JAPAN AIRLINES vs CA

G.R. No. 118664 August 7, 1998

The case is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking the reversal of
the decision of the Court of Appeals, which affirmed with modification the award of damages made by the trial
court in favor of herein private respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco and
Jose Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francisco,
California bound for Manila. Likewise, on the same day private respondents Enrique Agana, Maria Angela Nina
Agana and Adelia Francisco left Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive
for travelling on the said airline, both flights were to make an overnight stopover at Narita, Japan, at the airlines'
expense, thereafter proceeding to Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikko Narita
for the night. The next day, private respondents, on the final leg of their journey, went to the airport to take their
flight to Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino
International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, private respondents' trip to
Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers on
flight No. 741 due to depart on June 16, 1991 and also paid for the hotel expenses for their unexpected overnight
stay. On June 16, 1991, much to the dismay of the private respondents, their long anticipated flight to Manila
was again cancelled due to NAIA's indefinite closure. At this point, JAL informed the private respondents that it
would no longer defray their hotel and accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to
pay for their accommodations and meal expenses from their personal funds from June 16 to June 21, 1991. Their
unexpected stay in Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.
On July 25, 1991, commenced an action for damages against JAL before the Regional Trial Court of
Quezon City, Branch 104. To support their claim, private respondents asserted that JAL failed to live up to its
duty to provide care and comfort to its stranded passengers when it refused to pay for their hotel and
accommodation expenses from June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was
obligated to shoulder their expenses as long as they were still stranded in Narita. On the other hand, JAL denied
this allegation and averred that airline passengers have no vested right to these amenities in case a flight is
cancelled due to "force majeure."
On June 18, 1992, the trial court rendered its judgment in favor of private respondents holding JAL
liable for damages,:
WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan Airlines to pay the
plaintiffs Enrique Agana, Adalia B. Francisco and Maria Angela Nina Agana the sum of One million Two
Hundred forty-six Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda the sum of
Three Hundred Twenty Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual, moral and
exemplary damages and pay attorney's fees in the amount of Two Hundred Thousand Pesos (P200,000.00), and
to pay the costs of suit.
JAL appealed the decision before the Court of Appeals, which, however, with the exception of lowering
the damages awarded affirmed the trial court's finding,
Thus, the award of moral damages should be as it is hereby reduced to P200,000.00 for each of the plaintiffs, the
exemplary damages to P300,000.00 and the attorney's fees to P100,000.00 plus the costs.
WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby AFFIRMED in all other
respects.
ISSUE: whether JAL, as a common carrier has the obligation to shoulder the hotel and meal expenses of
its stranded passengers until they have reached their final destination, even if the delay were caused by
"force majeure.
There is no dispute that the Mt. Pinatubo eruption prevented JAL from proceeding to Manila on
schedule. Likewise, private respondents concede that such event can be considered as "force majeure" since their
delayed arrival in Manila was not imputable to JAL.
Private respondents contend that while JAL cannot be held responsible for the delayed arrival in Manila,
it was nevertheless liable for their living expenses during their unexpected stay in Narita since airlines have
the obligation to ensure the comfort and convenience of its passengers. While we (SC) sympathize with the
private respondents' plight, we are unable to accept this contention.
In a plethora of cases SC have consistently ruled that a contract to transport passengers is quite different
in kind, and degree from any other contractual relation. It is safe to conclude that it is a relationship imbued with
public interest. Failure on the part of the common carrier to live up to the exacting standards of care and
diligence renders it liable for any damages that may be sustained by its passengers. However, this is not to
say that common carriers are absolutely responsible for all injuries or damages even if the same were
caused by a fortuitous event. To rule otherwise would render the defense of "force majeure," as an
exception from any liability, illusory and ineffective.
 When a party is unable to fulfill his obligation because of "force majeure," the general rule is that he
cannot be held liable for damages for non-performance. Corollarily, when JAL was prevented from
resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever losses or damages in
the form of hotel and meal expenses the stranded passengers incurred, cannot be charged to JAL. Yet it is
undeniable that JAL assumed the hotel expenses of respondents for their unexpected overnight stay on June 15,
1991.
The respondents predicament was not due to the fault or negligence of JAL but the closure of NAIA to
international flights. Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the amenities of its
stranded passengers by reason of a fortuitous event is too much of a burden to assume.
Adverse weather conditions or extreme climatic changes are some of the perils involved in air travel, the
consequences of which the passenger must assume or expect. After all, common carriers are not the insurer of all
risks.
The Court of Appeals, despite the presence of "force majeure," still ruled against JAL relying in our
decision in PAL v. Court of Appeals, thus:
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting standard required by
law. Undisputably, PAL's diversion of its flight due to inclement weather was a fortuitous event. Nonetheless,
such occurrence did not terminate PAL's contract with its passengers. Being in the business of air carriage and
the sole one to operate in the country, PAL is deemed equipped to deal with situations as in the case at bar. What
we said in one case once again must be stressed, i.e., the relation of carrier and passenger continues until the
latter has been landed at the port of destination and has left the carrier's premises. Hence, PAL necessarily
would still have to exercise extraordinary diligence in safeguarding the comfort, convenience and safety of its
stranded passengers until they have reached their final destination. On this score, PAL grossly failed considering
the then ongoing battle between government forces and Muslim rebels in Cotabato City and the fact that the
private respondent was a stranger to the place.
