Transpo

Transportation Law Case Digests
Cases Applying Articles 1732, 1733 and 1766 of the New Civil
Code
General Provisions on
Common Carriers
Articles Applied:
1
Art. 1732. Common carriers are persons, corporations, firms or

associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation,
offering their services to the public.
Art. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further

expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set
forth in Articles 1755 and 1756.
Art. 1766. In all matters not regulated by this Code, the rights and
obligations of common carriers shall be governed by the Code of
Commerce and by special laws.
2
Pedro de Guzman v. Court of Appeals

G.R. No. L-47822
Facts:
Herein respondent Ernesto Cendana was engaged in buying up

used bottles and scrap metal in Pangasinan. Normally, after collection
respondent would bring such material to Manila for resale. He utilized
(2) two six-wheelers trucks which he owned for the purpose. Upon
returning to Pangasinan, he would load his vehicle with cargo belonging
to different merchants to different establishments in Pangasisnan which
respondents charged a freight fee for.
Sometime in November 1970, herein petitioner Pedro de Guzman,
a merchant and dealer of General Milk Company Inc. in Pangasinan
contracted with respondent for hauling 750 cartons of milk.
Unfortunately, only 150 cartons made it, as the other 600 cartons were
intercepted by hijackers along Marcos Highway. Hence, petitioners
commenced an action against private respondent.
In his defense, respondent argued that he cannot be held liable
due to force majuere, and that he is not a common carrier and hence is
not required to exercise extraordinary diligence.
Issues:
1. Whether or not respondent can be held liable for loss of the
cartons of milk due to force majeure.
2. Whether or not respondent is a common carrier.
Held:
3
1. The court ruled the affirmative. The circumstances do not fall

under the exemption from liability as enumerated in Article 1734 of
the Civil Code. The general rule is established by the article that
common carriers are responsible for the loss, destruction or
deterioration of the goods which they carry, unless the same is due
to any of the following causes only:
a. Flood, storm, earthquake, lightning or other natural disasters;
b. Act of the public enemy, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. Character of the goods or defects in the packing;
e. Order or act of competent public authority.
2. The court ruled the affirmative. Article 1732 of the New Civil Code
avoids any distinction between one whose principal business
activity is the carrying of persons or goods or both and one who
does such carrying only as an ancillary activity. It also avoids a
distinction between a person or enterprise offering transportation
services on a regular or scheduled basis and one offering such
services on an occasional, episodic, and unscheduled basis.
Planters Products, Inc. v. Court of Appeals

G.R. No. 101503
Facts:
Planters Products (Planters) purchased from Mitsubishi
International Corporation of USA of 9,000 metric tons of urea fertilizer
which the latter shipped abroad the cargo vessel owned by private
respondent Kyosei Kisin Kabushiki Kaisha (KKKK) from America to La
Union. Prior to its voyage, a time charter party was entered into
4
between Mitusbishi as shipper/charterer and KKKK as ship-owner. After

the Urea fertilizer was loaded in bulk by stevedored hired by the
shipper, the steel hatches were closed with heavy iron lids which
remained closed during the entire journey.
Upon arrival of the vessel, the hatches were opened with the use
of the vessel boom. Planters unloaded the cargo from the holders into
the steel bodied dump trucks. Each time the dump trucks were filled up,
its load of urea was covered with tarpaulin before it was transported to
the consignee’s warehouse located some (50) fifty meteres from the
wharf. It took (11) eleven days from planters to unload the cargo. The
report submitted by private marine and cargo surveyors revealed a
shortage in the cargo, and some portion in the cargo was contaminated
with dirt, rendering the same unfit for commerce. Planters filed an
action for damages bu the appellate court absolved the carrier from
liability.
Issues:
1. Whether or not the respondent is a common carrier.
2. Whether or not the respondent is liable for damages.
Held:
1. The court rules the affirmative as to the respondent being a
common carrier. The term common carrier is defined in Article
1732 of the Civil Code. The definition refers to carriers either by
land, water, or air which holds themselves out as ready to engage
in carrying goods on transporting passengers or both for
compensation as a public employment and not as a casual
occupation; if the undertaking is a single transaction, not a part of
the general business or corporation, although involving the
carriage of goods for a fee, then the person or corporation offering
such services is a private carrier. In the case at bar respondent
carrier transports goods indiscriminately for all persons. Being
such, he is a common carrier.
2. The court rules the negative. True, being a common carrier,
respondent must have observed extraordinary diligence over the
goods it carries. In the case at bar it has been proven that the
respondent has sufficiently overcome this, by clear and convincing
proof, the prima facie presumption of negligence, due to the
5
manner of storage of the goals during the vogyage. In fact, it was

pointed out that there was a risk in shipping the urea due to its
character.
F.C. Fisher v. Yangco Steamship Company

G.R. No. L-8095
Facts:
On June 10, 1912, the directors of Yangco Steamship Company
which is duly licensced to engage in the coastwise trade in the
Philippines, adopted a resolution which was thereafter ratified and
affirmed by the shareholders of the company expressly declaring and
providing that the classes of merchandise to be carried by the company
in its business as a common carrier to include dynamite, power or other
explosives and other expressly prohibiting the officers, agents, and
servatnts of the company from offering to carry or accepting to carry
said articles.
In view of the resolution passed the collector of customs
suspended the issuance of clearances for the vessles unless they allow
the carriage of such articles. Hence, herein petitioner a major
stockholder filed a petition for prohibition.
Issue:
Whether or not the resolution of Yanco is justified.
Held:
6
The court rules the negative. Common carrier in the jurisdiction

cannot lawfully decline to accept a particular class of goods, unless it
appears that for some sufficient reason the discrimination is reasonalble
and necessary. Yangco Steamships Company has not met those
conditions.
The nature of the business of a common carrier as a public
employment is such that it is within the power of the state to impose
such just regulation in the interest of the public as the legistalors may
deem proper.
United States v. Quinajon

G.R. No. 8686
7
Facts:
Herein defendants were charged with the violation of Act No. 98.
The accused herein have been engaged for more than (4) four years in
the transportation of passengers and merchandise in the port of
Curimao, in the loading and unloading of passengers and merchandise
by means of voyages from the shore. The facts state that sometime in
September 1912, the said accused, by means of voyages, unloaded
5,986 sacks of rice belonging to the provincial government of Ilocos
Norte where they regularly charge 6 cents for the unloading and loading
of each package of merchandise.
Issue:
Whether or not the provincial government was prejudiced by the
preferential privileges in favor of the shippers.
Held:
The court rules the affirmative. Sec. 5 of Act No. 98, provides that
any person or corporation who may be damaged by the common carrier
of any matter or things prohibited shall be entitled to sue or recover all
damges so incurred. It is not believed that that law prohibits common
carrier from making special rates for handling merchandise when the
same are made for the purpose of increasing the business which are
regarded as sound. That does not require absolute equality in all cases;
it only applies where the services perfomed in the different cases are
substantially the same and conditions similar.
8
Loadstar Shipping Co. Inc. v. Court of Appelas

G.R. No. 131621
Facts:
On November 19, 1984 herein petitioner shipping company
carried, a shipment of (3) three bulk items on board its M/V Cherokee,
which amounted to P6,067,178.00, the same being insured by the
Manila Insurance Co. (MIC). The vessel in turn was insured by Prudential
Guarantee and Assurance, Inc. of P4 million. Unfortunately the ship sank
in the are of Limasawa.
MIC settled the insurance with the consignee and asked for the
subrogation receipt, then MIC filed a claim against Loadstar. PGAI
alleging the sinking was due to the fault and negligence of Loadstar. In
their defense, Loadstar set up the argument of force majuere. PGAI was
dropped from the case afer proving MIC had no locus standi against
them. Inter alia all other defenses, Loadstar argues that it cannot be
considered a common carrier because it was issued a certificate of
public convenience and that it carried a particular type of cargo for a
particular shipper.
Issues:
1. Whether or not Loadstar’s Cherokee is a common carrier;
2. Wheter or not, considering the type of carriage the M/V is, the
required amount of diligence was observed;
9
Held:
1. The court rules the affirmative that the M/V Cherokee is a common
carrier. It is not necessary that the carrier be issued a certificate of
public convenience and their public character is not altered by the
fact that the carriage of the goods in question was periodic,
occasional, episodic, or unscheduled. Additionally, the second
argument of Loadstar must fail; that the M/V Cherokee was
carrying a particular type of cargo for one shipper which appears
to be purely coincidental is not reason enough to convert a vessel
that is a common carrier to a private one, especially where, as in
the case, it was shown that the vessel was also carrying
passengers.
2. The court rules the negative. Loadstar should have exercised
extraordinary diligence since it is a common carrier; and the fact
that it still allowed the voyage despite the knowledge of a typhoon
present counters their exercise of extra ordinary diligence required.
First Philippine Industrial Corp. v. Court of Appeals

G.R. No. 125948
Facts:
10
Herein petitioner applied for a mayor’s permit to operate its

pipeline concession. Before such permit was issued, the City treasurer
required petitioner to pay local tax. In order not to hamper its
operations, petitioner paid the tax under protest.
Then the petitioner filed a letter protest addressed to the treasurer
claiming exemption from payment of the tax because according to the
Local Government Code of 1991, transportation contractors are not
included in the enumeration of contractors which are liable to pay taxes.
The city treasurer denied the protest. The petitioner filed a case before
the trial court for tax refund, however it was subsequently dismissed.
Hence, this petition.
Issue:
Whether or not the petitioner is a common carrier as contemplated
to be exempted under the law.
Held:
The court rules the affirmative. The court enunciated the (4) tests
in determining whether the carrier is that of a common carrier:
a. must be engaged int eh business of carrying goods for other as
a public employment and must hold itself out as ready to
engage in the transportation of goods generally as a business
and not a casual occupation
b. it must undertake to carry goods of the kind which its business
is confined;
c. it must undertake the method by which his business is
conducted and over its established roads;
d. the transportation must be for hire.
In the case at bar, the court categorically ruled that the
transporting of oil through pipelines is still considered to be an activity
of a common carrier. The petitioner is a common carrier because it is
engaged in the business of transporting passengers or goods; like
petroleum. It undertakes to carry for all persons indifferently. The fact
that the petitioner has limited clientele does not exclude it from the
definition of common carrier. Under the petroleum act of the Philippines,
11
the petitioner is considered a common carrier even if it is a pipeline

concessionaire.
And even as regards the petroleum operation, it is of public utility.
Specifically, the Bureau of Internal Revenue considers petitioners as
common carrier not subject to withholding tax.
Home Insurance Co. v American Steamship Agencies

23 SCRA 24 April 4, 1968
Facts:
Consorcio Pasquero Del Perse of South America shipped a freight of
21,740 jute bags of Peruvian fish meal through the SS Crowborough
consigned to the Sam Miguel Brewery and insured by Home Insurance
Company for $202,505.00. It arrived in Manila on March 7, 1963 and
was loaded into the lighters of Luzon Stevedoring Company. However, it
arrived with shortages. Thus SMB demanded that Home Insurance pay
the claim of P14,000.00. Home Insurance on the other hand filed for the
recovery of the P14,000.00 from Luzon Stevedoring. The Court of First
Instance absolved Luzon Stevedoring, but ordered the American
Steamship Agencies to reimburse the amount to Home Insurance,
basing the ruling on Art. 587 of the Code of Commerce which makes the
ship agent civilly liable for damages in favor of third persons due to
conduct of carrier’s captain and that the stipulation in the charter party
12
exempting the owner from liability is against public policy under Article
1744 of the New Civil Code.
Issue:
Between the provisions of the New Civil Code and the Code of
Commerce, which should apply.
Held:
The court rules the affirmative as to the non-applicability of the
prohibition of the exemption of the carrier from liability. The provisions
of our Civil Code on common carriers were taken from Anglo-American
Law. Under American Jurisprudence, a common carrier undertakes to
carry a special cargo or chartered to a special person only, becomes a
private carrier. And thus, as a private carrier, a stipulation exempting
the owner from liability for the negligence of its agent is not against
public policy. The reason is that there is no strict public policy applied.
13
San Pablo v. PANTRANCO South Express

G.R. No. L-61461
Facts:
Defendant PANTRANCO planned to operate a ferryboat service
between Matnog and Allen as a common carrier. It requested authority
from the MARINA to purchase the vessel M/V Black Double in
accordance with the procedure provided for by law on such application
for a certificate of public convenience (CPC). Its request was denied as
the said routes are adequately serviced by existing authorized operators
such as the Cardinal Shipping Company. However, the defendant
continued to purchase the vessel and started operating. Defendant
contends that what it proposed was to operate a PRIVATE FERRY BOAT
service across a “small body of water” specially for its buses and trucks
from Matnog to Allen, Tacloban for the purpose of continuing the
highway. Thus, the ferry is merely an incident to its franchise to convey
passengers and cargo from Pasay to Tacloban and need not secure a
separate CPC. Defendants also contend that they are not a PUBLIC
FERRY BOAT as they do not accept walkins.
The Board of Transportation (BOT) enjoined PANTRANCO from
operating the ferry. The petitioner along with Cardinal Shipping
interposed their opposition as they are able to service the riding public.
BOT sought for the opinion of then Minister of Justice Ricardo Puno
that rendered and affirmative opinion in favor of PANTRACO. Justice
Puno gave an opinion to the effect that there is no need for bus
operators to secure a separate CPC to operate a ferryboat service. BOT
rendered its decision holding that the ferry boat service is part of its
CPC to operate from Pasay to Samar/Leyte by amending PANTRANCO's
CPC. Petitioners filed for motions of consideration and were denied by
BOT.
Issue:
Whether or not the water transport service is a ferry service for
purpose of continuing the highway or a coastwise/ interland service.
14
Held:
The court holds that the water transport service between Matnog
and Allen is not a ferryboat service but a coastwise or interland shipping
service. Under no circumstance can the sea between Matnog and Allen
be considered a continuation of the highway. While a ferry boat service
has been considered as a continuation of the highway when crossing
rivers or even lakes, which are small body of waters - separating the
land, however, Matnog and Allen are separated by an open sea it can
not be considered as a continuation of the highway. Respondent
PANTRANCO should secure a separate CPC for the operation of an
interisland or coastwise shipping service in accordance with the
provisions of law. Its CPC as a bus transportation cannot be merely
amended to include this water service under the guise that it is a mere
private ferry service.
Argumento, PANTRANCO is a a ferry service, it is absurd to be
called a Private ferry service. It is confusing that respondent
PANTRANCO claims that it is a private carrier in relation to its ferry
service but it affirms its obligation as a common carrier to observe
extraordinary diligence and vigilance in the transportation of its
passengers and goods. By considering that the authority granted to
PANTRANCO is to operate a private ferry, it can still assert that it cannot
be held to account as a common carrier towards its passengers and
cargo. Such an anomalous situation that will jeopardize the safety and
interests of its passengers and the cargo owners cannot be allowed.
National Steel Corporation v. Court of Appeals

G.R. Nos. 112287/112350
Facts:
Herein petitioner of G.R. No. 112350, Vlasons Shipping entered into
a contract of afreightment on contract of vogage4 charter line with the
petitioner of the other consolidated case, National Steel Corporation
(NSC), whereby the latter hired Vlason’s vessel, the M/V Vlasons I to
15
make a voyage to load steel products from Ilagan City to Manila. Under
the agreement, the loading and unloading of the cargoes are the
responsibility of the charter and the owner shall no be liable of the loss
or damage of the cargo arising from the unseaworthiness unless
counsel by want of diligence on the part of the owners to make the
vessel seaworthy and to secure that it is properly manned, equipped
and supplied.
Upon arrival on August 12, 1974, it was found that nearly all the tin
plates and hot rolled sheets were wet and rusty. The cargo was
unloaded by the charterer Hence the petitioner filed for a claim of
damages amounting to P941,145.58, alleging the negligence of the
master and crew of the ship.
Issue:
Whether or not Vlasons Shipping is made liable notwithstanding
the Charter Party stipulations.
Held:
The courts rule the negative. At bottom, this appeal really hinges
on a factual issue as to then, how, and who caused the damages to the
cargo. Ranged against NSC are two formidable truhs. First, it was found
that such damage was brought about during the unloading process
when the rain seeped into the cargo due to the negligence of the
stevedores employed by it.
Second and more importantly, the agreement between the parties
“The Contact of Voyage Charter Party for Hire” placed the burden of
proof of such loss or damage upon the shipper, not upon the ship owner.
Such stipulation, while disadvantageous to the NSC, is valid because the
parties entered into a contract of private charter, not one of common
carriage.
Basic too is the doctrine that courts cannot relieve a party from the
effects of a private contract fully entered into, on the ground that it is
allegedly one-sided or unfair to the plaintiff. It has been held that the
true test of a common carrier of passengers/goods is the carriage of the
16
same, provided it has space, for all who opt to avail for its
transportation service for a fee.
Kilusang Mayo Uno Labor Center vs. Garcia Jr.

G.R. No. 115381
Facts:
Petition for certiorari assails the constitutionality and validity of
circulars released by the Land Transportation Franchising and
Regulatory Board (LTFRB). Such circulars authorized provincial bus and
jeepney operators to increase or decrease the prescribed transportation
fares without application with the LTFRB fro a period of one year.
Likewise, it established a presumption of public need for certificates of
public convenience (CPC). Petitioner KMU claims however that the
authority given by LTFRB to provincial bus operators to set a fare range
is unconstitutional, invalid and illegal. Also, the establishment of the
presumption of public need for a proposed transport service without
having to prove public necessity, is likewise illegal it being violative of
Public Service Act and the Rules of Court.
Issue:
17
Whether or not such circulars released by the LTFRB is valid.
Held:
The Supreme Court held that the authority given by the LTFRB to
the provincial bus operators to set a fare range over and above the
authorized existing fare is illegal and invalid. This is tantamount to an
undue delegation of legislative authority. The policy of allowing the
provincial bus operators to change and increase their fares would result
not only to a chaotic situation but also to an anarchic state of affairs.
This would leave the riding public at the mercy of transport operators
who may change fares every hour, every day, every month as he may
wish to do so. The Supreme Court held that rate-fixing is a delicate and
sensitive government function that requires dexterity of judgment with
a settled goal of arriving at a just and reasonable rate accepted by both
the public and the utility. With regard to the presumption of public need,
CPC is an authorization granted by the LTFRB for the operation of land
transportation services for public use as required by law. Public
convenience or necessity generally means something fitting for public
need. Thus in the case at bar, it was founded that the LTFRB committed
grave abuse of discretion is issuing orders to regulate the transport
sector. Such circulars are deemed null and void and of no force or effect.
18
Tatad v. Garcia
G.R. No. 114222
Facts:
EDSA LRT Consortium, a foreign corporation, was awarded with the
construction of Light Rail Transit III (LRT III) as the only bidder who has
qualified with the requirements provided by the PBAC. The said foreign
corporation will construct the LRT III in a “Built-Lease-Transfer”
agreement that such public utility will be leased by the government
through the Department of Transportation and Communication (DOTC)
and then it would be subsequently sold by the corporation to the
government. An objection was raised by the petitioner stating that the
awarding of the bid to the said corporation is against the Constitution. It
was provided in the Constitution that only Filipinos are entitled to
operate a public utility such as the LRT III.
Issue:
Whether or not the awarding of the bid to EDSA LRT Consortium is
against the Constitution.
Held:
The Court held that there is a distinction in the “operation” of a
public utility and ownership in the facilities and equipment to serve the
public. The EDSA LRT Consortium fall under the latter because the said
corporation will not operate the public utility. The said corporation will
only own the facilities and equipment such as the train carts, the
railings and the booths. In addition, such ownership will then be
subsequently transferred to the government under “Built-Lease-
Transfer” agreement. With that said, the operation of the public utility
will fall to the Filipinos through its government. Therefore, the awarding
of the bid to EDSA LRT Consortium is not against the provisions of the
Constitution.
19
Samar Mining Co. v. Nordeutscher Lloyd & C.F. Sharp & Co. Inc.
G.R. No. L-28673
Facts:
Herein petitioner and defendant entered into a contract where the
former agreed to ship a crate of optima wielded wedge wire sleeves,
with the Bill of Lading indicated the effective transportation from
Germany to Manila only.
From Manila, the crate was to be further transported to Davao. The
carrier had unloaded and delivered the goods in the rouded warehouse
in Manila.
Unfortunately, the goods were lost and never reached Davao City.
Issue:
20
Whether or not herein petitioner is liable for the loss.
Held:
The court rules the negative, when the carrier under the terms of
the Bill of Lading had delivered the goods at the port of destination, at
that point he merely becomes the agent of the consignee and ceases to
be liable for any loss a damage of goods transported.
Furthermore, there is no applicability of Article 1738 of the New
Civil Code, which contemplates liability of the carrier of the shipment of
goods while stored in the warehouse of the carrier. However, in the
present case, the warehouse belonged to a third person.
21
Eastern Shipping Lines vs. IAC

150 SCRA 463
Facts:
In GR 69044, the M/S ASIATICA, a vessel operated by Eastern
Shipping Lines loaded at Kobe, Japan for Manila:
(1) 5,000 pieces of calorized lance pipes in 28 packages valued at
P256,039.00 consigned to Philippine Blooming Mills Co., Inc.,
(2) 7 cases of spare parts valued at P92,361.75, consigned to
Central Textile Mills, Inc.
Both sets of goods were insured for their value with Development
Insurance and Surety Corporation.
In GR 71478, the same vessel took on board :

