Trans-Asia Shipping vs. Court of Appeals | (1996)
(Keyword/s: Engine failure of ship)
FACTS
- Atty. Arroyo boarded the ship of petitioner Trans-asia (Cebu-CDO)
- Due to engine failure, the ship stopped in the middle of the sea just after
an hour of slow voyage.
- Some passengers (including Atty. Arroyo) demanded to be returned to
Cebu City. The captain acceded and they were returned to the Cebu port
and were allowed to disembark. Atty. Arroyo stayed another night in Cebu
and boarded another ship of Trans-asia the following day.
- Arroyo filed a complaint for damages arising from bad faith, breach of
contract and from tort.
- RTC: DISMISSED.
- CA: Reversed; awarded compensatory, moral, and exemplary damages. It
did not, however, allow the grant of damages for the delay in the
performance of the petitioners obligation (as there was no demand made).
ISSUE/S & HELD:
WoN Trans-asia is liable to Atty. Arroyo. YES (except for ACTUAL
DAMAGES.
RATIONALE
- Undoubtedly, there was, between the parties, a contract of common
carriage. The laws of primary application then are the provisions on
common carriers under Section 4, Chapter 3, Title VIII, Book IV of the Civil
Code, while for all other matters not regulated thereby, the Code of
Commerce and special laws.
- In this case, we are in full accord with the Court of Appeals that the
petitioner failed to discharge the obligation of a common carrier as the law
provides.
- Trans-asia allowed the vessel to leave the port of origin on only one
functioning engine, instead of two. Moreover, even the lone functioning
engine was not in perfect condition. Plainly, the vessel was unseaworthy
even before the voyage began. The failure of a common carrier to maintain
in seaworthy condition its vessel involved in a contract of carriage is a
clear breach of its duty.
As to Damages:
- In a breach of a contract of common carriage, moral damages may be
awarded if the common carrier, acted fraudulently or in bad faith.
- Exemplary damages are imposed by way of example or correction for
the public good, in addition to moral, temperate, liquidated or
compensatory damages. In contracts and quasi-contracts, exemplary
damages may be awarded if the defendant acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.
- - Actual or compensatory damages represent the adequate
compensation for pecuniary loss suffered and for profits the obligee failed
to obtain. In contracts or quasi-contracts, the obligor is liable for all the
damages which may be reasonably attributed to the non-performance of
the obligation if he is guilty of fraud, bad faith, malice, or wanton attitude.
(Trans-asia not liable for actual damages)
- There was in fact no delay in the commencement of the contracted voyage. If
any delay was incurred, it was after the commencement of such voyage. As to
the rights and duties of the parties strictly arising out of such delay, the Civil
Code is silent. Article 698 1 of the Code of Commerce specifically provides for
such a situation.
- This article applies suppletorily pursuant to Article 1766 of the Civil Code.
Since the cause of the delay was the petitioner's failure to observe
extraordinary diligence, Article 698 must then be read together with the Civil
Code provisions: So read, it means that the petitioner is liable for any pecuniary
loss or loss of profits which the private respondent may have suffered by reason
thereof.
- Any further delay then in the private respondent's arrival at the port of
destination was caused by his decision to disembark. Actual or compensatory
damages must be proved. There is no convincing evidence that he did not
receive his salary for that day nor that his absence was not excused.
Pilapil V. CA | Padilla, J. (1989)
RATIO DECIDENDI
While the law requires the highest degree of diligence from common
carriers in the safe transport of their passengers and creates a
presumption of negligence against them, it does not make the carrier
an insurer of the absolute safety of its passengers.
FACTS
Jose Pilapil, a paying passenger, boarded Alatco Transportation
Companys bus No. 409 at San Iriga City.
Upon reaching Camarines Sur, on the way to Naga City, an unidentified
man, a bystander along said national highway, hurled a stone at the left
side of the bus, which hit Pilapil above his left eye.
The bus companys personnel lost no time in bringing the petitioner to
the provincial hospital in Naga City where he was confined and treated.
o Considering that the sight of his left eye was impaired, Pilapil
was taken to Dr. Malabanan of Iriga City where he was treated
for another week.
o Since there was no improvement in his left eye's vision, Pilapil
went to V. Luna Hospital, Quezon City where he was treated by
Dr. Capulong.
o Despite the treatment accorded to him by Dr. Capulong, Pilapil
1
In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the
fare in proportion to the distance covered, without right to recover for losses and damages if the
interruption is due to fortuitous event or force majeure, but with a right to indemnity if the interruption
should have been caused by the captain exclusively. If the interruption should be caused by the
disability of the vessel and a passenger should agree to await the repairs, he may not be required to
pay any increased price of passage, but his living expenses during the stay shall be for his own
account.