The reliance is misplaced. The factual background of the PAL case is different from the instant petition. In
that case there was indeed a fortuitous event resulting in the diversion of the PAL flight. However, the
unforeseen diversion was worsened when "private respondents (passenger) was left at the airport and could not
even hitch a ride in a Ford Fiera loaded with PAL personnel," not to mention the apparent apathy of the PAL
station manager as to the predicament of the stranded passengers. In light of these circumstances, we held that if
the fortuitous event was accompanied by neglect and malfeasance by the carrier's employees, an action for
damages against the carrier is permissible. Unfortunately, for private respondents, none of these conditions
are present in the instant petition.
Will not completely absolve petitioner JAL from any liability. It must be noted that private respondents
bought tickets from the United States with Manila as their final destination. While JAL was no longer required to
defray private respondents' living expenses during their stay in Narita on account of the fortuitous event, JAL
had the duty to make the necessary arrangements to transport private respondents on the first available
connecting flight to Manila. Petitioner JAL reneged on its obligation to look after the comfort and
convenience of its passengers when it declassified private respondents from "transit passengers" to "new
passengers" as a result of which private respondents were obliged to make the necessary arrangements
themselves for the next flight to Manila. Private respondents were placed on the waiting list from June 20 to
June 24. To assure themselves of a seat on an available flight, they were compelled to stay in the airport the
whole day of June 22, 1991 and it was only at 8:00 p.m. of the aforesaid date that they were advised that they
could be accommodated in said flight which flew at about 9:00 a.m. the next day.
The cancellation of JAL flights to Manila from June 15 to June 21, 1991 caused considerable disruption
in passenger booking and reservation. In fact, it would be unreasonable to expect, considering NAIA's closure,
that JAL flight operations would be normal on the days affected. Nevertheless, this does not excuse JAL from
its obligation to make the necessary arrangements to transport private respondents on its first available
flight to Manila. After all, it had a contract to transport private respondents from the United States to
Manila as their final destination.
The award of nominal damages is in order. Nominal damages are adjudicated in order that a right of a
plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and not for the
purpose of indemnifying any loss suffered by him. The court may award nominal damages in every obligation
arising from any source enumerated in article 1157, or in every case where any property right has been invaded.
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated December 22, 1993
is hereby MODIFIED. The award of actual, moral and exemplary damages is hereby DELETED.
Petitioner JAL is ordered to pay each of the private respondents nominal damages in the sum of
P100,000.00 each including attorney' s fees of P50,000.00 plus costs.

DY TEBAN TRADING vs JOSE CHING ET AL

G.R. No. 161803 February 4, 2008

The vehicular collision resulting in damages and injuries in this case could have been avoided if the
stalled prime mover with trailer were parked properly and equipped with an early warning device. It is high time
 We sounded the call for strict enforcement of the law and regulation on traffic and vehicle registration.
Panahon na para mahigpit na ipatupad ang batas at regulasyon sa trapiko at pagpapatala ng sasakyan.
Before Us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) modifying that of
the Regional Trial Court (RTC) in Butuan City finding private respondents Liberty Forest, Inc. and Cresilito
Limbaga liable to petitioner Dy Teban Trading, Inc. for damages.
Facts
On July 4, 1995, at around 4:45 a.m., Rogelio Ortiz, with helper Romeo Catamora, was driving a Nissan
van owned by petitioner Dy Teban Trading, Inc. along the National Highway in Barangay Sumilihon, Butuan
City, going to Surigao City. They were delivering commercial ice to nearby barangays and municipalities. A
Joana Paula passenger bus was cruising on the opposite lane towards the van. In between the two vehicles was a
parked prime mover with a trailer, owned by private respondent Liberty Forest, Inc.
The night before, at around 10:00 p.m., the prime mover with trailer suffered a tire blowout. The driver,
private respondent Cresilito Limbaga, parked the prime mover askew occupying a substantial portion of the
national highway, on the lane of the passenger bus. He parked the prime mover with trailer at the shoulder of the
road with the left wheels still on the cemented highway and the right wheels on the sand and gravel shoulder of
the highway. The prime mover was not equipped with triangular, collapsible reflectorized plates, the early
warning device required under Letter of Instruction No. 229. As substitute, Limbaga placed a banana trunk with
leaves on the front and the rear portion of the prime mover to warn incoming motorists. It is alleged that
Limbaga likewise placed kerosene lighted tin cans on the front and rear of the trailer.
To avoid hitting the parked prime mover occupying its lane, the incoming passenger bus swerved to the
right, onto the lane of the approaching Nissan van. Ortiz saw two bright and glaring headlights and the
approaching passenger bus. He pumped his break slowly, swerved to the left to avoid the oncoming bus but the
van hit the front of the stationary prime mover. The passenger bus hit the rear of the prime mover.