1. 128 cartons of garment fabrics and accessories, in 2 containers,
consigned to Mariveles Apparel Corporation
2. two cases of surveying instruments consigned to Aman
Enterprises and General Merchandise.
The 128 cartons were insured for their value by Nisshin Fire &
Marine Insurance Co., for US$46,583.00. The 2 cases by Dowa Fire &
Marine Insurance Co., Ltd., for US$11,385.00. Enroute for Kobe, Japan,
to Manila, the vessel caught fire and sank, resulting in the total loss of
ship and cargo. The respective Insurers paid the corresponding marine
insurance values to the consignees concerned and were thus
subrogated unto the rights of the latter as the insured.
Eastern Shipping denied liability mainly on the ground that the loss
was due to an extraordinary fortuitous event; hence, it is not liable
under the law. The Trial Court rendered judgment in favor of
Development Insurance in the amounts of P256,039.00 and P92,361.75,
respectively, with legal interest, plus P35,000.00 as attorney’s fees and
costs. Eastern Shipping took an appeal to the then Court of Appeals
which, on 14 August 1984, affirmed the decision of the trial court.
Eastern Shipping filed a petition for review on certiorari.
22
Nisshin, and Dowa, as subrogees of the insured, filed suit against

Eastern Shipping for the recovery of the insured value of the cargo lost
imputing unseaworthiness of the ship and non-observance of
extraordinary diligence by Eastern Shipping. Eastern Shipping denied
liability on the principal grounds that the fire which caused the sinking
of the ship is an exempting circumstance under Section 4(2) (b) of the
Carriage of Goods by Sea Act (COGSA); and that when the loss of fire is
established, the burden of proving negligence of the vessel is shifted to
the cargo shipper. Trial Court rendered judgment in favor of Nisshin and
Dowa. CA affirmed decision. Hence this petition on certiorari.
Issue:
Whether or not the carrier exercised extraordinary diligence.
Held:
Eastern Shipping shall pay the Development Insurance the amount
of P256,039 for the 28 packages of calorized lance pipes, and P71,540
for the 7 cases of spare parts, with interest at the legal rate from the
date of the filing of the Complaint on 13 June 1978, plus P5,000 as
attorney’s fees, and the costs. The Court, on the other hand, in GR
71478, affirmed the judgment.
The evidence of the defendant did not show that extraordinary
diligence was observed by the vessel to prevent the occurrence of fire
at hatches nos. 2 and 3. Defendant’s evidence did not likewise show
the amount of diligence made by the crew, on orders, in the care of the
cargoes. What appears is that after the cargoes were stored in the
hatches, no regular inspection was made as to their condition during the
voyage. The complete defense afforded by the COGSA when loss results
from fire is unavailing to Eastern Shipping. The Carriage of Goods by
Sea Act (COGSA), a special law, is merely suppletory to the provisions of
the Civil Code The fire may not be considered a natural disaster or
calamity, as it arises almost invariably from some act of man or by
human means. It does not fall within the category of an act of God
23
unless caused by lightning or by other natural disaster or calamity. It

may even be caused by the actual fault or privity of the carrier.
24
National Development Company v. Court of Appeals

164 SCRA 593
Facts:
In accordance with a memorandum entered into between
defendants National Development Company (NDC) and Maritime
Company of the Philippines (MCP) on September 13, 1962, defendant
NDC as the first preferred mortgagee of three ocean-going vessels
including one the name “Doña Nati” appointed defendant MCP as its
agent to manage and operate said vessels in its behalf.The E. Phillipp
Corporation of the New York loaded on board the vessel “Doña Nati” at
San Francisco, California, a total of 1,200 bales of American raw cotton
consigned to Manila Banking Corporation, Manila and the People’s Bank
and Trust Company acting for and in behalf of the Pan Asiatic
Commercial Company, Inc., who represents Riverside Mills
Corporation.The vessel figured in a collision at Ise Bay, Japan with a
japanese vessel as a result of which 550 bales of aforesaid cargo were
lost and/or destroyed The damage and lost cargo was worth
P344,977.86 which amount, the plaintiff Development Insurance and
Surety Corporation as insurer, paid to the Riverside Mills Corporation as
holder of the negotiable bills of lading duly endorsed.The insurer filed
before the CFI of Manila an action for the recovery of said amount from
NDC and MCP.
Issue:
Whether or not the law of country or port of destination shall apply.
Held:
In Easter Shipping Lines, Inc., v. IAC, 150 SCRA 469 (1987), we
held under similar circumstances that the law of the country to which
the goods are to be transported governs the liability of the common
carrier in case of their loss, destruction or deterioration. Thus, the rule
was specifically laid down that for cargoes transported from Japan to the
Philippines, the liability of the carrier is governed primarily by the Civil
25
Code and in all matters not regulated by said Code, the rights and
obligations of common carrier shall be governed by the Code of
Commerce and by especial laws (Article 1766, Civil Code). Hence, the
carriage of Goods by Sea Act, a special law, is merely suppletory to the
provisions of the Civil Code. The goods in question were being
transported from San Francisco, California and Tokyo, Japan to the
Philippines and that they were lost or damaged due to a collision which
was found to have been caused by negligence or fault of both captains
of the colliding vessels.Under the above ruling, it is evident that laws of
the Philippines will apply, and it is immaterial that the collision actually
occurred in foreign waters, such as Ise Bay, Japan. It appears, however,
that collision falls among matters not specifically regulated by the Civil
Code, so that no reversible error can be found in respondent courtâ€™s
application to the case at bar of Articles 826 to 839, Book Three of the
Code of Commerce, which deal exclusively with collision of vessels.
Article 826 of the Code of Commerce provides that where collision is
imputable to the personnel of a vessel, the owner of the vessel at fault
shall indemnify the losses and damages incurred after an expert
appraisal. But more in point to the instant case in is Article 827 of the
same Code, which provides that if the collision is imputable to both
vessels, each one shall suffer its own damages and both shall be
solidarily responsible for the losses and damages suffered by their
cargoes.There is, therefore, no room for NDCs interpretation that the
Code of Commerce should apply only to domestic trade and not to
foreign trade.MCP next contends that it cannot be liable solidarily with
NDC because it is merely the manager and operator of the vessel
“Doña Nati”, nor a ship agent. As the general managing agent,
according, to MCP, it can only be liable if it acted in excess of its
authority. The Memorandum Agreement of September 13, 1962 shows
that NDC appointed MCP as agent, a term broad enough to include the
concept of ship agent in Maritime Law. In fact, MCP was even conferred
all the powers of the owner of the vessel, including the power to
contract in the name of the NDC. Consequently, under the
circumstances, MCP cannot escape liability. It is well-settled that both
26
the owner and agent of the offending vessel are liable for the damage
done where both are impleaded.
27
Cases Applying Articles 1734 – 1743 of the New Civil Code
Vigilance Over Goods

of Common Carriers
Articles Applied:
Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the
following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
28
(4) The character of the goods or defects in the packing or in the

containers;
(5) Order or act of competent public authority.
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and
5 of the preceding article, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed
extraordinary diligence as required in Article 1733.
Art. 1736. The extraordinary responsibility of the common carrier lasts

from the time the goods are unconditionally placed in the possession of,
and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the consignee, or
to the person who has a right to receive them, without prejudice to the
provisions of Article 1738.
Art. 1737. The common carrier's duty to observe extraordinary diligence

over the goods remains in full force and effect even when they are
temporarily unloaded or stored in transit, unless the shipper or owner
has made use of the right of stoppage in transitu.
Art. 1738. The extraordinary liability of the common carrier continues to

be operative even during the time the goods are stored in a warehouse
of the carrier at the place of destination, until the consignee has been
advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
Art. 1739. In order that the common carrier may be exempted from
responsibility, the natural disaster must have been the proximate and
only cause of the loss. However, the common carrier must exercise due
diligence to prevent or minimize loss before, during and after the
29
occurrence of flood, storm or other natural disaster in order that the

common carrier may be exempted from liability for the loss, destruction,
or deterioration of the goods. The same duty is incumbent upon the
common carrier in case of an act of the public enemy referred to in
Article 1734, No. 2.
Art. 1740. If the common carrier negligently incurs in delay in

transporting the goods, a natural disaster shall not free such carrier
from responsibility.
Art. 1741. If the shipper or owner merely contributed to the loss,

destruction or deterioration of the goods, the proximate cause thereof
being the negligence of the common carrier, the latter shall be liable in
damages, which however, shall be equitably reduced.
Art. 1742. Even if the loss, destruction, or deterioration of the goods

should be caused by the character of the goods, or the faulty nature of
the packing or of the containers, the common carrier must exercise due
diligence to forestall or lessen the loss.
Art. 1743. If through the order of public authority the goods are seized
or destroyed, the common carrier is not responsible, provided said
public authority had power to issue the order.
30
Gelisan v. Alday
154 SCRA 388
Facts:
Herein petitioner is Bienvenido Gelisan, is the owner of a freight
truck. He and Roberto Espiritu entered into a contract under which
Espiritu hired the freight truck Gelisan for the purpose of hauling sugar,
flour, and fertilizers. It also stipulated that Espiritu shall bear the loss
and damage attending the goods to be hauled by him.
Benito Alday, a trucking operator who knew of Espiritu, had a
contract to haul the fertilizers of Atlas Fertilizer Corporation from Pier 4,
North Harborn, to Mandaluyong.
Alday met Espiritu at the gate of Pier 4 and the latter offered the
use of his truck with the driver and helper. Alday accepted and
instructed the checker to let Espiritu hau fertilizer.
Espiritu managed 200 bags of fertilizer per trip. The fertilizer was
delivered to the driver and maid with the necessary way bill receipt.
However, Espiritu never delivered the fertilizer to the Atlas Fertilizer
bodega in Mandaluyong.
Hence, Alday was compelled to pay for the loss of 400 tags to Atlas
Fertilizer Corporation and filed a complaint against Espiritu and Gelisan
with the CFI Manila.
While the CFI ruled that Espiritu alone is liable, the Court of
Appeals ruled to include Gelisan.
Issue:
Whether or not Gelisan be held solidarily liable with Espiritu.
Held:
The court rules the affirmative, Gelisan being the registered owner
of the truck. The court has held invariably in several decisions that the
registered owner of a public service vehicle is responsible for damages
31
that may arise from consequences incidental to its operation or that

may be caused by any of the passengers therein.
The claim that the petitioner is not liable in view of the lease
contract executed by and between him and Roberto Espiritu which
exempts him from liability to third persons cannot be sustained because
it appears that the lease contract, adverted to, had not been approved
by the Public Dercric Commision.
It is settled in our jurisprudence that if a property covered by a
franchise is transferred or leased to another without the requisite
approval, the transfer is not binding upon the public and third persons,
However, Gelisan is not without recourse as he may be indemnified
by Espiritu the amount he many have been udered to pay for the
damages.
Benedicto v. Intermediate Appellate Court

187 SCRA 547
Facts:
Herein private respondent Greenhills Wood Industries Co., Inc.
operates saw hill in Quirino. Sometime in May 1980, private
respondents bound itself to sell and deliver to Blue Star Mahogany, Inc.
(Blue Star), a company in Bulacan 100,000 board feet of sawn lumber
with the understanding that an initial delivery would be made on May
15, 1980. to effect its first delivery, private respondents’ resident
32
manager, Dominador Cruz, contracted Virgitio Licuden, the drivear of a

cargo truck to transport its sawn lumber to the consignee, Blue Star, in
Valenzuela, Bulacan. The cargo truck was registered in the name of
herein petitioner Luisa Benedicto, the proprietor of Macorem Trucking, a
business enterprise engaged in hauling freight.
On May 15, 1980, Cruz in the presence and with the consent of
the driver Licuden, supervised the loading of san lumber with invoice
aboard the cargo truck. Thereafter, the manager of Blue Star called up
the manager of Greenhills informing the former that the sawn lumber
had not yet arrived in Bulacan. The manager of Greenhills was this
informed. Still, Blue Star was constrained to look for other suppliers.
Thus Greenhills filed a criminal case against Luciden for Estafa
and also against Benedicto for recovery of the value of the lost sawn
lumber plus damages. The RTC ruled against Benedicto and Luciden.
Hence this petition from the IAC.
Issue:
Whether or not Benedicto, being the registered owner of the truck
should be held liable for the value of the undelivered or lost sawn
lumber.
Held:
The court rules the affirmative. There is no dispute that petitioner
Benedicto has been holding herself out to the public as engaged in the
business of hauling or transporting goods for hire or compensation. In
sum, Benedicto is a common carrier.
The prevailing doctrine on common carriers makes the registered
owner liable for consequences flowing from the operations of the carrier
, even though the specific vehicle involved may have already been
transferred to another person. The doctrine rests upon the principle that
in dealing with vehicles registered under the Public Service Law, the
public has the right to assume that the registered owner is the actual or
lawful owner thereof.
It would be very difficult and often impossible as a practical
matter, for members of the general public to enforce their right of
33
action against those that may have inflicted injuries should they be
required to prove who the actual owner is. The registered owner is not
allowed to deny liability by proving the identity of the alleged
transferee.
Philtranco Service Enterprise v. Court of Appeals

273 SCRA 563
Facts:
The victim herein, Ramon Asuesta was riding in his easy rider
tricycle along Calbayog City. Also in the city, herein defendant
Philtranco’s bus was driven by defendant Rogasiones Dolira Manilbing
was being pushed by some persons in order to start its engine. As the
bus was pushed, its engine started thereby the bus continued on its
running motion and it occurred at the time when Ramon Asuesta, who
was still riding on his bicycle was directly (was) in front of the said bus.
Due to the abrupt start of the bus’ engine, it thereby bumped on the
victim Ramon. As a result, he fell and was run over by the bus
Still, the bus did not halt after hitting the victim. Thereafter P/Sgt.
Yabao, who was then jogging approached the driver defendant and
signaled him to stop, but the driver only stopped when the former
introduced himself as a police officer. The trial court rendered a decision
ordering the petitioner (Philtranco) to jointly and severally pay the
private respondents. On appeal, the CA affirmed the decision.
Issue:
34
Whether or not the court erred in holding Philtranco liable being

the registered owner of a public service for the tortuous act of the
driver.
Held:
The courts ruled the negative. The Appellate court was correct in
holding herein petitioner liable. Article 2176 of the New Civil Code
provides that “whoever by act or omission causes damage to another,
these being fault or negligence, is obligated 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. Further, Article
2180 of the Civil Code states that “The obligation imposed by Article
2176 is demandable not only for ones owns acts or omissions, but for
whom one is responsible.”
In the case at bar, the liability of the registered owner of a public
service vehicle, like petitioner Philtranco, for damages arising from the
tortuous acts of the driver are primary, direct and joint and solidary, its
only recourse if the judgement for damages is satisfied by it is to be
recovered what it has paid from its employee who committed the fault
or negligence which gave rise to the action based on the quasi-delict.
35
Santos v. Sibug
G.R. No. L-26815
Facts:
Santos, who owns a jeep, entered into an arrangement with Vivad
that the latter will fictitiously purchase the jeep so that Santos may use
the Certificate of Public Convenience (CPC) of Vivad. Subsequently, the
Sibug was bumped by the said jeep. Damages was then awarded to
Sibug against Vivad and his driver. The Sheriff of Manila then levied the
jeep and sold it in a public auction. Santos then files of the third-party
claim with the Sheriff stating that he owns the jeep and such sale is null
and void because the property levied is not owned by Vivad.
Issue:
Whether or not the levy and auction sale made on the jeep is null
and void.
Held:
The Court held that the agreement entered into by Santos and
Vivad is a “Kabit System,” which is prohibited by law. Such system was
not approved by the Public Service Commission (PSC) therefore Vivad is
the owner of the jeep in legal contemplation. Since Vivad is the owner of
the jeep according to law, then it cannot be said that the Sheriff seized
the property belonging to a stranger. The auction sale is still valid
according to the Court.
36
Lita Enterprises, Inc. v. IAC

G.R. No. L-64693
Facts:
Spouse ocampo purchased 5 toyota standard cars from delta
motors in installments to be used as taxi cabs. However, since they do
not have any franchise to operate a taxicabs, they entered in an
agreement with lita enterprises for the use of the latter’s certificate of
public convenience, commonly known as Kabit system. Later on, the
taxi collided into a motorcycle resulting to the death of the driver of the
motorcycle Emeterio Martin. Lita enterprises were adjudged liable and
two of the taxicabs were levied upon and sold at a public auction.
Thereafter the spouses ocampo decided to register the taxicabs in their
own name and ask Lita enterprise to return the papers but the latter
refused. Hence this petition.
Issue:
Whether or not the agreement between the parties is valid.
Held:
The Court held that the agreement between the parties is not
valid.Under the arrangement of kabit system, whereby a person who
has been granted a certificate of convenience allows another person
who owns motor vehicles to operate under such for a fee. The Kabit
37
System has been identifies as one of the root causes of prevalence of

graft and corruption in the government transportation offices. It is void
being contrary to public policy. And the parties have no right of action
against each other because they are in pari delicto, the court will leave
them both where it finds them.
Teja Marketing vs. IAC

148 SCRA 347
Facts:
Respondent purchased from petitioner a tiyajle. Such tiyalje
amounted to a total value of P800. Respondent was able to pay the
purchase price but however left a balance of P1, 700. Subsequently, a
chattel mortgage was executed over the said balance. It was found by
the court that the defendant purchased the motorcycle for the purpose
of engaging and using the same for transportation business. To be able
to use the vehicle, the tricycle was attached to the plaintiff’s
transportation line, which had the franchise. In effect, the registration
38
certificate is under petitioner’s name. It appeared that they agreed that

the petitioner would undertake the yearly registration of the unit in the
Land Transportation Commission.
Issue:
Whether or not relief may be granted to any of the parties.
Held:
The Supreme Court held that neither of the two parties are entitled
for relief. Both parties have entered into an illegal contract, thus no
action arises out from any illicit transaction. The parties operated under
an agreement known as the “Kabit System”. Such system operates
when a person who has been granted a certificate of public convenience
allows another person who owns a motor vehicle to operate under such
franchise for a fee. A certificate of public convenience is a special
privilege which cannot be countenanced. This illegitimate arrangement
has been recognized as one of the root causes of the frequency of graft
and corruption in the government transportation affairs. It is declared
void it being against public policy. It is a fundamental principle that the
court will not aid either party to enforce an illegal contract and will
leave both where it finds them. The defects of the contract are
permanent and cannot be ratified. Thus, both parties are culpable of
their illicit indenture.
39
Magboo v. Bernardo
G.R. No. L-16790
Facts:
The petitioners filed an action against the respondent who is the
owner of the jeep and who is being claimed to be responsible for the
death of the petitioner’s 8 year old child in a vehicular accident. The
respondent denies being liable for the death of the said child because
he claimed that there was no employer-employee relationship between
him and the driver of the said jeep because of the boundary system that
they are following. The respondent claims that only the driver should be
liable because the relationship between the two is that of a lessor-
lessee. Respondent also claims that he should not be held subsidiary
liable because the driver of the jeep pleaded guilty to a criminal case
without respondent’s knowledge.
Issue:
Whether or not the respondent is liable for the death of the child of
the petitioners.
Held:
The Court held that the respondent should be liable because the
lease he made with the driver of the jeep was not approved by the
Public Service Commission (PSC). Since the lease was made without
such approval, the owner continued to be the operator of the jeep in
legal contemplation and such was responsible for the consequences of
his operation. The Court also held that the claim of the respondent in
40
stating that he did not know of the plea made by the driver, which
prevented him from proving his innocence, was raised too late in the
case therefore the respondent is estopped from enforcing any claim
regarding to that matter.
Eastern Shipping Lines vs. IAC

150 scra 463
Facts: In GR 69044, the M/S ASIATICA, a vessel operated by

Eastern Shipping Lines loaded at Kobe, Japan for Manila:
1.) 5,000 pieces of calorized lance pipes in 28 packages valued at
P256,039.00 consigned to Philippine Blooming Mills Co., Inc.,
2.) 7 cases of spare parts valued at P92,361.75, consigned to
Central Textile Mills, Inc.
41
Both sets of goods were insured for their value with

Development
Insurance and Surety Corporation.
In GR 71478, the same vessel took on board :

