’s liability is the contract of carriage
the part of the appellate court; viz: and its obligation to indemnify the victim arises from the
"I. breach of that contract by reason of its failure to exercise the
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY high diligence required of the common carrier. In the
DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT discharge of its commitment to ensure the safety of
"II. passengers, a carrier may choose to hire its own employees
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN or avail itself of the services of an outsider or an independent
FINDING THAT PETITIONERS ARE LIABLE FOR THE DEATH OF firm to undertake the task. In either case, the common carrier
NICANOR NAVIDAD, JR. is not relieved of its responsibilities under the contract of
"III. carriage.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN Should Prudent be made likewise liable? If at all, that liability
FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA." 3 could only be for tort under the provisions of Article
Petitioners would contend that the appellate court ignored the 217612 and related provisions, in conjunction with Article
evidence and the factual findings of the trial court by holding 2180,13 of the Civil Code. The premise, however, for the
them liable on the basis of a sweeping conclusion that the employer’s liability is negligence or fault on the part of the
presumption of negligence on the part of a common carrier employee. Once such fault is established, the employer can
was not overcome. Petitioners would insist that Escartin’s then be made liable on the basis of the presumption juris
assault upon Navidad, which caused the latter to fall on the tantum that the employer failed to exercise diligentissimi
tracks, was an act of a stranger that could not have been patris families in the selection and supervision of its
foreseen or prevented. The LRTA would add that the appellate employees. The liability is primary and can only be negated
court’s conclusion on the existence of an employer-employee by showing due diligence in the selection and supervision of
relationship between Roman and LRTA lacked basis because the employee, a factual matter that has not been shown.
Roman himself had testified being an employee of Metro Absent such a showing, one might ask further, how then must
Transit and not of the LRTA. the liability of the common carrier, on the one hand, and an
Respondents, supporting the decision of the appellate court, independent contractor, on the other hand, be described? It
contended that a contract of carriage was deemed created would be solidary. A contractual obligation can be breached
from the moment Navidad paid the fare at the LRT station and by tort and when the same act or omission causes the injury,
entered the premises of the latter, entitling Navidad to all the one resulting in culpa contractual and the other in culpa
rights and protection under a contractual relation, and that aquiliana, Article 219414 of the Civil Code can well apply.15 In
the appellate court had correctly held LRTA and Roman liable fine, a liability for tort may arise even under a contract, where
for the death of Navidad in failing to exercise extraordinary tort is that which breaches the contract. 16 Stated differently,
diligence imposed upon a common carrier. when an act which constitutes a breach of contract would
Law and jurisprudence dictate that a common carrier, both have itself constituted the source of a quasi-delictual liability
from the nature of its business and for reasons of public had no contract existed between the parties, the contract can
policy, is burdened with the duty of exercising utmost be said to have been breached by tort, thereby allowing the
diligence in ensuring the safety of passengers.4 The Civil Code, rules on tort to apply.17
governing the liability of a common carrier for death of or Regrettably for LRT, as well as perhaps the surviving spouse
injury to its passengers, provides: and heirs of the late Nicanor Navidad, this Court is concluded
"Article 1755. A common carrier is bound to carry the by the factual finding of the Court of Appeals that "there is
passengers safely as far as human care and foresight can nothing to link (Prudent) to the death of Nicanor (Navidad), for
provide, using the utmost diligence of very cautious persons, the reason that the negligence of its employee, Escartin, has
with a due regard for all the circumstances. not been duly proven x x x." This finding of the appellate court

10
is not without substantial justification in our own review of the ground, her skull crushed, and without life. The child
records of the case. was none other than his daughter Raquel, who was
There being, similarly, no showing that petitioner Rodolfo run over by the bus in which she rode earlier
Roman himself is guilty of any culpable act or omission, he together with her parents.
must also be absolved from liability. Needless to say, the For the death of their said child, the plaintiffs
contractual tie between the LRT and Navidad is not itself a commenced the present suit against the defendant
juridical relation between the latter and Roman; thus, Roman seeking to recover from the latter an aggregate
can be made liable only for his own fault or negligence. amount of P16,000 to cover moral damages and
The award of nominal damages in addition to actual damages actual damages sustained as a result thereof and
is untenable. Nominal damages are adjudicated in order that attorney's fees. After trial on the merits, the court
a right of the plaintiff, which has been violated or invaded by below rendered the judgment in question.
the defendant, may be vindicated or recognized, and not for On the basis of these facts, the trial court found defendant
the purpose of indemnifying the plaintiff for any loss suffered liable for breach of contract of carriage and sentenced it to
by him.18 It is an established rule that nominal damages pay P3,000.00 for the death of the child and P400.00 as
cannot co-exist with compensatory damages.19 compensatory damages representing burial expenses and
WHEREFORE, the assailed decision of the appellate court is costs.
AFFIRMED with MODIFICATION but only in that (a) the award On appeal to the Court of Appeals, La Mallorca claimed that
of nominal damages is DELETED and (b) petitioner Rodolfo there could not be a breach of contract in the case, for the
Roman is absolved from liability. No costs. reason that when the child met her death, she was no longer
SO ORDERED. a passenger of the bus involved in the incident and, therefore,
G.R. No. L-20761             July 27, 1966 the contract of carriage had already terminated. Although the
LA MALLORCA, petitioner,  Court of Appeals sustained this theory, it nevertheless found
vs. the defendant-appellant guilty of quasi-delict and held the
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, latter liable for damages, for the negligence of its driver, in
ET AL., respondents. accordance with Article 2180 of the Civil Code. And, the Court
G. E. Yabut, R. Monterey and M.C. Lagman for of Appeals did not only find the petitioner liable, but increased
petitioner. the damages awarded the plaintiffs-appellees to P6,000.00,
Ahmed Garcia for respondents. instead of P3,000.00 granted by the trial court.
BARRERA, J.: In its brief before us, La Mallorca contends that the Court of
La Mallorca seeks the review of the decision of the Court of Appeals erred (1) in holding it liable for quasi-delict,
Appeals in CA-G.R. No. 23267-R, holding it liable for quasi- considering that respondents complaint was one for breach of
delict and ordering it to pay to respondents Mariano Beltran, contract, and (2) in raising the award of damages from
et al., P6,000.00 for the death of his minor daughter Raquel P3,000.00 to P6,000.00 although respondents did not appeal
Beltran, plus P400.00 as actual damages. from the decision of the lower court.
The facts of the case as found by the Court of Appeals, briefly Under the facts as found by the Court of Appeals, we have to
are: sustain the judgement holding petitioner liable for damages
On December 20, 1953, at about noontime, plaintiffs, for the death of the child, Raquel Beltran. It may be pointed
husband and wife, together with their minor out that although it is true that respondent Mariano Beltran,
daughters, namely, Milagros, 13 years old, Raquel, his wife, and their children (including the deceased child) had
about 4½ years old, and Fe, over 2 years old, alighted from the bus at a place designated for disembarking
boarded the Pambusco Bus No. 352, bearing plate or unloading of passengers, it was also established that the
TPU No. 757 (1953 Pampanga), owned and operated father had to return to the vehicle (which was still at a stop)
by the defendant, at San Fernando, Pampanga, to get one of his bags or bayong that was left under one of
bound for Anao, Mexico, Pampanga. At the time, they the seats of the bus. There can be no controversy that as far
were carrying with them four pieces of baggages as the father is concerned, when he returned to the bus for
containing their personal belonging. The conductor of his bayongwhich was not unloaded, the relation of passenger
the bus, who happened to be a half-brother of and carrier between him and the petitioner remained
plaintiff Mariano Beltran, issued three tickets (Exhs. subsisting. For, the relation of carrier and passenger does not
A, B, & C) covering the full fares of the plaintiff and necessarily cease where the latter, after alighting from the
their eldest child, Milagros. No fare was charged on car, aids the carrier's servant or employee in removing his
Raquel and Fe, since both were below the height at baggage from the car.1 The issue to be determined here is
which fare is charged in accordance with the whether as to the child, who was already led by the father to
appellant's rules and regulations. a place about 5 meters away from the bus, the liability of the
After about an hour's trip, the bus reached Anao carrier for her safety under the contract of carriage also
whereat it stopped to allow the passengers bound persisted.
therefor, among whom were the plaintiffs and their It has been recognized as a rule that the relation of carrier
children to get off. With respect to the group of the and passenger does not cease at the moment the passenger
plaintiffs, Mariano Beltran, then carrying some of alights from the carrier's vehicle at a place selected by the
their baggages, was the first to get down the bus, carrier at the point of destination, but continues until the
followed by his wife and his children. Mariano led his passenger has had a reasonable time or a reasonable
companions to a shaded spot on the left pedestrians opportunity to leave the carrier's premises. And, what is a
side of the road about four or five meters away from reasonable time or a reasonable delay within this rule is to be
the vehicle. Afterwards, he returned to the bus in determined from all the circumstances. Thus, a person who,
controversy to get his other bayong, which he had after alighting from a train, walks along the station platform is
left behind, but in so doing, his daughter Raquel considered still a passenger.2 So also, where a passenger has
followed him, unnoticed by her father. While said alighted at his destination and is proceeding by the usual way
Mariano Beltran was on the running board of the bus to leave the company's premises, but before actually doing so
waiting for the conductor to hand him is halted by the report that his brother, a fellow passenger,
his bayong which he left under one of its seats near has been shot, and he in good faith and without intent of
the door, the bus, whose motor was not shut off engaging in the difficulty, returns to relieve his brother, he is
while unloading, suddenly started moving forward, deemed reasonably and necessarily delayed and thus
evidently to resume its trip, notwithstanding the fact continues to be a passenger entitled as such to the protection
that the conductor has not given the driver the of the railroad and company and its agents.3
customary signal to start, since said conductor was In the present case, the father returned to the bus to get one
still attending to the baggage left behind by Mariano of his baggages which was not unloaded when they alighted
Beltran. Incidentally, when the bus was again placed from the bus. Raquel, the child that she was, must have
into a complete stop, it had travelled about ten followed the father. However, although the father was still on
meters from the point where the plaintiffs had gotten the running board of the bus awaiting for the conductor to
off. hand him the bag or bayong, the bus started to run, so that
Sensing that the bus was again in motion, Mariano even he (the father) had to jump down from the moving
Beltran immediately jumped from the running board vehicle. It was at this instance that the child, who must be
without getting his bayong from the conductor. He near the bus, was run over and killed. In the circumstances, it
landed on the side of the road almost in front of the cannot be claimed that the carrier's agent had exercised the
shaded place where he left his wife and children. At "utmost diligence" of a "very cautions person" required by
that precise time, he saw people beginning to gather Article 1755 of the Civil Code to be observed by a common
around the body of a child lying prostrate on the carrier in the discharge of its obligation to transport safely its

11
passengers. In the first place, the driver, although stopping 1982, is hereby affirmed with the
the bus, nevertheless did not put off the engine. Secondly, he modification that appellant Aboitiz Shipping
started to run the bus even before the bus conductor gave is hereby ordered to pay plaintiff-appellees
him the signal to go and while the latter was still unloading the amount of P30,000.00 for the death of
part of the baggages of the passengers Mariano Beltran and Anacleto Viana; actual damages of
family. The presence of said passengers near the bus was not P9,800.00; P150,000.00 for unearned
unreasonable and they are, therefore, to be considered still as income; P7,200.00 as support for
passengers of the carrier, entitled to the protection under deceased's parents; P20,000.00 as moral
their contract of carriage. damages; P10,000.00 as attorney's fees;
But even assuming arguendo that the contract of carriage has and to pay the costs.
already terminated, herein petitioner can be held liable for the The undisputed facts of the case, as found by the court a
negligence of its driver, as ruled by the Court of Appeals, quo and adopted by respondent court, are as follows: .
pursuant to Article 2180 of the Civil Code. Paragraph 7 of the The evidence disclosed that on May 11,
complaint, which reads — 1975, Anacleto Viana boarded the vessel
That aside from the aforesaid breach of contract, the M/V Antonia, owned by defendant, at the
death of Raquel Beltran, plaintiffs' daughter, was port at San Jose, Occidental Mindoro, bound
caused by the negligence and want of exercise of the for Manila, having purchased a ticket (No.
utmost diligence of a very cautious person on the 117392) in the sum of P23.10 (Exh. 'B'). On
part of the defendants and their agent, necessary to May 12, 1975, said vessel arrived at Pier 4,
transport plaintiffs and their daughter safely as far as North Harbor, Manila, and the passengers
human care and foresight can provide in the therein disembarked, a gangplank having
operation of their vehicle. been provided connecting the side of the
is clearly an allegation for quasi-delict. The inclusion of this vessel to the pier. Instead of using said
averment for quasi-delict, while incompatible with the other gangplank Anacleto Viana disembarked on
claim under the contract of carriage, is permissible under the third deck which was on the level with
Section 2 of Rule 8 of the New Rules of Court, which allows a the pier. After said vessel had landed, the
plaintiff to allege causes of action in the alternative, be they Pioneer Stevedoring Corporation took over
compatible with each other or not, to the end that the real the exclusive control of the cargoes loaded
matter in controversy may be resolved and determined. 4 on said vessel pursuant to the Memorandum
The plaintiffs sufficiently pleaded the culpa or negligence of Agreement dated July 26, 1975 (Exh. '2')
upon which the claim was predicated when it was alleged in between the third party defendant Pioneer
the complaint that "the death of Raquel Beltran, plaintiffs' Stevedoring Corporation and defendant
daughter, was caused by the negligence and want of exercise Aboitiz Shipping Corporation.
of the utmost diligence of a very cautious person on the part The crane owned by the third party
of the defendants and their agent." This allegation was also defendant and operated by its crane
proved when it was established during the trial that the driver, operator Alejo Figueroa was placed
even before receiving the proper signal from the conductor, alongside the vessel and one (1) hour after
and while there were still persons on the running board of the the passengers of said vessel had
bus and near it, started to run off the vehicle. The disembarked, it started operation by
presentation of proof of the negligence of its employee gave unloading the cargoes from said vessel.
rise to the presumption that the defendant employer did not While the crane was being operated,
exercise the diligence of a good father of the family in the Anacleto Viana who had already
selection and supervision of its employees. And this disembarked from said vessel obviously
presumption, as the Court of Appeals found, petitioner had remembering that some of his cargoes were
failed to overcome. Consequently, petitioner must be still loaded in the vessel, went back to the
adjudged peculiarily liable for the death of the child Raquel vessel, and it was while he was pointing to
Beltran. the crew of the said vessel to the place
The increase of the award of damages from P3,000.00 to where his cargoes were loaded that the
P6,000.00 by the Court of Appeals, however, cannot be crane hit him, pinning him between the side
sustained. Generally, the appellate court can only pass upon of the vessel and the crane. He was
and consider questions or issues raised and argued in thereafter brought to the hospital where he
appellant's brief. Plaintiffs did not appeal from that portion of later expired three (3) days thereafter, on
the judgment of the trial court awarding them on P3,000.00 May 15, 1975, the cause of his death
damages for the death of their daughter. Neither does it according to the Death Certificate (Exh. "C")
appear that, as appellees in the Court of Appeals, plaintiffs being "hypostatic pneumonia secondary to
have pointed out in their brief the inadequacy of the award, or traumatic fracture of the pubic bone
that the inclusion of the figure P3,000.00 was merely a clerical lacerating the urinary bladder" (See also
error, in order that the matter may be treated as an exception Exh. "B"). For his hospitalization, medical,
to the general rule.5Herein petitioner's contention, therefore, burial and other miscellaneous expenses,
that the Court of Appeals committed error in raising the Anacleto's wife, herein plaintiff, spent a total
amount of the award for damages is, evidently, of P9,800.00 (Exhibits "E", "E-1", to "E-5").
meritorious.1äwphï1.ñët Anacleto Viana who was only forty (40)
Wherefore, the decision of the Court of Appeals is hereby years old when he met said fateful accident
modified by sentencing, the petitioner to pay to the (Exh. 'E') was in good health. His average
respondents Mariano Beltran, et al., the sum of P3,000.00 for annual income as a farmer or a farm
the death of the child, Raquel Beltran, and the amount of supervisor was 400 cavans of palay
P400.00 as actual damages. No costs in this instance. So annually. His parents, herein plaintiffs
ordered. Antonio and Gorgonia Viana, prior to his
death had been recipient of twenty (20)
G.R. No. 84458 November 6, 1989 cavans of palay as support or P120.00
ABOITIZ SHIPPING CORPORATION, petitioner,  monthly. Because of Anacleto's death,
vs. plaintiffs suffered mental anguish and
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA extreme worry or moral damages. For the
C. VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA, filing of the instant case, they had to hire a
and PIONEER STEVEDORING lawyer for an agreed fee of ten thousand
CORPORATION, respondents. (P10,000.00) pesos. 2
Herenio E. Martinez for petitioner. Private respondents Vianas filed a complaint 3 for damages
M.R. Villaluz Law Office for private respondent. against petitioner corporation (Aboitiz, for brevity) for breach
of contract of carriage.
REGALADO, J.: In its answer. 4 Aboitiz denied responsibility contending that at
In this appeal by certiorari, petitioner Aboitiz Shipping the time of the accident, the vessel was completely under the
Corporation seeks a review of the decision 1 of respondent control of respondent Pioneer Stevedoring Corporation
Court of Appeals, dated July 29, 1988, the decretal portion of (Pioneer, for short) as the exclusive stevedoring contractor of
which reads: Aboitiz, which handled the unloading of cargoes from the
WHEREFORE, the judgment appealed from vessel of Aboitiz. It is also averred that since the crane
as modified by the order of October 27,

12
operator was not an employee of Aboitiz, the latter cannot be pursuant to Art. 2206, Par. 2, of the Civil
held liable under the fellow-servant rule. Code; P20,000.00 as moral damages, and
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party costs; and
complaint 5 against Pioneer imputing liability thereto for (2) Absolving third-party defendant Pioneer
Anacleto Viana's death as having been allegedly caused by Stevedoring Corporation for (sic) any
the negligence of the crane operator who was an employee of liability for the death of Anacleto Viana the
Pioneer under its exclusive control and supervision. passenger of M/V Antonia owned by
Pioneer, in its answer to the third-party complaint, 6 raised the defendant third party plaintiff Aboitiz
defenses that Aboitiz had no cause of action against Pioneer Shipping Corporation it appearing that the
considering that Aboitiz is being sued by the Vianas for breach negligence of its crane operator has not
of contract of carriage to which Pioneer is not a party; that been established therein.
Pioneer had observed the diligence of a good father of a Not satisfied with the modified judgment of the trial court,
family both in the selection and supervision of its employees Aboitiz appealed the same to respondent Court of Appeals
as well as in the prevention of damage or injury to anyone which affirmed the findings of of the trial court except as to
including the victim Anacleto Viana; that Anacleto Viana's the amount of damages awarded to the Vianas.
gross negligence was the direct and proximate cause of his Hence, this petition wherein petitioner Aboitiz postulates that
death; and that the filing of the third-party complaint was respondent court erred:
premature by reason of the pendency of the criminal case for (A) In holding that the doctrine laid down by
homicide through reckless imprudence filed against the crane this honorable Court in La Mallorca vs. Court
operator, Alejo Figueroa. of Appeals, et al. (17 SCRA 739, July 27,
In a decision rendered on April 17, 1980 by the trial 1966) is applicable to the case in the face of
court, 7 Aboitiz was ordered to pay the Vianas for damages the undisputable fact that the factual
incurred, and Pioneer was ordered to reimburse Aboitiz for situation under the La Mallorca case is
whatever amount the latter paid the Vianas. The dispositive radically different from the facts obtaining in
portion of said decision provides: this case;
WHEREFORE, judgment is hereby rendered (B) In holding petitioner liable for damages
in favor of the plantiffs: in the face of the finding of the court a quo
(1) ordering defendant Aboitiz Shipping and confirmed by the Honorable respondent
Corporation to pay to plaintiffs the sum of court of Appeals that the deceased,
P12,000.00 for the death of Anacleto Viana Anacleto Viana was guilty of contributory
P9,800.00 as actual damages; P533,200.00 negligence, which, We respectfully submit
value of the 10,664 cavans of palay contributory negligence was the proximate
computed at P50.00 per cavan; P10,000.00 cause of his death; specifically the
as attorney's fees; F 5,000.00, value of the honorable respondent Court of Appeals
100 cavans of palay as support for five (5) failed to apply Art. 1762 of the New Civil
years for deceased (sic) parents, herein Code;
plaintiffs Antonio and Gorgonia Viana (C) In the alternative assuming the holding
computed at P50.00 per cavan; P7,200.00 of the Honorable respondent Court of
as support for deceased's parents computed Appears that petitioner may be legally
at P120.00 a month for five years pursuant condemned to pay damages to the private
to Art. 2206, Par. 2, of the Civil Code; respondents we respectfully submit that it
P20,000.00 as moral damages, and costs; committed a reversible error when it
and dismissed petitioner's third party complaint
(2) ordering the third party defendant against private respondent Pioneer
Pioneer Stevedoring Corporation to Stevedoring Corporation instead of
reimburse defendant and third party plaintiff compelling the latter to reimburse the
Aboitiz Shipping Corporation the said petitioner for whatever damages it may be
amounts that it is ordered to pay to herein compelled to pay to the private respondents
plaintiffs. Vianas. 9
Both Aboitiz and Pioneer filed separate motions for At threshold, it is to be observed that both the trial court and
reconsideration wherein they similarly raised the trial court's respondent Court of Appeals found the victim Anacleto Viana
failure to declare that Anacleto Viana acted with gross guilty of contributory negligence, but holding that it was the
negligence despite the overwhelming evidence presented in negligence of Aboitiz in prematurely turning over the vessel to
support thereof. In addition, Aboitiz alleged, in opposition to the arrastre operator for the unloading of cargoes which was
Pioneer's motion, that under the memorandum of agreement the direct, immediate and proximate cause of the victim's
the liability of Pioneer as contractor is automatic for any death.
damages or losses whatsoever occasioned by and arising from I. Petitioner contends that since one (1) hour had already
the operation of its arrastre and stevedoring service. elapsed from the time Anacleto Viana disembarked from the
In an order dated October 27, 1982, 8 the trial court absolved vessel and that he was given more than ample opportunity to
Pioneer from liability for failure of the Vianas and Aboitiz to unload his cargoes prior to the operation of the crane, his
preponderantly establish a case of negligence against the presence on the vessel was no longer reasonable e and he
crane operator which the court a quo ruled is never consequently ceased to be a passenger. Corollarily, it insists
presumed, aside from the fact that the memorandum of that the doctrine in La Mallorca vs. Court of Appeals, et al. 10 is
agreement supposedly refers only to Pioneer's liability in case not applicable to the case at bar.
of loss or damage to goods handled by it but not in the case The rule is that the relation of carrier and passenger continues
of personal injuries, and, finally that Aboitiz cannot properly until the passenger has been landed at the port of destination
invoke the fellow-servant rule simply because its liability and has left the vessel owner's dock or premises. 11 Once
stems from a breach of contract of carriage. The dispositive created, the relationship will not ordinarily terminate until the
portion of said order reads: passenger has, after reaching his destination, safely alighted
WHEREFORE, judgment is hereby modified from the carrier's conveyance or had a reasonable
insofar as third party defendant Pioneer opportunity to leave the carrier's premises. All persons who
Stevedoring Corporation is concerned remain on the premises a reasonable time after leaving the
rendered in favor of the plaintiffs-,: conveyance are to be deemed passengers, and what is a
(1) Ordering defendant Aboitiz Shipping reasonable time or a reasonable delay within this rule is to be
Corporation to pay the plaintiffs the sum of determined from all the circumstances, and includes a
P12,000.00 for the death of Anacleto Viana; reasonable time to see after his baggage and prepare for his
P9,000.00 (sic) as actual damages; departure.12 The carrier-passenger relationship is not
P533,200.00 value of the 10,664 cavans of terminated merely by the fact that the person transported has
palay computed at P50.00 per cavan; been carried to his destination if, for example, such person
P10,000.00 as attorney's fees; P5,000.00 remains in the carrier's premises to claim his baggage. 13
value of the 100 cavans of palay as support It was in accordance with this rationale that the doctrine in
for five (5) years for deceased's parents, the aforesaid case of La Mallorca was enunciated, to wit:
herein plaintiffs Antonio and Gorgonia It has been recognized as a rule that the
Viana,computed at P50.00 per cavan; relation of carrier and passenger does not
P7,200.00 as support for deceased's parents cease at the moment the passenger alights
computed at P120.00 a month for five years from the carrier's vehicle at a place selected

13
 by the carrier at the point of destination, but destination but also to afford them a reasonable time to claim
continues until the passenger has had a their baggage.
reasonable time or a reasonable opportunity It is not definitely shown that one (1) hour prior to the
to leave the carrier's premises. And, what is incident, the victim had already disembarked from the vessel.
a reasonable time or a reasonable delay Petitioner failed to prove this. What is clear to us is that at the
within this rule is to be determined from all time the victim was taking his cargoes, the vessel had already
the circumstances. Thus, a person who, docked an hour earlier. In consonance with common shipping
after alighting from a train, walks along the procedure as to the minimum time of one (1) hour allowed for
station platform is considered still a the passengers to disembark, it may be presumed that the
passenger. So also, where a passenger has victim had just gotten off the vessel when he went to retrieve
alighted at his destination and is proceeding his baggage. Yet, even if he had already disembarked an hour
by the usual way to leave the company's earlier, his presence in petitioner's premises was not without
premises, but before actually doing so is cause. The victim had to claim his baggage which was
halted by the report that his brother, a possible only one (1) hour after the vessel arrived since it was
fellow passenger, has been shot, and he in admittedly standard procedure in the case of petitioner's
good faith and without intent of engaging in vessels that the unloading operations shall start only after
the difficulty, returns to relieve his brother, that time. Consequently, under the foregoing circumstances,
he is deemed reasonably and necessarily the victim Anacleto Viana is still deemed a passenger of said
delayed and thus continues to be a carrier at the time of his tragic death.
passenger entitled as such to the protection II. Under the law, common carriers are, from the nature of
of the railroad company and its agents. their business and for reasons of public policy, bound to
In the present case, the father returned to observe extraordinary diligence in the vigilance over the
the bus to get one of his baggages which goods and for the safety of the passengers transported by
was not unloaded when they alighted from them, according to all the circumstances of each case. 15 More
the bus. Racquel, the child that she was, particularly, a common carrier is bound to carry the
must have followed the father. However, passengers safely as far as human care and foresight can
although the father was still on the running provide, using the utmost diligence of very cautious persons,
board of the bus waiting for the conductor with a due regard for all the circumstances. 16 Thus, where a
to hand him the bag or bayong, the bus passenger dies or is injured, the common carrier is presumed
started to run, so that even he (the father) to have been at fault or to have acted negligently. 17 This
had to jump down from the moving vehicle. gives rise to an action for breach of contract of carriage where
It was at this instance that the child, who all that is required of plaintiff is to prove the existence of the
must be near the bus, was run over and contract of carriage and its non-performance by the carrier,
killed. In the circumstances, it cannot be that is, the failure of the carrier to carry the passenger safely
claimed that the carrier's agent had to his destination, 18which, in the instant case, necessarily
exercised the 'utmost diligence' of a 'very includes its failure to safeguard its passenger with
cautious person' required by Article 1755 of extraordinary diligence while such relation subsists.
the Civil Code to be observed by a common The presumption is, therefore, established by law that in case
carrier in the discharge of its obligation to of a passenger's death or injury the operator of the vessel was
transport safely its passengers. ... The at fault or negligent, having failed to exercise extraordinary
presence of said passengers near the bus diligence, and it is incumbent upon it to rebut the same. This
was not unreasonable and they are, is in consonance with the avowed policy of the State to afford
therefore, to be considered still as full protection to the passengers of common carriers which
passengers of the carrier, entitled to the can be carried out only by imposing a stringent statutory
protection under their contract of obligation upon the latter. Concomitantly, this Court has
carriage. 14 likewise adopted a rigid posture in the application of the law
It is apparent from the foregoing that what prompted the by exacting the highest degree of care and diligence from
Court to rule as it did in said case is the fact of the common carriers, bearing utmost in mind the welfare of the
passenger's reasonable presence within the carrier's passengers who often become hapless victims of indifferent
premises. That reasonableness of time should be made to and profit-oriented carriers. We cannot in reason deny that
depend on the attending circumstances of the case, such as petitioner failed to rebut the presumption against it. Under the
the kind of common carrier, the nature of its business, the facts obtaining in the present case, it cannot be gainsaid that
customs of the place, and so forth, and therefore precludes a petitioner had inadequately complied with the required
consideration of the time element per se without taking into degree of diligence to prevent the accident from happening.
account such other factors. It is thus of no moment whether in As found by the Court of Appeals, the evidence does not show
the cited case of La Mallorca there was no appreciable that there was a cordon of drums around the perimeter of the
interregnum for the passenger therein to leave the carrier's crane, as claimed by petitioner. It also adverted to the fact
premises whereas in the case at bar, an interval of one (1) that the alleged presence of visible warning signs in the
hour had elapsed before the victim met the accident. The vicinity was disputable and not indubitably established. Thus,
primary factor to be considered is the existence of a we are not inclined to accept petitioner's explanation that the
reasonable cause as will justify the presence of the victim on victim and other passengers were sufficiently warned that
or near the petitioner's vessel. We believe there exists such a merely venturing into the area in question was fraught with
justifiable cause. serious peril. Definitely, even assuming the existence of the
It is of common knowledge that, by the very nature of supposed cordon of drums loosely placed around the
petitioner's business as a shipper, the passengers of vessels unloading area and the guard's admonitions against entry
are allotted a longer period of time to disembark from the ship therein, these were at most insufficient precautions which
than other common carriers such as a passenger bus. With pale into insignificance if considered vis-a-vis the gravity of
respect to the bulk of cargoes and the number of passengers the danger to which the deceased was exposed. There is no
it can load, such vessels are capable of accommodating a showing that petitioner was extraordinarily diligent in
bigger volume of both as compared to the capacity of a requiring or seeing to it that said precautionary measures
regular commuter bus. Consequently, a ship passenger will were strictly and actually enforced to subserve their purpose
need at least an hour as is the usual practice, to disembark of preventing entry into the forbidden area. By no stretch of
from the vessel and claim his baggage whereas a bus liberal evaluation can such perfunctory acts approximate the
passenger can easily get off the bus and retrieve his luggage "utmost diligence of very cautious persons" to be exercised
in a very short period of time. Verily, petitioner cannot "as far as human care and foresight can provide" which is
categorically claim, through the bare expedient of comparing required by law of common carriers with respect to their
the period of time entailed in getting the passenger's cargoes, passengers.
that the ruling in La Mallorca is inapplicable to the case at bar. While the victim was admittedly contributorily negligent, still
On the contrary, if we are to apply the doctrine enunciated petitioner's aforesaid failure to exercise extraordinary
therein to the instant petition, we cannot in reason doubt that diligence was the proximate and direct cause of, because it
the victim Anacleto Viana was still a passenger at the time of could definitely have prevented, the former's death.
the incident. When the accident occurred, the victim was in Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner
the act of unloading his cargoes, which he had every right to has expressly conceded the factual finding of respondent
do, from petitioner's vessel. As earlier stated, a carrier is duty Court of Appeals that petitioner did not present sufficient
bound not only to bring its passengers safely to their evidence in support of its submission that the deceased