Ortiz and Catamora only suffered minor injuries. The Nissan van, however, became inoperable as a result of the
incident. After the collision, SPO4 Teofilo Pame conducted an investigation and submitted a police traffic
incident investigation report.
On October 31, 1995, petitioner Nissan van owner filed a complaint for damages against private
respondents prime mover owner and driver with the RTC in Butuan City. The Joana Paula passenger bus was not
impleaded as defendant in the complaint.
RTC Disposition
On August 7, 2001, the RTC rendered a decision in favor of petitioner Dy Teban Trading, Inc.
WHEREFORE, judgment is hereby rendered directing, ordaining and ordering:
a) That defendants Liberty Forest, Inc. and Cresilito M. Limbaga pay, jointly and solidarily, plaintiff Dy Teban
Trading, Inc. the amounts of P279,832.00 as actual and compensatory damages, P30,000.00 as attorneys fees
and P5,000.00 as expenses of litigation;
b) That all money claims of plaintiff Rogelio C. Ortiz are dismissed;
c) That defendant Jose Ching is absolved from any civil liability or the case against him dismissed;
d) That the counterclaim of all the defendants is dismissed; and
e) That defendants Liberty Forest, Inc. and Cresilito M. Limbaga to pay, jointly and solidarily, the costs.

The RTC held that the proximate cause of the three-way vehicular collision was improper parking of the prime
mover on the national highway and the absence of an early warning device on the vehicle, thus:
The court finds that the proximate cause of the incidents is the negligence and carelessness attributable
to the defendants. When the trailer being pulled by the prime mover suffered two (2) flat tires at Sumilihon, the
prime mover and trailer were parked haphazardly, as the right tires of the prime mover were the only ones on the
sand and gravel shoulder of the highway while the left tires and all the tires of the trailer were on the cemented
pavement of the highway, occupying almost the whole of the right lane on the direction the prime mover and
trailer were traveling. The statement of Limbaga that he could not park the prime mover and trailer deeper into
the sand and gravel shoulder of the highway to his right because there were banana plants is contradicted by the
picture marked Exhibit "F." The picture shows that there was ample space on the shoulder. If defendant Limbaga
was careful and prudent enough, he should have the prime mover and trailer traveled more distance forward so
that the bodies of the prime mover and trailer would be far more on the shoulder rather than on the cemented
highway when they were parked. x x x The court has some doubts on the statement of witness-driver Limbaga
that there were banana trunks with leaves and lighted tin cans with crude oil placed 3 strides in front of the prime
mover and behind the trailer because the testimonies of witnesses Rogelio C. Ortiz, driver of the ice van, Romeo
D. Catamora, helper of the ice van, and Police Traffic Investigator SPO3 Teofilo M. Pame show that there were
no banana trunks with leaves and lighted tin cans at the scene of the incident. But even assuming that there were
banana trunks with leaves but they were placed close to the prime mover and trailer as they were placed 3 strides
away which to the mind of the court is equivalent approximately to 3 meters and with this distance, approaching
vehicles would have no sufficient time and space to make a complete stop, especially if the vehicles are heavy
and loaded. If there were lighted tin cans, it was not explained by the defendants why the driver, especially
driver witness Ortiz, did not see them.
xxxx
Defendant Liberty Forest, Inc. did not exercise the diligence of a good father of a family in managing and
running its business. The evidence on record shows that it failed to provide its prime mover and trailer with the
required "early warning devices" with reflectors and it did not keep proper maintenance and condition of the
prime mover and the trailer. The circumstances show that the trailer were provided with wornout tires and with
only one (1) piece of spare tire. The pictures show that two (2) flat tires suffered by the trailer and these two (2)
tires were attached to one of the two (2) I-beams or axles attached to the rear of the trailer which axle is very
near but behind the other axle and with the location of the 2 I-beams, it would have the other I-beam that would
have suffered the flat tires as it has to bear the brunt of weight of the D-8 bulldozer. The bulldozer was not
loaded directly above the two (2) I-beams as 2 I-beams, as a pair, were attached at the far rear end of the trailer.
xxxx
However, defendant Jose Ching should be absolved of any liability as there is no showing that he is the manager
or CEO of defendant Liberty Forest, Inc. Although, it is admitted that he is an officer of the defendant
corporation, but it is not clarified what kind of position he is holding, as he could be an officer as one of the
members of the Board of Directors or a cashier and treasurer of the corporation. Witness Limbaga in his
testimony mentioned a certain Boy Ching as the Manager but it was never clarified whether or not Boy Ching
and defendant Jose Ching is one and the same person.
CA Disposition
On August 28, 2003, the CA reversed the RTC decision, disposing as follows:
WHEREFORE, premises considered, the decision dated August 7, 2001 of the Regional Trial Court,
Branch 2, Butuan City in Civil Case No. 4360 is hereby PARTLY MODIFIED by absolving the defendants-
appellants/appellees of any liability to plaintiffs-appellants/appellees by reason of the incident on July 4, 1995.
The dismissal of the case against Jose Ching, the counterclaim of defendants-appellants/appellees and the money
claim of Rogelio Ortiz STANDS.