3. 128 cartons of garment fabrics and accessories, in 2 containers,
consigned to Mariveles Apparel Corporation
4. two cases of surveying instruments consigned to Aman
Enterprises and General Merchandise.
The 128 cartons were insured for their value by Nisshin Fire & Marine
Insurance Co., for US$46,583.00. The 2 cases by Dowa Fire & Marine
Insurance Co., Ltd., for US$11,385.00. Enroute for Kobe, Japan, to
Manila, the vessel caught fire and sank, resulting in the total loss of ship
and cargo. The respective Insurers paid the corresponding marine
insurance values to the consignees concerned and were thus
subrogated unto the rights of the latter as the insured.
Eastern Shipping denied liability mainly on the ground that the loss
was due to an extraordinary fortuitous event; hence, it is not liable
under the law. The Trial Court rendered judgment in favor of
Development Insurance in the amounts of P256,039.00 and P92,361.75,
respectively, with legal interest, plus P35,000.00 as attorney’s fees and
costs. Eastern Shipping took an appeal to the then Court of Appeals
which, on 14 August 1984, affirmed the decision of the trial court.
Eastern Shipping filed a petition for review on certiorari.
Nisshin, and Dowa, as subrogees of the insured, filed suit against
Eastern Shipping for the recovery of the insured value of the cargo lost
imputing unseaworthiness of the ship and non-observance of
extraordinary diligence by Eastern Shipping. Eastern Shipping denied
liability on the principal grounds that the fire which caused the sinking
of the ship is an exempting circumstance under Section 4(2) (b) of the
Carriage of Goods by Sea Act (COGSA); and that when the loss of fire is
established, the burden of proving negligence of the vessel is shifted to
the cargo shipper. Trial Court rendered judgment in favor of Nisshin and
Dowa. CA affirmed decision. Hence this petition on certiorari.
42
Issue: Whether or not the carrier exercised extraordinary

diligence.
Held: Eastern Shipping shall pay the Development Insurance

the amount of P256,039 for the 28 packages of calorized lance pipes,
and P71,540 for the 7 cases of spare parts, with interest at the legal
rate from the date of the filing of the Complaint on 13 June 1978, plus
P5,000 as attorney’s fees, and the costs. The Court, on the other hand,
in GR 71478, affirmed the judgment.
The evidence of the defendant did not show that
extraordinary diligence was observed by the vessel to prevent the
occurrence of fire at hatches nos. 2 and 3. Defendant’s evidence did
not likewise show the amount of diligence made by the crew, on orders,
in the care of the cargoes. What appears is that after the cargoes were
stored in the hatches, no regular inspection was made as to their
condition during the voyage. The complete defense afforded by the
COGSA when loss results from fire is unavailing to Eastern Shipping. The
Carriage of Goods by Sea Act (COGSA), a special law, is merely
suppletory to the provisions of the Civil Code The fire may not be
considered a natural disaster or calamity, as it arises almost invariably
from some act of man or by human means. It does not fall within the
category of an act of God unless caused by lightning or by other
natural disaster or calamity. It may even be caused by the actual fault
or privity of the carrier.
43
Ganzon v. Court of Appeals

161 SCRA 646
Facts:
Ganzon, petitioner herein, was hired by Tumambing to haul 305
tons of scrap iron. The contract was for the petitioner to transport the
44
scrap iron to Manila from Bataan. Tumambing delivered the scrap iron to
Niza, captain of the lighter LCT “Batman”, to board it on the same. The
crew of the Batman started to load the iron, and when they were about
halfway through, Mayor Advincula arrived and demanded P5,000 from
Tumambing. The latter resisted and a heated argument started. Mayor
Advincula drew his gun and fired at Tumambing. He was brought to the
hospital for treatment, lucky for him the wound was not fatal.
A few days after this incident, the loading of the scrap metal was
resumed. However, the acting Mayor this time went to the port where
the Batman was docked. He was accompanied by 3 policemen and he
ordered Captain Niza to dump the scrap iron where the lighter was
docked. What was left or the iron was confiscated by the Acting Mayor
and brought to NASSCO. A receipt was issued showing that the
municipality had taken custody of the scraps or iron.
Tumambing filed a case in order to recover damages for the loss
that he sustained. The lower court rendered a decision in favor of
Ganzon. However, on appeal the Court of Appeals reversed the decision
ordering Ganzon to pay Tumambing P5,895 as actual damages, P5,000
for exemplary damages and attorney’s fees as well. Hence this petition
by Ganzon.
Issue:
Whether or not Ganzon is liable for the loss that Tumambing
sustained.
Held:
The Court held that Ganzon is liable for the loss of Tumambing. The
defense that the scraps of iron were not unconditionally placed in his
custody and control is untenable. Petitioner herein admits that the
scraps of iron were delivered to Captain Niza by Tumambing in order to
load the same on the lighter Batman. The employees of Ganzon
received the scraps of iron on his behalf, therefore the scraps of metal
were placed in his custody and control. Upon the receipt of the scraps
by the carrier in order transport the same, the contract of carriage was
45
perfected. Upon perfection of the contract, the exercise of extraordinary

diligence in caring for the goods shall also commence to begin.
Article 1738 of the NCC provides that the exercise of extraordinary
diligence shall cease only upon delivery to the consignee or to the
person who has the right to receive the same. In this case, there was no
delivery made to the consignee, therefore the carrier should have
exercised extraordinary diligence in taking care of the scraps of iron. It
is irrelevant that the scraps of iron were only partially loaded on the
lighter. The scraps of iron were already under the custody and control of
the carrier, therefore he shall be liable for its loss.
Eastern Shipping Lines, Inc. vs. Court of Appeals

196 SCRA 570
Facts:
SS Eastern Comet, owned by defendant Eastern Shipping Lines was
engaged in the business of shipment from Japan to the Philippines.
Through the SS Eastern Comet, two fiber drums of riboflavin were
shipped from Yokohama to Manila. The shipment was discharged upon
arrival into the custody of defendant Metro Port Service, Inc. However,
the latter refused to one drum after claiming that such unwanted drum
was in bad order. Defendant Allied Brokerage Corporation received the
shipment from Metro Port and detected that one drum was opened and
without seal. The goods were then delivered to the consignee’s
warehouse. The latter noted that one drum contained spillages, while
the rest of the contents were adulterated. As a consequence of the
damage Mercantile Insurance Company paid the consignee under its
marine policy insurance and instituted civil action against defendants as
46
subrogee. The Court of Appeals affirmed judgment holding the common

carrier, arrastre operator, and customs brokers jointly and severally
liable.
Issue:
Whether Eastern Shipping Lines, Inc. can be held severally and
jointly liable with Metro Port and Allied brokerage.
Held:
The Supreme Court held that Esatern Shipping Lines, Inc can be
held liable. As what was already decided in Fireman’s Fund Isurance,
Co. vs Metro Port Service, Inc, the legal relationship between the
consignee and the arrastre operator is analogous to that of a depositor
and a warehouseman. Further explained, the relationship between the
consignee and the common carrier is comparable to that of the
consignee and the arrastre operator. Since it is the duty of the Arrastre
to take good care of the goods that are in its custody and to deliver
them in good condition to the consignee, such responsibility also
devolves upon the carrier. The duty of the consignee to guard the goods
and shelter it from destruction or impairment is also shouldered by the
common carrier. Both are therefore charged with the obligation to
deliver the goods in good condition to the consignee.
47
Sarkies Tours Philipines, Inc. vs. CA

G.R. No. 108897
Facts:
Fatima Fortades was a passenger of one of the buses of petitioner
Sarkies Tours bound for Legazpi City. She had onboard luggages which
contained important documents and personal belongings. Her
belongings were kept in the baggage compartment of the bus, but
during a stopover at Daet, it was discovered that only one bag remained
in the open compartment. The others, including Fatima's things, were
missing and might have dropped along the way. Despite the suggestion
of the passengers to retrace its route in order to recover their luggage,
the driver nevertheless neglected them and continued driving.
Consequently, respondents filed a case to recover the value of the
remaining lost items, as well as moral and exemplary damages,
attorney's fees and expenses of litigation. They claimed that the loss
was due to petitioner's failure to observe extraordinary diligence in the
care of Fatima's luggage and that petitioner dealt with them in bad faith
from the start. Petitioner, on the other hand, disowned any liability for
the loss on the ground that Fatima allegedly did not declare any excess
baggage upon boarding its bus.
Issue:
Whether or not Sarkies is liable for damages for lost propery of its
passengers.
Held:
The Supreme Court held that Sarkies is liable for the loss. The
cause of the loss was petitioner's negligence in not ensuring that the
doors of the baggage compartment of its bus were securely fastened.
As a result of this lack of care, almost the entire luggage was lost, to the
prejudice of the paying passengers. Common carriers, from the nature
of their business and for reasons of public policy, are bound to observe
48
extraordinary diligence in the vigilance over the goods transported by

them. This liability lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively,
by the carrier to the person who has a right to receive them. The
awarding of actual damages to respondents is just because their efforts
in recovering the lost items must be well compensated. Moral and
exemplary damages must also be awarded in the presence of bad faith
and negligence on the part of the common carrier.
Valenzuela Hardwood & Industrial Supply v. Court of Appeals

274 SCRA 642
Facts:
Valenzuela Hardwood & Industrial Supply (VHIS), plaintiff herein,
hired the services of Seven Brothers Shipping Corporation (SBC) to
transport 940 round logs. VHIS shipped the logs at the port in Isabella
and said logs were placed on the M/V Seven Ambassador owned by SBC
for transport. VHIS insured the logs against loss or damage with South
Sea Surety and Insurance Co. for the amount of P2,000,000.
Subsequently the M/V Seven Ambassador sank which resulted in the
loss of the logs on board the same. The plaintiff then filed a claim with
49
the insurance company and the SBC. However both claims were denied.
The insurance company denied liability under the policy and SBC denied
liability claiming that they are a private carrier and that they cannot be
held liable due to the stipulation that the owners shall not be
responsible for the loss, split, short-landing, breakages and any kind of
damages to the cargo.
Plaintiff filed a case in order to claim damages for the loss it
incurred. The lower court rendered a decision in favor of the plaintiff and
ordered the insurance company and SBC to pay the plaintiff. On appeal,
the Court of Appeals affirmed the decision but set aside the decision
against SBC holding that the stipulation between the parties is valid.
Hence this petition.
Issue:
1. Whether or not the stipulation between the parties is valid.
2. Whether or not SBC is liable for the loss of VHIS.
Held:
The Court held that the stipulation between the parties is valid. It
is clear in this case that the SBC is a private carrier and therefore a
stipulation between the parties limiting the liability of the carrier is
valid. In a contract of private carriage, the parties may validly stipulate
that the responsibility of the cargo rests solely on the charterer. Such
stipulations shall be valid as long as they are not contrary to law,
morals, good customs, public order and public policy.
It is a fact that the loss of the logs was due to the sinking of the
M/V Seven Ambassador. The sinking of the vessel was caused by the
snapping of the iron chains holding the logs. Said snapping was the
consequence of the negligence of the captain in securing the logs.
However, since there is a stipulation between the parties regarding the
responsibility of the loss of the cargo, the SBC cannot be held liable for
the loss of the logs.
50
Yobido v. Court of Appeals

281 SCRA 1
Facts:
The spouses Tumboy and their minor children boarded a bus

operated by the Yobido Bus Liner to Davao City. On the way to their
destination, the front left tire of the bus exploded which led to the bus
falling into a ravine and causing the death of Tito Tumboy and physical
injuries to the other passengers. The defendants then filed a case
against the petitioner for breach of the contract of carriage. The
petitioner claims that it is not liable because the tire explosion is a caso
fortuito.
Issue:
Whether or not the petitioner is liable for the accident.
Held:
The Court held that the tire explosion cannot be considered as a

fortuitous event. The reason is that the common carrier has the burden
of proof that it exercised extraordinary diligence in the carriage of the
passengers. There is always a presumption of negligence on the
common carrier in cases of death or injury and that the carrier needs to
present contrary evidence that it was not negligent and that it exercised
the required diligence of the law. The carrier cannot rely on the defense
51
that the tire was brand new or that it had daily check ups regarding the
parts of the bus.
Compania Maritima v. Insurance Co. of North America

12 SCRA 213
Facts:
Macleod & Co., contracted, first by telephone and later confirmed
by a formal written booking issued by Macleod & Co., the services of the
petitioner Comapania Maritima for the shipment of bales of lamp from
Davao to Manila. Two lighters of the petitioners loaded the said cargo
from Macleod’s wharf at Davao awaiting the arrival of another vessel of
the petitioner for reloading. One of the lighters sunk of which Macleod
suffered a total of P64,018. Respondent insurers of said cargo paid
Macleod, and being subrogated to Macleod’s right, filed a claim to
collect from the petitioner the amount it paid to Macleod. Petitioner
denied liability on the grounds that there was no bill of lading issued
thereby resulting to be non-existence of the contract; that the sinking
was due to a fortuitous event and the respondent has no personality.
Issue:
Whether or not there was a contract and whether or not there was
a fortuitous event.
Held:
There was complete contract of carriage the consummation of
which has already begun when the shipper delivered the cargo to the
carrier and the latter took possession of the same by placing it on a
lighter manned by its two authorized employers under which Macleod
become entitled to the privilege of law. The responsibility of the carrier
52
commenced on the actual delivery and receipt by, the carrier or its
authorized agent of the goods. The barges or lighters were merely
employed as the first step of the voyage. As to the issuance of the bill of
lading, it is not required or essential to the contract, although it may
become obligatory by reason of regulations or as a condition injured in
the contract by the agreement of the parties themselves.
Lu Do v. Binamara
101 PHIL 120
Facts:
Delta Company of New York shipped 6 cases of film and
photographic supplies to respondent herein. Having arrived at the Cebu
port, it discharged her cargo placing it in the custody of the arrastre
operator appointed by the Bureau of Customs. The cargo was checked
and found to be in good order. Later on the goods were delivered to
Binamara. After inspection it was found out that some cargo were
missing. Binamara demanded from the carrier indemnity for the loss it
sustained. However, the carrier denied liability relying on the stipulation
in the contract of carriage. It provides that the carrier is no longer liable
for the cargo after delivery of the same to the customs authorities. The
lower court rendered a decision in favor of Binamara. Hence this
petition.
Issue:
Whether or not the common carrier is liable for the lost cargo.
Held:
The Court held that the carrier is no longer liable for the loss of the
goods. The general rule is that delivery must be made to the consignee
53
or the person authorized to receive the goods, without such delivery the
carrier shall be liable for the loss or destruction of goods while in their
custody. However, parties may agree to limit the liability of the carrier
considering that the goods have to go through the inspection of the
customs authorities before they are actually turned over to the
authorities. The stipulation in this case is binding upon the parties it
being not contrary to law, morals, or public policy.
American President Lines, Ltd. Vs. Klepper

110 Phil 243
Facts:
Klepper on board SS Pre. Cleveland and Yokohama, Japan and lift
van containing personal and household effects. Upon its arrival in
Manila and while the lift van was being unloaded by crane, it fell on the
pier and its contents were spilled and scattered, as a result of which,
Klepper bought an action for damages against the carrier. While the
carrier does not dispute liability, it, however, contends that the same
cannot exceed $500, invoking in its favor the bill of lading and Sec. 4(5)
of the carriage of goods by Sea Act (COGSA). The trial Court ordered
the carrier to pay Klepper with a right to reimbursement from Delgado
Brothers, the operator of the crane. The CA affirmed the said decision.
The carrier appealed.
Issue:
Whether or not the carrier can be held liable beyond that stated in
the bill of lading and that provided in COGSA.
Held:
The carrier should only pay Klepper the sum of $500. The shipper
who accepted the bil of lading impliedly id bound by its items. While
54
regard to the contention of the carrier that COGSA should control in this
case, the same is of as moment. Art. 1763 of the New Civil Code
provides that “the laws of the country to which the goods are
transported shall govern the liability of the common carrier in case of
loss, destruction and deterioration.” This means that the law of the
Philippines on the New Civil Code. Under 1766 of NCC, “in all mater not
regulated by this Code, the rights and obligations of common carriers
shall be governed by the Code of Commerce and by Special Laws.” Art.
1736-1738, NCC govern said rights and obligations. Therefore, although
Sec 4(5) of COGSA states that the carrier shall not be liable in an
amount exceeding $500 per package unless the value of the goods had
been declared by the shipper and asserted in the bill of lading, said
section is merely supplementary to the provisions of the New Civil Code.
Servando v. Philippine Steam Navigation Co.

117 SCRA 832
Facts:
Clara Uy Bico and Amparo Servando loaded on board the
appellant's vessel, FS-176, for carriage from Manila to Pulupandan,
Negros Occidental cargoes of cavans of rice and cartons of colored
paper which were evidenced by bills of lading.
Upon arrival of the vessel at Pulupandan the cargoes were
discharged, complete and in good order, unto the warehouse of the
Bureau of Customs. At about 2:00 in the afternoon of the same day, said
warehouse was razed by a fire of unknown origin, destroying appellees'
cargoes. Before the fire, however, appellee Uy Bico was able to take
delivery of 907 cavans of rice Appellees' claims for the value of said
goods were rejected by the appellant.
Issue:
Whether or not carrier is liable for the loss of the cargo.
55
Held:
The court a quo held that the delivery of the shipment in question
to the warehouse of the Bureau of Customs is not the delivery
contemplated by Article 1736; and since the burning of the warehouse
occurred before actual or constructive delivery of the goods to the
appellees, the loss is chargeable against the appellant. Article 1736 of
the Civil Code imposes upon common carriers the duty to observe
extraordinary diligence from the moment the goods are unconditionally
placed in their possession "until the same are delivered, actually or
constructively, by the carrier to the consignee or to the person who has
a right to receive them, without prejudice to the provisions of Article
1738. "
It should be pointed out, however, that in the bills of lading issued
for the cargoes in question, the parties agreed to limit the responsibility
of the carrier for the loss or damage that may be caused to the
shipment by inserting therein the following stipulation:
Clause 14. Carrier shall not be responsible for loss or damage to

shipments billed 'owner's risk' unless such loss or damage is due to
negligence of carrier. Nor shall carrier be responsible for loss or
damage caused by force majeure, dangers or accidents of the sea
or other waters; war; public enemies; . . . fire . ...
The Court sustains the validity of the above stipulation. There is

nothing therein that is contrary to law, morals or public policy.
Therefore, the carrier is no longer liable for the loss of the goods.
Saludo, Jr. v. Court of Appeals

207 SCRA 498
Facts:
Plaintiff herein together with Pomierski and Son Funeral Home of
Chicago brought the remains of plaintiff’s mother to Continental
56
Mortuary Air Services which booked the shipment of the remains from
Chicago to San Francisco by Trans World Airways (TWA) and from San
Francisco to Mania with Philippine Airlines (PAL). The remains were
taken to the Chicago Airport, but it turned out that there were 2 bodies
in the said airport. Somehow the 2 bodies were switched, and the
remains of plaintiff’s mother was shipped to Mexico instead. The
shipment was immediately loaded on another PAL flight and it arrived
the day after the expected arrival. Plaintiff filed a claim for damages in
court. The lower court absolved both airlines and upon appeal it was
affirmed by the court.
Issue:
Whether or not the 2 airlines should be held liable for damages.
Held:
Explicit is the rule under Article 1736 of the Civil Code that the
extraordinary responsibility of the common carrier begins from the time
the goods are delivered to the carrier. This responsibility remains in full
force and effect even when they are temporarily unloaded or stored in
transit, unless the shipper or owner exercises the right of stoppage in
transitu, and terminates only after the lapse of a reasonable time for the
acceptance, of the goods by the consignee or such other person entitled
to receive them. And, there is delivery to the carrier when the goods are
ready for and have been placed in the exclusive possession, custody
and control of the carrier for the purpose of their immediate
transportation and the carrier has accepted them. Where such a
delivery has thus been accepted by the carrier, the liability of the
common carrier commences eo instanti. Hence, while we agree with
petitioners that the extraordinary diligence statutorily required to be
observed by the carrier instantaneously commences upon delivery of
the goods thereto, for such duty to commence there must in fact have
been delivery of the cargo subject of the contract of carriage. Only when
such fact of delivery has been unequivocally established can the liability
for loss, destruction or deterioration of goods in the custody of the
carrier, absent the excepting causes under Article 1734, attach and the
presumption of fault of the carrier under Article 1735 be invoked.
As already demonstrated, the facts in the case at bar belie the
averment that there was delivery of the cargo to the carrier on October
26, 1976. Rather, as earlier explained, the body intended to be shipped
as agreed upon was really placed in the possession and control of PAL
57
on October 28, 1976 and it was from that date that private respondents
became responsible for the agreed cargo under their undertakings in
PAL Airway Bill No. 079-01180454. Consequently, for the switching of
caskets prior thereto which was not caused by them, and subsequent
events caused thereby, private respondents cannot be held liable
Macam v. Court of Appeals

313 SCRA 77
Facts:
Petitioner Macam exported watermelons and mangoes to Hong
Kong, Great Prospect Company is the consignee. The bill of lading
stated that one of the bill must be presented by the Pakistan Bank as
consignee and GPC as the notify party. Upon arrival in Hong Kong, the
shipment was delivered by the carrier directly to GPC and not to
Pakistan Bank and without surrendering the bill of lading.
Issue:
Whether or not there was a valid delivery.
Held:
The extraordinary responsibility of common carriers last until

actual or constructive delivery of the cargo to the consignee or his
agent. Pakistan was indicted as consignee and GPC was the notify
party. However, in the export invoice, GPC was clearly named as buyer
or importer. Petitioner referred to GPC as such in his demand letter to
respondent and his complaint before the court. This premise brings into
conclusion that the deliveries of the cargo to GPC as buyer or importer
is in conformity with Art. 1736 of the Civil Code. Therefore, there was a
valid delivery.
58
Cases Applying Articles 1744-1754

of the New Civil Code
Vigilance Over Goods

of Common Carriers
Articles Applied:
Art. 1744. A stipulation between the common carrier and the shipper or
owner limiting the liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary diligence
shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service

rendered by the common carrier; and
59
(3) Reasonable, just and not contrary to public policy.
Art. 1745. Any of the following or similar stipulations shall be considered

unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or
shipper;
(2) That the common carrier will not be liable for any loss,
destruction, or deterioration of the goods;
(3) That the common carrier need not observe any diligence in the
custody of the goods;
(4) That the common carrier shall exercise a degree of diligence

less than that of a good father of a family, or of a man of ordinary
prudence in the vigilance over the movables transported;
(5) That the common carrier shall not be responsible for the acts or
omission of his or its employees;
(6) That the common carrier's liability for acts committed by

thieves, or of robbers who do not act with grave or irresistible
threat, violence or force, is dispensed with or diminished;
(7) That the common carrier is not responsible for the loss,
destruction, or deterioration of goods on account of the defective
condition of the car, vehicle, ship, airplane or other equipment
used in the contract of carriage.
Art. 1746. An agreement limiting the common carrier's liability may be

annulled by the shipper or owner if the common carrier refused to carry
the goods unless the former agreed to such stipulation.
Art. 1747. If the common carrier, without just cause, delays the
transportation of the goods or changes the stipulated or usual route, the
contract limiting the common carrier's liability cannot be availed of in
case of the loss, destruction, or deterioration of the goods.
60
Art. 1748. An agreement limiting the common carrier's liability for delay
on account of strikes or riots is valid.
Art. 1749. A stipulation that the common carrier's liability is limited to

the value of the goods appearing in the bill of lading, unless the shipper
or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered. by the
owner or shipper for the loss, destruction, or deterioration of the goods
is valid, if it is reasonable and just under the circumstances, and has
been fairly and freely agreed upon.
Art. 1751. The fact that the common carrier has no competitor along the
line or route, or a part thereof, to which the contract refers shall be
taken into consideration on the question of whether or not a stipulation
limiting the common carrier's liability is reasonable, just and in
consonance with public policy.
Art. 1752. Even when there is an agreement limiting the liability of the
common carrier in the vigilance over the goods, the common carrier is
disputably presumed to have been negligent in case of their loss,
destruction or deterioration.
Art. 1753. The law of the country to which the goods are to be
transported shall govern the liability of the common carrier for their
loss, destruction or deterioration.
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or in that of
his employee. As to other baggage, the rules in Articles 1998 and 2000
61
to 2003 concerning the responsibility of hotel-keepers shall be

applicable.
Juan Ysmael & Co. v. Barreto & Co.