14
Anacleto Viana was guilty of gross negligence. Petitioner and the calesahitting first the left side of the BTCO
cannot now be heard to claim otherwise. bus with the left front corner of its body and then
No excepting circumstance being present, we are likewise bumped and struck the calesa which was completely
bound by respondent court's declaration that there was no wrecked; that the driver was seriously injured and
negligence on the part of Pioneer Stevedoring Corporation, a the horse was killed; that the second and all other
confirmation of the trial court's finding to that effect, hence posts supporting the top of the left side of the BTCO
our conformity to Pioneer's being absolved of any liability. bus were completely smashed and half of the back
As correctly observed by both courts, Aboitiz joined Pioneer in wall to the left was ripped open. (Exhibits 1 and 2).
proving the alleged gross negligence of the victim, hence its The BTCO bus suffered damages for the repair of its
present contention that the death of the passenger was due damaged portion.
to the negligence of the crane operator cannot be sustained As a consequence of this occurrence, two (2) passengers of
both on grounds, of estoppel and for lack of evidence on its BTCO died, namely, Pedro Caguimbal and Guillermo Tolentino,
present theory. Even in its answer filed in the court below it apart from others who were injured. The widow and children
readily alleged that Pioneer had taken the necessary of Caguimbal instituted the present action, which was tried
safeguards insofar as its unloading operations were jointly with a similar action of the Tolentinos, to recover
concerned, a fact which appears to have been accepted by damages from the Batangas Transportation Company,
the plaintiff therein by not impleading Pioneer as a defendant, hereinafter referred to as BTCO. The latter, in turn, filed a
and likewise inceptively by Aboitiz by filing its third-party third-party complaint against the Biñan Transportation
complaint only after ten (10) months from the institution of Company — hereinafter referred to as Biñan — and its driver,
the suit against it. Parenthetically, Pioneer is not within the Marciano Ilagan. Subsequently, the Caguimbals amended
ambit of the rule on extraordinary diligence required of, and their complaint, to include therein, as defendants, said Biñan
the corresponding presumption of negligence foisted on, and Ilagan.
common carriers like Aboitiz. This, of course, does not detract After appropriate proceedings, the Court of First Instance of
from what we have said that no negligence can be imputed to Batangas rendered a decision dismissing the complaint
Pioneer but, that on the contrary, the failure of Aboitiz to insofar as the BTCO is concerned, without prejudice to
exercise extraordinary diligence for the safety of its plaintiff's right to sue Biñan — which had stopped
passenger is the rationale for our finding on its liability. participating in the proceedings herein, owing apparently, to a
WHEREFORE, the petition is DENIED and the judgment case in the Court of First Instance of Laguna for the insolvency
appealed from is hereby AFFIRMED in toto. of said enterprise — and Ilagan, and without pronouncement
SO ORDERED. as to costs.
G.R. No. L-22985           January 24, 1968 On appeal taken by the Caguimbals, the Court of Appeals
BATANGAS TRANSPORTATION COMPANY, petitioner,  reversed said decision and rendered judgment for them,
vs. sentencing the BTCO, Biñan and Ilagan to, jointly and
GREGORIO CAGUIMBAL, PANCRACIO CAGUIMBAL, severally, pay to the plaintiffs the aggregate sum of
MARIA MARANAN DE CAGUIMBAL, BIÑAN P10,500.00 1 and the costs in both instances. Hence, this
TRANSPORTATION COMPANY and MARCIANO appeal by BTCO, upon the ground that the Court of Appeals
ILAGAN, respondents. erred: 1) in finding said appellant liable for damages; and 2) in
Ozaeta, Gibbs and Ozaeta and Domingo E. de Lara for awarding attorney's fees.
petitioner.  In connection with the first assignment of error, we note that
Victoriano H. Endaya for respondents. the recklessness of defendant was, manifestly, a major factor
CONCEPCION, C.J.: in the occurrence of the accident which resulted, inter alia, in
Appeal by certiorari from a decision of the Court of Appeals. the death of Pedro Caguimbal. Indeed, as driver of the Biñan
The main facts are set forth in said decision from which we bus, he overtook Benito Makahiya's horse-driven rig
quote: or calesa and passed between the same and the BTCO bus
There is no dispute at all that the deceased Pedro despite the fact that the space available was not big enough
Caguimbal, Barrio Lieutenant of Barrio Calansayan, therefor, in view of which the Biñan bus hit the left side of the
San Jose, Batangas, was a paying passenger of BTCO BTCO bus and then the calesa. This notwithstanding, the
bus, with plate TPU-507, going south on its regular Court of Appeals rendered judgment against the BTCO upon
route from Calamba, Laguna, to Batangas, Batangas, the ground that its driver, Tomas Perez, had failed to exercise
driven by Tomas Perez, its regular driver, at about the "extraordinary diligence," required in Article 1733 of the
5:30 o'clock on the early morning of April 25, 1954. new Civil Code, "in the vigilance for the safety" of his
The deceased's destination was his residence at passengers. 2
Calansayan, San Jose, Batangas. The bus of the The record shows that, in order to permit one of them to
Biñan Transportation Company, bearing plate TPU- disembark, Perez drove his BTCO bus partly to the right
820, driven by Marciano Ilagan, was coming from the shoulder of the road and partly on the asphalted portion
opposite direction (north-bound). Along the national thereof. Yet, he could have and should have seen to it — had
highway at Barrio Daraza, Tanauan, Batangas, on the he exercised "extraordinary diligence" — that his bus was
date and hour above indicated, a horse-driven rig completely outside the asphalted portion of the road, and fully
(calesa) managed by Benito Makahiya, which was within the shoulder thereof, the width of which being more
then ahead of the Biñan bus, was also coming from than sufficient to accommodate the bus. He could have and
the opposite direction, meaning proceeding towards should have done this, because, when the aforementioned
the north. As to what transpired thereafter, the lower passenger expressed his wish to alight from the bus, Ilagan
court chose to give more credence to defendant had seen the aforementioned "calesa", driven by Makahiya, a
Batangas Transportation Company's version which, few meters away, coming from the opposite direction, with
in the words of the Court a quo, is as follows: "As the the Biñan bus about 100 meters behind the rig cruising at a
BTCO bus was nearing a house, a passenger good speed. 3 When Perez slowed down his BTCO bus to
requested the conductor to stop as he was going to permit said passenger to disembark, he must have known,
alight, and when he heard the signal of the therefore, that the Biñan bus would overtake the calesa at
conductor, the driver Tomas Perez slowed down his about the time when the latter and BTCO bus would probably
bus swerving it farther to the right in order to stop; at be on the same line, on opposite sides of the asphalted
this juncture, a calesa, then driven by Benito portions of the road, and that the space between the BTCO
Makahiya was at a distance of several meters facing bus and the "calesa" would not be enough to allow the Biñan
the BTCO bus coming from the opposite direction; bus to go through. It is true that the driver of the Biñan bus
that at the same time the Biñan bus was about 100 should have slowed down or stopped, and, hence, was
meters away likewise going northward and following reckless in not doing so; but, he had no especial obligations
the direction of the calesa; that upon seeing the toward the passengers of the BTCO unlike Perez whose duty
Biñan bus the driver of the BTCO bus dimmed his was to exercise "utmost" or "extraordinary" diligence for their
light as established by Magno Ilaw, the very safety. Perez was thus under obligation to avoid a situation
conductor of the Biñan bus at the time of the which would be hazardous for his passengers, and, make their
accident; that as the calesa and the BTCO bus were safety dependent upon the diligence of the Biñan driver. Such
passing each other from the opposite directions, the obligation becomes more patent when we considered the fact
Biñan bus following the calesa swerved to its left in — of which the Court may take judicial cognizance — that our
an attempt to pass between the BTCO bus and motor vehicle drivers, particularly those of public service
the calesa; that without diminishing its speed of utilities, have not distinguished themselves for their concern
about seventy (70) kilometers an hour, the Biñan bus over the safety, the comfort or the convenience of others.
passed through the space between the BTCO bus

15
Besides, as correctly stated in the syllabus to Brito Sy vs. Manager for Departure Services at Mactan Airport and who
Malate Taxicab & Garage, Inc., 4 was in charge of cancelled flights, that he was going to sue
In an action based on a contract of carriage, the the airline for discriminating against him. It was only then that
court need not make an express finding of fault or Jereza offered to pay respondent Pantejo P300.00 which, due
negligence on the part of the carrier in order to hold to the ordeal and anguish he had undergone, the latter
it responsible to pay the damages sought for by the declined.
passenger. By the contract of carriage, the carrier On March 18, 199l, the Regional Trial Court of Surigao
assumes the express obligation to transport the City, Branch 30, rendered judgment in the action for damages
passenger to his destination safely and to observe filed by respondent Pantejo against herein petitioner,
extraordinary diligence with a due regard for all the Philippine Airlines, Inc., ordering the latter to pay
circumstances, and any injury that might be suffered Pantejo P300.00 for actual damages, P150,000.00 as moral
by the passenger is right away attributable to the damages, P100,000.00 as exemplary damages, P15,000.00 as
fault or negligence of the carrier (Article 1756, new attorneys fees, and 6% interest from the time of the filing of
Civil Code). This is an exception to the general rule the complaint until said amounts shall have been fully paid,
that negligence must be proved, and it is therefore plus costs of suit.[2] On appeal, respondent court affirmed the
incumbent upon the carrier to prove that it has decision of the court a quo, but with the exclusion of the
exercised extraordinary diligence as prescribed in award of attorneys fees and litigation expenses.
Articles 1733 and 1755 of the new Civil Code. The main issue posed for resolution is whether petitioner
In the case at bar, BTCO has not proven the exercise of airlines acted in bad faith when it failed and refused to
extraordinary diligence on its part. For this reason, the case provide hotel accommodations for respondent Pantejo or to
of Isaac vs. A. L. Ammen Trans. Co., Inc.  5 relied upon by BTCO, reimburse him for hotel expenses incurred by reason of the
is not in point, for, in said case, the public utility driver had cancellation of its connecting flight to Surigao City due to
done everything he could to avoid the accident, and could not force majeure.
have possibly avoided it, for he "swerved the bus to the To begin with, it must be emphasized that a contract to
very extreme right of the road," which the driver, in the transport passengers is quite different in kind and degree
present case, had failed to do. from any other contractual relation, and this is because of the
As regards the second assignment of error, appellant argues relation which an air carrier sustains with the public. Its
that the award of attorney's fees is not authorized by law, business is mainly with the travelling public. It invites people
because, of the eleven (11) cases specified in Article 1208 of to avail of the comforts and advantages it offers. The contract
the new Civil Code, only the fifth and the last are relevant to of air carriage, therefore, generates a relation attended with a
the one under consideration; but the fifth case requires bad public duty. Neglect or malfeasance of the carriers employees
faith, which does not exist in the case at bar. As regards the naturally could give ground for an action for damages.[3]
last case, which permits the award, "where the court deems it In ruling for respondent Pantejo, both the trial court and
just and equitable that attorney's fees . . . should be the Court of Appeals found that herein petitioner acted in bad
recovered," it is urged that the evidence on record does not faith in refusing to provide hotel accommodations for
show the existence of such just and equitable grounds. respondent Pantejo or to reimburse him for hotel expenses
We, however, believe otherwise, for: (1) the accident in incurred despite and in contrast to the fact that other
question took place on April 25, 1954, and the Caguimbals passengers were so favored.
have been constrained to litigate for over thirteen (13) years In declaring that bad faith existed, respondent court took
to vindicate their rights; and (2) it is high time to impress into consideration the following factual circumstances:
effectively upon public utility operators the nature and extent 1. Contrary to petitioners claim that cash assistance was
of their responsibility in respect of the safety of their given instead because of non-availability of rooms in hotels
passengers and their duty to exercise greater care in the where petitioner had existing tie-ups, the evidence shows that
selection of drivers and conductor and in supervising the Sky View Hotel, where respondent Pantejo was billeted, had
performance of their duties, in accordance, not only with plenty of rooms available.
Article 1733 of the Civil Code of the Philippines, but, also, with 2. It is not true that the P300.00 paid to Ernesto Gonzales, a
Articles 1755 and 1756 thereof 6 and the spirit of these co-passenger of respondent, was a refund for his plane ticket,
provisions, as disclosed by the letter thereof, and elucidated the truth being that it was a reimbursement for hotel and
by the Commission that drafted the same.  7 meal expenses.
WHEREFORE, the decision appealed from, should be, as it is 3. It is likewise not denied that said Gonzales and herein
hereby, affirmed, with the costs of this instance against respondent came to know about the reimbursements only
appellant Batangas Transportation Company. because another passenger, Mrs. Rocha, informed them that
she was able to obtain the refund for her own hotel expenses.
[G.R. No. 120262. July 17, 1997] 4. Petitioner offered to pay P300.00 to private respondent
PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF only after he had confronted the airlines manager about the
APPEALS and LEOVIGILDO A. discrimination committed against him, which the latter
PANTEJO, respondents. realized was an actionable wrong.
DECISION 5. Service Voucher No. 199351, presented by petitioner to
REGALADO, J.: prove that it gave cash assistance to its passengers, was
In this appeal by certiorari, petitioner Philippine Airlines, based merely on the list of passengers already given cash
Inc. (PAL) seeks to set aside the decision of respondent Court assistance and was purportedly prepared at around 10:00
of Appeals,[1] promulgated on December 29, 1994, which A.M. of October 23, 1988. This was two
affirmed the award for damages made by the trial court in hours before respondent came to know of the cancellation of
favor of herein private respondent Leovegildo A. Pantejo. his flight to Surigao, hence private respondent could not have
On October 23, 1988, private respondent Pantejo, then possibly refused the same.[4]
City Fiscal of Surigao City, boarded a PAL plane in Manila and It must be stressed that these factual findings, which are
disembarked in Cebu City where he was supposed to take his supported by substantial evidence, are binding, final and
connecting flight to Surigao City. However, due to conclusive upon this Court absent any reason, and we find
typhoon Osang, the connecting flight to Surigao City was none, why this settled evidential rule should not apply.
cancelled. Petitioner theorizes that the hotel accommodations or
To accommodate the needs of its stranded passengers, cash assistance given in case a flight is cancelled is in the
PAL initially gave out cash assistance of P100.00 and, the next nature of an amenity and is merely a privilege that may be
day, P200.00, for their expected stay of two days in extended at its own discretion, but never a right that may be
Cebu.Respondent Pantejo requested instead that he be demanded by its passengers. Thus, when respondent Pantejo
billeted in a hotel at PALs expense because he did not have was offered cash assistance and he refused it, petitioner
cash with him at that time, but PAL refused. Thus, respondent cannot be held liable for whatever befell respondent Pantejo
Pantejo was forced to seek and accept the generosity of a co- on that fateful day, because it was merely exercising its
passenger, an engineer named Andoni Dumlao, and he shared discretion when it opted to just give cash assistance to its
a room with the latter at Sky View Hotel with the promise to passengers.
pay his share of the expenses upon reaching Surigao. Assuming arguendo that the airline passengers have no
On October 25, 1988 when the flight for Surigao was vested right to these amenities in case a flight is cancelled
resumed, respondent Pantejo came to know that the hotel due to force majeure, what makes petitioner liable for
expenses of his co-passengers, one Superintendent Ernesto damages in this particular case and under the facts obtaining
Gonzales and a certain Mrs. Gloria Rocha, an auditor of the herein is its blatant refusal to accord the so-called amenities
Philippine National Bank, were reimbursed by PAL. At this equally to all its stranded passengers who were bound for
point, respondent Pantejo informed Oscar Jereza, PALs

16
Surigao City. No compelling or justifying reason was advanced not salve the moral wounds inflicted by PAL on private
for such discriminatory and prejudicial conduct. respondent but even approximated insult added to injury.
More importantly, it has been sufficiently established The discriminatory act of petitioner against respondent
that it is petitioners standard company policy, whenever a ineludibly makes the former liable for moral damages under
flight has been cancelled, to extend to its hapless passengers Article 21 in relation to Article 2219 (10) of the Civil Code. [9] As
cash assistance or to provide them accommodations in hotels held in Alitalia Airways vs. CA, et al.,[10] such inattention to and
with which it has existing tie-ups. In fact, petitioners Mactan lack of care by petitioner airline for the interest of its
Airport Manager for departure services, Oscar Jereza, passengers who are entitled to its utmost consideration,
admitted that PAL has an existing arrangement with hotels to particularly as to their convenience, amount to bad faith
accommodate stranded passengers,[5] and that the hotel bills which entitles the passenger to the award of moral damages.
of Ernesto Gonzales were reimbursed [6] obviously pursuant to Moral damages are emphatically not intended to enrich
that policy. a plaintiff at the expense of the defendant. They are awarded
Also, two witnesses presented by respondent, Teresita only to allow the former to obtain means, diversion, or
Azarcon and Nerie Bol, testified that sometime in November, amusements that will serve to alleviate the moral suffering he
1988, when their flight from Cebu to Surigao was cancelled, has undergone due to the defendants culpable action and
they were billeted at Rajah Hotel for two nights and three must, perforce, be proportional to the suffering inflicted.
days at the expense of PAL.[7] This was never denied by PAL. [11]
 However, substantial damages do not translate into
Further, Ernesto Gonzales, the aforementioned co- excessive damages.[12] Except for attorneys fees and costs of
passenger of respondent on that fateful flight, testified that suit, it will be noted that the Court of Appeals affirmed point
based on his previous experience hotel accommodations were by point the factual findings of the lower court upon which the
extended by PAL to its stranded passengers either in Magellan award of damages had been based. [13] We, therefore, see no
or Rajah Hotels, or even in Cebu Plaza. Thus, we view as reason to modify the award of damages made by the trial
impressed with dubiety PALs present attempt to represent court.
such emergency assistance as being merely ex gratia and Under the peculiar circumstances of this case, we are
not ex debito. convinced that the awards for actual, moral and exemplary
While petitioner now insists that the passengers were damages granted in the judgment of respondent court, for the
duly informed that they would be reimbursed for their hotel reasons meticulously analyzed and thoroughly explained in its
expenses, it miserably and significantly failed to explain why decision, are just and equitable. It is high time that the
the other passengers were given reimbursements while travelling public is afforded protection and that the duties of
private respondent was not. Although Gonzales was common carriers, long detailed in our previous laws and
subsequently given a refund, this was only so because he jurisprudence and thereafter collated and specifically
came to know about it by accident through Mrs. Rocha, as catalogued in our Civil Code in 1950, be enforced through
earlier explained. appropriate sanctions.
Petitioner could only offer the strained and flimsy pretext We agree, however, with the contention that the interest
that possibly the passengers were not listening when the of 6% imposed by respondent court should be computed from
announcement was made. This is absurd because when the date of rendition of judgment and not from the filing of the
respondent Pantejo came to know that his flight had been complaint. The rule has been laid down in Eastern Shipping
cancelled, he immediately proceeded to petitioners office and Lines, Inc. vs. Court of Appeals, et al.[14] that:
requested for hotel accommodations. He was not only refused When an obligation, not constituting a loan or forbearance of
accommodations, but he was not even informed that he may money, is breached, an interest on the amount of damages
later on be reimbursed for his hotel expenses. This explains awarded may be imposed at the discretion of the court at the
why his co-passenger, Andoni Dumlao, offered to answer for rate of 6% per annum. No interest, however, shall be
respondents hotel bill and the latter promised to pay him adjudged on unliquidated claims or damages except when or
when they arrive in Surigao. Had both known that they would until the demand can be established with reasonable
be reimbursed by the airline, such arrangement would not certainty. Accordingly, where the demand is established with
have been necessary. reasonable certainty, the interest shall begin to run from the
Respondent Court of Appeals thus correctly concluded time the claim is made judicially or extrajudicially (Art. 1169,
that the refund of hotel expenses was surreptitiously and Civil Code) but when such certainty cannot be so reasonably
discriminatorily made by herein petitioner since the same was established at the time the demand is made, the interest shall
not made known to everyone, except through word of mouth begin to run only from the date the judgment of the court is
to a handful of passengers. This is a sad commentary on the made (at which time the quantification of damages may be
quality of service and professionalism of an airline company, deemed to have been reasonably ascertained). The actual
which is the countrys flag carrier at that. base for the computation of legal interest shall, in any case,
On the bases of all the foregoing, the inescapable be on the amount finally adjudged.
conclusion is that petitioner acted in bad faith in disregarding This is because at the time of the filing of the complaint,
its duties as a common carrier to its passengers and in the amount of damages to which plaintiff may be entitled
discriminating against herein respondent Pantejo. It was even remains unliquidated and not known, until it is definitely
oblivious to the fact that this respondent was exposed to ascertained, assessed and determined by the court, and only
humiliation and embarrassment especially because of his after the presentation of proof thereon.[15]
government position and social prominence, which altogether WHEREFORE, the challenged judgment of respondent
necessarily subjected him to ridicule, shame and anguish. It Court of Appeals is hereby AFFIRMED, subject to the
remains uncontroverted that at the time of the incident, MODIFICATION regarding the computation of the 6% legal rate
herein respondent was then the City Prosecutor of Surigao of interest on the monetary awards granted therein to private
City, and that he is a member of the Philippine Jaycee Senate, respondent.
past Lt. Governor of the Kiwanis Club of Surigao, a past
Master of the Mount Diwata Lodge of Free Masons of the [G.R. No. 136048. January 23, 2001]
Philippines, member of the Philippine National Red Cross, JOSE BARITUA and JB LINE, petitioners, vs. NIMFA
Surigao Chapter, and past Chairman of the Boy Scouts of the DIVINA MERCADER in her capacity and as
Philippines, Surigao del Norte Chapter.[8] guardian of DARWIN, GIOVANNI, RODEL and
It is likewise claimed that the moral and exemplary DENNIS, all surnamed MERCADER; LEONIDA
damages awarded to respondent Pantejo are excessive and Vda. de MERCADER on her behalf and on behalf
unwarranted on the ground that respondent is not totally of her minor child MARY JOY MERCADER;
blameless because of his refusal to accept the P100.00 cash SHIRLEY MERCADER DELA CRUZ; MARIA
assistance which was inceptively offered to him. It bears THERESA MERCADER-GARCIA; DANILO
emphasis that respondent Pantejo had every right to make MERCADER; JOSE DANTE MERCADER; and
such refusal since it evidently could not meet his needs and JOSEFINA MERCADER, respondents.
that was all that PAL claimed it could offer. DECISION
His refusal to accept the P300.00 proffered as an PANGANIBAN, J.:
afterthought when he threatened suit was justified by his The Manchester ruling requiring the payment of docket
resentment when he belatedly found out that his co- and other fees as a condition for the acquisition of jurisdiction
passengers were reimbursed for hotel expenses and he was has no retroactive effect and applies only to cases filed after
not. Worse, he would not even have known about it were it its finality.
not for a co-passenger who verbally told him that she was The Case

reimbursed by the airline for hotel and meal expenses. It may Before us is a Petition for Review under Rule 45 of the
even be said that the amounts, the time and the Rules of Court, assailing the April 17, 1998 Decision [1] and the
circumstances under which those amounts were offered could October 28, 1998 Resolution [2] of the Court of Appeals (CA) in

17
CA-GR CV No. 40772. The decretal portion of said Decision station/terminal) was issued any passenger-freight ticket
reads as follows: conformably with law and practice. It is a fact of public
WHEREFORE, upon all the foregoing premises considered, the knowledge that, in compliance with existing rules and laws,
DECISION appealed from is AFFIRMED with the MODIFICATION [Petitioner] Baritua, as a public utility operator, issues, thru
that the loss of earnings of the late Dominador Mercader is his conductors, in appropriate situations, to a true passenger,
reduced to P798,000.00.[3] the familiar and known passenger and freight ticket which
The assailed Resolution denied petitioners Motion for reads in part:
Reconsideration. NOTICE
The Court of Appeals sustained the Decision of the Baggage carried at owners risk x x x liability on prepaid
Regional Trial Court (RTC) of Laoang, Northern Samar (Branch freight otherwise declared.
21). Except for the modification of the loss of earnings, it x x x x x x x x x
affirmed all the monetary damages granted by the trial court Whole Fare Paid P ______________
to respondents. The decretal portion of the assailed RTC Declared value ____________ x x x.
Decision reads as follows:[4] Description of Freight _____________________________
WHEREFORE, on preponderance of evidence, judgment is for Signature of Owner.
[herein respondents] and against [herein petitioners], 3. It is also a fact of public knowledge that [Petitioner] Baritua
ordering the latter to pay the former: does not have any Manila station/terminal, because what he
(a) As compensatory damages for the death of Dominador has is a Pasay city station.
Mercader -- P50,000.00; 4. [Petitioner] Baritua had no prior knowledge that, on or
(b) For the loss of earnings of the late Dominador Mercader -- about March 17, 1983, and/or previous thereto, the Bugko
P1,660,000.00, more or less, based on the average life span Bailey Bridge (across Catarman-Laoang road) in Barangay
of 75 years from the time of his death who earned a net Roxas, Mondragon, Northern Samar, was in virtual
income of P5,000.00 monthly out of his business; dilapida[ted] and dangerous condition, in a state of decay and
(c) Actual damages of P30,000.00 receipted purchases of disrepair, thus calling for the concerned government and
goods in Manila; P5,750.00 for the first class coffin and a 15- public officials performance of their coordinative and joint
day wake services evidenced by a receipt marked Exh. D; duties and responsibilities, to repair, improve and maintain
[P]850.00 for the 50 x 60 headstone, receipt marked Exh. E that bridge, in good and reasonably safe condition, but, far
and P1,590.00 -- Deed of Absolute Sale of a burial lot, marked from performing or complying with said subject duties and
Exh. F; responsibilities, the adverted officials concerned, without just
(d) 25% of whatever amount is collected by [respondents] cause, not only failed and neglected to cause such needed
from [petitioners] but no less than P50,000.00 plus P1,000.00 repair, improvement and maintenance of the Bugko Bailey
per hearing by way of attorneys fees; Bridge, on or prior to March 17, 1983, but also failed, and
(e) As moral damages -- P50,000.00; neglected to either close the Bugko Bridge to public use and
(f) As exemplary damages -- P30,000.00; and travel, and/or to put appropriate warning and cautionary
(g) To pay the costs. signs, for repair, improvement, maintenance, and safety
The Facts
purposes. So that, as a proximate and direct consequence of
The antecedents of the case are succinctly summarized the aggregate officials nonfeasance, bad faith, negligence,
by the Court of Appeals in this wise: serious inefficiency, and callous indifference to public safety,
The original complaint was filed against JB Lines, Inc. that Bugko Bridge collapsed inward and caved in ruin, on that
[Petitioner JB Lines, Inc.] filed a motion to dismiss complaint, March 17, 1983, while Barituas bus 142 was cautiously and
to strike out false-impertinent matters therefrom, and/or for prudently passing and travelling across the said bridge, as a
bill of particulars on the primary grounds that [respondents] result of which the bus fell into the river and sea waters,
failed to implead Jose Baritua as an indispensable party and despite the exercise and compliance by Baritua and his driver
that the cause of action is a suit against a wrong and non- of their duties in the matter of their requisite degree of
existent party. [Respondents] filed an opposition to the said diligence, caution and prudence, Baritua also exercised and
motion and an amended complaint. complied with the requisite duty of diligence, care, and
In an Order dated December 11, 1984 the trial court denied prudence in the selection and supervision over his driver,
the aforesaid motion and admitted the amended complaint of contrary to the baseless imputation in paragraphs 14 and 20
[respondents] impleading Jose Baritua and alleged the of the original and amended complaints. Moreover, Baritua
following: and his driver did not violate any traffic rule and regulation,
(10) The late Dominador Mercader is a [b]usinessman mainly contrary to plaintiffs insinuation.
engaged in the buy and sell of dry goods in Laoang, N. 5. Furthermore, [Petitioner] Baritua and his driver have no
Samar. He buys his goods from Manila and bring[s] them to causative connection with the alleged death of Dominador
Laoang, Northern Samar for sale at his store located in the Mercader who, according to a reliable source, was already
said locality; seriously suffering from a lingering illness even prior to his
(11) Sometime on March 16, 1983, the late Dominador alleged demise. Baritua also learned lately, and so it is herein
Mercader boarded [petitioners] bus No. 142 with Plate No. 484 alleged that Dominador Mercader contributed considerably,
EU at [petitioners] Manila Station/terminal, bound for Brgy. to, and/or provided the proximate and direct cause of his own
Rawis, Laoang Northern Samar as a paying passenger; death, hence, he himself is to be blamed for whatever may
(12) At that time, Dominador Mercader had with him as his have happened to him or for whatever may have been
baggage, assorted goods (i.e. long pants, short pants, dusters, sustained by his supposed heirs, vis--vis the suit against the
etc.) which he likewise loaded in [petitioners] bus; wrong party.
(13) The late Dominador Mercader was not able to reach his 6. Baritua and his driver, as earlier stated, did not commit any
destination considering that on March 17, 1983 at Beily actionable breach of contract with the alleged Dominador
(Bugco) Bridge, Barangay Roxas, Mondragon, Northern Mercader or the latters supposed heirs.
Samar, while he was on board [petitioners] bus no. 142 with 7. There is no factual nor any legal basis for plaintiffs
Plate No. 484 EU, the said bus fell into the river as a result of proffered claims for damages.
which the late Dominador Mercader died. x x x. II. AFFIRMATIVE DEFENSES
(14) The accident happened because [petitioners] driver 8. Based on the preceding averments, plaintiffs have neither
negligently and recklessly operated the bus at a fast speed in a cause nor a right of action against [Petitioner] Baritua and
wanton disregard of traffic rules and regulations and the his driver.
prevailing conditions then existing that caused [the] bus to 8.1. The allegation that supposedly the x x x [p]laintiffs are
fall into the river. the compulsory heirs of the late DOMINADOR MERCADER x x x
[Respondents] then filed a motion to declare [petitioners] in (par. 8, complaint) is too vague and too broad, as the subject
default which motion was opposed by [petitioners]. allegation is a bare and pure conclusionary averment
[Respondents] withdrew the said motion prompting the trial unaccompanied by the requisite statement of ultimate facts
court to cancel the scheduled hearing of the said motion to constitutive of a cause or right of action.
declare [petitioners] in default in an Order dated January 23, 8.2. Even assuming arguendo, without however conceding,
1985. plaintiffs statement of a cause of action, the complaint is
In its answer, [petitioners] denied specifically all the material nonetheless replete with false and impertinent matters which
allegations in the complaint and alleged the following: fit the rule on striking out pleadings or parts thereof. To
2. The alleged person of Dominador Mercader did not board mention only a glaring few:
bus 142 at [petitioners] Manila station/terminal x x x as a 8.2.a. The allegation on exemplary damages x x x is
(supposed paying passenger). There is even no statement in impertinent and immaterial in the complaint against a
the complaint that Dominador Mercader (if it were true that supposed employer. For, even theoretically assuming, without
he was a passenger of bus 142 at the [petitioners] Manila however admitting a negligent act-omission on the part of a

18
driver, nevertheless, in such a hypothetical situation, the Did the CA also ignore the fact that the trial court was not
causative negligence, if any there was, is personal to the paid the correct amount of the docket and other lawful fees;
wrongdoer, i.e., the employee-driver, to the exclusion of the hence, without jurisdiction over the original and amended
employer. complaints or over the subject matter of the case;
8.2.b. The allegation on supposed minimum life of 75 years III
and on he expects to earn no less than P1,680,000.00 x x x is Did the CA likewise arbitrarily disregard petitioners
false, a pure hyperbole, and bereft of factual and legal constitutional right to procedural due process and fairness
basis. Besides, what jurisprudential rule refers to is when it ignored and thrust aside their right to present
only net earning. The law abhors a claim, akin to plaintiffs evidence and to expect that their evidence will be duly
allegation, which is manifestly speculative, as it may not exist considered and appreciated; and
at all. Furthermore, the questioned allegation in the plaintiffs IV
original and amended complaints is not preceded by the In awarding excessive and extravagant damages, did the CA
requisite statement of definitive facts, nor of any specific fact, and the trial court adhere to the rule that their assailed
which could possibly afford a rational basis for a reasonable decision must state clearly and distinctly the facts and the
expectation of supposed earning that could be lost, or laws on which they are based?[7]
impaired. Distilling the alleged errors cited above, petitioners raise
8.2.c. Likewise, the allegations that allegedly x x x the late two main issues for our consideration: (1) whether the CA
Dominador Mercader boarded x x x Bus No. 142 x x x and that erred in holding that the RTC had jurisdiction over the subject
supposedly the latter had a baggage x x x containing matter of the case, and (2) whether the CA disregarded
drygoods x x x in which case [petitioners have] to pay the petitioners procedural rights.
value thereof in such amount as may be proven by The Courts Ruling