In partly reversing or partly modifying the RTC decision, the CA held that the proximate cause of the
vehicular collision was the failure of the Nissan van to give way or yield to the right of way of the
passenger bus, thus:
It was stated that the Joana Paula bus in trying to avoid a head-on collision with the truck, sideswept the parked
trailer loaded with bulldozer.
Evidently, the driver of the Joana Paula bus was aware of the presence on its lane of the parked trailer with
bulldozer. For this reason, it proceeded to occupy what was left of its lane and part of the opposite lane. The
truck occupying the opposite lane failed to give way or yield the right of way to the oncoming bus by proceeding
with the same speed. The two vehicles were, in effect, trying to beat each other in occupying a single lane. The
bus was the first to occupy the said lane but upon realizing that the truck refused to give way or yield the right of
way, the bus, as a precaution, geared to its right where the trailer was parked. Unfortunately, the bus
miscalculated its distance from the parked trailer and its rear right side hit the protruding blade of the bulldozer
then on the top of the parked trailer. The impact of the collision on its right rear side with the blade of the
bulldozer threw the bus further to the opposite lane, landing its rear portion on the shoulder of the opposite lane.
xxxx
Facts of the case reveal that when Ortiz, the driver of the truck, failed to give the Joana Paula bus the space on
the road it needed, the latter vehicle scraped its rear right side on the protruded bulldozer blade and the impact
threw the bus directly on the path of the oncoming truck. This made plaintiffs-appellants/appellees conclude that
the Joana Paula bus occupied its lane which forced Ortiz, the driver of the truck, to swerve to its left and ram the
front of the parked trailer.
xxxx
The trailer was parked because its two (2) rear-left tires were blown out. With a bulldozer on top of the trailer
and two (2) busted tires, it would be dangerous and quite impossible for the trailer to further park on the graveled
shoulder of the road. To do so will cause the flat car to tilt and may cause the bulldozer to fall from where it was
mounted. In fact, it appeared that the driver of the trailer tried its best to park on the graveled shoulder since the
right-front tires were on the graveled shoulder of the road.
The lower court erred in stating that the Joana Paula bus swerved to the left of the truck because it did not see the
parked trailer due to lack of warning sign of danger of any kind that can be seen from a distance. The damage
suffered by the Joana Paula bus belied this assessment. As stated before, the Joana Paula bus, with the intention
of passing first which it did, first approached the space beside the parked trailer, veered too close to the parked
trailer thereby hitting its rear right side on the protruding bulldozer blade. Since the damage was on the rear right
most of the bus, it was clearly on the space which was wide enough for a single passing vehicle but not sufficient
for two (2) passing vehicles. The bus was thrown right to the path of the truck by the impact of the collision of
its rear right side with the bulldozer blade.
The CA disagreed with the RTC that the prime mover did not have an early warning device. The appellate court
accepted the claim of private respondent that Limbaga placed kerosene lighted tin cans on the front and rear of
the trailer which, in Baliwag Transit, Inc. v. Court of Appeals,may act as substitute early warning device. The CA
stated:
Likewise, it was incorrect for the lower court to state that there was no warning sign of danger of any kind, most
probably referring to the absence of the triangular reflectorized plates. The police sketch clearly indicated the
stack of banana leaves placed at the rear of the parked trailer. The trailers driver testified that they placed
kerosene lighted tin can at the back of the parked trailer.
A pair of triangular reflectorized plates is not the only early warning device allowed by law. The Supreme Court
(in Baliwag Transit, Inc. v. Court of Appeals) held that:
"x x x Col. Dela Cruz and Romano testified that they did not see any early warning device at the scene of the
accident. They were referring to the triangular reflectorized plates in red and yellow issued by the Land
Transportation Office. However, the evidence shows that Recontique and Ecala placed a kerosene lamp or torch
at the edge of the road, near the rear portion of the truck to serve as an early warning device. This substantially
complies with Section 34(g) of the Land Transportation and Traffic Code x x x
Baliwags argument that the kerosene lamp or torch does not substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early warning device of the triangular reflectorized plates
variety but also parking lights or flares visible one hundred meters away. x x x."
This Court holds that the defendants-appellants/appellees were not negligent in parking the trailer on the scene
of the accident. It would have been different if there was only one flat tire and defendant-appellant/appellee
Limbaga failed to change the same and left immediately.
As such, defendants-appellants/appellees are not liable for the damages suffered by plaintiffs-
appellants/appellees. Whatever damage plaintiffs-appellants/appellees suffered, they alone must bear them.
The meat of the petition is whether or not the prime mover is liable for the damages suffered by the
Nissan van. The RTC ruled in the affirmative holding that the proximate cause of the vehicular collision was the
negligence of Limbaga in parking the prime mover on the national highway without an early warning device on
the vehicle. The CA reversed the RTC decision, holding that the proximate cause of the collision was the
negligence of Ortiz in not yielding to the right of way of the passenger bus.
Article 2176 of the Civil Code provides that whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict. To sustain a claim based on
quasi-delict, the following requisites must concur: (a) damage suffered by plaintiff; (b) fault or negligence of
defendant; and (c) connection of cause and effect between the fault or negligence of defendant and the damage
incurred by plaintiff.