51 PHIL 90
Facts:
Plaintiff seeks to recover from defendant the alleged value of the
four cases of merchandise which it delivered to the steamship ANDRES
on October 23, 1922, at Manila, to be shipped to Surogao. Said
shipment was never delivered to the consignee. The defendants rely
only on clause 7 of the bill of lading whereby it was provided that action
not brought within 610 days from the time the cause of action accrued
still be barred, and on clause 12 which provided that the defendants are
not liable for any package in excess of P300 unless the value and
contracts of such package are correctly stated in the bill of lading at the
time of the shipment. The goods in question were shipped from Manila
on October 25, 1922, or a little less that 6 months after the shipment
was made.
Issue:
62
Whether or not the action was brought within a reasonable time.
Held:
The action was brought within a reasonable time as those words
are specified and defined in the authorities sited. It is true that both the
plaintiff and the defendants are residents of the City of Manila, but it is
also true that Surigao where the goods in question were to be delivered
is one of the most distant places from Manila in the Philippine Islands. In
the very nature of things, plaintiff would not want to commence its
action until such time as it had made a full and careful investigation of
all of the material facts and even the law of the case, so as to determine
whether or not defendants were liable for its loss.
Clause 12 places a limit of P300 for “any single package of silk.”
The evidence of each case very near P2,500. In this situation, the limit
of defendant’s liability for each package of silk for loss or damage from
any cause of for any reason, would put it in the power of the defendant
to have taken the whole cargo of 64 cases of silk at a valuation of P300
of each case, or less than 1/8 of its actual value. If that rule of law
should be sustained, no silk would ever be shipped from one island to
another in the Philippines. Such a limitation in value is valid as against
public policy.
63
Shewaram v. Philippine Airlines

17 SCRA 606
Facts:
Shewaram, petitioner herein, is a Hindu from Davao. He boarded a
PAL plane for a trip to Manila. He checked in 3 pieces of baggage, a
suitcase 2 other pieces. One of the suitcases were mistagged by the
defendant and as a result the said suitcase did not arrive with him in
Manila. He was shown a similar bag, but the contents did not belong to
him. Among his things in the suitcase was a Rollflex camera and
Transistor Radio 7. His baggage was later on returned but the camera
and radio were missing. He demanded indemnity for his loss from PAL.
The latter offered to pay P100 for his loss but Shewaram. Defendant
herein claimed that the PAL ticket, on the reverse side, stated in fine
print that if the value of baggage is not stated, and the baggage is lost,
the maximum liability of PAL is P100.00. If value in excess of P100.00 is
stated, PAL will charge extra because PAL is being held liable for an
amount exceeding P100.00. Shewaram rejected the offer and
demanded full payment of P800.00 for the amount of the things he lost.
PAL refused to do so.
Issue:
Whether the stipulation limiting the liability of PAL shall apply in
the case at bar.
Held:
The Court held that PAL is liable for the loss of the petitioner
herein. The stipulation in at the back of the ticket shall not be binding
against the petitioner. Article 1750 of the NCC provides that Article 1750
the pecuniary liability of a common carrier may, by contract, be limited
to a fixed amount. It is required, however, that the contract must be
"reasonable and just under the circumstances and has been fairly and
freely agreed upon." In this case, the court believes that the
requirements of said article have not been met. It cannot be said that
the petitioner had actually entered into a contract with the PAL,
embodying the conditions as printed at the back of the ticket stub that
was to the petitioner. The fact that those conditions are printed at the
back of the ticket stub in letters so small that they are hard to read
would not warrant the presumption that the petitioner was aware of
those conditions such that he had "fairly and freely agreed" to those
conditions.
64
Sea-Land Service, Inc. v. Intermediate Appellate Court

153 SCRA 552
Facts:
Sea-Land, a foreign shipping and forwarding company licensed to
do business in the Philippines, received from Sea-borne Trading
Company in California, a shipment consigned to Sen Hiap Hing, the
business name used by Cue. The shipper not having declared the value
of the shipment , no value was indicated in the bill of lading. The
shipment was discharged in Manila, and while awaiting transshipment
to Cebu, the cargo was stolen and never recovered.
The trial court sentenced Sea-Land to pay Cue P186,048
representing the Philippine currency value of the lost cargo, P55, 814 for
unrealized profit and P25,000 for attorney’s fees. CA affirmed the trial
court’s decision.
Issue:
Whether or not Sea-Land is liable to pay Cue.
65
Held:
There is no question of the right of a consignee in a bill of lading to
recover from the carrier or shipper for loss of, or damage to, goods
being transported under said bill, although that document may have
been drawn up only by the consignor and the carrier without the
intervention of the consignee.
Since the liability of a common carrier for loss of or damage to
goods transported by it under a contract of carriage os governed by the
laws of the country of destination and the goods in question were
shipped from the United States to the Philippines, the liability of Sea-
Land has Cue is governed primarily by the Civil Code, and as ordained
by the said Code, supplementary, in all matters not cluttered thereby,
by the Code of Commerce and special laws. One of these
supplementary special laws is the Carriage of goods by Sea Act
(COGSA), made applicable to all contracts for the carriage by sea to and
from the Philippines Ports in Foreign Trade by Comm. Act. 65.
Even if Section 4(5) of COGSA did not list the validity and binding
effect of the liability limitation clause in the bill of lading here are fully
substantial on the basis alone of Article 1749 and 1750 of the Civil
Code. The justices of such stipulation is implicit in its giving the owner
or shipper the option of avoiding accrual of liability limitation by the
simple expedient of declaring the value of the shipment in the bill of
lading.
The stipulation in the bill of lading limiting the liability of Sea-Land
for loss or damages to the shipment covered by said rule to US$500 per
package unless the shipper declares the value of the shipment and pays
additional charges is valid and binding on Cue.
66
Citadel Lines, Inc. v. Court of Appeals

184 SCRA 544
Facts:
Citadel Lines, Inc., petitioner herein is the general agent of the
vessel "Cardigan Bay/Strait Enterprise" . Manila Wine Merchants, Inc.
(Consignee) is the importer of the subject shipment of Dunhill cigarettes
from England. The said vessel loaded on board Filbrite cartons of
manufactured cigarettes called "Dunhill International Filter" and "Dunhill
International Menthol". The shipment arrived at the Port of Manila in a
container. The said container was received by Metro Port Service, Inc.,
respondent herein. Subsequently the container van, which contained
two shipments was stripped. One shipment was delivered and the other
shipment containing cigarettes was palletized. Due to lack of space at
the Special Cargo Coral, the aforesaid cigarettes were placed in two
containers with two pallets with both containers duly padlocked and
sealed by the representative of the petitioner.
The next day, petitioners headchecker discovered that the
container van of the cigarettes had a different padlock and the seal was
tampered with. This was reported to the Pier Superintendent it was
found that 90 cases of imported British manufactured cigarettes were
missing. When the Consignee found out that 90 cases were missing it
filed a claim demanding the payment of the market value of the missing
cargo. Petitioner, in its reply letter, admitted the loss but alleged that
the same occurred at Pier 13, an area absolutely under the control of
the arrastre (Metro Port Service, Inc). Manila Wine Merchants filed a
formal claim, with the arrastre and demanded payment of the value of
the goods but said claim was denied.
The lower court rendered a decision exonerating the arrastre of
any liability on the ground that the subject container van was not
formally turned over to its custody, and held the petitioner liable for the
amount representing the market value of the lost shipment. On appeal
the court of Appeals affirmed the decision of the lower court but
deleted the award of attorney's fees and costs of suit. Hence this
petition.
Issue:
67
Whether the stipulation limiting the liability of the carrier contained

in the bill of lading is binding on the consignee.
Held:
The Court held that the stipulation limiting the liability of the
carrier is valid and binding upon the consignee. It was expressly
stipulated in the bill of lading that the carrier’s liability is limited to
$2.00 per kilo. It has been held in previous cases that a stipulation
appearing in the bill of lading limiting the liability of the carrier is
binding, unless the owner or shipper declares a higher value.
The consignee in this case did not declare a higher value and
admits that the value of the goods does not appear in the bill of lading.
Therefore the stipulation in the bill of lading should be applied. The
contract had been freely agreed upon and the stipulation appears to be
just and reasonable. Therefore, the award of damages should be
reduced and computed with regard to the bill of lading.
Everett Steamship Corporation v. Court of Appeals

297 SCRA 496
Facts:
Hernandez Trading Co., respondent herein, imported 3 crates of
bus spare parts from its supplier, Maruman Trading Company, Ltd., a
foreign corporation based in Japan. The crates were shipped from Japan
to Manila on board "ADELFAEVERETTE," a vessel owned by the principal
of the petitioner herein, Everett Orient Lines. The said crates were
covered by Bill of Lading No. NGO53MN. The vessel arrived in Manila
and it was discovered that the one crate was missing. This was
confirmed and admitted by petitioner in its letter of January 13, 1992
addressed to private respondent, which thereafter made a formal claim
upon petitioner for the value of the lost cargo amounting to One Million
Five Hundred Fifty Two Thousand Five Hundred (Y1,552,500.00) Yen, the
68
amount shown in an Invoice No. MTM-941, dated November 14, 1991.

However, petitioner offered to pay only One Hundred Thousand
(Y100,000.00) Yen, the maximum amount stipulated under Clause 18 of
the covering bill of lading which limits the liability of petitioner.
Respondent rejected the offer and filed a case to collect payment for
the loss against the petitioner.
Issue:
Whether or not the petitioner is liable for the actual value and not
the maximum value recoverable under the bill of lading.
Held:
A stipulation in the bill of lading limiting the liability of the common
carrier for the loss, damages of cargo to a certain sum, unless the
shipper declares or a higher value is sanctioned by law, particularly
Articles 1749 and 1780 of the Civil Code. The stipulations in the bill of
lading are reasonable and just. In the bill of lading, the carrier made it
clear that its liability would only be up to Y100,000.00 (Yen). However,
the shipper, Maruman Trading, had the option to declare a higher
valuation if the value of its cargo was higher than the limited liability of
the carrier. Considering that the shipper did not declare a higher
valuation, it had itself to blame for not complying with the stipulations.
The trial court’s decision that private respondent could not have fairly
agreed to the limited liability clause in the bill of lading because the said
condition were printed in small letters does not make the bill of lading
invalid.
69
British Airways v. Court of Appeals

G.R. No. 121824
Facts:
On April 6, 1989, Mahtani decided to visit his relative in Bombay,
India. In anticipation of his visit, he obtained the services of a certain
Mr. Gemar to prepare his travel plan. Since british Airways had no ticket
flights from Manila to Bombay, Maktani had to take a connecting flight
to Bombay on board British Airways. Prior to his departure, Maktani
checked in the PAL counter in Manila his two pieces of luggage
containing his clothing and personal effects, confident that upon
reaching Hong Kong, the same would be transferred to the BA flight
bound for Bombay, Unfortunately, when Maktani arrived in Bombay, he
discovered that his luggage was missing and that upon inquiry from the
BA representatives, he was told that the same might have been
diverted to London. After plaintiff waiting for his luggage for one week,
BA finally advised him to file a claim accomplishing the property.
Issue:
Whether or not defendant BA is liable for compulsory damages
and attorney’s fee, as well as the dismissal of its third party
complaint against PAL
Held:
The contract of transportation was exclusively between Maktani
and BA. The latter merely endorsing the Manila to Hong Kong log of the
former’s journey to PAL, as its subcontractor or agent. Conditions of
contacts was one of continuous air transportation from Manila to
Bombay. The Court of Appeals should have been cognizant of the well-
settled rule that an agent is also responsible for any negligence in the
performance of its function and is liable for damages which the principal
may suffer by reason of its negligent act. Since the instant petition was
based on breach of contract of carriage, Maktani can only sue BA and
not PAL, since the latter was not a party in the contract.
70
Sweet Lines Inc. v. Teves

G.R. No. L-37750
Facts:
Private respondents Atty. Leovigildo Tandog and Rogelio Tirog
bought tickets at the branch office of the petitioner, a shipping company
transporting inter-island passengers and cargoes, at the Cagayan de
Oro City. Respondents were to board M/S “Sweet Hope”,however upon
learning that it will not be proceeding to Bohol they decided to board
M/S “Sweet Town.” On such vessel the respondents agreed to hide at
the cargo section to avoid inspection of the officers of the Philippine
Coast guard.
After suffering the inconviences in the cargo section and paying
other tickets because those that are in their possession were no
honored. The respondents sued the petitioners in the Court of First
Instance of Misamis Oriental for breach of contract of carriage in the
alleged sum of P110,000.00.
71
Petitioners moved for the dismissal of the complaint on the ground

of improper venue for Conditon No. 14 printed on the ticket essentially
provides that any actions arising out of the ticket will be filed at the
competent court of Cebu.
The trial court ruled in favor of the respondents after denying the
motion for dismissal. Having exhausted all the remedies available and
still failed to obtain a ruling in their favor, the petitioner filed this instant
petition for prohibition with preliminary injunction.
The Supreme Court gave due course to their petition and required
them to submit their memoranda in support of their respective
contention.
Respondents contend that condition No. 14 is not a part of the
contract of carriage and that it is an independent contract requiring the
mutual consent of the parties. In the case at bar the consent of the
respondents was not sought it was imposed on them unilaterally. Venue
of actions can only be waived if there is a “written agreement of the
parties.” Condition No.14 not being agreed to by the respondents is not
valid and enforceable. Supposing that it is otherwise, it is not exclusive
and does not, therefore exclude the filing of the action in Misamis
Oriental.
Petioner contend that condition No. 14 is valid and enforceable
because private respondents acceded to it when they purchased
passage tickets and it is an effective waiver of venue, valid and binding
as such, since it is printed in bold and capital letters and not in fine print
and merely assigns the place where the action arising from the contract
is instituted. That condition No. 14 is unequivocal and mandatory, the
words and phrases “any and all”, “irrespective of where it is issued,”
and “shall” leave no doubt that the intention of Condition No. 14 is to fix
the venue in the City of Cebu, to the exclusion of all other places.
Issue:
Whether or not condition No. 14 is valid and enforceable.
Held:
Condition No. 14 is subversive of public policy on transfers of
venue of actions. For, although venue may be changed or transferred
from one province to another by agreement of the parties in writing
pursuant to Rule 4, Section 3, of the Rules of Court, such an agreement
will not be held valid where it practically negates the action of the
claimants, such as the private respondents herein. The philosophy
72
underlying the provisions on transfer of venue of actions is the

convenience of the plaintiffs as well as his witnesses and to promote the
ends of justice. Considering the expense and trouble a passenger
residing outside of Cebu City would incur to prosecute a claim in the
City of Cebu, he would most probably decide not to file the action at all.
The condition will thus defeat, instead of enhance, the ends of justice.
Upon the other hand, petitioner has branches or offices in the
respective ports of call of its vessels and can afford to litigate in any of
these places. Hence, the filing of the suit in the CFI of Misamis Oriental,
as was done in the instant case, will not cause inconvience to, much
less prejudice, petitioner.
Public policy is “. . . that principle of the law which holds that no
subject or citizen can lawfully do that which has a tendency to be
injurious to the public or against the public good . . .”. Under this
principle “. . . freedom of contract or private dealing is restricted by law
for the good of the public.” Clearly, Condition No. 14, if enforced, will be
subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger claimants outside of Cebu City,
thus placing petitioner company at a decided advantage over said
persons, who may have perfectly legitimate claims against it. The said
condition should, therefore, be declared void and unenforceable, as
contrary to public policy — to make the courts accessible to all who may
have need of their services.
73
Quisumbing Sr. vs. Court of Appeals

189 SCRA 605
Facts:
Norberto Quisumbing and Gunther Loeffler were passengers of
PAL’s Fokker “Friendship” plane flying from Macatan City bound to
Manila. A senior NBI agent, Florencio O. Villarin, a senior NBI agent and
also one of the passengers of the said plane, saw a certain “Zaldy”
boarded on the same flight. Zaldy was a suspect for the killing of a
Judge Valdez. Villarin sent a note to the Captain of the plane requesting
74
that they contact the NBI director to send agents on their point of
destination because of the presence of Zaldy. However, Captain Luis
Bonnevie came out of the cockpit and informed Villarin the he could not
send the message because it would be heard by all ground aircraft
stations. Villarin advised the Captain of the danger having Zaldy and his
companions onboard. Consequently, gunshots ensued between Zaldy’s
group and Villarin. Zaldy announced a hold-up and obtained the
belongings of the passengers. Zaldy and his companions successfully
escaped upon landing in Manila. Petitioners now demand from PAL
indemnity for their lost belongings. The petitioners contended that PAL
is liable for breach of contract of carriage, for not transporting them and
their belongings at the point of destination without loss or damage. As a
defense, PAL interposed that the incident was force majeure.
Issue:
Whether PAL can be held liable for the loss of petitioners’
belongings due to the hi-jacking?
Held:
The Supreme Court held that PAL cannot be held liable for the loss
of property. Where the defendants has faithfully complied with the
requirements of government agencies and adhered to the established
procedures and precautions of the airline industry and particular time,
its failure to take certain steps that a passenger in hindsight believes
should have been done is not the negligence or misconduct which
mingles with force majeure as an active and cooperative cause. It was
proven that PAL cannot be faulted with negligence. Hence, there was no
breach of contract of carriage because there was no clear evidence that
PAL acted in bad faith in their obligation to transport the passengers
and their properties at the point of destination. The mandatory use of
the most sophisticated electronic devices may have minimized
hijackings but all these have proved ineffective against truly determined
highjackers. Such incident which occurred was indeed force majeure.
75
Pan American World Airways vs. Rapadas

G.R. No. 60673
Facts:
Private respondent Jose Rapadas held passenger ticket and
baggage claim check for petitioner’s flight No. 841 with the route from
Guam to Manila. While standing inline to board the flight at the Guam
Airport, Rapadas was ordered by petitioner’s hand carry control agent to
check-in his samsonite attaché case. Rapadas protested pointing to the
fact that other co-pasengers were permitted to hand carry baggage. He
stepped out of the line only to go back again at the end of it to try of he
can get through without having to register his attaché case. However,
the same man in charge of had carry control did not fail to notice him
and ordered him again to register his baggage. Upon arriving in Manila
on the same day, Rapadas claimed and was given all his checked in
baggage except the attaché case.
Issue:
Whether or not a passenger is bound by the terms of a passenger
under the Warsaw convention, shall apply in case of loss, damage
or destruction to a registered luggage of a passenger.
Held:
After a review of the various arguments of the appointing parties,
the court found sufficient basis under the particular facts of the case for
the availment of the liability limitations under the Warsaw Convention.
There is no dispute and the courts below admit that there was such a
notice appearing on page 2 of the airline ticket stating that the Warsaw
Convention governs in case of death or injury of passengers or of loss,
damage or destructionto a passenger’s luggage. Art. 22(4) of the
Warsaw Convention does not preclude an award of attorney’s fees. That
provision states that the limits of liability prescribed in the instrument
shall not prevent the court from awarding in accordance with its own
76
law, in addition, the whole or part of the court costs and other expenses
of litigation incurred by the plaintiff.
H.E. Heacock Co. v. Macondray & Co.