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 lost partially his left eye's vision and sustained a
permanent scar above the left eye.
Pilapil then sued the bus company for damages sustained as a
result of the stone-throwing incident.
ISSUE/HELD
WoN Alatco Bus Company is liable for damages sustained as a
result of the stone-throwing incident - NO
RATIO
A common carrier does not give its consent to become an
insurer of any and all risks to passengers and goods.
o It merely undertakes to perform certain duties to the public
as the law imposes, and holds itself liable for any breach
thereof.
Under Article 1733, common carriers are required to observe
extraordinary diligence for the safety of the passenger
transported by them, according to all the circumstances of each
case.
o In case of death of or injuries to passengers, the law
presumes said common carriers to be at fault or to
have acted negligently.
While the law requires the highest degree of diligence from
common carriers in the safe transport of their passengers and
creates a presumption of negligence against them, it does not
make the carrier an insurer of the absolute safety of its
passengers.
o Article 1755 of the Civil Code qualifies the duty of
extraordinary care, vigilance and precaution in the carriage
of passengers by common carriers to only such as
human care and foresight can provide.
Article 1756 of the Civil Code, in creating a presumption of fault or
negligence on the part of the common carrier when its passenger
is injured, merely relieves the latter, for the time being, from
introducing evidence to fasten the negligence on the former,
because the presumption stands in the place of evidence.
o Being a mere presumption, the same is rebuttable by
Yobido vs. Court of Appeals | Romero (1997)
proof that the common carrier had exercised
extraordinary diligence as required by law in the
FACTS
performance of its contractual obligation, or that the
injury suffered by the passenger was solely due to a
fortuitous event.
o Neither the law nor the nature of the business of a
transportation company makes it an insurer of the
passenger's safety, but that its liability for personal
injuries sustained by its passenger rests upon its
negligence, its failure to exercise the degree of diligence
that the law requires.
The presumption of fault or negligence against the carrier is only a
disputable presumption.
o Where, as in the instant case, the injury sustained by Pilapil was
in no way due to any defect in the means of transport or
in the method of transporting or to the negligent or willful
acts of Alatcos employees, and therefore involving no issue of
negligence in its duty to provide safe and suitable cars as well
as competent employees, with the injury arising wholly from
causes created by strangers over which the carrier had
no control or even knowledge or could not have
prevented, the presumption is rebutted and the carrier is
not and ought not to be held liable.
As a general rule, common carriers are bound to exercise extraordinary
diligence in the safe transport of their passengers, it would seem that
this is not the standard by which its liability is to be determined
when intervening acts of strangers is to be determined to
directly cause the injury.
A tort committed by a stranger which causes injury to a passenger does
not accord the latter a cause of action against the carrier.
The negligence for which a common carrier is held responsible is the
negligent omission by the carrier's employees to prevent the
tort from being committed when the same could have been
foreseen and prevented by them.
When the violation of the contract is due to the willful acts of strangers,
as in the instant case, the degree of care essential to be exercised by
the common carrier for the protection of its passenger is only that of a
good father of a family.
o The carrier is not charged with the duty of providing or
maintaining vehicles as to absolutely prevent any and all
injuries to passengers.
o Where the carrier uses cars of the most approved type, in
general use by others engaged in the same occupation, and
exercises a high degree of care in maintaining them in suitable
condition, the carrier cannot be charged with negligence in this
respect.
Respondents, spouses Tito and Leny Tumboy together with their children
Ardee and Jasmin (Tumboys), boarded a Yobido bus bound for Davao City
at Surigao del Sur.
While traveling, the left front tire of the bus exploded, causing it to fall
into a ravine and hit a tree.
Tito died from the accident while the rest of the family suffered injuries.
The Tumboys filed a complaint for breach of contract of carriage
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 against petitioners Alberta Yobido (Alberta), the owner of the bus,
and Cresencio Yobido (Cresencio), its driver.
The Tumboys asserted that the Cresencio failed to exercise the
diligence required of the carrier because he was driving fast even with
the poor condition the road and the rainy weather.
Alberta and Cresencio claim that the explosion of the tire was a
fortuitous event which could not have been foreseen or avoided,
considering the following: it was a new tire, the bus going at a slow
speed because it was traversing a zigzag road, and the bus was
traveling below full capacity.
The trial court ruled in favor of Alberta and Cresencio.
The Court of Appeals reversed and awarded damages for the
Tumboys.
Hence, this petition.