[respondents] in court during the trial x x x, apart from being The Petition is devoid of merit.
false, are offensive to the rule on concise statement of First Issue: Jurisdiction

ultimate facts. The assailed allegations also contravene Petitioners contend that since the correct amounts of
Interim Rule 11, (i)f any demand is for damages in a civil docket and other lawful fees were not paid by respondents,
action the amount thereof must be specifically alleged. In then the trial court did not acquire jurisdiction over the
consequence of this averment, [respondents] have not yet subject matter of the case.
paid the correct docket fee, for which reason, [respondents] The Court, in Manchester Development Corporation v.
case may be dismissed on that ground alone. CA,[8] held that [t]he court acquires jurisdiction over any case
8.3. In violation also of the same Interim Rule 11, regarding only upon the payment of the prescribed docket fee. An
the requisite definitive amount of claim, the allegation on the amendment of the complaint or similar pleading will not
supposed funeral expense x x x does not also indicate any thereby vest jurisdiction in the court, much less the payment
specific amount. So with the averment on supposed moral of the docket fee based on the amounts sought in the
damage which may not be warranted because of absence of amended pleading. x x x.
allegation of fraud or bad faith, if any, there was, apart from Generally, the jurisdiction of a court is determined by the
want of causative connection with the defendant. statute in force at the commencement of the action, [9] unless
8.4. The allegation in paragraph 15 of the original and such statute provides for its retroactive application. [10] Once
amended complaint is also a pure conclusionary averment, the jurisdiction of a court attaches, it continues until the case
without a factual premise. is finally terminated.[11] The trial court cannot be ousted
9. [Petitioner] JB LINE, impleaded in the amended complaint, therefrom by subsequent happenings or events, although of a
is merely a business name and sole proprietorship of character that would have prevented jurisdiction from
defendant Baritua. As such, JB Line is not a juridical person, attaching in the first instance.[12]
nor an entity authorized by law to sue and be sued, hence, it The Manchester ruling, which became final in 1987, has
cannot legally be a party to any action. With this averment, no retroactive application and cannot be invoked in the
correlated with that in paragraphs 4-5 hereof, [respondents] subject Complaint filed in 1984. The Court explicitly declared:
amended complaint is essentially a suit against a wrong party. To put a stop to this irregularity, henceforth all complaints,
[5]
petitions, answers and other similar pleadings should specify
The RTC, after due trial, rendered the aforesaid assailed the amount of damages being prayed for not only in the body
Decision. of the pleading but also in the prayer, and said damages shall
Ruling of the Court of Appeals
be considered in the assessment of the filing fees in any
As earlier stated, the Court of Appeals affirmed the trial case. Any pleading that fails to comply with this requirement
courts award of monetary damages in favor of respondents, shall not be accepted nor admitted, or shall otherwise be
except the amount of Dominador Mercaders lost earnings, expunged from the record.[13] (emphasis supplied)
which it reduced to P798,000. It held that petitioners failed to Second Issue: Petitioners Procedural Rights

rebut the presumption that in the event a passenger died or Motion for a Bill of Particulars

was injured, the carrier had acted negligently. Petitioners, it Petitioners argue that the Court of Appeals erred when it
added, presented no sufficient proof that they had exercised passed sub silencio on the trial courts failure to rule frontally
extraordinary diligence. on their plea for a bill of particulars.
Hence, this Petition.[6] We are not impressed. It must be noted that petitioners
The Issues
counsel manifested in open court his desire to file a motion for
In their Memorandum, petitioners submit the following a bill of particulars. The RTC gave him ten days from March
issues for our consideration: 12, 1985 within which to do so.[14] He, however, filed the
I aforesaid motion only on April 2, 1985 or eleven days past the
Did the honorable Court of Appeals (CA) gravely abuse its deadline set by the trial court. [15] Moreover, such motion was
discretion when it allowed to pass sub silencio the trial courts already moot and academic because, prior to its filing,
failure to rule frontally on petitioners plea for a bill of petitioners had already filed their answer and several other
particulars, and ignored the nature of respondents prayer in pleadings to the amended Complaint. Section 1, Rule 12 of
the complaint pleading for an award of -- the Rules of Court, provides:
a) P12,000.00 -- representing the death Section 1. When applied for; purpose. -- Before responding to
compensation; a pleading, a party may move for a more definite statement
b) An amount to be proven in court, representing or for a bill of particulars of any matter which is not averred
actual damages; with sufficient definiteness or particularity to enable him
c) P1,660,000.00 or more as may be proven during properly to prepare his responsive pleading. If the pleading is
the trial, by way of loss of earnings; a reply, the motion must be filed within ten (10) days from
d) An amount to be proven in court as and by way service thereof. Such motion shall point out the defects
of funeral expenses; complained of, the paragraphs wherein they are contained,
e) An amount to be proven during the trial, and the details desired.[16] (emphasis supplied)
representing moral damages; Petitioners Right to Adduce Evidence

f) An amount to be determined by this Honorable Petitioners also argue that their right to present
Court, representing exemplary damages; evidence was violated by the CA, because it did not consider
g) An amount equivalent to 25% of whatever their contention that the trial judges who heard the case were
amount the plaintiffs would be able to collect from biased and impartial. Petitioners contend, as they did before
the defendant but in no case less than P50,000.00 the CA, that Judge Tomas B. Noynay based his Decision on
plus an additional amount of P1,000.00 per hearing certain chosen partial testimonies of [respondents] witnesses
as and by way of Attorneys fees; x x x. They further maintain that Judge Fortunato Operario,
II who initially handled the case, questioned some witnesses in

19
an overzealous manner and assum[ed] the dual role of that the common carrier was at fault or was negligent
magistrate and advocate.[17] when a passenger dies or is injured. Unless the
These arguments are not meritorious. First, judges presumption is rebutted, the court need not even make
cannot be expected to rely on the testimonies of every an express finding of fault or negligence on the part of
witness. In ascertaining the facts, they determine who are the common carrier. This statutory presumption may
credible and who are not. In doing so, they consider all the only be overcome by evidence that the carrier exercised
evidence before them. In other words, the mere fact that extraordinary diligence as prescribed in Articles 1733
Judge Noynay based his decision on the testimonies of and 1755 of the Civil Code. The records are bereft of any
respondents witnesses does not necessarily mean that he did proof to show that Baliwag exercised extraordinary
not consider those of petitioners. Second, we find no sufficient diligence. On the contrary, the evidence demonstrates
showing that Judge Operario was overzealous in questioning its driver's recklessness. Leticia Garcia testified that the
the witnesses. His questions merely sought to clarify their bus was running at a very high speed despite the drizzle
testimonies. In all, we reject petitioners contention that their and the darkness of the highway. The passengers
right to adduce evidence was violated. pleaded for its driver to slow down, but their plea was
Alleged Failure to State Clearly the Facts and the Law
ignored. Leticia also revealed that the driver was
We are not convinced by petitioners contention, either, smelling of liquor. She could smell him as she was
that both the trial and the appellate courts failed to state seated right behind the driver. Another passenger, Felix
clearly and distinctly the facts and the law involved in the Cruz testified that immediately before the collision, the
case. As can be gleaned from their Decisions, both courts bus driver was conversing with a co-employee. All these
clearly laid down their bases for awarding monetary damages prove the bus driver's wanton disregard for the physical
to respondents. safety of his passengers, which make Baliwag as a
Both the RTC and the CA found that a contract of common carrier liable for damages under Article 1759 of
carriage existed between petitioners and Dominador the Civil Code.
Mercader when he boarded Bus No. 142 in Pasay City on 2. ID.; ID.; ID.; ID.; LAND TRANSPORTATION AND
March 16, 1983. Petitioners failed to transport him to his TRAFFIC CODE; SECTION 34(g) THEREOF;
destination, because the bus fell into a river while traversing SUBSTANTIALLY COMPLIED WITH IN CASE AT BAR.
the Bugko Bailey Bridge. Although he survived the fall, he Baliwag cannot evade its liability by insisting that the
later died of asphyxia secondary to drowning. accident was caused solely by the negligence of A & J
We agree with the findings of both courts that Trading and Julio Recontique. It harps on their alleged
petitioners failed to observe extraordinary diligence[18] that non use of early warning device as testified to by Col.
fateful morning. It must be noted that a common carrier, by Demetrio dela Cruz, the station commander of Gapan,
the nature of its business and for reasons of public policy, is Nueva Ecija who investigated the incident, and Francisco
bound to carry passengers safely as far as human care and Romano, the bus conductor. The records do not bear out
foresight can provide. It is supposed to do so by using the Baliwag's contention. Col. dela Cruz and Romano
utmost diligence of very cautious persons, with due regard for testified that they did not see any early warning device
all the circumstances.[19] In case of death or injuries to at the scene of the accident. They were referring to the
passengers, it is presumed to have been at fault or to have triangular reflectorized plates in red and yellow issued
acted negligently, unless it proves that it observed by the Land Transportation Office. However, the
extraordinary diligence as prescribed in Articles 1733 and evidence shows that Recontique and Ecala placed a
1755[20] of the Civil Code. kerosene lamp or torch at the edge of the road, near the
We sustain the ruling of the CA that petitioners failed to rear portion of the truck to serve as an early warning
prove that they had observed extraordinary diligence. device. This substantially complies with Section 34 (g) of
First, petitioners did not present evidence on the skill or the Land Transportation and Traffic Code, to
expertise of the driver of Bus No. 142 or the condition of that wit: "(g) lights and reflector when parked or disabled.
vehicle at the time of the incident. Appropriate parking lights or flares visible one hundred
Second, the bus was overloaded at the time. In fact, meters away shall be displayed at the corner of the
several individuals were standing when the incident occurred. vehicle whenever such vehicle is parked on highways or
[21]
in places that are not well-lighted or, is placed in such
Third, the bus was overspeeding. Its conductor testified manner as to endanger passing traffic. Furthermore,
that it had overtaken several buses before it reached the every motor vehicle shall be provided at all times with
Bugko Bailey Bridge.[22] Moreover, prior to crossing the bridge, built-in reflectors or other similar warning devices either
it had accelerated and maintained its speed towards the pasted, painted or attached at its front and back which
bridge.[23] shall likewise be visible at night at least one hundred
We therefore believe that there is no reason to overturn meters away. No vehicle not provided with any of the
the assailed CA Decision, which affirmed that of the RTC. It is requirements mentioned in this subsection shall be
a well-settled rule that the trial courts factual findings, when registered." Baliwag's argument that the kerosene lamp
affirmed by the appellate court, are conclusive and binding, if or torch does not substantially comply with the law is
they are not tainted with arbitrariness or oversight of some untenable. The aforequoted law clearly allows the use
fact or circumstance of significance and influence. [24] As not only of an early warning device of the triangular
clearly discussed above, petitioners have not presented reflectorized plates variety but also parking lights or
sufficient ground to warrant a deviation from this rule. flares visible one hundred meters away. Indeed, Col.
Finally, we cannot fault the appellate court in its dela Cruz himself admitted that a kerosene lamp is an
computation of the damages and lost earnings, since it acceptable substitute for the reflectorized plates. No
effectively computed only net earnings in accordance with negligence, therefore, may be imputed to A & J Trading
existing jurisprudence.[25] and its driver, Recontique.
WHEREFORE, the Petition is hereby DENIED, and the 3. ID.; DAMAGES; To PROVE ACTUAL DAMAGES, THE
assailed Decision AFFIRMED. Costs against petitioners. BEST EVIDENCE AVAILABLE TO THE PARTIES MUST
SO ORDERED. BE PRESENTED. The propriety of the amount awarded
as hospitalization and medical fees. The award of
P25,000.00 is not supported by the evidence on
[G.R. No. 116110. May 15,1996] record. The Garcias presented receipts marked as
BALIWAG TRANSIT, INC., petitioner, vs.  COURT OF Exhibits "B-1 " to "B-42" but their total amounted only to
APPEALS, SPOUSES ANTONIO GARCIA & LETICIA P5,017.74. To be sure, Leticia testified as to the extra
GARCIA, A & J TRADING, AND JULIO amount spent for her medical needs but without more
RECONTIQUE, respondents. reliable evidence, her lone testimony cannot justify the
SYLLABUS award of P25,000.00. To prove actual damages, the best
1. CIVIL LAW; CONTRACTS; SPECIAL CONTRACTS; evidence available to the injured party must be
COMMON CARRIERS; LIABILITY FOR DAMAGES; presented. The court cannot rely on uncorroborated
ESTABLISHED IN CASE AT BAR. As a common carrier, testimony whose truth is suspect, but must depend upon
Baliwag breached its contract of carriage when it failed competent proof that damages have been actually
to deliver its passengers, Leticia and Allan Garcia to their suffered. Thus, we reduce the actual damages for
destination safe and sound. A common carrier is bound medical and hospitalization expenses to P5,017.74.
to carry its passengers safely as far as human care and 4. ID.; ID.; MORAL DAMAGES; RECOVERABLE IF THE
foresight can provide, using the utmost diligence of a CARRIER THROUGH ITS AGENT, ACTED
very cautious person, with due regard for all the FRAUDULENTLY OR IN BAD FAITH. The award of
circumstances. In a contract of carriage, it is presumed moral damages is in accord with law. In a breach of

20
 contract of carriage, moral damages are recoverable if On appeal, the Court of Appeals modified the trial court's
the carrier, through its agent, acted fraudulently or in Decision by absolving A & J Trading from liability and by
bad faith. The evidence shows the gross negligence of reducing the award of attorney's fees to P10,000.00 and loss
the driver of Baliwag bus which amounted to bad of earnings to P300,000.00, respectively.[10]
faith. Without doubt, Leticia and Allan experienced Baliwag filed the present petition for review raising the
physical suffering, mental anguish and serious anxiety following issues:
by reason of the accident. 1. Did the Court of Appeals err in absolving A & J Trading from
APPEARANCES OF COUNSEL liability and holding Baliwag solely liable for the injuries
Leopoldo C. Sta. Maria for Baliwag Transit, Inc. suffered by Leticia and Allan Garcia in the accident?
Arturo D. Vallar for Sps. Antonio & Leticia Garcia. 2. Is the amount of damages awarded by the Court of Appeals
Allan A. Leynes for A & J Trading, and Julio Recontique. to the Garcia spouses correct?
DECISION We affirm the factual findings of the Court of Appeals.
PUNO, J.: I
This is a petition for certiorari to review the Decision[1] of As a common carrier, Baliwag breached its contract of
the Court of Appeals in CA-G.R. CV-31246 awarding damages carriage when it failed to deliver its passengers, Leticia and
in favor of the spouses Antonio and Leticia Garcia for breach Allan Garcia to their destination safe and sound. A common
of contract of carriage.[2] filed by the spouses Garcia carrier is bound to carry its passengers safely as far as human
questioning the same Court of Appeals' Decision which care and foresight can provide, using the utmost diligence of
reduced their award of damages. On November 13, 1995, we a very cautious person, with due regard for all the
denied their petition for review. circumstances.[11] In a contract of carriage, it is presumed that
The records show that on July 31, 1980, Leticia Garcia, the common carrier was at fault or was negligent when a
and her five-year old son, Allan Garcia, boarded Baliwag passenger dies or is injured. Unless the presumption is
Transit Bus No. 2036 bound for Cabanatuan City driven by rebutted, the court need not even make an express finding of
Jaime Santiago. They took the seat behind the driver. fault or negligence on the part of the common carrier. This
At about 7:30 in the evening, in Malimba, Gapan, Nueva statutory presumption may only be overcome by evidence
Ecija, the bus passengers saw a cargo truck parked at the that the carrier exercised extraordinary diligence as
shoulder of the national highway. Its left rear portion jutted to prescribed in Articles 1733 and 1755 of the Civil Code. [12]
the outer lane, the shoulder of the road was too narrow to The records are bereft of any proof to show that Baliwag
accommodate the whole truck. A kerosene lamp appeared at exercised extraordinary diligence. On the contrary, the
the edge of the road obviously to serve as a warning evidence demonstrates its driver's recklessness. Leticia
device. The truck driver, Julio Recontique, and his helper, Garcia testified that the bus was running at a very high speed
Arturo Escala, were then replacing a flat tire. The truck is despite the drizzle and the darkness of the highway. The
owned by respondent A & J Trading. passengers pleaded for its driver to slow down, but their plea
Bus driver Santiago was driving at an inordinately fast was ignored.[13]Leticia also revealed that the driver was
speed and failed to notice the truck and the kerosene lamp at smelling of liquor.[14] She could smell him as she was seated
the edge of the road. Santiago's passengers urged him to slow right behind the driver. Another passenger, Felix Cruz testified
down but he paid them no heed. Santiago even carried that immediately before the collision, the bus driver was
animated conversations with his co-employees while conversing with a co-employee. [15] All these prove the bus
driving. When the danger of collision became imminent, the driver's wanton disregard for the physical safety of his
bus passengers shouted "Babangga tayo!". Santiago stepped passengers, which makes Baliwag as a common carrier liable
on the brake, but it was too late. His bus rammed into the for damages under Article 1759 of the Civil Code:
stalled cargo truck. It caused the instant death of Santiago Art. 1759. Common carriers are liable for the death of or
and Escala, and injury to several others. Leticia and Allan injuries to passengers through the negligence or willfull acts
Garcia were among the injured passengers. of the former's employees, although such employees may
Leticia suffered a fracture in her pelvis and right have acted beyond the scope of their authority or in violation
leg. They rushed her to the provincial hospital in Cabanatuan of the orders of the common carriers.
City where she was given emergency treatment. After three This liability of the common carriers do not cease upon proof
days, she was transferred to the National Orthopedic Hospital that they exercised all the diligence of a good father of a
where she was confined for more than a month. [3] She family in the selection or supervision of their employees.
underwent an operation for partial hip prosthesis.[4] Baliwag cannot evade its liability by insisting that the
Allan, on the other hand, broke a leg. He was also given accident was caused solely by the negligence of A & J Trading
emergency treatment at the provincial hospital. and Julio Recontique. It harps on their alleged non use of an
Spouses Antonio and Leticia Garcia sued Baliwag Transit, early warning device as testified to by Col. Demetrio dela
Inc., A & J Trading and Julio Recontique for damages in the Cruz, the station commander of Gapan, Nueva Ecija who
Regional Trial Court of Bulacan. [5] Leticia sued as an injured investigated the incident, and Francisco Romano, the bus
passenger of Baliwag and as mother of Allan. At the time of conductor.
the complaint, Allan was a minor, hence, the suit initiated by The records do not bear out Baliwag's contention. Col.
his parents in his favor. dela Cruz and Romano testified that they did not see any
Baliwag, A & J Trading and Recontique disclaimed early warning device at the scene of the accident. [16] They
responsibility for the mishap. Baliwag alleged that the were referring to the triangular reflectorized plates in red and
accident was caused solely by the fault and negligence of A & yellow issued by the Land Transportation Office. However, the
J Trading and its driver, Recontique. Baliwag charged that evidence shows that Recontique and Ecala placed a kerosene
Recontigue failed to place an early warning device at the lamp or torch at the edge of the road, near the rear portion of
corner of the disabled cargo truck to warn oncoming vehicles. the truck to serve as an early warning device. [17] This
[6]
 On the other hand, A & J Trading and Recontique alleged substantially complies with Section 34 (g) of the Land
that the accident was the result of the negligence and Transportation and Traffic Code, to wit:
reckless driving of Santiago, bus driver of Baliwag. [7] (g) Lights and reflector when parked or
After hearing, the trial court found all the defendants disabled. Appropriate parking lights or flares visible one
liable, thus: hundred meters away shall be displayed at the corner of
x x x x x x x x x the vehicle whenever such vehicle is parked on highways or in
"In view thereof, the Court holds that both defendants should places that are not well-lighted or, is placed in such manner
be held liable; the defendant Baliwag Transit, Inc. for having as to endanger passing traffic. Furthermore, every motor
failed to deliver the plaintiff and her son to their point of vehicle shall be provided at all times with built-in reflectors or
destination safely in violation of plaintiff's and defendant other similar warning devices either pasted, painted or
Baliwag Transit's contractual relation. attached at its front and back which shall likewise be visible at
The defendant A & J and Julio Recontique for failure to provide night at least one hundred meters away. No vehicle not
its cargo truck with an early warning device in violation of the provided with any of the requirements mentioned in this
Motor Vehicle Law."[8] subsection shall be registered. (Italics supplied)
The trial court ordered Baliwag, A & J Trading and Baliwag's argument that the kerosene lamp or torch
Recontique to pay jointly and severally the Garcia spouses the does not substantially comply with the law is untenable. The
following: (1) P25,000.00 hospitalization and medication fee, aforequoted law clearly allows the use not only of an early
(2) P450,000.00 loss of earnings in eight (8) years, (3) warning device of the triangular reflectorized plates variety
P2,000.00 for the hospitalization of their son Allan Garcia, (4) but also parking lights or flares visible one hundred meters
P50,000.00 moral damages, and (5) P30,000.00 attorney's away. Indeed, Col. dela Cruz himself admitted that a kerosene
fee.[9] lamp is an acceptable substitute for the reflectorized plates.

21
  No negligence, therefore, may be imputed to A & J Trading
[18]
confined at the National Orthopedic Hospital for 45 days. The
and its driver, Recontique. young Allan was also confined in the hospital for his foot
Anent this factual issue, the analysis of evidence made injury. Contrary to the contention of Baliwag, the decision of
by the Court of Appeals deserves our concurrence, viz: the trial court as affirmed by the Court of Appeals awarded
xxx xxx xxx moral damages to Antonio and Leticia Garcia not in their
In the case at bar, both the injured passengers of the Baliwag capacity as parents of Allan. Leticia was given moral damages
involved in the accident testified that they saw some sort of as an injured party. Allan was also granted moral damages as
kerosene or a torch on the rear portion of the truck before the an injured party but because of his minority, the award in his
accident. Baliwag Transit's conductor attempted to defeat favor has to be given to his father who represented him in the
such testimony by declaring that he noticed no early warning suit.
device in front of the truck. Finally, we find the award of attorney's fees justified. The
Among the testimonies offered by the witnesses who complaint for damages was instituted by the Garcia spouses
were present at the scene of the accident, we rule to uphold on December 15, 1982, following the unjustified refusal of
the affirmative testimonies given by the two injured Baliwag to settle their claim. The Decision was promulgated
passengers and give less credence to the testimony of the by the trial court only on January 29, 1991 or about nine years
bus conductor who solely testified that no such early warning later. Numerous pleadings were filed before the trial court,
device exists. the appellate court and to this Court. Given the complexity of
The testimonies of injured passengers who may well be the case and the amount of damages involved, [25] the award of
considered as disinterested witness appear to be natural and attorney's fee for P10,000.00 is just and reasonable.
more probable than the testimony given by Francisco Romano IN VIEW WHEREOF, the Decision of the respondent
who is undoubtedly interested in the outcome of the case, Court of Appeals in CA-G.R. CV-31246 is AFFIRMED with the
being the conductor of the defendant-appellant Baliwag MODIFICATION reducing the actual damages for
Transit Inc. hospitalization and medical fees to P5,017.74. No costs.
It must be borne in mind that the situation then SO ORDERED.
prevailing at the time of the accident was admittedly drizzly
and all dark. This being so, it would be improbable and [G.R. No. 113003. October 17, 1997]
perhaps impossible on the part of the truck helper without the ALBERTA YOBIDO and CRESENCIO
torch nor the kerosene to remove the flat tires of the truck. YOBIDO, petitioners, vs. COURT OF APPEALS,
Moreover, witness including the bits conductor himself LENY TUMBOY, ARDEE TUMBOY and JASMIN
admitted that the passengers shouted, that they are going to TUMBOY, respondents.
bump before the collision which consequently caused the bus DECISION
driver to apply the brake 3 to 4 meters away from the ROMERO, J.:
truck. Again, without the kerosene nor the torch in front of In this petition for review on certiorari of the decision of
the truck, it would be improbable for the driver, more so the the Court of Appeals, the issue is whether or not the explosion
passengers to notice the truck to be bumped by the bus of a newly installed tire of a passenger vehicle is a fortuitous
considering the darkness of the place at the time of the event that exempts the carrier from liability for the death of a
accident. passenger.
x x x x x x x x x On April 26, 1988, spouses Tito and Leny Tumboy and
While it is true that the investigating officer testified that their minor children named Ardee and Jasmin, boarded at
he found no early warning device at the time of his Mangagoy, Surigao del Sur, a Yobido Liner bus bound for
investigation, We rule to give less credence to such testimony Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan
insofar as he himself admitted on cross examination that he del Sur, the left front tire of the bus exploded. The bus fell into
did not notice the presence of any kerosene lamp at the back a ravine around three (3) feet from the road and struck a
of the truck because when he arrived at the scene of the tree. The incident resulted in the death of 28-year-old Tito
accident, there were already many people surrounding the Tumboy and physical injuries to other passengers.
place (TSN, Aug, 22, 1989, p. 13). He further admitted that On November 21, 1988, a complaint for breach of
there exists a probability that the lights of the truck may have contract of carriage, damages and attorneys fees was filed by
been smashed by the bus at the time of the accident Leny and her children against Alberta Yobido, the owner of the
considering the location of the truck where its rear portion bus, and Cresencio Yobido, its driver, before the Regional Trial
was connected with the front portion of the bus (TSN, March Court of Davao City. When the defendants therein filed their
29, 1985, pp. 11-13). Investigator's testimony therefore did answer to the complaint, they raised the affirmative defense
not confirm nor deny the existence of such warning device, of caso fortuito. They also filed a third-party complaint against
making his testimony of little probative value. [19] Philippine Phoenix Surety and Insurance, Inc. This third-party
II defendant filed an answer with compulsory counterclaim. At
We now review the amount of damages awarded to the the pre-trial conference, the parties agreed to a stipulation of
Garcia spouses. facts.[1]
First, the propriety of the amount awarded as Upon a finding that the third party defendant was not
hospitalization and medical fees. The award of P25,000.00 is liable under the insurance contract, the lower court dismissed
not supported by the evidence on record. The Garcias the third party complaint. No amicable settlement having
presented receipts marked as Exhibits B-1 to B 42 but their been arrived at by the parties, trial on the merits ensued.
total amounted only to P5,017.74. To be sure, Leticia testified The plaintiffs asserted that violation of the contract of
as to the extra amount spent for her medical needs but carriage between them and the defendants was brought
without more reliable evidence, her lone testimony cannot about by the drivers failure to exercise the diligence required
justify the award of P25,000.00. To prove actual damages, the of the carrier in transporting passengers safely to their place
best evidence available to the injured party must be of destination. According to Leny Tumboy, the bus left
presented. The court cannot rely on uncorroborated testimony Mangagoy at 3:00 oclock in the afternoon. The winding road it
whose truth is suspect, but must depend upon competent traversed was not cemented and was wet due to the rain; it
proof that damages have been actually suffered[20] Thus, we was rough with crushed rocks. The bus which was full of
reduce the actual damages for medical and hospitalization passengers had cargoes on top. Since it was running fast, she
expenses to P5,017.74. cautioned the driver to slow down but he merely stared at her
Second, we find as reasonable the award of P300,000.00 through the mirror. At around 3:30 p.m., in Trento, she heard
representing Leticia's lost earnings. Before the accident, something explode and immediately, the bus fell into a
Leticia was engaged in embroidery, earning P5,000.00 per ravine.
month.[21] Her injuries forced her to stop working. Considering For their part, the defendants tried to establish that the
the nature and extent of her injuries and the length of time it accident was due to a fortuitous event. Abundio Salce, who
would take her to recover,[22] we find it proper that Baliwag was the bus conductor when the incident happened, testified
should compensate her lost income for five (5) years.[23] that the 42-seater bus was not full as there were only 32
Third, the award of moral damages is in accord with passengers, such that he himself managed to get a seat. He
law. In a breach of contract of carriage, moral damages are added that the bus was running at a speed of 60 to 50 and
recoverable if the carrier, through its agent, acted that it was going slow because of the zigzag road. He affirmed
fraudulently or in bad faith. [24] The evidence shows the gross that the left front tire that exploded was a brand new tire that
negligence of the driver of Baliwag bus which amounted to he mounted on the bus on April 21, 1988 or only five (5) days
bad faith. Without doubt, Leticia and Allan experienced before the incident. The Yobido Liner secretary, Minerva
physical suffering, mental anguish and serious anxiety by Fernando, bought the new Goodyear tire from Davao Toyo
reason of the accident. Leticia underwent an operation to Parts on April 20, 1988 and she was present when it was
replace her broken hip bone with a metal plate. She was mounted on the bus by Salce. She stated that all driver

22
applicants in Yobido Liner underwent actual driving tests such re-examination, we found no reason to overturn the
before they were employed. Defendant Cresencio Yobido findings and conclusions of the Court of Appeals.
underwent such test and submitted his professional drivers As a rule, when a passenger boards a common carrier,
license and clearances from the barangay, the fiscal and the he takes the risks incidental to the mode of travel he has
police. taken. After all, a carrier is not an insurer of the safety of its
On August 29, 1991, the lower court rendered a passengers and is not bound absolutely and at all events to
decision[2] dismissing the action for lack of merit. On the issue carry them safely and without injury.[9] However, when a
of whether or not the tire blowout was a caso fortuito, it found passenger is injured or dies while travelling, the law presumes
that the falling of the bus to the cliff was a result of no other that the common carrier is negligent. Thus, the Civil Code
outside factor than the tire blow-out. It held that the ruling in provides:
the La Mallorca and Pampanga Bus Co. v. De Jesus [3] that a Art. 1756. In case of death or injuries to passengers, common
tire blowout is a mechanical defect of the conveyance or a carriers are presumed to have been at fault or to have acted
fault in its equipment which was easily discoverable if the bus negligently, unless they prove that they observed
had been subjected to a more thorough or rigid check-up extraordinary diligence as prescribed in articles 1733 and
before it took to the road that morning is inapplicable to this 1755.
case. It reasoned out that in said case, it was found that the Article 1755 provides that (a) common carrier is bound
blowout was caused by the established fact that the inner to carry the passengers safely as far as human care and
tube of the left front tire was pressed between the inner circle foresight can provide, using the utmost diligence of very
of the left wheel and the rim which had slipped out of the cautious persons, with a due regard for all the circumstances.
wheel. In this case, however, the cause of the explosion Accordingly, in culpa contractual, once a passenger dies or is
remains a mystery until at present. As such, the court added, injured, the carrier is presumed to have been at fault or to
the tire blowout was a caso fortuito which is completely an have acted negligently. This disputable presumption may only
extraordinary circumstance independent of the will of the be overcome by evidence that the carrier had observed
defendants who should be relieved of whatever liability the extraordinary diligence as prescribed by Articles 1733,
plaintiffs may have suffered by reason of the explosion [10]
 1755 and 1756 of the Civil Code or that the death or injury
pursuant to Article 1174[4] of the Civil Code. of the passenger was due to a fortuitous event.
Dissatisfied, the plaintiffs appealed to the Court of [11]
 Consequently, the court need not make an express finding
Appeals. They ascribed to the lower court the following errors: of fault or negligence on the part of the carrier to hold it
(a) finding that the tire blowout was a caso fortuito; (b) failing responsible for damages sought by the passenger.[12]
to hold that the defendants did not exercise utmost and/or In view of the foregoing, petitioners contention that they
extraordinary diligence required of carriers under Article 1755 should be exempt from liability because the tire blowout was
of the Civil Code, and (c) deciding the case contrary to the no more than a fortuitous event that could not have been
ruling in Juntilla v. Fontanar,[5] and Necesito v. Paras.[6] foreseen, must fail. A fortuitous event is possessed of the
On August 23, 1993, the Court of Appeals rendered the following characteristics: (a) the cause of the unforeseen and
Decision[7] reversing that of the lower court. It held that: unexpected occurrence, or the failure of the debtor to comply
To Our mind, the explosion of the tire is not in itself a with his obligations, must be independent of human will; (b) it
fortuitous event. The cause of the blow-out, if due to a factory must be impossible to foresee the event which constitutes
defect, improper mounting, excessive tire pressure, is not an the caso fortuito, or if it can be foreseen, it must be
unavoidable event. On the other hand, there may have been impossible to avoid; (c) the occurrence must be such as to
adverse conditions on the road that were unforeseeable render it impossible for the debtor to fulfill his obligation in a
and/or inevitable, which could make the blow-out a caso normal manner; and (d) the obligor must be free from any
fortuito. The fact that the cause of the blow-out was not participation in the aggravation of the injury resulting to the
known does not relieve the carrier of liability. Owing to the creditor.[13] As Article 1174 provides, no person shall be
statutory presumption of negligence against the carrier and responsible for a fortuitous event which could not be foreseen,
its obligation to exercise the utmost diligence of very cautious or which, though foreseen, was inevitable. In other words,
persons to carry the passenger safely as far as human care there must be an entire exclusion of human agency from the
and foresight can provide, it is the burden of the defendants cause of injury or loss.[14]
to prove that the cause of the blow-out was a fortuitous Under the circumstances of this case, the explosion of
event. It is not incumbent upon the plaintiff to prove that the the new tire may not be considered a fortuitous event. There
cause of the blow-out is not caso-fortuito. are human factors involved in the situation. The fact that the
Proving that the tire that exploded is a new Goodyear tire is tire was new did not imply that it was entirely free from
not sufficient to discharge defendants burden. As enunciated manufacturing defects or that it was properly mounted on the
in Necesito vs. Paras, the passenger has neither choice nor vehicle. Neither may the fact that the tire bought and used in
control over the carrier in the selection and use of its the vehicle is of a brand name noted for quality, resulting in
equipment, and the good repute of the manufacturer will not the conclusion that it could not explode within five days
necessarily relieve the carrier from liability. use. Be that as it may, it is settled that an accident caused
Moreover, there is evidence that the bus was moving fast, and either by defects in the automobile or through the negligence
the road was wet and rough. The driver could have explained of its driver is not a caso fortuito that would exempt the
that the blow-out that precipitated the accident that caused carrier from liability for damages.[15]
the death of Toto Tumboy could not have been prevented Moreover, a common carrier may not be absolved from
even if he had exercised due care to avoid the same, but he liability in case of force majeure or fortuitous event alone. The
was not presented as witness. common carrier must still prove that it was not  negligent in
The Court of Appeals thus disposed of the appeal as causing the death or injury resulting from an accident. [16] This
follows: Court has had occasion to state:
WHEREFORE, the judgment of the court a quo is set aside and While it may be true that the tire that blew-up was still good
another one entered ordering defendants to pay plaintiffs the because the grooves of the tire were still visible, this fact
sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 alone does not make the explosion of the tire a fortuitous
in moral damages, and P7,000.00 for funeral and burial event. No evidence was presented to show that the accident
expenses. was due to adverse road conditions or that precautions were
SO ORDERED. taken by the jeepney driver to compensate for any conditions
The defendants filed a motion for reconsideration of said liable to cause accidents. The sudden blowing-up, therefore,
decision which was denied on November 4, 1993 by the Court could have been caused by too much air pressure injected
of Appeals. Hence, the instant petition asserting the position into the tire coupled by the fact that the jeepney was
that the tire blowout that caused the death of Tito Tumboy overloaded and speeding at the time of the accident. [17]
was a caso fortuito. Petitioners claim further that the Court of It is interesting to note that petitioners proved through
Appeals, in ruling contrary to that of the lower court, the bus conductor, Salce, that the bus was running at 60-50
misapprehended facts and, therefore, its findings of fact kilometers per hour only or within the prescribed lawful speed
cannot be considered final which shall bind this Court. Hence, limit. However, they failed to rebut the testimony of Leny
they pray that this Court review the facts of the case. Tumboy that the bus was running so fast that she cautioned
The Court did re-examine the facts and evidence in this the driver to slow down. These contradictory facts must,
case because of the inapplicability of the established principle therefore, be resolved in favor of liability in view of the
that the factual findings of the Court of Appeals are final and presumption of negligence of the carrier in the law. Coupled
may not be reviewed on appeal by this Court. This general with this is the established condition of the road rough,
principle is subject to exceptions such as the one present in winding and wet due to the rain. It was incumbent upon the
this case, namely, that the lower court and the Court of defense to establish that it took precautionary measures
Appeals arrived at diverse factual findings. [8] However, upon considering partially dangerous condition of the road. As