42 PHIL 205
Facts:
The plaintiff shipped Edmonton clocks from New York to Manila on
board a vessel of the defendant. It was agreed in the bill of lading that
the value of the goods received does not exceed $500 per freight or on
in proportion for any part of a ton, unless the value be expressly stated
in the bill and freight [aid. It was also agreed that in the event of claims
for shortage or damages the carrier shall not be liable for than the net
invoice price plus freight and insurances loss charges, and any loss or
damage for which the carrier may be liable shall be adjusted pro rata on
77
said basis. The clocks were not delivered despite demands. Plaintiff
claimed P420.00, the market value of the clocks, while defendant
tendered only P76.36, the proportionate freight for value. The trial
court decided in favor of the plaintiff freight ton value. The trial value
plus freight and insurance.
Issue:
Whether or not the stipulation in the bil og lading in the case at bar
be followed.
Held:
Three kinds of stipulation have after been made in a bill of lading.
First, one exempting the carrier from any and all liability for ton and
damage occasioned by its own negligence. Second, one providing for
an agreed valuation. Third, one limiting the liability of the carrier to an
agreed valuation unless the shipper declares a higher value and pay of
authority, the first and second kinds of stipulations are involved as
being contrary to public policy, but the third is valid and enforceable.
The stipulation in a bill of lading which limits the liability of the
carrier to a specified amount unless the shipper declares a higher value
and pays a higher freight valid and enforceable. Thus, if a carrier gives
to a shipper the choice of two takes, the lower of them cautioned upon
his agreeing to a stipulated valuation of his property in case of loss even
by carrier’s negligence, if the shipper makes the choice understandingly
and freely, and names his valuation, he cannot thereafter recover move
than the value which he puts on this places upon his property.
78
Augusto Ong Yiu v. Court of Appeals

91 SCRA 223
Facts:
Petitioner was paying passenger of respondent Philippine Airlines
on board flight No. 946-R from Mactan Cebu bound for Butuan City. He
was scheduled to attend the trial in the Court of First instance , Br. II
thereat. As a passenger, he checked in one piece of luggage, a bull
maleta. The plane left Mactan Airport, Cebu City at about 1pm and
arrived at Bacasi Airport, Butuan City at past 2pm of the same day.
Upon arrival, petitioner claimed his luggage but it could not be found.
According to petitioner, it was only after reacting indignantly to the loss
that the matter was attended by the porter clerk which however, the
later denied. When the luggage was delivered to the petitioner with the
information that the lock was open, he found out that the folder
containing documents and transcripts were missing, aside from the two
gift items for his parents-in-law. Petitioner refused to accept the
luggage.
Issue:
Whether or not PAL acted with gross negligence so as to entitle
petitioner to an award of moral and exemplary damages.
Held:
PAL did not act in bad faith. It was the duty of PAL to look for
petitioner’s luggage which had been miscarried. PAL exerted diligent
efforts to locate the plaintiff’s baggage. Petitioner is neither entitled to
exemplary damages. Exemplary damages can only be granted if the
defendant asked in a wanton, fraudulent, reckless, oppressive or
malevolent manner, which loss, in accordance with the stipulation
written at the back of the ticket is limited to P100 per luggage plaintiff
not having declared a greater value and not having called the attention
of the defendant on its value ad paid the tariff thereon. Wherefore, for
79
lack of merit, the instant petition is hereby denied, and judgment

sought to be reviewed is hereby affirmed.
Alitalia v. Intermediate Appellate Court

192 SCRA 9
Facts:
Dr. Felipa Pablo, a professor from UP was invited to attend a
meeting by the United Nations in Ispra, Italy. She was to read a paper
regarding foreign substances in food and the agriculture environment
which she had specialized knowledge of. She booked a flight to Italy
with Alitalia airlines, petitioner herein. She had arrived in Milan the day
before the meeting however her luggage did not arrive with her. The
airline informed her that her luggage was delayed because it was
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placed in one of the succeeding flights to Italy. She never got her
luggage.
When she got back to Manila she demanded that Alitalia
compensate her for the damages that she suffered. Petitioner herein
offered free airline tickets in order to compensate for the alleged
damages, however she rejected this offer and instead filed a case.
Subsequently it was found out that the luggages of Dr. Pablo were not
placed in the succeeding flights. She received her luggage 11 months
after and after she had already instituted a case against Alitalia.
The lower court rendered a decision in favor of Dr. Pablo and
ordered plaintiff to pay damages. On appeal, the Court of Appeals
affirmed the decision and even increased the amount of damages to be
awarded to Dr. Pablo. Hence this petition for certiorari.
Issue:
Whether or not Alitalia is liable for damages incurred by Dr. Pablo.
Held:
The Court held that Alitalia is liable to pay Dr. Pablo for nominal
damages. The Warsaw Convention provides that an air carrier is made
liable for damages when: (1) the death, wounding or other bodily injury
of a passenger if the accident causing it took place on board the aircraft
or in the course of its operations of embarking or disembarking; (2) the
destruction or loss of, or damage to, any registered luggage or goods, if
the occurrence causing it took place during the carriage by air"; and (3)
delay in the transportation by air of passengers, luggage or goods.
However, the claim for damages may be brought subject to limitations
provided in the said convention.
In this case, Dr. Pablo did not suffer any other injury other than not
being able to read her paper in Italy. This was due to the fact that
Alitalia misplaced her luggage. There was no bad faith or malice on the
part of Alitalia in the said delay in the arrival of her luggage. Dr. Pablo
received all her things which were returned to her in good condition
although 11 months late. Therefore she shall receive nominal damages
for the special injury caused.
81
Maerskline v. Court of Appeals

222 SCRA 108
Facts:
Respondent herein is a firm engaged in the manufacture of
pharmaceutical products. It ordered from Eli Lily, Inc. of Puerto Rico
empty gelatin capsules. Said capsules were placed in 6 drums
containing 100 capsules each. The drums were placed on board the M/V
Anders Maeerskline. However the capsules were shipped to Virginia,
USA instead of the Philippines. The goods arrived in the Philippines 2
months after the original date of arrival, and respondent herein refused
to accept the goods due to its late arrival.
An action was filed by respondent to rescind the contract with Eli
Lily, Inc. and Maersk together with a claim for damages. The lower court
dismissed the complaint against Eli Lily, Inc. and held Maersk to be
liable for breach of the contract of common carriage. On appeal, the
court affirmed the lower court’s decision. Hence this appeal.
Issue:
Whether or not Maersk is liable for breach of contract of common
carriage.
Held:
The Court held that Maersk is liable for the breach of contract of
common carriage. Common carriers are not obligated by law to carry
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and deliver merchandise promptly unless the common carrier previously

assumes to deliver the goods at a given date or time. However, such
delivery should be made within a reasonable time.
In this case, it appears in the bill of lading that the goods will arrive
on April 3. There was no contract between the parties in this case,
however the petitioner was aware of the date of the expected arrival of
the goods. The court finds that the delay of the delivery was
unreasonable. It was due to the negligence of the petitioner why the
cargo arrived so late. Petitioner did not even explain the reason for such
delay. Therefore, petitioner herein is held liable for the breach of
contract.
Nocum v. Laguna Tayabas Bus Co.

G.R. No. L-23733
Facts:
Petitioner boarded the respondent’s bus. Subsequently, a box

containing fireworks inside the bus exploded which cause the petitioner
83
to be thrown out of the bus and obtained injuries. The petitioner then
filed a case against the respondent for breach of the contract of
carriage. The petitioner claims that the respondent was careless and did
not exercised the diligence required of it when the latter’s employees
did not inspect the box which contained the fireworks and allowed such
dangerous objects inside the bus. The respondent in its defense claimed
that it only relied on the statement of the person who carried the box
that such item is safe to be transported inside the bus.
Issue:
Whether or not the respondent committed a breach in the contract
of carriage.
Held:
The Court held that the respondent did not commit a breach in the
contract of carriage, The Court applied Art. 1755 of the Civil Code
stating that the common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost
diligence of very cautious person, with due regard to all circumstances.
The Court emphasized that there was utmost diligence on the part of
the carrier when it asked the person who bought the box what its
contents are. It is not duly bound to open the box and inspect the
contents. The carrier had regard to all the circumstances in the case
because allowances should be given to the passengers and their
property bought for it is presumed that passengers will not bring
anything that will cause damage to him or to others. In addition, the
Court stressed the constitutional right to privacy which is always
present. Therefore, the carrier is not liable.
84
Mecenas v. CA
180 SCRA 83
Facts:
M/T Tacloban City, owned by Philippine National Oil Company
(PNOC) collided with M/T Don Juan, was owned by respondents Negros
Navigation Co., Inc. The petitioners in this case are the heirs of two
passengers who boarded the M/T Don Juan and perished due to the
collision. The trial court held the respondents liable for damages. On
appeal, the respondents denied the liability by stating that between the
two vessels, the M/T Tacloban City was the one who is negligent and
failed to follow the International Rules of the Road when it did not turn
starboard (right) to prevent the collision. The respondent court reversed
the decision applying the doctrine of last clear chance raised by the
respondent. Petitioners then appealed.
Issue:
Whether or not the respondent should be held liable.
Held:
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The Court held that the respondent should be held liable and the
respondent court erred in reversing the decision of the trial court. The
Court found the respondent to be gross negligent based on certain
instances. Such instances are first, the captain was playing mahjong at
the time of the collision and the captain stated that he was on break
during the emergency when he should take charge of the ship, second,
the crew of the vessel failed to delay the sinking of the vessel because
the ship sank around ten to fifteen minutes, third, the ship was
overloaded with passengers than that prescribed number of passengers
and lastly, there was no ample number of life saving devices such as
rafts due to the overloading of passengers. The respondent can not also
raise the defense that it followed the International Rules of the Road
when it had the chance to prevent the collision with proper care and
skill. The doctrine of last clear chance cannot be applied in the case as
well because the doctrine is only applicable between two drivers that
are negligent against each other and not to a passenger claiming for
damages to the carrier.
Negros Navigation Co., Inc. v. Court of Appeals
86
281 SCRA 534
Facts:
Ramon Miranda purchased tickets for his wife, daughter, son and
niece for a trip to Bacolod on board the M/V Don Juan. The said vessel is
operated by the Negros Navigation Co., petitioner herein. Unfortunately,
the M/V Don Juan collided with the M/T Tacloban City which resulted to
the sinking of the former. Many perished in this accident and some of
the bodies of the victims were washed to the shore. Unfortunately, the
bodies of his family members were never found.
Miranda filed a case in order to recover damages from Negros
Navigation for the loss of his family. Petitioner herein alleges that since
the bodies of his family cannot be found there is no proof that his family
was in fact on board the vessel, hence they cannot be held liable for the
loss of his family. The lower court rendered a judgment in favor of
Miranda. Pursuant to the legal maxim of "stare decisis et non quieta
movere", the court applied the ruling in the case of Mecenas v. Court of
Appeals, and held that Negros Navigation was negligent and that it is
liable for the loss of the family of Miranda. On appeal the court affirmed
the decision of the lower court. Hence this petition.
Issue:
1. Whether or not the family members of Miranda were on the M/V
Don Juan therefore making them liable for the said loss.
2. Whether or not the legal maxim of stare decisis et non quieta
movere is applicable in this case.
Held:
The Court held that there was sufficient evidence to prove that
Miranda’s family was in fact on board the M/V Don Juan. Miranda
testified that he personally brought his family to the vessel and watched
the departure of the same. This was further proven when the numbers
of the purchased tickets appeared on the passenger’s manifest of the
vessel. There is no reason for Miranda to claim that he had lost his
whole family in the tragedy and even went through the anguish of
87
looking for their bodies. In the Mecenas case the bodies of the victims
were likewise never recovered.
The legal maxim of stare decisis et non quieta movere (Follow past
precedents and do not disturb what has been settled) was properly
applied in this case. When the same questions relating to the same
event have been put forward by parties similarly situated as in a
previous case litigated and decided by a competent court, the rule of
stare decisis is a bar to any attempt to relitigate the same issue.
Therefore, Negros Navigation is liable to pay for the damages incurred
by Miranda for the loss of his family.
Korean Airlines Co., Ltd. V. Court of Appeals

234 SCRA 717
Facts:
In 1980, Juanito C. Lopez, an automotive electrician, was
contracted for employment in Jeddah , Saudi Arabia , for a period of one
year through Pan Pacific Overseas Recruiting Services, Inc. Lapuz was
supposed to leave on November 8, 1980, via Korean Airlines. Initially, he
was wait listed. When two of such passengers did not appear, Lapuz and
another person by the name of Perico were given two unclaimed seats.
According to Lapuz, he was allowed to check in with one suitcase
and one shoulder bag at the check-in counter of KAL. He passed through
the customs and immigration section for routine check-up and was
cleared by departure. He rode on the shuttle bus and proceeded to the
88
ramp of the KAL aircraft for boarding. However, when he was the third
or fourth rung of the stairs, a KAL officer pointed to him and shouted.
“DOWN! DOWN!”and was barred from taking the flight. When he later
asked for another booking, his ticket was canceled by KAL.
Consequently, he was unable to report for his work in Saudi Arabia
within the stipulated 2 week period and so lost his employment.
Issue:
Whether or not the petitioner should be liable for damages.
Held:
A perusal of the plaintiff-appellant’s contract of employment shows
that the effectivity of the contract is for only one year, renewable every
year for five years. Although plaintiff-appellant intends to renew his
contract, such renewal will still be subject to his foreign employer.
Plaintiff appellant had not yet started working with his foreign,
employer, hence, there can be no basis as to whether his contract will
be renewed by his foreign employer or not. Thus, the damages
representing the loss of earnings of plaintiff-appellant in the renewal of
the contract of the employment is at most speculative. Damages may
not be awarded on the basis of speculation or conjecture (Gatchalian vs.
Delim, 203 SCRA 126). Defendant appellant’s liability is limited to the
one year contract only. Plaintiff appellant is therefore entitled only to his
lost earning for one year, i.e., P60,000.00 which is 1/5 of P300,000.00
the total amount of actual damages , representing lost earnings for five
years prayed for in the complaint. The legal interest of 6% on the
damages awarded to private respondent should commence from the
date of the decision of the trial court on November 14, 1990.
89
Fortune Express vs. Court of Appeals

305 SCRA 14
Facts:
A bus of petitioner Fortune Express, Inc. figured an accident with a
jeepney in Lanao del Norte which resulted to the death of several
passengers of the jeepney including two Maranaos. A Constabulary
agent investigated that the jeepney was owned by a Maranao and
certain Maranaos were planning to take revenge on petitioner by
burning some of its buses. Subsequently, the Operations Manager of
Fortune Express was advised to take precautionary measures. Four days
after the accident, three armed Maranaos pretended to be passengers
of a bus of petitioner. They seized such bus and set it on fire. The
passengers of the bus were asked to get off, but one passenger, Atty.
Talib Caorong went back to retrieve something. He was shot and killed
during the incident. Petitioner contends that the seizure by the armed
assailants was a fortuitous event thus it cannot be held liable.
Issue:
Whether or not Fortune Express is liable for the death of Atty.
Caorong.
Held:
The Supreme Court held that the seizure of the bus by the armed
Maranaos cannot be assailed as a fortuitous event. The requisite of
unforseeability to be considered forced majeure is lacking. Fortune
Express knew that Maranaos were planning to burn some of its
passenger buses and yet petitioner did nothing to protect the safety of
90
its passengers. Petitioner’s employees failed to prevent the attack on

one of its passengers because they did not exercise the diligence of a
good father of a family. Hence, petitioner should be held liable for the
death of Atty. Caorong. Art. 1763 of the New Civil Code provides that the
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 proper diligence.
Because of Fortune Express’s negligence, the seizure of the bus by the
armed Maranaos was made possible.
Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate Court

189 SCRA 158
Facts:
Several people boarded a jeepney owned by the spouses Isidro
Mangue and Guillermo Carreon. Said jeepney was driven by Manalo and
was travelling to Pampanga to Pangasinan. The passengers wre on their
way home to spend Christmas together with their families. On its way to
Pangasinan, one of the rear tires of the jeepney was detached and it
91
prompted the driver to step on the brakes. Upon applying the brakes
the jeepney made a sudden u-turn and it stopped on the opposite lane
of the highway. Subsequent to the unexpected u-turn a Philippine Rabbit
bus bumped the jeepney from behind. As a result of the collision, three
passengers died and the others sustained physical injuries.
The heirs of the passengers filed a case to claim for damages. The
lower court held that Manalo, the driver of the jeep, was negligent. On
appeal the Court of Appeals reversed the decision with regard to the
payment of damages to Philippine Rabbit Bus Lines. Hence this petition.
Issue:
1. Whether or not the doctrine of last clear chance is applicable in
this case.
2. Whether or not Manalo is solely liable for the death and physical
injuries of the victims.
Held:
The Court held that the doctrine of last clear chance is not
applicable in this case. This doctrine shall only apply to suits between
the owners and drivers of the two colliding vehicles. The case at bar is a
case where the passengers are demanding indemnity from the carrier
due to the contract of common carriage.
It is clear from the evidence that it is Manalo and the owners of the
jeepney who are negligent in this case. There was no proper explanation
as to why the rear wheel of the vehicle suddenly became detached.
Therefore the Court affirms the decision of the lower court and holds
Manalo and the owners liable to pay damages.
92
Bustamante v. Court of Appeals

G.R. No. 89880
Facts:
A sand and gravel truck was descending on a road, on the opposite
direction, was a Mazada passenger bus. The driver of the bus noticed
that the truck was wiggling however; the driver still increased its speed
in order to overtake a tractor in front of it. This act of the bus led to the
two vehicles side swiping each other. Several passengers were thrown
and caused death and injury to them. The petitioners then filed a suit
against the owner and driver of the truck and the owner and driver of
the bus. The trial court held that both drivers should be solidarily liable
to the petitioners. From the decision, only the owner and driver of the
truck appealed. The respondent court reversed the decision as to the
two who appealed. The petitioners now filed this petition.
Issue:
Whether or not the respondents are liable.
Held:
The Court held that the respondents should be liable to the
petitioners. The reason is that the owner of the truck is negligent in
hiring the driver and using the old truck in his business which is
detrimental to other due to its poor condition. On the other hand, the
driver is liable for he was driving the old truck in a descending road and
93
in a fast rate. The driver also noticed the wiggling of the tires and did
not give regard to it. Furthermore, the vehicle which is going down or
descending is more liable to get out of control because it has added
momentum as provided by the Court. The petitioners raised the
doctrine of last clear chance which the Court disregarded because such
doctrine apply only to two drivers against each other in a case and not
in a case where the passenger is claiming for damages against the
carrier.
Lara v. Valencia
104 PHIL 65
Facts:
The deceased was an inspector of the Bureau of Forestry in Davao
who went to classify logs with defendant in his Cotabato concession.
94
Lara got sick of malaria. He asked defendant if he could take him in

pick-up back to Davao. Lara sat at the back of the vehicle on a bag.
Lara fell off and later died. CFI rendered judgment ordering defendant
to pay damages.
Issue:
Whether or not defendant, as owner of the truck, liable to the
death of Lara when the later fell off his vehicle.
Held:
As accommodation passenger or invited guests, defendant as
owner and driver of the pick-up truck owes them merely the duty to
exercise reasonable care so that they may be transported safely to their
destination. Thus, the rule is established by the weight of authority that
the owner or operator of an automobile owes the duty to an invited
guest to exercise reasonable care and injury by increasing the hazards
of travels. The rule is that n owner of an automobile owes a guest the
duty to exercise ordinary or reasonable care to avoid injuring him. Since
one riding in an automobile is no less a guest because he asked for the
privilege of doing so, the same obligation of care is imposed upon the
driver as in case of one expressing invitation to ride. The extraordinary
diligence required of common carriers is not required.
In the case at bar, declared himself chose the place where he
would sit and he was half-asleep when the accident took place so that
the incident is attributed to his lack of care considering that the pick-up
was open and he was then in a crouching position. On the other hand,
there is no showing that the defendant failed to take the precautions
necessary to conduct his passengers safely to this place of destination.
Defendant therefore is not liable for damages.
95
Necesito v. Paras
104 PHIL 75
Facts:
A mother and her son boarded a passenger auto-truck of the
Philippine Rabbit Bus Line. While entering a wooden bridge, its front
wheels swerved to the right, the driver lost control and the truck fell
into a breast-deep creek. The mother drowned and the son sustained
injuries. These cases involve action ex contractu against the owner of
PRBL filed by the son and heirs of the mother. Lower Court dismissed
the actions, holding that the accident was a fortuitous event.
Issue:
Whether or not the accident was considered a fortuitous event.
Held:
While the carrier is not an insurer of the safety of the passenger, it
should nevertheless be held to answer for the flaws of its equipment it
such defects were discoverable. In this connection, the manufacturer of
the defective appliance is considered in law the agent of the carrier, and
the good repute of the manufacturer will not relieve the carrier from
liability. The rationale of the carrier’s liability is the fact that the
passenger has no privity with the manufacturer of the defective
equipment; hence he has no remedy against him, while the carrier has.
We find that the defect could be detected. The periodical, usual
inspection of the steering knuckle did not measure up to the utmost
96
diligence of a very cautious person as far as human care and foresight

can provide and therefore the knuckle’s failure can not be considered a
fortuitous event that exempts the carrier from responsibility. Judgment
REVERSED, PRBL to pay indemnity.
Japan Airlines v. Court of Appeals

GR. No. 118864
Facts:
Private respondents were passengers of Japan Airlines from
California bound for Manila. The flights were to make an overnight
stopover at Nairita, Japan as an incentive for traveling. However, due to
the eruption of Mt. Pinatubo which rendered the NAIA inaccessible,
respondent’s flight from Japan to Manila was indefinitely. JAL assumed
the hotel expenses for their unexpected overnight stay on June 15,
1991. However, JAL no longer settled their hotel and accommodation
expenses during stay at Nauta, Japan. Since NAIA was only reopened
for airline’s traffic on June 22, 1991, private respondent were forced to
pay for their accommodations and meal expenses from their personal
funds from June 16 to June 21, 1991. Hence, they commenced an
action for damages against JAL for failing to provide care and comfort to
97
its stranded passengers when it refused to pay for their hotel and
accommodation expenses from June 16 to June 21, 1991.
Issue:
Whether or not JAL was liable for the hotel and meal expenses
defrayed by private respondents while pending destination.
Held:
The Supreme Court held that JAL cannot be held liable. In the case
at bar, there was absence of bad faith and negligence on the part of
Japan Airlines. Such occurrence of the eruption of Mt. Pinatubo amounts
to a force majeure. 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. Common carriers are not
insurer of all risks. Airline passengers must take such risks incident to
the mode of travel. However, JAL is not completely absolved from
liability. It has the obligation to make the necessary arrangements to
transport private respondents on its first available flight to Manila.
98
Layugan v. Intermediate Appellate Court