ISSUES/HELD
Was the bursting of the tire a fortuitous event which would exempt Alberta
and Cresencio from liability? NO. Judgment affirmed.
RATIONALE
When a passenger boards a common carrier, he takes the risks
incidental to the mode of travel he has taken because, after all, a
carrier is not an insurer of the safety of its passengers and is not bound
absolutely and at all events to carry them safely and without injury.
However, as expressed in Art. 1756, when a passenger is
injured or dies while travelling, the law presumes that the
common carrier is negligent.
Consequently, the court need not make an express finding of fault or
negligence on the part of the carrier to hold it responsible for damages
sought by the passenger.
This disputable presumption may only be overcome by
evidence that the carrier had observed extraordinary diligence
as prescribed by Articles 1733, 1755 and 1756 of the Civil Code or that
the death or injury of the passenger was due to a fortuitous event.
A fortuitous event is possessed of the following
characteristics: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor to comply
with his obligations, must be independent of human will; (b) it
must be impossible to foresee the event which constitutes the
caso fortuito, or if it can be foreseen, it must be impossible to
avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal
manner; and (d) the obliger must be free from any
participation in the aggravation of the injury resulting to the
creditor.
Under the circumstances of this case, the explosion of the new tire
may not be considered a fortuitous event because there are
human factors involved in the situation.
Moreover, a common carrier may not be absolved from liability by the mere
fact that fortuitous event had occurred; the common carrier must still
prove that it was not negligent in causing the death or injury
resulting from an accident.
It was incumbent upon the defense to establish that it took precautionary
measures considering partially dangerous condition of the road.
Having failed to discharge its duty to overthrow the presumption of
negligence with clear and convincing evidence, petitioners are
hereby held liable for damages.
Japan Airlines v Asuncion | Ynares-Santiago | 2005
FACTS:
Michael and Jeannette Asuncion (respondents) left Manila on board JAL
bound for Los Angeles
Their itinerary included a stopover in Narita and an overnight stay at Hotel
Nikko Narita thus the need for a shore pass, which is required of a foreigner
who desires to stay in the neighborhood of the port of call
Upon arrival, an employee of JAL endorsed the Respondents applications
for shore pass to the Japanese Immigration Official. However, Respondents
application was denied because Michael appeared to be shorter than his
height as indicated in his passport.
And so they were brought instead to the Narita Airport Rest House and were
charged $400 each for their accommodation
Respondents filed a complaint for damages claiming that
o JAL did not fully apprise them of their travel requirements
o JAL did not exhaust all means to prevent the denial of their shore
pass entry applications
o They were rudely and forcibly detained at Narita
JAL contends that the refusal of the immigration official is an act of
state which JAL cannot interfere with or prevail upon
TC and CA ruled in favor of the Respondents
ISSUE: WoN JAL is guilty of breach of contract
DECISION: NO
A contract of carriage includes the duty of JAL to inspect whether its
passengers have the necessary travel documents. HOWEVER, this duty
does not extend to checking the veracity of every entry
This is because the power to admit or not an alien into the country is a
sovereign act, which cannot be interfered with even by JAL. AS SUCH, JAL
cannot vouch for the authenticity of a passport and correctness of the
entries therein
RE: JALs failure to apprise the Respondents, it must be noted that
Respondents, prior to their departure were aware of the need to secure
shore pass entries for their overnight stay at Hotel Nikko
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 RE: failure of JAL to exhaust all means, as mentioned, JAL has no
authority to interfere with or influence the immigration officials. The
most that it could do is to endorse the Respondents applications,
which JAL immediately did upon arrival of Respondents. IN FACT, JAL
did all it could to assist them (making reservations at the Rest House)
RE: allegations of improper behavior, it must be noted that
Michaels testimony did not categorically state those allegations
RE: claim for damages, since there is no breach of contract nor proof
that JAL acted fraudulently, there is no basis for the award of any
damages
RE: claim for reimbursement (accommodation fee), it was proven
that the amount did not accrue to the benefit of JAL
Maranan vs. Perez
FACTS
Rogelio Carachea rode a taxi owned and operated by Pascual Perez
when he was stabbed and killed by the driver, Simeon Valenzuela
Valenzuela was found guilty for homicide in the CFI
While appeal was pending in CA, Maranan (Rogelios mom) filed an
action in CFI to recover damages from Perez (taxi owner) and
Valenzuela for her sons death
Perez and Valenzuela assert that Rogelio was killed in self-defense
since he first assaulted driver from behind. Perez also claimed that
the death was a caso fortuito for which the carrier was not
liable.
CFI ruled in favour of plaintiff Maranan
CA affirmed
ISSUE: WoN Perez, taxi owner and operator, should be held liable for the
death of the taxi passenger? YES.