23
stated above, proof that the tire was new and of good quality noticed that some repair works [sic] were
is not sufficient proof that it was not negligent. Petitioners being undertaken on the engine of the
should have shown that it undertook extraordinary diligence vessel. The vessel departed at around 11:00
in the care of its carrier, such as conducting daily routinary in the evening with only one (1) engine
check-ups of the vehicles parts. As the late Justice J.B.L. Reyes running.
said: After an hour of slow voyage, the vessel
It may be impracticable, as appellee argues, to require of stopped near Kawit Island and dropped its
carriers to test the strength of each and every part of its anchor thereat. After half an hour of
vehicles before each trip; but we are of the opinion that a due stillness, some passengers demanded that
regard for the carriers obligations toward the traveling public they should be allowed to return to Cebu
demands adequate periodical tests to determine the condition City for they were no longer willing to
and strength of those vehicle portions the failure of which continue their voyage to, Cagayan de Oro
may endanger the safety of the passengers. [18] City. The captain acceeded [sic] to their
Having failed to discharge its duty to overthrow the request and thus the vessel headed back to
presumption of negligence with clear and convincing Cebu City.
evidence, petitioners are hereby held liable for At Cebu City, plaintiff together with the
damages. Article 1764[19] in relation to Article 2206[20] of the other passengers who requested to be
Civil Code prescribes the amount of at least three thousand brought back to Cebu City, were allowed to
pesos as damages for the death of a passenger. Under disembark. Thereafter, the vessel
prevailing jurisprudence, the award of damages under Article proceeded to Cagayan de Oro City. Plaintiff,
2206 has been increased to fifty thousand pesos the next day, boarded the M/V Asia Japan
(P50,000.00).[21] for its voyage to Cagayan de Oro City,
Moral damages are generally not recoverable in culpa likewise a vessel of defendant.
contractual except when bad faith had been proven. However, On account of this failure of defendant to
the same damages may be recovered when breach of transport him to the place of destination on
contract of carriage results in the death of a passenger, [22] as November 12, 1991, plaintiff filed before the
in this case. Exemplary damages, awarded by way of example trial court a complaint for damages against
or correction for the public good when moral damages are defendant.4
awarded,[23]may likewise be recovered in contractual In his complaint, docketed as Civil Case No. 91-491, plaintiff
obligations if the defendant acted in wanton, fraudulent, (hereinafter private respondent) alleged that the engines of
reckless, oppressive, or malevolent manner. [24] Because the M/V Asia Thailand conked out in the open sea, and for
petitioners failed to exercise the extraordinary diligence more than an hour it was stalled and at the mercy of the
required of a common carrier, which resulted in the death of waves, thus causing fear in the passengers. It sailed back to
Tito Tumboy, it is deemed to have acted recklessly. [25] As Cebu City after it regained power, but for unexplained
such, private respondents shall be entitled to exemplary reasons, the passengers, including the private respondent,
damages. were arrogantly told to disembark without the necessary
WHEREFORE, the Decision of the Court of Appeals is precautions against possible injury to them. They were thus
hereby AFFIRMED subject to the modification that petitioners unceremoniously dumped, which only exacerbated the private
shall, in addition to the monetary awards therein, be liable for respondent's mental distress. He further alleged that by
the award of exemplary damages in the amount reason of the petitioner's wanton, reckless, and willful acts, he
of P20,000.00. Costs against petitioners. was unnecessarily exposed to danger and, having been
SO ORDERED. stranded in Cebu City for a day, incurred additional expenses
and loss of income. He then prayed that he be awarded
G.R. No. 118126 March 4, 1996 P1,100.00, P50,000.00, and P25,000.00 as compensatory,
TRANS-ASIA SHIPPING LINES, INC., petitioner, moral; and exemplary damages, respectively. 5
vs. In his pre-trial brief, the private respondent asserted that his
COURT OF APPEALS and ATTY. RENATO T. complaint was "an action for damages arising from bad faith,
ARROYO, respondents. breach of contract and from tort," with the former arising from
  the petitioner's "failure to carry [him] to his place of
DAVIDE, JR., J.:p destination as contracted," while the latter from the "conduct
As formulated by the petitioner, the issue in this petition for of the [petitioner] resulting [in] the infliction of emotional
review on certiorari under Rule 45 of the Rules of Court is as distress" to the private respondent.6
follows: After due trial, the trial court rendered its decision 7 and ruled
In case of interruption of a vessel's voyage that the action was only for breach of contract, with Articles
and the consequent delay in that vessel's 1170, 1172, and 1173 of the Civil Code as applicable law —
arrival at its port of destination, is the right not Article 2180 of the same Code. It was of the opinion that
of a passenger affected thereby to be Article 1170 made a person liable for damages if, in the
determined and governed by the vague Civil performance of his obligation, he was guilty of fraud,
Code provision on common carriers, or shall negligence, or delay, or in any manner contravened the tenor
it be, in the absence of a specific provision thereof; moreover, pursuant to Article 2201 of the same Code,
thereongoverned by Art. 698 of the Code of to be entitled to damages, the non-performance of the
Commerce?1 obligation must have been tainted not only by fraud,
The petitioner considers it a "novel question of law." negligence, or delay, but also bad faith, malice, and wanton
Upon a closer evaluation, however, of the challenged decision attitude. It then disposed of the case as follows:
of the Court of Appeals of 23 November 1994,2 vis-a-vis, the WHEREFORE, it not appearing from the
decision of 29 June 1992 in Civil Case No. 91-491 of the evidence that plaintiff was left in the Port of
Regional Trial Court (RTC) of Cagayan de Oro City, Branch Cebu because of the fault, negligence,
24,3 as well as the allegations and arguments adduced by the malice or wanton attitude of defendant's
parties, we find the petitioner's formulation of the issue employees, the complaint is DISMISSED.
imprecise. As this Court sees it, what stands for resolution is a Defendant's counterclaim is likewise
common carrier's liability for damages to a passenger who dismissed it not appearing also that filing of
disembarked from the vessel upon its return to the port of the case by plaintiff was motivated by
origin, after it suffered engine trouble and had to stop at sea, malice or bad faith.8
having commenced the contracted voyage on one engine. The trial court made the following findings to support its
The antecedents are summarized by the Court of Appeals as disposition:
follows: In the light of the evidence adduced by the
Plaintiff [herein private respondent Atty. parties and of the above provisions of the
Renato Arroyo], a public attorney, bought a New Civil Code, the issue to be resolved, in
ticket [from] defendant [herein petitioner], a the resolution of this case is whether or not,
corporation engaged in . . . inter-island defendant thru its employees in [sic] the
shipping, for the voyage of M/V Asia night of November 12, 1991, committed
Thailand vessel to Cagayan de Oro City from fraud, negligence, bad faith or malice when
Cebu City on November 12, 1991. it left plaintiff in the Port of Cebu when it
At around 5:30 in the evening of November sailed back to Cagayan de Oro City after it
12, 1991, plaintiff boarded the M/V Asia has [sic] returned from Kawit Island.
Thailand vessel. At that instance, plaintiff

24
 Evaluation of the evidence of the parties It did not, however, allow the grant of damages for the delay
tended to show nothing that defendant in the performance of the petitioner's obligation as the
committed fraud. As early as 3:00 p.m. of requirement of demand set forth in Article 1169 of the Civil
November 12, 1991, defendant did not hide Code had not been met by the private respondent. Besides, it
the fact that the cylinder head cracked. found that the private respondent offered no evidence to
Plaintiff even saw during its repair. If he had prove that his contract of carriage with the petitioner provided
doubts as to the vessel's capacity to sail, he for liability in case of delay in departure, nor that a
had time yet to take another boat. The designation of the time of departure was the controlling
ticket could be returned to defendant and motive for the establishment of the contract. On the latter,
corresponding cash [would] be returned to the court a quo observed that the private respondent even
him. admitted he was unaware of the vessel's departure time, and
Neither could negligence, bad faith or it was only when he boarded the vessel that he became aware
malice on the part of defendant be inferred of such. Finally, the respondent Court found no reasonable
from the evidence of the parties. When the basis for the private respondent's belief that demand was
boat arrived at [the] Port of Cebu after it useless because the petitioner had rendered it beyond its
returned from Kawit Island, there was an power to perform its obligation; on the contrary, he even
announcement that passengers who would admitted that the petitioner had been assuring the
like to disembark were given ten (10) passengers that the vessel would leave on time, and that it
minutes only to do so. By this could still perform its obligation to transport them as
announcement, it could be inferred that the scheduled.
boat will [sic] proceed to Cagayan de Oro To justify its award of damages, the Court of Appeals
City. If plaintiff entertained doubts, he ratiocinated as follows:
should have asked a member of the crew of It is an established and admitted fact that
the boat or better still, the captain of the the vessel before the voyage had
boat. But as admitted by him, he was of the undergone some repair work on the cylinder
impression only that the boat will not head of the engine. It is likewise admitted
proceed to Cagayan de Oro that evening so by defendant-appellee that it left the port of
he disembarked. He was instead, the ones Cebu City with only one engine running.
[sic] negligent. Had he been prudent, with Defendant-appellee averred:
the announcement that those who will . . . The dropping of the
disembark were given ten minutes only, he vessel's anchor after
should have lingered a little by staying in his running slowly on only
cot and inquired whether the boat will one engine when it
proceed to Cagayan de Oro City or not. departed earlier must
Defendant cannot be expected to be telling have alarmed some
[sic] the reasons to each passenger. nervous passengers . . .
Announcement by microphone was enough. The entries in the logbook which defendant-
The court is inclined to believe that the appellee itself offered as evidence
story of defendant that the boat returned to categorically stated therein that the vessel
the Port of Cebu because of the request of stopped at Kawit Island because of engine
the passengers in view of the waves. That it trouble. It reads:
did not return because of the defective 2330 HRS STBD ENGINE' EMERGENCY STOP
engines as shown by the fact that fifteen 2350 HRS DROP ANCHOR DUE TO ENGINE
(15) minutes after the boat docked [at] the TROUBLE, 2 ENGINE STOP.
Port of Cebu and those who wanted to The stoppage was not to start and
proceed to Cagayan de Oro disembarked, it synchronized [sic] the engines of the vessel
left for Cagayan de Oro City. as claimed by defendant-appellee. It was
The defendant got nothing when the boat because one of the engines of the vessel
returned to Cebu to let those who did not broke down; it was because of the disability
want to proceed to Cagayan de Oro City of the vessel which from the very beginning
including plaintiff disembarked. On the of the voyage was known to defendant-
contrary, this would mean its loss instead appellee.
because it will have to refund their tickets or Defendant-appellee from the very start of
they will use it the next trip without paying the voyage knew for a fact that the vessel
anymore. It is hard therefore, to imagine was not yet in its sailing condition because
how defendant by leaving plaintiff in Cebu the second engine was still being repaired.
could have acted in bad faith, negligently, Inspite of this knowledge, defendant-
wantonly and with malice. appellee still proceeded to sail with only one
If plaintiff, therefore, was not able to [m]ake engine running.
the trip that night of November 12, 1991, it Defendant-appellee at that instant failed to
was not because defendant maliciously did exercise the diligence which all common
it to exclude him [from] the trip. If he was carriers should exercise in transporting or
left, it was because of his fault or carrying passengers. The law does not
negligence.9 merely require extraordinary diligence in
Unsatisfied, the private respondent appealed to the Court of the performance of the obligation. The law
Appeals (CA-G.R. CV No. 39901) and submitted for its mandates that common carrier[s] should
determination the following assignment of errors: (1) the trial exercise utmost diligence the transport of
court erred in not finding that the defendant-appellee was passengers.
guilty of fraud, delay, negligence, and bad faith; and (2) the Article 1755 of the New Civil Code provides:
trial court. erred in not awarding moral and exemplary Art. 1755. A common
damages.10 carrier is bound to carry
In its decision of 23 November 1994,11 the Court of Appeals the passengers safely as
reversed the trial court's decision by applying Article 1755 in far as human care and
relation to Articles 2201, 2208, 2217, and 2232 of the Civil foresight can provide,
Code and, accordingly, awarded compensatory, moral, and using the utmost diligence
exemplary damages as follows: of very cautious persons,
WHEREFORE, premises considered, the with a due regard for all
appealed decision is hereby REVERSED and the circumstances.
SET ASIDE and another one is rendered Utmost diligence of a VERY CAUTIOUS
ordering defendant-appellee to pay plaintiff- person dictates that defendant-appellee
appellant: should have pursued the voyage only when
1. P20,000.00 as moral damages; its vessel was already fit to sail. Defendant-
2. P10,000.00 as exemplary damages; appellee should have made certain that the
3. P5,000.00 as attorney's fees; vessel [could] complete the voyage before
4. Cost of suit. starting [to] sail. Anything less than this, the
SO ORDERED.12

25
 vessel [could not] sail . . . with so many Undoubtedly, there was, between the petitioner and the
passengers on board it. private respondent, a contract of common carriage. The laws
However, defendant-appellant [sic] in of primary application then are the provisions on common
complete disregard of the safety of the carriers under Section 4, Chapter 3, Title VIII, Book IV of the
passengers, chose to proceed with its Civil Code, while for all other matters not regulated thereby,
voyage even if only one engine was running the Code of Commerce and special laws.20
as the second engine was still being Under Article 1733 of the Civil Code, the petitioner was bound
repaired during the voyage. Defendant- to observe extraordinary diligence in ensuring the safety of
appellee disregarded the not very remote the private respondent. That meant that the petitioner was,
possibility that because of the disability of pursuant to Article 1755 of the said Code, bound to carry the
the vessel, other problems might occur private respondent safely as far as human care and foresight
which would endanger the lives of the could provide, using the utmost diligence of very cautious
passengers sailing with a disabled vessel. persons, with due regard for all the circumstances. In this
As expected, . . . engine trouble occurred. case, we are in full accord with the Court of Appeals that the
Fortunate[ly] for defendant-appellee, such petitioner failed to discharge this obligation.
trouble only necessitated the stoppage of Before commencing the contracted voyage, the petitioner
the vessel and did not cause the vessel to undertook some repairs on the cylinder head of one of the
capsize. No wonder why some passengers vessel's engines. But even before it could finish these repairs,
requested to be brought back to Cebu City. it allowed the vessel to leave the port of origin on only one
Common carriers which are mandated to functioning engine, instead of two. Moreover, even the lone
exercise utmost diligence should not be functioning engine was not in perfect condition as sometime
taking these risks. after it had run its course, it conked out. This caused the
On this premise, plaintiff-appellant should vessel to stop and remain a drift at sea, thus in order to
not be faulted why he chose to disembark prevent the ship from capsizing, it had to drop anchor. Plainly,
from the vessel with the other passengers the vessel was unseaworthy even before the voyage began.
when it returned back to Cebu City. For a vessel to be seaworthy, it must be adequately equipped
Defendant-appellee may call him a very for the voyage and manned with a sufficient number of
"panicky passenger" or a "nervous person", competent officers and crew. 21 The failure of a common
but this will not relieve defendant-appellee carrier to maintain in seaworthy condition its vessel involved
from the liability it incurred for its failure to in a contract of carriage is a clear breach of its duty
exercise utmost diligence.13 prescribed in Article 1755 of the Civil Code.
xxx xxx xxx As to its liability for damages to the private respondent,
As to the second assigned error, we find Article 1764 of the Civil Code expressly provides:
that plaintiff-appellant is entitled to the Art. 1764. Damages in cases comprised in
award of moral and exemplary damages for this Section shall be awarded in accordance
the breach committed by defendant- with Title XVIII of this Book, concerning
appellee. Damages. Article 2206 shall also apply to
As discussed, defendant-appellee in sailing the death of a passenger caused by the
to Cagayan de Oro City with only one engine breach of contract by common carrier.
and with full knowledge of the true condition The damages comprised in Title XVIII of the Civil
of the vessel, acted. in bad faith with Code are actual or compensatory, moral, nominal,
malice, in complete disregard for the safety temperate or moderate, liquidated, and exemplary.
of the passengers and only for its own In his complaint, the private respondent claims actual or
personal advancement/interest. compensatory, moral, and exemplary damages.
The Civil Code provides: Actual or compensatory damages represent the adequate
Art. 2201. compensation for pecuniary loss suffered and for profits the
x x x           x x x          x x x obligee failed to obtain.22
In case of fraud, bad faith, In contracts or quasi-contracts, the obligor is liable for all the
malice or wanton attitude, damages which may be reasonably attributed to the non-
the obligor shall be performance of the obligation if he is guilty of fraud, bad faith,
responsible for all malice, or wanton attitude. 23
damages which may be Moral damages include moral suffering, mental anguish,
reasonably attributed to fright, serious anxiety, besmirched reputation, wounded
the non-performance of feelings, moral shock, social humiliation, or similar injury.
the obligation. They may be recovered in the cases enumerated in Article
Plaintiff-appellant is entitled to moral 2219 of the Civil Code, likewise, if they are the proximate
damages for the mental anguish, fright and result of, as in this case, the petitioner's breach of the
serious anxiety he suffered during the contract of carriage.24 Anent a breach of a contract of
voyage when the vessel's engine broke common carriage, moral damages may be awarded if the
down and when he disembarked from the common carrier, like the petitioner, acted fraudulently or in
vessel during the wee hours of the morning bad faith.25
at Cebu City when it returned.14 Exemplary damages are imposed by way of example or
Moral damages are recoverable in a damage correction for the public good, in addition to moral,
suit predicated upon a breach of contract of temperate, liquidated or compensatory damages. 26 In
carriage where it is proved that the carrier contracts and quasi-contracts, exemplary damages may be
was guilty of fraud or bad faith even if death awarded if the defendant acted in a wanton, fraudulent,
does not result. 15 reckless, oppressive or malevolent manner.27 It cannot,
Fraud and bad faith by defendant-appellee however, be considered as a matter of right; the court having
having been established, the award of moral to decide whether or not they should be adjudicated. 28Before
damages is in order.16 the court may consider an award for exemplary damages, the
To serve as a deterrent to the commission plaintiff must first show that he is entitled to moral, temperate
of similar acts in the future, exemplary or compensatory damages; but it is not necessary that he
damages should be imposed upon prove the monetary value thereof.29
defendant-appellee. 17 Exemplary damages The Court of Appeals did not grant the private respondent
are designed by our civil law to permit the actual or compensatory damages, reasoning that no delay
courts to reshape behavior that is socially was incurred since there was no demand, as required by
deleterious in its consequence by Article 1169 of the Civil Code. This article, however, finds no
creating . . . negative incentives or application in this case because, as found by the respondent
deterrents against such behavior.18 Court, there was in fact no delay in the commencement of the
Moral damages having been awarded, contracted voyage. If any delay was incurred, it was after the
exemplary damages maybe properly commencement of such voyage, more specifically, when the
awarded. When entitlement to moral voyage was subsequently interrupted when the vessel had to
damages has been established, the award stop near Kawit Island after the only functioning engine
of exemplary damages is proper.19 conked out.
The petitioner then instituted this petition and submitted the As to the rights and duties of the parties strictly arising out of
question of law earlier adverted to. such delay, the Civil Code is silent. However, as correctly

26
pointed out by the petitioner, Article 698 of the Code of respondent Court's decision was devoid of any statement
Commerce specifically provides for such a situation. It reads: regarding attorney's fees:
In case a voyage already begun should be Plaintiff-appellant was forced to litigate in
interrupted, the passengers shall be obliged order that he can claim moral and
to pay the fare in proportion to the distance exemplary damages for the suffering he
covered, without right to recover for losses encurred [sic]. He is entitled to attorney's
and damages if the interruption is due to fees pursuant to Article 2208 of the Civil
fortuitous event or force majeure, but with a Code. It states:
right to indemnity if the interruption should Art. 2208. In the absence of stipulation,
have been caused by the captain attorney's fees and expenses of litigation,
exclusively. If the interruption should be other than judicial costs cannot be
caused by the disability of the vessel and a recovered except:
passenger should agree to await the repairs, 1. When exemplary
he may not be required to pay any damages are awarded;
increased price of passage, but his living 2. When the defendant's
expenses during the stay shall be for his act or omission has
own account. compelled the plaintiff to
This article applies suppletorily pursuant to Article litigate with third persons
1766 of the Civil Code. or to incur expenses to
Of course, this does not suffice for a resolution of the case at protect his interest.
bench for, as earlier stated, the cause of the delay or This Court holds that the above does not satisfy the
interruption was the petitioner's failure to observe benchmark of "factual, legal and equitable
extraordinary diligence. Article 698 must then be read justification" needed as basis for an award of
together with Articles 2199, 2200, 2201, and 2208 in relation attorney's fees.3 7 In sum, for lack of factual and
to Article 21 of the Civil Code. So read, it means that the legal basis, the award of attorney's fees must be
petitioner is liable for any pecuniary loss or loss of profits deleted.
which the private respondent may have suffered by reason WHEREFORE, the instant petition is DENIED and the
thereof. For the private respondent, such would be the loss of challenged decision of the Court of Appeals in CA-G.R. CV No.
income if unable to report to his office on the day he was 39901 is AFFIRMED subject to the modification as to the
supposed to arrive were it not for the delay. This, however, award for attorney's fees which is hereby SET ASIDE.
assumes that he stayed on the vessel and was with it when it Costs against the petitioner.
thereafter resumed its voyage; but he did not. As he and SO ORDERED.
some passengers resolved not to complete the voyage, the
vessel had to return to its port of origin and allow them to [G.R. No. 139875. December 4, 2000]
disembark. The private respondent then took the petitioner's GREGORIO PESTAO and METRO CEBU AUTOBUS
other vessel the following day, using the ticket he had CORPORATION, petitioners, vs. Spouses
purchased for the previous day's voyage. TEOTIMO SUMAYANG and PAZ C.
Any further delay then in the private respondent's arrival at SUMAYANG, respondents.
the port of destination was caused by his decision to DECISION
disembark. Had he remained on the first vessel, he would PANGANIBAN,  J.:
have reached his destination at noon of 13 November 1991, Factual findings of the Court of Appeals, affirming those
thus been able to report to his office in the afternoon. He, of the trial judge, are binding on this Court. In quasi-delicts,
therefore, would have lost only the salary for half of a day. But such findings are crucial because negligence is largely a
actual or compensatory damages must be proved, 30 which the matter of evidence. In computing an award for lost earning
private respondent failed to do. There is no convincing capacity, the life expectancy of the deceased, not that of the
evidence that he did not receive his salary for 13 November heir, is used as basis.
1991 nor that his absence was not excused. The Case
We likewise fully agree with the Court of Appeals that the Before us is a Petition for Review on Certiorari under
petitioner is liable for moral and exemplary damages. In Rule 45 of the Rules of Court, assailing the April 21, 1999
allowing its unseaworthy M/V Asia Thailand to leave the port Decision and the August 6, 1999 Resolution of the Court of
of origin and undertake the contracted voyage, with full Appeals[1](CA) in CA-GR CV No. 30289. The questioned
awareness that it was exposed to perils of the sea, it Decision disposed as follows:
deliberately disregarded its solemn duty to exercise WHEREFORE, premises considered, the instant appeal is
extraordinary diligence and obviously acted with bad faith and hereby DENIED. The assailed Decision of the lower court is
in a wanton and reckless manner. On this score, however, the hereby AFFIRMED with the aforesaid modification regarding
petitioner asserts that the safety or the vessel and passengers the award of death penalty.
was never at stake because the sea was "calm" in the vicinity The Resolution of August 6, 1999 denied
where it stopped as faithfully recorded in the vessel's log book reconsideration.[2]
(Exhibit "4"). Hence, the petitioner concludes, the private The Facts
respondent was merely "over-reacting" to the situation The events leading to this Petition were summarized by
obtaining then.31 the Court of Appeals as follows:
We hold that the petitioner's defense cannot exculpate it nor It appears from the records that at around 2:00 oclock [o]n
mitigate its liability. On the contrary, such a claim the afternoon of August 9, 1986, Ananias Sumayang was
demonstrates beyond cavil the petitioner's lack of genuine riding a motorcycle along the national highway in Ilihan,
concern for the safety of its passengers. It was, perhaps, only Tabagon, Cebu. Riding with him was his friend Manuel
providential then the sea happened to be calm. Even so, the Romagos. As they came upon a junction where the highway
petitioner should not expect its passengers to act in the connected with the road leading to Tabagon, they were hit by
manner it desired. The passengers were not stoics; becoming a passenger bus driven by [Petitioner] Gregorio Pestao and
alarmed, anxious, or frightened at the stoppage of a vessel at owned by [Petitioner] Metro Cebu Autobus Corporation (Metro
sea in an unfamiliar zone as nighttime is not the sole Cebu, for brevity), which had tried to overtake them, sending
prerogative of the faint-hearted. More so in the light of the the motorcycle and its passengers hurtling upon the
many tragedies at sea resulting in the loss of lives of hopeless pavement. Both Ananias Sumayang and Manuel Romagos
passengers and damage to property simply because common were rushed to the hospital in Sogod, where Sumayang was
carriers failed in their duty to exercise extraordinary diligence pronounced dead on arrival.Romagos was transferred to the
in the performance of their obligations. Cebu Doctors Hospital, but he succumbed to his injuries the
We cannot, however, give our affirmance to the award of day after.
attorney's fees. Under Article 2208 of the Civil Code, these are Apart from the institution of criminal charges against Gregorio
recoverable only in the concept of actual damages,32 not as Pestao, [Respondents] Teotimo and Paz Sumayang, as heirs of
moral damages33 nor judicial costs. 34 Hence, to merit such an Ananias Sumayang, filed this civil action for damages against
award, it is settled that the amount thereof must be Gregorio Pestao, as driver of the passenger bus that rammed
proven. 35 Moreover, such must be specifically prayed for — as the deceaseds motorcycle, Metro Cebu, as owner and
was not done in this case—and may not be deemed operator of the said bus, and Perla Compania de Seguros, as
incorporated within a general prayer for "such other relief and insurer of Metro Cebu. The case was docketed as Civil Case
remedy as this court may deem just and equitable." 36 Finally, No. CEB-6108.
it must be noted that aside from the following, the body of the On November 9, 1987, upon motion of [Petitioner] Pestao,
Judge Pedro C. Son ordered the consolidation of the said case