G.R. No. 73998
Facts:
Petitioner and a companion was repairing the tire of a parked truck
along the National Highway. The respondent’s driver then recklessly hit
the parked truck from behind which caused injuries to the petitioner.
The petitioner then filed for an action of damages against respondent.
The lower court awarded damages to the petitioner. On appeal, the
respondent claimed that the petitioner was negligent in not installing an
early warning device. The appellate court then reversed the decision of
the lower court by finding the petitioner negligent based on the doctrine
of res ipsa loquitur. Thus, the petitioner filed this appeal.
Issue:
Whether or not the respondent should be held liable for the injuries
incurred by the petitioner.
Held:
The Court held that the respondent court erred in applying the
doctrine of res ipsa loquitur because there were pieces of conclusive
evidence which points to the negligence of the respondent. The said
doctrine only applies if there is no conclusive evidence to determine
who is indeed negligent in the accident. The respondent’s driver stated
that when the accident occurred his brakes were not working and that
he was driving in a fast rate. This shows that the respondent was indeed
negligent. The defense of the respondent that there was no early
warning device will not stand for there was actually a lamp lighted and
placed at the back of the truck which is considered as an early warning
device. Therefore, the Court found that the respondent is liable for the
injuries of the petitioner.
99
Del Castillo v. Jaymalin

112 SCRA 629
Facts:
Mario a deaf mute is a son of Petitioner Del Castillo. They are
paying passengers of defendant Bicol Transportation operated by A.L
Ammen Transportation. Mario fell upon aligting from the bus and died.
An action for damages was filed against the driver, conductor and
bus companies. The court rendered a judgment in favor of the
respondent. Trial court dismissed the petition based solely that
damages and liability of the carrier is based on the earning capacity of
the victim. In the case at bar, the court considered there is no loss of
earning capacity considering the victim was deaf-mute.
100
Issue:
Whether or not the bus employees are liable for damages.
Held:
Common carriers are responsible for the death of their passengers
as provided in Articles 1964 and 2206 of the Civil Code. It includes the
loss of the deceased earning capacity. The conductor was told and
knowledgeable of passenger Mario being deaf and dumb. The court
held that the conductor should have taken extraordinary care for the
safety of the said deaf passenger.
Court procedure demands that the case be remanded to the lower
court for determination of the amount of damages to be awarded.
However, the court considered the pendency of the case being on roll
for 13 years. The Supreme Court determined the damages at
Php12,000 as indemnity for the victims death without interest and
Php2,000 attorney;s fees. The loss of earning capacity is not awarded
since the vivtim is deaf-mute.
101
Gatchalian v. Delim
203 SCRA 126
Facts:
Reynalda Gatchalian boarded a minibus owned and operated by
respondent herein. She boarded the bus at La Union and it was bound
for Bauang. While the bus was running, one of the passengers noticed a
snapping sound. She was alarmed and asked the driver about it, he then
replied that it was normal. Subsequently, the minibus hit a flower pot on
the side of the road which caused the bus to turn turtle and it fell into a
ditch. Several passengers were injured in the accident. Gatchalian
suffered injuries on her leg, arm and face specifically the forehead.
The injured passengers were brought to the hospital for treatment
of their injuries. While the passengers were confined in the hospital,
Mrs. Delim, wife of the respondent visited them and paid for the medical
expenses of the victims. Before leaving the hospital, she made the
injured passengers sign a prepared affidavit which stated that they were
no longer interested in filing a complaint whether criminal or civil
against the driver and owner of the minibus. Gatchalian also signed the
said document.
Subsequently, Gatchalian filed a complaint for damages even
though she had already signed the affidavit prepared by Mrs. Delim. The
lower court dismissed the complaint of Gatchalian and held that there
was a valid waiver of the right to file a complaint. The Court of Appeals
reversed the decision that there was a valid waiver but denied
petitioner’s claim for damages. Hence this petition.
Issue: Whether or not Gatchalian is entitled to the award of damages in

lieu of the injuries that she suffered.
Held:
102
The Court held that there was no valid waiver and that Gatchalian
is entitled to the award of damages. A waiver, in order to be valid, must
be couched in clear and equivocal terms which leave no doubt as to the
intention of relinquishing a right that is legally his or hers. A waiver
must not be contrary to law, morals, public policy or good customs. The
waiver in this case is not valid because the terms in the affidavit did not
clearly state the intention of giving up the right to file a complaint. The
words “no longer interested” do not manifestly show such intention.
Also, such waiver is against public policy because it would weaken the
standard of utmost diligence required of common carriers in bringing
their passengers safely to their destination.
It was established through evidence that the common carrier is
guilty of negligence. The reply of the driver when asked about the
snapping sound is sufficient proof to indicate that such sound had been
there for a while and that the common carrier did not look after the
roadworthiness of the vehicle to assure the safety of the passengers.
There was gross negligence on the part of the driver because there was
wanton disregard for the passengers safety when he did not stop the
minibus after hearing the snapping sound and the remark of one of the
passengers.
Therefore the petitioner in this case is entitled to receive actual or
compensatory damages which include 15,000 pesos for the cost of
plastic surgery to remove the scar on Gatchalian’s face.
103
Cases Applying Articles1756-1763

of the New Civil Code
Safety of Passengers
Articles Applied:
Art. 1756. In case of death of or injuries to passengers, common carriers

are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as prescribed in
Articles 1733 and 1755.
Art. 1757. The responsibility of a common carrier for the safety of

passengers as required in Articles 1733 and 1755 cannot be dispensed
with or lessened by stipulation, by the posting of notices, by statements
on tickets, or otherwise.
Art. 1758. When a passenger is carried gratuitously, a stipulation

limiting the common carrier's liability for negligence is valid, but not for
wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common
carrier's liability.
Art. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or wilful acts of the former's
104
employees, although such employees may have acted beyond the

scope of their authority or in violation of the orders of the common
carriers.
This liability of the common carriers does not cease upon proof that
they exercised all the diligence of a good father of a family in the
selection and supervision of their employees.
Art. 1760. The common carrier's responsibility prescribed in the

preceding article cannot be eliminated or limited by stipulation, by the
posting of notices, by statements on the tickets or otherwise.
Art. 1761. The passenger must observe the diligence of a good father of
a family to avoid injury to himself.
Art. 1762. The contributory negligence of the passenger does not bar
recovery of damages for his death or injuries, if the proximate cause
thereof is the negligence of the common carrier, but the amount of
damages shall be equitably reduced.
Art. 1763. A common carrier is responsible for injuries suffered by a

passenger on account of the wilful acts or negligence of other
passengers or of strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
La Mallorca v. Court of Appeals

17 SCRA 739
Facts:
Plaintiffs husband and wife, together with their minor children,
boarded a La Mallorca bus. Upon arrival at their destination, plaintiffs
and their children alighted from the bus and the father led them to a
105
shaded spot about 5 meters from the vehicle. The father returned to
the bus to get a piece of baggage which was not unloaded. He was
followed by her daughter Raquel. While the father was still on the
running board awaiting for the conductor to give his baggage, the bus
started to run so that the father had to jump. Raquel, who was near the
bus, was run over and killed.
Lower court rendered judgment for the plaintiff which was
affirmed by CA, holding La Mallorca liable for quasi-delict and ordering it
to pay P6,000 plus P400. La Mallorco contended that when the child was
killed, she was no longer a passenger and therefore the contract of
carriage terminated.
Issue:
Whether or not the contractual obligation between the parties
ceases the moment the passenger alighted form the vehicle.
Held:
On the question whether the liability of the carrier, as to the child
who was already led a place 5 meters from the bus under the contract
of carrier, still persists, we rule in the affirmative. It is a recognized
rules that the relation between carrier and passengers does not cease
at the moment the passenger alights from the carrier’s premises, to be
determined from the circumstances. In this case, there was no utmost
diligence. Firstly, the driver, although stopping the bus, did not put off
the engine. Secondly, he started to run the bus even before the bus
conductor gave him the signal and while the latter was unloading cargo.
Here, the presence of said passenger near the bus was not
unreasonable and the duration of responsibility still exists. Averment of
quasi-delict is permissible under the Rules of Court, although
incompatible with the contract of carriage. The Rules of Court allows the
plaintiffs to allege causes of action in the alternative, be they
compatible with each other or not (Sec. 2, Rule 1). Even assuming
arguendo that the contract of carriage has already terminated, herein
petitioner can be held liable for the negligence of its driver pursuant to
Art. 2180 of NCC. Decision MODIFIED. Only question raised in the briefs
106
can be passed upon, and as plaintiffs did not appeals the award of
P3,000.00 the increase by the CA of the award to P6,000.00 cannot be
sustained.
Aboitiz Shipping Corporation vs. Court of Appeals

188 SCRA 387
Facts:
Anacleto Viana was a passenger of M/V Antonia bound for Manila
which was owned by defendant Aboitiz. After the said vessel has landed,
the Pioneer Stevedoring Corp., as the arrastre operator, took over the
exclusive control of the cargoes loaded on it. One hour after the
passengers had disembarked, Pioneer Stevedoring started operation by
unloading the cargoes using its crane. Viana who had already
disembarked remembered that some of his cargoes were still inside the
vessel. While pointing to the crew of the vessel the place where his
cargoes were, the crane hit him, pinning him between the side of the
vessel and the crane which resulted to his death. Viana’s wife filed a
complaint for damages against Aboitiz for breach of contract f carriage.
Aboitiz, however filed a third party complaint against Pioneer since it
had control completely over the vessel during the incident. Furthermore,
petitioner contends that one hour has already elapsed from the time
Viana disembarked, thus he has already ceased to be a passenger.
107
Issue:
Whether or not Aboitiz is liable for the death of Viana.
Held:
The Supreme Court held that the failure of Aboitiz to exercise
extraordinary diligence for the safety of its passengers makes Aboitiz
liable. It has been recognized as a rule that the relation of the carrier
and passenger does not cease the moment the passenger alights from
the carrier’s vehicle, but continues until the passenger has had a
reasonable time or a reasonable opportunity to leave the carrier’s
premises. A reasonable time or a reasonable delay within this rule is to
be determined from all the circumstances. The primary factor to be
considered is the existence of a reasonable cause as will justify the
presence of the victim on or near the petitioner’s vessel. In the case at
bar, such justifiable cause exists because he had to come back for his
cargo. Aboitiz has failed to safeguard its passenger with extraordinary
diligence in requiring or seeing to it that precautionary measures were
strictly and actually enforced to subserve their purpose of preventing
entry into a forbidden area.
108
Mallari, Sr. v. Court of Appeals

324 SCRA 147
Facts:
Mallari Jr. was the driving a passenger jeepney owned by his father,
co-petitioner herein. The jeep collided with the delivery van of Bulletin
Publishing Corp. while travelling on the National Nighway in Bataan.
Mallari Jr. proceeded to overtake a fiera which had stopped in front of
him. He negotiated the curve and moved in the opposite lane in order to
overtake the fiera. As he passed the vehicle he saw the delivery van of
Bulletin and the vehicles collided. The points of collision were the and
the left rear portion of the passenger jeepney and the left front side of
the delivery van. The 2 right wheels of the delivery van were on the
right shoulder of the road and pieces of debris from the accident were
found scattered along the shoulder of the road up to a certain portion of
the lane travelled by the passenger jeepney. The impact caused the
jeepney to turn around and fall on its left side resulting in injuries to its
passengers one of whom was Israel Reyes who eventually died due to
the gravity of his injuries.
The widow of Reyes filed a complaint to recover damages from
Mallari, Jr. and Sr. and Bulletin as well. The trial court found that the
proximate cause of the collision was the negligence of the driver of the
Bulletin delivery van, considering the fact that the left front portion of
the delivery truck hit and bumped the left rear portion of the passenger
jeepney. On appeal, the court reversed the decision of the lower court
and held that it was Mallari Jr. who was negligent. Hence this petition.
Issue: Whether or not petitioners herein should be held liable for the
death of Reyes.
Held:
The Court affirmed the decision of the Court of Appeals and held
that Mallari Jr. and Sr. who are responsible for the death of Reyes. The
collision was caused by the sole negligence of petitioner Alfredo Mallari
Jr. who admitted that immediately before the collision and after he
rounded a curve on the highway, he overtook a Fiera which had stopped
109
on his lane and that he had seen the van driven by Angeles before
overtaking the Fiera. This act of overtaking was in clear violation of Sec.
41, pars. (a) and (b), of RA 4136 as amended, otherwise known as The
Land Transportation and Traffic Code. The rule is settled that a driver
abandoning his proper lane for the purpose of overtaking another
vehicle in an ordinary situation has the duty to see to it that the road is
clear and not to proceed if he cannot do so in safety. Article 2185 of the
NCC, there is a presumption of negligence on the part of a person
driving a motor vehicle if at the time of the mishap he was violating a
traffic regulation. Petitioners herein failed to present satisfactory
evidence to overcome this legal presumption. Therefore they shall be
liable for the loss of Reyes’ life.
Bayasen v. Court of Appeals

G.R. No. L-25785
Facts:
Petitioner Saturnino Bayasen, the Rural Health Physician in Sagada,
Mountain Province, went to barrio Ambasing to visit a patient. Two
nurses from the Saint Theodore’s Hospital in Sagada, Elena Awichen and
Dolores Balcita, rode with him in the jeep assigned for the use of the
Rural Health Unit. Later, at Ambasing, the girls, who wanted to gather
flowers, again asked if they could ride with him up to a certain place on
the way to barrio Suyo which he intended to visit anyway. Dr. Bayasen
110
again allowed them to ride, Elena sitting herself between him and
Dolores.
On the way, the jeep went over a precipice. About 8 feet below the
road, it was blocked by a pine tree. The three, were thrown out of the
jeep. Elena was found lying in a creek further below. She suffered a
skull fracture which caused her death. Saturnino Bayasen was charged
by with Homicide Thru Reckless Imprudence. Trial Court found Bayasen
sentenced him to an indeterminate penalty of 4 Months and 1 Day of
arresto mayor as minimum, to 1 Year, 7 Months and 10 Days of prision
correccional, as maximum, indemnify the heirs Elena Awichen
P3,000.00 as compensatory damages, P1,000.00 as attorney’s fees and
P1,886.00 for burial expenses of the deceased, and to pay the costs. On
Appeal, CA affirmed the decision of the trial court with the modifications
that the indemnity was increased to P6,000.00; the award of attorney’s
fees was set aside; and that the maximum of the prison term was raised
to 1 Year, 7 Months, and 17 Days of prision correccional. The motion
for reconsideration of Bayasen was denied. Hence, the petition for
review on certiorari.
Issue:
Whether or not the reckless driving of accused-petitioner was the
proximate cause of the death of the victim.
Held:
The proximate cause of the tragedy was the skidding of the rear
wheels of the jeep and not the unreasonable speed of the petitioner
because there was no evidence on record to prove or support the
finding that the petitioner was driving at “an unreasonable speed”. The
star witness of the prosecution, Dolores Balcita who was one of the
passengers in the jeep, testified that Saturnino Bayasen was driving his
jeep moderately just before the accident and categorically stated that
she did not know what caused the jeep to fall into the precipice. It is a
well-known physical fact that cars may skid on greasy or slippery roads,
as in the instant case, without fault on account of the manner of
handling the car. Skidding means partial or complete loss of control of
111
the car under circumstances not necessarily implying negligence. It may

occur without fault. Herein, under the particular circumstances, Bayasen
who skidded could not be regarded as negligent, the skidding being an
unforeseen event, so that Bayasen had a valid excuse for his departure
from his regular course.
The negligence of Bayasen has not having been sufficiently
established, his guilt of the crime charged has not been proven beyond
reasonable doubt. He is, therefore, entitled to acquittal. The Supreme
Court set aside the decision of the Court of Appeals sought to be
reviewed, and acquitted Bayasen of the crime charged in the
information in Criminal Case 1056 of the CFI of Mountain Province, with
costs de oficio.
Cervantes vs. Court of Appeals

304 SCRA 25
Facts:
In compliance with a Compromise Agreement entered into by the
contending parties, PAL issued to petitioner Nicholas Cervantes on
March 27, 1989, a round trip ticket for Manila-Honolulu-Los Angeles-
Honolulu-Manila. Such ticket expressly provided an expiry date of one
year from issuance. Four days before the expiration of the subject
ticket, Cervantes used it. Upon his arrival in Los Angeles, he
immediately booked his return ticket to Manila with PAL. The same was
confirmed for April 2, 1990. Upon learning that PAL was making a stop-
over to San Francisco, Cervantes made arrangements with PAL for him
to board such flight. On April 2, when Cervantes checked in the PAL
counter in San Francisco, he was not allowed to board. The PAL
personnel marked ticket “TICKET NOT ACCEPTED DUE TO EXPIRATION
OF VALIDITY” on his ticket. Cervantes filed a complaint for breach of
contract.
Issue:
Whether or not PAL is liable for breach of contract.
112
Held:
The Supreme Court held that PAL is not liable. Petitioner Cervantes
was fully aware that there was a need to send a letter to the legal
counsel of PAL for the extension of the period of validity of his ticket.
The PAL agent was not privy to the said agreement, thus the agent
acted without authority when they confirmed the flights of the
petitioner. When the petitioner knows that the agent was acting beyond
his power, the principal cannot be held liable for the acts of the agent. It
further held that Cervantes acted in bad faith since he bought a back-up
ticket to ensure his departure. The employees of PAL were guilty only of
simple negligence.
Calalas v. Court of Appeals

332 SCRA 356
113
Facts:
Private respondent Eliza Sunga, then freshman at Siliman
University , took a passenger jeepney owned and operated by petitioner
Vicente Calalas. As the jeepney was filled to capacity, Sunga was given
by the conductor an extension seat, a wooden stool at the back of the
door at the rear end of the vehicle. When the jeepney stopped to a let
passenger off and Sunga was about to give way to the outgoing
passenger, an Izuzu truck driven by Verena and owned by Salva
bumped the left rear portion of the jeepney. Sunga sustained multiple
injuries and remained on a cast for three months.
Sunga filed a complaint for damages against Calalas, for breach of
contract of carriage. Calalas, on the other hand,filed a third party
complaint against Francisco Salva, the owner of the truck. The lower
court rendered judgment against Salva and absolved Calalas of liability.
It took cognizance of other case (Civil Case No. 3490), filed by
Calalas against Salva and Verena ,for quasi-delict, in which branch 37 of
the same court held Salva and his driver Verena jointly liable to Calalas
for the damage to his jeepney
The CA reversed the lower courts ruling on the ground the ground
that Sunga’s cause of action was based on a contract of carriage, not
quasi-deplict, and that the common carrier failed to exercise the
diligence required under the Civil Code. The appellate court dismissed
the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga.
Issue:
Whether or not there was a breach of contract of carriage.
Held:
Iin quasi-delict, the negligence or fault should be clearly
established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the existence
of the contract and the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to his destination. In
114
case of death or injuries to passengers, Article 1756 of the Civil Code

provides that common carriers are presumed to have been at fault or
have acted negligently unless they proved that they observed
extraordinary diligence as defined in Arts. 1733 and 1755 of the Code.
This provision necessarily shifts to the common carrier the burden of
proof.
It is immaterial that the proximate cause of the collision between
the jeepney and the truck was the negligence of the truck driver. The
doctrine of proximate cause is applicable only in action for quasi-delict,
not in actions involving breach of contract. The doctrine is a device for
imputing liability to a person where there is no relation between him
and another party. In such a case, the obligation is created by law itself.
But, where there is a pre-existing contractual relation between parties,
it is the parties themselves who create the obligation, and the function
of the law is merely to regulate the relation thus created.
Pestaño vs. Spouses Sumayang

G.R. No. 139875
Facts:
On August 9, 1986, Ananias Sumayang along with his friend
Manuel Romagos was riding a motorcycle along the National highway in
Cebu. Upon a junction where the highway was connected, they were hit
by a passenger bus driven by Gregorio Pestaño and owned by Metro
Cebu Auto Bus Corp. Such bus tried to overtake them sending the
motorcycle upon the pavement, resulting to the death pf the
passengers of the motorcycle. Actions were filed by the heirs of
115
Sumayang against the driver and the owner of Metro Cubu and its
insurer.
Issue:
Whether or not Metro Cebu and Pestaño are liable for the death of
the passengers of the motorcycle.
Held:
The Supreme Court held that Metro Cebu and Pestañ are liable for
the death of Sumayang and Romagos. As a professional driver operating
a public transport bus, he should have anticipated that overtaking at a
junction was a perilous maneuver and thus should have exercised
extreme caution. The vehicular collision was caused by Pestaño’s
negligence when he attempted to overtake the motorcycle. In addition,
Articles 2180 and 2176 of the Civil Code provide that owners and
managers are responsible for damages caused by their employees. The
employer is presumed to be negligent in the selection or supervision of
its employees when an injury is caused by the latter’s negligence. As
evidence has shown that the bus operated with a defective
speedometer, it further proved that Metro Cebu was negligent in the
supervision over its driver. It thus failed to conduct its business with the
diligence required by law.
116
De Gillaco v. Manila Railroad Co.