There is no dispute that the Nissan van suffered damage. That is borne by the records and conceded by
the parties. The outstanding issues are negligence and proximate cause. Tersely put, the twin issues are: (a)
whether or not prime mover driver Limbaga was negligent in parking the vehicle; and (b) whether or not
his negligence was the proximate cause of the damage to the Nissan van.
Limbaga was negligent in parking the prime mover on the national highway; he failed to prevent or minimize
the risk to oncoming motorists.
Negligence is defined as the failure to observe for the protection of the interests of another person that
degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person
suffers injury.
Picart v. Smith: The test by which to determine the existence or negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an
ordinary person would have used in the same situation? If not, then he is guilty of negligence. The law here in
effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference to the personal judgment
of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in
the man of ordinary intelligence and prudence and determines liability by that.
We find that Limbaga was utterly negligent in parking the prime mover askew on the right side of the
national highway. The vehicle occupied a substantial portion of the national road on the lane of the passenger
bus. It was parked at the shoulder of the road with its left wheels still on the cemented highway and the right
wheels on the sand and gravel shoulder of the highway. It is common sense that the skewed parking of the prime
mover on the national road posed a serious risk to oncoming motorists. It was incumbent upon Limbaga to take
some measures to prevent that risk, or at least minimize it.
Limbaga also failed to take proper steps to minimize the risk posed by the improperly parked
prime mover. He did not immediately inform his employer, private respondent Liberty Forest, Inc., that
the prime mover suffered two tire blowouts and that he could not have them fixed because he had only one
spare tire. Instead of calling for help, Limbaga took it upon himself to simply place banana leaves on the front
and rear of the prime mover to serve as warning to oncoming motorists. Worse, Limbaga slept on the prime
mover instead of standing guard beside the vehicle. By his own account, Limbaga was sleeping on the prime
mover at the time of the collision and that he was only awakened by the impact of the Nissan van and the
passenger bus on the prime mover. Private respondent Liberty Forest, Inc. was utterly negligent in allowing a
novice driver, like Limbaga, to operate a vehicle, such as a truck loaded with a bulldozer, which required highly
specialized driving skills. Respondent employer clearly failed to properly supervise Limbaga in driving the
prime mover.
The CA erred in accepting the bare testimony of Limbaga that he placed kerosene lighted tin cans on the
front and rear of the prime mover. The evidence on records belies such claim. The CA reliance on Baliwag
Transit, Inc. v. Court of Appeals as authority for the proposition that kerosene lighted tin cans may act as
substitute early warning device is misplaced.
First, the traffic incident report did not mention any lighted tin cans on the prime mover or within the
immediate vicinity of the accident. Only banana leaves were placed on the prime mover.
Second, SPO4 Pame, who investigated the collision, testified 24 that only banana leaves were placed on
the front and rear of the prime mover. He did not see any lighted tin cans in the immediate vicinity of the
collision.
Third, the claim of Limbaga that he placed lighted tin cans on the front and rear of the prime mover
belatedly surfaced only during his direct examination. No allegation to this effect was made by private
respondents in their Answer to the complaint for damages. Petitioners counsel promptly objected to the
testimony of Limbaga
We thus agree with the RTC that Limbaga did not place lighted tin cans on the front and rear of the
prime mover. We give more credence to the traffic incident report and the testimony of SPO4 Pame that only
banana leaves were placed on the vehicle. Baliwag Transit, Inc. v. Court of Appeals thus finds no application to
the case at bar.
The skewed parking of the prime mover was the proximate cause of the collision.
Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result would not have occurred. More
comprehensively, proximate cause is that cause acting first and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and continuous chain of events, each having a close
causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as
natural and probable result of the cause which first acted, under such circumstances that the person responsible
for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result therefrom.
There is no exact mathematical formula to determine proximate cause. It is based upon mixed considerations of
logic, common sense, policy and precedent. Plaintiff must, however, establish a sufficient link between the act or
omission and the damage or injury. That link must not be remote or far-fetched; otherwise, no liability will
attach. The damage or injury must be a natural and probable result of the act or omission.
Private respondents Liberty Forest, Inc. and Limbaga are liable for all damages that resulted from the
skewed parking of the prime mover. Their liability includes those damages resulting from precautionary
measures taken by other motorist in trying to avoid collision with the parked prime mover. The skewed parking
is the proximate cause of the damage to the Nissan van.
Private respondent Limbaga could have prevented the three-way vehicular collision if he had properly
parked the prime mover on the shoulder of the national road. The improper parking of vehicles, most especially
along the national highways, poses a serious and unnecessary risk to the lives and limbs of other motorists and
passengers. Drivers owe a duty of care to follow basic traffic rules and regulations and to observe road safety
standards. They owe that duty not only for their own safety, but also for that of other motorists. We can prevent
most vehicular accidents by simply following basic traffic rules and regulations.
We also note a failure of implementation of basic safety standards, particularly the law on early warning
devices. This applies even more to trucks and big vehicles, which are prone to mechanical breakdown on the
national highway. The law, as crafted, requires vehicles to be equipped with triangular reflectorized plates.