27
with Criminal Case No. 10624, pending in Branch 16 of the father of a family to prevent damage. Nor has Metro Cebu
same Court, involving the criminal prosecution of Gregorio proven that it had exercised due diligence in the supervision
Pestao for [d]ouble [h]omicide thru [r]eckless of its employees and in the maintenance of vehicles. [3]
[i]mprudence. Joint trial of the two cases thereafter ensued, Ruling of the Court of Appeals
where the following assertions were made: The CA affirmed respondents liability for the accident
[Respondents] rely mainly on the testimonies of Ignacio Neis, and for Sumayangs death. Pestao was negligent when he tried
Pat. Aquilino Dinoy and Teotimo Sumayang, father of the to overtake the victims motorcycle at the Tabagon
deceased. Neis declared that he saw the incident while he junction. As a professional driver operating a public transport
was sitting on a bench beside the highway; that both vehicles vehicle, he should have taken extra precaution to avoid
c[a]me from the North; that as the motorcycle approached the accidents, knowing that it was perilous to overtake at a
junction to Tab[a]gon, the driver Ananias Sumayang signalled junction, where adjoining roads had brought about merging
with his left arm to indicate that he was taking the Tab[a]gon and diverging traffic.
Road; that the motorcycle did turn left but as it did so, it was The appellate court opined that Metro Cebu had shown
bumped by an overspeeding bus; that the force of the impact laxity in the conduct of its operations and in the supervision of
threw Ananias Sumayang and his companion Manuel its employees. By allowing the bus to ply its route despite the
Romagos about 14 meters away. The motorcycle, Neis defective speedometer, said petitioner showed its indifference
continued, was badly damaged as it was dragged by the bus. towards the proper maintenance of its vehicles. Having failed
On the other hand, Pat. Dinoy testified that he was in the to observe the extraordinary diligence required of public
nearby house of Ruben Tiu [when] he heard the sound or transportation companies, it was held vicariously liable to the
noise caused by the collision; that he immediately went to the victims of the vehicular accident.
scene where he found Ananias Sumayang and Manuel In accordance with prevailing jurisprudence, the CA
Romagos lying on the road bleeding and badly injured; that he raised to P50,000 the granted indemnity for the death of the
requested the driver of a PU vehicle to take them to a victim. It also affirmed the award of loss of earning capacity
hospital; that he took note of the various distances which he based on his life expectancy. Such liability was assessed, not
included in his sketch (Exh. J) that the probable point of as a pension for the claiming heirs, but as a penalty and an
impact was at the left lane of the highway and right at the indemnity for the drivers negligent act.
junction to Tab[a]gon (Exh J-11); that he based his conclusion Hence, this Petition.[4]
on the scratches caused by the motorcycles footrest on the Issues
asphalt pavement; that he described the damage caused to Petitioners submit the following issues[5] for our
the motorcycle in his sketch (Exh J); that on the part of the consideration:
bus, the right end of its front bumper was bent and the right 1. The Court of Appeals misapplied facts of weight and
portion of the radiator grill was dented. Pat. Dinoy substance affecting the result of the case.
acknowledged that he met at the scene Ignacio Neis who 2. The Court of Appeals misapplied R.A. 4136 as regards the
informed him that he saw the incident. behavior of the deceased at the time of the accident.
On the contrary, Pestao blamed Sumayang for the 3. The Court of Appeals erred in ruling that the award of
accident. He testified that when he first blew the horn the damages representing income that deceased could have
motorcycle which was about 15 or 20 meters ahead went to earned be considered a penalty.
the right side of the highway that he again blew the horn and 4. The Court of Appeals, contrary to Article 2204, Civil Code,
accelerated in order to overtake the motorcycle; that when he raised the award of P30,000.00 damages representing
was just one meter behind, the motorcycle suddenly turned indemnity for death to P50,000.00.
left towards the Tab[a]gon [R]oad and was bumped by his 5. The Court of Appeals used as basis for the loss of earning
bus; that he was able to apply his break only after the capacity, the life expectancy of the [d]eceased instead of that
impact. Pestaos testimony was corroborated by Ireneo Casilia of the respondents which was shorter.[6]
who declared that he was one of the passengers of the bus; In short, they raise these questions: whether the CA
that the motorcycle suddenly turned left towards Tab[a]gon erred (1) in applying Section 45 of RA 4136 when it ruled that
[R]oad without giving any signal to indicate its maneuver; that negligence in driving was the proximate cause of the
the bus was going at 40 kph when the accident occurred. accident; (2) in increasing the civil indemnity from P30,000 to
To substantiate its defense of bonos pater familias [petitioner] P50,000; and (3) in using the life expectancy of the deceased
[c]orporation recalled to the witness box Gregorio Pestao who instead of the life expectancies of respondents.
explained how his driving experience and ability were tested The Courts Ruling
by the company before he was hired. He further declared that The Petition has no merit.
the management gave regular lectures to drivers and First Issue: Negligence
conductors touching on various topics like speeding, parking, Petitioners contend that Pestao was not under any
loading and treatment of passengers, and that before he took obligation to slow down when he overtook the motorcycle,
to the road at 2:30 AM of that day he checked together with because the deceased had given way to him upon hearing the
the mechanic the tires, brake, signal lights as well as the tools bus horn.Seeing that the left side of the road was clearly
to be brought along. He did the same thing before visible and free of oncoming traffic, Pestao accelerated his
commencing his return trip from Hagnaya, San Remegio later speed to pass the motorcycle. Having given way to the bus,
in the day. the motorcycle driver should have slowed down until he had
The corporation also presented its maintenance supervisor, been overtaken.
Agustin Pugeda, Jr., and its manager, Alfonso Corominas, Jr. They further contend that the motorcycle was not in the
who corroborated Pestaos testimony that his driving ability middle of the road nearest to the junction as found by the trial
was thoroughly tested, and that all drivers underwent periodic and the appellate courts, but was on the inner lane. This
lecture on various aspects of safety driving including pertinent explains why the damage on the bus were all on the right side
traffic regulations. They also confirmed the thorough checkup the right end of the bumper and the right portion of the
of every vehicle before it would depart and that the radiator grill were bent and dented. Hence, they insist that it
performance of the drivers was being monitored by several was the victim who was negligent.
inspectors posted at random places along the route. We disagree. Petitioners are raising a question of fact
In judgment, the lower court found [petitioners] liable to the based on Pestaos testimony contradicting that of Eyewitness
[respondents], in the amounts of P30,000.00 for death Ignacio Neis and on the location of the dents on the bumper
indemnity, P829,079 for loss of earning capacity of the and the grill. Neis testified that as the two vehicles
deceased Ananias Sumayang, and P36,000.00 for necessary approached the junction, the victim raised his left arm to
interment expenses. The liability of defendant Perla Compania signal that he was turning left to Tabagon, but that the latter
de Seguros, Inc., however, was limited only to the amount and his companion were thrown off the motorcycle after it
stipulated in the insurance policy, which [was] P12,000 for was bumped by the overspeeding bus.
death indemnity and P4,500.00 for burial expenses. These contentions have already been passed upon by
In so ruling, the lower court found [Petitioner] Pestao to have the trial and the appellate courts. We find no cogent reason to
been negligent in driving the passenger bus that hit the reverse or modify their factual findings. The CA agreed with
deceased. It was shown that Pestao negligently attempted to the trial court that the vehicular collision was caused by
overtake the motorcycle at a dangerous speed as they were Pestaos negligence when he attempted to overtake the
coming upon a junction in the road, and as the motorcycle motorcycle. As a professional driver operating a public
was about to turn left towards Tabagon. The court likewise transport bus, he should have anticipated that overtaking at a
found Metro Cebu directly and primarily liable, along with junction was a perilous maneuver and should thus have
Pestao, the latters employer under Article 2180 of the Civil exercised extreme caution.
Code, as [Petitioner] Metro Cebu failed to present evidence to Factual findings of the CA affirming those of the trial
prove that it had observed x x x [the] diligence of a good court are conclusive and binding on this Court. Petitioners

28
failed to demonstrate that this case falls under any of the (L-28014) the sum of P6,500.00, and the plaintiffs in Civil Case
recognized exceptions to this rule.[7] Indeed, the issue of No. 1470 (L-28015) the sum of P3,500.00.
negligence is basically factual and, in quasi-delicts, crucial in The complaints in said Civil Cases Nos. D-1468 and D-1470
the award of damages. were filed by the spouses Marcelo Landingin and Racquel
Petitioners aver that the CA was wrong in attributing the Bocasas, and the spouses Pedro Garcia and Eufracia
accident to a faulty speedometer and in implying that the Landingin, respectively, for damages allegedly suffered by
accident could have been avoided had this instrument been them in connection with the death of their respective
properly functioning. daughter, Leonila Landingin and Estrella Garcia, due to the
This contention has no factual basis. Under Articles 2180 alleged negligence of the defendants and/or breach of
and 2176 of the Civil Code, owners and managers are contract of carriage. In their complaints, plaintiffs averred,
responsible for damages caused by their employees. When an among others, that in the morning of April 20, 1963, their
injury is caused by the negligence of a servant or an above-mentioned daughters were among the passengers in
employee, the master or employer is presumed to be the bus driven by defendant Marcelo Oligan and owned and
negligent either in the selection or in the supervision of that operated by defendant PANTRANCO on an excursion trip from
employee. This presumption may be overcome only by Dagupan City to Baguio City and back, that the bus was open
satisfactorily showing that the employer exercised the care on one side and enclosed on the other, in gross violation of
and the diligence of a good father of a family in the selection the rules of the Public Service Commission; that defendant
and the supervision of its employee.[8] PANTRANCO acted with negligence, fraud and bad faith in
The CA said that allowing Pestao to ply his route with a pretending to have previously secured a special permit for the
defective speedometer showed laxity on the part of Metro trip when in truth it had not done so; that upon reaching an
Cebu in the operation of its business and in the supervision of uphill point at Camp 8, Kennon Road, Baguio City, on the
its employees. The negligence alluded to here is in its onward trip, defendant driver, through utter lack of foresight,
supervision over its driver, not in that which directly caused experience and driving knowledge, caused the bus to stall and
the accident. The fact that Pestao was able to use a bus with stop for a few moments; that through the said defendant's
a faulty speedometer shows that Metro Cebu was remiss in fault and mishandling, the motor ceased to function, causing
the supervision of its employees and in the proper care of its the bus to slide back unchecked; that when the said
vehicles. It had thus failed to conduct its business with the defendant suddenly swerved and steered the bus toward the
diligence required by law. mountainside, Leonila and Estrella, together with several
Second Issue: Life Indemnity other passengers, were thrown out of the bus through its
Petitioners aver that the CA erred in increasing the open side unto the road, suffering serious injuries as a result
award for life indemnity from P30,000 to P50,000, without of which Leonila and Estrella died at the hospital and the
specifying any aggravating circumstance to justify the same day; and that in connection with the incident, defendant
increment as provided in the Civil Code.[9] driver had been charged with and convicted of multiple
This contention is untenable. The indemnity for death homicide and multiple slight physical injuries on account of
caused by a quasi-delict used to be pegged at P3,000, based the death of Leonila and Estrella and of the injuries suffered
on Article 2206 of the Civil Code. However, the amount has by four others, although it may be said, by way of
been gradually increased through the years because of the parenthesis, that this case is now pending appeal in a higher
declining value of our currency. At present, prevailing court. The plaintiffs prayed for awards of moral, actual and
jurisprudence fixes the amount at P50,000.[10] exemplary damages in the total sum of P40,000.00 in Civil
Third Issue: Loss of Earning Capacity Case No. D-1468, and in the total sum of P25,000.00 in Civil
Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, Case No. D-1470 as well as attorney's fees in the amounts of
[11]
 which held: P5,000.00 and P4,000.00, respectively.
The determination of the indemnity to be awarded to the heirs Defendants filed a joint answer to each of the two complaints
of a deceased person has therefore no fixed basis. x x x The alleging, among others, that at the time of the accident,
life expectancy of the deceased or of the beneficiary, defendant driver was driving the bus at, the slow speed of
whichever is shorter, is an important factor. x x x. about 10 kilometers per hour; that while the said defendant
They contend that the CA used the wrong basis for its was steering his bus toward the mountainside after hearing a
computation of earning capacity. sound coming from under the rear end of the bus, Leonila and
We disagree. The Court has consistently computed the Estrella recklessly, and in disobedience to his shouted
loss of earning capacity based on the life expectancy of the warnings and advice, jumped out of the bus causing their
deceased,[12] and not on that of the heir.[13] Even Villa Rey heads to hit the road or pavement; that the bus was then
Transit did likewise. being driven with extraordinary care, prudence and diligence;
The award for loss of earning capacity is based on two that defendant PANTRANCO observed the care and diligence
factors: (1) the number of years on which the computation of of a good father of a family to prevent the accident as well as
damages is based and (2) the rate at which the loss sustained in the selection and supervision of its employees, particularly
by the heirs is fixed.[14] The first factor refers to the life of defendant driver; and that the decision convicting the said
expectancy, which takes into consideration the nature of the defendant was not yet final, the same having been appealed
victims work, lifestyle, age and state of health prior to the to the Court of Appeals where it was still pending.
accident. The second refers to the victims earning capacity By agreement of the parties, the two cases were tried jointly.
minus the necessary living expenses. Stated otherwise, the On October 17, 1966, the court a quo rendered its decision
amount recoverable is that portion of the earnings of the therein in which it made the following findings; that upon
deceased which the beneficiary would have received -- the reaching the fatal spot at Camp 8, a sudden snapping or
net earnings of the deceased.[15] breaking of metal below the floor of the bus was heard, and
WHEREFORE, the Petition is DENIED  and the assailed the bus abruptly stopped, rolling back a few moments later;
Decision and Resolution AFFIRMED. Cost against petitioners. that as a result, some of the passengers jumped out of the
SO ORDERED. bus, while others stepped down; that defendant driver
maneuvered the bus safely to and against the side of the
G.R. No. L-28014-15 May 29, 1970 mountain where its rear end was made to rest, ensuring the
SPOUSES MARCELO LANDINGIN and RACQUEL safety of the many passengers still inside the bus; that while
BOCASAS, plaintiffs-appellees,  defendant driver as steering the bus towards the
vs. mountainside, he advised the passengers not to jump, but to
PANGASINAN TRANSPORTATION CO. and MARCELO remain seated; that Leonila and Estrella were not thrown out
OLIGAN, defendants-appellants. of the bus, but that they panicked and jumped out; that the
SPOUSES PEDRO GARCIA and EUFRACIA malfunctioning of the motor resulted from the breakage of the
LANDINGIN, plaintiffs-appellees,  cross-joint; that there was no negligence on the part of either
vs. of the defendants; that only the day before, the said cross-
PANGASINAN TRANSPORTATION CO. and MARCELO joint was duly inspected and found to be in order; and that
OLIGAN, defendants-appellants. defendant PANTRANCO had exercised the requisite care in the
Gabriel A. Zabala for plaintiffs-appellees. selection and supervision of its employees, including the
Vicente M. Erfe Law Office for defendants-appellants. defendant driver. The court concluded that "the accident was
  caused by a fortuitous event or an act of God brought about
VILLAMOR, J.: by some extra-ordinary circumstances independent of the will
Direct appeal on a question of law from the portion of the of the Pantranco or its employees."
judgment of the Court of First Instance of Manila ordering the One would wonder why in the face of such factual findings
defendants Pangasinan Transportation Co. (PANTRANCO) and and conclusion of the trial court, the defendants, instead of
Marcelo Oligan to pay the plaintiffs in Civil Case No. D-1468 

29
the plaintiffs, should come to this Court on appeal. The that "the accident was caused by a fortuitous event or an act
answer lies in the dispositive portion of the decision, to wit: of God brought about by some extraordinary circumstances
IN VIEW OF THE FOREGOING independent of the will of the Pantranco or its employees," is
CONSIDERATIONS, the Court hereby renders in large measure conjectural and speculative, and was arrived
judgment: (a) Absolving the defendants at without due regard to all the circumstances, as required by
from any liability on account of negligence Article 1755. In Lasam vs. Smith (45 Phil. 660), this Court held
on their part and therefore dismissing the that an accident caused by defects in the automobile is not
complaints in these two cases; (b) However, a caso fortuito. The rationale of the carrier's liability is the fact
as stated above, the Court hereby orders that "the passenger has neither the choice nor control over
the defendant Pantranco to pay to the the carrier in the selection and use of the equipment and
plaintiffs spouses Marcelo Tandingin and appliances in use by the carrier." (Necesito, et al. vs. Paras, et
Racquel Bocasas in Civil Case No. D-1468 al., 104 Phil. 75.)
the amount of P6,500.00; and the amount of When a passenger dies or is injured, the presumption is that
P3,500.00 to the spouses Pedro Garcia and the common carrier is at fault or that it acted negligently
Eufracia Landingin in Civil Case No. D- (Article 1756). This presumption is only rebutted by proof on
1470, not in payment of liability because of the carrier's part that it observed the "extraordinary
any negligence on the part of the diligence" required in Article 1733 and the "utmost diligence
defendants but as an expression of of very cautious persons" required in Article 1755 (Article
sympathy and goodwill. (Emphasis 1756). In the instant case it appears that the court below
supplied.) considered the presumption rebutted on the strength of
As to what impelled the court below to include item (b) in the defendants-appellants' evidence that only the day before the
dispositive portion of its decision, can be gathered from the incident, the crossjoint in question was duly inspected and
penultimate paragraph of the decision, which reads: found to be in order. It does not appear, however, that the
However, there is evidence to the effect that carrier gave due regard for all the circumstances in
an offer of P8,500.00 in the instant cases connection with the said inspection. The bus in which the
without any admission of fault or negligence deceased were riding was heavily laden with passengers, and
had been made by the defendant Pantranco it would be traversing mountainous, circuitous and ascending
and that actually in Civil Case No. D-1469 roads. Thus the entire bus, including its mechanical parts,
for the death of Pacita Descalso, the other would naturally be taxed more heavily than it would be under
deceased passenger of the bus in question, ordinary circumstances. The mere fact that the bus was
the heirs of the decease received P3,000.00 inspected only recently and found to be in order would not
in addition to hospital and medical bills and exempt the carrier from liability unless it is shown that the
the coffin of the deceased for the dismissal particular circumstances under which the bus would travel
of the said case without Pantranco were also considered.
accepting liability. There was as a matter of In the premises, it was error for the trial court to dismiss the
fact during the pre-trial of these two cases a complaints. The awards made by the court should be
continuing offer of settlement on the part of considered in the concept of damages for breach of contracts
the defendant Pantranco without accepting of carriage.
any liability for such damages, and the IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment
Court understood that the Pantranco would appealed from is modified as indicated above, and defendant-
be willing still to pay said amounts even if appellant PANTRANCO is ordered to pay to plaintiffs-appellees
these cases were to be tried on the merits. the amounts stated in the judgment appealed from, as
It is well-known that the defendant damages for breach of contracts, with interest thereon at the
Pantranco is zealous in the preservation of legal rate from the date of the filing of the complaints. Costs
its public relations. In the spirit therefore of against defendant-appellant PANTRANCO.
the offer of the defendant Pantranco
aforesaid, to assuage the feelings of the
herein plaintiffs an award of P6,500.00 for [G.R. No. L-10605. June 30, 1958.]
the spouses Marcelo Landingin and Racquel PRECILLANO NECESITO, ETC., Plaintiff-Appellant, v.
Bocasas in Civil Case No. D-1468 whose NATIVIDAD PARAS, ET AL., Defendants-Appellees. 
daughter Leonila was, when she died, a [G.R. No. L-10606. June 30, 1958.]
third-year Commerce student at the Far GERMAN NECESITO, ET AL., Plaintiffs-Appellants, v.
Eastern University, and P3,500.00 for the NATIVIDAD PARAS, ET AL., Defendants-Appellees. 
spouses Pedro Garcia and Eufracia Tomas Besa and Federico Agrava for Appellants. 
Landingin in Civil Case No. D-1470 whose Jose W. Diokno for Appellees.
daughter Estrella was in the fourth year
High at the Dagupan Colleges when she SYLLABUS
died, is hereby made in their favor. This
award is in addition to what Pantranco
might have spent to help the parents of
1. CARRIERS; LIABILITY FOR DAMAGES CAUSED BY
both deceased after the accident.
MECHANICAL DEFECTS. — While the carrier is not an insurer
Defendants-appellants complain that having found them to be
of the safety of the passengers, it should nevertheless be held
absolutely free from fault or negligence, and having in fact
to answer for the laws its equipment if such flaws were at all
dismissed the complaints against them, the court should not
discoverable. In this connection, the manufacturer of the
have ordered them to assume any pecuniary liability. There
defective appliance is considered in law the agent of the
would be merit in his argument but for the fact that
carrier, and the good repute of the manufacturer will not
defendant-appellant PANTRANCO was guilty of breach of
relieve the carrier from liability. The rationale of the carrier’s
contract of carriage. It will be noted that in each of the two
liability is the fact that the passenger has no privity with the
complaints it is averred that two buses including the one in
manufacturer of the defective equipment; hence, he has no
which the two deceased girls were riding, were hired to
remedy against him, while the carrier usually has. 
transport the excursionist passengers from Dagupan City to
Baguio City, and return, and that the said two passengers did
2. DAMAGES; MORAL DAMAGES FOR BREACH OF CONTRACT,
not reach destination safely.
WHEN RECOVERABLE. — Under Article 2220 of the new Civil
As a common carrier, defendant-appellant PANTRANCO was
Code, in case to suits for breach of contract, moral damages
duty bound to carry its passengers "safely as far as human
are recoverable only where the defendant acted fraudulently
care and foresight can provide, using the utmost diligence of
or in bad faith, and there is none in the case at bar. (But see
very cautious persons, with a due regard for all the
Resolution on the Motion to Reconsider.) 
circumstances." (Article 1755, Civil Code.) Did defendant-
appellant PANTRANCO measure up to the degree of care and
3. CARRIERS; MECHANICAL DEFECTS. — A carrier is liable to
foresight required it under the circumstances? We think not.
its passengers for damages caused by mechanical defects of
The court below found that the cross-joint of the bus in which
the conveyance. 
the deceased were riding broke, which caused the
malfunctioning of the motor, which in turn resulted in panic
4. ID.; ID.; WHERE INJURY IS PATENT, INDEMNITY CANNOT BE
among some of the passengers. This is a finding of fact which
DENIED. — Where the injury is patent and not denied, the
this Court may not disturb. We are of the opinion, however,
court is empowered to calculate moderate damages, although
that the lower court's conclusion drawn from that fact, i.e.,
there is no definite proof of the pecuniary loss suffered by the

30
injured party.  at the time of the accident, the records show that they
registered no objection on that ground at the trial below. 
5. ID.; ID.; RIGHT OF HEIRS OF DECEASED PASSENGER TO
RECOVER MORAL DAMAGES. — In case of accident due to a The issue is thus reduced to the question whether or not the
carrier’s negligence, the heirs of a deceased passenger may carrier is liable for the manufacturing defect of the steering
recover moral damages, even though a passenger who is knuckle, and whether the evidence discloses that in regard
injured, but manages to survive, is not entitled to them. This thereto the carrier exercised the diligence required by law
special rule (Arts. 1264 and 2206, No. 3) in case of death (Art. 1755, new Civil Code). 
controls the general rule of Article 2220. 
"ART. 1755. A common carrier is bound to carry the
6. ATTORNEY’S FEES; LITIGANT CANNOT BE DEPRIVED OF FEE passengers safely as far as human care and foresight can
IF HE IS ENTITLED TO RECOVERY. — A litigant who provide, using the utmost diligence of very cautious persons,
improvidently stipulates higher counsel fees than those to with a due regard for all the circumstances."cralaw virtua1aw
which he is entitled, does not for that reason earn the right to library
a larger indemnity; but, by parity of reasoning, he should not
be deprived of counsel fees if by law he is entitled to recover It is clear that the carrier is not an insurer of the passengers’
them. safety. His liability rests upon negligence, his failure to
exercise the "utmost" degree of diligence that the law
requires, and by Art. 1756, in case of a passenger’s death or
injury the carrier bears the burden of satisfying the court that
DECISION
he has duly discharged the duty of prudence required. In the
American law, where the carrier is held to the same degree of
diligence as under the new Civil Code, the rule on the liability
REYES, J.B.L., J.: of carriers for defects of equipment is thus expressed: "The
preponderance of authority is in favor of the doctrine that a
passenger is entitled to recover damages from a carrier for an
These cases involve actions ex contractu against the owners injury resulting from a defect in an appliance purchased from
and operators of the common carrier known as Philippine a manufacturer, whenever it appears that the defect would
Rabbit Bus Lines, filed by one passenger, and the heirs of have been discovered by the carrier if it had exercised the
another, who were injured as a result of the fall into a river of degree of care which under the circumstances was incumbent
the vehicle in which they were riding.  upon it, with regard to inspection and application of the
necessary tests. For the purposes of this doctrine, the
In the morning of January 28, 1954, Severina Garces and her manufacturer is considered as being in law the agent or
one- year old son, Precillano Necesito, carrying vegetables, servant of the carrier, as far as regards the work of
boarded passenger auto truck or bus No. 199 of the Philippine constructing the appliance. According to this theory, the good
Rabbit Bus Lines at Agno, Pangasinan. The passenger truck, repute of the manufacturer will not relieve the carrier from
driven by Francisco Bandonell, then proceeded on its regular liability" (10 Am. Jur. 205, s, 1324; see a]so Pennsylvania R.
run from Agno to Manila. After passing Mangatarem, Co. v. Roy, 102 U. S. 451; 20 L. Ed. 141; Southern R. Co. v.
Pangasinan, truck No. 199 entered a wooden bridge, but the Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed Note, 29 ALR
front wheels swerved to the right; the driver lost control, and 788; Ann Cas. 1916E 929). 
after wrecking the bridge’s wooden rails, the truck fell on its
right side into a creek where water was breast deep. The The rationale of the carrier’s liability is the fact that the
mother, Severina Garces, was drowned; the son, Precillano passenger has neither choice nor control over the carrier in
Necesito, was injured, suffering abrasions and fracture of the the selection and use of the equipment and appliances in use
left femur. He was brought to the Provincial Hospital at by the carrier. Having, no privity whatever with the
Dagupan, where the fracture was set but with fragments one manufacturer or vendor of the defective equipment, the
centimeter out of line. The money, wrist watch and cargo of passenger has no remedy against him, while the carrier
vegetables were lost.  usually has. It is but logical, therefore, that the carrier, while
not an insurer of the safety of his passengers, should
Two actions for damages and attorney’s fees totalling over nevertheless be held to answer for the flaws of his equipment
P85,000 having been filed in the Court of First Instance of if such flaws were at all discoverable. Thus Hannen, J., in
Tarlac (Cases Nos. 908 and 909) against the carrier, the latter Francis v. Cockrell, LR 5 Q. P. 184, said:jgc:chanrobles.com.ph
pleaded that the accident was due to "engine or mechanical
trouble" independent or beyond the control of the defendants "In the ordinary course of things, the passenger does not
or of the driver Bandonell.  know whether the carrier has himself manufactured the
means of carriage, or contracted with someone else for its
After joint trial, the Court of First Instance found that the bus manufacture. If the carrier has contracted with someone else
was proceeding slowly due to the bad condition of the road; the passenger does not usually know who that person is, and
that the accident was caused by the fracture of the right in no case has he any share in the selection. The liability of
steering knuckle, which was defective in that its center or the manufacturer must depend on the terms of the contract
core was not compact but "bubbled and cellulous", a condition between him and the carrier, of which the passenger has no
that could not be known or ascertained by the carrier despite knowledge, and over which he can have no control, while the
the fact that regular thirty-day inspections were made of the carrier can introduce what stipulations and take what
steering knuckle, since the steel exterior was smooth and securities he may think proper. For injury resulting to the
shiny to the depth of 3/16 of an inch all around; that the carrier himself by the manufacturer’s want of care, the carrier
knuckles are designed and manufactured for heavy duty and has a remedy against the manufacturer; but the passenger
may last up to ten years; that the knuckle of bus No. 199 that has no remedy against the manufacturer for damage arising
broke on January 28, 1954, was last inspected on January 5, from a mere breach of contract with the carrier . . . Unless,
1954, and was due to be inspected again on February 5th. therefore, the presumed intention of the parties be that the
Hence, the trial court, holding that the accident was passenger should, in the event of his being injured by the
exclusively due to fortuitous event, dismissed both actions. breach of the manufacturer’s contract, of which he has no
Plaintiffs appealed directly to this Court in view of the amount knowledge, be without remedy, the only way in which effect
in controversy.  can be given to a different intention is by supposing that the
carrier is to be responsible to the passenger, and to look for
We are inclined to agree with the trial court that it is not likely his indemnity to the person whom he selected and whose
that bus No. 199 of the Philippine Rabbit Lines was driven breach of contract has caused the mischief." (29 ALR 789)
over the deeply rutted road leading to the bridge at a speed
of 50 miles per hour, as testified for the plaintiffs. Such And in the leading case of Morgan v. Chesapeake & O. R. Co.
conduct on the part of the driver would have provoked instant 15 LRA (NS) 790, 16 Ann. Cas. 608, the Court, in holding the
and vehement protest on the part of the passengers because carrier responsible for damages caused by the fracture of a
of the attendant discomfort, and there is no trace of any such car axle, due to a "sand hole" in the course of moulding the
complaint in the records. We are thus forced to assume that axle, made the following observations. 
the proximate cause of the accident was the reduced strength
of the steering knuckle of the vehicle caused by defects in "The carrier, in consideration of certain well-known and highly
casting it. While appellants hint that the broken knuckle valuable rights granted to it by the public, undertakes certain
exhibited in court was not the real fitting attached to the truck duties toward the public, among them being to provide itself

31
with suitable and safe cars and vehicles in which to carry the vehicles before each trip; but we are of the opinion that a due
traveling public. There is no such duty on the manufacturer of regard for the carrier’s obligations toward the traveling public
the cars. There is no reciprocal legal relation between him and demands adequate periodical tests to determine the condition
the public in this respect. When the carrier elects to have and strength of those vehicle portions the failure of which
another build its cars, it ought not to be absolved by that fact may endanger the safety of the passengers. 
from its duty to the public to furnish safe care. The carrier
cannot lessen its responsibility by shifting its undertaking to As to the damages suffered by the plaintiffs, we agree with
another’s shoulders. Its duty to furnish safe care is side by appellee that no allowance may be made for moral damages,
side with its duty to furnish safe track, and to operate them in since under Article 2220 of the new Civil Code, in case of suits
a safe manner. None of its duties in these respects can be for breach of contract, moral damages are recoverable only
sublet so as to relieve it from the full measure primarily where the defendant acted fraudulently or in bad faith, and
exacted of it by law. The carrier selecta the manufacturer of there is none in the case before us. As to exemp]ary
its cars, if it does not itself construct them, precisely as it does damages, the carrier has not acted in a "wanton, fraudulent,
those who grade its road, and lay its tracks, and operate its reckless, oppressive or malevolent manner" to warrant their
trains. That it does not exercise control over the former is award. Hence, we believe that for the minor Precillano
because it elects to place that matter in the hands of the Necesito (G. R No. L-10605), an indemnity of P5,000 would be
manufacturer, instead of retaining the supervising control adequate for the abrasions and fracture of the femur,
itself. The manufacturer should be deemed the agent of the including medical and hospitalization expenses, there being
carrier as respects its duty to select the material out of which no evidence that there would be any permanent impairment
its cars and locomotive are built, as well as in inspecting each of his faculties or bodily functions, beyond the lack of
step of their construction. If there be tests known to the crafts anatomical symmetry. As for the death of Severina Garces (G.
of ear builders, or iron moulders, by which such defects might R. No. L-10606) who was 33 years old, with seven minor
be discovered before the part was incorporated into the car, children when she died, her heirs are obviously entitled to
then the failure of the manufacturer to make the test will be indemnity not only for the incidental loses of property (cash,
deemed a failure by the carrier to make it. This is not a wrist watch and merchandise) worth P394 that she carried at
vicarious responsibility. It extends, as the necessity of this the time of the accident and for the burial expenses of P490,
business demands, the rule of respondent superior to a but also for the loss of her earnings (shown to average P120 a
situation which falls clearly within its scope and spirit. Where month) and for the deprivation of her protection, guidance
an injury is inflicted upon a passenger by the breaking or and company. In our judgment, an award of P15,000 would be
wrecking of a part of the train on which he is riding, it is adequate (cf Alcantara v. Surro, 49 Off. Gaz. 2769; 93 Phil.,
presumably the result of negligence at some point by the 472). 
carrier. As stated by Judge Story, in Story on Bailments, sec.
601a: ‘When the injury or damage happens to the passenger The low income of the plaintiffs-appellants makes an award
by the breaking down or overturning of the coach, or by any for attorney’s fees just and equitable (Civil Code, Art. 2208,
other accident occurring on the ground, the presumption par. 11). Considering that the two cases filed were tried
prima facie is that it occurred by the negligence of the jointly, a fee of P3,500 would be reasonable. 
coachmen, and onus probandi is on the proprietors of the
coach to establish that there has been no negligence In view of the foregoing, the decision appealed from is
whatever, and that the damage or injury has been occasioned reversed, and the defendants-appellees are sentenced to
by inevitable casualty, or by some cause which human care indemnify the plaintiffs-appellants in the following amounts:
and foresight could not prevent; for the law will, in tenderness P5,000 to Precillano Necesito, and P15,000 to the heirs of the
to human life and limb, hold the proprietors liable for the deceased Severina Garces, plus P3,500 by way of attorney’s
slightest negligence, and will compel them to repel by fees and litigation expenses. Costs against defendants-
satisfactory proofs every imputation thereof.’ When the appellees. So ordered. 
passenger has proved his injury as the result of a breakage in
the car or the wrecking of the train on which he was being Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion
carried, whether the defect was in the particular car in which and Endencia, JJ., concur. 
he was riding or not, the burden is then cast upon the carrier
to show that it was due to a cause or causes which the Felix, J., concurs in the result. 
exercise of the utmost human skill and foresight could not
prevent. And the carrier in this connection must show, if the RESOLUTION
accident was due to a latent defect in the material or
construction of the car, that not only could it not have September 11, 1958 - REYES, J.B.L., J.:
discovered the defect by the exercise of such care, but that
the builders could not by the exercise of the same care have
discovered the defect or foreseen the result. This rule applies
Defendants-appellees have submitted a motion asking this
the same whether the defective car belonged to the carrier or
Court to reconsider its decision of June 30, 1958, and that the
not."cralaw virtua1aw library
same be modified with respect to (1) its holding the carrier
liable for the breakage of the steering knuckle that caused the
In the case now before us, the record is to the effect that the
autobus No. 199 to overturn, whereby the passengers riding
only test applied to the steering knuckle in question was a
in it were injured; (2) the damages awarded, that appellees
purely visual inspection every thirty days, to see if any cracks
argue to be excessive; and (3) the award of attorneys’ fees. 
developed. It nowhere appears that either the manufacturer
or the carrier at any time tested the steering knuckle to
(1) The rule prevailing in this jurisdiction as established in
ascertain whether its strength was up to standard, or that it
previous decisions of this Court, cited in our main opinion, is
had no hidden flaws that would impair that strength. And yet
that a carrier is liable to its passengers for damages caused
the carrier must have been aware of the critical importance of
by mechanical defects of the conveyance. As early as 1924, in
the knuckle’s resistance; that its failure or breakage would
Lasam v. Smith, 45 Phil. 659 this Court
result in loss of balance and steering control of the bus, with
ruled:jgc:chanrobles.com.ph
disastrous effects upon the passengers. No argument is
required to establish that a visual inspection could not directly
"As far as the record shows, the accident was caused either
determine whether the resistance of this critically important
by defects in the automobile or else through the negligence of
part was not impaired. Nor has it been shown that the
its driver. That is not caso fortuito."cralaw virtua1aw library
weakening of the knuckle was impossible to detect by any
known test; on the contrary, there is testimony that it could
And in Son v. Cebu Autobus Company, 94 Phil., 892, this Court
be detected. We are satisfied that the periodical visual
held a common carrier liable in damages to a passenger for
inspection of the steering knuckle as practiced by the carrier’s
injuries caused by an accident due to the breakage of a faulty
agents did not measure up to the required legal standard of
drag-link spring. 
"utmost diligence of very cautious persons" — "as far as
human care and foresight can provide", and therefore that the
It can be seen that while the courts of the United States are at
knuckle’s failure can not be considered a fortuitous event that
variance on the question of a carrier’s liability for latent
exempts the carrier from responsibility (Lasam v. Smith, 45
mechanical defects, the rule in this jurisdiction has been
Phil, 607; Son v. Cebu Autobus Co., 94 Phil., 892. 
consistent in holding the carrier responsible. This Court has
quoted from American and English decisions, not because it
It may be impracticable, as appellee argues, to require of
felt bound to follow the same, but merely in approval of the
carriers to test the strength of each and every part of its
rationale of the rule as expressed therein, since the previous