G.R. No. L-8034
Facts:
Lt. Tomas Gillaco, husband of Cornelia A. de Gillaco, was a
passenger in the early morning train of the Manila Railroad Company
(MRC) from Calamba, Laguna to Manila. When the train reached the
Paco Railroad station, Emilio Devesa, a train guard of MRC assigned in
the Manila-San Fernando, La Union Line, happened to be in said station
waiting for the same train which would take him to Tutuban Station,
where he was going to report for duty. Devesa had a long standing
personal grudge against Tomas Gillaco dating back during the Japanese
occupation. And because of this personal grudge, Devesa shot Gillaco
upon seeing him inside the train. The carbine furnished by the MRC for
his use as train guard. Tomas Gillaco died as a result of the wound
sustained from the shot. Devesa was convicted of homicide by final
judgment of the Court of Appeals.
Wife of deceased petitioner, filed an action against the MRC at CFI
Laguna. The trial court sentenced the respondents to pay P4,000
damages to the petitioners. Thus this appeal.
Issue:
Whether or not the carrier should be held liable
Held:
While the passenger is entitled to protection from personal
violence by the carrier or its agents or employees, the responsibility of
117
the carrier extends to those acts that the carrier could foresee or avoid
through the exercise of the degree of care or diligence required of it.
The Old Civil Code did not impose upon the carrier absolute liability for
assaults of their employees upon the passenger. In the present case,
the act of Devesa is shooting the passenger was entirely unforeseeable
by MRC. They had no means to ascertain or anticipate that the two
would meet, or could it reasonably foresee every personal career that
might exist between each of its may employee and any one of the
thousands of passengers riding in its train. The shooting was therefore,
a caso fortuito, both being unforeseeable and inevitable, under the
circumstances. The resulting breach of Manila Railroad’s contract of
safe carriage with the late Tomas Gillaco was excused thereby.
Furthermore, when the crime took place, the guard Devesa had no
duties to discharge in connection with the transportation of the
deceased from Calamba to Manila. The stipulation of facts is clear that
when Devesa shot and killed Gillaco, Devesa was assigned to guard the
Manila-San Fernando (La Union) trains, and he was at Paco Station
awaiting transportation to Tutuban.
SC reversed the judgment appealed from, and dismissed the

complaint, without costs.
Maranan v. Perez
20 SCRA 412
Facts:
Rogelio Carachea was a passenger in a taxicab operated by
Pascual perez when he was stabbed and killed by the driver, who was
found guilty of homicide in the CFI. While an appeal at the CA, Antonia
Maranan, Rogelio’s mother, filed an action to recover damages for the
118
death of her son. The CFI awarded her P3000 as damages against Perez
dismissing the claim against the driver.
Issue:
Whether or not the carrier is liable for the assaults of its employee
upon the passengers.
Held:
Under Art. 1739 of the Civil Code, “a common carrier are liable for
the death of or injuries to passengers through the negligence or willful
acts of the former’s employees, although such employees may have
ached beyond the scope of their authority or in violation of the order of
the common carrier.
It is the carrier’s strict obligation to select its drivers and similar
employees with due regard not only to technical competence but also to
this total personality, their behavior and thus moral fiber.
The dismissal of the claim against the driver is correct. Plaintiff’s
action was predicated in breach of contract of carriage and the cab
driver was not a part thereto. His civil liability is covered on the criminal
case.
119
Philippine National Railways vs. CA

139 SCRA 87
Facts:
Winifredo Tupang was a paying passenger who boarded Train No.
516 f the Philippine National Railways at Camarines Sur bound for
Manila. Due to some mechanical defect, the train stopped which took
two hours before the train could resume its trip to Manila. Unfortunately,
upon passing Iyam Bridge at Lucena, Tupang fell off the train resulting
to his death. Alarm was raised by the passengers that somebody fell but
the train did not stop. Instead, the train conductor called the station
agent and requested for verification of the confirmation. Rosario
Tupang, the deceased’s widow filed a cmplaint against PNR for breach of
contract f carriage. However, PNR raised as a defense hat it was a mere
agency of the Philippine government without distinct or separate
personality of it own. Likewise, they contended that their funds are
governmental in character, thus they are not subject to garnishment or
execution.
Issue:
Whether or not PNR could be held liable for damages for the death
of Winifredo Tupang.
Held:
120
The Supreme Court held that PNR should be held liable. The
Philippine National Railways is not exempt from garnishment. It
descends to a level of a citizen, thus it cannot assail non-suability as a
bar for damages. Under PA 4156, PNR was created generally with all
powers of a corporation under the Corporation Law. Hence, the
characteristics and attributes of a corporation is fully applicable to PNR.
PNR may sue and be sued and could be subjected to court processes
just like any other corporation. The Supreme Court held that PNR should
be held liable for the death of Winifredo Tupang because it acted in bad
faith as it did not stop despite the alarm raised by its passengers. PNR
has the obligation to transport its passengers to their destination and to
observe extraordinary diligence in doing so.
Isaac v. A. L. Ammen Trans. Co., Inc.

1046 SCRA 101
Facts:
Cesar Isaac boarded one of the buses operated by defendant A.L.
Ammen Trans. Co., Inc. But before reaching his destination, the bus
collided with a pick up type vehicle. The collision caused the amputation
of the left arm of the plaintiff. Due to the incident, the plaintiff went
121
through several treatments causing many expenses. Thus, plaintiff filed

a case for damages alleging that the collision which resulted in the loss
of his left arm was mainly due to the gross incompetence and
recklessness of the driver of the bus operated by the defendant. In
addition, he contended that the defendant incurred liability in culpa
contractual arising from its non-compliance with its obligation to
transport plaintiff to his destination. Defendant on its part set up the
defense that the injury caused was due entirely to the fault or
negligence of the pick up car and a contributory negligence on the part
of the plaintiff.
Issue:
Whether or not the common carrier liable for the injury caused.
Held:
The Supreme Court held that the defendant A.L. Ammen Trans. Co.,
Inc., exercised the diligence required from it and is absolved from
liability for the injury caused to its passengers. It was proven in the case
at bar, that the driver of the pick up car was the sole responsible for the
accident. Reports show that the bus was at moderate speed while the
pick up was at a full speed and on the wrong lane. The Supreme Court
likewise held that there was indeed contributory negligence on the part
of the plaintiff, as he placed his elbow outside the window knowing that
such was dangerous. The injuries caused by the accident worsen.
The Supreme Court held that the following governs the liability of a
common carrier: 1) the liability of a carrier is contractual and arises
upon breach of its obligation. There is a breach if it fails to exert
extraordinary diligence according to all the circumstances of each case;
2) a carrier is obliged to carry its passengers with the utmost diligence
of a very cautious person, having due regard for all circumstances; 3) a
carrier is presumed to be at fault or to have acted negligently in case of
death of, or injury to, passengers, it being its duty to prove that it
exercised extraordinary diligence; and 4) the carrier is not an insurer
against all risk of travel.
122
Bachelor Express, Inc. v. Court of Appeals

G.R. No. 85691
Facts:
Ornominio Beter and Narcisa Rautraut were passengers of a bus
belonging to petitioner Bachelor Express, Inc. While the bus was on its
way to Cagayan de Oro, a passenger at the rear portion suddenly
stabbed another passenger. The stabbing cause commotion and panic
amount the passengers such that the passengers started running to the
sole exit shoving each other resulting in the falling off the bus by
passengers Beter and Rautraut causing them fatal injuries. The heirs of
the deceased sued the bus company Evidence adduced showed that the
bus driver did not immediately stop the bus at the height of the
commotion; the bus was speeding from a full stop; and the victims fell
from the bus door when it was opened or gave way while the bus was
still running.
Petitioner denied liability on the ground that the death of its two
passengers was caused by a force majeure as it was due to the act of a
third person who was beyond its control and supervision. In line with
this, petitioner also argued that it is not an insurer of its passengers.
Issue:
1. Whether or not the case at bar is within the context of force
majeure.
2. Whether or not the petitioner should be absolved from liability for
the death of its passengers.
123
Held:
The sudden act o the passenger who stabbed another passenger in
the bus is within the context of force majeure. However, in order that a
common carrier may be absolved from liability in case of force majeure,
it is not enough that the accident was caused by force majeure. The
common carrier must still proves that it was not negligent in causing the
injuries resulting from such accident. Considering the factual findings in
this case, it is clear that petitioner has failed to overcome the
presumption of fault and negligence found in the law governing
common carriers. The argument that the petitioners are not insurers of
their passengers deserves no merit in view of the failure of the
petitioners to observe extraordinary diligence in transporting safely the
passengers to their destination as warranted by law.
Fortune Express vs. Court of Appeals

305 SCRA 14
124
Facts:
A bus of petitioner Fortune Express, Inc. figured an accident with a
jeepney in Lanao del Norte which resulted to the death of several
passengers of the jeepney including two Maranaos. A Constabulary
agent investigated that the jeepney was owned by a Maranao and
certain Maranaos were planning to take revenge on petitioner by
burning some of its buses. Subsequently, the Operations Manager of
Fortune Express was advised to take precautionary measures. Four days
after the accident, three armed Maranaos pretended to be passengers
of a bus of petitioner. They seized such bus and set it on fire. The
passengers of the bus were asked to get off, but one passenger, Atty.
Talib Caorong went back to retrieve something. He was shot and killed
during the incident. Petitioner contends that the seizure by the armed
assailants was a fortuitous event thus it cannot be held liable.
Issue:
Whether or not Fortune Express is liable for the death of Atty.
Caorong.
Held:
The Supreme Court held that the seizure of the bus by the armed
Maranaos cannot be assailed as a fortuitous event. The requisite of
unforseeability to be considered forced majeure is lacking. Fortune
Express knew that Maranaos were planning to burn some of its
passenger buses and yet petitioner did nothing to protect the safety of
its passengers. Petitioner’s employees failed to prevent the attack on
one of its passengers because they did not exercise the diligence of a
good father of a family. Hence, petitioner should be held liable for the
death of Atty. Caorong. Art. 1763 of the New Civil Code provides that the
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 proper diligence.
Because of Fortune Express’s negligence, the seizure of the bus by the
armed Maranaos was made possible.
125
Liability of Common Carriers:
Payment of
Damages
Cariaga v. Laguna Tayabas Bus
126
110 PHIL 346
Facts:
Edgardo Cariaga, a fourth year medical student at the University of
Santo Tomas suffered physical injuries from a collision between a train
of Manila Railroad and the Laguna Tayabas Bus (LTB) which he was on
board. The bus collided with the train while the former was about to
cross the railroad. He suffered a severe head injury which diminished his
intelligence and he will no longer be able to continue his studies as a
medical student. The said injury that he sustained also made him
physically and mentally incapable of working. All of the medical
expenses were paid LTB plus allowances.
A case was filed by Edgardo’s parents against LTB and Manila
Railroad to recover actual, compensatory, moral and exemplary
damages amounting to 312,000 pesos. LTB filed a cross-complaint
alleging that it was MRR who was negligent by not blowing its whistle as
a warning for the vehicles that were crossing the railroad and that there
was no crossing bar at the said crossing. The lower court held that LTB
was negligent in crossing and the injuries sustained by Edgardo Cariaga
was due to the said negligence of the driver of the bus. The cross-
complaint was dismissed by the lower court and ordered LTB to pay
10,490 pesos as compensatory damages plus interest. Hence this
petition by LTB.
Issue:
1. Whether or not LTB should be held solely liable for the injuries of
Edgardo Cariaga.
2. Whether or not the award of damages by the lower court is proper.
Held: The Court held that it was LTB that was negligent and not the
driver of the train. The driver of the bus ignored the whistle of the train.
He should have exercised utmost diligence in crossing the railroad
tracks. The collision between the bus and the train even caused the
latter to be derailed. Therefore LTB should be solely liable for the
payment of damages to the Cariaga’s.
127
As to the award of damages, the Court held that the amount of

10,490 pesos is inadequate. Article 2201 of the NCC provides that a
common carrier shall be liable for actual or compensatory damages,
those which are natural and probable consequences of the breach of the
contract of common carriage and which the parties had foreseen or
could have reasonably foreseen at the time the obligation was
constituted, provided such damages have been duly provided. This
means that, actual or compensatory damages are not only limited to
medical and other expenses. It includes the possible income that
Edgardo would have earned after graduating from medical school.
Considering that Edgardo was already a fourth year med student at the
time that he boarded the bus, such income could be foreseen. These
circumstances would make it sufficient to presume that he would have
finished school and passed the board exam. The award of actual
damages should be increased to 25,000 pesos assuming that the
income of Edgardo would have been 300 pesos a month.
The parents of Edgardo are not parties in this case because the
contract of common carriage was between LTB and Edgardo. They were
not injured in the accident therefore their claim for damages is without
merit. No award of moral damages may be given because the
circumstances of this case do not fall under the enumeration provided in
Article 2219 and Article 2220 of the NCC. Attorney’s fees cannot be
granted as well for the same reason that the circumstances do not fall
under Article 2208 of the NCC.
Villa Rey Transit, Inc. v. Court of Appeals

31 SCRA 511
Facts:
Policarpio Quintos, Jr. boarded a Villa Rey Transit bus at Pangasinan
which was bound for Manila. He was seated at the first seat on the right
side of the bus. The bus met an accident at a bridge in Pampanga. It hit
128
the back of a bullcart full of hay while it was crossing the said bridge.
Unfortunately, there was a bamboo pole tied to the cart and the end of
this bamboo pole penetrated through the wind shield of the bus and hit
the face of Quintos. A La Mallorca bus was passing by the same bridge
and helped bring Quintos, Jr. and those who were on board the bullcart
to the hospital. The bamboo pole caused a severe injury to his eye and
head which later on resulted into his death.
A complaint was filed by the sisters of Quintos to recover damages
from Villa Rey Transit. The Court of First Instance held that Villa Rey
Transit is liable to pay actual or compensatory damages in the amount
of 63,750 pesos as well as attorney’s fees. Villa Rey Transit appealed the
case and the Court of Appeals affirmed the decision of the lower court.
Issue:
Whether or not the amount awarded as damages to the heirs of
Quintos is proper.
Held:
The Court modified the award of damages to the heirs of Quintos.
It explained that the award of damages is computed with regard to the
life expectancy of the deceased and the rate of losses sustained by the
deceased sisters. The court emphasized that the life expectancy of the
victim is very important in the computation of actual damages however
it is not the sole basis for computation of the said amount. Expenses
shall be deducted from the amount determined to be the monthly
income of the deceased. It is proper to deduct living expenses that the
victim would have also incurred if he were alive.
Therefore the award of actual damages shall be 33,333 pesos with
regard to Quintos’ possible earnings, the amount of medical and burial
expenses, and 12,000 pesos pursuant to Articles 104 and 107 of the
RPC in relation to Article 2206 of the NCC. In addition to this, attorney’s
fees shall be awarded as well.
129
Gatchalian v. Delim
203 SCRA 126
Facts:
Reynalda Gatchalian boarded a minibus owned and operated by
respondent herein. She boarded the bus at La Union and it was bound
for Bauang. While the bus was running, one of the passengers noticed a
snapping sound. She was alarmed and asked the driver about it, he then
replied that it was normal. Subsequently, the minibus hit a flower pot on
the side of the road which caused the bus to turn turtle and it fell into a
ditch. Several passengers were injured in the accident. Gatchalian
suffered injuries on her leg, arm and face specifically the forehead.
The injured passengers were brought to the hospital for treatment
of their injuries. While the passengers were confined in the hospital,
Mrs. Delim, wife of the respondent visited them and paid for the medical
expenses of the victims. Before leaving the hospital, she made the
injured passengers sign a prepared affidavit which stated that they were
no longer interested in filing a complaint whether criminal or civil
against the driver and owner of the minibus. Gatchalian also signed the
said document.
130
Subsequently, Gatchalian filed a complaint for damages even

though she had already signed the affidavit prepared by Mrs. Delim. The
lower court dismissed the complaint of Gatchalian and held that there
was a valid waiver of the right to file a complaint. The Court of Appeals
reversed the decision that there was a valid waiver but denied
petitioner’s claim for damages. Hence this petition.
Issue:
Whether or not Gatchalian is entitled to the award of damages in
lieu of the injuries that she suffered.
Held:
he Court held that there was no valid waiver and that Gatchalian is
entitled to the award of damages. A waiver, in order to be valid, must
be couched in clear and equivocal terms which leave no doubt as to the
intention of relinquishing a right that is legally his or hers. A waiver
must not be contrary to law, morals, public policy or good customs. The
waiver in this case is not valid because the terms in the affidavit did not
clearly state the intention of giving up the right to file a complaint. The
words “no longer interested” do not manifestly show such intention.
Also, such waiver is against public policy because it would weaken the
standard of utmost diligence required of common carriers in bringing
their passengers safely to their destination.
It was established through evidence that the common carrier is
guilty of negligence. The reply of the driver when asked about the
snapping sound is sufficient proof to indicate that such sound had been
there for a while and that the common carrier did not look after the
roadworthiness of the vehicle to assure the safety of the passengers.
There was gross negligence on the part of the driver because there was
wanton disregard for the passengers safety when he did not stop the
minibus after hearing the snapping sound and the remark of one of the
passengers.
Therefore the petitioner in this case is entitled to receive actual or
compensatory damages which include 15,000 pesos for the cost of
plastic surgery to remove the scar on Gatchalian’s face.
131
Soberano v. Manila Railroad & Benguet Auto Line

18 SCRA 732
Facts:
Juana Soberano was a passenger of a Benguet Auto line bus bound
for Baguio from Ilocos Sur. She has brought on board the bus some eggs
which was her business. When the bus reached Naguilian road it hit a
stone embankment, this caused the bus to fall from a 65-foot precipice.
As a result of the accident 2 passengers died and several passengers
were injured. Soberano was also injured in the said accident. All of her
belongings were lost and destroyed as a result of the accident.
The defendant in this case offered to pay 5,000 pesos for the injury
and loss caused by the accident. However, Soberano rejected the offer
and instituted a case to recover damages in the amount of 76,757.76
pesos. The lower court awarded 5,000 pesos for actual or compensatory
damages. Petitioner herein claims that the award of damages is not
enough and that the defendant herein was in bad faith for not satisfying
her claim. Hence this petition.
Issue:
Whether or not Soberano is entitled to recover a higher amount as
to damages for the injury and loss she sustained.
Held: The Court held that the award of actual damages, in relation to
loss of earning capacity should be increased from 5,000 to 15,000
pesos. Petitioner herein suffered physical injuries which resulted in a
loss of positive economic values. She had been a merchant since 1950
and she has been earning 1,500 pesos a year. Therefore, the award of
damages with regard to her loss of earning capacity should be increased
to 15,000 pesos. In addition to this amount, the defendant herein shall
132
also pay for the unpaid allowances and the loss of profit for the eggs
which were damaged in the accident.
Defendant herein cannot be held to be in bad faith for not
satisfying the claim of the petitioner. It was justified in rejecting the
claim of the petitioner because the amount asked of them was too
much. The defendant in this case did not compel Soberano to file a
case, she rejected the offer of the former and decided to push through
with this case. Therefore, no other damages should be awarded to the
petitioner.
Marchan vs. Mendoza

G.R. No. L-24471
Facts:
A passenger bus of the Philippine Rabbit Bus Lines, driven by
Silverio Marchan, fell into a ditch while travelling on its way to Manila.
As a result of which respondents Arsenio Mendoza, his wife and child,
passengers of the said bus were thrown out to the ground resulting in
their multiple injuries. It was proven that the bus was traveling at high
speed without due regard to the safety of its passengers and that
passengers complained and asked Machan, the driver to slow down. On
133
the contrary, Marchan increased its speed while approaching a truck

which was then parked, apparently to avoid collision with the incoming
vehicle from the opposite direction. The rear tires of the bus skidded
because of its high speed which caused the bus to fall into a ditch.
Subsequently, Marchan was convicted for physical injuries through
reckless imprudence.
Issue:
Whether or not Marchan and Philippine Rabbit Bus Lines are liable
for the injuries suffered by its passengers.
Held:
The Supreme Court held that the proximate cause of the accident
was the gross negligence of Marchan who when driving is expected to
have employed the highest degree of care. He should have been
assiduously prudent in handling his vehicle to insure the safety of his
passengers. There is no reason why he shouldn’t stop the vehicle upon
noticing a parked truck in front of him. He must have taken
precautionary measures in securing the safety of his passengers.
Philippine Rabbit is also liable because common carriers cannot escape
liability for the death or injuries to passengers through the negligence
and willful acts of the former's employees, although such employees
may have acted beyond the scope of their authority or in violation of
the orders. The awarding of compensatory damages is reasonable
because Arsenio Mendoza had suffered paralysis on the lower
extremities, which will incapacitate him to engage in his customary
occupation throughout the remaining years of his life. The awarding of
exemplary damages likewise is found just although the plaintiffs did not
specify such claim. The court is called upon the exercise and can use its
discretion in the imposition of punitive or exemplary damages even
though not expressly prayed or pleaded in the plaintiffs' complaint.
134
Philippine Airlines vs. Court of Appeals

185 SCRA 110
Facts:
The Stralight Flight of Philippine Airlines (PAL) with 33 passengers
took off from Iloilo bpund for Manila. An hour and fifteen after it crashed
in Mindoro. The plane was manufacture 1942 and was acquired by the
airline 1948. It has been certified as airworthy by the Civil Aeronautics
Administration.
Passenger Nicanor Padilla is 29 years old, single and dead. His
only legal heir is his mother Natividad Padilla who filed for damages.
She demanded Php600,000 as actual and compensatory damages,
exemplary damages and Php60,000 attorney;s fees.
Issue:
How are damages computed.
Held:
The award of damages for death is computed on the life
expectancy of the deceased and not of the beneficiary. Artcle 1764 of
the Civil Code provides that article 2206 shall also applu to death of
passenger caused by the breach of contract by the common carrier.
135
The manner of computing damages is taken from Davila vs. CA.