Vehicles without the required early warning devices are ineligible for registration. Vehicle owners may also be
arrested and fined for non-compliance with the law.
PETITION GRANTED.
REYES et al vs CA
G.R. No. 118492 August 15, 2001

The Philippine Racing Club, Inc. (PRCI) sent four (4) delegates to the 20 th Asian Racing Conference
then scheduled to be held in September, 1988 in Sydney, Australia. Petitioner Gregorio H. Reyes, as vice-
president for finance, racing manager, treasurer, and director of PRCI, sent Godofredo Reyes, the club's chief
cashier, to the respondent bank to apply for a foreign exchange demand draft in Australian dollars.
Godofredo went to respondent bank's Buendia Branch in Makati City to apply for a demand draft in the
amount AU$1,610.00 payable to the order of the 20 th Asian Racing Conference Secretariat of Sydney, Australia.
He was attended to by respondent bank's assistant cashier, Mr. Yasis, who at first denied the application for the
reason that respondent bank did not have an Australian dollar account in any bank in Sydney. Godofredo asked if
there could be a way for respondent bank to accommodate PRCI's urgent need to remit Australian dollars to
Sydney. Yasis of respondent bank then informed Godofredo of a roundabout way of effecting the requested
remittance to Sydney thus: the respondent bank would draw a demand draft against Westpac Bank in Sydney,
Australia (Westpac-Sydney) and have the latter reimburse itself from the U.S. dollar account of the respondent in
Westpac Bank in New York, U.S.A. (Westpac-New York). This arrangement has been customarily resorted to
since the 1960's and the procedure has proven to be problem-free. PRCI and the petitioner Gregorio H. Reyes,
acting through Godofredo, agreed to this arrangement or approach in order to effect the urgent transfer of
Australian dollars payable to the Secretariat of the 20 th Asian Racing Conference.
 On July 28, 1988, the respondent bank approved the said application of PRCI and issued Foreign
Exchange Demand Draft (FXDD) No. 209968 in the sum applied for AU$ 1,610.00, payable to the order of the
20th Asian Racing Conference Secretariat of Sydney, Australia, and addressed to Westpac-Sydney as the drawee
bank.
On August 10, 1988, upon due presentment of the foreign exchange demand draft, denominated as
FXDD No. 209968, the same was dishonored, with the notice of dishonor stating the following: "xxx No account
held with Westpac." Meanwhile, on August 16, 1988, Wespac-New York sent a cable to respondent bank
informing the latter that its dollar account in the sum of One Thousand Six Hundred Ten Australian Dollars
(AU$ 1,610.00) was debited. On August 19, 1988, in response to PRCI's complaint about the dishonor of the
said foreign exchange demand draft, respondent bank informed Westpac-Sydney of the issuance of the said
demand draft FXDD No. 209968, drawn against the Wespac-Sydney and informing the latter to be reimbursed
from the respondent bank's dollar account in Westpac-New York. The respondent bank on the same day likewise
informed Wespac-New York requesting the latter to honor the reimbursement claim of Wespac-Sydney. On
September 14, 1988, upon its second presentment for payment, FXDD No. 209968 was again dishonored by
Westpac-Sydney for the same reason, that is, that the respondent bank has no deposit dollar account with the
drawee Wespac-Sydney.
On September 17, 1988 and September 18, 1988, petitioners spouses Gregorio H. Reyes and Consuelo
Puyat-Reyes left for Australia to attend the said racing conference. When petitioner Gregorio H. Reyes arrived in
Sydney in the morning of September 18, 1988, he went directly to the lobby of Hotel Regent Sydney to register
as a conference delegate. At the registration desk, in the presence of other delegates from various member of the
conference secretariat that he could not register because the foreign exchange demand draft for his registration
fee had been dishonored for the second time. A discussion ensued in the presence and within the hearing of many
delegates who were also registering. Feeling terribly embarrassed and humiliated, petitioner Gregorio H. Reyes
asked the lady member of the conference secretariat that he be shown the subject foreign exchange demand draft
that had been dishonored as well as the covering letter after which he promised that he would pay the registration
fees in cash. In the meantime he demanded that he be given his name plate and conference kit. The lady member
of the conference secretariat relented and gave him his name plate and conference kit. It was only two (2) days
later, or on September 20, 1988, that he was given the dishonored demand draft and a covering letter. It was then
that he actually paid in cash the registration fees as he had earlier promised.
Meanwhile, on September 19, 1988, petitioner Consuelo Puyat-Reyes, member of the House of
Representatives representing the lone Congressional District of Makati, arrived in Sydney. She too was
embarassed and humiliated at the registration desk of the conference secretariat when she was told in the
presence and within the hearing of other delegates that she could not be registered due to the dishonor of the
subject foreign exchange demand draft. She felt herself trembling and unable to look at the people around her.
Fortunately, she saw her husband, coming toward her. He saved the situation for her by telling the secretariat
member that he had already arranged for the payment of the registration fee in cash once he was shown the
dishonored demand draft. Only then was petitioner Puyat-Reyes given her name plate and conference kit.