32
Philippine cases did not enlarge on the ideas underlying the not for that reason earn the right to a larger indemnity; but,
doctrine established thereby.  by parity of reasoning, he should not be deprived of counsel
fees if by law he is entitled to recover them. 
The new evidence sought to be introduced do not warrant the
grant of a new trial, since the proposed proof was available We find no reason to alter the main decision heretofore
when the original trial was held. Said evidence is not newly rendered. Ultimately, the position taken by this Court is that a
discovered.  common carrier’s contract is not to be regarded as a game of
chance wherein the passenger stakes his limb and life against
(2) With regard to the indemnity awarded to the child the carrier’s property and profits. 
Precilliano Necesito, the injuries suffered by him are incapable
of accurate pecuniary estimation, particularly because the full Wherefore, the motion for reconsideration is hereby denied.
effect of the injury is not ascertainable immediately. This So ordered. 
uncertainty, however, does not preclude the right to an
indemnity, since the injury is patent and not denied (Civil
Code, Art. 2224). The reasons behind this award are [G.R. No. 120027. April 21, 1999]
expounded by the Code Commission in its EDNA A. RAYNERA, for herself and on behalf of the
report:jgc:chanrobles.com.ph minors RIANNA and REIANNE
RAYNERA,  petitioners, vs. FREDDIE HICETA and
"There are cases where from the nature of the case, definite JIMMY ORPILLA, respondents.
proof of pecuniary loss cannot be offered, although the court DECISION
is convinced that there has been such loss. For instance, PARDO, J.:
injury to one’s commercial credit or to the goodwill of a The case is a petition for review on certiorari of the
business firm is often hard to show with certainty in terms of decision of the Court of Appeals,[1] reversing that of the
money. Should damages be denied for that reason? The judge Regional Trial Court, Branch 45, Manila.[2]
should be empowered to calculate moderate damages in such The rule is well-settled that factual findings of the Court
cases, rather than that the plaintiff should suffer, without of Appeals are generally considered final and may not be
redress, from the defendant’s wrongful act." (Report of the reviewed on appeal. However, this principle admits of certain
Code Commission, p. 75) exceptions, among which is when the findings of the appellate
court are contrary to those of the trial court, a re-examination
In awarding to the heirs of the deceased Severina Garces an of the facts and evidence may be undertaken. [3] This case falls
indemnity for the loss of her "guidance, protection and under the cited exception.
company," although it is but moral damage, the Court took The antecedent facts are as follows:
into account that the case of a passenger who dies in the Petitioner Edna A. Raynera was the widow of Reynaldo
course of an accident, due to the carrier’s negligence Raynera and the mother and legal guardian of the minors
constitutes an exception to the general rule. While, as pointed Rianna and Reianne, both surnamed Raynera. Respondents
out in the main decision, under Article 2220 of the new Civil Freddie Hiceta and Jimmy Orpilla were the owner and driver,
Code there can be no recovery of moral damages for a breach respectively, of an Isuzu truck-trailer, with plate No. NXC 848,
of contract in the absence of fraud malice) or bad faith, the involved in the accident.
case of a violation of the contract of carriage leading to a On March 23, 1989, at about 2:00 in the morning,
passenger’s death escapes this general rule, in view of Article Reynaldo Raynera was on his way home. He was riding a
1764 in connection with Article 2206, No. 3 of the new Civil motorcycle traveling on the southbound lane of East Service
Code.  Road, Cupang, Muntinlupa. The Isuzu truck was travelling
ahead of him at 20 to 30 kilometers per hour.[4] The truck was
"ART. 1764. Damages in cases comprised in this Section shall loaded with two (2) metal sheets extended on both sides, two
be awarded in accordance with Title XVIII of this Book, (2) feet on the left and three (3) feet on the right. There were
concerning Damages. Article 2206 shall also apply to the two (2) pairs of red lights, about 35 watts each, on both sides
death of a passenger caused by the breach of contract by a of the metal plates.[5] The asphalt road was not well lighted.
common carrier."cralaw virtua1aw library At some point on the road, Reynaldo Raynera crashed
his motorcycle into the left rear portion of the truck trailer,
"ART. 2206. . . .  which was without tail lights. Due to the collision, Reynaldo
sustained head injuries and truck helper Geraldino D.
(3) The spouse, legitimate and illegitimate descendants and Lucelo[6] rushed him to the Paraaque Medical Center. Upon
ascendants of the deceased may demand moral damages for arrival at the hospital, the attending physician, Dr. Marivic
mental anguish by reason of the death of the Aguirre,[7] pronounced Reynaldo Raynera dead on arrival.
deceased."cralaw virtua1aw library At the time of his death, Reynaldo was manager of the
Engineering Department, Kawasaki Motors (Phils.)
Being a special rule limited to cases of fatal injuries, these Corporation. He was 32 years old, had a life expectancy of
articles prevail over the general rule of Art. 2220. Special sixty five (65) years, and an annual net earnings of not less
provisions control general ones (Lichauco & Co. v. Apóstol, 44 than seventy three thousand five hundred (P73,500.00)
Phil. 138; Sancio v. Lizarraga, 55 Phil. 601).  pesos,[8] with a potential increase in annual net earnings of
not less than ten percent (10%) of his salary. [9]
It thus appears that under the new Civil Code, in case of On May 12, 1989, the heirs of the deceased
accident due to a carrier’s negligence, the heirs of a deceased demanded[10] from
passenger may recover moral damages, even though a respondents payment of damages arising from the death of
passenger who is injured, but manages to survive, is not Reynaldo Raynera as a result of the vehicular accident. The
entitled to them. There is, therefore, no conflict between our respondents refused to pay the claims.
main decision in the instant case and that of Cachero v. On September 13, 1989, petitioners filed with the
Manila Yellow Taxi Cab Co., 101 Phil., 523, where the Regional Trial Court, Manila[11] a complaint[12] for damages
passenger suffered injuries, but did not lose his life.  against respondents owner and driver of the Isuzu truck.
In their complaint against respondents, petitioners
(3) In the Cachero case this Court disallowed attorneys’ fees sought recovery of damages for the death of Reynaldo
to the injured plaintiff because the litigation arose out of his Raynera caused by the negligent operation of the truck-trailer
exaggerated and unreasonable demands for an indemnity at nighttime on the highway, without tail lights.
that was out of proportion with the compensatory damages to In their answer filed on April 4, 1990, respondents
which he was solely entitled. Put in the present case, alleged that the truck was travelling slowly on the service
plaintiffs’ original claims can not be deemed a priori wholly road, not parked improperly at a dark portion of the road, with
unreasonable, since they had a right to indemnity for moral no tail lights, license plate and early warning device.
damages besides compensatory ones, and moral damages At the trial, petitioners presented Virgilio Santos. He
are not determined by set and invariable bounds.  testified that at about 1:00 and 2:00 in the morning of March
23, 1989, he and his wife went to Alabang market, on board a
Neither does the fact that the contract between the tricycle.They passed by the service road going south, and saw
passengers and their counsel was on a contingent basis affect a parked truck trailer, with its hood open and without tail
the former’s right to counsel fees. As pointed out for lights. They would have bumped the truck but the tricycle
appellants, the Court’s award is an indemnity to the party and driver was quick in avoiding a collision. The place was dark,
not to counsel. A litigant who improvidently stipulates higher and the truck had no early warning device to alert passing
counsel fees than those to which he is lawfully entitled, does motorists.[13]

33
 On the other hand, respondents presented truck helper the truck, the photos taken and the sketch in the spot report
Geraldino Lucelo.[14] He testified that at the time the incident proved that there were no tail lights.
happened, the truck was slowly traveling at approximately 20 Despite the absence of tail lights and license plate,
to 30 kilometers per hour. Another employee of respondents, respondents truck was visible in the highway. It was traveling
auto-mechanic Rogoberto Reyes,[15] testified that at about at a moderate speed, approximately 20 to 30 kilometers per
3:00 in the afternoon of March 22, 1989, with the help of hour. It used the service road, instead of the highway,
Lucelo, he installed two (2) pairs of red lights, about 30 to 40 because the cargo they were hauling posed a danger to
watts each, on both sides of the steel plates. [16] On his part, passing motorists. In compliance with the Land Transportation
traffic investigation officer Cpl. Virgilio del Monte [17] admitted Traffic Code (Republic Act No. 4136)[25] respondents installed 2
that these lights were visible at a distance of 100 meters. pairs of lights on top of the steel plates, as the vehicles cargo
On December 19, 1991, the trial court rendered decision load extended beyond the bed or body thereof.
in favor of petitioners. It found respondents Freddie Hiceta We find that the direct cause of the accident was the
and Jimmy Orpilla negligent in view of these negligence of the victim. Traveling behind the truck, he had
circumstances: (1) the truck trailer had no license plate and the responsibility of avoiding bumping the vehicle in front of
tail lights; (2) there were only two pairs of red lights, 50 him. He was in control of the situation. His motorcycle was
watts[18] each, on both sides of the steel plates; and (3) the equipped with headlights to enable him to see what was in
truck trailer was improperly parked in a dark area. front of him. He was traversing the service road where the
The trial court held that respondents negligence was the prescribed speed limit was less than that in the highway.
immediate and proximate cause of Reynaldo Rayneras death, Traffic investigator Cpl. Virgilio del Monte testified that
for which they are jointly and severally liable to pay damages two pairs of 50-watts bulbs were on top of the steel plates,
to petitioners. The trial court also held that the victim was [26]
 which were visible from a distance of 100 meters. [27] Virgilio
himself negligent, although this was insufficient to overcome Santos admitted that from the tricycle where he was on
respondents negligence. The trial court applied the doctrine of board, he saw the truck and its cargo of iron plates from a
contributory negligence[19] and reduced the responsibility of distance of ten (10) meters.[28] In light of these circumstances,
respondents by 20% on account of the victims own an accident could have been easily avoided, unless the victim
negligence. had been driving too fast and did not exercise due care and
The dispositive portion of the lower courts decision reads prudence demanded of him under the circumstances.
as follows: Virgilio Santos testimony strengthened respondents
All things considered, the Court is of the opinion that it is fair defense that it was the victim who was reckless and negligent
and reasonable to fix the living and other expenses of the in driving his motorcycle at high speed. The tricycle where
deceased the sum of P54,000.00 a year or about P4,500.00 a Santos was on board was not much different from the victims
month (P150.00 p/d) and that, consequently, the loss or motorcycle that figured in the accident. Although Santos
damage sustained by the plaintiffs may be estimated claimed the tricycle almost bumped into the improperly
at P1,674,000.00 for the 31 years of Reynaldo Rayneras life parked truck, the tricycle driver was able to avoid hitting the
expectancy. truck.
Taking into account the cooperative negligence of the It has been said that drivers of vehicles who bump the
deceased Reynaldo Raynera, the Court believes that the rear of another vehicle are presumed to be the cause of the
demand of substantial justice are satisfied by allocating the accident, unless contradicted by other evidence. [29] The
damages on 80-20 ratio. Thus, P1,337,200.00 shall be paid by rationale behind the presumption is that the driver of the rear
the defendants with interest thereon, at the legal rate, from vehicle has full control of the situation as he is in a position to
date of decision, as damages for the loss of earnings. To this observe the vehicle in front of him.
sum, the following shall be added: We agree with the Court of Appeals that the
(a) P33,412.00, actually spent for funeral services, interment responsibility to avoid the collision with the front vehicle lies
and memorial lot; with the driver of the rear vehicle.
(b) P20,000.00 as attorneys fees; Consequently, no other person was to blame but the
(c) cost of suit. victim himself since he was the one who bumped his
SO ORDERED.[20] motorcycle into the rear of the Isuzu truck. He had the last
On January 10, 1992, respondents Hiceta and Orpilla clear chance of avoiding the accident.
appealed to the Court of Appeals.[21] WHEREFORE, we DENY the petition for review
After due proceedings, on April 28, 1995, the Court of on certiorari and AFFIRM the decision of the Court of Appeals
Appeals rendered decision setting aside the appealed in CA-G. R. CV No. 35895, dismissing the amended complaint
decision. The appellate court held that Reynaldo Rayneras in Civil Case No. 89-50355, Regional Trial Court, Branch 45,
bumping into the left rear portion of the truck was the Manila.
proximate cause of his death,[22] and consequently, absolved No costs.
respondents from liability. SO ORDERED.
Hence, this petition for review on certiorari.
In this petition, the heirs of Reynaldo Raynera contend th
at the appellate court erred in: (1) overturning the trial courts G.R. No. 108897 October 2, 1997
finding that respondents negligent operation of the Isuzu SARKIES TOURS PHILIPPINES, INC., petitioner, 
truck was the proximate cause of the victims death; (2) vs.
applying the doctrine of last clear chance; (3) setting aside HONORABLE COURT OF APPEALS (TENTH DIVISION),
the trial courts award of actual and compensatory damages. DR. ELINO G. FORTADES, MARISOL A. FORTADES and
The issues presented are (a) whether respondents were FATIMA MINERVA A. FORTADES, respondents.
negligent, and if so, (b) whether such negligence was the
proximate cause of the death of Reynaldo Raynera. ROMERO, J.:
Petitioners maintain that the proximate cause of This petition for review is seeking the reversal of the decision
Reynaldo Rayneras death was respondents negligence in of the Court of Appeals in CA-G.R. CV No. 18979 promulgated
operating the truck trailer on the highway without tail lights on January 13, 1993, as well as its resolution of February 19,
and license plate. 1993, denying petitioner's motion for reconsideration for
The Court finds no reason to disturb the factual findings being a mere rehash of the arguments raised in the
of the Court of Appeals. appellant's brief.
Negligence is the omission to do something which a The case arose from a damage suit filed by private
reasonable man, guided by those considerations which respondents Elino, Marisol, and Fatima Minerva, all surnamed
ordinarily regulate the conduct of human affairs, would do, or Fortades, against petitioner for breach of contract of carriage
the doing of something, which a prudent and reasonable man allegedly attended by bad faith.
would not do.[23] On August 31, 1984, Fatima boarded petitioner's De Luxe Bus
Proximate cause is that cause, which, in natural and No. 5 in Manila on her way to Legazpi City. Her brother Raul
continuous sequence, unbroken by any efficient intervening helped her load three pieces of luggage containing all of her
cause, produces the injury, and without which the result optometry review books, materials and equipment, trial
would not have occurred.[24] lenses, trial contact lenses, passport and visa, as well as her
During the trial, it was established that the truck had no mother Marisol's U.S. immigration (green) card, among other
tail lights. The photographs taken of the scene of the accident important documents and personal belongings. Her
showed that there were no tail lights or license plates belongings were kept in the baggage compartment of the bus,
installed on the Isuzu truck. Instead, what were installed were but during a stopover at Daet, it was discovered that only one
two (2) pairs of lights on top of the steel plates, and one (1) bag remained in the open compartment. The others, including
pair of lights in front of the truck. With regard to the rear of Fatima's things, were missing and might have dropped along

34
the way. Some of the passengers suggested retracing the bus drivers and the radio stations. To expedite the
route of the bus to try to recover the lost items, but the driver replacement of her mother's lost U.S. immigration documents,
ignored them and proceeded to Legazpi City. Fatima also had to execute an affidavit of loss.3 Clearly, they
Fatima immediately reported the loss to her mother who, in would not have gone through all that trouble in pursuit of a
turn, went to petitioner's office in Legazpi City and later at its fancied loss.
head office in Manila. Petitioner, however, merely offered her Fatima was not the only one who lost her luggage.
P1,000.00 for each piece of luggage lost, which she turned Apparently, other passengers had suffered a similar fate: Dr.
down. After returning to Bicol, disappointed but not defeated, Lita Samarista testified that petitioner offered her P1,000.00
mother and daughter asked assistance from the radio stations for her lost baggage and she accepted it;4 Carleen Carullo-
and even from Philtranco bus drivers who plied the same Magno lost her chemical engineering review materials, while
route on August 31st. The effort paid off when one of Fatima's her brother lost abaca products he was transporting to Bicol. 5
bags was recovered. Marisol further reported the incident to Petitioner's receipt of Fatima's personal luggage having been
the National Bureau of Investigation's field office in Legazpi thus established, it must now be determined if, as a common
City and to the local police. carrier, it is responsible for their loss. Under the Civil Code,
On September 20, 1984, respondents, through counsel, "(c)ommon carriers, from the nature of their business and for
formally demanded satisfaction of their complaint from reasons of public policy, are bound to observe extraordinary
petitioner. In a letter dated October 1, 1984, the latter diligence in the vigilance over the goods . . . transported by
apologized for the delay and said that "(a) team has been them,"6 and this liability "lasts from the time the goods are
sent out to Bicol for the purpose of recovering or at least unconditionally placed in the possession of, and received by
getting the full detail"1 of the incident. the carrier for transportation until the same are delivered,
After more than nine months of fruitless waiting, respondents actually or constructively, by the carrier to . . . the person who
decided to file the case below to recover the value of the has a right to receive them," 7 unless the loss is due to any of
remaining lost items, as well as moral and exemplary the excepted causes under Article 1734 thereof. 8
damages, attorney's fees and expenses of litigation. They The cause of the loss in the case at bar was petitioner's
claimed that the loss was due to petitioner's failure to observe negligence in not ensuring that the doors of the baggage
extraordinary diligence in the care of Fatima's luggage and compartment of its bus were securely fastened. As a result of
that petitioner dealt with them in bad faith from the start. this lack of care, almost all of the luggage was lost, to the
Petitioner, on the other hand, disowned any liability for the prejudice of the paying passengers. As the Court of Appeals
loss on the ground that Fatima allegedly did not declare any correctly observed:
excess baggage upon boarding its bus. . . . . Where the common carrier accepted its
On June 15, 1988, after trial on the merits, the court a passenger's baggage for transportation and even
quo adjudged the case in favor of respondents, viz.: had it placed in the vehicle by its own employee, its
PREMISES CONSIDERED, judgment is hereby failure to collect the freight charge is the common
rendered in favor of the plaintiffs (herein carrier's own lookout. It is responsible for the
respondents) and against the herein defendant consequent loss of the baggage. In the instant case,
Sarkies Tours Philippines, Inc., ordering the latter to defendant appellant's employee even helped Fatima
pay to the former the following sums of money, to Minerva Fortades and her brother load the
wit: luggages/baggages in the bus' baggage
1. The sum of P30,000.00 equivalent to the value of compartment, without asking that they be weighed,
the personal belongings of plaintiff Fatima Minerva declared, receipted or paid for (TSN, August 4, 1986,
Fortades, etc. less the value of one luggage pp. 29, 34, 54, 57, 70; December 23, 1987, p. 35).
recovered; Neither was this required of the other passengers
2. The sum of P90,000.00 for the transportation (TSN, August 4, 1986, p. 104; February 5, 1988; p.
expenses, as well as moral damages; 13).
3. The sum of P10,000.00 by way of exemplary Finally, petitioner questions the award of actual damages to
damages; respondents. On this point, we likewise agree with the trial
4. The sum of P5,000.00 as attorney's fees; and and appellate courts' conclusions. There is no dispute that of
5. The sum of P5,000.00 as litigation expenses or a the three pieces of luggage of Fatima, only one was
total of One Hundred Forty Thousand (P140,000.00) recovered. The other two contained optometry books,
Pesos. materials, equipment, as well as vital documents and personal
to be paid by herein defendant Sarkies Tours belongings. Respondents had to shuttle between Bicol and
Philippines, Inc. to the herein plaintiffs within 30 days Manila in their efforts to be compensated for the loss. During
from receipt of this Decision. the trial, Fatima and Marisol had to travel from the United
SO ORDERED. States just to be able to testify. Expenses were also incurred
On appeal, the appellate court affirmed the trial court's in reconstituting their lost documents. Under these
judgment, but deleted the award of moral and exemplary circumstances, the Court agrees with the Court of Appeals in
damages. Thus, awarding P30,000.00 for the lost items and P30,000.00 for the
WHEREFORE, premises considered, except as above transportation expenses, but disagrees with the deletion of
modified, fixing the award for transportation the award of moral and exemplary damages which, in view of
expenses at P30,000.00 and the deletion of the the foregoing proven facts, with negligence and bad faith on
award for moral and exemplary damages, the the fault of petitioner having been duly established, should be
decision appealed from is AFFIRMED, with costs granted to respondents in the amount of P20,000.00 and
against defendant-appellant. P5,000.00, respectively.
SO ORDERED. WHEREFORE, the assailed decision of the Court of Appeals
Its motion for reconsideration was likewise rejected by the dated January 13, 1993, and its resolution dated February 19,
Court of Appeals, so petitioner elevated its case to this Court 1993, are hereby AFFIRMED with the MODIFICATION that
for a review. petitioner is ordered to pay respondents an additional
After a careful scrutiny of the records of this case, we are P20,000.00 as moral damages and P5,000.00 as exemplary
convinced that the trial and appellate courts resolved the damages. Costs against petitioner.
issues judiciously based on the evidence at hand. SO ORDERED.
Petitioner claims that Fatima did not bring any piece of G.R. No. 143133           June 5, 2002
luggage with her, and even if she did, none was declared at BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V.
the start of the trip. The documentary and testimonial and JARDINE DAVIES TRANSPORT SERVICES,
evidence presented at the trial, however, established that INC., petitioners, 
Fatima indeed boarded petitioner's De Luxe Bus No. 5 in the vs.
evening of August 31, 1984, and she brought three pieces of PHILIPPINE FIRST INSURANCE CO., INC., respondents.
luggage with her, as testified by her brother Raul,2 who PANGANIBAN, J.:
helped her pack her things and load them on said bus. One of Proof of the delivery of goods in good order to a common
the bags was even recovered by a Philtranco bus driver. In its carrier and of their arrival in bad order at their destination
letter dated October 1, 1984, petitioner tacitly admitted its constitutes prima facie fault or negligence on the part of the
liability by apologizing to respondents and assuring them that carrier. If no adequate explanation is given as to how the loss,
efforts were being made to recover the lost items. the destruction or the deterioration of the goods happened,
The records also reveal that respondents went to great the carrier shall be held liable therefor.
lengths just to salvage their loss. The incident was reported to Statement of the Case
the police, the NBI, and the regional and head offices of Before us is a Petition for Review under Rule 45 of the Rules
petitioner. Marisol even sought the assistance of Philtranco of Court, assailing the July 15, 1998 Decision1 and the May 2,

35
2000 Resolution2 of the Court of Appeals3 (CA) in CA-GR CV valuation of the cargo had been declared by the shipper. The
No. 53571. The decretal portion of the Decision reads as CA, however, affirmed the award of attorney's fees.
follows: Hence, this Petition.11
"WHEREFORE, in the light of the foregoing Issues
disquisition, the decision appealed from is hereby In their Memorandum, petitioners raise the following issues
REVERSED and SET ASIDE. Defendants-appellees are for the Court's consideration:
ORDERED to jointly and severally pay plaintiffs- I
appellants the following: "Whether or not plaintiff by presenting only one
'1) FOUR Hundred Fifty One Thousand witness who has never seen the subject
Twenty-Seven Pesos and 32/100 shipment and whose testimony is purely hearsay
(P451,027.32) as actual damages, is sufficient to pave the way for the applicability of
representing the value of the damaged Article 1735 of the Civil Code;
cargo, plus interest at the legal rate from II
the time of filing of the complaint on July 25, "Whether or not the consignee/plaintiff filed the
1991, until fully paid; required notice of loss within the time required by
'2) Attorney's fees amounting to 20% of the law;
claim; and III
'3) Costs of suit.'"4 "Whether or not a notation in the bill of lading at the
The assailed Resolution denied petitioner's Motion for time of loading is sufficient to show pre-shipment
Reconsideration. damage and to exempt herein defendants from
The CA reversed the Decision of the Regional Trial Court (RTC) liability;
of Makati City (Branch 134), which had disposed as follows: IV
"WHEREFORE, in view of the foregoing, judgment is "Whether or not the "PACKAGE LIMITATION" of
hereby rendered, dismissing the complaint, as well liability under Section 4 (5) of COGSA is applicable to
as defendant's counterclaim." 5 the case at bar."12
The Facts In sum, the issues boil down to three:
The factual antecedents of the case are summarized by the 1. Whether petitioners have overcome the
Court of Appeals in this wise: presumption of negligence of a common carrier
"On June 13, 1990, CMC Trading A.G. shipped on 2. Whether the notice of loss was timely filed
board the M/V 'Anangel Sky' at Hamburg, Germany 3. Whether the package limitation of liability is
242 coils of various Prime Cold Rolled Steel sheets applicable
for transportation to Manila consigned to the This Court's Ruling
Philippine Steel Trading Corporation. On July 28, The Petition is partly meritorious.
1990, M/V Anangel Sky arrived at the port of Manila First Issue:
and, within the subsequent days, discharged the Proof of Negligence
subject cargo. Four (4) coils were found to be in bad Petitioners contend that the presumption of fault imposed on
order B.O. Tally sheet No. 154974. Finding the four common carriers should not be applied on the basis of the
(4) coils in their damaged state to be unfit for the lone testimony offered by private respondent. The contention
intended purpose, the consignee Philippine Steel is untenable.
Trading Corporation declared the same as total Well-settled is the rule that common carriers, from the nature
loss.1âwphi1.nêt of their business and for reasons of public policy, are bound to
"Despite receipt of a formal demand, defendants- observe extraordinary diligence and vigilance with respect to
appellees refused to submit to the consignee's claim. the safety of the goods and the passengers they
Consequently, plaintiff-appellant paid the consignee transport.13 Thus, common carriers are required to render
five hundred six thousand eighty six & 50/100 pesos service with the greatest skill and foresight and "to use all
(P506,086.50), and was subrogated to the latter's reason[a]ble means to ascertain the nature and
rights and causes of action against defendants- characteristics of the goods tendered for shipment, and to
appellees. Subsequently, plaintiff-appellant instituted exercise due care in the handling and stowage, including such
this complaint for recovery of the amount paid by methods as their nature requires."14 The extraordinary
them, to the consignee as insured. responsibility lasts from the time the goods are
"Impugning the propriety of the suit against them, unconditionally placed in the possession of and received for
defendants-appellees imputed that the damage transportation by the carrier until they are delivered, actually
and/or loss was due to pre-shipment damage, to the or constructively, to the consignee or to the person who has a
inherent nature, vice or defect of the goods, or to right to receive them.15
perils, danger and accidents of the sea, or to This strict requirement is justified by the fact that, without a
insufficiency of packing thereof, or to the act or hand or a voice in the preparation of such contract, the riding
omission of the shipper of the goods or their public enters into a contract of transportation with common
representatives. In addition thereto, defendants- carriers.16 Even if it wants to, it cannot submit its own
appellees argued that their liability, if there be any, stipulations for their approval.17 Hence, it merely adheres to
should not exceed the limitations of liability provided the agreement prepared by them.
for in the bill of lading and other pertinent laws. Owing to this high degree of diligence required of them,
Finally, defendants-appellees averred that, in any common carriers, as a general rule, are presumed to have
event, they exercised due diligence and foresight been at fault or negligent if the goods they transported
required by law to prevent any damage/loss to said deteriorated or got lost or destroyed.18 That is, unless they
shipment."6 prove that they exercised extraordinary diligence in
Ruling of the Trial Court transporting the goods.19 In order to avoid responsibility for
The RTC dismissed the Complaint because respondent had any loss or damage, therefore, they have the burden of
failed to prove its claims with the quantum of proof required proving that they observed such diligence.20
by law.7 However, the presumption of fault or negligence will not
It likewise debunked petitioners' counterclaim, because arise21 if the loss is due to any of the following causes: (1)
respondent's suit was not manifestly frivolous or primarily flood, storm, earthquake, lightning, or other natural disaster
intended to harass them.8 or calamity; (2) an act of the public enemy in war, whether
Ruling of the Court of Appeals international or civil; (3) an act or omission of the shipper or
In reversing the trial court, the CA ruled that petitioners were owner of the goods; (4) the character of the goods or defects
liable for the loss or the damage of the goods shipped, in the packing or the container; or (5) an order or act of
because they had failed to overcome the presumption of competent public authority.22 This is a closed list. If the cause
negligence imposed on common carriers. of destruction, loss or deterioration is other than the
The CA further held as inadequately proven petitioners' claim enumerated circumstances, then the carrier is liable
that the loss or the deterioration of the goods was due to pre- therefor.23
shipment damage.9 It likewise opined that the notation "metal Corollary to the foregoing, mere proof of delivery of the goods
envelopes rust stained and slightly dented" placed on the Bill in good order to a common carrier and of their arrival in bad
of Lading had not been the proximate cause of the damage to order at their destination constitutes a prima facie case of
the four (4) coils.10 fault or negligence against the carrier. If no adequate
As to the extent of petitioners' liability, the CA held that the explanation is given as to how the deterioration, the loss or
package limitation under COGSA was not applicable, because the destruction of the goods happened, the transporter shall
the words "L/C No. 90/02447" indicated that a higher be held responsible.24