Net yearly income multiplied by the Life Expectancy of the deceased.
The Life Expectancy is based on the American Expectancy Table of
Mortality formula (2/3x[80-30]) cited from Villa Rey Transit Inc. vs. CA.
The income and salary of Nicanor Padilla is evidenced by
witnesses, the auditor and manager of Allied Overseas Trading, pay rolls
of the companies and his income tax returns.
The trial court determined the deceased gross annual income to be
Php23,100 from his yearly salary from Padilla shipping Company and
Allied Overseas Trading Company. The court considered that he is
single and thus deducted Php9, 200 as yearly living expenses.
His NET INCOME is thus, 13,900 with a life expectancy of 30 years.
(Net income x Life Expectancy) is Php417, 000. This is the amount of
indemnity his mother is to receive.
This includes a legal rate of interest of 6% annum from date of
judgment on 31August1973 until fully paid.
De Caliston vs. Court of Appeals

122 SCRA 958
Facts:
136
Juana Sonza Vda. De Darrocha was run over by a passenger bus

driven by Dalmacio which resulted to the former’s death. Da Rrocha was
a USVA pensioner. She was survived by her only child, Gloria Darrocha
de Caliston. Dalmacio was convicted subsequently of homicide thru
reckless imprudence. He was sentenced to imprisonment and was
ordered to pay de Caliston P15,000 for the death of Darrocha, P5,000 as
moral damages, P5,000 for burial expenses and P10,000 for loss of
pension, which the deceased had failed to receive. On appeal, the CA
modified the CFI decision and absolved Dalmacio from the payment of
the P10,000 for loss of pension and credited him for the amount of
P5,000, previously paid to de Caliston under a vehicular insurance
policy obtained by the bus owner.
Issue:
Whether or not the deletion of the P10, 000 awarded for the loss of
pension proper.
Held:
Yes the deletion of damages for loss of pension was unwarranted.
The pension of the decedent being a sure income was cut short by her
death, for which Dalmacio was responsible. The surviving heir, de
Caliston, is entitled to the award of P10, 000, which is just equivalent to
the pension the decedent would have received for one year if she did
not die. The P5, 000 paid to de Caliston by the insurer of the passenger
bus which figured in the accident may be deemed to have come from
the bus owner who procured the insurance. Since the civil liability (ex-
delicto) of the bus owner for the death caused by his driver is subsidiary
and, at bottom, arises from the same culpa, the insurance proceeds
should be credited in favor of the errant driver.
137
Philippine Airlines v. Court of Appeals

106 SCRA 391
Facts:
Samson is a licensed aviator employed by the Philippine Airlines.
He was partnered with another pilot Bustamante. Samson had
complained on previous occasions to PAL that Bustamante was slow in
reacting and was having lapses of poor judgment during flights. PAL
however still allowed Bustamante to continue flying.
On a certain flight, Bustamante overshot the airfield while landing
the plane at the Daet airport. Samson tried to control the plane, but did
not succeed. The plane crash-landed beyond the runway into a
mangrove. Samson hit his head on the windshield due to the impact of
the crash. He suffered head injuries such as brain concussions and
wounds on his forehead. To make matters worse, plaintiff was
discharged from employment. Samson then filed an action for damages
against PAL.
Issue:
Whether or not PAL is liable for damages.
Held:
138
The Court held that PAL is liable for damages. There was gross
negligence on the part of PAL because despite the knowledge of
Bustamante’s condition the still allowed him to continue flying.
Bustamante had a tumor in his nasopharynx which affected his vision.
As provided in Articles 1732, 1733, and 1756 of the NCC, PAL being a
common carrier should have exercised extraordinary diligence in the
supervision of their employees and utmost diligence in bringing
passengers to their destination.
The court affirmed the decision of the trial court in awaring
damages. Private respondent is entitled to P198,000.00 as unearned
income or compulsory damages, P80,000.00 for moral damages,
P20,000 as attorney’s fees and P5,000 as expenses for litigation. This
claim of the plaintiff for loss and impairment of earning capacity is
based on the provision of Art. 2205, NCC. Even from the standpoint of
the petitioner that there is employer-employee relationship between it
and private respondent arising from the contract of employment,
private respondent is still entitled to moral damages in view of the
finding of bad faith or malice, applying the provisions of Art. 2220 of the
NCC.
Cachero v. Manila Yellow Taxicab

139
101 PHIL 523
Facts:
Atty. Cachero, plaintiff herein, boarded a taxicab owned by the
Manila Yellow Taxicab Co., Inc. The said taxicab bumped against a
Meralco post. The taxicab was badly smashed and the plaintiff fell out of
the vehicle to the ground. As a result of the accident, he suffered slight
physical injuries. The driver of the taxi was prosecuted and convicted
criminally. Respondent herein offered to settle the case and the plaintiff
demanded the amount of P79,245.65 as for damages. Respondent
refused to pay the said amount. Plaintiff then proceeded to file a case to
recover the same amount through the courts. The CFI rendered a
decision in favor of the plaintiff and ordered that respondent pay the
amount of P700 for medical and transportation allowances, attorney’s
fees and professional fees. Both parties appealed and the decision was
affirmed. Hence this petition.
Issue: Whether or not Cachero is entitled to recover damages other

than those already awarded.
Held:
The Court modified the decision of the lower court. The award of
professional fees were reduced to P2,000 and the award of moral
damages of P2,000. Plaintiff in this case did not maintain his action
against all persons liable for the breach of the contract of common
carriage. Since he did not include the driver in this complaint he may
not recover moral damages. Respondent herein did not commit any
criminal offense against the plaintiff, it was the driver who was the
reason behind the injury. This case does not fall under Article 2219 of
the NCC therefore he is not entitled to be awarded moral damages.
140
Fores v. Miranda
105 PHIL 266
Facts:
Ireneo Miranda, a professor of Fine Arts, was a passenger of a
passenger jeepney registered to Fores but actuall operated by
Sackerman. The vehicle was descending the Sta. Mesa bridge at an
excessive rate of speed, and the driver lost control of the same which
caused it to swerve and to hit the bridge wall. As a result of the
accident, Five of the passengers were injured, including the respondent
herein. He suffered a fracture of the upper right humerus. He was taken
to the National Orthopedic Hospital for treatment, and later was
subjected to a series of operations. At the time of the trial, it appears
that respondent had not yet recovered the use of his right arm. The
driver was charged with serious physical injuries through reckless
imprudence, and upon interposing a plea of guilty was sentenced
accordingly. The lower court awarded actual damages to the
141
respondent. On appeal, the Court reduced the amount of actual

damages and added the award of moral damages and attorney’s fees.
Issue:
Whether or not the award of moral damages and attorney’s fee
was proper.
Held:
The Court held that the award of moral damages is not proper in
this case. As a general rule, moral damages are not awarded to the
victim in cases of breach of contract of common carriage. The exception
is that if such accident resulted in the death of the passenger, in which
case Article 1764 of the NCC, makes the carrier subject to Article 2206
of the NCC. In case death did not result from the accident, moral
damages may be recovered if the common carrier is found guilty of
gross negligence amounting to bad faith or malice. In the case at bar
there was no bad faith on the part of the common carrier. Therefore,
respondent is not entitled to moral damages. As to the issue of
attorney’s fee, the court may moto proprio award moral damages as the
case may be. Attorney’s fees may be awarded by the court if it is
deemed to be just and equitable. Therefore, the Court set aside the
decision of the Court of Appeals as far as moral damages are
concerned.
142
Lopez v. Pan American Airways

16 SCRA 431
Facts:
Senator Lopez and party (plaintiffs) made reservations for first
class accommodations with Pan American Airways (Pan Am) for a flight
from Tokyo to San Francisco. Pan Am’s San Francisco Head Office
confirmed the reservations made by the plaintiffs. The first class tickets
for the said flight were subsequently issued by Pan Am in favor the
plaintiffs. As scheduled, plaintiffs left Manila by Northwest Airlines and
arrived in Tokyo the same day. As soon they arrived, Senator Lopez
requested Minister Busuego of the Philippine Embassy to contact Pan
Am’s Tokyo Office regarding their first class accommodations for that
evening’s flight. However, they found out that all first class seats were
booked. Pan Am’s agent mistakenly cancelled the reservation made by
the plaintiffs and deliberately withheld the incident from the latter. Pan
Am took the chance that some of the passengers would cancel their first
class seats and they would be able to accommodate the plaintiffs. This
never happened.
Since the first class seats therein were all taken, Pan Am’s Tokyo
Office informed the plaintiffs that it could not accommodate them in
that trip as first-class passengers. Due to the urgency of their arrival in
the United States they were constrained to take the flight from Tokyo to
San Francisco as tourist passengers.
Issue: Whether or not Pan Am is liable for moral, exemplary damages
and attorney’s fees.
Held:
The Court held that Pan Am’s actions amounted to bad faith and
malice which entitled
the plaintiffs herein to be awarded moral and exemplary damages. The
act of misleading plaintiffs to believe that they had in fact purchased
first class tickets when in they have not was a willful breach of the
143
contract of common carriage. Said actions of Pan Am may indeed have

been prompted by nothing more that the promotion of its self-interest in
holding on to Senator Lopez and party as passengers in its flight and
foreclosing their chances to seek the services of other airlines that may
have been able to afford them first class accommodations. Therefore
plaintiffs are entitled to receive the award of moral damages. The award
of exemplary damages is also proper in this case because such
damages are recoverable in breach of contract where the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner. Lastly, a working contract for an attorney’s fees, shall control
the amount to be paid therefore unless found by the court to be
unconscionable or unreasonable.
Ortigas, Jr. v. Lufthansa

64 SCRA 610
Facts:
Petitioner is booked on a first class accommodation in defendants
airline from Rome to Manila. The booking was confirmed by its airlines
office. The airline employee upong seeing his Filipino nationality
disallowed his boarding and the seat was given to a Belgian. Petitioner
has a heart ailment and is advised by physician to take only frst class
144
accommodations. He was promised to be transferred to first class on all

succeeding layovers from Cairo to Hongkong to no avail. Damages was
filed. Trial court awarded Moral and Exemplary damages.
Issue:
Whether or not defendant is liable for damages.
Held:
Yes. Inattenton and lack of care on the carrier rsulting in the
failure of the passenger to be accommodated in a class availed of and
contracted amounts to bad faith and fraud. Furthermore, the preference
to a Belgian passenger is also a wanton disregard of his right from
discrimination. The successive false representations of transferring him
to first class is an act of malice and bad faith. This entitles petitioner to
moral damages in accordance to Articlec 2220. Moral damages is
increased to Php15,000 and Exemplary damages to Php100,000.
145
Philippine Rabbit Bus Lines v. Esguerra

117 SCRA 741
Facts:
Respondent herein boarded a bus of the plaintiff herein which was
bound for Pampanga from Manila. He sat a few seats behind the driver
on the left side of the bus near the window. While on route to
Pampanga, the bus sideswiped with a freight truck owned and operated
by Transport Contractors, the latter coming from the opposite side of
the highway. The window glass near the driver's seat of the bus was
detached and the left side of its body was damaged. During the course
of the accident, the left forearm of Esguerra was hit by a hard blunt
object. It caused the breaking of its bones into small fragments while
the soft tissues of the muscles and the skin were mascerated. He was
immediately brought to the Bulacan Provincial Hospital in Malolos,
Bulacan for treatment. Unfortunately, because of the severe damage
caused, his left arm was amputated.
Defendant herein filed a case to recover damages. The lower court
rendered a decision in favor of Esguerra, finding that both vehicles were
reckless in driving. On appeal, the court affirmed the decision of the
lower court and awarded actual and moral damages to the respondent
herein. Hence this petition.
Issue:
Whether or not the respondent is entitled to receive moral
damages.
Held:
The Court held that the Court of Appeals erred in awarding moral
damages to the respondent herein. As a general rule moral damages
are not recoverable in actions for damages predicated on a breach of
146
the contract of transportation, as in the instant case, in view of the

provisions of Articles 2219 and 2220 of the New Civil Code. The
exceptions are (1) where the mishap results in the death of a passenger,
and (2) where it is proved that the carrier was guilty of fraud or bad
faith, even if death does not result. In the case at bar, the Court finds
that both vehicles were in their respective lanes and both were equally
negligent. The Court does not find that there was malice or bad faith on
the part of the driver of the petitioner herein. Therefore the award of
moral damages is deleted and the rest affirmed.
Sweet Lines v. Court of Appeals

121 SCRA 769
Facts:
The respondents, having first class tickets, boarded the M/V Sweet
Grace to Catbalogan. The vessel had some engine problems which led
to a change of schedule and they were thus delayed for a substantial
amount of time. Furthermore, the vessel bought the respondents to
Tacloban instead of Catbalogan. This led the respondents to purchase
another set of tickets and to ride another ferryboat going to Catbalogan.
147
The respondents then sued the petitioner carrier for damages for the
breach of contract of carriage.
Issue:
Whether or not the petitioner is liable for damages.
Held:
The Court held that the petitioner is liable for damages specifically
moral damages because there was bad faith on its part. The Court
found that such bad faith is present based on three circumstances
namely:
1. Petitioner did not give any notice to the respondents as to

the change of schedule of the vessel.
2. The petitioner knew fully that it would take no less than
fifteen (15) hours to effect the repairs of the damaged
engine. The petitioner also assured that the vessel will
leave within a short period of time and when the
defendants wanted to leave the trip petitioner stated that
the “the vessel is already leaving.”
3. The petitioner did not even offer to refund the tickets and
provide for their transportation from Tacloban to
Catbalogan.
148
Prudencio v. Alliance Transport System

148 SCRA 440
Facts:
Dra. Sofia L. Prudenciado was driving her own car along Taft
Avenue to go to the Philippine Normal College Compound where she
would hold classes. As she was moving slowly in a normal rate, her car
was then hit by the taxi operated by the respondent. The accident
caused the petitioner physical injuries and a brain concussion. She then
filed for an action for damages against respondent. The lower court,
finding the respondent’s driver to be negligent, granted the damages
and the Court of Appeals reduced the damages. The petitioner then
appealed from the decision of the appellate court.
Issue:
Whether or not the award of damages by the Court of Appeals was
correct.
Held:
The Court held that the reduction of the moral damages by the
appellate court to the petitioner was unreasonable and drastic. The
reason was that the trial court found the respondent to be grossly
negligent in injuring the petitioner. The award of moral damages was
proper. The appeal by the petitioner is proper because, as a doctor, she
has reasonable fears that such accident due to the carelessness of the
respondent’s driver can greatly affect her profession.
Exemplary damages are also awarded to the petitioner to provide
for an example or correction to public good. The reason is that the
149
respondent’s driver was driving at a high speed on a rainy day and on a

slippery road with complete disregard with the safety of other people.
Pan American World Airways, Inc. v. Intermediate Appellate

Court
153 SCRA 521
Facts:
Private respondent Tinitigan, filed a complaint against petitioner
for damages arising from defendant's alleged refusal to accommodate
her on Pan Am Flight No. 431 from Sto. Domingo, Republica Dominica to
San Juan, Puerto Rico notwithstanding that she possessed a confirmed
plane ticket. She is a businesswoman and a multimillionaire (proprietor
150
of Sampaguita Restaurant, New York City USA; Treasurer of the Molave

Development Corp., Phil., proprietor of Cavite Household Appliances and
Rowena's Handicraft, Phil.), was on a business trip with a Pan-Am ticket.
While in Sto. Domingo, Tinitigan is expected to be in San Juan that same
day to meet a client to sign a contract or lose it. She was expected to
make a profit of $1,000 in said contract but her failure to board the
flight, said profit was lost.
The refusal of accommodation caused her to suffer mental
anguish, serious anxiety, besmirched reputation, wounded feelings and
social humiliation She prayed that she be awarded moral damages of
P500,000.00, exemplary damages of P200,000.00, attorney's fees of
P100,000.00 and actual damages sustained by her in the amount of
US$1,546.15. Defendant denied that plaintiff was a confirmed
passenger since the ticket issued to her was on an open space basis,
which meant that she could only be accommodated if any of the
confirmed passengers failed to show up at the airport before departure.
The lower court rendered judgment in favor of plaintiff and awarded the
amount of damages as prayed for. Said decision was affirmed hence the
instant petition.
Issue: Whether or not the award of damages was proper.
Held:
Yes, but subject to modifications. Other instances which caused
moral damage to the plaintiff are the following:
1. While plaintiff was standing in line to board the aircraft, a Pan Am
employee ordered her in a loud voice to step out of line because her
ticket was not confirmed to her embarrassment in the presence of
several people who heard and order. Despite her Pleas she was not
allowed to board the aircraft. And her seat was also given to a
Caucasian.
2. When the plane took off without her but with her luggage on board.
She was forced to return to her hotel without any luggage much less an
extra dress.
151
Evidence shows petitioner as confirmed passenger. 1.) Defendant

issued a Passenger Ticket and Baggage Check with assigned seat and
the corresponding pass and baggage claim symbol. 2.) Plaintiff paid the
fare and terminal fee. 3.) plaintiff's passport was stamped by
immigration. 4.) Plaintiff's name was included in the passenger
manifest. There is a contract or carriage perfected between plaintiff and
defendant for the latter to take plaintiff to her place of destination. By
refusing to accommodate plaintiff in said flight, defendant had willfully
and knowingly violated the contract of carriage and failed to bring the
plaintiff to her place of destination under its contract with plaintiff.
There is showing of bad faith. Self-enrichment or fraternal interest and
not personal ill will may have been the motive of defendant, but it is
malice nevertheless. Malice is shown by the fact that that plaintiff was
ordered out of the line under some pretext in order to accommodate a
white man.
Exemplary damages and Attorney’s fees are also awarded. The
rational behind exemplary or corrective damages is, to provide an
example or correction for public good. SC reduced the moral and
exemplary damages to the combined total sum of Two Hundred
Thousand (P200,000.00) Pesos and the attorney's fees to Twenty
Thousand (P20,000.00) Pesos. The award of actual damages in the
amount of One Thousand Five Hundred Forty Six American dollars and
fifteen cents (US$1,546.15) computed at the exchange rate prevailing
at the time of payment is hereby retained and granted.
152
Trans World Airlines v. Court of Appeals

165 SCRA 143
Facts:
153
Atty. Vinluan purchased a first class ticket from the petitioner. Such
ticket was twice confirmed and yet the petitioner abruptly told the
respondent that there were no longer any available seats in the first
class and that he will be downgraded to the economy class. When he
protested an employee of the petitioner arrogantly threatened the
respondent. In addition, he also saw that several Caucasians who
arrived much later were accommodated in the first class when the other
passengers did not show up. The respondent then sued the petitioner
for damages.
Issue:
Whether or not the petitioner is liable for damages.
Held:
The Court held that the petitioner is liable for moral and exemplary
damages. The discrimination in this case is obvious and the humiliation
brought to the respondent is indisputable. The petitioner showed lack of
care in accommodating the respondent in the class that the latter
contracted. In addition, the petitioner rudely informed the respondent of
such downgrading of class. Such awarding of damages would serve as
an example and a discouragement to carriers who may repeat such
oppressive and discriminatory acts.
154
Armovit v. Court of Appeals

184 SCRA 476
Facts:
The petitioners in this case all resided in the United States and
went home to the Philippines for a Christmas visit. On their return trip to
the United States, they were bumped off at the airport due to an
erroneous entry in their plane tickets relating to the departure time. The
petitioners checked in the airport an hour and fifteen minutes earlier
than what was indicated in their airline tickets. Upon their check in, the
employees of the respondent airlines impolitely informed them that the
plane was already taking off and that their check in time was way
earlier and entirely different from what was stated in their tickets. The
petitioners then sued the respondent airlines for damages.
Issue:
Whether or not the respondent is liable for damages.
Held:
The Court held that the respondent is liable for damages. Actual
damages were awarded to the petitioner due to bumped off that
occurred. Moral damages were also awarded because the Court found
that the respondent was gross negligent in the issuance of the tickets as
155
to the correct time of departure. In addition, the act of the respondent in

rudely informing the petitioner of such bumped off is an indication that
there was bad faith and malice on the part of the respondent.
Furthermore, the relative of the petitioner stated how badly wounded
the feelings of the petitioners were. Exemplary damages were also
awarded as to provide for an example to the public good. Lastly,
nominal damages were properly deleted since such damages cannot co-
exist with actual damages.
156

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(3) Act of omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the

(5) Order or act of competent public authority.

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Art. 1737. The common carrier's duty to observe extraordinary diligence

Art. 1738. The extraordinary liability of the common carrier continues to

occurrence of flood, storm or other natural disaster in order that the

Art. 1740. If the common carrier negligently incurs in delay in

Art. 1741. If the shipper or owner merely contributed to the loss,

Art. 1742. Even if the loss, destruction, or deterioration of the goods

that may arise from consequences incidental to its operation or that

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