Perez relies on the ruling in Gillaco v. Manila Railroad Co. where it held
that the carrier is under no absolute liability for assaults of its employees
upon the passengers.
HELD
In the Gillaco2 case, the passenger was killed outside the scope and the
course of duty of the guilty employee. In this case, the killing was done
by the driver of the taxi transporting the passenger, in whose hands
the carrier had entrusted the duty of executing the contract of
carriage. Unlike in the Gillaco case, the passengers killing here
happened in the course of duty of the guilty employee and within the
scope of his duties.
Moreover, the Gillaco case was decided under the Civil Code of 1889
provisions, which (unlike the new Civil Code) did not impose
2 investigation and he found that certain Maranaos were planning to take
When the crime happened, the guard had no duty to discharge in connection with the
transportation of the deceased.
upon common carriers absolute liability for the safety of the
passengers against wilful assaults or negligent acts committed by
their employees. Unlike the old Civil Code, the new Civil Code
expressly makes the common carrier liable for intentional assaults
committed by its employees upon its passengers under Art. 1759
CC.
The Civil Code provisions on common carriers were taken from Anglo
American Law which based the common carriers liability for assaults on
passengers committed by its drivers on either:
o (a) the doctrine of respondeat superior OR
o (b) the principle that it is the carriers implied duty to transport the
passenger safely.
Under (a) the doctrine of respondeat superior, the carrier is liable only when
the employees act is within the scope of his authority and duty. BUT under
the (b), its not enough that the assault happens within the course
of the employees duty. The carriers liability is absolute such that
it practically secures the passengers from assaults committed by
its own employees.
Under Art. 1759 CC, Philippines follows (b) the principle that it is the
carriers implied duty to transport the passenger safely. The rule is based on
3 reasons:
o the carriers special undertaking requires that it furnish its
passengers full measure of protection afforded by the exercise
of the high degree of care prescribed by law from violence and
insults from strangers, passengers and most especially from its owns
employees charged with passengers safety
o It is the result of the carriers confiding in the employees hands
the performance of his contract to safely transport the
passenger, delegating the duty of protecting the passenger with the
utmost care prescribed by law
o The carrier must bear the risk of wrongful acts or negligence of
the carriers employees against passengers since it has the power
to select and remove them
It is the carriers strict obligation to select its drivers and similar
employees with due regard not just to their technical competence
and physical ability but also to their total personality, behaviour,
moral fiber and social attitude.
Isaac vs. A. L. Ammen
Fortune Express vs. Court of Appeals | (1999)
(Keywords: Maranaos hijack and burn bus)
FACTS
- There was a previous accident between a jeepney and a bus of petitioner
where 2 Maranaos died. An agent of the Constabulary conducted an
revenge on petitioner by burning some of its buses.
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- This information was reported to Operations manager of Fortune Express
who assured the agent that the necessary precautions would be taken.
- 4 days after the incident, a bus of petitioner was hijacked by 3 armed
Maranaos who pretended to be passengers. Atty. Caraong was on this bus.
They planned to burn the bus and the driver of the bus. The passengers
were allowed to run away from the bus, but Atty. Caraong went back to the
bus to retrieve something. He then pleaded for the life of the driver, so he
was shot by the armed men.
- RTC: Dismissed the complaint. There was no duty on the part of the
common carrier to provide security guards. It is an obligation that properly
belongs to the State. The death was due to the wilfull acts of the lawless
for which the common carrier could neither prevent nor stop.
- CA: Reversed. Carrier was negligent. No concrete action was taken by the
carrier in light of the information they received. There was no system of
verification adopted such as frisking of passengers.
ISSUE/S & HELD:
WON Fortune Express is liable to the respondents? YES.
RATIONALE
- Art. 1763: a common carrier is responsible for injuries suffered by a
passenger on account of willful acts of other passengers, if the employees
of the common carrier could have prevented the act through the exercise
of the diligence of a good father of a family. In the case at bar, because of
the negligence of petitioners employees, the seizure of the bus by the
Maranaos was made possible. Petitioner did nothing to protect the safety
of its passengers despite the warning given to them.
- Petitioners employees failed to prevent the attack because they did not
exercise the diligence of a good father of a family, by being vigilant or
frisking the passengers.
- The case may not be deemed a fortuitous event since the event was
foreseeable. Neither may the deceased be held guilty of contributory
negligence as he was playing the role of the Good Samaritan.
- Fortune is liable for Indemnity for death, actual damages, moral,
exemplary, attorneys fees and Compensation for loss of earning capacity.