36
That petitioners failed to rebut the prima facie presumption of and his crew should have undertaken precautionary measures
negligence is revealed in the case at bar by a review of the to avoid possible deterioration of the cargo. But none of these
records and more so by the evidence adduced by measures was taken.38 Having failed to discharge the burden
respondent.25 of proving that they have exercised the extraordinary
First, as stated in the Bill of Lading, petitioners received the diligence required by law, petitioners cannot escape liability
subject shipment in good order and condition in Hamburg, for the damage to the four coils.39
Germany.26 In their attempt to escape liability, petitioners further contend
Second, prior to the unloading of the cargo, an Inspection that they are exempted from liability under Article 1734(4) of
Report27 prepared and signed by representatives of both the Civil Code. They cite the notation "metal envelopes rust
parties showed the steel bands broken, the metal envelopes stained and slightly dented" printed on the Bill of Lading as
rust-stained and heavily buckled, and the contents thereof evidence that the character of the goods or defect in the
exposed and rusty. packing or the containers was the proximate cause of the
Third, Bad Order Tally Sheet No. 15497928 issued by Jardine damage. We are not convinced.
Davies Transport Services, Inc., stated that the four coils were From the evidence on record, it cannot be reasonably
in bad order and condition. Normally, a request for a bad concluded that the damage to the four coils was due to the
order survey is made in case there is an apparent or a condition noted on the Bill of Lading.40 The aforecited
presumed loss or damage.29 exception refers to cases when goods are lost or damaged
Fourth, the Certificate of Analysis30 stated that, based on the while in transit as a result of the natural decay of perishable
sample submitted and tested, the steel sheets found in bad goods or the fermentation or evaporation of substances liable
order were wet with fresh water. therefor, the necessary and natural wear of goods in
Fifth, petitioners -- in a letter 31 addressed to the Philippine transport, defects in packages in which they are shipped, or
Steel Coating Corporation and dated October 12, 1990 -- the natural propensities of animals.41 None of these is present
admitted that they were aware of the condition of the four in the instant case.
coils found in bad order and condition. Further, even if the fact of improper packing was known to the
These facts were confirmed by Ruperto Esmerio, head carrier or its crew or was apparent upon ordinary observation,
checker of BM Santos Checkers Agency. Pertinent portions of it is not relieved of liability for loss or injury resulting
his testimony are reproduce hereunder: therefrom, once it accepts the goods notwithstanding such
"Q.       Mr. Esmerio, you mentioned that you are a condition.42 Thus, petitioners have not successfully proven the
Head Checker. Will you inform the Honorable Court application of any of the aforecited exceptions in the present
with what company you are connected? case.43
A.       BM Santos Checkers Agency, sir. Second Issue:
Q.       How is BM Santos checkers Agency related or Notice of Loss
connected with defendant Jardine Davies Transport Petitioners claim that pursuant to Section 3, paragraph 6 of
Services? the Carriage of Goods by Sea Act44 (COGSA), respondent
A.       It is the company who contracts the checkers, should have filed its Notice of Loss within three days from
sir. delivery. They assert that the cargo was discharged on July
Q.       You mentioned that you are a Head Checker, 31, 1990, but that respondent filed its Notice of Claim only on
will you inform this Honorable Court your duties and September 18, 1990.45
responsibilities? We are not persuaded. First, the above-cited provision of
A.       I am the representative of BM Santos on board COGSA provides that the notice of claim need not be given if
the vessel, sir, to supervise the discharge of cargoes. the state of the goods, at the time of their receipt, has been
x x x           x x x           x x x the subject of a joint inspection or survey. As stated earlier,
Q.       On or about August 1, 1990, were you still prior to unloading the cargo, an Inspection Report46 as to the
connected or employed with BM Santos as a Head condition of the goods was prepared and signed by
Checker? representatives of both parties.47
A.       Yes, sir. Second, as stated in the same provision, a failure to file a
Q.       And, on or about that date, do you recall notice of claim within three days will not bar recovery if it is
having attended the discharging and inspection of nonetheless filed within one year.48 This one-year prescriptive
cold steel sheets in coil on board the MV/AN ANGEL period also applies to the shipper, the consignee, the insurer
SKY? of the goods or any legal holder of the bill of lading.49
A.       Yes, sir, I was there. In Loadstar Shipping Co., Inc, v. Court of Appeals,50 we ruled
x x x           x x x           x x x that a claim is not barred by prescription as long as the one-
Q.       Based on your inspection since you were also year period has not lapsed. Thus, in the words of the ponente,
present at that time, will you inform this Honorable Chief Justice Hilario G. Davide Jr.:
Court the condition or the appearance of the bad "Inasmuch as the neither the Civil Code nor the Code
order cargoes that were unloaded from the of Commerce states a specific prescriptive period on
MV/ANANGEL SKY? the matter, the Carriage of Goods by Sea Act
ATTY. MACAMAY: (COGSA)--which provides for a one-year period of
Objection, Your Honor, I think the document limitation on claims for loss of, or damage to,
itself reflects the condition of the cold steel cargoes sustained during transit--may be applied
sheets and the best evidence is the suppletorily to the case at bar."
document itself, Your Honor that shows the In the present case, the cargo was discharged on July 31,
condition of the steel sheets. 1990, while the Complaint51 was filed by respondent on July
COURT: 25, 1991, within the one-year prescriptive period.
Let the witness answer. Third Issue:
A.       The scrap of the cargoes is broken already and Package Limitation
the rope is loosen and the cargoes are dent on the Assuming arguendo they are liable for respondent's claims,
sides."32 petitioners contend that their liability should be limited to
All these conclusively prove the fact of shipment in good order US$500 per package as provided in the Bill of Lading and by
and condition and the consequent damage to the four coils Section 4(5)52 of COGSA.53
while in the possession of petitioner,33 who notably failed to On the other hand, respondent argues that Section 4(5) of
explain why.34 COGSA is inapplicable, because the value of the subject
Further, petitioners failed to prove that they observed the shipment was declared by petitioners beforehand, as
extraordinary diligence and precaution which the law requires evidenced by the reference to and the insertion of the Letter
a common carrier to know and to follow to avoid damage to or of Credit or "L/C No. 90/02447" in the said Bill of Lading. 54
destruction of the goods entrusted to it for safe carriage and A bill of lading serves two functions. First, it is a receipt for the
delivery.35 goods shipped.53 Second, it is a contract by which three
True, the words "metal envelopes rust stained and slightly parties -- namely, the shipper, the carrier, and the consignee
dented" were noted on the Bill of Lading; however, there is no -- undertake specific responsibilities and assume stipulated
showing that petitioners exercised due diligence to forestall or obligations.56 In a nutshell, the acceptance of the bill of lading
lessen the loss.36 Having been in the service for several years, by the shipper and the consignee, with full knowledge of its
the master of the vessel should have known at the outset that contents, gives rise to the presumption that it constituted a
metal envelopes in the said state would eventually deteriorate perfected and binding contract.57
when not properly stored while in transit.37 Equipped with the Further, a stipulation in the bill of lading limiting to a certain
proper knowledge of the nature of steel sheets in coils and of sum the common carrier's liability for loss or destruction of a
the proper way of transporting them, the master of the vessel cargo -- unless the shipper or owner declares a greater

37
value58 -- is sanctioned by law.59 There are, however, two This is a petition for review on certiorari of the decision1 of the
conditions to be satisfied: (1) the contract is reasonable and Court of Appeals, dated March 31, 1991, reversing the
just under the circumstances, and (2) it has been fairly and contrary decision of the Regional Trial Court, Branch 36,
freely agreed upon by the parties.60 The rationale for this rule Dumaguete City, and awarding damages instead to private
is to bind the shippers by their agreement to the value respondent Eliza Jujeurche Sunga as plaintiff in an action for
(maximum valuation) of their goods.61 breach of contract of carriage.
It is to be noted, however, that the Civil Code does not limit The facts, as found by the Court of Appeals, are as follows:
the liability of the common carrier to a fixed amount per At 10 o'clock in the morning of August 23, 1989, private
package.62 In all matters not regulated by the Civil Code, the respondent Eliza Jujeurche G. Sunga, then a college freshman
right and the obligations of common carriers shall be majoring in Physical Education at the Siliman University, took
governed by the Code of Commerce and special laws. 63 Thus, a passenger jeepney owned and operated by petitioner
the COGSA, which is suppletory to the provisions of the Civil Vicente Calalas. As the jeepney was filled to capacity of about
Code, supplements the latter by establishing a statutory 24 passengers, Sunga was given by the conductor an
provision limiting the carrier's liability in the absence of a "extension seat," a wooden stool at the back of the door at
shipper's declaration of a higher value in the bill of the rear end of the vehicle.
lading.64 The provisions on limited liability are as much a part On the way to Poblacion Sibulan, Negros Occidental, the
of the bill of lading as though physically in it and as though jeepney stopped to let a passenger off. As she was seated at
placed there by agreement of the parties.65 the rear of the vehicle, Sunga gave way to the outgoing
In the case before us, there was no stipulation in the Bill of passenger. Just as she was doing so, an Isuzu truck driven by
Lading66 limiting the carrier's liability. Neither did the shipper Iglecerio Verena and owned by Francisco Salva bumped the
declare a higher valuation of the goods to be shipped. This left rear portion of the jeepney. As a result, Sunga was
fact notwithstanding, the insertion of the words "L/C No. injured. She sustained a fracture of the "distal third of the left
90/02447 cannot be the basis for petitioners' liability. tibia-fibula with severe necrosis of the underlying skin."
First, a notation in the Bill of Lading which indicated the Closed reduction of the fracture, long leg circular casting, and
amount of the Letter of Credit obtained by the shipper for the case wedging were done under sedation. Her confinement in
importation of steel sheets did not effect a declaration of the the hospital lasted from August 23 to September 7, 1989. Her
value of the goods as required by the bill.67 That notation was attending physician, Dr. Danilo V. Oligario, an orthopedic
made only for the convenience of the shipper and the bank surgeon, certified she would remain on a cast for a period of
processing the Letter of Credit.68 three months and would have to ambulate in crutches during
Second, in Keng Hua Paper Products v. Court of Appeals,69 we said period.
held that a bill of lading was separate from the Other Letter of On October 9, 1989, Sunga filed a complaint for damages
Credit arrangements. We ruled thus: against Calalas, alleging violation of the contract of carriage
"(T)he contract of carriage, as stipulated in the bill of by the former in failing to exercise the diligence required of
lading in the present case, must be treated him as a common carrier. Calalas, on the other hand, filed a
independently of the contract of sale between the third-party complaint against Francisco Salva, the owner of
seller and the buyer, and the contract of issuance of the Isuzu truck.
a letter of credit between the amount of goods The lower court rendered judgment against Salva as third-
described in the commercial invoice in the contract party defendant and absolved Calalas of liability, holding that
of sale and the amount allowed in the letter of credit it was the driver of the Isuzu truck who was responsible for
will not affect the validity and enforceability of the the accident. It took cognizance of another case (Civil Case
contract of carriage as embodied in the bill of lading. No. 3490), filed by Calalas against Salva and Verena, for
As the bank cannot be expected to look beyond the quasi-delict, in which Branch 37 of the same court held Salva
documents presented to it by the seller pursuant to and his driver Verena jointly liable to Calalas for the damage
the letter of credit, neither can the carrier be to his jeepney.
expected to go beyond the representations of the On appeal to the Court of Appeals, the ruling of the lower
shipper in the bill of lading and to verify their court was reversed on the ground that Sunga's cause of
accuracy vis-à-vis the commercial invoice and the action was based on a contract of carriage, not quasi-delict,
letter of credit. Thus, the discrepancy between the and that the common carrier failed to exercise the diligence
amount of goods indicated in the invoice and the required under the Civil Code. The appellate court dismissed
amount in the bill of lading cannot negate the third-party complaint against Salva and adjudged Calalas
petitioner's obligation to private respondent arising liable for damages to Sunga. The dispositive portion of its
from the contract of transportation."70 decision reads:
In the light of the foregoing, petitioners' liability should be WHEREFORE, the decision appealed from is
computed based on US$500 per package and not on the per hereby REVERSED and SET ASIDE, and
metric ton price declared in the Letter of Credit. 71 In Eastern another one is entered ordering defendant-
Shipping Lines, Inc. v. Intermediate Appellate Court,72 we appellee Vicente Calalas to pay plaintiff-
explained the meaning of packages: appellant:
"When what would ordinarily be considered packages (1) P50,000.00 as actual and compensatory
are shipped in a container supplied by the carrier and damages;
the number of such units is disclosed in the shipping (2) P50,000.00 as moral damages;
documents, each of those units and not the container (3) P10,000.00 as attorney's fees; and
constitutes the 'package' referred to in the liability (4) P1,000.00 as expenses of litigation; and
limitation provision of Carriage of Goods by Sea Act." (5) to pay the costs.
Considering, therefore, the ruling in Eastern Shipping SO ORDERED.
Lines and the fact that the Bill of Lading clearly disclosed the Hence, this petition. Petitioner contends that the ruling in Civil
contents of the containers, the number of units, as well as the Case No. 3490 that the negligence of Verena was the
nature of the steel sheets, the four damaged coils should be proximate cause of the accident negates his liability and that
considered as the shipping unit subject to the US$500 to rule otherwise would be to make the common carrier an
limitation.1âwphi1.nêt insurer of the safety of its passengers. He contends that the
WHEREFORE, the Petition is partly granted and the assailed bumping of the jeepney by the truck owned by Salva was
Decision MODIFIED. Petitioners' liability is reduced to a caso fortuito. Petitioner further assails the award of moral
US$2,000 plus interest at the legal rate of six percent from damages to Sunga on the ground that it is not supported by
the time of the filing of the Complaint on July 25, 1991 until evidence.
the finality of this Decision, and 12 percent thereafter until The petition has no merit.
fully paid. No pronouncement as to costs. The argument that Sunga is bound by the ruling in Civil Case
SO ORDERED. 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
G.R. No. 122039 May 31, 2000 apply.
VICENTE CALALAS, petitioner, Nor are the issues in Civil Case No. 3490 and in the present
vs. case the same. The issue in Civil Case No. 3490 was whether
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and Salva and his driver Verena were liable for quasi-delict for the
FRANCISCO SALVA, respondents. damage caused to petitioner's jeepney. On the other hand,
the issue in this case is whether petitioner is liable on his
MENDOZA, J.: contract of carriage. The first, quasi-delict, also known
as culpa aquiliana or culpa extra contractual, has as its source

38
the negligence of the tortfeasor. The second, breach of more passengers or more freight or cargo in
contract or culpa contractual, is premised upon the his vehicle than its registered capacity.
negligence in the performance of a contractual obligation. The fact that Sunga was seated in an "extension seat" placed
Consequently, in quasi-delict, the negligence or fault should her in a peril greater than that to which the other passengers
be clearly established because it is the basis of the action, were exposed. Therefore, not only was petitioner unable to
whereas in breach of contract, the action can be prosecuted overcome the presumption of negligence imposed on him for
merely by proving the existence of the contract and the fact the injury sustained by Sunga, but also, the evidence shows
that the obligor, in this case the common carrier, failed to he was actually negligent in transporting passengers.
transport his passenger safely to his destination. 2 In case of We find it hard to give serious thought to petitioner's
death or injuries to passengers, Art. 1756 of the Civil Code contention that Sunga's taking an "extension seat" amounted
provides that common carriers are presumed to have been at to an implied assumption of risk. It is akin to arguing that the
fault or to have acted negligently unless they prove that they injuries to the many victims of the tragedies in our seas
observed extraordinary diligence as defined in Arts. 1733 and should not be compensated merely because those passengers
1755 of the Code. This provision necessarily shifts to the assumed a greater risk of drowning by boarding an
common carrier the burden of proof. overloaded ferry. This is also true of petitioner's contention
There is, thus, no basis for the contention that the ruling in that the jeepney being bumped while it was improperly
Civil Case No. 3490, finding Salva and his driver Verena liable parked constitutes caso fortuito. A caso fortuito is an event
for the damage to petitioner's jeepney, should be binding on which could not be foreseen, or which, though foreseen, was
Sunga. It is immaterial that the proximate cause of the inevitable.3 This requires that the following requirements be
collision between the jeepney and the truck was the present: (a) the cause of the breach is independent of the
negligence of the truck driver. The doctrine of proximate debtor's will; (b) the event is unforeseeable or unavoidable;
cause is applicable only in actions for quasi-delict, not in (c) the event is such as to render it impossible for the debtor
actions involving breach of contract. The doctrine is a device to fulfill his obligation in a normal manner, and (d) the debtor
for imputing liability to a person where there is no relation did not take part in causing the injury to the
between him and another party. In such a case, the obligation creditor.4 Petitioner should have foreseen the danger of
is created by law itself. But, where there is a pre-existing parking his jeepney with its body protruding two meters into
contractual relation between the parties, it is the parties the highway.
themselves who create the obligation, and the function of the Finally, petitioner challenges the award of moral damages
law is merely to regulate the relation thus created. Insofar as alleging that it is excessive and without basis in law. We find
contracts of carriage are concerned, some aspects regulated this contention well taken.
by the Civil Code are those respecting the diligence required In awarding moral damages, the Court of Appeals stated:
of common carriers with regard to the safety of passengers as Plaintiff-appellant at the time of the accident
well as the presumption of negligence in cases of death or was a first-year college student in that
injury to passengers. It provides: school year 1989-1990 at the Silliman
Art. 1733. Common carriers, from the nature University, majoring in Physical Education.
of their business and for reasons of public Because of the injury, she was not able to
policy, are bound to observe extraordinary enroll in the second semester of that school
diligence in the vigilance over the goods year. She testified that she had no more
and for the safety of the passengers intention of continuing with her schooling,
transported by them, according to all the because she could not walk and decided not
circumstances of each case. to pursue her degree, major in Physical
Such extraordinary diligence in the vigilance Education "because of my leg which has a
over the goods is further expressed in defect already."
articles 1734, 1735, and 1746, Nos. 5, 6, Plaintiff-appellant likewise testified that
and 7, while the extraordinary diligence for even while she was under confinement, she
the safety of the passengers is further set cried in pain because of her injured left foot.
forth in articles 1755 and 1756. As a result of her injury, the Orthopedic
Art. 1755. A common carrier is bound to Surgeon also certified that she has "residual
carry the passengers safely as far as human bowing of the fracture side." She likewise
care and foresight can provide, using the decided not to further pursue Physical
utmost diligence of very cautious persons, Education as her major subject, because
with due regard for all the circumstances. "my left leg . . . has a defect already."
Art. 1756. In case of death of or injuries to Those are her physical pains and moral
passengers, common carriers are presumed sufferings, the inevitable bedfellows of the
to have been at fault or to have acted injuries that she suffered. Under Article
negligently, unless they prove that they 2219 of the Civil Code, she is entitled to
observed extraordinary diligence as recover moral damages in the sum of
prescribed by articles 1733 and 1755. P50,000.00, which is fair, just and
In the case at bar, upon the happening of the accident, the reasonable.
presumption of negligence at once arose, and it became the As a general rule, moral damages are not recoverable in
duty of petitioner to prove that he had to observe actions for damages predicated on a breach of contract for it
extraordinary diligence in the care of his passengers. is not one of the items enumerated under Art. 2219 of the
Now, did the driver of jeepney carry Sunga "safely as far as Civil Code.5 As an exception, such damages are recoverable:
human care and foresight could provide, using the utmost (1) in cases in which the mishap results in the death of a
diligence of very cautious persons, with due regard for all the passenger, as provided in Art. 1764, in relation to Art. 2206(3)
circumstances" as required by Art. 1755? We do not think so. of the Civil Code; and (2) in the cases in which the carrier is
Several factors militate against petitioner's contention. guilty of fraud or bad faith, as provided in Art. 2220. 6
First, as found by the Court of Appeals, the jeepney was not In this case, there is no legal basis for awarding moral
properly parked, its rear portion being exposed about two damages since there was no factual finding by the appellate
meters from the broad shoulders of the highway, and facing court that petitioner acted in bad faith in the performance of
the middle of the highway in a diagonal angle. This is a the contract of carriage. Sunga's contention that petitioner's
violation of the R.A. No. 4136, as amended, or the Land admission in open court that the driver of the jeepney failed
Transportation and Traffic Code, which provides: to assist her in going to a nearby hospital cannot be construed
Sec. 54. Obstruction of Traffic. — No person as an admission of bad faith. The fact that it was the driver of
shall drive his motor vehicle in such a the Isuzu truck who took her to the hospital does not imply
manner as to obstruct or impede the that petitioner was utterly indifferent to the plight of his
passage of any vehicle, nor, while injured passenger. If at all, it is merely implied recognition by
discharging or taking on passengers or Verena that he was the one at fault for the accident.
loading or unloading freight, obstruct the WHEREFORE, the decision of the Court of Appeals, dated
free passage of other vehicles on the March 31, 1995, and its resolution, dated September 11,
highway. 1995, are AFFIRMED, with the MODIFICATION that the award
Second, it is undisputed that petitioner's driver took in more of moral damages is DELETED.
passengers than the allowed seating capacity of the jeepney, SO ORDERED.
a violation of §32(a) of the same law. It provides:
Exceeding registered capacity. — No person
operating any motor vehicle shall allow

39
 Petitioner was the one which contracted with MCCII for the
G.R. No. 150403             January 25, 2007 transport of the cargo. It had control over what vessel it would
CEBU SALVAGE CORPORATION, Petitioner,  use. All throughout its dealings with MCCII, it represented
vs. itself as a common carrier. The fact that it did not own the
PHILIPPINE HOME ASSURANCE vessel it decided to use to consummate the contract of
CORPORATION, Respondent. carriage did not negate its character and duties as a common
DECISION carrier. The MCCII (respondent’s subrogor) could not be
CORONA, J.: reasonably expected to inquire about the ownership of the
May a carrier be held liable for the loss of cargo resulting from vessels which petitioner carrier offered to utilize. As a
the sinking of a ship it does not own? practical matter, it is very difficult and often impossible for the
This is the issue presented for the Court’s resolution in this general public to enforce its rights of action under a contract
petition for review on certiorari1 assailing the March 16, 2001 of carriage if it should be required to know who the actual
decision2 and September 17, 2001 resolution3 of the Court of owner of the vessel is.25 In fact, in this case, the voyage
Appeals (CA) in CA-G.R. CV No. 40473 which in turn affirmed charter itself denominated petitioner as the "owner/operator"
the December 27, 1989 decision4 of the Regional Trial Court of the vessel.26
(RTC), Branch 145, Makati, Metro Manila.5 Petitioner next contends that if there was a contract of
The pertinent facts follow. carriage, then it was between MCCII and ALS as evidenced by
On November 12, 1984, petitioner Cebu Salvage Corporation the bill of lading ALS issued.27
(as carrier) and Maria Cristina Chemicals Industries, Inc. Again, we disagree.
[MCCII] (as charterer) entered into a voyage charter 6 wherein The bill of lading was merely a receipt issued by ALS to
petitioner was to load 800 to 1,100 metric tons of silica quartz evidence the fact that the goods had been received for
on board the M/T Espiritu Santo7 at Ayungon, Negros transportation. It was not signed by MCCII, as in fact it was
Occidental for transport to and discharge at Tagoloan, simply signed by the supercargo of ALS.28 This is consistent
Misamis Oriental to consignee Ferrochrome Phils., Inc.8 with the fact that MCCII did not contract directly with ALS.
Pursuant to the contract, on December 23, 1984, petitioner While it is true that a bill of lading may serve as the contract
received and loaded 1,100 metric tons of silica quartz on of carriage between the parties,29 it cannot prevail over the
board the M/T Espiritu Santo which left Ayungon for Tagoloan express provision of the voyage charter that MCCII and
the next day.9 The shipment never reached its destination, petitioner executed:
however, because the M/T Espiritu Santo sank in the [I]n cases where a Bill of Lading has been issued by a carrier
afternoon of December 24, 1984 off the beach of Opol, covering goods shipped aboard a vessel under a charter
Misamis Oriental, resulting in the total loss of the cargo.10 party, and the charterer is also the holder of the bill of lading,
MCCII filed a claim for the loss of the shipment with its insurer, "the bill of lading operates as the receipt for the goods, and as
respondent Philippine Home Assurance document of title passing the property of the goods, but not
Corporation.11 Respondent paid the claim in the amount as varying the contract between the charterer and the
of P211,500 and was subrogated to the rights of shipowner." The Bill of Lading becomes, therefore, only a
MCCII.12Thereafter, it filed a case in the RTC13 against receipt and not the contract of carriage in a charter of the
petitioner for reimbursement of the amount it paid MCCII. entire vessel, for the contract is the Charter Party, and is the
After trial, the RTC rendered judgment in favor of respondent. law between the parties who are bound by its terms and
It ordered petitioner to pay respondent P211,500 plus legal condition provided that these are not contrary to law, morals,
interest, attorney’s fees equivalent to 25% of the award and good customs, public order and public policy. 30
costs of suit. Finally, petitioner asserts that MCCII should be held liable for
On appeal, the CA affirmed the decision of the RTC. Hence, its own loss since the voyage charter stipulated that cargo
this petition. insurance was for the charterer’s account. 31 This deserves
Petitioner and MCCII entered into a "voyage charter," also scant consideration. This simply meant that the charterer
known as a contract of affreightment wherein the ship was would take care of having the goods insured. It could not
leased for a single voyage for the conveyance of goods, in exculpate the carrier from liability for the breach of its
consideration of the payment of freight.14 Under a voyage contract of carriage. The law, in fact, prohibits it and
charter, the shipowner retains the possession, command and condemns it as unjust and contrary to public policy. 32
navigation of the ship, the charterer or freighter merely To summarize, a contract of carriage of goods was shown to
having use of the space in the vessel in return for his payment exist; the cargo was loaded on board the vessel; loss or non-
of freight.15 An owner who retains possession of the ship delivery of the cargo was proven; and petitioner failed to
remains liable as carrier and must answer for loss or non- prove that it exercised extraordinary diligence to prevent such
delivery of the goods received for transportation. 16 loss or that it was due to some casualty or force majeure. The
Petitioner argues that the CA erred when it affirmed the RTC voyage charter here being a contract of affreightment, the
finding that the voyage charter it entered into with MCCII was carrier was answerable for the loss of the goods received for
a contract of carriage.17 It insists that the agreement was transportation.33
merely a contract of hire wherein MCCII hired the vessel from The idea proposed by petitioner is not only preposterous, it is
its owner, ALS Timber Enterprises (ALS).18 Not being the also dangerous. It says that a carrier that enters into a
owner of the M/T Espiritu Santo, petitioner did not have contract of carriage is not liable to the charterer or shipper if
control and supervision over the vessel, its master and it does not own the vessel it chooses to use. MCCII never dealt
crew.19 Thus, it could not be held liable for the loss of the with ALS and yet petitioner insists that MCCII should sue ALS
shipment caused by the sinking of a ship it did not own. for reimbursement for its loss. Certainly, to permit a common
We disagree. carrier to escape its responsibility for the goods it agreed to
Based on the agreement signed by the parties and the transport (by the expedient of alleging non-ownership of the
testimony of petitioner’s operations manager, it is clear that it vessel it employed) would radically derogate from the
was a contract of carriage petitioner signed with MCCII. It carrier's duty of extraordinary diligence. It would also open
actively negotiated and solicited MCCII’s account, offered its the door to collusion between the carrier and the supposed
services to ship the silica quartz and proposed to utilize the owner and to the possible shifting of liability from the carrier
M/T Espiritu Santo in lieu of the M/T Seebees or the M/T to one without any financial capability to answer for the
Shirley (as previously agreed upon in the voyage charter) resulting damages.34
since these vessels had broken down.20 WHEREFORE, the petition is hereby DENIED.
There is no dispute that petitioner was a common carrier. At Costs against petitioner.
the time of the loss of the cargo, it was engaged in the SO ORDERED.
business of carrying and transporting goods by water, for
compensation, and offered its services to the public. 21
From the nature of their business and for reasons of public THE HEIRS OF THE LATE PANFILO V. PAJARILLO,
policy, common carriers are bound to observe extraordinary Petitioners,
diligence over the goods they transport according to the v. THE HON. COURT OF APPEALS, NATIONAL LABOR
circumstances of each case.22 In the event of loss of the RELATIONS COMMISSION and SAMAHAN NG MGA
goods, common carriers are responsible, unless they can MANGGAGAWA NG PANFILO V. PAJARILLO, ALFREDO
prove that this was brought about by the causes specified in HOYOHOY, HERMINIO CASTILLO, BERNARDO ROCO,
Article 1734 of the Civil Code.23 In all other cases, common RODOLFO TORRES, JULIAN JORVINA, LOURDES ROCO,
carriers are presumed to be at fault or to have acted FLORITA YAPOC, MARLON ALDANA, PARALUMAN
negligently, unless they prove that they observed ULANG, TOLENTINO SANHI, JOHNNY SORIANO, ANDRES
extraordinary diligence.24 CALAQUE, ROBERTO LAVAREZ, FRANCISCO MORALES,
SALVACION PERINA, ANTONIO ABALA, ROMEO

40
 SALONGA, PARALUMAN ULANG, TOLENTINO SANHI, standard laws claiming non-payment of (1) ECOLA, (2)
JOHNNY SORIANO, ANDRES CALAQUE, ROBERTO 13thmonth pay, (3) overtime pay, (4) legal holiday pay, (5)
LAVAREZ, FRANCISCO MORALES, SALVACION PERINA, premium pay, and (6) service incentive leave. The party-
ANTONIO ABALA, ROMEO SALONGA, AUGUR M. respondents in this complaint were PVP LINER INC. and
MANIPOL, BIENVENIDA TEQUIL, MARIO ELEP, ALADINO PANFILO V. PAJARILLO, as its General
LATIGO, BERNARDINE BANSAL, PEDRO DE BAGUIO, Manager/Operator. This was docketed as NLRC Case No.
RICARDO CALICA, LAURA CO, VICENTE RECANA, ELENA 00-01-00331-88.[11]
TOLLEDO, ALFREDO PLAZA, SR., HERMINIO BALDONO,  
FELIPE YAPOC, ARISTON NIPA, and ALFONSO C. Notifications and summons with respect to NLRC/NCR
BALDOMAR, Case No. 00-08-03013-87 were addressed and sent
Respondents. to PANFILO V. PAJARILLO, President/Manager, Panfilo
G.R. No. 155056-57 October 19, 2007 V. Pajarillo Liner, Pasig Line St., Sta. Ana, Manila on 31
  August 1987. The Registry Return Receipt dated 4 September
D E C I S I O N  1987 was addressed to Panfilo V. Pajarillo, and a signature
CHICO-NAZARIO, J.: therein appears on top of the signature of the name of the
  addressee.[12] With regard to NLRC Case No. 00-01-00331-
  88, notifications and summonses were addressed and sent
In this Petition for Review on Certiorari under Rule 45 to THE PRESIDENT/MANAGER, PVP Liner Inc. and
of the Rules of Court, [1] petitioners, heirs of Panfilo V. Pajarillo, Panfilo V. Pajarillo, 2175 Zamora Street, Sta. Ana,
seek to set aside the Decision,[2] and Resolution,[3] dated 12 Manila on 25 January 1988. The Registry Return Receipt
March 2002 and 28 August 2002, respectively, of the Court of dated 4 February 1988 was addressed to PVP Liner Inc. and
Appeals in CA-G.R. SP No. 54330 and CA-G.R. SP No. 54331, was signed by a certain Irene G. Pajarillo as the addressees
reversing the two Per Curiam Orders dated 28 October 1996 agent.[13]
and 10 January 1997, [4] of the National Labor Relations  
Commission (NLRC) in NLRC NCR Cases No. 08-03013-87 and Panfilo denied the charges in the complaints. He
01-00331-88. maintained that private respondents were not dismissed from
  work on account of their union activities; that private
Stripped of the non-essentials, the facts are as respondents and several of their co-employees either
follows: resigned or were separated from work, or simply abandoned
  their employment long before the respondent union was
Panfilo V. Pajarillo (Panfilo) was the owner and organized and registered with the DOLE; that the private
operator of several buses plying certain routes in Metro respondents are not entitled to ECOLA and 13 th month pay
Manila. He used the name PVP Liner in his buses. Private because they received wages above the minimum provided
respondents were employed as drivers, conductors and by law; that the private respondents are not entitled to
conductresses by Panfilo. overtime and legal holiday pay because these are already
  included in their daily commissions; that the private
During their employment with Panfilo, private respondents are not entitled to five days incentive leave pay
respondents worked at least four times a week or for an because they work only four days a week; that no deductions
average of fifteen working days per month. They were were made in the daily commissions of the private
required to observe a work schedule starting from 4:00 in the respondents; that the private respondents voluntarily and
morning up to 10:00 in the evening on a straight time directly paid certain individuals for barangay protection and
basis. Private respondent drivers were paid a daily for the cleaning of the assigned buses; that he had no
commission of 10%, while private respondent conductors and participation in these activities/arrangements; that the private
conductresses received a daily commission of 7%. In sum, respondents were not dismissed from work; and that the
each of the private respondents earned an average daily private respondents either abandoned their jobs or voluntarily
commission of about P150.00 a day. They were not given resigned from work.[14]
emergency cost of living allowance (ECOLA), 13 th month pay,  
legal holiday pay and service incentive leave pay. [5] Upon motion of Panfilo, the complaints in NLRC/NCR
  Case No. 00-08-03013-87 and NLRC Case No. 00-01-
The following were deducted from the private 00331-88 were consolidated.[15] On 29 January 1991, Panfilo
respondents daily commissions: (a) costs of washing the died.[16]
assigned buses; (b) terminal fees; (c) fees for sweeping the  
assigned buses; (d) fees paid to the barangay tanod at bus After hearing and submission by both parties of their
terminals; and (e) rental fees for the use of stereo in the respective position papers and memoranda, Labor Arbiter
assigned buses. Any employee who refused such deductions Manuel P. Asuncion (Arbiter Asuncion) rendered a
were either barred from working or dismissed from work. [6] Decision[17] dated 28 December 1992, dismissing the
Thereafter, private respondents and several co- consolidated complaints for lack of merit. Thus:
employees formed a union called SAMAHAN NG MGA  
MANGGAGAWA NG PANFILO V. PAJARILLO (respondent IN THE LIGHT OF ALL THE
union). The Department of Labor and Employment (DOLE) FOREGOING CONSIDERATIONS, the
issued a Certificate of Registration in favor of the respondent complaint should be as it is hereby
union.[7] dismissed for lack of merit.
   