On November 23, 1988, the petitioners filed in the Regional Trial Court of Makati, Metro Manila, a
complaint for damages against the respondent bank due to the dishonor of the said foreign exchange demand
draft issued by the respondent bank. The petitioners claim that as a result of the dishonor of the said demand
draft, they were exposed to unnecessary shock, social humiliation, and deep mental anguish in a foreign country,
and in the presence of an international audience.
On November 12, 1992, the trial court rendered judgment in favor of the defendant (bank) and
against the plaintiffs (petitioners), the dispositive portion of which states:
Judgment is hereby rendered in favor of the defendant, dismissing plaintiff's complaint, and ordering
plaintiffs to pay to defendant, on its counterclaim, the amount of P50,000.00, as reasonable attorney's fees.
Costs against the plaintiff.
The petitioners appealed the decision of the trial court to the Court of Appeals. On July 22, 1994, the
appellate court affirmed the decision of the trial court but in effect deleted the award of attorney's fees to the
defendant (herein respondent bank) and the pronouncement as to the costs. The decretal portion of the decision
of the appellate court states:
WHEREFORE, the judgment appealed from, insofar as it dismissed plaintiff's complaint, is hereby
AFFIRMED, but is hereby REVERSED and SET ASIDE in all other respect. No special pronouncement as to
costs.
SO ORDERED.
According to the appellate court, there is no basis to hold the respondent bank liable for damages for the
reason that it exerted every effort for the subject foreign exchange demand draft to be honored. The appellate
court found and declared that:
xxx xxx xxx
Thus, the Bank had every reason to believe that the transaction finally went through smoothly, considering that
its New York account had been debited and that there was no miscommunication between it and Westpac-New
York. SWIFT is a world wide association used by almost all banks and is known to be the most reliable mode of
communication in the international banking business. Besides, the above procedure, with the Bank as drawer
and Westpac-Sydney as drawee, and with Westpac-New York as the reimbursement Bank had been in place since
1960s and there was no reason for the Bank to suspect that this particular demand draft would not be honored
by Westpac-Sydney.
From the evidence, it appears that the root cause of the miscommunications of the Bank's SWIFT message is the
erroneous decoding on the part of Westpac-Sydney of the Bank's SWIFT message as an MT799 format. However,
a closer look at the Bank's Exhs. "6" and "7" would show that despite what appears to be an asterick written
over the figure before "99", the figure can still be distinctly seen as a number "1" and not number "7", to the
effect that Westpac-Sydney was responsible for the dishonor and not the Bank.
Moreover, it is not said asterisk that caused the misleading on the part of the Westpac-Sydney of the numbers "1"
to "7", since Exhs. "6" and "7" are just documentary copies of the cable message sent to Wespac-Sydney. Hence,
if there was mistake committed by Westpac-Sydney in decoding the cable message which caused the Bank's
message to be sent to the wrong department, the mistake was Westpac's, not the Bank's. The Bank had done what
an ordinary prudent person is required to do in the particular situation, although appellants expect the Bank to
have done more. The Bank having done everything necessary or usual in the ordinary course of banking
transaction, it cannot be held liable for any embarrassment and corresponding damage that appellants may
have incurred.
xxx xxx xxx
Hence, this petition, anchored on the following assignment of errors:
I THE HONORABLE COURT OF APPEALS ERRED IN FINDING PRIVATE RESPONDENT NOT
NEGLIGENT BY ERRONEOUSLY APPLYING THE STANDARD OF DILIGENCE OF AN "ORDINARY
PRUDENT PERSON" WHEN IN TRUTH A HIGHER DEGREE OF DILIGENCE IS IMPOSED BY LAW
UPON THE BANKS.
II THE HONORABLE COURT OF APPEALS ERRED IN ABSOLVING PRIVATE RESPONDENT FROM
LIABILITY BY OVERLOOKING THE FACT THAT THE DISHONOR OF THE DEMAND DRAFT WAS A
BREACH OF PRIVATE RESPONDENT'S WARRANTY AS THE DRAWER THEREOF.
III THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT AS SHOWN
OVERWHELMINGLY BY THE EVIDENCE, THE DISHONOR OF THE DEMAND DRAFT AS DUE TO
PRIVATE RESPONDENT'S NEGLIGENCE AND NOT THE DRAWEE BANK.
The petitioners contend that due to the fiduciary nature of the relationship between the
respondent bank and its clients, the respondent should have exercised a higher degree of diligence than
that expected of an ordinary prudent person in the handling of its affairs as in the case at bar. The
appellate court, according to petitioners, erred in applying the standard of diligence of an ordinary prudent
person only. Petitioners also claim that the respondent bank violate Section 61 of the Negotiable Instruments
Law which provides the warranty of a drawer that "xxx on due presentment, the instrument will be accepted or
paid, or both, according to its tenor xxx." Thus, the petitioners argue that respondent bank should be held
liable for damages for violation of this warranty. The petitioners pray this Court to re-examine the facts to
cite certain instances of negligence.
It is our view and we hold that there is no reversible error in the decision of the appellate court.
Section 1 of Rule 45 of the Revised Rules of Court provides that "(T)he petition (for review) shall raise
only questions of law which must be distinctly set forth." Thus, we have ruled that factual findings of the Court
of Appeals are conclusive on the parties and not reviewable by this Court and they carry even more weight
when the Court of Appeals affirms the factual findings of the trial court.