Net earning capacity =
(Life expectancy) (Gross Annual Income Necessary Living Expenses)
Life expectancy = (2/3) (80 age of deceased)
Victory Liner v. Gammad | Ynares-Santiago (2004)
Facts:
On March 14, 1996, Rosalito Gammads wife, Marie Grace Pagulayan-
Gammad, was on board an air-conditioned Victory Liner bus bound for
Tuguegarao, Cagayan from Manila.
At about 3:00 a.m., the bus while running at a high speed fell on a
ravine somewhere in Barangay Baliling, Sta. Fe, Nueva Vizcaya, which
resulted in the death of Marie Grace and physical injuries to other
passengers.
Respondent heirs of the deceased filed a complaint for damages arising
from culpa contractual against petitioner.
In its answer, the petitioner claimed that the incident was purely accidental
and that it has always exercised extraordinary diligence in its 50 years of
operation.
Trial court rendered its decision in favor of respondents, ordering Victory
Liner to pay the following:
o Actual Damages: P 122,000.00; Death Indemnity: 50,000.00; Exemplary
and Moral Damages: 400,000.00; Compensatory Damages:
1,500,000.00; Attorneys Fees: 10% of the total amount granted; Cost of
the Suit.
Court of Appeals affirmed the decision of the trial court with modification as
follows:
o Actual Damages: P88,270.00; Compensatory Damages: P1,135,536,10;
Moral and Exemplary Damages: P400,000.00
Petitioner filed MR praying that the case be remanded to the trial court for
cross-examination of respondents witness and for the presentation of its
evidence, invoking APEX Mining, Inc. v. Court of Appeals, which set aside
the decision of the trial court because of the negligence of its former
counsel. MR was denied.
Issues:
1. WON petitioners counsel was guilty of gross negligence. NO
2. WON petitioner should be held liable for breach of contract of carriage. YES
3. WON the award of damages was proper. NO
Held:
1. Petitioner is guilty, at the least, of contributory negligence and fault cannot
be imputed solely on previous counsel.
2. Petitioner was correctly found liable for breach of contract of carriage. A
common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard to all the circumstances. In a contract of carriage,
it is presumed that the common carrier was at fault or was negligent when
a passenger dies or is injured. Unless the presumption is rebutted, the court
need not even make an express finding of fault or negligence on the part of
the common carrier. This statutory presumption may only be overcome by
evidence that the carrier exercised extraordinary diligence.
In the instant case, there is no evidence to rebut the statutory presumption
that the proximate cause of Marie Graces death was the negligence of
petitioner. Hence, the courts below correctly ruled that petitioner was guilty
of breach of contract of carriage.
3. Article 1764 in relation to Article 2206 of the Civil Code, holds the common
carrier in breach of its contract of carriage that results in the death of a
passenger liable to pay the following: (1) indemnity for death, (2) indemnity
for loss of earning capacity, and (3) moral damages.
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Death indemnity: entitled to indemnity for the death of Marie Grace
which under current jurisprudence is fixed at P50,000.00.
Compensatory: The award of compensatory damages for the loss of
the deceaseds earning capacity should be deleted for lack of basis. As
a rule, documentary evidence should be presented to substantiate the
claim for damages for loss of earning capacity. (Exception: when (1)
the deceased is self-employed earning less than the minimum wage
under current labor laws, and judicial notice may be taken of the fact
that in the deceaseds line of work no documentary evidence is
available; or (2) the deceased is employed as a daily wage worker
earning less than the minimum wage under current labor laws.) The
award is erroneous because the deceaseds earnings does not fall
within the exceptions.
Temperate: the amount of P500,000.00 should be awarded to
respondents under Article 2224 of the Civil Code.
Moral: P100, 000; Exemplary: P100,000. Moral damages cannot be
lumped with exemplary damages because they are based on different
jural foundations. These damages are different in nature and require
separate determination. By special rule in Article 1764 in relation to
Article 2206 of the Civil Code, moral damages may also be awarded in
case the death of a passenger results from a breach of carriage. On the
other hand, exemplary damages may be recovered in contractual
obligations if the defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner.
Respondents in the instant case should be awarded moral damages to
compensate for the grief caused by the death of the deceased
resulting from the petitioners breach of contract of carriage.
Furthermore, the petitioner failed to prove that it exercised the
extraordinary diligence required for common carriers, it is presumed to
have acted recklessly.
Actual: should be further reduced to P78,160.00, which was the
amount supported by official receipts.
Interest: 12% per annum until satisfaction, per paragraph 3 of the rule
in Eastern Shipping Lines, Inc. v. Court of Appeals.

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