Upon learning of the formation of respondent union,  
Panfilo and his children ordered some of the private Respondent union appealed to the NLRC. On 18 June
respondents to sign a document affirming their trust and 1996, the NLRC reversed the decision of Arbiter Asuncion and
confidence in Panfilo and denying any irregularities on his ordered the reinstatement of, and payment of
part. Other private respondents were directed to sign a blank backwages, ECOLA, 13th month pay, legal holiday pay and
document which turned out to be a resignation letter. Private service incentive leave pay to, private respondents. [18] The
respondents refused to sign the said documents, hence, they dispositive portion of the NLRC decision reads:
were barred from working or were dismissed without hearing  
and notice. Panfilo and his children and relatives also formed Wherefore, the appealed decision
a company union where they acted as its directors and is hereby set aside. Accordingly, judgment is
officers.[8] hereby rendered directing:
   
On 25 August 1987, respondent union and several
employees filed a Complaint for unfair labor practice and (1) The respondent, PVP Liner, Inc. to reinstate to their former
illegal deduction before the Labor Arbiter with Panfilo V.
positions, without loss of seniority rights and other benefits,
Pajarillo Liner as party-respondent. This was docketed
the following complainants: Alfredo [Hoyohoy], Bernardo
as NLRC/NCR Case No. 00-08-03013-87.[9] On 28 September
1987, the respondent union filed an Amended Complaint Roco, Rodolfo Torres, Julian Jorvina, Florita Yapoc, Marlon
alleging this time not only unfair labor practice and illegal Aldana, Paraluman Ulang, Tolentino Sanhi, Johnny Soriano,
deduction but also illegal dismissal.[10] Andres Calaque, Roberto Lavarez, Francisco Morales,
  Salvacion Perina, Antonio Abala, Alfonso Baldomar, Jr., Romeo
On 20 January 1988, respondent union and several Salonga, Augur Manipol, Bienvenida Tequil, Mario Elep,
employees filed another Complaint for violation of labor Aladino Latigo, Bernardine Bansal, Pedro de Baguio, Ricardo

41
Calica, Laura Co, Vicente Recana, Elena Tolledo, Alfredo Plaza, THE HONORABLE COURT OF APPEALS
Sr., Herminio Baldono, Felioe Yapoc, Ariston Nipa and SERIOUSLY ERRED IN ARRIVING AT THE
Herminia Castillo and to pay them their backwages CONCLUSION THAT PVP LINER INC. WAS
corresponding to a period of three (3) years without PROPERLY MISPLEADED, WHICH IS A NON-
qualifications and deductions; EXISTING CORPORATION.
 
(2) The same respondent PVP Liner, Inc. to pay amounts to be II.
computed in a hearing called for said purpose by the  
Arbitration Branch of Origin, the aforesaid complainants their THE HONORABLE COURT OF APPEALS
SERIOUSLY ERRED IN NOT CONSIDERING
claims for emergency cost of living allowance (ECOLA),
THAT THERE WAS NO PROPER AND
13th month pay, legal holiday pay and service incentive leave
EFFECTIVE SERVICE OF SUMMONS.
benefits subject to the three-year prescriptive period provided  
under Article 291 of the Labor Code, as amended; III.
 
(3) The dismissal of the claims on alleged illegal deductions of THE HONORABLE COURT OF APPEALS
the respondents for lack of merits; and SERIOUSLY ERRED IN PIERCING THE VEIL OF
CORPORATE ENTITY OF PVP PAJARILLO
(4) The dismissal of the case of Lourdes Roco due to LINER INC.
prescription.  
IV.
All other claims of the complainants and the respondents are  
likewise DISMISSED, for being without merit.  THE HONORABLE COURT OF APPEALS
SERIOUSLY ERRED IN REINSTATING THE
The Arbitration Branch of Origin is hereby directed to enforce ORDER OF THE NLRC DATED JUNE 18, 1996,
this decision. WHICH DECLARED THAT PRIVATE
RESPONDENTS WERE ILLEGALLY DISMISSED.
  [24]

Panfilos counsel filed a motion for reconsideration which was  

partially granted by the NLRC in its Order dated 28 October  
1996, to wit: Anent the first issue, petitioners alleged that the
Decision dated 18 June 1996 of the NLRC, ordered PVP Liner
Dictated, however, by the imperatives of due process, we find Inc. to reinstate private respondents and pay their
it more judicious to just remand this case for further hearing backwages, ECOLA, 13th month pay, legal holiday pay and
on key questions of: service incentive leave pay; that there was no such entity
as PVP Liner Inc. organized and existing in the
1) whether or not PVP Liner Inc. was properly impleaded as Philippines;that it was not possible for Arbiter Asuncion and
party respondent in the consolidated cases below; the NLRC to acquire jurisdiction over a non-existing company;
that there can never be a service of summons or notice to a
2) whether or not summons was properly served on said non-existent entity; that the true employer of private
corporation below; and respondents was Panfilo as the sole proprietor/operator of
passenger buses doing business under the tradename, PVP
 3) whether or not the subject cases can be considered as Liner, and not PVP Liner Inc. which was non-existent; that
principally money claims which have to be litigated in Panfilo never used PVP Liner Inc. as his tradename; that the
intestate/testate proceedings involving the estate of the late present operator of PVP Liner buses is P.V. PAJARILLO
Panfilo V. Pajarillo. LINER, a corporation duly registered with the Securities and
Exchange Commission; that at the time the instant case was
WHEREFORE, our decision dated June 18, 1996 is hereby set filed before Arbiter Asuncion in 1987, the latter did not have
aside. Let this case be remanded to the NCR Arbitration jurisdiction over P.V. PAJARILLO LINER because it was
Branch for further hearing on the questions above-mentioned. organized and duly registered only on 22 January 1990;
[19] that P.V. PAJARILLO LINER has a separate and distinct
personality from Panfilo as the sole operator of PVP Liner
  buses; that, therefore, P.V. PAJARILLO LINER cannot be
  made a party or impleaded in the present case; that the
Respondent union filed a motion for reconsideration amended complaint in NLRC/NCR Case No. 00-08-03013-
of the above-stated Order, but this was denied by the NLRC in 87 impleaded as party-respondent PANFILO V. PAJARILLO
its Order dated 10 January 1997.[20] Thus, respondent union LINER and PANFILO V. PAJARILLO, as operator and
filed a Petition for Certiorari under Rule 65 before this Court. responsible officer; that PVP Liner Inc. was not impleaded
Pursuant, however, to our ruling in St. Martin Funeral Home in the instant case; and that no summons was ever served
v. National Labor Relations Commission,[21]we remanded the on PVP Liner Inc. in NLRC/NCR Case No. 00-08-03013-87.
[25]
petition to the Court of Appeals for proper disposition.
   
On 12 March 2002, the Court of Appeals rendered a The contentions are bereft of merit.
Decision granting the respondent unions petition and  
nullifying the Orders dated 28 October 1996 and 10 January In the Complaint dated 20 January 1988, PVP Liner
1997 of the NLRC. It also reinstated the Decision dated 18 Inc. and Panfilo were impleaded as party-respondents, thus:
June 1986 of the NLRC.[22] The appellate court decreed:  
  That respondent PVP Liner, Inc., is a
WHEREFORE, premises considered, private business entity, engaged in
the PETITION FOR CERTIORARI is hereby transportation of passengers, duly
GRANTED. Accordingly, the Order organized and existing pursuant to law and
dated October 28 1996 and January 10, for this purpose maintains its principal office
1997 of the NLRC are hereby NULLIFIED and at 2175, Zamora Street, Sta. Ana,
its Decision dated 18 June 1986 be Manila; while individual respondent
REINSTATED. [Panfilo] is the General
  Manager/Operator and may be served
  with summons, notices and other
Panfilos counsel filed a motion for reconsideration of processes at the aforementioned
the said decision but this was denied by the appellate court in principal office.[26]
its Resolution dated 28 August 2002.[23]  
   
Herein petitioners, as heirs of Panfilo, filed the Panfilo did not question in his position paper or in his
instant petition before this Court assigning the following motion for consolidation of the complaints the foregoing
errors: allegations. Neither did he assail the inclusion of PVP Liner
  Inc. as party-respondent in respondent unions position paper
I. dated 6 June 1988.

42
   Panfilo as the sole operator of PVP Liner buses; and that at the
In Panfilos position paper as well as in the records of time P.V. Pajarillo Liner Inc. was established, it had no
the proceedings before Arbiter Asuncion, there is nothing that liability or obligation which it tried to shield or circumvent. [34]
shows that Panfilo challenged the jurisdiction of Arbiter  
Asuncion over PVP Liner Inc. When Arbiter Asuncion decided It is a fundamental principle of corporation law that a
in favor of Panfilo, the latter said nothing about the inclusion corporation is an entity separate and distinct from its
of PVP Liner Inc. as party respondent and the lack of stockholders and from other corporations to which it may be
jurisdiction of Arbiter Asuncion over the same. It was only connected. However, this separate and distinct personality of
when the NLRC rendered a Decision adverse to Panfilo that a corporation is merely a fiction created by law for
the latter alleged the non-existence of PVP Liner Inc. and convenience and to promote justice. Hence, when the notion
the fact that Arbiter Asuncion and the NLRC had no of separate juridical personality is used to defeat public
jurisdiction over it. convenience, justify wrong, protect fraud or defend crime, or
  is used as a device to defeat labor laws, this separate
Petitioners are now precluded from questioning the personality of the corporation may be disregarded or the veil
inclusion of PVP Liner Inc. as party-respondent as well as the of the corporate fiction pierced. This is true likewise when the
jurisdiction of Arbiter Asuncion and the NLRC over them under corporation is merely an adjunct, a business conduit or an
the principle of estoppel. It is settled that the active alter ego of another corporation. The corporate mask may be
participation of a party against whom the action was brought, lifted and the corporate veil may be pierced when a
coupled with his failure to object to the jurisdiction of the corporation is but the alter ego of a person or another
court or quasi-judicial body where the action is pending, is corporation.[35]
tantamount to an invocation of that jurisdiction and a  
willingness to abide by the resolution of the case and will bar It is apparent that Panfilo started his transportation
said party from later on impugning the court or bodys business as the sole owner and operator of passenger buses
jurisdiction.[27] This Court has time and again frowned upon utilizing the name PVP Liner for his buses. After being
the undesirable practice of a party submitting his case for charged by respondent union of unfair labor practice, illegal
decision and then accepting the judgment only if favorable, deductions, illegal dismissal and violation of labor standard
and attacking it for lack of jurisdiction when adverse.[28] laws, Panfilo transformed his transportation business into a
  family corporation, namely, P.V. Pajarillo Liner Inc. He and
It is apparent that Panfilo V. Pajarillo petitioners were the incorporators, stockholders and officers
Liner and PVP Liner Inc. are one and the same entity therein. P.V. Pajarillo Inc. and the sole proprietorship of
belonging to one and the same person, Panfilo. When PVP Panfilo have the same business address. P.V. Pajarillo
Liner Inc. and Panfilo V. Pajarillo Liner were impleaded as Inc. also uses the name PVP Liner in its buses. Further, the
party-respondents, it was Panfilo, through counsel, who license to operate or franchise of the sole proprietorship was
answered the complaints and filed the position papers, merely transferred to P.V. Pajarillo Liner Inc. The testimony
motions for reconsideration and appeals. It was also Panfilo, of Abel during the hearing before Arbiter Asuncion is
through counsel, who participated in the hearings and revealing, thus:
proceedings. In fact, Abel Pajarillo (Abel), son of Panfilo,  
testified before Arbiter Asuncion that he was the operations Q: Mr. Pajarillo, when did you start assuming
manager of PVP Liner Inc.[29] Further, both Panfilo the functions of operations
and PVP Liner Inc. were charged jointly and severally in the manager of PVP Liner?
aforesaid complaints. A: Seven years from now, sometime in the
  year 1984 or 1985, sir.
Apropos the second issue, petitioners alleged that  
the notices and summons were received by a certain Irene G. Q: Do you have any written appointment as
Pajarillo (Irene) for and in behalf of the PVP Liner Inc.; that Operations Manager?
Irene was neither and could not have been the A: No, sir.
President/Manager of PVP Liner Inc., the latter being non-  
existent; and that Irene was not an officer of P.V. Pajarillo Q: I noticed that your surname is Pajarillo
Liner.[30] you are one way or another related
  to Mr. Panfilo V. Pajarillo, is that
Sections 4 and 5 of Rule IV of the Revised Rules of correct?
Procedure of the NLRC provides the rule for the service of  
summonses and notices in NLRC cases, viz: Witness:
   
Sec. 4. Service of notices and A: I am the son of Panfilo Pajarillo, sir.
resolutions. a) Notices or summons and  
copies of orders, resolutions or decisions Q: In so far as PVP Liner is concerned and
shall be served personally by the bailiff or being the operations manager, are
the duly authorized public officer or by you aware if it is a single proprietor
registered mail on the parties to the case or a corporation?
within five (5) days from receipt thereof by A: At the start it was a single
the serving officer. proprietorship, lately, it has
  become a family corporation.
Sec. 5. Proof and completeness of  
service. The return is prima facie proof of Atty. Flores, Jr. (to witness)
the facts indicated therein. Service by  
registered mail is complete upon receipt by Q: When you became the Operations
the addressee or his agent.[31] Manager of PVP Liner, is it a single
  proprietor or a family Corporation?
  A: It was a single proprietorship.
Records show that Irene received the summons for  
NLRC Case No. 00-01-00331-88 on 4 February 1988 in Q: Mr. Witness, since PVP Liner is a
behalf of PVP Liner Inc. These summonses were addressed transportation business it has a
and sent to THE PRESIDENT/MANAGER, PVP Liner Inc. license to operate these buses?
and Panfilo V. Pajarillo, 2175 Zamora Street, Sta. Ana, A: Yes, there is, sir.
Manila on 25 January 1988. The Registry Return Receipt  
dated 4 February 1988 was addressed to PVP Liner Inc. and Atty. Flores, Jr. (to witness)
was signed by Irene as the addressees agent. [32] Abel, one of  
the heirs of Panfilo and the Operations Manager of PVP Liner Q: In whose name was it registered?
Inc., testified during the hearing before Arbiter Asuncion that A: Before it was with my father Panfilo
Irene was one of the secretaries of PVP Liner Inc. [33] Hence, V. Pajarillo, sir.
there was a valid service of summons.  
  Q: Do I understand that the licensing of
Regarding the third issue, petitioners posited this transportation company
that P.V. Pajarillo Liner Inc. is an independent corporation was transferred to another
and cannot be considered as an adjunct or extension of person?

43
 A: It was never transferred to another not forced or tricked by their lawyer in accepting the same;
person, except now, that it has and that they already received the amount of consideration.[42]
been transferred to a  
corporation.[36] Further, the considerations received by the private
  respondents were credible and reasonable because they were
  not grossly disproportionate to the computation by the NLRC
It is clear from the foregoing that P.V. Pajarillo of the amount of backwages and other money claims. [43]
Liner Inc. was a mere continuation and successor of the sole  
proprietorship of Panfilo. It is also quite obvious that Panfilo Given these circumstances, the quitclaims should be
transformed his sole proprietorship into a family corporation considered as binding on the private respondents who
in a surreptitious attempt to evade the charges of respondent executed them. It is settled that a legitimate waiver which
union. Given these considerations, Panfilo and P.V. represents a voluntary and reasonable settlement of a
Pajarillo Liner Inc. should be treated as one and the same workers claim should be respected as the law between the
person for purposes of liability. [37] parties.[44] Accordingly, the private respondents who made
  such quitclaims are already precluded from claiming
Finally, petitioners averred that no unfair labor reinstatement, backwages, ECOLA, 13TH month pay, legal
practice was committed, and that private respondents were holiday pay, service incentive leave pay, and other monetary
not illegally dismissed from work. claims.
   
In its Decision dated 18 June 1996, the NLRC made With regard to the other private respondents who did
an exhaustive discussion of the allegations and evidence of not execute such quitclaims, they are entitled to
both parties as regards unfair labor practice and illegal reinstatement, backwages, ECOLA, 13TH month pay, legal
dismissal. It concluded that private respondents, officers and holiday pay and service incentive leave pay in accordance
members of respondent union were dismissed by reason of with the computation of the NLRC.
their union activities and that there was no compliance with  
substantial and procedural due process in terminating their WHEREFORE, the petition is hereby DENIED. The
services. It also held that the private respondents who were Decision and Resolution dated 12 March 2002 and 28 August
not members of the respondent union were also dismissed 2002, respectively, of the Court of Appeals in CA-G.R. SP No.
without just or valid cause, and that they were denied due 54330 and CA-G.R. SP No. 54331, are hereby AFFIRMED with
process. These factual findings and conclusions were the following MODIFICATIONS: (1) Private
supported by substantial evidence comprised of affidavits, respondents Augur Manipol, Rodolfo M. Torres, Ricardo
sworn statements, testimonies of witnesses during hearings Calica, Paraluman Ulang, Edith Chua, Alfredo Hoyohoy, Johnny
before Arbiter Asuncion, and other documentary Soriano, Bernardo Roco, Tolentino Sanhi, Salvacion Perina,
evidence. These findings were sustained by the Court of Pedro L. de Baguio, Ariston Nipa, Felipe Yapoc, Laura Co,
Appeals. Bienvenida Tequil, Roberto Lavarez, Francisco Morales and
  Herminio Castillo are hereby precluded from
The rule is that findings of fact of quasi-judicial claiming reinstatement, backwages, ECOLA, 13THmonth pay,
agencies like the NLRC are accorded by this Court not only legal holiday pay and service incentive leave pay by reason of
respect but even finality if they are supported by substantial their respective quitclaims; (2) Petitioners are hereby
evidence, or that amount of relevant evidence which a ordered to reinstate private respondentsJulian Jorvina,
reasonable mind might accept as adequate to justify a Florita Yapoc, Marlon Aldana, Andres Calaque, Antonio Abala,
conclusion.[38] We find no compelling reason to deviate from Alfonso Baldomar, Romeo Salonga, Mario Elep, Aladino Latigo,
such findings of the NLRC as affirmed by the Court of Appeals. Bernardine Bansal, Vicente Recana, Elena Tolledo and Alfredo
  Plaza, Sr., and to pay these respondents backwages from the
Consequently, the private respondents are entitled to time of their dismissal up to the finality of this Decision.
reinstatement, backwages and other privileges and benefits Petitioners are also ordered to pay the foregoing private
under Article 279 of the Labor Code. Separation pay may be respondents ECOLA, 13TH month pay, legal holiday pay and
given in lieu of reinstatement if the employee concerned service incentive leave pay in accordance with the
occupies a position of trust and confidence. In the case at bar, computation of the NLRC. Costs against petitioners.
however, the private respondents, as former bus drivers,  
conductors and conductresses of petitioners, do not hold the SO ORDERED.
position of trust and confidence.[39]
  PHILIPPINE NATIONAL RAILWAYS and VIRGILIO J.
Nonetheless, it appears from the records that some BORJA,
of the private respondents, namely, Augur Manipol, Rodolfo Petitioners, - versus -COURT OF APPEALS (Second
Torres, Ricardo Calica, Paraluman Ulang, Edith Chua, Alfredo Division), CORAZON C. AMORES, MA. EMILIE A. MOJICA,
Hoyohoy, Johnny Soriano, Bernardo Roco, Tolentino Sanhi, CECILE C. SISON, DINO C. AMORES, LARISA C. AMORES,
Salvacion Perina, Pedro L. de Baguio, Ariston Nipa, Felipe ARMAND JINO C. AMORES and JOHN C. AMORES,
Yapoc, Laura Co, Bienvenida Tequil, Roberto Lavarez, Respondents.
Francisco Morales and Herminio Castillo, had executed a G.R. No. 157658 October 15, 2007
Quitclaim/Release discharging petitioners from any and all DECISION
claims by way of unpaid wages, separation pay, overtime pay, NACHURA, J.:
differential pay, ECOLA, 13th month pay, holiday pay, service Before the Court is a petition for review
incentive leave pay or otherwise.[40] on certiorari under Rule 45 of the 1997 Rules of Civil
  Procedure, as amended, seeking to annul and set aside the
Generally, deeds of release, waivers, or quitclaims Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No.
cannot bar employees from demanding benefits to which they 54906 which reversed the Decision[2] of the Regional Trial
are legally entitled or from contesting the legality of their Court (RTC) of Manila, Branch 28, in Civil Case No. 92-61987.
dismissal, since quitclaims are looked upon with disfavor and  
are frowned upon as contrary to public policy. Where, The factual antecedents are as follows:
however, the person making the waiver has done so  
voluntarily, with a full understanding thereof, and the In the early afternoon of April 27, 1992, Jose Amores (Amores)
consideration for the quitclaim is credible and reasonable, the was traversing the railroad tracks in Kahilum II Street,
transaction must be recognized as being a valid and binding Pandacan, Manila. Before crossing the railroad track, he
undertaking.[41] stopped for a while then proceeded accordingly.
  [3]
 Unfortunately, just as Amores was at the intersection, a
There is no showing that the executions of these Philippine National Railways (PNR) train with locomotive
quitclaims were tainted with deceit or coercion. On the number T-517 turned up and collided with the car.[4]
contrary, each of the private respondents Sinumpaang At the time of the mishap, there was neither a signal
Salaysay,which accompanied the quitclaims, evinces nor a crossing bar at the intersection to warn motorists of an
voluntariness and full understanding of the execution and approaching train. Aside from the railroad track, the only
consequence of the quitclaim. In their said Sinumpaang visible warning sign at that time was the defective standard
Salaysay, the private respondents stated that their lawyer had signboard STOP, LOOK and LISTEN wherein the sign Listen
extensively explained to them the computation and the actual was lacking while that of Look was bent. [5] No whistle blow
amount of consideration they would receive; that they were from the train was likewise heard before it finally bumped the
car of Amores.[6] After impact, the car was dragged about ten

44
(10) meters beyond the center of the crossing. [7] Amores died negligence on the failure of PNR to install a semaphore or at
as a consequence thereof. the very least, to post a flagman, considering that the
  crossing is located in a thickly populated area. Moreover, the
On July 22, 1992, the heirs of Amores, consisting of his signboard Stop, Look and Listen was found insufficient
surviving wife and six children, herein respondents, filed a because of its defective condition as described above. Lastly,
Complaint for Damages[8] against petitioners PNR and Virgilio no negligence could be attributed to Amores as he exercised
J. Borja (Borja), PNRs locomotive driver at the time of the reasonable diligence in crossing the railroad track.
incident, before the RTC of Manila. The case was raffled to  
Branch 28 and was docketed as Civil Case No. 92-61987. In Aggrieved by this reversal, the petitioners filed the
their complaint, respondents averred that the trains present petition for review on certiorari, raising the following
speedometer was defective, and that the petitioners grounds:
negligence was the proximate cause of the mishap for their  
failure to take precautions to prevent injury to persons and I
property despite the dense population in the vicinity. They  
then prayed for actual and moral damages, as well as THE COURT OF APPEALS COMMITTED GRAVE
attorneys fees.[9] ABUSE OF DISCRETION IN RENDERING ITS
  DECISION REVERSING THE DECISION OF THE
In their Answer,[10] the petitioners denied the allegations, REGIONAL TRIAL COURT OF MANILA
stating that the train was railroad-worthy and without any BRANCH 28, IN NOT TAKING INTO
defect. According to them, the proximate cause of the death CONSIDERATION THE PROVISION OF
of Amores was his own carelessness and negligence, and SECTION 42, R.A. 4136 OF THE LAND
Amores wantonly disregarded traffic rules and regulations in TRANSPORTATION AND TRAFFIC CODE.
crossing the railroad tracks and trying to beat the  
approaching train. They admitted that there was no crossing II
bar at the site of the accident because it was merely  
a barangay road.[11] PNR stressed that it exercised the THE DECISION OF THE COURT OF APPEALS
diligence of a good father of a family in the selection and IS CONTRARY TO THE EVIDENCE ON
supervision of the locomotive driver and train engineer, Borja, RECORD ADDUCED IN THE TRIAL ON THE
and that the latter likewise used extraordinary diligence and MERIT IN CIVIL CASE NO. 92-61987.[14]
caution to avoid the accident. Petitioners further asserted that  
respondents had the last clear chance to avoid the accident  
but recklessly failed to do so. The petitioners insist that Amores must have heard the trains
  whistle and heeded the warning but, noting that the train was
After trial on the merits, on August 22, 1996, the RTC still a distance away and moving slowly, he must have
rendered judgment in favor of the petitioners, the dispositive calculated that he could beat it to the other side of the track
portion of which reads: before the train would arrive at the intersection. The
  petitioners likewise add that the train was railroad-worthy and
WHEREFORE, judgment is hereby rendered that its defective speedometer did not affect the trains
dismissing the complaint of the plaintiffs operation. Lastly, they insist that evidence showed sufficient
and the defendants counterclaim. warning signs strategically installed at the crossing to alert
  both motorists and pedestrians.
The costs shall be halved and paid equally  
by the parties. Respondents, on the other hand, argue that the cause of the
  accident was petitioners carelessness, imprudence and laxity
The counsel for the defendants is hereby in failing to provide a crossing bar and keeper at the Kahilum
ordered to inform this court who is the legal II railway intersection. Considering that Kahilum II Street is in
representative of the deceased defendant, the middle of a thickly populated squatters area, and many
Virgilio Borja, within ten (10) days from pedestrians cross the railroad track, notwithstanding the fact
receipt of a copy of this decision. that it is a public street and a main thoroughfare utilized in
  going to Herran Street, the presence of adequate warning
SO ORDERED.[12] signals would have prevented the untimely death of Amores.
  Another crucial point raised by the respondents is the manner
  in which Borja applied the brakes of the train only when the
The RTC rationalized that the proximate cause of the collision locomotive was already very near Amores car, as admitted by
was Amores fatal misjudgment and the reckless course of witness Querimit. Finally, respondents claim that Borjas
action he took in crossing the railroad track even after seeing failure to blow the locomotives horn, pursuant to the usual
or hearing the oncoming train. practice of doing the same 100 meters before reaching the
  Kahilum II crossing point is an earmark of recklessness on the
On appeal, the CA reversed the RTC decision, as follows: part of the petitioners.
   
WHEREFORE, the assailed Decision of the The petition must fail.
Regional Trial Court of Manila, Branch 28 is  
hereby REVERSED. The defendants PNR The only issue to be resolved in the present case is
and the estate of Virgilio J. Borja are jointly whether the appellate court was correct in ascribing
and severally liable to pay plaintiffs the negligence on the part of the petitioners. It was ascertained
following: beyond quandary that the proximate cause of the collision is
  the negligence and imprudence of the petitioner PNR and its
1)                  The amount of P122,300.00 for locomotive driver, Borja, in operating the passenger train.
the cost of damage to the car; and,  
  As the action is predicated on negligence, the
2)                  The amount of P50,000 as relevant provision is Article 2176 of the New Civil Code, which
moral damages. states that:
   
For lack of official receipts for Whoever by act or omission causes damage
funeral expenses and specimen of the last to another, there being fault or negligence,
pay slip of the deceased, the claim for is obliged to pay for the damage done. Such
reimbursement of funeral expenses and fault or negligence, if there was no pre-
claim for payment of support is existing contractual relation between the
hereby DENIED for lack of basis. Costs parties, is called quasi-delict and is
against Defendants. governed by the provisions of this chapter.
   
SO ORDERED.[13]  
  We have thoroughly reviewed the records of the case
  and we find no cogent reason to reverse the appellate courts
In reversing the trial courts decision, the appellate court found decision. Negligence has been defined as the failure to
the petitioners negligent. The court based the petitioners observe for the protection of the interests of another person

45
that degree of care, precaution, and vigilance which the control of Amores for no person would sacrifice his precious
circumstances justly demand, whereby such other person life if he had the slightest opportunity to evade the
suffers injury.[15] Using the aforementioned philosophy, it may catastrophe. Besides, the authority in this jurisdiction is that
be reliably concluded that there is no hard and fast rule the failure of a railroad company to install a semaphore or at
whereby such degree of care and vigilance is calibrated; it is the very least, to post a flagman or watchman to warn the
dependent upon the circumstances in which a person finds public of the passing train amounts to negligence. [19]
himself. All that the law requires is that it is perpetually  
compelling upon a person to use that care and diligence In view of the foregoing, We will now discuss the
expected of sensible men under comparable circumstances.[16] liability of petitioner PNR. Article 2180[20] of the New Civil Code
  discusses the liability of the employer once negligence or fault
We hold that the petitioners were negligent when the on the part of the employee has been established. The
collision took place. The transcript of stenographic notes employer is actually liable on the assumption of juris
reveals that the train was running at a fast speed because tantum that the employer failed to exercise diligentissimi
notwithstanding the application of the ordinary and patris families in
emergency brakes, the train still dragged the car some
distance away from the point of impact. Evidence likewise
unveils the inadequate precautions taken by petitioner PNR to
the selection and supervision of its employees. The liability is
forewarn the public of the impending danger. Aside from not
primary and can only be negated by showing due diligence in
having any crossing bar, no flagman or guard to man the
the selection and supervision of the employee, a factual
intersection at all times was posted on the day of the incident.
matter that has not been demonstrated. [21] Even the existence
A reliable signaling device in good condition, not just a
of hiring procedures and supervisory employees cannot be
dilapidated Stop, Look and Listen signage because of many
incidentally invoked to overturn the presumption of
years of neglect, is needed to give notice to the public. It is
negligence on the part of the employer.[22]
the responsibility of the railroad company to use reasonable
 
care to keep the signal devices in working order. Failure to do
WHEREFORE, the petition is DENIED. The Decision
so would be an indication of negligence.
of the Court of Appeals dated March 31, 2003 in CA-G.R. CV
 
No. 54906 is hereby AFFIRMED.
As held in the case of Philippine National Railway v.
 
Brunty,[17] it may broadly be stated that railroad companies
SO ORDERED.
owe to the public a duty of exercising a reasonable degree of
care to avoid injury to persons and property at railroad
crossings, which duties pertain both to the operation of trains
and to the maintenance of the crossings. Moreover, every
corporation constructing or operating a railway shall make
and construct at all points where such railway crosses any
public road, good, sufficient, and safe crossings, and erect at
such points, at sufficient elevation from such road as to admit
a free passage of vehicles of every kind, a sign with large and
distinct letters placed thereon, to give notice of the proximity
of the railway, and warn persons of the necessity of looking
out for trains.[18] The failure of the PNR to put a cross bar, or
signal light, flagman or switchman, or semaphore is evidence
of negligence and disregard of the safety of the public, even if
there is no law or ordinance requiring it, because public safety
demands that said device or equipment be installed.
 
The petitioners insist that a train has a right-of-way
in a railroad crossing under the existing laws. They derive
their theory from Section 42 (d), Article III of R.A. 4136,
otherwise known as the Land Transportation and Traffic Code,
which states that:
 
The driver of a vehicle upon a
highway shall bring to a full stop such
vehicle before traversing any through
highway or railroad crossing: Provided, That
when it is apparent that no hazard exists,
the vehicle may be slowed down to five
miles per hour instead of bringing it to a full
stop.
 
 
They claim that motorists are enjoined by law to stop, look
and listen before crossing railroad tracks and that a heavier
responsibility rests upon the motorists in avoiding accidents
at level crossings.
 
It is true that one driving an automobile must use his
faculties of seeing and hearing when nearing a railroad
crossing. However, the obligation to bring to a full stop
vehicles moving in public highways before traversing any
through street only accrues from the time the said through
street or crossing is so designated and sign-posted. From the
records of the case, it can be inferred that Amores exercised
all the necessary precautions required of him as to avoid
injury to himself and to others. The witnesses testimonies
showed that Amores slackened his speed, made a full stop,
and then proceeded to cross the tracks when he saw that
there was no impending danger to his life. Under these
circumstances, we are convinced that Amores did everything,
with absolute care and caution, to avoid the collision.
 
It is settled that every person or motorist crossing a
railroad track should use ordinary prudence and alertness to
determine the proximity of a train before attempting to cross.
We are persuaded that the circumstances were beyond the

46