The courts a quo found that respondent bank did not misrepresent that it was maintaining a deposit
account with Westpac-Sydney. Respondent bank's assistant cashier explained to Godofredo Reyes, representing
PRCI and petitioner Gregorio H. Reyes, how the transfer of Australian dollars would be effected through
Westpac-New York where the respondent bank has a dollar account to Westpac-Sydney where the subject foreign
exchange demand draft could be encashed by the payee, the 20 th Asian Racing Conference Secretariat. PRCI and
its Vice-President for finance, petitioner Gregorio H. Reyes, through their said representative, agreed to that
arrangement or procedure. In other words, the petitioners are estopped from denying the said arrangement
or procedure. Similar arrangements have been a long standing practice in banking to facilitate international
commercial transactions. It was the erroneous decoding of the cable message on the part of Westpac-Sydney that
caused the dishonor of the subject foreign exchange demand draft. An employee of Westpac-Sydney in Sydney,
Australia mistakenly read the printed figures in the SWIFT cable message of respondent bank as "MT799"
instead of as "MT199". As a result, Westpac-Sydney construed the said cable message as a format for a letter of
credit, and not for a demand draft. The appellate court correct found that "the figure before '99' can still be
distinctly seen as a number '1' and not number '7'." Indeed, the line of a "7" is in a slanting position while the line
of a "1" is in a horizontal position. Thus, the number "1" in "MT199" cannot be construed as "7".
The evidence also shows that the respondent bank exercised that degree of diligence expected of an
ordinary prudent person under the circumstances obtaining. Prior to the first dishonor of the subject foreign
exchange demand draft, the respondent bank advised Westpac-New York to honor the reimbursement claim of
Westpac-Sydney and to debit the dollar account of respondent bank with the former. As soon as the demand draft
was dishonored, the respondent bank, thinking that the problem was with the reimbursement and without any
idea that it was due to miscommunication, re-confirmed the authority of Westpac-New York to debit its dollar
account for the purpose of reimbursing Westpac-Sydney. Respondent bank also sent two (2) more cable
messages to Westpac-New York inquiring why the demand draft was not honored.
With these established facts, we now determine the degree of diligence that banks are required to exert
in their commercial dealings. In Philippine Bank of Commerce v. Court of Appeals upholding a long standing
doctrine, we ruled that the degree of diligence required of banks, is more than that of a good father of a
family where the fiduciary nature of their relationship with their depositors is concerned. In other words
banks are duty bound to treat the deposit accounts of their depositors with the highest degree of care. But
the said ruling applies only to cases where banks act under their fiduciary capacity, that is, as depositary of the
deposits of their depositors. But the same higher degree of diligence is not expected to be exerted by banks in
commercial transactions that do not involve their fiduciary relationship with their depositors.
Considering the foregoing, the respondent bank was not required to exert more than the diligence of a
good father of a family in regard to the sale and issuance of the subject foreign exchange demand draft. The case
at bar does not involve the handling of petitioners' deposit, if any, with the respondent bank. Instead, the
relationship involved was that of a buyer and seller, that is, between the respondent bank as the seller of the
subject foreign exchange demand draft, and PRCI as the buyer of the same, with the 20 th Asian Racing
conference Secretariat in Sydney, Australia as the payee thereof. As earlier mentioned, the said foreign exchange
demand draft was intended for the payment of the registration fees of the petitioners as delegates of the PRCI to
the 20th Asian Racing Conference in Sydney.
The evidence shows that the respondent bank did everything within its power to prevent the
dishonor of the subject foreign exchange demand draft. The erroneous reading of its cable message to
Westpac-Sydney by an employee of the latter could not have been foreseen by the respondent bank. Being
unaware that its employee erroneously read the said cable message, Westpac-Sydney merely stated that the
respondent bank has no deposit account with it to cover for the amount of AU $1610.00 indicated in the foreign
exchange demand draft. Thus, the respondent bank had the impression that Westpac-New York had not yet made
available the amount for reimbursement to Westpac-Sydney despite the fact that respondent bank has a sufficient
deposit dollar account with Westpac-New York. That was the reason why the respondent bank had to re-confirm
and repeatedly notify Westpac-New York to debit its (respondent bank's) deposit dollar account with it and to
transfer or credit the corresponding amount to Westpac-Sydney to cover the amount of the said demand draft.
In view of all the foregoing, and considering that the dishonor of the subject foreign exchange demand
draft is not attributable to any fault of the respondent bank, whereas the petitioners appeared to be under estoppel
as earlier mentioned, it is no longer necessary to discuss the alleged application of Section 61 of the Negotiable
Instruments Law to the case at bar. In any event, it was established that the respondent bank acted in good faith
and that it did not cause the embarrassment of the petitioners in Sydney, Australia. Hence, the Court of Appeals
did not commit any reversable error in its challenged decision. WHEREFORE, the petition is hereby DENIED,
and the assailed decision of the Court of Appeals is AFFIRMED. Costs against the petitioners. SO ORDERED.